The Florida Senate

CHAPTER 627
INSURANCE RATES AND CONTRACTS

PART I
RATES AND RATING ORGANIZATIONS (ss. 627.011-627.381)

PART II
THE INSURANCE CONTRACT (ss. 627.401-627.4301)

PART III
LIFE INSURANCE AND ANNUITY CONTRACTS (ss. 627.451-627.482)

PART IV
INDUSTRIAL LIFE INSURANCE POLICIES (ss. 627.501-627.522)

PART V
GROUP LIFE INSURANCE POLICIES (ss. 627.551-627.575)

PART VI
HEALTH INSURANCE POLICIES (ss. 627.601-627.6499)

PART VII
GROUP, BLANKET, AND FRANCHISE HEALTH INSURANCE POLICIES
(ss. 627.651-627.6699)

PART VIII
MEDICARE SUPPLEMENT POLICIES (ss. 627.671-627.675)

PART IX
CREDIT LIFE AND DISABILITY INSURANCES (ss. 627.676-627.6845)

PART X
PROPERTY INSURANCE CONTRACTS (ss. 627.701-627.707)

PART XI
MOTOR VEHICLE AND CASUALTY INSURANCE CONTRACTS
(ss. 627.7261-627.745)

PART XII
SURETY INSURANCE CONTRACTS (ss. 627.751-627.759)

PART XIII
TITLE INSURANCE CONTRACTS (ss. 627.7711-627.798)

PART XIV
VARIABLE OR INDETERMINATE VALUE CONTRACTS (ss. 627.801-627.807)

PART XV
PREMIUM FINANCE COMPANIES AND AGREEMENTS (ss. 627.826-627.849)

PART XVI
PREMIUM FINANCING (ss. 627.901-627.904)

PART XVII
INSURER REPORTING (ss. 627.911-627.919)

PART XVIII
LONG-TERM CARE INSURANCE POLICIES (ss. 627.9401-627.9408)

PART XIX
PURCHASING GROUPS AND RISK RETENTION GROUPS
(ss. 627.941-627.955)

PART XX
FINANCIAL GUARANTY INSURANCE (ss. 627.971-627.975)

PART XXI
MORTGAGE INSURANCE CONSOLIDATIONS (ss. 627.981-627.987)

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PART I
RATES AND RATING ORGANIZATIONS

627.011  Short title.

627.021  Scope of this part.

627.031  Purposes of this part; interpretation.

627.041  Definitions.

627.0612  Administrative proceedings in rating determinations.

627.0613  Consumer advocate.

627.062  Rate standards.

627.0623  Restrictions on expenditures and solicitations of insurers and affiliates.

627.0625  Commercial property and casualty risk management plans.

627.0628  Florida Commission on Hurricane Loss Projection Methodology.

627.0629  Residential property insurance; rate filings.

627.0645  Annual filings.

627.06501  Insurance discounts for certain persons completing driver improvement course.

627.0651  Making and use of rates for motor vehicle insurance.

627.0652  Insurance discounts for certain persons completing safety course.

627.0653  Insurance discounts for specified motor vehicle equipment.

627.06535  Electric vehicles; restrictions on imposing surcharges.

627.0654  Insurance discounts for buildings with fire sprinklers.

627.066  Excessive profits for motor vehicle insurance prohibited.

627.0661  Insurers to be added to those exempt from excess profit requirements.

627.0665  Automatic bank withdrawal agreements; notification required.

627.072  Making and use of rates.

627.091  Rate filings; workers' compensation and employer's liability insurances.

627.0915  Rate filings; workers' compensation, drug-free workplace, and safe employers.

627.0916  Agricultural horse farms.

627.092  Workers' Compensation Administrator.

627.093  Application of s. 286.011 to workers' compensation and employer's liability insurances.

627.096  Workers' Compensation Rating Bureau.

627.101  When filing becomes effective; workers' compensation and employer's liability insurances.

627.111  Effective date of filing.

627.141  Subsequent disapproval of filing; workers' compensation and employer's liability insurances.

627.151  Basis of approval or disapproval of workers' compensation or employer's liability insurance filing; scope of disapproval power.

627.1615  Workers' compensation applicant discrimination.

627.162  Requirements for premium installments; delinquency, collection, and check return charges; attorney's fees.

627.171  Excess rates.

627.191  Adherence to filings; workers' compensation and employer's liability insurances.

627.192  Workers' compensation insurance; employee leasing arrangements.

627.211  Deviations; workers' compensation and employer's liability insurances.

627.212  Workplace safety program surcharge.

627.215  Excessive profits for workers' compensation, employer's liability, commercial property, and commercial casualty insurance prohibited.

627.221  Rating organizations; licensing; fee.

627.231  Subscribers to rating organizations.

627.241  Notice of changes.

627.251  Bureau rules not to affect dividends.

627.261  Actuarial and technical services.

627.281  Appeal from rating organization; workers' compensation and employer's liability insurance filings.

627.291  Information to be furnished insureds; appeal by insureds; workers' compensation and employer's liability insurances.

627.301  Advisory organizations.

627.311  Joint underwriters and joint reinsurers.

627.314  Concerted action by two or more insurers.

627.318  Records.

627.331  Recording and reporting of loss, expense, and claims experience; rating information.

627.351  Insurance risk apportionment plans.

627.3511  Depopulation of Residential Property and Casualty Joint Underwriting Association.

627.3512  Recoupment of residual market deficit assessments.

627.3513  Standards for sale of bonds by underwriting associations.

627.3515  Market assistance plan; property and casualty risks.

627.3516  Residential property insurance market coordinating council.

627.357  Medical malpractice self-insurance.

627.361  False or misleading information.

627.371  Hearings.

627.381  Penalty for violation.

627.011  Short title.--This part of this chapter may be referred to as the "Rating Law."

History.--s. 412, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.021  Scope of this part.--

(1)  This part of this chapter applies only to property, casualty, and surety insurances on subjects of insurance resident, located, or to be performed in this state.

(2)  This chapter does not apply to:

(a)  Reinsurance, except joint reinsurance as provided in s. 627.311.

(b)  Insurance against loss of or damage to aircraft, their hulls, accessories, or equipment, or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance, or use of aircraft.

(c)  Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine insurance policies.

(d)  Commercial inland marine insurance.

(e)  Surplus lines insurance placed under the provisions of ss. 626.913-626.937.

(3)  For the purposes of this chapter, all motor vehicle insurance shall be deemed to be casualty insurance only.

(4)  This part does not apply to health insurance.

History.--s. 413, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 92, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 337, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 2, ch. 88-166; s. 114, ch. 92-318; s. 1, ch. 98-173.

627.031  Purposes of this part; interpretation.--

(1)  The purposes of this part are:

(a)  To promote the public welfare by regulating insurance rates as herein provided to the end that they shall not be excessive, inadequate, or unfairly discriminatory;

(b)  To encourage independent action by, and reasonable price competition among, insurers;

(c)  To authorize the existence and operation of qualified rating organizations and advisory organizations and to require that specified rating services of such rating organizations be generally available to all authorized insurers; and

(d)  To authorize cooperation between insurers in ratemaking and other related matters.

(2)  It is the purpose of this part to protect policyholders and the public against the adverse effects of excessive, inadequate, or unfairly discriminatory insurance rates, and to authorize the department to regulate such rates. If at any time the department has reason to believe any such rate is excessive, inadequate, or unfairly discriminatory under the law, it is directed to take the necessary action to cause such rate to comply with the laws of this state.

(3)  Nothing in this part shall be construed to repeal or modify the provisions of ¹part X of chapter 626, relating to unfair trade practices.

History.--s. 411, ch. 59-205; s. 1, ch. 67-9; ss. 13, 35, ch. 69-106; s. 1, ch. 71-3(B); s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 338, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 28, ch. 87-228; s. 114, ch. 92-318.

¹Note.--Redesignated as part IX of ch. 626 to conform to the transfer of ss. 626.941-626.945, comprising former part IX, by ch. 98-89.

627.041  Definitions.--As used in this part:

(1)  "Rate" means the unit charge by which the measure of exposure or the amount of insurance specified in a policy of insurance or covered thereunder is multiplied to determine the premium.

(2)  "Premium" means the consideration paid or to be paid to an insurer for the issuance and delivery of any binder or policy of insurance.

(3)  "Rating organization" means every person, other than an authorized insurer, whether located within or outside this state, who has as his or her object or purpose the making of rates, rating plans, or rating systems. Two or more authorized insurers that act in concert for the purpose of making rates, rating plans, or rating systems, and that do not operate within the specific authorizations contained in ss. 627.311, 627.314(2), (4), and 627.351, shall be deemed to be a rating organization. No single insurer shall be deemed to be a rating organization.

(4)  "Advisory organization" means every group, association, or other organization of insurers, whether located within or outside this state, which prepares policy forms or makes underwriting rules incident to but not including the making of rates, rating plans, or rating systems or which collects and furnishes to authorized insurers or rating organizations loss or expense statistics or other statistical information and data and acts in an advisory, as distinguished from a ratemaking, capacity.

(5)  "Member" means an insurer who participates in or is entitled to participate in the management of a rating, advisory, or other organization.

(6)  "Subscriber" means an insurer which is furnished at its request:

(a)  With rates and rating manuals by a rating organization of which it is not a member; or

(b)  With advisory services by an advisory organization of which it is not a member.

(7)  "Willful" or "willfully" in relation to an act or omission which constitutes a violation of this part means with actual knowledge or belief that such act or omission constitutes such violation and with specific intent nevertheless to commit such act or omission.

(8)  "Motor vehicle insurance" means a policy of motor vehicle insurance delivered or issued for delivery in the state by an authorized insurer:

(a)  Insuring a natural person as the named insured or one or more related individuals resident of the same household, or both; and

(b)  Insuring a motor vehicle of the private passenger type or station wagon type, which motor vehicle is not used as public or livery conveyance for passengers or rented to others, or insuring any other four-wheeled motor vehicle having a capacity of 1,500 pounds or less which is not used in the occupation, profession, or business of the insured, other than farming;

other than any policy issued under an automobile insurance risk apportionment plan; or other than any policy insuring more than four automobiles; or other than any policy covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards.

(9)  "Insurer," for purposes of ss. 627.091, 627.096, 627.101, 627.111, 627.141, 627.171, 627.191, 627.211, and 627.291, includes a commercial self-insurance fund as defined in s. 624.462 and a group self-insurance fund as defined in s. 624.4621.

History.--s. 414, ch. 59-205; s. 2, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 340, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 3, ch. 87-124; s. 114, ch. 92-318; s. 93, ch. 93-415; s. 315, ch. 97-102.

627.0612  Administrative proceedings in rating determinations.--In any proceeding to determine whether rates, rating plans, or other matters governed by this part comply with the law, the appellate court shall set aside a final order of the department if the department has violated s. 120.57(1)(k) by substituting its findings of fact for findings of an administrative law judge which were supported by competent substantial evidence.

History.--s. 7, ch. 86-160; s. 2, ch. 87-50; s. 114, ch. 92-318; s. 272, ch. 96-410; s. 27, ch. 99-3.

627.0613  Consumer advocate.--The Insurance Commissioner must appoint a consumer advocate who must represent the general public of the state before the department. The consumer advocate must report directly to the Insurance Commissioner, but is not otherwise under the authority of the department or of any employee of the department. The consumer advocate has such powers as are necessary to carry out the duties of the office of consumer advocate, including, but not limited to, the powers to:

(1)  Recommend to the department, by petition, the commencement of any proceeding or action; appear in any proceeding or action before the department; or appear in any proceeding before the Division of Administrative Hearings relating to subject matter under the jurisdiction of the department.

(2)  Have access to and use of all files, records, and data of the department.

(3)  Examine rate and form filings submitted to the department, hire consultants as necessary to aid in the review process, and recommend to the department any position deemed by the consumer advocate to be in the public interest.

(4)  Prepare an annual budget for presentation to the Legislature by the department, which budget must be adequate to carry out the duties of the office of consumer advocate.

History.--s. 18, ch. 92-318.

627.062  Rate standards.--

(1)  The rates for all classes of insurance to which the provisions of this part are applicable shall not be excessive, inadequate, or unfairly discriminatory.

(2)  As to all such classes of insurance:

(a)  Insurers or rating organizations shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on such classes of insurance written in this state. A copy of rates, rating schedules, rating manuals, premium credits or discount schedules, and surcharge schedules, and changes thereto, shall be filed with the department under one of the following procedures:

1.  If the filing is made at least 90 days before the proposed effective date and the filing is not implemented during the department's review of the filing and any proceeding and judicial review, then such filing shall be considered a "file and use" filing. In such case, the department shall finalize its review by issuance of a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing. The notice of intent to approve and the notice of intent to disapprove constitute agency action for purposes of the Administrative Procedure Act. Requests for supporting information, requests for mathematical or mechanical corrections, or notification to the insurer by the department of its preliminary findings shall not toll the 90-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the department does not issue a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing.

2.  If the filing is not made in accordance with the provisions of subparagraph 1., such filing shall be made as soon as practicable, but no later than 30 days after the effective date, and shall be considered a "use and file" filing. An insurer making a "use and file" filing is potentially subject to an order by the department to return to policyholders portions of rates found to be excessive, as provided in paragraph (h).

(b)  Upon receiving a rate filing, the department shall review the rate filing to determine if a rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the department shall, in accordance with generally accepted and reasonable actuarial techniques, consider the following factors:

1.  Past and prospective loss experience within and without this state.

2.  Past and prospective expenses.

3.  The degree of competition among insurers for the risk insured.

4.  Investment income reasonably expected by the insurer, consistent with the insurer's investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. The department may promulgate rules utilizing reasonable techniques of actuarial science and economics to specify the manner in which insurers shall calculate investment income attributable to such classes of insurance written in this state and the manner in which such investment income shall be used in the calculation of insurance rates. Such manner shall contemplate allowances for an underwriting profit factor and full consideration of investment income which produce a reasonable rate of return; however, investment income from invested surplus shall not be considered. The profit and contingency factor as specified in the filing shall be utilized in computing excess profits in conjunction with ¹s. 627.0625.

5.  The reasonableness of the judgment reflected in the filing.

6.  Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida policyholders, members, or subscribers.

7.  The adequacy of loss reserves.

8.  The cost of reinsurance.

9.  Trend factors, including trends in actual losses per insured unit for the insurer making the filing.

10.  Conflagration and catastrophe hazards, if applicable.

11.  A reasonable margin for underwriting profit and contingencies.

12.  The cost of medical services, if applicable.

13.  Other relevant factors which impact upon the frequency or severity of claims or upon expenses.

(c)  In the case of fire insurance rates, consideration shall be given to the availability of water supplies and the experience of the fire insurance business during a period of not less than the most recent 5-year period for which such experience is available.

(d)  If conflagration or catastrophe hazards are given consideration by an insurer in its rates or rating plan, including surcharges and discounts, the insurer shall establish a reserve for that portion of the premium allocated to such hazard and shall maintain the premium in a catastrophe reserve. Any removal of such premiums from the reserve for purposes other than paying claims associated with a catastrophe or purchasing reinsurance for catastrophes shall be subject to approval of the department. Any ceding commission received by an insurer purchasing reinsurance for catastrophes shall be placed in the catastrophe reserve.

(e)  After consideration of the rate factors provided in paragraphs (b), (c), and (d), a rate may be found by the department to be excessive, inadequate, or unfairly discriminatory based upon the following standards:

1.  Rates shall be deemed excessive if they are likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered.

2.  Rates shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when the replenishment is attributable to investment losses.

3.  Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.

4.  A rating plan, including discounts, credits, or surcharges, shall be deemed unfairly discriminatory if it fails to clearly and equitably reflect consideration of the policyholder's participation in a risk management program adopted pursuant to s. 627.0625.

5.  A rate shall be deemed inadequate as to the premium charged to a risk or group of risks if discounts or credits are allowed which exceed a reasonable reflection of expense savings and reasonably expected loss experience from the risk or group of risks.

6.  A rate shall be deemed unfairly discriminatory as to a risk or group of risks if the application of premium discounts, credits, or surcharges among such risks does not bear a reasonable relationship to the expected loss and expense experience among the various risks.

(f)  In reviewing a rate filing, the department may require the insurer to provide at the insurer's expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated in this section.

(g)  The department may at any time review a rate, rating schedule, rating manual, or rate change; the pertinent records of the insurer; and market conditions. If the department finds on a preliminary basis that a rate may be excessive, inadequate, or unfairly discriminatory, the department shall initiate proceedings to disapprove the rate and shall so notify the insurer. However, the department may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for a period of 1 year after the effective date of the filing unless the department finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being so notified, the insurer or rating organization shall, within 60 days, file with the department all information which, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. The department shall issue a notice of intent to approve or a notice of intent to disapprove pursuant to the procedures of paragraph (a) within 90 days after receipt of the insurer's initial response. In such instances and in any administrative proceeding relating to the legality of the rate, the insurer or rating organization shall carry the burden of proof by a preponderance of the evidence to show that the rate is not excessive, inadequate, or unfairly discriminatory. After the department notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the department withdraws the notification, the insurer shall not alter the rate except to conform with the department's notice until the earlier of 120 days after the date the notification was provided or 180 days after the date of the implementation of the rate. The department may, subject to chapter 120, disapprove without the 60-day notification any rate increase filed by an insurer within the prohibited time period or during the time that the legality of the increased rate is being contested.

(h)  In the event the department finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the department shall issue an order of disapproval specifying that a new rate or rate schedule which responds to the findings of the department be filed by the insurer. The department shall further order, for any "use and file" filing made in accordance with subparagraph (a)2., that premiums charged each policyholder constituting the portion of the rate above that which was actuarially justified be returned to such policyholder in the form of a credit or refund. If the department finds that an insurer's rate or rate change is inadequate, the new rate or rate schedule filed with the department in response to such a finding shall be applicable only to new or renewal business of the insurer written on or after the effective date of the responsive filing.

(i)  Except as otherwise specifically provided in this chapter, the department shall not prohibit any insurer, including any residual market plan or joint underwriting association, from paying acquisition costs based on the full amount of premium, as defined in s. 627.403, applicable to any policy, or prohibit any such insurer from including the full amount of acquisition costs in a rate filing.

The provisions of this subsection shall not apply to workers' compensation and employer's liability insurance and to motor vehicle insurance.

(3)(a)  For individual risks that are not rated in accordance with the insurer's rates, rating schedules, rating manuals, and underwriting rules filed with the department and which have been submitted to the insurer for individual rating, the insurer must maintain documentation on each risk subject to individual risk rating. The documentation must identify the named insured and specify the characteristics and classification of the risk supporting the reason for the risk being individually risk rated, including any modifications to existing approved forms to be used on the risk. The insurer must maintain these records for a period of at least 5 years after the effective date of the policy.

(b)  Individual risk rates and modifications to existing approved forms are not subject to this part or part II, except for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404, 627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132, 627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426, 627.4265, 627.427, and 627.428, but are subject to all other applicable provisions of this code and rules adopted thereunder.

(c)  This subsection does not apply to private passenger motor vehicle insurance.

(4)  The establishment of any rate, rating classification, rating plan or schedule, or variation thereof in violation of ²part X of chapter 626 is also in violation of this section.

(5)  With respect to a rate filing involving coverage of the type for which the insurer is required to pay a reimbursement premium to the Florida Hurricane Catastrophe Fund, the insurer may fully recoup in its property insurance premiums any reimbursement premiums paid to the Florida Hurricane Catastrophe Fund, together with reasonable costs of other reinsurance, but may not recoup reinsurance costs that duplicate coverage provided by the Florida Hurricane Catastrophe Fund.

(6)(a)  After any action with respect to a rate filing that constitutes agency action for purposes of the Administrative Procedure Act, an insurer may, in lieu of demanding a hearing under s. 120.57, require arbitration of the rate filing. Arbitration shall be conducted by a board of arbitrators consisting of an arbitrator selected by the department, an arbitrator selected by the insurer, and an arbitrator selected jointly by the other two arbitrators. Each arbitrator must be certified by the American Arbitration Association. A decision is valid only upon the affirmative vote of at least two of the arbitrators. No arbitrator may be an employee of any insurance regulator or regulatory body or of any insurer, regardless of whether or not the employing insurer does business in this state. The department and the insurer must treat the decision of the arbitrators as the final approval of a rate filing. Costs of arbitration shall be paid by the insurer.

(b)  Arbitration under this subsection shall be conducted pursuant to the procedures specified in ss. 682.06-682.10. Either party may apply to the circuit court to vacate or modify the decision pursuant to s. 682.13 or s. 682.14. The department shall adopt rules for arbitration under this subsection, which rules may not be inconsistent with the arbitration rules of the American Arbitration Association as of January 1, 1996.

(c)  Upon initiation of the arbitration process, the insurer waives all rights to challenge the action of the department under the Administrative Procedure Act or any other provision of law; however, such rights are restored to the insurer if the arbitrators fail to render a decision within 90 days after initiation of the arbitration process.

History.--s. 3, ch. 67-9; s. 3, ch. 71-3(B); s. 3, ch. 76-168; s. 21, ch. 77-468; s. 1, ch. 77-457; s. 93, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 341, 357, 809(2nd), ch. 82-243; ss. 45, 49, 79, ch. 82-386; s. 93, ch. 83-216; s. 9, ch. 86-160; ss. 19, 114, ch. 92-318; s. 8, ch. 92-328; s. 5, ch. 95-276; s. 4, ch. 96-194; s. 7, ch. 96-377; s. 8, ch. 2000-370.

¹Note.--Section 2, ch. 88-390, deleted any reference in s. 627.0625 to computing excess profits.

²Note.--Redesignated as part IX of ch. 626 to conform to the transfer of ss. 626.941-626.945, comprising former part IX, by ch. 98-89.

627.0623  Restrictions on expenditures and solicitations of insurers and affiliates.--

(1)  As used in this section:

(a)  "Insurer" means any entity holding a certificate of authority under chapter 624, chapter 628, chapter 629, chapter 632, or chapter 641.

(b)  "Affiliate" means any insurance holding company required to be registered under s. 628.801 or any subsidiary of such holding company.

(2)  No insurer, affiliate, or officer of an insurer or affiliate, and no political committee or committee of continuous existence representing the interests of such insurer, affiliate, or officer shall make a contribution in excess of $100, for any election, to or on behalf of the Treasurer or to or on behalf of any candidate for the office of Treasurer. The provisions of this subsection shall not prevent any candidate or members of that candidate's family from contributing to that candidate's campaign as otherwise permitted by law.

(3)  The Treasurer or a candidate for the office of Treasurer may not accept a campaign contribution in excess of $100 from any insurer, affiliate, or officer of an insurer or affiliate, or any political committee or committee of continuous existence that represents such insurer, affiliate, or officer.

(4)  No employee of the department may solicit a campaign contribution for the Treasurer or any candidate for the office of Treasurer from any insurer, affiliate, or officer of an insurer or affiliate, or any political committee or committee of continuous existence that represents such insurer, affiliate, or officer. For purposes of this section, "employee of the department" means any person employed in the Department of Insurance or the Treasurer's office holding a position in the Senior Management Service as defined in s. 110.402; any person holding a position in the Selected Exempt Service as defined in s. 110.602; any person having authority over insurance policy, regulation, or supervision; or any person hired on a contractual basis, having the power normally conferred upon such person, by whatever title.

(5)  The Department of Insurance shall make available by electronic means a list of persons whose names are filed with the department and who are insurers, affiliates, or officers subject to this section. The department may charge a fee for the furnishing of a list under this subsection in an amount to cover the cost of preparing the list.

(6)  Any person who commits a knowing and willful violation of this section commits a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.

History.--s. 20, ch. 92-318; s. 1, ch. 92-329.

627.0625  Commercial property and casualty risk management plans.--

(1)  For the purposes of this section, the term:

(a)  "Commercial property insurance" means insurance as defined in s. 624.604, but limited to coverage of commercial risks, excluding windstorm coverage, flood insurance, federal crop insurance, crop hail insurance, the Pollution Liability Insurance Association, and other federal governmental pools and associations. If separate rates and supporting experience data are not filed and justified for windstorm coverage, the insurer shall, using generally accepted actuarial and economic principles and techniques, identify and justify the premiums, losses, reserves, and associated data for the windstorm coverage excluded from commercial property insurance.

(b)  "Commercial casualty insurance" means insurance as defined in s. 624.605, other than workers' compensation and employer's liability insurance, but limited to coverage of commercial risks.

(c)  "Commercial umbrella liability insurance" means insurance as defined in s. 624.605 but limited to any policy or endorsement which provides coverage in the amount of $300,000 or more in excess of an underlying policy providing $300,000 liability or equivalent limits of insurance, on a specific insured vehicle, location, business operation, or other specific commercial risk.

(2)  This section shall apply only to commercial property insurance and to commercial casualty insurance as those terms are defined in subsection (1), or any combination thereof.

(3)  Each insurer or insurer group offering commercial casualty insurance or commercial property insurance covering risks located in this state shall develop and make available to insureds guidelines for risk management plans. The risk management program shall include the following:

(a)  Safety measures, including, as applicable, the following areas:

1.  Pollution and environmental hazards;

2.  Disease hazards;

3.  Accidental occurrences;

4.  Fire hazards and fire prevention and detection;

5.  Liability for acts from the course of business;

6.  Slip and fall hazards;

7.  Product injury; and

8.  Hazards unique to a particular class or category of insureds.

(b)  Training to insureds in safety management techniques.

(c)  Safety management counseling services.

There shall be no civil cause of action against any insurer or its agents or employees for acts or omissions in any way connected with the requirements of this subsection. This shall not limit the authority for the department to enforce the provisions of this subsection.

History.--s. 10, ch. 86-160; s. 2, ch. 87-50; s. 2, ch. 88-390; s. 18, ch. 89-167; s. 1, ch. 89-225; s. 114, ch. 92-318.

627.0628  Florida Commission on Hurricane Loss Projection Methodology.--

(1)  LEGISLATIVE FINDINGS AND INTENT.--

(a)  Reliable projections of hurricane losses are necessary in order to assure that rates for residential property insurance meet the statutory requirement that rates be neither excessive nor inadequate. The ability to accurately project hurricane losses has been enhanced greatly in recent years through the use of computer modeling. It is the public policy of this state to encourage the use of the most sophisticated actuarial methods to assure that consumers are charged lawful rates for residential property insurance coverage.

(b)  The Legislature recognizes the need for expert evaluation of computer models and other recently developed or improved actuarial methodologies for projecting hurricane losses, in order to resolve conflicts among actuarial professionals, and in order to provide both immediate and continuing improvement in the sophistication of actuarial methods used to set rates charged to consumers.

(c)  It is the intent of the Legislature to create the Florida Commission on Hurricane Loss Projection Methodology as a panel of experts to provide the most actuarially sophisticated guidelines and standards for projection of hurricane losses possible, given the current state of actuarial science. It is the further intent of the Legislature that such standards and guidelines must be used by the State Board of Administration in developing reimbursement premium rates for the Florida Hurricane Catastrophe Fund, and may be used by insurers in rate filings under s. 627.062 unless the way in which such standards and guidelines were applied by the insurer was erroneous, as shown by a preponderance of the evidence.

(d)  It is the intent of the Legislature that such standards and guidelines be employed as soon as possible, and that they be subject to continuing review thereafter.

(2)  COMMISSION CREATED.--

(a)  There is created the Florida Commission on Hurricane Loss Projection Methodology, which is assigned to the State Board of Administration. The commission shall be administratively housed within the State Board of Administration, but it shall independently exercise the powers and duties specified in this section.

(b)  The commission shall consist of the following 11 members:

1.  The insurance consumer advocate.

2.  The Chief Operating Officer of the Florida Hurricane Catastrophe Fund.

3.  The Executive Director of the Residential Property and Casualty Joint Underwriting Association.

4.  The Director of the Division of Emergency Management of the Department of Community Affairs.

5.  The actuary member of the Florida Hurricane Catastrophe Fund Advisory Council.

6.  Six members appointed by the Insurance Commissioner, as follows:

a.  An employee of the Department of Insurance who is an actuary responsible for property insurance rate filings.

b.  An actuary who is employed full time by a property and casualty insurer which was responsible for at least 1 percent of the aggregate statewide direct written premium for homeowner's insurance in the calendar year preceding the member's appointment to the commission.

c.  An expert in insurance finance who is a full time member of the faculty of the State University System and who has a background in actuarial science.

d.  An expert in statistics who is a full time member of the faculty of the State University System and who has a background in insurance.

e.  An expert in computer system design who is a full time member of the faculty of the State University System.

f.  An expert in meteorology who is a full time member of the faculty of the State University System and who specializes in hurricanes.

(c)  Members designated under subparagraphs (b)1.-5. shall serve on the commission as long as they maintain the respective offices designated in subparagraphs (b)1.-5. Members appointed by the Insurance Commissioner under subparagraph (b)6. shall serve on the commission until the end of the term of office of the Insurance Commissioner who appointed them, unless earlier removed by the Insurance Commissioner for cause. Vacancies on the commission shall be filled in the same manner as the original appointment.

(d)  The State Board of Administration shall annually appoint one of the members of the commission to serve as chair.

(e)  Members of the commission shall serve without compensation, but shall be reimbursed for per diem and travel expenses pursuant to s. 112.061.

(f)  The State Board of Administration shall, as a cost of administration of the Florida Hurricane Catastrophe Fund, provide for travel, expenses, and staff support for the commission.

(g)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member of the commission, any member of the State Board of Administration, or any employee of the State Board of Administration for any action taken in the performance of their duties under this section. In addition, the commission may, in writing, waive any potential cause of action for negligence of a consultant, contractor, or contract employee engaged to assist the commission.

(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--

(a)  The commission shall consider any actuarial methods, principles, standards, models, or output ranges that have the potential for improving the accuracy of or reliability of the hurricane loss projections used in residential property insurance rate filings. The commission shall, from time to time, adopt findings as to the accuracy or reliability of particular methods, principles, standards, models, or output ranges.

(b)  In establishing reimbursement premiums for the Florida Hurricane Catastrophe Fund, the State Board of Administration must, to the extent feasible, employ actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable.

(c)  With respect to a rate filing under s. 627.062, an insurer may employ actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable to determine hurricane loss factors for use in a rate filing under s. 627.062, which findings and factors are admissible and relevant in consideration of a rate filing by the department or in any arbitration or administrative or judicial review.

(d)  The commission shall adopt revisions to previously adopted actuarial methods, principles, standards, models, or output ranges at least annually.

History.--s. 6, ch. 95-276; s. 6, ch. 96-194; s. 3, ch. 97-55; s. 4, ch. 2000-333.

627.0629  Residential property insurance; rate filings.--

¹(1)  Effective July 1, 1994, a rate filing for residential property insurance must include appropriate discounts, credits, or other rate differentials, or appropriate reductions in deductibles, for properties on which fixtures actuarially demonstrated to reduce the amount of loss in a windstorm have been installed.

(2)(a)  A rate filing for residential property insurance made on or before the implementation of paragraph (b) may include rate factors that reflect the manner in which building code enforcement in a particular jurisdiction addresses the risk of wind damage; however, such a rate filing must also provide for variations from such rate factors on an individual basis based on an inspection of a particular structure by a licensed home inspector, which inspection may be at the cost of the insured.

(b)  A rate filing for residential property insurance made more than 150 days after approval by the department of a building code rating factor plan submitted by a statewide rating organization shall include positive and negative rate factors that reflect the manner in which building code enforcement in a particular jurisdiction addresses risk of wind damage. The rate filing shall include variations from standard rate factors on an individual basis based on inspection of a particular structure by a licensed home inspector. If an inspection is requested by the insured, the insurer may require the insured to pay the reasonable cost of the inspection. This paragraph applies to structures constructed or renovated after the implementation of this paragraph.

(c)  The premium notice shall specify the amount by which the rate has been adjusted as a result of this subsection and shall also specify the maximum possible positive and negative adjustments that are approved for use by the insurer under this subsection.

(3)  A rate filing made on or after July 1, 1995, for mobile home owner's insurance must include appropriate discounts, credits, or other rate differentials for mobile homes constructed to comply with American Society of Civil Engineers Standard ANSI/ASCE 7-88, adopted by the United States Department of Housing and Urban Development on July 13, 1994, and that also comply with all applicable tie-down requirements provided by state law.

(4)  The Legislature finds that separate consideration and notice of hurricane insurance premiums will assist consumers by providing greater assurance that hurricane premiums are lawful and by providing more complete information regarding the components of property insurance premiums. Effective January 1, 1997, a rate filing for residential property insurance shall be separated into two components, rates for hurricane coverage and rates for all other coverages. A premium notice reflecting a rate implemented on the basis of such a filing shall separately indicate the premium for hurricane coverage and the premium for all other coverages.

(5)  In order to provide an appropriate transition period, an insurer may, in its sole discretion, implement an approved rate filing for residential property insurance over a period of years. An insurer electing to phase in its rate filing must provide an informational notice to the department setting out its schedule for implementation of the phased-in rate filing.

(6)  An insurer may not write a residential property insurance policy without providing windstorm coverage or hurricane coverage as defined in s. 627.4025. This subsection does not apply with respect to risks located in an area eligible for coverage under the Florida Windstorm Underwriting Association under s. 627.351(2).

(7)  Any rate filing that is based in whole or part on data from a computer model may not exceed 25 percent unless there is a public hearing.

(8)  An insurer may implement appropriate discounts or other rate differentials of up to 10 percent of the annual premium to mobile home owners who provide to the insurer evidence of a current inspection of tie-downs for the mobile home, certifying that the tie-downs have been properly installed and are in good condition.

(9)  EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL SOUNDNESS.--

(a)  It is the intent of the Legislature to provide a program whereby homeowners may obtain an evaluation of the wind resistance of their homes with respect to preventing damage from hurricanes, together with a recommendation of reasonable steps that may be taken to upgrade their homes to better withstand hurricane force winds.

(b)  To the extent that funds are provided for this purpose in the General Appropriations Act, the Legislature hereby authorizes the establishment of a program to be administered by the Florida Windstorm Underwriting Association.

(c)  The program shall provide grants to homeowners, for the purpose of providing homeowner applicants with funds to conduct an evaluation of the integrity of their homes with respect to withstanding hurricane force winds, recommendations to retrofit the homes to better withstand damage from such winds, and the estimated cost to make the recommended retrofits.

(d)  The Department of Community Affairs shall establish by rule standards to govern the quality of the evaluation, the quality of the recommendations for retrofitting, the eligibility of the persons conducting the evaluation, and the selection of applicants under the program. In establishing the rule, the department shall consult with the advisory committee to minimize the possibility of fraud or abuse in the evaluation and retrofitting process, and to ensure that funds spent by homeowners acting on the recommendations achieve positive results.

(e)  The Florida Windstorm Underwriting Association shall identify areas of this state with the greatest wind risk to residential properties and recommend annually to the department priority target areas for such evaluations and inclusion with the associated residential construction mitigation program.

(10)  A property insurance rate filing that includes any adjustments related to premiums paid to the Florida Hurricane Catastrophe Fund must include a complete calculation of the insurer's catastrophe load, and the information in the filing may not be limited solely to recovery of moneys paid to the fund.

History.--s. 13, ch. 93-410; s. 7, ch. 95-276; s. 7, ch. 96-194; s. 4, ch. 97-55; s. 99, ch. 2000-141.

¹Note.--Section 99, ch. 2000-141, amended subsection (1), effective July 1, 2001, to read:

(1)  A rate filing for residential property insurance must include actuarially reasonable discounts, credits, or other rate differentials, or appropriate reductions in deductibles, for properties on which fixtures or construction techniques demonstrated to reduce the amount of loss in a windstorm have been installed or implemented. The fixtures or construction techniques shall include, but not be limited to, fixtures or construction techniques which enhance roof strength, roof covering performance, roof-to-wall strength, wall-to-floor-to-foundation strength, opening protection, and window, door, and skylight strength. Credits, discounts, or other rate differentials for fixtures and construction techniques which meet the minimum requirements of the Florida Building Code must be included in the rate filing. All insurance companies must make a rate filing which includes the credits, discounts, or other rate differentials by June 1, 2002.

627.0645  Annual filings.--

(1)  Each rating organization filing rates for, and each insurer writing, any line of property or casualty insurance to which this part applies, except:

(a)  Workers' compensation and employer's liability insurance; or

(b)  Commercial property and casualty insurance as defined in s. 627.0625(1) other than commercial multiple line and commercial motor vehicle,

shall make an annual base rate filing for each such line with the department no later than 12 months after its previous base rate filing, demonstrating that its rates are not inadequate.

(2)(a)  Deviations filed by an insurer to any rating organization's base rate filing are not subject to this section.

(b)  The department, after receiving a request to be exempted from the provisions of this section, may, for good cause due to insignificant numbers of policies in force or insignificant premium volume, exempt a company, by line of coverage, from filing rates or rate certification as required by this section.

(3)  The filing requirements of this section shall be satisfied by one of the following methods:

(a)  A rate filing prepared by an actuary which contains documentation demonstrating that the proposed rates are not excessive, inadequate, or unfairly discriminatory pursuant to the applicable rating laws and pursuant to rules of the department.

(b)  If no rate change is proposed, a filing which consists of a certification by an actuary that the existing rate level produces rates which are actuarially sound and which are not inadequate, as defined in s. 627.062.

(4)  An insurer may satisfy the annual filing requirements of this section by being a member or subscriber of a licensed rating organization which complies with the requirements of this section.

(5)  If an insurer does not employ or otherwise retain the services of an actuary, the insurer's rate filing or certification that rates are actuarially sound shall be prepared by insurer personnel or consultants with a minimum of 5 years' experience in insurance ratemaking. A rate filing or certification prepared by a consultant must be reviewed and signed by an employee of the insurer who is authorized to approve rate filings.

(6)  If at the time a filing is required under this section an insurer is in the process of completing a rate review, the insurer may apply to the department for an extension of up to an additional 30 days in which to make the filing. The request for extension must be received by the department no later than the date the filing is due.

(7)  Nothing in this section limits the department's authority to review rates at any time or to find that a rate or rate change is excessive, inadequate, or unfairly discriminatory pursuant to s. 627.062.

(8)  As used in this section, the term "actuary" means an individual who is a member of the Casualty Actuarial Society.

(9)  If an insurer fails to meet the filing requirements of this section and does not submit the filing within 60 days after the date the filing is due, the department may, in addition to any other penalty authorized by law, order the insurer to discontinue the issuance of policies for the line of insurance for which the required filing was not made until such time as the department determines that the required filing is properly submitted.

History.--s. 2, ch. 89-360; s. 1, ch. 90-192; s. 19, ch. 90-249; s. 11, ch. 90-366; ss. 21, 114, ch. 92-318.

627.06501  Insurance discounts for certain persons completing driver improvement course.--

(1)  Any rate, rating schedule, or rating manual for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the department may provide for an appropriate reduction in premium charges as to such coverages when the principal operator on the covered vehicle has successfully completed a driver improvement course approved and certified by the Department of Highway Safety and Motor Vehicles which is effective in reducing crash or violation rates, or both, as determined pursuant to ¹s. 318.1451(5). Any discount, not to exceed 10 percent, used by an insurer is presumed to be appropriate unless credible data demonstrates otherwise.

(2)  The premium reduction authorized by this section shall be effective for an insured for a 3-year period after successful completion of the approved course, except that the insurer may require, as a condition of maintaining the reduction, that the insured:

(a)  Not be involved in an accident for which the insured is at fault; and

(b)  Not be convicted of or plead guilty or nolo contendere to a moving traffic violation.

(3)  The organization offering the course shall, upon a person's successful completion of the course, issue the person a certificate that the person may use to qualify for the premium discount authorized by this section.

(4)  This section does not apply if the driver improvement course is taken in lieu of a court appearance for a traffic infraction as provided for in s. 318.14(9). However, the five-election restriction enumerated in that section is not applicable to taking the course for the purposes of receiving insurance premium reductions.

History.--s. 1, ch. 97-178.

¹Note.--Repealed by s. 14, ch. 99-5.

627.0651  Making and use of rates for motor vehicle insurance.--

(1)  Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on motor vehicle insurance written in this state. A copy of rates, rating schedules, and rating manuals, and changes therein, shall be filed with the department under one of the following procedures:

(a)  If the filing is made at least 60 days before the proposed effective date and the filing is not implemented during the department's review of the filing and any proceeding and judicial review, such filing shall be considered a "file and use" filing. In such case, the department shall initiate proceedings to disapprove the rate and so notify the insurer or shall finalize its review within 60 days after receipt of the filing. Notification to the insurer by the department of its preliminary findings shall toll the 60-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the department does not issue notice to the insurer of its preliminary findings within 60 days after the filing.

(b)  If the filing is not made in accordance with the provisions of paragraph (a), such filing shall be made as soon as practicable, but no later than 30 days after the effective date, and shall be considered a "use and file" filing. An insurer making a "use and file" filing is potentially subject to an order by the department to return to policyholders portions of rates found to be excessive, as provided in subsection (11).

(2)  Upon receiving notice of a rate filing or rate change, the department shall review the rate or rate change to determine if the rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the department shall in accordance with generally accepted and reasonable actuarial techniques consider the following factors:

(a)  Past and prospective loss experience within and outside this state.

(b)  The past and prospective expenses.

(c)  The degree of competition among insurers for the risk insured.

(d)  Investment income reasonably expected by the insurer, consistent with the insurer's investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. Such investment income shall not include income from invested surplus. The department may promulgate rules utilizing reasonable techniques of actuarial science and economics to specify the manner in which insurers shall calculate investment income attributable to motor vehicle insurance policies written in this state and the manner in which such investment income is used in the calculation of insurance rates. Such manner shall contemplate the use of a positive underwriting profit allowance in the rates that will be compatible with a reasonable rate of return plus provisions for contingencies. The total of the profit and contingency factor as specified in the filing shall be utilized in computing excess profits in conjunction with s. 627.066. In promulgating such rules, the department shall in all instances adhere to and implement the provisions of this paragraph.

(e)  The reasonableness of the judgment reflected in the filing.

(f)  Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida policyholders, members, or subscribers.

(g)  The cost of repairs to motor vehicles.

(h)  The cost of medical services, if applicable.

(i)  The adequacy of loss reserves.

(j)  The cost of reinsurance.

(k)  Trend factors, including trends in actual losses per insured unit for the insurer making the filing.

(l)  Other relevant factors which impact upon the frequency or severity of claims or upon expenses.

(3)  Rates shall be deemed excessive if they are likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered.

(4)  Rates shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when such replenishment is attributable to investment losses.

(5)(a)  Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.

(b)  The Insurance Commissioner shall have the responsibility to ensure that rates for private passenger vehicle insurance are adequate. To that end, the department shall promulgate rules and regulations establishing standards defining inadequate rates on private passenger vehicle insurance as defined in s. 627.041(8). In the event that the department finds that a rate or rate change is inadequate, the department shall order that a new rate or rate schedule be thereafter filed by the insurer and shall further provide information as to the manner in which noncompliance of the standards may be corrected. When a violation of this provision occurs, the department shall impose an administrative fine pursuant to s. 624.4211.

(6)  One rate shall be deemed unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses.

(7)  Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as rates reflect the differences with reasonable accuracy.

(8)  Rates are not unfairly discriminatory if averaged broadly among members of a group; nor are rates unfairly discriminatory even though they are lower than rates for nonmembers of the group. However, such rates are unfairly discriminatory if they are not actuarially measurable and credible and sufficiently related to actual or expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against. Use of a single United States Postal Service zip code as a rating territory shall be deemed unfairly discriminatory.

(9)  In reviewing the rate or rate change filed, the department may require the insurer to provide at the insurer's expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated herein.

(10)  The department may, at any time, review a rate or rate change, the pertinent records of the insurer, and market conditions; and, if the department finds on a preliminary basis that the rate or rate change may be excessive, inadequate, or unfairly discriminatory, the department shall so notify the insurer. However, the department may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for a period of 1 year after the effective date of the filing unless the department finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being so notified, the insurer or rating organization shall, within 60 days, file with the department all information which, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. In such instances and in any administrative proceeding relating to the legality of the rate, the insurer or rating organization shall carry the burden of proof by a preponderance of the evidence to show that the rate is not excessive, inadequate, or unfairly discriminatory. After the department notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the department withdraws the notification, the insurer shall not increase the rate until the earlier of 120 days after the date the notification was provided or 180 days after the date of the implementation of the rate. The department may, subject to chapter 120, disapprove without the 60-day notification any rate increase filed by an insurer within the prohibited time period or during the time that the legality of the increased rate is being contested.

(11)  In the event the department finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the department shall issue an order of disapproval specifying that a new rate or rate schedule which responds to the findings of the department be filed by the insurer. The department shall further order for any "use and file" filing made in accordance with paragraph (1)(b), that premiums charged each policyholder constituting the portion of the rate above that which was actuarially justified be returned to such policyholder in the form of a credit or refund. If the department finds that an insurer's rate or rate change is inadequate, the new rate or rate schedule filed with the department in response to such a finding shall be applicable only to new or renewal business of the insurer written on or after the effective date of the responsive filing.

(12)  Any portion of a judgment entered as a result of a statutory or common-law bad faith action and any portion of a judgment entered which awards punitive damages against an insurer shall not be included in the insurer's rate base, and shall not be used to justify a rate or rate change. Any portion of a settlement entered as a result of a statutory or common-law bad faith action identified as such and any portion of a settlement wherein an insurer agrees to pay specific punitive damages shall not be used to justify a rate or rate change. The portion of the taxable costs and attorney's fees which is identified as being related to the bad faith and punitive damages in these judgments and settlements shall not be included in the insurer's rate base and shall not be utilized to justify a rate or rate change.

(13)(a)  Underwriting rules not contained in rating manuals shall be filed for private passenger automobile insurance and homeowners' insurance.

(b)  The submission of rates, rating schedules, and rating manuals to the department by a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this subsection for any insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating schedules, and rating manuals of such organization. All such information shall be available for public inspection, upon receipt by the department, during usual business hours.

History.--s. 22, ch. 77-468; s. 8, ch. 78-374; s. 2, ch. 81-318; ss. 343, 357, 809(2nd), ch. 82-243; ss. 46, 47, 49, 79, ch. 82-386; s. 94, ch. 83-216; s. 16, ch. 85-245; s. 34, ch. 90-119; s. 114, ch. 92-318; s. 2, ch. 98-173.

627.0652  Insurance discounts for certain persons completing safety course.--

(1)  Any rates, rating schedules, or rating manuals for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the department shall provide for an appropriate reduction in premium charges as to such coverages when the principal operator on the covered vehicle is an insured 55 years of age or older who has successfully completed a motor vehicle accident prevention course approved by the Department of Highway Safety and Motor Vehicles. Any discount used by an insurer is presumed to be appropriate unless credible data demonstrates otherwise.

(2)  The premium reduction required by this section shall be effective for an insured for a 3-year period after successful completion of the approved course, except that the insurer may require, as a condition of maintaining the discount, that the insured:

(a)  Not be involved in an accident for which the insured is at fault; and

(b)  Not be convicted of or plead guilty or nolo contendere to a moving traffic violation.

(3)  The Department of Highway Safety and Motor Vehicles shall approve motor vehicle accident prevention courses for the purposes of this section. The Department of Highway Safety and Motor Vehicles shall consider the competency of the personnel offering the course, the quality of the content and activities of the course with respect to its capability to prevent accidents by persons age 55 or older who complete the course, and the reasonableness of the fee for the course. The Department of Highway Safety and Motor Vehicles shall establish the minimum number of hours necessary for completion of a course. A course approved by the Department of Highway Safety and Motor Vehicles shall require each person completing the course to pass a written test given by the course evaluating the person's knowledge of the content of the course.

(4)  The organization offering the course shall, upon a person's successful completion of the course, issue the person a certificate that the person may use to qualify for the premium discount required by this section.

(5)  This section does not apply if the approved course is taken as punishment specified by a court or other governmental entity resulting from a moving traffic violation.

History.--s. 1, ch. 85-244; s. 1, ch. 86-286; s. 1, ch. 88-250; ss. 22, 114, ch. 92-318.

627.0653  Insurance discounts for specified motor vehicle equipment.--

(1)  Any rates, rating schedules, or rating manuals for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the department shall provide a premium discount if the insured vehicle is equipped with factory-installed, four-wheel antilock brakes.

(2)  Each insurer writing motor vehicle comprehensive coverage in this state shall include in its rating manual discount provisions for comprehensive coverage which specifically relate to an antitheft device or vehicle recovery system utilized in the insured vehicle which are factory installed or approved by the department. The department shall adopt, by rule, procedures under which manufacturers, distributors, or sellers may apply to the department for approval of non-factory-installed devices under this subsection. The rules must include, at a minimum, the test results that must accompany the application and the standards for approval.

(3)  Any rates, rating schedules, or rating manuals for personal injury protection coverage and medical payments coverage, if offered, of a motor vehicle insurance policy filed with the department shall provide a premium discount if the insured vehicle is equipped with one or more air bags which are factory installed.

(4)  The removal of a discount or credit does not constitute the imposition of, or request for, additional premium or a surcharge if the basis for the discount or credit no longer exists or is substantially eliminated.

(5)  Each insurer writing motor vehicle comprehensive coverage in this state may provide a premium discount for this coverage if the insured vehicle has the complete manufacturer's vehicle identification number permanently etched on the windshield and all windows of the vehicle. The etching must be by a tool or process that does not destroy the integrity of the glass or visibility for the operator of the motor vehicle. The identification numbers and letters must be at least 1/4 inch in height. A sticker may identify the presence of this identification system. The department may, by rule, set forth appropriate guidelines to implement this subsection.

History.--ss. 37, 52, ch. 90-119; ss. 23, 109, 114, ch. 92-318.

627.06535  Electric vehicles; restrictions on imposing surcharges.--An insurer may not impose a surcharge on the premium for motor vehicle insurance written on an electric vehicle, as defined in s. 320.01, if the surcharge is based on a factor such as new technology, passenger payload, weight-to-horsepower ratio, or types of materials, including composite materials or aluminum, used to manufacture the vehicle, unless the Department of Insurance determines from actuarial data submitted to it that the surcharge is justified.

History.--s. 13, ch. 95-333.

627.0654  Insurance discounts for buildings with fire sprinklers.--

(1)  Any rates, rating schedules, or rating manuals for a new or renewal fire insurance policy for an existing or newly constructed building, whether used for commercial or residential purposes, must provide for a premium discount if a fire sprinkler system has been installed in the building in accordance with nationally accepted fire sprinkler design standards, as adopted by the department, and if the fire sprinkler system is maintained in accordance with nationally accepted standards.

(2)  The discount required by this section must provide a premium rate that is lower than that for a building in which a fire sprinkler system has not been installed. A discount used by an insurer is presumed appropriate unless credible data demonstrates otherwise.

History.--s. 4, ch. 95-379.

627.066  Excessive profits for motor vehicle insurance prohibited.--

(1)  As used herein:

(a)  "Private passenger automobile business" means that insurance business that is written on a family automobile policy, standard automobile policy, or personal automobile or similar private passenger automobile policy written for personal use, as opposed to commercial automobile insurance business.

(b)  "Cash" means coins, currency, checks, drafts, or money orders.

(2)  Each Florida private passenger automobile insurer group shall file with the department, prior to July 1 of each year on forms prescribed by the department, the following data for Florida private passenger automobile business. The data filed for the group shall be a consolidation of the data of the individual insurers of the group. The data shall include both voluntary and joint underwriting association business, as follows:

(a)  Calendar-year total limits earned premium.

(b)  Accident-year incurred losses and loss adjustment expenses.

(c)  The administrative and selling expenses incurred in this state or allocated to this state for the calendar year.

(d)  Policyholder dividends incurred during the applicable calendar year.

(3)(a)  Excessive profit has been realized if there has been an underwriting gain for the 3 most recent calendar-accident years combined which is greater than the anticipated underwriting profit plus 5 percent of earned premiums for those calendar-accident years.

(b)  As used herein with respect to any 3-year period, "anticipated underwriting profit" means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during such period, the earned premiums applicable to such rate filing during such period by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by Florida business. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.

(4)  Each insurer group shall also file a schedule of Florida private passenger automobile loss and loss adjustment experience for each of the 3 most recent accident years. The incurred losses and loss adjustment expenses shall be valued as of March 31 of the year following the close of the accident year, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of three evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1976, so that the reporting of 3 accident years will not take place until accident years 1977 and 1978 have become available.

(5)  Each insurer group's underwriting gain or loss for each calendar-accident year shall be computed as follows: The sum of the accident-year incurred losses and loss adjustment expenses as of March 31 of the following year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, will be subtracted from the calendar-year earned premium to determine the underwriting gain or loss.

(6)  For the 3 most recent calendar-accident years, the underwriting gain or loss will be compared to the anticipated underwriting profit.

(7)  If the insurer group has realized an excessive profit, the department shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the department that the refund of the excessive amounts will render a member of the insurer group financially impaired or will render it insolvent under the provisions of the Florida Insurance Code.

(8)  The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the voluntary private passenger automobile policyholders of record of the insurer group on December 31 of the final compilation year.

(9)  Any excess profit of an insurance company offering motor vehicle insurance shall be returned to policyholders in the form of a cash refund or a credit towards the future purchase of insurance.

(10)(a)  Cash refunds to policyholders may be rounded to the nearest dollar.

(b)  Data in required reports to the department may be rounded to the nearest dollar.

(c)  Rounding, if elected by the insurer group, shall be applied consistently.

(11)(a)  Refunds shall be completed in one of the following ways:

1.  If the insurer group elects to make a cash refund, the refund shall be completed within 60 days of entry of a final order indicating that excessive profits have been realized.

2.  If the insurer group elects to make refunds in the form of a credit to renewal policies, such credits shall be applied to policy renewal premium notices which are forwarded to insureds more than 60 calendar days after entry of a final order indicating that excessive profits have been realized. If an insurer group has made this election but an insured thereafter cancels his or her policy or otherwise allows the policy to terminate, the insurer group shall make a cash refund not later than 60 days after termination of such coverage.

(b)  Upon completion of the renewal credits or refund payments, the insurer group shall immediately certify to the department that the refunds have been made.

(12)  Any refund or renewal credit made pursuant to this section shall be treated as a policyholder dividend applicable to the year in which it is incurred, for purposes of reporting under this section for subsequent years.

(13)  Since it appears to the Legislature that private passenger automobile insurer groups have realized excessive profits during all or part of the years 1977, 1978, and 1979 and that such profits were realized in part due to statutory changes for which rates were not adequately adjusted, it is the desire and intent of the Legislature that the provisions of this section, as amended by chapter 80-236, Laws of Florida, shall apply retroactively to excessive profits realized during the years 1977, 1978, and 1979. In the event that such retroactive application is judicially determined to be unconstitutional, it is the intent of the Legislature that the act be given prospective application as stated hereinafter. Prior to July 1, 1982, the data required by this section shall be submitted to the department for the years 1979, 1980, and 1981. Excessive profits shall be calculated in accordance with the provisions of this section. However, only the excessive profits realized by the insurer group in 1981 shall be refunded to policyholders, and such refunds shall be made in accordance with this section. Prior to July 1, 1983, the data required by this section shall be submitted to the department for the years 1980, 1981, and 1982. Excessive profits shall be calculated in accordance with this section; however, refunds shall only be made for excessive profits realized in the years 1981 and 1982. Thereafter, excessive profits shall be calculated and refunded on the basis of 3 years as set forth in this section.

History.--s. 23, ch. 77-468; ss. 26, 27, ch. 80-236; s. 424, ch. 81-259; s. 2, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 2, ch. 90-366; s. 114, ch. 92-318; s. 316, ch. 97-102.

627.0661  Insurers to be added to those exempt from excess profit requirements.--Insurers described in ¹s. 624.509(10) are exempt from the excess profit requirements.

History.--s. 8, ch. 90-366.

¹Note.--Repealed by s. 39, ch. 92-173.

627.0665  Automatic bank withdrawal agreements; notification required.--Any insurer licensed to issue insurance in the state who has an automatic bank withdrawal agreement with an insured party for the payment of insurance premiums for any type of insurance shall give the named insured at least 15 days advance written notice of any increase in policy premiums prior to any automatic bank withdrawal of an increased premium.

History.--ss. 1, 2, ch. 88-320; s. 114, ch. 92-318.

627.072  Making and use of rates.--

(1)  As to workers' compensation and employer's liability insurance, the following factors shall be used in the determination and fixing of rates:

(a)  The past loss experience and prospective loss experience within and outside this state;

(b)  The conflagration and catastrophe hazards;

(c)  A reasonable margin for underwriting profit and contingencies;

(d)  Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

(e)  Investment income on unearned premium reserves and loss reserves;

(f)  Past expenses and prospective expenses, both those countrywide and those specifically applicable to this state; and

(g)  All other relevant factors, including judgment factors, within and outside this state.

(2)  As to all rates which are subject to this part, the systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

(3)  As to all rates which are subject to this part, risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that can be demonstrated to have a probable effect upon losses or expenses. Such classifications and modifications shall apply to all risks under the same or substantially the same circumstances or conditions.

(4)(a)  In the case of workers' compensation and employer's liability insurance, the department shall consider utilizing the following methodology in rate determinations: Premiums, expenses, and expected claim costs would be discounted to a common point of time, such as the initial point of a policy year, in the determination of rates; the cash-flow pattern of premiums, expenses, and claim costs would be determined initially by using data from 8 to 10 of the largest insurers writing workers' compensation insurance in the state; such insurers may be selected for their statistical ability to report the data on an accident-year basis and in accordance with subparagraphs (b)1., 2., and 3., for at least 21/2 years; such a cash-flow pattern would be modified when necessary in accordance with the data and whenever a radical change in the payout pattern is expected in the policy year under consideration.

(b)  If the methodology set forth in paragraph (a) is utilized, to facilitate the determination of such a cash-flow pattern methodology:

1.  Each insurer shall include in its statistical reporting to the rating bureau and the department the accident year by calendar quarter data for paid-claim costs;

2.  Each insurer shall submit financial reports to the rating bureau and the department which shall include total incurred claim amounts and paid-claim amounts by policy year and by injury types as of December 31 of each calendar year; and

3.  Each insurer shall submit to the rating bureau and the department paid-premium data on an individual risk basis in which risks are to be subdivided by premium size as follows:


Number of Risks in
  Premium Range

Standard Premium Size

 (to be filled in by carrier) 

$300--999

 (to be filled in by carrier) 

1,000--4,999

 (to be filled in by carrier) 

5,000--49,999

 (to be filled in by carrier) 

50,000--99,999

 (to be filled in by carrier) 

100,000 or more

Total:

4.  Each insurer which does not have the capability of reporting in accordance with subparagraphs 1., 2., and 3. shall be required to commence such reporting procedures as of January 1, 1980.

History.--s. 4, ch. 67-9; s. 1, ch. 70-179; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 24, ch. 77-468; s. 94, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 344, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 11, ch. 86-160; s. 114, ch. 92-318; s. 317, ch. 97-102; s. 5, ch. 2000-333.

627.091  Rate filings; workers' compensation and employer's liability insurances.--

(1)  As to workers' compensation and employer's liability insurances, every insurer shall file with the department every manual of classifications, rules, and rates, every rating plan, and every modification of any of the foregoing which it proposes to use. Every insurer is authorized to include deductible provisions in its manual of classifications, rules, and rates. Such deductibles shall in all cases be in a form and manner which is consistent with the underlying purpose of chapter 440.

(2)  Every such filing shall state the proposed effective date thereof, and shall indicate the character and extent of the coverage contemplated. When a filing is not accompanied by the information upon which the insurer supports the filing and the department does not have sufficient information to determine whether the filing meets the applicable requirements of this part, it shall within 15 days after the date of filing require the insurer to furnish the information upon which it supports the filing. The information furnished in support of a filing may include:

(a)  The experience or judgment of the insurer or rating organization making the filing;

(b)  Its interpretation of any statistical data it relies upon;

(c)  The experience of other insurers or rating organizations; or

(d)  Any other factors which the insurer or rating organization deems relevant.

(3)  A filing and any supporting information shall be open to public inspection as provided in s. 119.07(1).

(4)  An insurer may satisfy its obligation to make such filings by becoming a member of, or a subscriber to, a licensed rating organization which makes such filings and by authorizing the department to accept such filings in its behalf; but nothing contained in this chapter shall be construed as requiring any insurer to become a member or a subscriber to any rating organization.

(5)  Pursuant to the provisions of s. 624.3161, the department may examine the underlying statistical data used in such filings.

(6)  Whenever the committee of a recognized rating organization with responsibility for workers' compensation and employer's liability insurance rates in this state meets to discuss the necessity for, or a request for, Florida rate increases or decreases, the determination of Florida rates, the rates to be requested, and any other matters pertaining specifically and directly to such Florida rates, such meetings shall be held in this state and shall be subject to s. 286.011. The committee of such a rating organization shall provide at least 3 weeks' prior notice of such meetings to the department and shall provide at least 14 days' prior notice of such meetings to the public by publication in the Florida Administrative Weekly.

History.--s. 419, ch. 59-205; s. 5, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 20, ch. 78-300; s. 95, ch. 79-40; ss. 20, 22, ch. 80-236; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 4, 9, 10, ch. 87-124; s. 63, ch. 91-108; s. 4, ch. 91-429; s. 1, ch. 93-289.

627.0915  Rate filings; workers' compensation, drug-free workplace, and safe employers.--The Department of Insurance shall approve rating plans for workers' compensation insurance that give specific identifiable consideration in the setting of rates to employers that either implement a drug-free workplace program pursuant to rules adopted by the Division of Workers' Compensation of the Department of Labor and Employment Security or implement a safety program approved by the Division of Safety pursuant to rules adopted by the Division of Safety of the Department of Labor and Employment Security or implement both a drug-free workplace program and a safety program. The Division of Safety may by rule require that the client of a help supply services company comply with the essential requirements of a workplace safety program as a condition for receiving a premium credit. The plans must take effect January 1, 1994, must be actuarially sound, and must state the savings anticipated to result from such drug-testing and safety programs.

History.--s. 51, ch. 90-201; s. 49, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429; s. 94, ch. 93-415; s. 5, ch. 98-126.

627.0916  Agricultural horse farms.--Notwithstanding any other provision of this chapter to the contrary, any rates, rating schedules, or rating manuals for workers' compensation and employer's liability insurance filed with the Department of Insurance shall provide for the rates of an agricultural horse farm engaged in breeding or training to be separated into the following three rate classifications and the premium paid shall be applied proportionately according to payroll: breeding activity involving stallions; breeding activity not involving stallions, including but not limited to boarding and foaling; and training.

History.--s. 96, ch. 93-415; s. 2, ch. 95-219.

627.092  Workers' Compensation Administrator.--There is created within the Division of Insurer Services of the Department of Insurance the position of Workers' Compensation Administrator to monitor carrier practices in the field of workers' compensation.

History.--s. 21, ch. 78-300; s. 96, ch. 79-40; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 6, ch. 97-93.

627.093  Application of s. 286.011 to workers' compensation and employer's liability insurances.--Section 286.011 shall be applicable to every rate filing, approval or disapproval of filing, rating deviation from filing, or appeal from any of these regarding workers' compensation and employer's liability insurances.

History.--s. 97, ch. 79-40; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.

627.096  Workers' Compensation Rating Bureau.--

(1)  There is created within the department a Workers' Compensation Rating Bureau, which shall make an investigation and study of all insurers authorized to issue workers' compensation and employer's liability coverage in this state. Such bureau shall study the data, statistics, schedules, or other information as it may deem necessary to assist and advise the department in its review of filings made by or on behalf of workers' compensation and employer's liability insurers. The department shall have the authority to promulgate rules requiring all workers' compensation and employer's liability insurers to submit to the rating bureau any data, statistics, schedules, and other information deemed necessary to the rating bureau's study and advisement.

(2)  The acquisition by the Department of Management Services of data processing software, hardware, and services necessary to carry out the provisions of this act for the Treasurer's Management Information Center of the Department of Insurance shall be exempt from the provisions of part I of chapter 287.

History.--s. 98, ch. 79-40; s. 2, ch. 81-318; ss. 345, 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 5, 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 313, ch. 92-279; s. 55, ch. 92-326.

627.101  When filing becomes effective; workers' compensation and employer's liability insurances.--

(1)  The department shall review filings as to workers' compensation and employer's liability insurances as soon as reasonably possible after they have been made in order to determine whether they meet the applicable requirements of this part. If the department determines that part of a rate filing does not meet the applicable requirements of this part, it may reject so much of the filing as does not meet these requirements, and approve the remainder of the filing.

(2)  The department shall specifically approve the filing before it becomes effective, unless the department has concluded it to be in the public interest to hold a public hearing to determine whether the filing meets the requirements of this chapter and has given notice of such hearing to the insurer or rating organization that made the filing, and in which case the effectiveness of the filing shall be subject to the further order of the department made as provided in s. 627.111. If the department specifically disapproves the filing, the provisions of subsection (4) shall apply.

(3)  An insurer or rating organization may, at the time it makes a filing with the department, request a public hearing thereon. In such event, the department shall give notice of the hearing.

(4)  If the department disapproves a filing, it shall promptly give notice of such disapproval to the insurer or rating organization that made the filing, stating the respects in which it finds that the filing does not meet the requirements of this chapter. If the department approves a filing, it shall give prompt notice thereof to the insurer or rating organization that made the filing, and in which case the filing shall become effective upon such approval or upon such subsequent date as may be satisfactory to the department and the insurer or rating organization that made the filing.

History.--s. 420, ch. 59-205; s. 6, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 22, ch. 78-300; s. 99, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 2, ch. 93-289.

627.111  Effective date of filing.--

(1)  If, pursuant to s. 627.101(2), the department determines to hold a public hearing as to a filing, or it holds such a public hearing pursuant to request therefor under s. 627.101(3), it shall give written notice thereof to the rating organization or insurer that made the filing and shall hold such hearing within 30 days, and not less than 10 days prior to the date of the hearing, it shall give written notice of the hearing to the insurer or rating organization that made the filing. The department may also, in its discretion, give advance public notice of such hearing by publication of notice in one or more daily newspapers of general circulation in this state.

(2)  If the order of the department disapproves the filing, the filing shall not become effective during the effectiveness of such order. If the order of the department approves the filing, the filing shall become effective upon the date of the order or upon such subsequent date as may be satisfactory to the insurer or rating organization that made the filing.

History.--s. 421, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 3, ch. 93-289.

627.141  Subsequent disapproval of filing; workers' compensation and employer's liability insurances.--If at any time after a filing has been approved by it or has otherwise become effective the department finds that the filing no longer meets the requirements of this chapter, it shall issue an order specifying in what respects it finds that such filing fails to meet such requirements and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. The order shall not affect any insurance contract or policy made or issued prior to the expiration of the period set forth in the order.

History.--s. 424, ch. 59-205; s. 7, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 100, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.

627.151  Basis of approval or disapproval of workers' compensation or employer's liability insurance filing; scope of disapproval power.--

(1)  In determining at any time whether to approve or disapprove a filing as to workers' compensation or employer's liability insurance, or to permit the filing otherwise to become effective, the department shall give consideration only to the applicable standards and factors referred to in ss. 627.062 and 627.072.

(2)  As to workers' compensation and employer's liability insurances, no manual of classifications, rule, rating plan, rating system, plan of operation, or any modification of any of the foregoing which establishes standards for measuring variations in hazards or expense provisions, or both, shall be disapproved if the rates thereby produced meet the applicable requirements of this part.

History.--s. 425, ch. 59-205; s. 8, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 101, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.

627.1615  Workers' compensation applicant discrimination.--Insurers shall not refuse to provide workers' compensation coverage on the basis of the applicant's premium volume.

History.--s. 52, ch. 90-201; s. 50, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429.

627.162  Requirements for premium installments; delinquency, collection, and check return charges; attorney's fees.--

(1)  Insurers providing workers' compensation coverage under chapter 440 shall provide, upon request of the employer, policies providing for the payment of premiums by installment for policies with annual premiums exceeding $1,000.

(2)  Insurers providing workers' compensation coverage under chapter 440 may charge the insured a delinquency and collection fee on each installment in default for a period of not less than 5 days in an amount not to exceed $10 or 5 percent of the delinquent installment, whichever is greater. Only one such delinquency and collection fee may be collected on any such installment regardless of the period during which it remains in default.

(3)  If an installment in default under this section is referred for collection to an attorney, the insured is liable for the payment of attorney's fees not exceeding 25 percent of the sum of the installment and any delinquency and collection fee charged by the insurer.

(4)  Notwithstanding other provisions of this section, an insurer may not take or receive from or charge an insured any collection fee or attorney's fee unless the insurer has mailed a notice of the default to the insured at his or her address as shown on the records of the insurer, giving the insured at least 5 days within which to make the payment in default. A notice of cancellation sent by the insurer to the insured in accordance with s. 440.42 is legally sufficient notice of the default for purposes of this section.

(5)  If a payment is made to an insurer by check or draft and the instrument is returned because of insufficient funds, the insurer may impose a charge of $20 or 5 percent of the check amount, whichever is greater.

(6)  The term "insurer," for purposes of this section, includes a commercial self-insurance fund as defined in s. 624.462, an assessable mutual insurer as defined in s. 628.6011, and a group self-insurer's fund as defined in s. 624.4621.

History.--s. 53, ch. 90-201; s. 51, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429; s. 24, ch. 92-318; s. 318, ch. 97-102; s. 28, ch. 99-3.

627.171  Excess rates.--

(1)  With written consent of the insured signed prior to the policy inception date and filed with the insurer, the insurer may use a rate in excess of the otherwise applicable filed rate on any specific risk. The signed consent form must include the filed rate as well as the excess rate for the risk insured and a copy of the form must be maintained by the insurer for 3 years and be available for review by the department.

(2)  An insurer may not use excess rates pursuant to this section for more than 10 percent of its commercial insurance policies written or renewed in each calendar year for any line of commercial insurance or for more than 5 percent of its personal lines insurance policies written or renewed in each calendar year for any line of personal insurance.

History.--s. 427, ch. 59-205; s. 9, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 53, ch. 89-360; s. 4, ch. 91-429.

627.191  Adherence to filings; workers' compensation and employer's liability insurances.--No insurer or employee thereof, and no agent, shall make or issue a contract or policy of workers' compensation or employer's liability insurance except in accordance with the filings which are in effect for such insurer, as provided in the applicable provisions of this part, or in accordance with s. 627.171.

History.--s. 429, ch. 59-205; s. 11, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 102, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.

627.192  Workers' compensation insurance; employee leasing arrangements.--

(1)  The purpose of this section is to ensure that an employer who leases some or all of its workers properly obtains workers' compensation insurance coverage for all of its employees, including those leased from or coemployed with another entity, and that premium paid by an employee leasing company is commensurate with exposure and anticipated claim experience for all employees.

(2)  For purposes of the Florida Insurance Code:

(a)  "Employee leasing" shall have the same meaning as set forth in s. 468.520(4).

(b)  "Experience rating modification" means a factor applied to a premium to reflect a risk's variation from the average risk. The experience modification is determined by comparing actual losses to expected losses, using the risk's own past experience.

(c)  "Leased employee" means a person performing services for a lessee under an employee leasing arrangement.

(d)  "Lessee" means an entity which obtains all or part of its workforce from another entity through an employee leasing arrangement or which employs the services of an entity through an employee leasing arrangement.

(e)  "Lessor" means an employee leasing company, as set forth in part XI of chapter 468, engaged in the business of or holding itself out as being in the business of employee leasing. A lessor may also be referred to as an employee leasing company.

(f)  "Premium subject to dispute" means that the insured has provided a written notice of dispute to the insurer or service carrier, has initiated any applicable proceeding for resolving such disputes as prescribed by law or rating organization procedures approved by the department, or has initiated litigation regarding the premium dispute. The insured must have detailed the specific areas of dispute and provided an estimate of the premium the insured believes to be correct. The insured must have paid any undisputed portion of the bill.

(3)  A lessor that obtains coverage in the voluntary workers' compensation market may elect, with the voluntary market insurer's knowledge and consent, to secure the coverage on leased employees through a workers' compensation policy issued to the lessor. The insurer of the lessor may, in its discretion, take all reasonable steps to ascertain exposure under the policy and collect the appropriate premium by:

(a)  Requiring the lessor to provide a complete description of lessor's operations.

(b)  Requiring periodic reporting by the lessor of covered lessees' payroll, classifications, claims information, loss data, and jurisdictions with exposure. This reporting may be supplemented by a requirement for lessees to submit to the carrier Internal Revenue Service Form 941 or its equivalent on a quarterly basis.

(c)  Auditing the lessor's operations.

(d)  Using other reasonable measures to determine the appropriate premium.

(4)  A lessor that applies for coverage or is covered through the voluntary market shall also maintain and furnish to the insurer on an annual basis, and as the insurer may otherwise reasonably require, sufficient information to permit the calculation of an experience modification factor for each lessee upon termination of the employee leasing relationship. Information accruing during the term of the leasing arrangement which is used to calculate an experience modification factor for a lessee upon termination of the leasing relationship shall continue to be used in the future experience ratings of the lessor. Such information shall include:

(a)  The lessee's corporate name.

(b)  The lessee's taxpayer or employer identification number.

(c)  Payroll summaries and class codes applicable to each lessee, and, if requested by the insurer, a listing of all leased employees associated with a given lessee.

(d)  Claims information grouped by lessee, and any other information maintained by or readily available to the lessor that is necessary for the calculation of an experience modification factor for each lessee.

(5)  In addition to any other provision of law, any material violation of this section by an employee leasing company is grounds for cancellation or nonrenewal of the lessor's insurance policy provided that the employee leasing company has been provided a reasonable opportunity to cure the violation. If an employee leasing company has received notice that its workers' compensation insurance policy will be canceled or nonrenewed, the leasing company shall notify by certified mail, within 15 days after receipt of the notice, all of the lessees for which there is an employee leasing arrangement covered under the policy to be canceled, except notice is not required if the employee leasing company has obtained another insurance policy with an effective date that is the same as the date of cancellation or nonrenewal.

(6)  If the employee leasing arrangement with a lessee is terminated, the lessee shall be assigned an experience modification factor which reflects its experience during the experience period specified by the approved experience rating plan, including, if applicable, experience incurred for leased employees under the employee leasing arrangements. The employee leasing company shall notify the insurer of its intent to terminate any lessee relationship prior to termination when feasible. When prior notice is not feasible, the employee leasing company shall notify its insurer within 5 working days following actual termination.

(7)  This section shall not have any effect on the statutory obligation, if any, of a lessee to secure workers' compensation coverage for employees that the lessee does not coemploy or lease pursuant to an employee leasing arrangement.

(8)  A lessee shall not enter into an employee leasing relationship or be eligible for workers' compensation coverage in the voluntary market if the lessee owes its current or a prior insurer any premium for workers' compensation insurance, or if the lessee owes its current or prior employee leasing company amounts due under the service agreement, except for premium or amounts due that are subject to dispute. For the purposes of this section and compliance with other laws and regulations, a lessor may rely on a sworn statement by the lessee that the lessee has met any and all prior premium or fee obligations, unless the lessor has actual knowledge to the contrary.

(9)  Insurers shall conduct annual audits of payroll and classifications of employee leasing companies in order to ensure that the appropriate premium is charged for workers' compensation coverage. The audits shall be conducted to ensure that all sources of payment by lessors to employees, subcontractors, and independent contractors have been reviewed and the accuracy of classifications of employees has been verified. Insurers may provide for more frequent audits of lessors based on such factors as amount of premium, type of business, loss ratios, or other relevant factors. Payroll and classification verification audit rules of insurers must include, but need not be limited to, use by the insurer of state and federal reports of employee income, payroll and other accounting records, certificates of insurance maintained by subcontractors, and duties of employees.

(10)  If a lessor or a lessee fails to provide reasonable access to payroll and classification records for a payroll and classification audit, the insured shall pay a premium to the insurer not to exceed three times the most recent estimated annual premium. However, the lessor is not subject to such penalty if the failure to obtain the needed records is the direct result of the acts or omissions of the lessee.

(11)  This section shall take effect July 1, 1998, and shall apply to any workers' compensation insurance policy issued to or renewed with an employee leasing company on or after October 1, 1998.

History.--s. 95, ch. 98-199.

627.211  Deviations; workers' compensation and employer's liability insurances.--

(1)  Every member or subscriber to a rating organization shall, as to workers' compensation or employer's liability insurance, adhere to the filings made on its behalf by such organization; except that any such insurer may make written application to the department for permission to file a uniform percentage decrease or increase to be applied to the premiums produced by the rating system so filed for a kind of insurance, for a class of insurance which is found by the department to be a proper rating unit for the application of such uniform percentage decrease or increase, or for a subdivision of workers' compensation or employer's liability insurance:

(a)  Comprised of a group of manual classifications which is treated as a separate unit for ratemaking purposes; or

(b)  For which separate expense provisions are included in the filings of the rating organization.

Such application shall specify the basis for the modification and shall be accompanied by the data upon which the applicant relies. A copy of the application and data shall be sent simultaneously to the rating organization.

(2)  Every member or subscriber to a rating organization may, as to workers' compensation and employer's liability insurance, file a plan or plans to use deviations that vary according to factors present in each insured's individual risk. The insurer that files for the deviations provided in this subsection shall file the qualifications for the plans, schedules of rating factors, and the maximum deviation factors which shall be subject to the approval of the department pursuant to s. 627.091. The actual deviation which shall be used for each insured that qualifies under this subsection may not exceed the maximum filed deviation under that plan and shall be based on the merits of each insured's individual risk as determined by using schedules of rating factors which shall be applied uniformly. Insurers shall maintain statistical data in accordance with the schedule of rating factors. Such data shall be available to support the continued use of such varying deviations.

(3)  In considering an application for the deviation, the department shall give consideration to the applicable principles for ratemaking as set forth in ss. 627.062 and 627.072, the financial condition of the insurer, and the impact of the deviation on the current market conditions including the composition of the market, the stability of rates, and the level of competition in the market. In evaluating the financial condition of the insurer, the department may consider: (1) the insurer's audited financial statements and whether the statements provide unqualified opinions or contain significant qualifications or "subject to" provisions; (2) any independent or other actuarial certification of loss reserves; (3) whether workers' compensation and employer's liability reserves are above the midpoint or best estimate of the actuary's reserve range estimate; (4) the adequacy of the proposed rate; (5) historical experience demonstrating the profitability of the insurer; (6) the existence of excess or other reinsurance that contains a sufficiently low attachment point and maximums that provide adequate protection to the insurer; and (7) other factors considered relevant to the financial condition of the insurer by the department. The department shall approve the deviation if it finds it to be justified, it would not endanger the financial condition of the insurer, it would not adversely affect the current market conditions including the composition of the market, the stability of rates, and the level of competition in the market, and that the deviation would not constitute predatory pricing. It shall disapprove the deviation if it finds that the resulting premiums would be excessive, inadequate, or unfairly discriminatory, would endanger the financial condition of the insurer, or would adversely affect current market conditions including the composition of the marketplace, the stability of rates, and the level of competition in the market, or would result in predatory pricing. The insurer may not use a deviation unless the deviation is specifically approved by the department.

(4)  No filing for a deviation may be made pursuant to this section prior to January 1, 1997. Notwithstanding the provisions of this subsection, the department may extend or renew any deviation filed and approved prior to the effective date of this subsection.

(5)  Each deviation permitted to be filed shall be effective for a period of 1 year unless terminated, extended, or modified with the approval of the department. If at any time after a deviation has been approved the department finds that the deviation no longer meets the requirements of this code, it shall notify the insurer in what respects it finds that the deviation fails to meet such requirements and specify when, within a reasonable period thereafter, the deviation shall be deemed no longer effective. The notice shall not affect any insurance contract or policy made or issued prior to the expiration of the period set forth in the notice.

(6)  For purposes of this section, the department, when considering the experience of any insurer, shall consider the experience of any predecessor insurer when the business and the liabilities of the predecessor insurer were assumed by the insurer pursuant to an order of the department which approves the assumption of the business and the liabilities.

History.--s. 431, ch. 59-205; s. 12, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 103, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 6, 9, 10, ch. 87-124; s. 17, ch. 90-249; s. 7, ch. 90-366; s. 4, ch. 91-429; s. 1, ch. 96-405.

627.212  Workplace safety program surcharge.--The department shall approve a rating plan for workers' compensation coverage insurance that provides for carriers voluntarily to impose a surcharge of no more than 10 percent on the premium of a policyholder or fund member if that policyholder or fund member has been identified by the Department of Labor and Employment Security as having been required to implement a safety program and having failed to establish or maintain, either in whole or in part, a safety program. The division shall adopt rules prescribing the criteria for the employee safety programs.

History.--s. 97, ch. 93-415; s. 12, ch. 99-240.

627.215  Excessive profits for workers' compensation, employer's liability, commercial property, and commercial casualty insurance prohibited.--

(1)(a)  Each insurer group writing workers' compensation and employer's liability insurance as defined in s. 624.605(1)(c), commercial property insurance as defined in s. 627.0625, commercial umbrella liability insurance as defined in s. 627.0625, or commercial casualty insurance as defined in s. 627.0625 shall file with the department prior to July 1 of each year, on a form prescribed by the department, the following data for the component types of such insurance as provided in the form:

1.  Calendar-year earned premium.

2.  Accident-year incurred losses and loss adjustment expenses.

3.  The administrative and selling expenses incurred in this state or allocated to this state for the calendar year.

4.  Policyholder dividends applicable to the calendar year.

Nothing herein is intended to prohibit an insurer from filing on a calendar-year basis.

(b)  The data filed for the group shall be a consolidation of the data of the individual insurers of the group. However, an insurer may elect to either consolidate commercial umbrella liability insurance data with commercial casualty insurance data or to separately file data for commercial umbrella liability insurance. Each insurer shall elect its method of filing commercial umbrella liability insurance at the time of filing data for accident year 1987 and shall thereafter continue filing under the same method. In the case of commercial umbrella liability insurance data reported separately, a separate excessive profits test shall be applied and the test period shall be 10 years. In the case of workers' compensation and employer's liability insurance, the final report for the test period including accident years 1984, 1985, and 1986 must be filed prior to July 1, 1988. In the case of commercial property and commercial casualty insurance, the final report for the test period including accident years 1987, 1988, and 1989 must be filed prior to July 1, 1991.

(2)  Each insurer group writing workers' compensation and employer's liability insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 3 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year to be reported, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of three evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1984, so that the reporting of 3 accident years under this revised evaluation will not take place until accident years 1985 and 1986 have become available. For reporting purposes unrelated to determining excessive profits, the loss and loss adjustment experience of each accident year shall continue to be reported until each accident year has been reported at eight stages of development.

(3)(a)  Each insurer group writing commercial property insurance or commercial casualty insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 3 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of 3 evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1987, which shall first be reported on or before July 1, 1989, and the reporting of 3 accident years will not take place until accident years 1988 and 1989 have become available. For medical malpractice insurance, the first year to be so reported shall be accident year 1990, which shall first be reported on or before July 1, 1992, and the reporting of 3 accident years for full inclusion of medical malpractice experience in commercial casualty insurance will not take place until accident years 1991 and 1992 become available. Accordingly, no medical malpractice insured shall be eligible for refunds or credits until the reporting period ending with calendar-accident year 1992. For reporting purposes unrelated to determining excess profits, the loss and loss adjustment experience of each accident year shall continue to be reported until each accident year has been reported at eight stages of development.

(b)  Each insurer group writing commercial umbrella liability insurance which elects to file separate data for such insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 10 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year, developed to an ultimate basis, and at nine 12-month intervals thereafter, each developed to an ultimate basis, so that a total of 10 evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1987, which shall first be reported on or before October 1, 1989, and the reporting of 10 accident years will not take place until accident year 1996 data is reported.

(4)  Each insurer group's underwriting gain or loss for each calendar-accident year shall be computed as follows: The sum of the accident-year incurred losses and loss adjustment expenses as of December 31 of the year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, shall be subtracted from the calendar-year earned premium to determine the underwriting gain or loss.

(5)  For the 3 most recent calendar-accident years for which data is to be filed under this section, the underwriting gain or loss shall be compared to the anticipated underwriting profit, except in the case of separately reported commercial umbrella liability insurance for which such comparison shall be made for the 10 most recent calendar-accident years.

(6)  For those insurer groups writing workers' compensation and employer's liability insurance during the years 1984, 1985, 1986, 1987, and 1988, an excessive profit has been realized if underwriting gain is greater than the anticipated underwriting profit plus 5 percent of earned premiums for the 3 most recent calendar years for which data is to be filed under this section. Any excess profit of an insurance company offering workers' compensation or employer's liability insurance during this period of time, shall be returned to policyholders in the form of a cash refund or a credit toward future purchase of insurance. The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the workers' compensation policyholders of record of the insurer group on December 31 of the final compilation year.

(7)(a)  Beginning with the July 1, 1991, report for workers' compensation insurance, employer's liability insurance, commercial property insurance, and commercial casualty insurance, an excessive profit has been realized if the net aggregate underwriting gain for all these lines combined is greater than the net aggregate anticipated underwriting profit for these lines plus 5 percent of earned premiums for the 3 most recent calendar years for which data is to be filed under this section. For calculation purposes commercial property insurance and commercial casualty insurance shall be broken down into sublines in order to ascertain the anticipated underwriting profit factor versus the actual underwriting gain for the given subline.

(b)  Beginning with the July 1, 1998, report for commercial umbrella liability insurance, if an insurer has elected to file data separately for such insurance, an excessive profit has been realized if the underwriting gain for such insurance is greater than the anticipated underwriting profit for such insurance plus 5 percent of earned premiums for the 10 most recent calendar years for which data is to be filed under this section.

(8)  As used in this section with respect to any 3-year period, or with respect to any 10-year period in the case of commercial umbrella liability insurance, "anticipated underwriting profit" means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during such period, the earned premiums applicable to such rate filing during such period by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by Florida business, except that the anticipated underwriting profit for the purposes of this section shall be calculated using a profit and contingencies factor that is not less than zero. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.

(9)  If the insurer group has realized an excessive profit, the department shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the department that the refund of the excessive amounts will render a member of the insurer group financially impaired or will render it insolvent under the provisions of the Florida Insurance Code.

(10)  Any excess profit of an insurance company as determined on July 1, 1991, and thereafter shall be returned to policyholders in the form of a cash refund or a credit toward the future purchase of insurance. The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the policyholders of record of the insurer group on December 31 of the final compilation year.

(11)(a)  Cash refunds to policyholders may be rounded to the nearest dollar.

(b)  Data in required reports to the department may be rounded to the nearest dollar.

(c)  Rounding, if elected by the insurer, shall be applied consistently.

(12)(a)  Refunds shall be completed in one of the following ways:

1.  If the insurer group elects to make a cash refund, the refund shall be completed within 60 days of entry of a final order indicating that excessive profits have been realized.

2.  If the insurer group elects to make refunds in the form of a credit to renewal policies, such credits shall be applied to policy renewal premium notices which are forwarded to insureds more than 60 calendar days after entry of a final order indicating that excessive profits have been realized. If an insurer group has made this election but an insured thereafter cancels her or his policy or otherwise allows the policy to terminate, the insurer group shall make a cash refund not later than 60 days after termination of such coverage.

(b)  Upon completion of the renewal credits or refund payments, the insurer group shall immediately certify to the department that the refunds have been made.

(13)  Any refund or renewal credit made pursuant to this section shall be treated as a policyholder dividend applicable to the year immediately succeeding the compilation period giving rise to the refund or credit, for purposes of reporting under this section for subsequent years.

(14)  The application of this law to commercial property and commercial casualty insurance, which includes commercial umbrella liability insurance, ceases on January 1, 1997.

History.--s. 104, ch. 79-40; ss. 21, 22, ch. 80-236; s. 425, ch. 81-259; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 7, 9, 10, ch. 87-124; s. 3, ch. 88-390; s. 2, ch. 89-225; s. 8, ch. 90-249; ss. 1, 3, ch. 90-366; s. 4, ch. 91-429; s. 15, ch. 95-276; s. 319, ch. 97-102; ss. 1, 2, ch. 97-292; s. 6, ch. 2000-333.

627.221  Rating organizations; licensing; fee.--

(1)  A person, whether located within or outside this state, may make application to the department for a license as a rating organization. As to property or inland marine insurance, the application shall be for such kinds of insurance or subdivisions thereof or classes of risk or a part or combination thereof as are specified in the application. As to casualty and surety insurances, the application shall be for such kinds of insurance or subdivisions thereof as are specified in the application. The applicant shall file with its application:

(a)  A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules, and regulations governing the conduct of its business;

(b)  A list of its members and subscribers;

(c)  The name and address of a resident of this state upon whom notices or orders of the department or process affecting such rating organization may be served; and

(d)  A statement of its qualifications as a rating organization.

If the department finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules, and regulations governing the conduct of its business conform to the requirements of law, it shall issue a license specifying (in the case of a casualty or surety rating organization) the kinds of insurance or subdivisions thereof, or (in the case of a property insurance rating organization) the kinds of insurance or subdivisions thereof or classes of risk or a part or combination thereof, for which the applicant is authorized to act as a rating organization.

(2)  Licenses issued pursuant to this section shall expire on the September 30 next following date of issuance and shall be subject to annual renewal.

(3)  The fee for the license shall be in the amount specified therefor in s. 624.501. This fee, when collected, shall be deposited to the credit of the Insurance Commissioner's Regulatory Trust Fund.

History.--s. 432, ch. 59-205; s. 17, ch. 65-269; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 346, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.231  Subscribers to rating organizations.--

(1)  Subject to rules and regulations which have been approved by the department as reasonable, each rating organization shall permit any insurer, not a member, to subscribe to its rating services. As to property and marine rating organizations, an insurer shall be so permitted to subscribe to rating services for any kind of insurance, subdivision thereof, or class of risk or a part or combination thereof for which the rating organization is authorized so to act. As to casualty and surety rating organizations, an insurer shall be so permitted to subscribe to rating services for any kind of insurance or subdivision thereof for which the rating organization is authorized so to act. The rating organization shall give notice to subscribers of proposed changes in such rules and regulations.

(2)  The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber, shall, at the request of any subscriber or any such insurer, be reviewed by the department. If the department finds that such rule or regulation is unreasonable in its application to subscribers, it shall order that such rule or regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurer's application for subscribership within 30 days after it was made, the insurer may request a review by the department as if the application had been rejected. If the department finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, it shall order the rating organization to admit the insurer as a subscriber. If it finds that the action of the rating organization was justified, it shall make an order affirming its action.

(3)  Each rating organization shall furnish its rating services without discrimination to its members and subscribers.

History.--s. 433, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.241  Notice of changes.--Every rating organization shall notify the department promptly of every change in:

(1)  Its constitution, its articles of agreement or association, or its certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business;

(2)  Its list of members and subscribers; and

(3)  The name and address of the resident of this state designated by it upon whom notices or orders of the department or process affecting such rating organization may be served.

History.--s. 434, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.251  Bureau rules not to affect dividends.--No rating organization shall adopt any rule the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.

History.--s. 435, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.261  Actuarial and technical services.--Any rating organization may subscribe for or purchase actuarial, technical, or other services; and such services shall be available to all members and subscribers without discrimination.

History.--s. 436, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.281  Appeal from rating organization; workers' compensation and employer's liability insurance filings.--

(1)  Any member or subscriber to a rating organization may appeal to the department from the action or decision of such rating organization in approving or rejecting any proposed change in or addition to the workers' compensation or employer's liability insurance filings of such rating organization, and the department shall issue an order approving the decision of such rating organization or directing it to give further consideration to such proposal. If such appeal is from the action or decision of the rating organization in rejecting a proposed addition to its filings, the department may, in the event it finds that such action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings, on behalf of its members and subscribers, in a manner consistent with its findings, within a reasonable time after the issuance of such order.

(2)  If such appeal is based upon the failure of the rating organization to make a filing on behalf of such member or subscriber which is based on a system of expense provisions which differs, in accordance with the right granted in s. 627.072(2), from the system of expense provisions included in a filing made by the rating organization, the department shall, if it grants the appeal, order the rating organization to make the requested filing for use by the appellant. In deciding such appeal, the department shall apply the applicable standards set forth in ss. 627.062 and 627.072.

History.--s. 438, ch. 59-205; s. 13, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 105, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.

627.291  Information to be furnished insureds; appeal by insureds; workers' compensation and employer's liability insurances.--

(1)  As to workers' compensation and employer's liability insurances, every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate.

(2)  As to workers' compensation and employer's liability insurances, every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his or her authorized representative, on his or her written request to review the manner in which such rating system has been applied in connection with the insurance afforded him or her. If the rating organization or insurer fails to grant or rejects such request within 30 days after it is made, the applicant may proceed in the same manner as if his or her application had been rejected. Any party affected by the action of such rating organization or insurer on such request may, within 30 days after written notice of such action, appeal to the department, which may affirm or reverse such action.

History.--s. 439, ch. 59-205; s. 14, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 106, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 320, ch. 97-102.

627.301  Advisory organizations.--

(1)  No advisory organization shall conduct its operations in this state unless and until it has filed with the department:

(a)  A copy of its constitution, articles of incorporation, articles of agreement or of association, and bylaws or rules and regulations governing its activities, all duly certified by the custodian of the originals thereof;

(b)  A list of its members and subscribers; and

(c)  The name and address of a resident of this state upon whom notices or orders of the department or process may be served.

(2)  Every such advisory organization shall notify the department promptly of every change in:

(a)  Its constitution;

(b)  Its articles of incorporation, agreement, or association;

(c)  Its bylaws, rules and regulations governing the conduct of its business;

(d)  The list of members and subscribers; and

(e)  The name and address of the resident of this state designated by it upon whom notices or orders of the department or process affecting such organization may be served.

(3)  No such advisory organization shall engage in any unfair or unreasonable practice with respect to such activities.

History.--s. 440, ch. 59-205; s. 15, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.311  Joint underwriters and joint reinsurers.--

(1)  Every group, association, or other organization of insurers which engages in joint underwritings or joint reinsurance shall be subject to regulation with respect thereto as herein provided, subject, however, with respect to joint underwriting, to all other provisions of this chapter and, with respect to joint reinsurance, to ss. 624.15 and 624.3161.

(2)  If the department finds that any activity or practice of any such group, association, or other organization is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, it may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, and requiring the discontinuance of such activity or practice.

(3)  The department may, after consultation with insurers licensed to write automobile insurance in this state, approve a joint underwriting plan for purposes of equitable apportionment or sharing among insurers of automobile liability insurance and other motor vehicle insurance, as an alternate to the plan required in s. 627.351(1). All insurers authorized to write automobile insurance in this state shall subscribe to the plan and participate therein. The plan shall be subject to continuous review by the department which may at any time disapprove the entire plan or any part thereof if it determines that conditions have changed since prior approval and that in view of the purposes of the plan changes are warranted. Any disapproval by the department shall be subject to the provisions of chapter 120. If adopted, the plan and the association created under the plan:

(a)  Must be subject to all provisions of s. 627.351(1), except apportionment of applicants.

(b)  May provide for one or more designated insurers, able and willing to provide policy and claims service, to act on behalf of all other insurers to provide insurance for applicants who are in good faith entitled to, but unable to, procure insurance through the voluntary insurance market at standard rates.

(c)  Must provide that designated insurers will issue policies of insurance and provide policyholder and claims service on behalf of all insurers for the joint underwriting association.

(d)  Must provide for the equitable apportionment among insurers of losses and expenses incurred.

(e)  Must provide that the joint underwriting association will operate subject to the supervision and approval of a board of governors consisting of 11 individuals, including 1 who will be elected as chair. Five members of the board must be appointed by the Insurance Commissioner. Two of the commissioner's appointees must be chosen from the insurance industry. Any board member appointed by the Insurance Commissioner may be removed and replaced by her or him at any time without cause. Six members of the board must be appointed by the participating insurers, two of whom must be from the insurance agents' associations. All board members, including the chair, must be appointed to serve for 2-year terms beginning annually on a date designated by the plan.

(f)  Must provide that an agent appointed to a servicing carrier must be a licensed general lines agent of an insurer which is authorized to write automobile liability and physical damage insurance in the state and which is actively writing such coverage in the county in which the agent is located, or the immediately adjoining counties, or an agent who places a volume of other property and casualty insurance in an amount equal to the premium volume placed with the Florida Joint Underwriting Association. The department may, however, determine that an agent may be appointed to a servicing carrier if, after public hearing, the department finds that consumers in the agent's operating area would not have adequate and reasonable access to the purchase of automobile insurance if the agent were not appointed to a servicing carrier.

(g)  Must make available noncancelable coverage as provided in s. 627.7275(2).

(h)  Must provide for the furnishing of a list of insureds and their mailing addresses upon the request of a member of the association or an insurance agent licensed to place business with an association member. The list must indicate whether the insured is currently receiving a good driver discount from the association. The plan may charge a reasonable fee to cover the cost incurred in providing the list.

(i)  Must not provide a renewal credit or discount or any other inducement designed to retain a risk.

(j)  Must not provide any other good driver credit or discount that is not actuarially sound. In addition to other criteria that the plan may specify, to be eligible for a good driver credit, an insured must not have any criminal traffic violations within the most recent 36-month period preceding the date the discount is received.

(k)  Shall have no liability, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, agents or employees of the association, members of the board of governors of the association, or the department or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to actions for or arising out of breach of any contract or agreement pertaining to insurance, or any willful tort.

(l)1.  Shall be subject to the public records requirements of chapter 119 and the public meeting requirements of s. 286.011. However, the following records of the Florida Automobile Joint Underwriting Association are confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution:

a.  Underwriting files, except that a policyholder or an applicant shall have access to his or her own underwriting files.

b.  Claims files, until termination of all litigation and settlement of all claims arising out of the same incident, although portions of the claims files may remain exempt, as otherwise provided by law. Confidential and exempt claims file records may be released to other governmental agencies upon written request and demonstration of need; such records held by the receiving agency remain confidential and exempt as provided by this paragraph.

c.  Records obtained or generated by an internal auditor pursuant to a routine audit, until the audit is completed or, if the audit is conducted as part of an investigation, until the investigation is closed or ceases to be active. An investigation is considered "active" while the investigation is being conducted with a reasonable, good faith belief that it could lead to the filing of administrative, civil, or criminal proceedings.

d.  Matters reasonably encompassed in privileged attorney-client communications.

e.  Proprietary information licensed to the association under contract when the contract provides for the confidentiality of such proprietary information.

f.  All information relating to the medical condition or medical status of an association employee which is not relevant to the employee's capacity to perform his or her duties, except as otherwise provided in this paragraph. Information which is exempt shall include, but is not limited to, information relating to workers' compensation, insurance benefits, and retirement or disability benefits.

g.  All records relative to an employee's participation in an employee assistance program designed to assist any employee who has a behavioral or medical disorder, substance abuse problem, or emotional difficulty which affects the employee's job performance, except as otherwise provided in s. 112.0455(11).

h.  Information relating to negotiations for financing, reinsurance, depopulation, or contractual services, until the conclusion of the negotiations.

i.  Minutes of closed meetings regarding underwriting files, and minutes of closed meetings regarding an open claims file until termination of all litigation and settlement of all claims with regard to that claim, except that information otherwise confidential or exempt by law must be redacted.

When an authorized insurer is considering underwriting a risk insured by the association, relevant underwriting files and confidential claims files may be released to the insurer provided the insurer agrees in writing, notarized and under oath, to maintain the confidentiality of such files. When a file is transferred to an insurer, that file is no longer a public record because it is not held by an agency subject to the provisions of the public records law. The association may make the following information obtained from underwriting files and confidential claims files available to licensed general lines insurance agents: name, address, and telephone number of the automobile owner or insured; location of the risk; rating information; loss history; and policy type. The receiving licensed general lines insurance agent must retain the confidentiality of the information received.

2.  Portions of meetings of the Florida Automobile Joint Underwriting Association during which confidential underwriting files or confidential open claims files are discussed are exempt from the provisions of s. 286.011 and s. 24(b), Art. I of the State Constitution. All portions of association meetings which are closed to the public shall be recorded by a court reporter. The court reporter shall record the times of commencement and termination of the meeting, all discussion and proceedings, the names of all persons present at any time, and the names of all persons speaking. No portion of any closed meeting shall be off the record. Subject to the provisions of this paragraph and s. 119.07(2)(a), the court reporter's notes of any closed meeting shall be retained by the association for a minimum of 5 years. A copy of the transcript, less any exempt matters, of any closed meeting during which claims are discussed shall become public as to individual claims after settlement of the claim.

This paragraph is subject to the Open Government Sunset Review Act of 1995 in accordance with s. 119.15, and shall stand repealed on October 2, 2003, unless reviewed and saved from repeal through reenactment by the Legislature.

(4)(a)  Effective upon this act becoming a law, the department shall, after consultation with insurers, approve a joint underwriting plan of insurers which shall operate as a nonprofit entity. For the purposes of this subsection, the term "insurer" includes group self-insurance funds authorized by s. 624.4621, commercial self-insurance funds authorized by s. 624.462, assessable mutual insurers authorized under s. 628.6011, and insurers licensed to write workers' compensation and employer's liability insurance in this state. The purpose of the plan is to provide workers' compensation and employer's liability insurance to applicants who are required by law to maintain workers' compensation and employer's liability insurance and who are in good faith entitled to but who are unable to purchase such insurance through the voluntary market. The joint underwriting plan shall issue policies beginning January 1, 1994. The plan must have actuarially sound rates that assure that the plan is self-supporting.

(b)  The operation of the plan is subject to the supervision of a 13-member board of governors. The board of governors shall be comprised of:

1.  Five of the 20 domestic insurers, as defined in s. 624.06(1), having the largest voluntary direct premiums written in this state for workers' compensation and employer's liability insurance, which shall be elected by those 20 domestic insurers;

2.  Five of the 20 foreign insurers as defined in s. 624.06(2) having the largest voluntary direct premiums written in this state for workers' compensation and employer's liability insurance, which shall be elected by those 20 foreign insurers;

3.  One person, who shall serve as the chair, appointed by the Insurance Commissioner;

4.  One person appointed by the largest property and casualty insurance agents' association in this state; and

5.  The consumer advocate appointed under s. 627.0613 or the consumer advocate's designee.

Each board member shall serve a 4-year term and may serve consecutive terms. No board member shall be an insurer which provides service to the plan or which has an affiliate which provides services to the plan or which is serviced by a service company or third-party administrator which provides services to the plan or which has an affiliate which provides services to the plan. The minutes, audits, and procedures of the board of governors are subject to chapter 119.

(c)  The operation of the plan shall be governed by a plan of operation that is prepared at the direction of the board of governors. The plan of operation may be changed at any time by the board of governors or upon request of the department. The plan of operation and all changes thereto are subject to the approval of the department. The plan of operation shall:

1.  Authorize the board to engage in the activities necessary to implement this subsection, including, but not limited to, borrowing money.

2.  Develop criteria for eligibility for coverage by the plan, including, but not limited to, documented rejection by at least two insurers which reasonably assures that insureds covered under the plan are unable to acquire coverage in the voluntary market. Any insured may voluntarily elect to accept coverage from an insurer for a premium equal to or greater than the plan premium if the insurer writing the coverage adheres to the provisions of s. 627.171.

3.  Require notice from the agent to the insured at the time of the application for coverage that the application is for coverage with the plan and that coverage may be available through an insurer, group self-insurers' fund, commercial self-insurance fund, or assessable mutual insurer through another agent at a lower cost.

4.  Establish programs to encourage insurers to provide coverage to applicants of the plan in the voluntary market and to insureds of the plan, including, but not limited to:

a.  Establishing procedures for an insurer to use in notifying the plan of the insurer's desire to provide coverage to applicants to the plan or existing insureds of the plan and in describing the types of risks in which the insurer is interested. The description of the desired risks must be on a form developed by the plan.

b.  Developing forms and procedures that provide an insurer with the information necessary to determine whether the insurer wants to write particular applicants to the plan or insureds of the plan.

c.  Developing procedures for notice to the plan and the applicant to the plan or insured of the plan that an insurer will insure the applicant or the insured of the plan, and notice of the cost of the coverage offered; and developing procedures for the selection of an insuring entity by the applicant or insured of the plan.

d.  Provide for a market-assistance plan to assist in the placement of employers. All applications for coverage in the plan received 45 days before the effective date for coverage shall be processed through the market-assistance plan. A market-assistance plan specifically designed to serve the needs of small good policyholders as defined by the board must be finalized by January 1, 1994.

5.  Provide for policy and claims services to the insureds of the plan of the nature and quality provided for insureds in the voluntary market.

6.  Provide for the review of applications for coverage with the plan for reasonableness and accuracy, using any available historic information regarding the insured.

7.  Provide for procedures for auditing insureds of the plan which are based on reasonable business judgment and are designed to maximize the likelihood that the plan will collect the appropriate premiums.

8.  Authorize the plan to terminate the coverage of and refuse future coverage for any insured that submits a fraudulent application to the plan or provides fraudulent or grossly erroneous records to the plan or to any service provider of the plan in conjunction with the activities of the plan.

9.  Establish service standards for agents who submit business to the plan.

10.  Establish criteria and procedures to prohibit any agent who does not adhere to the established service standards from placing business with the plan or receiving, directly or indirectly, any commissions for business placed with the plan.

11.  Provide for the establishment of reasonable safety programs for all insureds in the plan.

12.  Authorize the plan to terminate the coverage of and refuse future coverage to any insured who fails to pay premiums or surcharges when due; who, at the time of application, is delinquent in payments of workers' compensation or employer's liability insurance premiums or surcharges owed to an insurer, group self-insurers' fund, commercial self-insurance fund, or assessable mutual insurer licensed to write such coverage in this state; or who refuses to substantially comply with any safety programs recommended by the plan.

13.  Authorize the board of governors to provide the services required by the plan through staff employed by the plan, through reasonably compensated service providers who contract with the plan to provide services as specified by the board of governors, or through a combination of employees and service providers.

14.  Provide for service standards for service providers, methods of determining adherence to those service standards, incentives and disincentives for service, and procedures for terminating contracts for service providers that fail to adhere to service standards.

15.  Provide procedures for selecting service providers and standards for qualification as a service provider that reasonably assure that any service provider selected will continue to operate as an ongoing concern and is capable of providing the specified services in the manner required.

16.  Provide for reasonable accounting and data-reporting practices.

17.  Provide for annual review of costs associated with the administration and servicing of the policies issued by the plan to determine alternatives by which costs can be reduced.

18.  Authorize the acquisition of such excess insurance or reinsurance as is consistent with the purposes of the plan.

19.  Provide for an annual report to the department on a date specified by the department and containing such information as the department reasonably requires.

20.  Establish multiple rating plans for various classifications of risk which reflect risk of loss, hazard grade, actual losses, size of premium, and compliance with loss control. At least one of such plans must be a preferred-rating plan to accommodate small-premium policyholders with good experience as defined in sub-subparagraph 22.a.

21.  Establish agent commission schedules.

22.  Establish three subplans as follows:

a.  Subplan "A" must include those insureds whose annual premium does not exceed $2,500 and who have neither incurred any lost-time claims nor incurred medical-only claims exceeding 50 percent of their premium for the immediate 2 years.

b.  Subplan "B" must include insureds that are employers identified by the board of governors as high-risk employers due solely to the nature of the operations being performed by those insureds and for whom no market exists in the voluntary market, and whose experience modifications are less than 1.00.

c.  Subplan "C" must include all other insureds within the plan.

(d)  The plan must be funded through actuarially sound premiums charged to insureds of the plan. The plan may issue assessable policies only to those insureds in subplan "C." Those assessable policies must be clearly identified as assessable by containing, in contrasting color and in not less than 10-point type, the following statements: "This is an assessable policy. If the plan is unable to pay its obligations, policyholders will be required to contribute on a pro rata earned premium basis the money necessary to meet any assessment levied." The plan may issue assessable policies with differing terms and conditions to different groups within the plan when a reasonable basis exists for the differentiation. The plan may offer rating, dividend plans, and other plans to encourage loss prevention programs.

(e)  The plan shall establish and use its rates and rating plans, and the plan may establish and use changes in rating plans at any time, but no more frequently than two times per any rating class for any calendar year. By December 1, 1993, and December 1 of each year thereafter, the board shall establish and use actuarially sound rates for use by the plan to assure that the plan is self-funding while those rates are in effect. Such rates and rating plans must be filed with the department within 30 calendar days after their effective dates, and shall be considered a "use and file" filing. Any disapproval by the department must have an effective date that is at least 60 days from the date of disapproval of the rates and rating plan and must have prospective effect only. The plan may not be subject to any order by the department to return to policyholders any portion of the rates disapproved by the department. The department may not disapprove any rates or rating plans unless it demonstrates that such rates and rating plans are excessive, inadequate, or unfairly discriminatory.

(f)  No later than June 1 of each year, the plan shall obtain an independent actuarial certification of the results of the operations of the plan for prior years, and shall furnish a copy of the certification to the department. If, after the effective date of the plan, the projected ultimate incurred losses and expenses and dividends for prior years exceed collected premiums, accrued net investment income, and prior assessments for prior years, the certification is subject to review and approval by the department before it becomes final.

(g)  Whenever a deficit exists, the plan shall, within 90 days, provide the department with a program to eliminate the deficit within a reasonable time. The deficit may be funded through increased premiums charged to insureds of the plan for subsequent years, through the use of policyholder surplus attributable to any year, and through assessments on insureds in the plan if the plan uses assessable policies.

(h)  Any premium or assessments collected by the plan in excess of the amount necessary to fund projected ultimate incurred losses and expenses of the plan and not paid to insureds of the plan in conjunction with loss prevention or dividend programs shall be retained by the plan for future use.

(i)  The decisions of the board of governors do not constitute final agency action and are not subject to chapter 120.

(j)  Policies for insureds shall be issued by the plan.

(k)  The plan created under this subsection is liable only for payment for losses arising under policies issued by the plan with dates of accidents occurring on or after January 1, 1994.

(l)  Plan losses are the sole and exclusive responsibility of the plan, and payment for such losses must be funded in accordance with this subsection and must not come, directly or indirectly, from insurers or any guaranty association for such insurers.

(m)  Each joint underwriting plan or association created under this section is not a state agency, board, or commission. However, for the purposes of s. 199.183(1) only, the joint underwriting plan is a political subdivision of the state and is exempt from the corporate income tax.

(n)  Each joint underwriting plan or association may elect to pay premium taxes on the premiums received on its behalf or may elect to have the member insurers to whom the premiums are allocated pay the premium taxes if the member insurer had written the policy. The joint underwriting plan or association shall notify the member insurers and the Department of Revenue by January 15 of each year of its election for the same year. As used in this paragraph, the term "premiums received" means the consideration for insurance, by whatever name called, but does not include any policy assessment or surcharge received by the joint underwriting association as a result of apportioning losses or deficits of the association pursuant to this section.

(o)  Effective midnight, December 31, 1993, the Florida Workers' Compensation Insurance Plan, administered by the National Council on Compensation Insurance, shall terminate, except with respect to workers' compensation policies issued pursuant to such Florida Workers' Compensation Insurance Plan with inception dates on or before December 31, 1993.

(p)  Neither the plan nor any member of the board of governors is liable for monetary damages to any person for any statement, vote, decision, or failure to act, regarding the management or policies of the plan, unless:

1.  The member breached or failed to perform her or his duties as a member; and

2.  The member's breach of, or failure to perform, duties constitutes:

a.  A violation of the criminal law, unless the member had reasonable cause to believe her or his conduct was unlawful. A judgment or other final adjudication against a member in any criminal proceeding for violation of the criminal law estops that member from contesting the fact that her or his breach, or failure to perform, constitutes a violation of the criminal law; but does not estop the member from establishing that she or he had reasonable cause to believe that her or his conduct was lawful or had no reasonable cause to believe that her or his conduct was unlawful;

b.  A transaction from which the member derived an improper personal benefit, either directly or indirectly; or

c.  Recklessness or any act or omission that was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property. For purposes of this sub-subparagraph, the term "recklessness" means the acting, or omission to act, in conscious disregard of a risk:

(I)  Known, or so obvious that it should have been known, to the member; and

(II)  Known to the member, or so obvious that it should have been known, to be so great as to make it highly probable that harm would follow from such act or omission.

(q)  No insurer shall provide workers' compensation and employer's liability insurance to any person who is delinquent in the payment of premiums, assessments, penalties, or surcharges owed to the plan.

¹(5)  As used in this section and ss. 215.555 and 627.351, the term "collateral protection insurance" means commercial property insurance of which a creditor is the primary beneficiary and policyholder and which protects or covers an interest of the creditor arising out of a credit transaction secured by real or personal property. Initiation of such coverage is triggered by the mortgagor's failure to maintain insurance coverage as required by the mortgage or other lending document. Collateral protection insurance is not residential coverage.

History.--s. 441, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 74-51; s. 3, ch. 76-168; s. 16, ch. 77-290; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 107, ch. 79-40; ss. 1, 2, 4, ch. 79-394; s. 238, ch. 79-400; ss. 1, 2, ch. 80-360; ss. 1, 2, ch. 80-362; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 34, ch. 89-289; s. 4, ch. 91-106; s. 64, ch. 91-108; ss. 25, 114, ch. 92-318; s. 98, ch. 93-415; s. 7, ch. 97-93; s. 321, ch. 97-102; s. 4, ch. 97-214; s. 3, ch. 98-173; s. 1, ch. 98-315; s. 66, ch. 99-5; s. 1, ch. 99-237; s. 13, ch. 99-240; s. 8, ch. 2000-150.

¹Note.--Also published at ss. 215.555(15) and 627.351(7).

627.314  Concerted action by two or more insurers.--

(1)  Subject to and in compliance with the provisions of this part authorizing insurers to be members or subscribers of rating or advisory organizations or to engage in joint underwriting or joint reinsurance, two or more insurers may act in concert with each other and with others with respect to any matters pertaining to:

(a)  The making of rates or rating systems except for private passenger automobile insurance rates;

(b)  The preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections, and investigations;

(c)  The furnishing of loss or expense statistics or other information and data; or

(d)  The carrying on of research.

(2)  With respect to any matters pertaining to the making of rates or rating systems; the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections, and investigations; the furnishing of loss or expense statistics or other information and data; or the carrying on of research, two or more authorized insurers having a common ownership or operating in the state under common management or control are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer. To the extent that such matters relate to cosurety bonds, two or more authorized insurers executing such bonds are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer.

(3)(a)  Members and subscribers of rating or advisory organizations may use the rates, rating systems, underwriting rules, or policy or bond forms of such organizations, either consistently or intermittently; but, except as provided in subsection (2) and ss. 627.311 and 627.351, they shall not agree with each other or rating organizations or others to adhere thereto.

(b)  The fact that two or more authorized insurers, whether or not members or subscribers of a rating or advisory organization, use, either consistently or intermittently, the rates or rating systems made or adopted by a rating organization or the underwriting rules or policy or bond forms prepared by a rating or advisory organization shall not be sufficient in itself to support a finding that an agreement to so adhere exists, and may be used only for the purpose of supplementing or explaining direct evidence of the existence of any such agreement.

(c)  This subsection does not apply as to workers' compensation and employer's liability insurances.

(4)  Licensed rating organizations and authorized insurers are authorized to exchange information and experience data with rating organizations and insurers in this and other states and may consult with them with respect to ratemaking and the application of rating systems.

(5)  Upon compliance with the provisions of this part applicable thereto, any rating organization or advisory organization, and any group, association, or other organization of authorized insurers which engages in joint underwriting or joint reinsurance through such organization or by standing agreement among the members thereof, may conduct operations in this state. As respects insurance risks or operations in this state, no insurer shall be a member or subscriber of any such organization, group, or association that has not complied with the provisions of this part applicable to it.

(6)  Notwithstanding any other provisions of this part, insurers shall not participate directly or indirectly in the deliberations or decisions of rating organizations on private passenger automobile insurance. However, such rating organizations shall, upon request of individual insurers, be required to furnish at reasonable cost the rate indications resulting from the loss and expense statistics gathered by them. Individual insurers may modify the indications to reflect their individual experience in determining their own rates. Such rates shall be filed with the department for public inspection whenever requested and shall be available for public announcement only by the press, department, or insurer.

History.--s. 16, ch. 67-9; s. 1, ch. 70-320; s. 1, ch. 71-6(B); s. 3, ch. 76-168; s. 1, ch. 77-457; s. 108, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.318  Records.--Every insurer, rating organization, and advisory organization and every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance shall maintain reasonable records, of the type and kind reasonably adapted to its method of operation, of its experience or the experience of its members and of the data, statistics, or information collected or used by it in connection with the rates, rating plans, rating systems, underwriting rules, policy or bond forms, surveys, or inspections made or used by it, so that such records will be available at all reasonable times to enable the department to determine whether such organization, insurer, group, or association, and, in the case of an insurer or rating organization, every rate, rating plan, and rating system made or used by it, complies with the provisions of this part applicable to it. The maintenance of such records in the office of a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this section for any such insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating plans, rating systems, or underwriting rules of such organization. Such records shall be maintained in an office within this state or shall be made available for examination or inspection within this state by the department at any time upon reasonable notice.

History.--s. 17, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 348, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.331  Recording and reporting of loss, expense, and claims experience; rating information.--

(1)  The department may promulgate rules and statistical plans which shall thereafter be used by each insurer in the recording and reporting of its loss, expense, and claims experience, in order that the experience of all insurers may be made available at least annually in such form and detail as may be necessary to aid the department in determining whether the insurer's activities comply with the applicable standards of this code.

(2)  In promulgating such rules and plans, the department shall give due consideration to the rating systems in use in this state and, in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states. No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system used by it, except for motor vehicle insurance as otherwise provided by law.

(3)  The department may designate one or more rating organizations or other agencies to assist it in gathering such experience and making compilations thereof; and such compilations shall be made available, subject to reasonable rules promulgated by the department, to insurers and rating organizations.

History.--s. 443, ch. 59-205; s. 19, ch. 67-9; ss. 13, 35, ch. 69-106; s. 1, ch. 70-75; s. 1, ch. 70-321; s. 1, ch. 70-439; s. 1, ch. 73-153; s. 1, ch. 74-320; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 27, ch. 77-468; ss. 2, 3, ch. 81-318; ss. 350, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 10, ch. 83-288; s. 1, ch. 84-352; s. 12, ch. 86-160; s. 22, ch. 89-360; s. 1, ch. 89-528; ss. 11, 35, ch. 90-119; s. 114, ch. 92-318.

627.351  Insurance risk apportionment plans.--

(1)  MOTOR VEHICLE INSURANCE RISK APPORTIONMENT.--Agreements may be made among casualty and surety insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but are unable to, procure such insurance through ordinary methods, and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the approval of the department. The department shall, after consultation with the insurers licensed to write automobile liability insurance in this state, adopt a reasonable plan or plans for the equitable apportionment among such insurers of applicants for such insurance who are in good faith entitled to, but are unable to, procure such insurance through ordinary methods, and, when such plan has been adopted, all such insurers shall subscribe thereto and shall participate therein. Such plan or plans shall include rules for classification of risks and rates therefor. The plan or plans shall make available noncancelable coverage as provided in s. 627.7275(2). Any insured placed with the plan shall be notified of the fact that insurance coverage is being afforded through the plan and not through the private market, and such notification shall be given in writing within 10 days of such placement. To assure that plan rates are made adequate to pay claims and expenses, insurers shall develop a means of obtaining loss and expense experience at least annually, and the plan shall file such experience, when available, with the department in sufficient detail to make a determination of rate adequacy. Prior to the filing of such experience with the department, the plan shall poll each member insurer as to the need for an actuary who is a member of the Casualty Actuarial Society and who is not affiliated with the plan's statistical agent to certify the plan's rate adequacy. If a majority of those insurers responding indicate a need for such certification, the plan shall include the certification as part of its experience filing. Such experience shall be filed with the department not more than 9 months following the end of the annual statistical period under review, together with a rate filing based on said experience. The department shall initiate proceedings to disapprove the rate and so notify the plan or shall finalize its review within 60 days of receipt of the filing. Notification to the plan by the department of its preliminary findings, which include a point of entry to the plan pursuant to chapter 120, shall toll the 60-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the department does not issue notice to the plan of its preliminary findings within 60 days of the filing. In addition to provisions for claims and expenses, the ratemaking formula shall include a factor for projected claims trending and 5 percent for contingencies. In no instance shall the formula include a renewal discount for plan insureds. However, the plan shall reunderwrite each insured on an annual basis, based upon all applicable rating factors approved by the department. Trend factors shall not be found to be inappropriate if not in excess of trend factors normally used in the development of residual market rates by the appropriate licensed rating organization. Each application for coverage in the plan shall include, in boldfaced 12-point type immediately preceding the applicant's signature, the following statement:

"THIS INSURANCE IS BEING AFFORDED THROUGH THE FLORIDA JOINT UNDERWRITING ASSOCIATION AND NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED THAT COVERAGE WITH A PRIVATE INSURER MAY BE AVAILABLE FROM ANOTHER AGENT AT A LOWER COST. AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE LOCAL YELLOW PAGES."

The plan shall annually report to the department the number and percentage of plan insureds who are not surcharged due to their driving record.

(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--

(a)  Agreements may be made among property insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but are unable to procure, such insurance through ordinary methods; and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the applicable provisions of this chapter.

(b)  The department shall require all insurers holding a certificate of authority to transact property insurance on a direct basis in this state, other than joint underwriting associations and other entities formed pursuant to this section, to provide windstorm coverage to applicants from areas determined to be eligible pursuant to paragraph (c) who in good faith are entitled to, but are unable to procure, such coverage through ordinary means; or it shall adopt a reasonable plan or plans for the equitable apportionment or sharing among such insurers of windstorm coverage, which may include formation of an association for this purpose. As used in this subsection, the term "property insurance" means insurance on real or personal property, as defined in s. 624.604, including insurance for fire, industrial fire, allied lines, farmowners multiperil, homeowners' multiperil, commercial multiperil, and mobile homes, and including liability coverages on all such insurance, but excluding inland marine as defined in s. 624.607(3) and excluding vehicle insurance as defined in s. 624.605(1)(a) other than insurance on mobile homes used as permanent dwellings. The department shall adopt rules that provide a formula for the recovery and repayment of any deferred assessments.

1.  For the purpose of this section, properties eligible for such windstorm coverage are defined as dwellings, buildings, and other structures, including mobile homes which are used as dwellings and which are tied down in compliance with mobile home tie-down requirements prescribed by the Department of Highway Safety and Motor Vehicles pursuant to s. 320.8325, and the contents of all such properties. An applicant or policyholder is eligible for coverage only if an offer of coverage cannot be obtained by or for the applicant or policyholder from an admitted insurer at approved rates.

2.a.(I)  All insurers required to be members of such association shall participate in its writings, expenses, and losses. Surplus of the association shall be retained for the payment of claims and shall not be distributed to the member insurers. Such participation by member insurers shall be in the proportion that the net direct premiums of each member insurer written for property insurance in this state during the preceding calendar year bear to the aggregate net direct premiums for property insurance of all member insurers, as reduced by any credits for voluntary writings, in this state during the preceding calendar year. For the purposes of this subsection, the term "net direct premiums" means direct written premiums for property insurance, reduced by premium for liability coverage and for the following if included in allied lines: rain and hail on growing crops; livestock; association direct premiums booked; National Flood Insurance Program direct premiums; and similar deductions specifically authorized by the plan of operation and approved by the department. A member's participation shall begin on the first day of the calendar year following the year in which it is issued a certificate of authority to transact property insurance in the state and shall terminate 1 year after the end of the calendar year during which it no longer holds a certificate of authority to transact property insurance in the state. The commissioner, after review of annual statements, other reports, and any other statistics that the commissioner deems necessary, shall certify to the association the aggregate direct premiums written for property insurance in this state by all member insurers.

(II)  The plan of operation shall provide for a board of directors consisting of the Insurance Consumer Advocate appointed under s. 627.0613, 1 consumer representative appointed by the Insurance Commissioner, 1 consumer representative appointed by the Governor, and 12 additional members appointed as specified in the plan of operation. One of the 12 additional members shall be elected by the domestic companies of this state on the basis of cumulative weighted voting based on the net direct premiums of domestic companies in this state. Nothing in the 1997 amendments to this paragraph terminates the existing board or the terms of any members of the board.

(III)  The plan of operation shall provide a formula whereby a company voluntarily providing windstorm coverage in affected areas will be relieved wholly or partially from apportionment of a regular assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II).

(IV)  A company which is a member of a group of companies under common management may elect to have its credits applied on a group basis, and any company or group may elect to have its credits applied to any other company or group.

(V)  There shall be no credits or relief from apportionment to a company for emergency assessments collected from its policyholders under sub-sub-subparagraph d.(III).

(VI)  The plan of operation may also provide for the award of credits, for a period not to exceed 3 years, from a regular assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II) as an incentive for taking policies out of the Residential Property and Casualty Joint Underwriting Association. In order to qualify for the exemption under this sub-sub-subparagraph, the take-out plan must provide that at least 40 percent of the policies removed from the Residential Property and Casualty Joint Underwriting Association cover risks located in Dade, Broward, and Palm Beach Counties or at least 30 percent of the policies so removed cover risks located in Dade, Broward, and Palm Beach Counties and an additional 50 percent of the policies so removed cover risks located in other coastal counties, and must also provide that no more than 15 percent of the policies so removed may exclude windstorm coverage. With the approval of the department, the association may waive these geographic criteria for a take-out plan that removes at least the lesser of 100,000 Residential Property and Casualty Joint Underwriting Association policies or 15 percent of the total number of Residential Property and Casualty Joint Underwriting Association policies, provided the governing board of the Residential Property and Casualty Joint Underwriting Association certifies that the take-out plan will materially reduce the Residential Property and Casualty Joint Underwriting Association's 100-year probable maximum loss from hurricanes. With the approval of the department, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the Residential Property and Casualty Joint Underwriting Association, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies removed from the Residential Property and Casualty Joint Underwriting Association.

b.  Assessments to pay deficits in the association under this subparagraph shall be included as an appropriate factor in the making of rates as provided in s. 627.3512.

c.  The Legislature finds that the potential for unlimited deficit assessments under this subparagraph may induce insurers to attempt to reduce their writings in the voluntary market, and that such actions would worsen the availability problems that the association was created to remedy. It is the intent of the Legislature that insurers remain fully responsible for paying regular assessments and collecting emergency assessments for any deficits of the association; however, it is also the intent of the Legislature to provide a means by which assessment liabilities may be amortized over a period of years.

d.(I)  When the deficit incurred in a particular calendar year is 10 percent or less of the aggregate statewide direct written premium for property insurance for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the deficit.

(II)  When the deficit incurred in a particular calendar year exceeds 10 percent of the aggregate statewide direct written premium for property insurance for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the greater of 10 percent of the deficit or 10 percent of the aggregate statewide direct written premium for property insurance for the prior calendar year for member insurers. Any remaining deficit shall be recovered through emergency assessments under sub-sub-subparagraph (III).

(III)  Upon a determination by the board of directors that a deficit exceeds the amount that will be recovered through regular assessments on member insurers, pursuant to sub-sub-subparagraph (I) or sub-sub-subparagraph (II), the board shall levy, after verification by the department, emergency assessments to be collected by member insurers and by underwriting associations created pursuant to this section which write property insurance, upon issuance or renewal of property insurance policies other than National Flood Insurance policies in the year or years following levy of the regular assessments. The amount of the emergency assessment collected in a particular year shall be a uniform percentage of that year's direct written premium for property insurance for all member insurers and underwriting associations, excluding National Flood Insurance policy premiums, as annually determined by the board and verified by the department. The department shall verify the arithmetic calculations involved in the board's determination within 30 days after receipt of the information on which the determination was based. Notwithstanding any other provision of law, each member insurer and each underwriting association created pursuant to this section shall collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment. The emergency assessments so collected shall be transferred directly to the association on a periodic basis as determined by the association. The aggregate amount of emergency assessments levied under this sub-sub-subparagraph in any calendar year may not exceed the greater of 10 percent of the amount needed to cover the original deficit, plus interest, fees, commissions, required reserves, and other costs associated with financing of the original deficit, or 10 percent of the aggregate statewide direct written premium for property insurance written by member insurers and underwriting associations for the prior year, plus interest, fees, commissions, required reserves, and other costs associated with financing the original deficit. The board may pledge the proceeds of the emergency assessments under this sub-sub-subparagraph as the source of revenue for bonds, to retire any other debt incurred as a result of the deficit or events giving rise to the deficit, or in any other way that the board determines will efficiently recover the deficit. The emergency assessments under this sub-sub-subparagraph shall continue as long as any bonds issued or other indebtedness incurred with respect to a deficit for which the assessment was imposed remain outstanding, unless adequate provision has been made for the payment of such bonds or other indebtedness pursuant to the document governing such bonds or other indebtedness. Emergency assessments collected under this sub-sub-subparagraph are not part of an insurer's rates, are not premium, and are not subject to premium tax, fees, or commissions; however, failure to pay the emergency assessment shall be treated as failure to pay premium.

(IV)  Each member insurer's share of the total regular assessments under sub-sub-subparagraph (I) or sub-sub-subparagraph (II) shall be in the proportion that the insurer's net direct premium for property insurance in this state, for the year preceding the assessment bears to the aggregate statewide net direct premium for property insurance of all member insurers, as reduced by any credits for voluntary writings for that year.

(V)  If regular deficit assessments are made under sub-sub-subparagraph (I) or sub-sub-subparagraph (II), or by the Residential Property and Casualty Joint Underwriting Association under sub-subparagraph (6)(b)3.a. or sub-subparagraph (6)(b)3.b., the association shall levy upon the association's policyholders, as part of its next rate filing, or by a separate rate filing solely for this purpose, a market equalization surcharge in a percentage equal to the total amount of such regular assessments divided by the aggregate statewide direct written premium for property insurance for member insurers for the prior calendar year. Market equalization surcharges under this sub-sub-subparagraph are not considered premium and are not subject to commissions, fees, or premium taxes; however, failure to pay a market equalization surcharge shall be treated as failure to pay premium.

e.  The governing body of any unit of local government, any residents of which are insured under the plan, may issue bonds as defined in s. 125.013 or s. 166.101 to fund an assistance program, in conjunction with the association, for the purpose of defraying deficits of the association. In order to avoid needless and indiscriminate proliferation, duplication, and fragmentation of such assistance programs, any unit of local government, any residents of which are insured by the association, may provide for the payment of losses, regardless of whether or not the losses occurred within or outside of the territorial jurisdiction of the local government. Revenue bonds may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and the protection and preservation of the economic stability of insurers operating in this state, and declaring it an essential public purpose to permit certain municipalities or counties to issue bonds as will provide relief to claimants and policyholders of the association and insurers responsible for apportionment of plan losses. Any such unit of local government may enter into such contracts with the association and with any other entity created pursuant to this subsection as are necessary to carry out this paragraph. Any bonds issued under this sub-subparagraph shall be payable from and secured by moneys received by the association from assessments under this subparagraph, and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds. If any of the bonds remain unsold 60 days after issuance, the department shall require all insurers subject to assessment to purchase the bonds, which shall be treated as admitted assets; each insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the insurer's relative share of assessment liability under this subsection. An insurer shall not be required to purchase the bonds to the extent that the department determines that the purchase would endanger or impair the solvency of the insurer. The authority granted by this sub-subparagraph is additional to any bonding authority granted by subparagraph 6.

3.  The plan shall also provide that any member with a surplus as to policyholders of $20 million or less writing 25 percent or more of its total countrywide property insurance premiums in this state may petition the department, within the first 90 days of each calendar year, to qualify as a limited apportionment company. The apportionment of such a member company in any calendar year for which it is qualified shall not exceed its gross participation, which shall not be affected by the formula for voluntary writings. In no event shall a limited apportionment company be required to participate in any apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds $50 million after payment of available plan funds in any calendar year. However, a limited apportionment company shall collect from its policyholders any emergency assessment imposed under sub-sub-subparagraph 2.d.(III). The plan shall provide that, if the department determines that any regular assessment will result in an impairment of the surplus of a limited apportionment company, the department may direct that all or part of such assessment be deferred. However, there shall be no limitation or deferment of an emergency assessment to be collected from policyholders under sub-sub-subparagraph 2.d.(III).

4.  The plan shall provide for the deferment, in whole or in part, of a regular assessment of a member insurer under sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but not for an emergency assessment collected from policyholders under sub-sub-subparagraph 2.d.(III), if, in the opinion of the commissioner, payment of such regular assessment would endanger or impair the solvency of the member insurer. In the event a regular assessment against a member insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).

5.a.  The plan of operation may include deductibles and rules for classification of risks and rate modifications consistent with the objective of providing and maintaining funds sufficient to pay catastrophe losses.

b.  The association may require arbitration of a rate filing under s. 627.062(6). It is the intent of the Legislature that the rates for coverage provided by the association be actuarially sound and not competitive with approved rates charged in the admitted voluntary market such that the association functions as a residual market mechanism to provide insurance only when the insurance cannot be procured in the voluntary market. The plan of operation shall provide a mechanism to assure that, beginning no later than January 1, 1999, the rates charged by the association for each line of business are reflective of approved rates in the voluntary market for hurricane coverage for each line of business in the various areas eligible for association coverage.

c.  The association shall provide for windstorm coverage on residential properties in limits up to $10 million for commercial lines residential risks and up to $1 million for personal lines residential risks. If coverage with the association is sought for a residential risk valued in excess of these limits, coverage shall be available to the risk up to the replacement cost or actual cash value of the property, at the option of the insured, if coverage for the risk cannot be located in the authorized market. The association must accept a commercial lines residential risk with limits above $10 million or a personal lines residential risk with limits above $1 million if coverage is not available in the authorized market. The association may write coverage above the limits specified in this subparagraph with or without facultative or other reinsurance coverage, as the association determines appropriate.

d.  The plan of operation must provide objective criteria and procedures, approved by the department, to be uniformly applied for all applicants in determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:

(I)  Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and

(II)  Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the association pursuant to such criteria and procedures must be construed as the private placement of insurance, and the provisions of chapter 120 do not apply.

e.  The policies issued by the association must provide that if the association obtains an offer from an authorized insurer to cover the risk at its approved rates under either a standard policy including wind coverage or, if consistent with the insurer's underwriting rules as filed with the department, a basic policy including wind coverage, the risk is no longer eligible for coverage through the association. Upon termination of eligibility, the association shall provide written notice to the policyholder and agent of record stating that the association policy must be canceled as of 60 days after the date of the notice because of the offer of coverage from an authorized insurer. Other provisions of the insurance code relating to cancellation and notice of cancellation do not apply to actions under this sub-subparagraph.

f.  Association policies and applications must include a notice that the association policy could, under this section, be replaced with a policy issued by an authorized insurer that does not provide coverage identical to the coverage provided by the association. The notice shall also specify that acceptance of association coverage creates a conclusive presumption that the applicant or policyholder is aware of this potential.

6.a.  The plan of operation may authorize the formation of a private nonprofit corporation, a private nonprofit unincorporated association, a partnership, a trust, a limited liability company, or a nonprofit mutual company which may be empowered, among other things, to borrow money by issuing bonds or by incurring other indebtedness and to accumulate reserves or funds to be used for the payment of insured catastrophe losses. The plan may authorize all actions necessary to facilitate the issuance of bonds, including the pledging of assessments or other revenues.

b.  Any entity created under this subsection, or any entity formed for the purposes of this subsection, may sue and be sued, may borrow money; issue bonds, notes, or debt instruments; pledge or sell assessments, market equalization surcharges and other surcharges, rights, premiums, contractual rights, projected recoveries from the Florida Hurricane Catastrophe Fund, other reinsurance recoverables, and other assets as security for such bonds, notes, or debt instruments; enter into any contracts or agreements necessary or proper to accomplish such borrowings; and take other actions necessary to carry out the purposes of this subsection. The association may issue bonds or incur other indebtedness, or have bonds issued on its behalf by a unit of local government pursuant to ¹subparagraph (g)2., in the absence of a hurricane or other weather-related event, upon a determination by the association subject to approval by the department that such action would enable it to efficiently meet the financial obligations of the association and that such financings are reasonably necessary to effectuate the requirements of this subsection. Any such entity may accumulate reserves and retain surpluses as of the end of any association year to provide for the payment of losses incurred by the association during that year or any future year. The association shall incorporate and continue the plan of operation and articles of agreement in effect on the effective date of chapter 76-96, Laws of Florida, to the extent that it is not inconsistent with chapter 76-96, and as subsequently modified consistent with chapter 76-96. The board of directors and officers currently serving shall continue to serve until their successors are duly qualified as provided under the plan. The assets and obligations of the plan in effect immediately prior to the effective date of chapter 76-96 shall be construed to be the assets and obligations of the successor plan created herein.

c.  In recognition of s. 10, Art. I of the State Constitution, prohibiting the impairment of obligations of contracts, it is the intent of the Legislature that no action be taken whose purpose is to impair any bond indenture or financing agreement or any revenue source committed by contract to such bond or other indebtedness issued or incurred by the association or any other entity created under this subsection.

7.  On such coverage, an agent's remuneration shall be that amount of money payable to the agent by the terms of his or her contract with the company with which the business is placed. However, no commission will be paid on that portion of the premium which is in excess of the standard premium of that company.

8.  Subject to approval by the department, the association may establish different eligibility requirements and operational procedures for any line or type of coverage for any specified eligible area or portion of an eligible area if the board determines that such changes to the eligibility requirements and operational procedures are justified due to the voluntary market being sufficiently stable and competitive in such area or for such line or type of coverage and that consumers who, in good faith, are unable to obtain insurance through the voluntary market through ordinary methods would continue to have access to coverage from the association. When coverage is sought in connection with a real property transfer, such requirements and procedures shall not provide for an effective date of coverage later than the date of the closing of the transfer as established by the transferor, the transferee, and, if applicable, the lender.

9.  Notwithstanding any other provision of law:

a.  The pledge or sale of, the lien upon, and the security interest in any rights, revenues, or other assets of the association created or purported to be created pursuant to any financing documents to secure any bonds or other indebtedness of the association shall be and remain valid and enforceable, notwithstanding the commencement of and during the continuation of, and after, any rehabilitation, insolvency, liquidation, bankruptcy, receivership, conservatorship, reorganization, or similar proceeding against the association under the laws of this state or any other applicable laws.

b.  No such proceeding shall relieve the association of its obligation, or otherwise affect its ability to perform its obligation, to continue to collect, or levy and collect, assessments, market equalization or other surcharges, projected recoveries from the Florida Hurricane Catastrophe Fund, reinsurance recoverables, or any other rights, revenues, or other assets of the association pledged.

c.  Each such pledge or sale of, lien upon, and security interest in, including the priority of such pledge, lien, or security interest, any such assessments, emergency assessments, market equalization or renewal surcharges, projected recoveries from the Florida Hurricane Catastrophe Fund, reinsurance recoverables, or other rights, revenues, or other assets which are collected, or levied and collected, after the commencement of and during the pendency of or after any such proceeding shall continue unaffected by such proceeding.

d.  As used in this subsection, the term "financing documents" means any agreement, instrument, or other document now existing or hereafter created evidencing any bonds or other indebtedness of the association or pursuant to which any such bonds or other indebtedness has been or may be issued and pursuant to which any rights, revenues, or other assets of the association are pledged or sold to secure the repayment of such bonds or indebtedness, together with the payment of interest on such bonds or such indebtedness, or the payment of any other obligation of the association related to such bonds or indebtedness.

e.  Any such pledge or sale of assessments, revenues, contract rights or other rights or assets of the association shall constitute a lien and security interest, or sale, as the case may be, that is immediately effective and attaches to such assessments, revenues, contract, or other rights or assets, whether or not imposed or collected at the time the pledge or sale is made. Any such pledge or sale is effective, valid, binding, and enforceable against the association or other entity making such pledge or sale, and valid and binding against and superior to any competing claims or obligations owed to any other person or entity, including policyholders in this state, asserting rights in any such assessments, revenues, contract, or other rights or assets to the extent set forth in and in accordance with the terms of the pledge or sale contained in the applicable financing documents, whether or not any such person or entity has notice of such pledge or sale and without the need for any physical delivery, recordation, filing, or other action.

f.  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, agents or employees of the association, members of the board of directors of the association, or the department or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to actions for breach of any contract or agreement pertaining to insurance, or any willful tort.

²(c)  The provisions of paragraph (b) are applicable only with respect to:

1.  Those areas that were eligible for coverage under this subsection on April 9, 1993; or

2.  Any county or area as to which the department, after public hearing, finds that the following criteria exist:

a.  Due to the lack of windstorm insurance coverage in the county or area so affected, economic growth and development is being deterred or otherwise stifled in such county or area, mortgages are in default, and financial institutions are unable to make loans;

b.  The county or area so affected has adopted and is enforcing the structural requirements of the State Minimum Building Codes, as defined in s. 553.73, for new construction and has included adequate minimum floor elevation requirements for structures in areas subject to inundation; and

c.  Extending windstorm insurance coverage to such county or area is consistent with and will implement and further the policies and objectives set forth in applicable state laws, rules, and regulations governing coastal management, coastal construction, comprehensive planning, beach and shore preservation, barrier island preservation, coastal zone protection, and the Coastal Zone Protection Act of 1985.

Any time after the department has determined that the criteria referred to in this subparagraph do not exist with respect to any county or area of the state, it may, after a subsequent public hearing, declare that such county or area is no longer eligible for windstorm coverage through the plan.

(d)  For the purpose of evaluating whether the criteria of paragraph (c) are met, such criteria shall be applied as the situation would exist if policies had not been written by the Florida Residential Property and Casualty Joint Underwriting Association and property insurance for such policyholders was not available.

(e)  Notwithstanding the provisions of subparagraph (c)2. or paragraph (d), eligibility shall not be extended to any area that was not eligible on March 1, 1997, except that the department may act with respect to any petition on which a hearing was held prior to May 9, 1997.

(3)  POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK APPORTIONMENT.--

(a)  The department shall, after consultation with the casualty insurers licensed in this state, adopt a plan or plans for the equitable apportionment among them of casualty insurance coverage which may be afforded political subdivisions which are in good faith entitled to, but are unable to, procure such coverage through the voluntary market at standard rates or through a statutorily approved plan authorized by the department. The department may adopt a joint underwriting plan which shall provide for one or more designated insurers able and willing to provide policyholder and claims service, including the issuance of insurance policies, to act on behalf of all other insurers required to participate in the joint underwriting plan. Any joint underwriting plan adopted shall provide for the equitable apportionment of any profits realized, or of losses and expenses incurred, among participating insurers. The plan shall include, but shall not be limited to:

1.  Rules for the classification of risks and rates which reflect the past loss experience and prospective loss experience in different geographic areas.

2.  A rating plan which reasonably reflects the prior claims experience of the insureds.

3.  Excess coverage by insurers if the Insurance Commissioner, in his or her discretion, requires such coverage by insurers participating in the joint underwriting plan.

(b)  In the event an underwriting deficit exists at the end of any year the plan is in effect, each policyholder shall pay to the joint underwriting plan a premium contingency assessment not to exceed one-third of the premium payment paid by such policyholder for that year. The joint underwriting plan shall pay no further claims on any policy for which the policyholder fails to pay the premium contingency assessment.

(c)  Any deficit sustained under the plan shall first be recovered through a premium contingency assessment. Concurrently, the rates for insureds shall be adjusted for the next year so as to be actuarially sound in conformance with rules of the department.

(d)  If there is any remaining deficit under the plan after maximum collection of the premium contingency assessment, such deficit shall be recovered from the companies participating in the plan in the proportion that the net direct premiums of each such member written during the preceding calendar year bear to the aggregate net direct premiums written in this state by all members of the joint underwriting plan.

(e)  Upon adoption of a plan, all casualty insurers licensed in the state shall subscribe thereto and participate therein.

(4)  MEDICAL MALPRACTICE RISK APPORTIONMENT.--

(a)  The department shall, after consultation with insurers as set forth in paragraph (b), adopt a joint underwriting plan as set forth in paragraph (d).

(b)  Entities licensed to issue casualty insurance as defined in s. 624.605(1)(b), (k), and (q) and self-insurers authorized to issue medical malpractice insurance under s. 627.357 shall participate in the plan and shall be members of the Joint Underwriting Association.

(c)  The Joint Underwriting Association shall operate subject to the supervision and approval of a board of governors consisting of representatives of five of the insurers participating in the Joint Underwriting Association, an attorney to be named by The Florida Bar, a physician to be named by the Florida Medical Association, a dentist to be named by the Florida Dental Association, and a hospital representative to be named by the Florida Hospital Association. The board of governors shall choose, during the first meeting of the board after June 30 of each year, one of its members to serve as chair of the board and another member to serve as vice chair of the board. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, self-insurer, or its agents or employees, the Joint Underwriting Association or its agents or employees, members of the board of governors, or the department or its representatives for any action taken by them in the performance of their powers and duties under this subsection.

(d)  The plan shall provide coverage for claims arising out of the rendering of, or failure to render, medical care or services and, in the case of health care facilities, coverage for bodily injury or property damage to the person or property of any patient arising out of the insured's activities, in appropriate policy forms for all health care providers as defined in paragraph (h). The plan shall include, but shall not be limited to:

1.  Classifications of risks and rates which reflect past and prospective loss and expense experience in different areas of practice and in different geographical areas. To assure that plan rates are adequate to pay claims and expenses, the Joint Underwriting Association shall develop a means of obtaining loss and expense experience; and the plan shall file such experience, when available, with the department in sufficient detail to make a determination of rate adequacy. Within 60 days after a rate filing, the department shall approve such rates or rate revisions as are fully supported by the filing. In addition to provisions for claims and expenses, the ratemaking formula may include a factor for projected claims trending and a margin for contingencies. The use of trend factors shall not be found to be inappropriate.

2.  A rating plan which reasonably recognizes the prior claims experience of insureds.

3.  Provisions as to rates for:

a.  Insureds who are retired or semiretired.

b.  The estates of deceased insureds.

c.  Part-time professionals.

4.  Protection in an amount not to exceed $250,000 per claim, $750,000 annual aggregate for health care providers other than hospitals and in an amount not to exceed $1.5 million per claim, $5 million annual aggregate for hospitals. Such coverage for health care providers other than hospitals shall be available as primary coverage and as excess coverage for the layer of coverage between the primary coverage and the total limits of $250,000 per claim, $750,000 annual aggregate. The plan shall also provide tail coverage in these amounts to insureds whose claims-made coverage with another insurer or trust has or will be terminated. Such tail coverage shall provide coverage for incidents that occurred during the claims-made policy period for which a claim is made after the policy period.

5.  A risk management program for insureds of the association. This program shall include, but not be limited to: investigation and analysis of frequency, severity, and causes of adverse or untoward medical injuries; development of measures to control these injuries; systematic reporting of medical incidents; investigation and analysis of patient complaints; and auditing of association members to assure implementation of this program. The plan may refuse to insure any insured who refuses or fails to comply with the risk management program implemented by the association. Prior to cancellation or refusal to renew an insured, the association shall provide the insured 60 days' notice of intent to cancel or nonrenew and shall further notify the insured of any action which must be taken to be in compliance with the risk management program.

(e)  In the event an underwriting deficit exists for any policy year the plan is in effect, any surplus which has accrued from previous years and is not projected within reasonable actuarial certainty to be needed for payment of claims in the year the surplus arose shall be used to offset the deficit to the extent available.

1.  As to remaining deficit, except those relating to deficit assessment coverage, each policyholder shall pay to the association a premium contingency assessment not to exceed one-third of the premium payment paid by such policyholder to the association for that policy year. The association shall pay no further claims on any policy for the policyholder who fails to pay the premium contingency assessment.

2.  If there is any remaining deficit under the plan after maximum collection of the premium contingency assessment, such deficit shall be recovered from the companies participating in the plan in the proportion that the net direct premiums of each such member written during the calendar year immediately preceding the end of the policy year for which there is a deficit assessment bear to the aggregate net direct premiums written in this state by all members of the association. The term "premiums" as used herein means premiums for the lines of insurance defined in s. 624.605(1)(b), (k), and (q), including premiums for such coverage issued under package policies.

(f)  The plan shall provide for one or more insurers able and willing to provide policy service through licensed resident agents and claims service on behalf of all other insurers participating in the plan. In the event no insurer is able and willing to provide such services, the Joint Underwriting Association is authorized to perform any and all such services.

(g)  All books, records, documents, or audits relating to the Joint Underwriting Association or its operation shall be open to public inspection, except that a claim file in the possession of the Joint Underwriting Association is confidential and exempt from the provisions of s. 119.07(1) during the processing of that claim. Any information contained in these files that identifies an injured person is confidential and exempt from the provisions of s. 119.07(1).

(h)  As used in this subsection:

1.  "Health care provider" means hospitals licensed under chapter 395; physicians licensed under chapter 458; osteopathic physicians licensed under chapter 459; podiatric physicians licensed under chapter 461; dentists licensed under chapter 466; chiropractic physicians licensed under chapter 460; naturopaths licensed under chapter 462; nurses licensed under part I of chapter 464; midwives licensed under chapter 467; clinical laboratories registered under chapter 483; physician assistants licensed under chapter 458 or chapter 459; physical therapists and physical therapist assistants licensed under chapter 486; health maintenance organizations certificated under part I of chapter 641; ambulatory surgical centers licensed under chapter 395; other medical facilities as defined in subparagraph 2.; blood banks, plasma centers, industrial clinics, and renal dialysis facilities; or professional associations, partnerships, corporations, joint ventures, or other associations for professional activity by health care providers.

2.  "Other medical facility" means a facility the primary purpose of which is to provide human medical diagnostic services or a facility providing nonsurgical human medical treatment, to which facility the patient is admitted and from which facility the patient is discharged within the same working day, and which facility is not part of a hospital. However, a facility existing for the primary purpose of performing terminations of pregnancy or an office maintained by a physician or dentist for the practice of medicine shall not be construed to be an "other medical facility."

3.  "Health care facility" means any hospital licensed under chapter 395, health maintenance organization certificated under part I of chapter 641, ambulatory surgical center licensed under chapter 395, or other medical facility as defined in subparagraph 2.

(i)  The manager of the plan or the manager's assistant is the agent for service of process for the plan.

(5)  PROPERTY AND CASUALTY INSURANCE RISK APPORTIONMENT.--The department shall adopt by rule a joint underwriting plan to equitably apportion among insurers authorized in this state to write property insurance as defined in s. 624.604 or casualty insurance as defined in s. 624.605, the underwriting of one or more classes of property insurance or casualty insurance, except for the types of insurance that are included within property insurance or casualty insurance for which an equitable apportionment plan, assigned risk plan, or joint underwriting plan is authorized under s. 627.311 or subsection (1), subsection (2), subsection (3), subsection (4), or subsection (6) and except for risks eligible for flood insurance written through the federal flood insurance program to persons with risks eligible under subparagraph (a)1. and who are in good faith entitled to, but are unable to, obtain such property or casualty insurance coverage, including excess coverage, through the voluntary market. For purposes of this subsection, an adequate level of coverage means that coverage which is required by state law or by responsible or prudent business practices. The Joint Underwriting Association shall not be required to provide coverage for any type of risk for which there are no insurers providing similar coverage in this state. The department may designate one or more participating insurers who agree to provide policyholder and claims service, including the issuance of policies, on behalf of the participating insurers.

(a)  The plan shall provide:

1.  A means of establishing eligibility of a risk for obtaining insurance through the plan, which provides that:

a.  A risk shall be eligible for such property insurance or casualty insurance as is required by Florida law if the insurance is unavailable in the voluntary market, including the market assistance program and the surplus lines market.

b.  A commercial risk not eligible under sub-subparagraph a. shall be eligible for property or casualty insurance if:

(I)  The insurance is unavailable in the voluntary market, including the market assistance plan and the surplus lines market;

(II)  Failure to secure the insurance would substantially impair the ability of the entity to conduct its affairs; and

(III)  The risk is not determined by the Risk Underwriting Committee to be uninsurable.

c.  In the event the Federal Government terminates the Federal Crime Insurance Program established under 44 C.F.R. ss. 80-83, Florida commercial and residential risks previously insured under the federal program shall be eligible under the plan.

d.(I)  In the event a risk is eligible under this paragraph and in the event the market assistance plan receives a minimum of 100 applications for coverage within a 3-month period, or 200 applications for coverage within a 1-year period or less, for a given class of risk contained in the classification system defined in the plan of operation of the Joint Underwriting Association, and unless the market assistance plan provides a quotation for at least 80 percent of such applicants, such classification shall immediately be eligible for coverage in the Joint Underwriting Association.

(II)  Any market assistance plan application which is rejected because an individual risk is so hazardous as to be practically uninsurable, considering whether the likelihood of a loss for such a risk is substantially higher than for other risks of the same class due to individual risk characteristics, prior loss experience, unwillingness to cooperate with a prior insurer, physical characteristics and physical location shall not be included in the minimum percentage calculation provided above. In the event that there is any legal or administrative challenge to a determination by the department that the conditions of this subparagraph have been met for eligibility for coverage in the Joint Underwriting Association for a given classification, any eligible risk may obtain coverage during the pendency of any such challenge.

e.  In order to qualify as a quotation for the purpose of meeting the minimum percentage calculation in this subparagraph, the quoted premium must meet the following criteria:

(I)  In the case of an admitted carrier, the quoted premium must not exceed the premium available for a given classification currently in use by the Joint Underwriting Association or the premium developed by using the rates and rating plans on file with the department by the quoting insurer, whichever is greater.

(II)  In the case of an authorized surplus lines insurer, the quoted premium must not exceed the premium available for a given classification currently in use by the Joint Underwriting Association by more than 25 percent, after consideration of any individual risk surcharge or credit.

f.  Any agent who falsely certifies the unavailability of coverage as provided by sub-subparagraphs a. and b., is subject to the penalties provided in s. 626.611.

2.  A means for the equitable apportionment of profits or losses and expenses among participating insurers.

3.  Rules for the classification of risks and rates which reflect the past and prospective loss experience.

4.  A rating plan which reasonably reflects the prior claims experience of the insureds. Such rating plan shall include at least two levels of rates for risks that have favorable loss experience and risks that have unfavorable loss experience, as established by the plan.

5.  Reasonable limits to available amounts of insurance. Such limits may not be less than the amounts of insurance required of eligible risks by Florida law.

6.  Risk management requirements for insurance where such requirements are reasonable and are expected to reduce losses.

7.  Deductibles as may be necessary to meet the needs of insureds.

8.  Policy forms which are consistent with the forms in use by the majority of the insurers providing coverage in the voluntary market for the coverage requested by the applicant.

9.  A means to remove risks from the plan once such risks no longer meet the eligibility requirements of this paragraph. For this purpose, the plan shall include the following requirements: At each 6-month interval after the activation of any class of insureds, the board of governors or its designated committee shall review the number of applications to the market assistance plan for that class. If, based on these latest numbers, at least 90 percent of such applications have been provided a quotation, the Joint Underwriting Association shall cease underwriting new applications for such class within 30 days, and notification of this decision shall be sent to the Insurance Commissioner, the major agents' associations, and the board of directors of the market assistance plan. A quotation for the purpose of this subparagraph shall meet the same criteria for a quotation as provided in ³sub-subparagraph d. All policies which were previously written for that class shall continue in force until their normal expiration date, at which time, subject to the required timely notification of nonrenewal by the Joint Underwriting Association, the insured may then elect to reapply to the Joint Underwriting Association according to the requirements of eligibility. If, upon reapplication, those previously insured Joint Underwriting Association risks meet the eligibility requirements, the Joint Underwriting Association shall provide the coverage requested.

10.  A means for providing credits to insurers against any deficit assessment levied pursuant to paragraph (c), for risks voluntarily written through the market assistance plan by such insurers.

11.  That the Joint Underwriting Association shall operate subject to the supervision and approval of a board of governors consisting of 13 individuals appointed by the Insurance Commissioner, and shall have an executive or underwriting committee. At least four of the members shall be representatives of insurance trade associations as follows: one member from the American Insurance Association, one member from the Alliance of American Insurers, one member from the National Association of Independent Insurers, and one member from an unaffiliated insurer writing coverage on a national basis. Two representatives shall be from two of the statewide agents' associations. Each board member shall be appointed to serve for 2-year terms beginning on a date designated by the plan and shall serve at the pleasure of the commissioner. Members may be reappointed for subsequent terms.

(b)  Rates used by the Joint Underwriting Association shall be actuarially sound. To the extent applicable, the rate standards set forth in s. 627.062 shall be considered by the department in establishing rates to be used by the joint underwriting plan. The initial rate level shall be determined using the rates, rules, rating plans, and classifications contained in the most current Insurance Services Office (ISO) filing with the department or the filing of other licensed rating organizations with an additional increment of 25 percent of premium. For any type of coverage or classification which lends itself to manual rating for which the Insurance Services Office or another licensed rating organization does not file or publish a rate, the Joint Underwriting Association shall file and use an initial rate based on the average current market rate. The initial rate level for the rate plan shall also be subject to an experience and schedule rating plan which may produce a maximum of 25 percent debits or credits. For any risk which does not lend itself to manual rating and for which no rate has been promulgated under the rate plan, the board shall develop and file with the commissioner, subject to his or her approval, appropriate criteria and factors for rating the individual risk. Such criteria and factors shall include, but not be limited to, loss rating plans, composite rating plans, and unique and unusual risk rating plans. The initial rates required under this paragraph shall be adjusted in conformity with future filings by the Insurance Services Office with the department and shall remain in effect until such time as the Joint Underwriting Association has sufficient data as to independently justify an actuarially sound change in such rates.

(c)1.  In the event an underwriting deficit exists for any policy year the plan is in effect, any surplus which has accrued from previous years and is not projected within reasonable actuarial certainty to be needed for payment for claims in the year the surplus arose shall be used to offset the deficit to the extent available.

2.  As to any remaining deficit, the board of governors of the Joint Underwriting Association shall levy and collect an assessment in an amount sufficient to offset such deficit. Such assessment shall be levied against the insurers participating in the plan during the year giving rise to the assessment. Any assessments against insurers for the lines of property and casualty insurance issued to commercial risks shall be recovered from the participating insurers in the proportion that the net direct premium of each insurer for commercial risks written during the preceding calendar year bears to the aggregate net direct premium written for commercial risks by all members of the plan for the lines of insurance included in the plan. Any assessments against insurers for the lines of property and casualty insurance issued to personal risks eligible under sub-subparagraph (a)1.a. or sub-subparagraph (a)1.c. shall be recovered from the participating insurers in the proportion that the net direct premium of each insurer for personal risks written during the preceding calendar year bears to the aggregate net direct premium written for personal risks by all members of the plan for the lines of insurance included in the plan.

3.  The board shall take all reasonable and prudent steps necessary to collect the amount of assessment due from each participating insurer and policyholder, including, if prudent, filing suit to collect such assessment. If the board is unable to collect an assessment from any insurer, the uncollected assessments shall be levied as an additional assessment against the participating insurers and any participating insurer required to pay an additional assessment as a result of such failure to pay shall have a cause of action against such nonpaying insurer.

4.  Any funds or entitlements that the state may be eligible to receive by virtue of the Federal Government's termination of the Federal Crime Insurance Program referenced in sub-subparagraph (a)1.c. may be used under the plan to offset any subsequent underwriting deficits that may occur from risks previously insured with the Federal Crime Insurance Program.

5.  Assessments shall be included as an appropriate factor in the making of rates as provided in s. 627.3512.

6.a.  The Legislature finds that the potential for unlimited assessments under this paragraph may induce insurers to attempt to reduce their writings in the voluntary market, and that such actions would worsen the availability problems that the association was created to remedy. It is the intent of the Legislature that insurers remain fully responsible for covering any deficits of the association; however, it is also the intent of the Legislature to provide a means by which assessment liabilities may be amortized over a period of years.

b.  The total amount of deficit assessments under this paragraph with respect to any year may not exceed 10 percent of the statewide total gross written premium for all insurers for the coverages referred to in the introductory language of this subsection for the prior year, except that if the deficit with respect to any plan year exceeds such amount and bonds are issued under sub-subparagraph c. to defray the deficit, the total amount of assessments with respect to such deficit may not in any year exceed 10 percent of the deficit, or such lesser percentage as is sufficient to retire the bonds as determined by the board, and shall continue annually until the bonds are retired.

c.  The governing body of any unit of local government, any residents or businesses of which are insured by the association, may issue bonds as defined in s. 125.013 or s. 166.101 from time to time to fund an assistance program, in conjunction with the association, for the purpose of defraying deficits of the association. Revenue bonds may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and the protection and preservation of the economic stability of insurers operating in this state, and declaring it an essential public purpose to permit certain municipalities or counties to issue such bonds as will provide relief to claimants and policyholders of the joint underwriting association and insurers responsible for apportionment of association losses. The unit of local government shall enter into such contracts with the association as are necessary to carry out this paragraph. Any bonds issued under this sub-subparagraph shall be payable from and secured by moneys received by the association from assessments under this paragraph, and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds. If any of the bonds remain unsold 60 days after issuance, the department shall require all insurers subject to assessment to purchase the bonds, which shall be treated as admitted assets; each insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the insurer's relative share of assessment liability under this subsection. An insurer shall not be required to purchase the bonds to the extent that the department determines that the purchase would endanger or impair the solvency of the insurer.

7.  The plan shall provide for the deferment, in whole or in part, of the assessment of an insurer if the department finds that payment of the assessment would endanger or impair the solvency of the insurer. In the event an assessment against an insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in subparagraph 2.

(d)  Upon adoption of the plan, all insurers authorized in this state to underwrite property or casualty insurance shall participate in the plan.

(e)  A Risk Underwriting Committee of the Joint Underwriting Association composed of three members experienced in evaluating insurance risks is created to review risks rejected by the voluntary market for which application is made for insurance through the joint underwriting plan. The committee shall consist of a representative of the market assistance plan created under s. 627.3515, a member selected by the insurers participating in the Joint Underwriting Association, and a member named by the Insurance Commissioner. The Risk Underwriting Committee shall appoint such advisory committees as are provided for in the plan and are necessary to conduct its functions. The salaries and expenses of the members of the Risk Underwriting Committee and its advisory committees shall be paid by the joint underwriting plan. The plan approved by the department shall establish criteria and procedures for use by the Risk Underwriting Committee for determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:

1.  Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and

2.  Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the underwriting committee shall be construed as the private placement of insurance, and the provisions of chapter 120 shall not apply.

(f)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, the Florida Property and Casualty Joint Underwriting Association or its agents or employees, members of the board of governors, or the department or its representatives for any action taken by them in the performance of their duties under this subsection. Such immunity does not apply to actions for breach of any contract or agreement pertaining to insurance, or any other willful tort.

(6)  RESIDENTIAL PROPERTY AND CASUALTY JOINT UNDERWRITING ASSOCIATION.--

(a)  There is created a joint underwriting association for equitable apportionment or sharing among insurers of property and casualty insurance covering residential property, for applicants who are in good faith entitled, but are unable, to procure insurance through the voluntary market. The association shall operate pursuant to a plan of operation approved by order of the department. The plan is subject to continuous review by the department. The department may, by order, withdraw approval of all or part of a plan if the department determines that conditions have changed since approval was granted and that the purposes of the plan require changes in the plan. For the purposes of this subsection, residential coverage includes both personal lines residential coverage, which consists of the type of coverage provided by homeowner's, mobile home owner's, dwelling, tenant's, condominium unit owner's, and similar policies, and commercial lines residential coverage, which consists of the type of coverage provided by condominium association, apartment building, and similar policies.

(b)1.  All insurers authorized to write subject lines of business in this state, other than underwriting associations or other entities created under this section, must participate in and be members of the Residential Property and Casualty Joint Underwriting Association. A member's participation shall begin on the first day of the calendar year following the year in which the member was issued a certificate of authority to transact insurance for subject lines of business in this state and shall terminate 1 year after the end of the first calendar year during which the member no longer holds a certificate of authority to transact insurance for subject lines of business in this state.

2.  All revenues, assets, liabilities, losses, and expenses of the association shall be divided into two separate accounts, one of which is for personal lines residential coverages and the other of which is for commercial lines residential coverages. Revenues, assets, liabilities, losses, and expenses not attributable to particular coverages shall be prorated between the accounts.

3.  With respect to a deficit in an account:

a.  When the deficit incurred in a particular calendar year is not greater than 10 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year for all member insurers, the entire deficit shall be recovered through assessments of member insurers under paragraph (g).

b.  When the deficit incurred in a particular calendar year exceeds 10 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the greater of 10 percent of the deficit or 10 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year for all member insurers. Any remaining deficit shall be recovered through emergency assessments under sub-subparagraph d.

c.  Each member insurer's share of the total assessment under sub-subparagraph a. or sub-subparagraph b. shall be in the proportion that the member insurer's direct written premium for the subject lines of business for the year preceding the assessment bears to the aggregate statewide direct written premium for the subject lines of business for that year for all member insurers.

d.  Upon a determination by the board of governors that a deficit in an account exceeds the amount that will be recovered through regular assessments on member insurers under sub-subparagraph a. or sub-subparagraph b., the board shall levy, after verification by the department, emergency assessments to be collected by member insurers and by underwriting associations created under this section which write subject lines of business upon issuance or renewal of policies for subject lines of business, excluding National Flood Insurance policies, in the year or years following levy of the regular assessments. The amount of the emergency assessment collected in a particular year shall be a uniform percentage of that year's direct written premium for subject lines of business for all member insurers and underwriting associations, excluding National Flood Insurance Program policy premiums, as annually determined by the board and verified by the department. The department shall verify the arithmetic calculations involved in the board's determination within 30 days after receipt of the information on which the determination was based. Notwithstanding any other provision of law, each member insurer and each underwriting association created under this section which writes subject lines of business shall collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment. The emergency assessments so collected shall be transferred directly to the association on a periodic basis as determined by the association. The aggregate amount of emergency assessments levied under this sub-subparagraph in any calendar year may not exceed the greater of 10 percent of the amount needed to cover the original deficit, plus interest, fees, commissions, required reserves, and other costs associated with financing of the original deficit, or 10 percent of the aggregate statewide direct written premium for subject lines of business written by member insurers and underwriting associations for the prior year, plus interest, fees, commissions, required reserves, and other costs associated with financing the original deficit.

e.  The board may pledge the proceeds of assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other insurance and reinsurance recoverables, market equalization surcharges and other surcharges, and other funds available to the association as the source of revenue for and to secure bonds issued under paragraph (g), bonds or other indebtedness issued under subparagraph (c)3., or lines of credit or other financing mechanisms issued or created under this subsection, or to retire any other debt incurred as a result of deficits or events giving rise to deficits, or in any other way that the board determines will efficiently recover such deficits. The purpose of the lines of credit or other financing mechanisms is to provide additional resources to assist the association in covering claims and expenses attributable to a catastrophe. As used in this subsection, the term "assessments" includes regular assessments under sub-subparagraph a., sub-subparagraph b., or subparagraph (g)1. and emergency assessments under sub-subparagraph d. Emergency assessments collected under sub-subparagraph d. are not part of an insurer's rates, are not premium, and are not subject to premium tax, fees, or commissions; however, failure to pay the emergency assessment shall be treated as failure to pay premium. The emergency assessments under sub-subparagraph d. shall continue as long as any bonds issued or other indebtedness incurred with respect to a deficit for which the assessment was imposed remain outstanding, unless adequate provision has been made for the payment of such bonds or other indebtedness pursuant to the documents governing such bonds or other indebtedness.

f.  As used in this subsection, the term "subject lines of business" means, with respect to the personal lines account, any personal lines policy defined in s. 627.4025, and means, with respect to the commercial lines account, all commercial property and commercial fire insurance.

(c)  The plan of operation of the association:

1.  May provide for one or more designated insurers, able and willing to provide policy and claims service, to act on behalf of the association to provide such service. Each licensed agent shall be entitled to indicate the order of preference regarding who will service the business placed by the agent. The association shall adhere to each agent's preferences unless after consideration of other factors in assigning agents, including, but not limited to, servicing capacity and fee arrangements, the association has reason to believe it is in the best interest of the association to make a different assignment.

2.  Must provide for adoption of residential property and casualty insurance policy forms, which forms must be approved by the department prior to use. The association shall adopt the following policy forms:

a.  Standard personal lines policy forms including wind coverage, which are multiperil policies providing what is generally considered to be full coverage of a residential property similar to the coverage provided under an HO-2, HO-3, HO-4, or HO-6 policy.

b.  Standard personal lines policy forms without wind coverage, which are the same as the policies described in sub-subparagraph a. except that they do not include wind coverage.

c.  Basic personal lines policy forms including wind coverage, which are policies similar to an HO-8 policy or a dwelling fire policy that provide coverage meeting the requirements of the secondary mortgage market, but which coverage is more limited than the coverage under a standard policy.

d.  Basic personal lines policy forms without wind coverage, which are the same as the policies described in sub-subparagraph c. except that they do not include wind coverage.

e.  Commercial lines residential policy forms including wind coverage that are generally similar to the basic perils of full coverage obtainable for commercial residential structures in the admitted voluntary market.

f.  Commercial lines residential policy forms without wind coverage, which are the same as the policies described in sub-subparagraph e. except that they do not include wind coverage.

3.  May provide that the association may employ or otherwise contract with individuals or other entities to provide administrative or professional services that may be appropriate to effectuate the plan. The association shall have the power to borrow funds, by issuing bonds or by incurring other indebtedness, and shall have other powers reasonably necessary to effectuate the requirements of this subsection. The association may issue bonds or incur other indebtedness, or have bonds issued on its behalf by a unit of local government pursuant to subparagraph (g)2., in the absence of a hurricane or other weather-related event, upon a determination by the association, subject to approval by the department, that such action would enable it to efficiently meet the financial obligations of the association and that such financings are reasonably necessary to effectuate the requirements of this subsection. The association is authorized to take all actions needed to facilitate tax-free status for any such bonds or indebtedness, including formation of trusts or other affiliated entities. The association shall have the authority to pledge assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other reinsurance recoverables, market equalization and other surcharges, and other funds available to the association as security for bonds or other indebtedness. In recognition of s. 10, Art. I of the State Constitution, prohibiting the impairment of obligations of contracts, it is the intent of the Legislature that no action be taken whose purpose is to impair any bond indenture or financing agreement or any revenue source committed by contract to such bond or other indebtedness.

4.  Must require that the association operate subject to the supervision and approval of a board of governors consisting of 13 individuals, including 1 who is elected as chair. The board shall consist of:

a.  The insurance consumer advocate appointed under s. 627.0613.

b.  Five members designated by the insurance industry.

c.  Five consumer representatives appointed by the Insurance Commissioner. Two of the consumer representatives must, at the time of appointment, be holders of policies issued by the association, who are selected with consideration given to reflecting the geographic balance of association policyholders. Two of the consumer members must be individuals who are minority persons as defined in s. 288.703(3). One of the consumer members shall have expertise in the field of mortgage lending.

d.  Two representatives of the insurance industry appointed by the Insurance Commissioner. Of the two insurance industry representatives appointed by the Insurance Commissioner, at least one must be an individual who is a minority person as defined in s. 288.703(3).

Any board member may be disapproved or removed and replaced by the commissioner at any time for cause. All board members, including the chair, must be appointed to serve for 3-year terms beginning annually on a date designated by the plan.

5.  Must provide a procedure for determining the eligibility of a risk for coverage, as follows:

a.  With respect to personal lines residential risks, if the risk is offered coverage from an authorized insurer at the insurer's approved rate under either a standard policy including wind coverage or, if consistent with the insurer's underwriting rules as filed with the department, a basic policy including wind coverage, the risk is not eligible for any policy issued by the association. If the risk accepts an offer of coverage through the market assistance plan or an offer of coverage through a mechanism established by the association before a policy is issued to the risk by the association or during the first 30 days of coverage by the association, and the producing agent who submitted the application to the plan or to the association is not currently appointed by the insurer, the insurer shall either appoint the agent to service the risk or, if the insurer places the coverage through a new agent, require the new agent who then writes the policy to pay not less than 50 percent of the first year's commission to the producing agent who submitted the application to the plan or the association, except that if the new agent is an employee or exclusive agent of the insurer, the new agent shall pay a policy fee of $50 to the producing agent in lieu of splitting the commission. If the risk is not able to obtain any such offer, the risk is eligible for either a standard policy including wind coverage or a basic policy including wind coverage issued by the association; however, if the risk could not be insured under a standard policy including wind coverage regardless of market conditions, the risk shall be eligible for a basic policy including wind coverage unless rejected under subparagraph 8. The association shall determine the type of policy to be provided on the basis of objective standards specified in the underwriting manual and based on generally accepted underwriting practices.

b.  With respect to commercial lines residential risks, if the risk is offered coverage under a policy including wind coverage from an authorized insurer at its approved rate, the risk is not eligible for any policy issued by the association. If the risk accepts an offer of coverage through the market assistance plan or an offer of coverage through a mechanism established by the association before a policy is issued to the risk by the association, and the producing agent who submitted the application to the plan or the association is not currently appointed by the insurer, the insurer shall either appoint the agent to service the risk or, if the insurer places the coverage through a new agent, require the new agent who then writes the policy to pay not less than 50 percent of the first year's commission to the producing agent who submitted the application to the plan, except that if the new agent is an employee or exclusive agent of the insurer, the new agent shall pay a policy fee of $50 to the producing agent in lieu of splitting the commission. If the risk is not able to obtain any such offer, the risk is eligible for a policy including wind coverage issued by the association.

c.  This subparagraph does not require the association to provide wind coverage or hurricane coverage in any area in which such coverage is available through the Florida Windstorm Underwriting Association.

6.  Must include rules for classifications of risks and rates therefor.

7.  Must provide that if premium and investment income attributable to a particular plan year are in excess of projected losses and expenses of the plan attributable to that year, such excess shall be held in surplus. Such surplus shall be available to defray deficits as to future years and shall be used for that purpose prior to assessing member insurers as to any plan year.

8.  Must provide objective criteria and procedures to be uniformly applied for all applicants in determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:

a.  Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and

b.  Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the association shall be construed as the private placement of insurance, and the provisions of chapter 120 shall not apply.

9.  Must provide that the association shall make its best efforts to procure catastrophe reinsurance at reasonable rates, as determined by the board of governors.

10.  Must provide that in the event of regular deficit assessments under sub-subparagraph (b)3.a. or sub-subparagraph (b)3.b., or by the Florida Windstorm Underwriting Association under sub-sub-subparagraph (2)(b)2.d.(I) or sub-sub-subparagraph (2)(b)2.d.(II), the association shall levy upon association policyholders in its next rate filing, or by a separate rate filing solely for this purpose, a market equalization surcharge in a percentage equal to the total amount of such regular assessments divided by the aggregate statewide direct written premium for subject lines of business for member insurers for the prior calendar year. Market equalization surcharges under this subparagraph are not considered premium and are not subject to commissions, fees, or premium taxes; however, failure to pay a market equalization surcharge shall be treated as failure to pay premium.

11.  The policies issued by the association must provide that, if the association or the market assistance plan obtains an offer from an authorized insurer to cover the risk at its approved rates under either a standard policy including wind coverage or a basic policy including wind coverage, the risk is no longer eligible for coverage through the association. However, if the risk is located in an area in which Florida Windstorm Underwriting Association coverage is available, such an offer of a standard or basic policy terminates eligibility regardless of whether or not the offer includes wind coverage. Upon termination of eligibility, the association shall provide written notice to the policyholder and agent of record stating that the association policy shall be canceled as of 60 days after the date of the notice because of the offer of coverage from an authorized insurer. Other provisions of the insurance code relating to cancellation and notice of cancellation do not apply to actions under this subparagraph.

12.  Association policies and applications must include a notice that the association policy could, under this section or s. 627.3511, be replaced with a policy issued by an admitted insurer that does not provide coverage identical to the coverage provided by the association. The notice shall also specify that acceptance of association coverage creates a conclusive presumption that the applicant or policyholder is aware of this potential.

13.  May establish, subject to approval by the department, different eligibility requirements and operational procedures for any line or type of coverage for any specified county or area if the board determines that such changes to the eligibility requirements and operational procedures are justified due to the voluntary market being sufficiently stable and competitive in such area or for such line or type of coverage and that consumers who, in good faith, are unable to obtain insurance through the voluntary market through ordinary methods would continue to have access to coverage from the association. When coverage is sought in connection with a real property transfer, such requirements and procedures shall not provide for an effective date of coverage later than the date of the closing of the transfer as established by the transferor, the transferee, and, if applicable, the lender.

(d)1.  It is the intent of the Legislature that the rates for coverage provided by the association be actuarially sound and not competitive with approved rates charged in the admitted voluntary market, so that the association functions as a residual market mechanism to provide insurance only when the insurance cannot be procured in the voluntary market. Rates shall include an appropriate catastrophe loading factor that reflects the actual catastrophic exposure of the association and recognizes that the association has little or no capital or surplus; and the association shall carefully review each rate filing to assure that provider compensation is not excessive.

2.  For each county, the average rates of the association for each line of business for personal lines residential policies shall be no lower than the average rates charged by the insurer that had the highest average rate in that county among the 20 insurers with the greatest total direct written premium in the state for that line of business in the preceding year, except that with respect to mobile home coverages, the average rates of the association shall be no lower than the average rates charged by the insurer that had the highest average rate in that county among the 5 insurers with the greatest total written premium for mobile home owner's policies in the state in the preceding year.

3.  Rates for commercial residential coverage shall not be subject to the requirements of subparagraph 2., but shall be subject to all other requirements of this paragraph and s. 627.062.

4.  Nothing in this paragraph shall require or allow the association to adopt a rate that is inadequate under s. 627.062 or to reduce rates approved under s. 627.062.

5.  The association may require arbitration of a filing pursuant to s. 627.062(6). Rate filings of the association under this paragraph shall be made on a use and file basis under s. 627.062(2)(a)2. The association shall make a rate filing at least once a year, but no more often than quarterly.

(e)  Coverage through the association is hereby activated effective upon approval of the plan, and shall remain activated until coverage is deactivated pursuant to paragraph (f). Thereafter, coverage through the association shall be reactivated by order of the department only under one of the following circumstances:

1.  If the market assistance plan receives a minimum of 100 applications for coverage within a 3-month period, or 200 applications for coverage within a 1-year period or less for residential coverage, unless the market assistance plan provides a quotation from admitted carriers at their filed rates for at least 90 percent of such applicants. Any market assistance plan application that is rejected because an individual risk is so hazardous as to be uninsurable using the criteria specified in subparagraph (c)8. shall not be included in the minimum percentage calculation provided herein. In the event that there is a legal or administrative challenge to a determination by the department that the conditions of this subparagraph have been met for eligibility for coverage in the association, any eligible risk may obtain coverage during the pendency of such challenge.

2.  In response to a state of emergency declared by the Governor under s. 252.36, the department may activate coverage by order for the period of the emergency upon a finding by the department that the emergency significantly affects the availability of residential property insurance.

(f)  The activities of the association shall be reviewed at least annually by the board and, upon recommendation by the board or petition of any interested party, coverage shall be deactivated if the department finds that the conditions giving rise to its activation no longer exist.

(g)1.  The board shall certify to the department its needs for annual assessments as to a particular calendar year, and any startup or interim assessments that it deems to be necessary to sustain operations as to a particular year pending the receipt of annual assessments. Upon verification, the department shall approve such certification, and the board shall levy such annual, startup, or interim assessments. Such assessments shall be prorated as provided in paragraph (b). The board shall take all reasonable and prudent steps necessary to collect the amount of assessment due from each participating member insurer, including, if prudent, filing suit to collect such assessment. If the board is unable to collect an assessment from any member insurer, the uncollected assessments shall be levied as an additional assessment against the participating member insurers and any participating member insurer required to pay an additional assessment as a result of such failure to pay shall have a cause of action against such nonpaying member insurer. Assessments shall be included as an appropriate factor in the making of rates.

2.  The governing body of any unit of local government, any residents of which are insured by the association, may issue bonds as defined in s. 125.013 or s. 166.101 from time to time to fund an assistance program, in conjunction with the association, for the purpose of defraying deficits of the association. In order to avoid needless and indiscriminate proliferation, duplication, and fragmentation of such assistance programs, any unit of local government, any residents of which are insured by the association, may provide for the payment of losses, regardless of whether or not the losses occurred within or outside of the territorial jurisdiction of the local government. Revenue bonds may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and the protection and preservation of the economic stability of insurers operating in this state, and declaring it an essential public purpose to permit certain municipalities or counties to issue such bonds as will permit relief to claimants and policyholders of the joint underwriting association and insurers responsible for apportionment of association losses. Any such unit of local government may enter into such contracts with the association and with any other entity created pursuant to this subsection as are necessary to carry out this paragraph. Any bonds issued under this subparagraph shall be payable from and secured by moneys received by the association from emergency assessments under sub-subparagraph (b)3.d., and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds. If any of the bonds remain unsold 60 days after issuance, the department shall require all insurers subject to assessment to purchase the bonds, which shall be treated as admitted assets; each insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the insurer's relative share of assessment liability under this subsection. An insurer shall not be required to purchase the bonds to the extent that the department determines that the purchase would endanger or impair the solvency of the insurer.

3.a.  In addition to any credits, bonuses, or exemptions provided under s. 627.3511, the board shall adopt a program for the reduction of both new and renewal writings in the association. The board may consider any prudent and not unfairly discriminatory approach to reducing association writings, but must adopt at least a credit against assessment liability or other liability that provides an incentive for insurers to take risks out of the association and to keep risks out of the association by maintaining or increasing voluntary writings in counties in which association risks are highly concentrated and a program to provide a formula under which an insurer voluntarily taking risks out of the association by maintaining or increasing voluntary writings will be relieved wholly or partially from assessments under sub-subparagraphs (b)3.a. and b.

b.  Any credit or exemption from regular assessments adopted under this subparagraph shall last no longer than the 3 years following the cancellation or expiration of the policy by the association. With the approval of the department, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the association, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies so removed.

c.  There shall be no credit, limitation, exemption, or deferment from emergency assessments to be collected from policyholders pursuant to sub-subparagraph (b)3.d.

4.  The plan shall provide for the deferment, in whole or in part, of the assessment of a member insurer, other than an emergency assessment collected from policyholders pursuant to sub-subparagraph (b)3.d., if the department finds that payment of the assessment would endanger or impair the solvency of the insurer. In the event an assessment against a member insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in paragraph (b).

(h)  Nothing in this subsection shall be construed to preclude the issuance of residential property insurance coverage pursuant to part VIII of chapter 626.

(i)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, the association or its agents or employees, members of the board of governors or their respective designees at a board meeting, association committee members, or the department or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to:

1.  Any of the foregoing persons or entities for any willful tort;

2.  The association or its servicing or producing agents for breach of any contract or agreement pertaining to insurance coverage;

3.  The association with respect to issuance or payment of debt; or

4.  Any member insurer with respect to any action to enforce a member insurer's obligations to the association under this subsection.

(j)  The Residential Property and Casualty Joint Underwriting Association is not a state agency, board, or commission. However, for the purposes of s. 199.183(1), the Residential Property and Casualty Joint Underwriting Association shall be considered a political subdivision of the state and shall be exempt from the corporate income tax.

(k)  Upon a determination by the board of governors that the conditions giving rise to the establishment and activation of the association no longer exist, and upon the consent thereto by order of the department, the association is dissolved. Upon dissolution, the assets of the association shall be applied first to pay all debts, liabilities, and obligations of the association, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the association shall become property of the state and deposited in the Florida Hurricane Catastrophe Fund.

(l)  All obligations, rights, assets, and liabilities of the Florida Property and Casualty Joint Underwriting Association created by subsection (5), which obligations, rights, assets, or liabilities relate to the provision of commercial lines residential property insurance coverage as described in this section are hereby transferred to the Residential Property and Casualty Joint Underwriting Association. The Residential Property and Casualty Joint Underwriting Association is not required to issue endorsements or certificates of assumption to insureds during the remaining term of in-force transferred policies.

(m)  Notwithstanding any other provision of law:

1.  The pledge or sale of, the lien upon, and the security interest in any rights, revenues, or other assets of the association created or purported to be created pursuant to any financing documents to secure any bonds or other indebtedness of the association shall be and remain valid and enforceable, notwithstanding the commencement of and during the continuation of, and after, any rehabilitation, insolvency, liquidation, bankruptcy, receivership, conservatorship, reorganization, or similar proceeding against the association under the laws of this state.

2.  No such proceeding shall relieve the association of its obligation, or otherwise affect its ability to perform its obligation, to continue to collect, or levy and collect, assessments, market equalization or other surcharges under subparagraph (c)10., or any other rights, revenues, or other assets of the association pledged pursuant to any financing documents.

3.  Each such pledge or sale of, lien upon, and security interest in, including the priority of such pledge, lien, or security interest, any such assessments, market equalization or other surcharges, or other rights, revenues, or other assets which are collected, or levied and collected, after the commencement of and during the pendency of, or after, any such proceeding shall continue unaffected by such proceeding. As used in this subsection, the term "financing documents" means any agreement or agreements, instrument or instruments, or other document or documents now existing or hereafter created evidencing any bonds or other indebtedness of the association or pursuant to which any such bonds or other indebtedness has been or may be issued and pursuant to which any rights, revenues, or other assets of the association are pledged or sold to secure the repayment of such bonds or indebtedness, together with the payment of interest on such bonds or such indebtedness, or the payment of any other obligation of the association related to such bonds or indebtedness.

4.  Any such pledge or sale of assessments, revenues, contract rights, or other rights or assets of the association shall constitute a lien and security interest, or sale, as the case may be, that is immediately effective and attaches to such assessments, revenues, or contract rights or other rights or assets, whether or not imposed or collected at the time the pledge or sale is made. Any such pledge or sale is effective, valid, binding, and enforceable against the association or other entity making such pledge or sale, and valid and binding against and superior to any competing claims or obligations owed to any other person or entity, including policyholders in this state, asserting rights in any such assessments, revenues, or contract rights or other rights or assets to the extent set forth in and in accordance with the terms of the pledge or sale contained in the applicable financing documents, whether or not any such person or entity has notice of such pledge or sale and without the need for any physical delivery, recordation, filing, or other action.

(n)1.  The following records of the Residential Property and Casualty Joint Underwriting Association are confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution:

a.  Underwriting files, except that a policyholder or an applicant shall have access to his or her own underwriting files.

b.  Claims files, until termination of all litigation and settlement of all claims arising out of the same incident, although portions of the claims files may remain exempt, as otherwise provided by law. Confidential and exempt claims file records may be released to other governmental agencies upon written request and demonstration of need; such records held by the receiving agency remain confidential and exempt as provided for herein.

c.  Records obtained or generated by an internal auditor pursuant to a routine audit, until the audit is completed, or if the audit is conducted as part of an investigation, until the investigation is closed or ceases to be active. An investigation is considered "active" while the investigation is being conducted with a reasonable, good faith belief that it could lead to the filing of administrative, civil, or criminal proceedings.

d.  Matters reasonably encompassed in privileged attorney-client communications.

e.  Proprietary information licensed to the association under contract and the contract provides for the confidentiality of such proprietary information.

f.  All information relating to the medical condition or medical status of an association employee which is not relevant to the employee's capacity to perform his or her duties, except as otherwise provided in this paragraph. Information which is exempt shall include, but is not limited to, information relating to workers' compensation, insurance benefits, and retirement or disability benefits.

g.  Upon an employee's entrance into the employee assistance program, a program to assist any employee who has a behavioral or medical disorder, substance abuse problem, or emotional difficulty which affects the employee's job performance, all records relative to that participation shall be confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution, except as otherwise provided in s. 112.0455(11).

h.  Information relating to negotiations for financing, reinsurance, depopulation, or contractual services, until the conclusion of the negotiations.

i.  Minutes of closed meetings regarding underwriting files, and minutes of closed meetings regarding an open claims file until termination of all litigation and settlement of all claims with regard to that claim, except that information otherwise confidential or exempt by law will be redacted.

When an authorized insurer is considering underwriting a risk insured by the association, relevant underwriting files and confidential claims files may be released to the insurer provided the insurer agrees in writing, notarized and under oath, to maintain the confidentiality of such files. When a file is transferred to an insurer that file is no longer a public record because it is not held by an agency subject to the provisions of the public records law. Underwriting files and confidential claims files may also be released to staff of and the board of governors of the market assistance plan established pursuant to s. 627.3515, who must retain the confidentiality of such files, except such files may be released to authorized insurers that are considering assuming the risks to which the files apply, provided the insurer agrees in writing, notarized and under oath, to maintain the confidentiality of such files. Finally, the association or the board or staff of the market assistance plan may make the following information obtained from underwriting files and confidential claims files available to licensed general lines insurance agents: name, address, and telephone number of the residential property owner or insured; location of the risk; rating information; loss history; and policy type. The receiving licensed general lines insurance agent must retain the confidentiality of the information received.

2.  Portions of meetings of the Residential Property and Casualty Joint Underwriting Association are exempt from the provisions of s. 286.011 and s. 24(b), Art. I of the State Constitution wherein confidential underwriting files or confidential open claims files are discussed. All portions of association meetings which are closed to the public shall be recorded by a court reporter. The court reporter shall record the times of commencement and termination of the meeting, all discussion and proceedings, the names of all persons present at any time, and the names of all persons speaking. No portion of any closed meeting shall be off the record. Subject to the provisions hereof and s. 119.07(2)(a), the court reporter's notes of any closed meeting shall be retained by the association for a minimum of 5 years. A copy of the transcript, less any exempt matters, of any closed meeting wherein claims are discussed shall become public as to individual claims after settlement of the claim.

⁴(7)  As used in this section and ss. 215.555 and 627.311, the term "collateral protection insurance" means commercial property insurance of which a creditor is the primary beneficiary and policyholder and which protects or covers an interest of the creditor arising out of a credit transaction secured by real or personal property. Initiation of such coverage is triggered by the mortgagor's failure to maintain insurance coverage as required by the mortgage or other lending document. Collateral protection insurance is not residential coverage.

History.--s. 445, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 69-199; ss. 1, 2, ch. 70-234; s. 1, ch. 72-22; s. 1, ch. 73-259; s. 1, ch. 74-216; s. 14, ch. 75-9; s. 3, ch. 75-279; s. 1, ch. 76-96; s. 3, ch. 76-168; s. 5, ch. 76-260; s. 3, ch. 77-64; s. 1, ch. 77-93; s. 1, ch. 77-174; s. 1, ch. 77-380; s. 1, ch. 77-457; s. 28, ch. 77-468; s. 1, ch. 78-47; s. 164, ch. 79-164; ss. 1, 2, ch. 79-185; ss. 1, 2, ch. 80-94; ss. 1, 2, ch. 81-4; ss. 2, 3, ch. 81-318; ss. 351, 357, 809(2nd), 810, ch. 82-243; ss. 48, 49, 79, ch. 82-386; ss. 1, 5, ch. 82-391; s. 1, ch. 83-124; s. 1, ch. 83-206; s. 95, ch. 83-216; s. 15, ch. 85-62; s. 24, ch. 85-175; s. 1, ch. 85-274; ss. 13, 44, ch. 86-160; s. 35, ch. 86-191; s. 14, ch. 86-287; s. 1, ch. 88-368; s. 5, ch. 88-390; s. 1, ch. 89-236; s. 1, ch. 90-108; s. 6, ch. 91-106; s. 59, ch. 91-110; s. 18, ch. 92-179; s. 114, ch. 92-318; s. 3, ch. 92-345; s. 21, ch. 93-260; s. 4, ch. 93-289; s. 3, ch. 93-401; s. 14, ch. 93-410; s. 1, ch. 95-233; s. 9, ch. 95-276; s. 8, ch. 96-194; s. 2, ch. 96-377; s. 379, ch. 96-406; s. 5, ch. 97-55; s. 28, ch. 97-94; ss. 1731, 1732, ch. 97-102; s. 57, ch. 97-264; s. 8, ch. 98-49; ss. 221, 290, ch. 98-166; s. 8, ch. 98-173; s. 56, ch. 98-287; s. 1, ch. 99-237; s. 132, ch. 2000-141; s. 139, ch. 2000-318.

¹Note.--Subparagraph (g)2. does not exist. The reference may be to subparagraph (6)(g)2.

²Note.--Section 56, ch. 98-287, as amended by s. 132, ch. 2000-141, amended paragraph (c) of subsection (2), effective July 1, 2001, to read:

(c)  The provisions of paragraph (b) are applicable only with respect to:

1.  Those areas that were eligible for coverage under this subsection on April 9, 1993; or

2.  Any county or area as to which the department, after public hearing, finds that the following criteria exist:

a.  Due to the lack of windstorm insurance coverage in the county or area so affected, economic growth and development is being deterred or otherwise stifled in such county or area, mortgages are in default, and financial institutions are unable to make loans;

b.  The county or area so affected is enforcing the structural requirements of the Florida Building Code, as defined in s. 553.73, for new construction and has included adequate minimum floor elevation requirements for structures in areas subject to inundation; and

c.  Extending windstorm insurance coverage to such county or area is consistent with and will implement and further the policies and objectives set forth in applicable state laws, rules, and regulations governing coastal management, coastal construction, comprehensive planning, beach and shore preservation, barrier island preservation, coastal zone protection, and the Coastal Zone Protection Act of 1985.


The department shall consider reports of the Florida Building Commission when evaluating building code enforcement. Any time after the department has determined that the criteria referred to in this subparagraph do not exist with respect to any county or area of the state, it may, after a subsequent public hearing, declare that such county or area is no longer eligible for windstorm coverage through the plan.

³Note.--Subparagraph (5)(a)9. is not divided into sub-subparagraphs. The reference may be to sub-subparagraph (5)(a)1.d.

⁴Note.--Also published at ss. 215.555(15) and 627.311(5).

627.3511  Depopulation of Residential Property and Casualty Joint Underwriting Association.--

(1)  LEGISLATIVE INTENT.--The Legislature finds that the public policy of this state requires the maintenance of a residual market for residential property insurance. It is the intent of the Legislature to provide a variety of financial incentives to encourage the replacement of the highest possible number of Residential Property and Casualty Joint Underwriting Association policies with policies written by admitted insurers at approved rates.

(2)  TAKE-OUT BONUS.--The Residential Property and Casualty Joint Underwriting Association shall pay the sum of up to $100 to an insurer for each risk that the insurer removes from the association, either by issuance of a policy upon expiration or cancellation of the association policy or by assumption of the association's obligations with respect to an in-force policy. Such payment is subject to approval of the association board. In order to qualify for the bonus under this subsection, the take-out plan must include a minimum of 25,000 policies. Within 30 days after approval by the board, the department may reject the insurer's take-out plan and disqualify the insurer from the bonus, based on the following criteria:

(a)  The capacity of the insurer to absorb the policies proposed to be taken out of the association and the concentration of risks of those policies.

(b)  Whether the geographic and risk characteristics of policies in the proposed take-out plan serve to reduce the exposure of the association sufficiently to justify the bonus.

(c)  Whether coverage for risks to be taken out otherwise exists in the admitted voluntary market.

(d)  The degree to which the take-out bonus is promoting new capital being allocated by the insurer to Florida residential property coverage.

(3)  EXEMPTION FROM DEFICIT ASSESSMENTS.--

(a)  The calculation of an insurer's assessment liability under s. 627.351(6)(b)3.a. or b. shall, for an insurer that in any calendar year removes 50,000 or more risks from the Residential Property and Casualty Joint Underwriting Association, either by issuance of a policy upon expiration or cancellation of the association policy or by assumption of the association's obligations with respect to in-force policies, exclude such removed policies for the succeeding 3 years, as follows:

1.  In the first year following removal of the risks, the risks are excluded from the calculation to the extent of 100 percent.

2.  In the second year following removal of the risks, the risks are excluded from the calculation to the extent of 75 percent.

3.  In the third year following removal of the risks, the risks are excluded from the calculation to the extent of 50 percent.

If the removal of risks is accomplished through assumption of obligations with respect to in-force policies, the association shall pay to the assuming insurer all unearned premium with respect to such policies less any policy acquisition costs agreed to by the association and assuming insurer. The term "policy acquisition costs" is defined as costs of issuance of the policy by the association which includes agent commissions, servicing company fees, and premium tax. This paragraph does not apply to an insurer that, at any time within 5 years before removing the risks, had a market share in excess of 0.1 percent of the statewide aggregate gross direct written premium for any line of property insurance, or to an affiliate of such an insurer. This paragraph does not apply unless either at least 40 percent of the risks removed from the association are located in Dade, Broward, and Palm Beach Counties, or at least 30 percent of the risks removed from the association are located in such counties and an additional 50 percent of the risks removed from the association are located in other coastal counties.

(b)  An insurer that first wrote personal lines residential property coverage in this state on or after July 1, 1994, is exempt from regular deficit assessments imposed pursuant to s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., of the Residential Property and Casualty Joint Underwriting Association until the earlier of the following:

1.  The end of the calendar year in which it first wrote 0.5 percent or more of the statewide aggregate direct written premium for any line of residential property coverage; or

2.  December 31, 1997, or December 31 of the third year in which it wrote such coverage in this state, whichever is later.

(c)  Other than an insurer that is exempt under paragraph (b), an insurer that in any calendar year increases its total structure exposure subject to wind coverage by 25 percent or more over its exposure for the preceding calendar year is, with respect to that year, exempt from deficit assessments imposed pursuant to s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., of the Residential Property and Casualty Joint Underwriting Association attributable to such increase in exposure.

(d)  Any exemption or credit from regular assessments authorized by this section shall last no longer than 3 years following the cancellation or expiration of the policy by the association. With the approval of the department, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the association, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies so removed.

(4)  AGENT BONUS.--When the Residential Property and Casualty Joint Underwriting Association enters into a contractual agreement for a take-out plan that provides a bonus to the insurer, the producing agent of record of the association policy is entitled to retain any unearned commission on such policy, and the insurer shall either:

(a)  Pay to the producing agent of record of the association policy an amount equal to the insurer's usual and customary commission for the type of policy written if the term of the association policy was in excess of 6 months, or one-half of such usual and customary commission if the term of the association policy was 6 months or less; or

(b)  Offer to allow the producing agent of record of the association policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the insurer's usual and customary commission for the type of policy written.

The insurer need not take any further action if the offer is rejected. This subsection does not apply to any reciprocal interinsurance exchange, nonprofit federation, or any subsidiary or affiliate of such organization. This subsection does not apply if the agent is also the agent of record on the new coverage. The requirement of this subsection that the producing agent of record is entitled to retain the unearned commission on an association policy does not apply to a policy for which coverage has been provided in the association for 30 days or less or for which a cancellation notice has been issued pursuant to s. 627.351(6)(c)11. during the first 30 days of coverage.

(5)  APPLICABILITY.--

(a)  The take-out bonus provided by subsection (2) and the exemption from assessment provided by paragraph (3)(a) apply only if the association policy is replaced by either a standard policy including wind coverage or, if consistent with the insurer's underwriting rules as filed with the department, a basic policy including wind coverage; however, with respect to risks located in areas where coverage through the Florida Windstorm Underwriting Association is available, the replacement policy need not provide wind coverage. The insurer must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled by the insurer for a lawful reason other than reduction of hurricane exposure. If an insurer assumes the association's obligations for a policy, it must issue a replacement policy for a 1-year term upon expiration of the association policy and must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled by the insurer for a lawful reason other than reduction of hurricane exposure. For each replacement policy canceled or nonrenewed by the insurer for any reason during the 3-year coverage period required by this paragraph, the insurer must remove from the association one additional policy covering a risk similar to the risk covered by the canceled or nonrenewed policy. In addition to these requirements, the association must place the bonus moneys in escrow for a period of 3 years; such moneys may be released from escrow only to pay claims. A take-out bonus provided by subsection (2) or subsection (6) shall not be considered premium income for purposes of taxes and assessments under the Florida Insurance Code and shall remain the property of the Residential Property and Casualty Joint Underwriting Association, subject to the prior security interest of the insurer under the escrow agreement until it is released from escrow, and after it is released from escrow it shall be considered an asset of the insurer and credited to the insurer's capital and surplus.

(b)  It is the intent of the Legislature that an insurer eligible for the exemption under paragraph (3)(a) establish a preference in appointment of agents for those agents who lose a substantial amount of business as a result of risks being removed from the association.

(6)  COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.--

(a)  The Residential Property and Casualty Joint Underwriting Association shall pay a bonus to an insurer for each commercial residential policy that the insurer removes from the association pursuant to an approved take-out plan, either by issuance of a new policy upon expiration of the association policy or by assumption of the association's obligations with respect to an in-force policy. The association board shall determine the amount of the bonus based on such factors as the coverage provided, relative hurricane risk, the length of time that the property has been covered by the association, and the criteria specified in paragraphs (b) and (c). The amount of the bonus with respect to a particular policy may not exceed 25 percent of the association's 1-year premium for the policy. Such payment is subject to approval of the association board. In order to qualify for the bonus under this subsection, the take-out plan must include policies reflecting at least $100 million in structure exposure.

(b)  In order for a plan to qualify for approval:

1.  At least 40 percent of the policies removed from the association under the plan must be located in Dade, Broward, and Palm Beach Counties, or at least 30 percent of the policies removed from the association under the plan must be located in such counties and an additional 50 percent of the policies removed from the association must be located in other coastal counties.

2.  The insurer must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled or nonrenewed by the insurer for a lawful reason other than reduction of hurricane exposure. If an insurer assumes the association's obligations for a policy, it must issue a replacement policy for a 1-year term upon expiration of the association policy and must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled by the insurer for a lawful reason other than reduction of hurricane exposure. For each replacement policy canceled or nonrenewed by the insurer for any reason during the 3-year coverage period required by this subparagraph, the insurer must remove from the association one additional policy covering a risk similar to the risk covered by the canceled or nonrenewed policy.

(c)  A take-out plan is deemed approved unless the department, within 120 days after the board votes to recommend the plan, disapproves the plan based on:

1.  The capacity of the insurer to absorb the policies proposed to be taken out of the association and the concentration of risks of those policies.

2.  Whether the geographic and risk characteristics of policies in the proposed take-out plan serve to reduce the exposure of the association sufficiently to justify the bonus.

3.  Whether coverage for risks to be taken out otherwise exists in the admitted voluntary market.

4.  The degree to which the take-out bonus is promoting new capital being allocated by the insurer to residential property coverage in this state.

(d)  The calculation of an insurer's regular assessment liability under s. 627.351(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., shall, with respect to commercial residential policies removed from the association under an approved take-out plan, exclude such removed policies for the succeeding 3 years, as follows:

1.  In the first year following removal of the policies, the policies are excluded from the calculation to the extent of 100 percent.

2.  In the second year following removal of the policies, the policies are excluded from the calculation to the extent of 75 percent.

3.  In the third year following removal of the policies, the policies are excluded from the calculation to the extent of 50 percent.

(e)  An insurer that first wrote commercial residential property coverage in this state on or after June 1, 1996, is exempt from regular assessments under s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., with respect to commercial residential policies until the earlier of:

1.  The end of the calendar year in which such insurer first wrote 0.5 percent or more of the statewide aggregate direct written premium for commercial residential property coverage; or

2.  December 31 of the third year in which such insurer wrote commercial residential property coverage in this state.

(f)  An insurer that is not otherwise exempt from regular assessments under s. 627.351(6)(b)3.a. and b. with respect to commercial residential policies is, for any calendar year in which such insurer increased its total commercial residential hurricane exposure by 25 percent or more over its exposure for the preceding calendar year, exempt from regular assessments under s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., attributable to such increased exposure.

(7)  A minority business, which is at least 51 percent owned by minority persons as described in s. 288.703(3), desiring to operate or become licensed as a property and casualty insurer may exempt up to $50 of the escrow requirements of the take-out bonus, as described in this section. Such minority business, which has applied for a certificate of authority to engage in business as a property and casualty insurer, may simultaneously file the business' proposed take-out plan, as described in this section, to the Residential Property and Casualty Joint Underwriting Association.

History.--s. 10, ch. 95-276; s. 10, ch. 96-194; s. 6, ch. 97-55; s. 24, ch. 97-93; s. 1, ch. 99-142; s. 7, ch. 2000-333.

627.3512  Recoupment of residual market deficit assessments.--

(1)  An insurer or insurer group may recoup any assessments that have been paid during or after 1995 by the insurer or insurer group to defray deficits of an insurance risk apportionment plan or assigned risk plan under ss. 627.311 and 627.351, net of any earnings returned to the insurer or insurer group by the association or plan for any year after 1993. The recoupment shall be made by applying a separate assessment factor on policies of the same line or type as were considered by the residual markets in determining the assessment liability of the insurer or insurer group. An insurer or insurer group shall calculate a separate assessment factor for personal lines and commercial lines. The separate assessment factor shall provide for full recoupment of the assessments over a period of 1 year, unless the insurer or insurer group, at its option, elects to recoup the assessments over a longer period. The assessment factor expires upon collection of the full amount allowed to be recouped. Amounts recouped under this section are not subject to premium taxes, fees, or commissions.

(2)  The assessment factor must not be more than 3 percentage points above the ratio of the deficit assessment to the Florida direct written premium for policies for the lines or types of business as to which the assessment was calculated, as written in the year the deficit assessment was paid. If an insurer or insurer group fails to collect the full amount of the deficit assessment, the insurer or insurer group must carry forward the amount of the deficit and adjust the deficit assessment to be recouped in a subsequent year by that amount.

(3)  The insurer or insurer group shall file with the department a statement setting forth the amount of the assessment factor and an explanation of how the factor will be applied, at least 15 days prior to the factor being applied to any policies. The statement shall include documentation of the assessment paid by the insurer or insurer group and the arithmetic calculations supporting the assessment factor. The department shall complete its review within 15 days after receipt of the filing and shall limit its review to verification of the arithmetic calculations. The insurer or insurer group may use the assessment factor at any time after the expiration of the 15-day period unless the department has notified the insurer or insurer group in writing that the arithmetic calculations are incorrect.

(4)  The department may adopt rules to implement this section.

History.--s. 11, ch. 95-276; s. 7, ch. 97-55.

627.3513  Standards for sale of bonds by underwriting associations.--

(1)(a)  The purpose of this section is to provide standards for the sale of bonds pursuant to s. 627.351(2) and (6).

(b)  "Association" or "associations," for purposes of this section, means the Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association as established pursuant to s. 627.351(2) and (6), and any corporation or other entity established pursuant to those subsections.

(2)  The plan of operation of each association shall provide for the selection of financial services providers and underwriters. Such provisions shall include the method for publicizing or otherwise providing reasonable notice to potential financial services providers, underwriters, and other interested parties, which may include expedited procedures and methods for emergency situations. The associations shall not engage the services of any person or firm as a securities broker or bond underwriter that is not eligible to be engaged by the state under the provisions of s. 215.684. The associations shall make all selections of financial service providers and managing underwriters at a noticed public meeting.

(3)  The plan of operation of each association shall provide for any managing underwriter or financial adviser to provide to the association a disclosure statement containing at least the following information:

(a)  An itemized list setting forth the nature and estimated amounts of expenses to be incurred by the managing underwriter in connection with the issuance of such bonds. Notwithstanding the foregoing, any such list may include an item for miscellaneous expenses, provided such item includes only minor items of expense which cannot be easily categorized elsewhere in the statement.

(b)  The names, addresses, and estimated amounts of compensation of any finders connected with the issuance of the bonds.

(c)  The amount of underwriting spread expected to be realized and the amount of fees and expenses expected to be paid to the financial adviser.

(d)  Any management fee charged by the managing underwriter.

(e)  Any other fee, bonus, or compensation estimated to be paid by the managing underwriter in connection with the bond issue to any person not regularly employed or retained by it.

(f)  The name and address of each financial adviser or managing underwriter, if any, connected with the bond issue.

(g)  Any other disclosure which the association may require.

(4)(a)  No underwriter, commercial bank, investment banker, or financial consultant or adviser shall pay any finder any bonus, fee, or gratuity in connection with the sale of bonds issued by the association unless full disclosure is made in writing to the association prior to or concurrently with the submission of a purchase proposal for bonds by the underwriter, commercial bank, investment banker, or financial consultant or adviser, providing the name and address of any finder and the amount of bonus, fee, or gratuity paid to such finder. A violation of this subsection shall not affect the validity of the bond issue.

(b)  As used in this subsection, the term "finder" means a person who is neither regularly employed by, nor a partner or officer of, an underwriter, bank, banker, or financial consultant or adviser and who enters into an understanding with either the issuer or the managing underwriter, or both, for any paid or promised compensation or valuable consideration, directly or indirectly, expressed or implied, to act solely as an intermediary between such issuer and managing underwriter for the purpose of influencing any transaction in the purpose of such bonds.

(5)  This section is not intended to restrict or prohibit the employment of professional services relating to bonds issued under s. 627.351(2) or (6) or the issuance of bonds by the associations.

(6)  The failure of the association to comply with one or more provisions of this section shall not affect the validity of the bond issue; however, the failure of either association to comply in good faith both with this section and with the plan as amended shall be a violation of its plan of operation and a violation of the insurance code.

History.--s. 8, ch. 97-55.

627.3515  Market assistance plan; property and casualty risks.--

(1)  The department shall adopt a market assistance plan to assist in the placement of risks of applicants who are unable to procure property insurance as defined in s. 624.604 or casualty insurance as defined in s. 624.605(1)(b), (e), (f), (g), or (h) from authorized insurers when such insurance is otherwise generally available from insurers authorized to transact and actually writing that kind and class of insurance in this state. Through such measures as are found appropriate by the board of governors, the market assistance plan shall take affirmative steps to assist in the removal from the Residential Property and Casualty Joint Underwriting Association any risk that can be placed in the voluntary market. All property and casualty insurers licensed in this state shall participate in the plan.

(2)(a)  Each person serving as a member of the board of governors of the Residential Property and Casualty Joint Underwriting Association shall also serve as a member of the board of governors of the market assistance plan.

(b)  The plan shall be funded through payments from the Residential Property and Casualty Joint Underwriting Association and annual assessments of residential property insurers in the amount of $450.

(c)  The plan is not required to assist in the placement of any workers' compensation, employer's liability, malpractice, or motor vehicle insurance coverage.

History.--s. 1, ch. 85-92; s. 43, ch. 86-160; s. 1, ch. 86-286; s. 6, ch. 88-390; ss. 26, 114, ch. 92-318; s. 12, ch. 95-276; s. 3, ch. 96-377.

627.3516  Residential property insurance market coordinating council.--The Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association shall create a residual property insurance market coordinating council to assure that each association is informed of the activities and plans of the other. The coordinating council shall consist of the insurance consumer advocate, who shall chair the council, the executive director of each of the associations, and the chair of the governing board of each of the associations. The coordinating council may, from time to time, recommend to the presiding officers of the Legislature proposals to improve coordination between the associations or eliminate unnecessary duplication of efforts; however, any such recommendation must also include an analysis of the impact of the recommendation on the financial arrangements of each association and on the state's efforts to restore the voluntary property insurance market. The coordinating council shall, on March 1 of each year, provide a report of its activities during the preceding year to the presiding officers of the Legislature.

History.--s. 9, ch. 97-55.

627.357  Medical malpractice self-insurance.--

(1)  DEFINITIONS.--As used in this section, the term:

(a)  "Fund" means a group or association of health care providers authorized to self-insure.

(b)  "Health care provider" means any:

1.  Hospital licensed under chapter 395.

2.  Physician licensed, or physician assistant licensed, under chapter 458.

3.  Osteopathic physician or physician assistant licensed under chapter 459.

4.  Podiatric physician licensed under chapter 461.

5.  Health maintenance organization certificated under part I of chapter 641.

6.  Ambulatory surgical center licensed under chapter 395.

7.  Chiropractic physician licensed under chapter 460.

8.  Psychologist licensed under chapter 490.

9.  Optometrist licensed under chapter 463.

10.  Dentist licensed under chapter 466.

11.  Pharmacist licensed under chapter 465.

12.  Registered nurse, licensed practical nurse, or advanced registered nurse practitioner licensed or registered under part I of chapter 464.

13.  Other medical facility.

14.  Professional association, partnership, corporation, joint venture, or other association established by the individuals set forth in subparagraphs 2., 3., 4., 7., 8., 9., 10., 11., and 12. for professional activity.

(c)  "Other medical facility" means a facility the primary purpose of which is to provide human medical diagnostic services or a facility providing nonsurgical human medical treatment and in which the patient is admitted to and discharged from such facility within the same working day, and which is not part of a hospital. The term does not include a facility existing for the primary purpose of performing terminations of pregnancies or an office maintained by a physician or dentist for the practice of medicine.

(d)  "Hospital subsidiary corporation" means any corporation over which a hospital or the hospital's parent corporation exercises financial or operational control and which provides health care services to the hospital or the hospital parent corporation or another hospital subsidiary corporation.

(e)  "Hospital parent corporation" means any corporation which has financial or operational control over a hospital and which provides health care services to the hospital or another hospital subsidiary corporation.

(f)  "Committee" means a committee or board of trustees of a health care provider or group of health care providers established to make recommendations, policies, or decisions regarding patient institutional utilization, patient treatment, or institutional staff privileges or to perform other administrative or professional purposes or functions.

(2)  A group or association of health care providers composed of any number of members, is authorized to self-insure against claims arising out of the rendering of, or failure to render, medical care or services, or against claims for injury or death to the insured's patients arising out of the insured's activities, upon obtaining approval from the department and upon complying with the following conditions:

(a)  Establishment of a Medical Malpractice Risk Management Trust Fund to provide coverage against professional medical malpractice liability.

(b)  Employment of professional consultants for loss prevention and claims management coordination under a risk management program.

(3)  The fund may insure hospital parent corporations, hospital subsidiary corporations, and committees against claims arising out of the rendering of, or failure to render, medical care or services.

(4)  The fund is subject to regulation and investigation by the department. The fund is subject to rules of the department and to ¹part X of chapter 626, relating to trade practices and frauds.

(5)  The trust fund may purchase medical malpractice insurance, specific excess insurance, and aggregate excess insurance, up to determined limits, as necessary to provide the insurance coverages authorized by this section, consistent with market availability. The trust fund may purchase such risk management services as may be required, pay claims as may arise under any deductible provisions, and engage in prudent investment of trust funds and other activities reasonably relating to the payment of claims and to providing medical malpractice self-insurance, to the extent otherwise consistent with this section and law generally applicable to medical malpractice insurers.

(6)  The department shall adopt rules to implement this section, including rules that ensure that a trust fund maintains a sufficient reserve to cover contingent liabilities under subsection (7) in the event of its dissolution.

(7)(a)  The liability of each member for the obligations of the trust fund is individual, several, and proportionate, but not joint, except as provided in this subsection.

(b)  Each member has a contingent assessment liability for payment of actual losses and expenses incurred while the member's policy was in force.

(c)  The trust fund may from time to time assess members of the fund liable therefor under the terms of their policies and pursuant to this section. The department may assess the members in the event of liquidation of the fund.

(d)  A member's share of a deficiency for which an assessment is made is computed by applying to the premium earned on the member's policy or policies during the period to be covered by the assessment the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment. If one or more members fail to pay an assessment, the other members are liable on a proportionate basis for an additional assessment. The fund, acting on behalf of all members who paid the additional assessment, shall institute legal action, when necessary and appropriate, to recover the assessment from members who failed to pay it.

(e)  In computing the earned premiums for the purposes of this section, the gross premium received by the fund for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy.

(f)  No member has an offset against any assessment for which the member is liable, on account of any claim for unearned premium of losses payable.

(g)  If the assets of a trust fund are at any time insufficient to comply with the requirements of law, discharge the fund's liabilities, or meet the required conditions of financial soundness, or if a judgment against the fund has remained unsatisfied for 30 days, the trust fund must immediately make up the deficiency or levy an assessment upon the members for the amount needed to make up the deficiency, subject to the limitations set forth in this subsection.

(h)  If the trust fund fails to make an assessment as required by paragraph (g), the department shall order the fund to do so. If the deficiency is not sufficiently made up within 60 days after the date of the order, the fund is deemed insolvent and grounds exist to proceed against the fund as provided for in part I of chapter 631.

(i)  Subject to this section, any rehabilitation, liquidation, conservation, or dissolution of a trust fund shall be conducted under the supervision of the department, which has all power with respect thereto granted to it under part I of chapter 631 governing the rehabilitation, liquidation, conservation, or dissolution of insurers.

(8)  The expense factors associated with rates used by a fund shall be filed with the department at least 30 days prior to use and may not be used until approved by the department. The department shall disapprove the rates unless the filed expense factors associated therewith are justified and reasonable for the benefits and services provided.

(9)  Premiums, contributions, and assessments received by a fund are subject to ss. 624.509(1) and (2) and 624.5092, except that the tax rate is 1.6 percent of the gross amount of such premiums, contributions, or assessments.

(10)  A self-insurance fund may not be formed under this section after October 1, 1992.

History.--ss. 1, 2, 3, ch. 72-265; s. 162, ch. 73-333; s. 4, ch. 75-9; s. 3, ch. 76-168; s. 8, ch. 76-260; s. 5, ch. 77-64; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 353, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 15, ch. 86-160; s. 30, ch. 87-226; s. 6, ch. 88-206; s. 17, ch. 89-167; s. 13, ch. 90-249; s. 60, ch. 91-110; ss. 27, 114, ch. 92-318; s. 58, ch. 97-264; s. 9, ch. 98-49; ss. 222, 291, ch. 98-166; s. 140, ch. 2000-318.

¹Note.--Redesignated as part IX of ch. 626 to conform to the transfer of ss. 626.941-626.945, comprising former part IX, by ch. 98-89.

Note.--Former s. 627.355; s. 768.52, 1976 Supplement.

627.361  False or misleading information.--No person shall willfully withhold information from or knowingly give false or misleading information to the department, any statistical agency designated by the department, any rating organization, or any insurer, which will affect the rates or premiums chargeable under this part.

History.--s. 446, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 354, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.371  Hearings.--

(1)  Any person aggrieved by any rate charged, rating plan, rating system, or underwriting rule followed or adopted by an insurer, and any person aggrieved by any rating plan, rating system, or underwriting rule followed or adopted by a rating organization, may herself or himself or by her or his authorized representative make written request of the insurer or rating organization to review the manner in which the rate, plan, system, or rule has been applied with respect to insurance afforded her or him. If the request is not granted within 30 days after it is made, the requester may treat it as rejected. Any person aggrieved by the refusal of an insurer or rating organization to grant the review requested, or by the failure or refusal to grant all or part of the relief requested, may file a written complaint with the department, specifying the grounds relied upon. If the department has already disposed of the issue as raised by a similar complaint or believes that probable cause for the complaint does not exist or that the complaint is not made in good faith, it shall so notify the complainant. Otherwise, and if it also finds that the complaint charges a violation of this chapter and that the complainant would be aggrieved if the violation is proven, it shall proceed as provided in subsection (2).

(2)  If after examination of an insurer, rating organization, advisory organization, or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance, upon the basis of other information, or upon sufficient complaint as provided in subsection (1), the department has good cause to believe that such insurer, organization, group, or association, or any rate, rating plan, or rating system made or used by any such insurer or rating organization, does not comply with the requirements and standards of this part applicable to it, it shall, unless it has good cause to believe such noncompliance is willful, give notice in writing to such insurer, organization, group, or association stating therein in what manner and to what extent noncompliance is alleged to exist and specifying therein a reasonable time, not less than 10 days thereafter, in which the noncompliance may be corrected, including any premium adjustment.

(3)  If the department has good cause to believe that such noncompliance is willful or if, within the period prescribed by the department in the notice required by subsection (2), the insurer, organization, group, or association does not make such changes as may be necessary to correct the noncompliance specified by the department or establish to the satisfaction of the department that such specified noncompliance does not exist, then the department is required to proceed to further determine the matter. If no notice has been given as provided in subsection (2), the notice shall state in what manner and to what extent noncompliance is alleged to exist. The proceedings shall not consider any subject not specified in the notice required by subsections (2) and (3).

History.--s. 447, ch. 59-205; s. 20, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 355, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 5, ch. 93-289; s. 322, ch. 97-102.

627.381  Penalty for violation.--

(1)  The department may, if it finds that any person or organization has violated any provision of this part, impose an administrative fine pursuant to s. 624.4211.

(2)  The department may suspend the license or authority of any rating organization or insurer which fails to comply with an order of the department within the time limited by such order, or any extension thereof which the department may grant. The department shall not suspend the license or authority of any rating organization or insurer for failure to comply with an order until the time prescribed for an appeal therefrom has expired or, if an appeal has been taken, until such order has been affirmed. The department may determine when a suspension of license or authority shall become effective and it shall remain in effect for the period fixed by it, unless it modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded, or reversed.

History.--s. 448, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 356, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

PART II
THE INSURANCE CONTRACT

627.401  Scope of this part.

627.402  Definitions; specified certificates not included.

627.4025  Residential coverage and hurricane coverage defined.

627.403  "Premium" defined.

627.4035  Cash payment of premiums; claims.

627.404  Insurable interest; personal insurance.

627.405  Insurable interest; property.

627.406  Power to contract; purchase of insurance by or for minor.

627.407  Alteration of application.

627.408  Application as evidence.

627.4085  Insurer name, agent name, and license identification number required on application.

627.409  Representations in applications; warranties.

627.4091  Specific reasons for denial, cancellation, or nonrenewal.

627.410  Filing, approval of forms.

627.4105  Life and health insurance; reduced premiums upon rigorous physical examination.

627.411  Grounds for disapproval.

627.412  Standard provisions, in general.

627.413  Contents of policies, in general; identification.

627.4131  Telephone number required.

627.4132  Stacking of coverages prohibited.

627.4133  Notice of cancellation, nonrenewal, or renewal premium.

627.4135  Casualty insurance contracts subject to general provisions for insurance contracts.

627.4136  Nonjoinder of insurers.

627.4137  Disclosure of certain information required.

627.414  Additional policy contents.

627.4143  Outline of coverage.

627.4145  Readable language in insurance policies.

627.4147  Medical malpractice insurance contracts.

627.4148  Medical malpractice insurers; required offer of coverage limits.

627.415  Charter, bylaw provisions.

627.416  Execution of policies.

627.417  Underwriters' and combination policies.

627.418  Validity of noncomplying contracts.

627.419  Construction of policies.

627.4195  Health insurance; claims for payment of psychotherapeutic services; confidentiality.

627.420  Binders.

627.4205  Coverage identification number required.

627.421  Delivery of policy.

627.422  Assignment of policies.

627.423  Payment discharges insurer.

627.4232  Health insurance out-of-hospital benefits.

627.4233  Total disability defined.

627.4234  Health insurance cost containment provisions required.

627.4235  Coordination of benefits.

627.4236  Coverage for bone marrow transplant procedures.

627.4237  Sickness disability or disability due to sickness.

627.4238  Health insurer examinations.

627.4239  Coverage for use of drugs in treatment of cancer.

627.42395  Coverage for certain prescription and nonprescription enteral formulas.

627.424  Minor may give acquittance.

627.425  Forms for proof of loss to be furnished.

627.426  Claims administration.

627.4265  Payment of settlement.

627.427  Payment of judgment by insurer; penalty for failure.

627.428  Attorney's fee.

627.429  Medical tests for HIV infection and AIDS for insurance purposes.

627.4295  Dental procedures; anesthesia and hospitalization coverage.

627.4301  Genetic information for insurance purposes.

627.401  Scope of this part.--No provision of this part of this chapter applies to:

(1)  Reinsurance.

(2)  Policies or contracts not issued for delivery in this state nor delivered in this state, except as otherwise provided in this code.

(3)  Wet marine and transportation insurance, except ss. 627.409, 627.420, and 627.428.

(4)  Title insurance, except ss. 627.406, 627.415, 627.416, 627.419, 627.427, and 627.428.

(5)  Credit life or credit disability insurance, except ss. 627.419(5) and 627.428.

History.--s. 450, ch. 59-205; s. 1, ch. 70-322; s. 1, ch. 70-371; s. 1, ch. 71-45; s. 163, ch. 73-333; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 358, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.402  Definitions; specified certificates not included.--As used in this part, the term:

(1)  "Policy" means a written contract of insurance or written agreement for or effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements, and papers which are a part thereof.

(2)  The word "certificate" as used in this section does not include certificates as to group life or health insurance or as to group annuities issued to individual insureds.

History.--s. 451, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 359, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 28, 114, ch. 92-318.

627.4025  Residential coverage and hurricane coverage defined.--

(1)  Residential coverage includes both personal lines residential coverage, which consists of the type of coverage provided by homeowner's, mobile home owner's, dwelling, tenant's, condominium unit owner's, cooperative unit owner's, and similar policies, and commercial lines residential coverage, which consists of the type of coverage provided by condominium association, cooperative association, apartment building, and similar policies, including policies covering the common elements of a homeowners' association. Residential coverage for personal lines and commercial lines as set forth in this section includes policies that provide coverage for particular perils such as windstorm and hurricane or coverage for insurer insolvency or deductibles.

(2)  As used in policies providing residential coverage:

(a)  "Hurricane coverage" is coverage for loss or damage caused by the peril of windstorm during a hurricane. The term includes ensuing damage to the interior of a building, or to property inside a building, caused by rain, snow, sleet, hail, sand, or dust if the direct force of the windstorm first damages the building, causing an opening through which rain, snow, sleet, hail, sand, or dust enters and causes damage.

(b)  "Windstorm" for purposes of paragraph (a) means wind, wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane which results in direct physical loss or damage to property.

(c)  "Hurricane" for purposes of paragraphs (a) and (b) means a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service. The duration of the hurricane includes the time period, in Florida:

1.  Beginning at the time a hurricane watch or hurricane warning is issued for any part of Florida by the National Hurricane Center of the National Weather Service;

2.  Continuing for the time period during which the hurricane conditions exist anywhere in Florida; and

3.  Ending 72 hours following the termination of the last hurricane watch or hurricane warning issued for any part of Florida by the National Hurricane Center of the National Weather Service.

History.--s. 8, ch. 95-276; s. 11, ch. 96-194; s. 10, ch. 97-55.

627.403  "Premium" defined.--"Premium" is the consideration for insurance, by whatever name called. Any "assessment," or any "membership," "policy," "survey," "inspection," "service" or similar fee or charge in consideration for an insurance contract is deemed part of the premium.

History.--s. 452, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.4035  Cash payment of premiums; claims.--

(1)  The premiums for insurance contracts issued in this state or covering risk located in this state shall be paid in cash consisting of coins, currency, checks, or money orders.

(2)  Subsection (1) is not applicable to:

(a)  Reinsurance agreements;

(b)  Pension plans;

(c)  Premium loans, whether or not subject to an automatic provision;

(d)  Dividends, whether to purchase additional paid-up insurance or to shorten the dividend payment period;

(e)  Salary deduction plans;

(f)  Preauthorized check plans;

(g)  Waivers of premiums on disability;

(h)  Nonforfeiture provisions affording benefits under supplementary contracts; or

(i)  Such other methods of paying for life insurance as may be permitted by the department pursuant to rule or regulation.

(3)  All payments of claims made in this state under any contract of insurance shall be paid:

(a)  In cash consisting of coins, currency, checks, drafts, or money orders and, if by check or draft, shall be in such form as will comply with the standards for cash items adopted by the Federal Reserve System to facilitate the sorting, routing, and mechanized processing of such items; or

(b)  If authorized in writing by the recipient or the recipient's representative, by debit card or any other form of electronic transfer. Any fees or costs to be charged against the recipient must be disclosed in writing to the recipient or the recipient's representative at the time of written authorization.

History.--s. 1, ch. 70-69; s. 1, ch. 70-439; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 11, ch. 83-288; s. 114, ch. 92-318; s. 1, ch. 2000-113.

627.404  Insurable interest; personal insurance.--

(1)  An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest which such applicant has in the insured; and no insurer shall incur any legal liability except as set forth in the policy, by virtue of any untrue statements, declarations, or representations so relied upon in good faith by the insurer.

(2)  A charitable organization that meets the requirements of s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, may own or purchase life insurance on an insured who consents to the ownership or purchase of that insurance.

History.--s. 453, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 13, ch. 91-296; s. 114, ch. 92-318.

627.405  Insurable interest; property.--

(1)  No contract of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss.

(2)  "Insurable interest" as used in this section means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.

(3)  The measure of an insurable interest in property is the extent to which the insured might be damnified by loss, injury, or impairment thereof.

History.--s. 454, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.406  Power to contract; purchase of insurance by or for minor.--

(1)  Any person of competent legal capacity may contract for insurance.

(2)  Any minor of the age of 15 years or more, as determined by the nearest birthday, may, notwithstanding his or her minority, contract for annuities or for insurance on his or her own life, body, health, property, liabilities, or other interests or on the person of another in whom the minor has an insurable interest. Such a minor shall, notwithstanding such minority, be deemed competent to exercise all rights and powers with respect to or under any contract for annuity or for insurance upon his or her own life, body, or health or any contract such minor effected on his or her own property, liabilities, or other interests or on the person of another, as might be exercised by a person of full legal age. Such minor may at any time surrender his or her interest in any such contracts and give a valid discharge for any benefits accruing or money payable thereunder. Such a minor shall not, by reason of his or her minority, be entitled to rescind, avoid, or repudiate the contract, nor to rescind, avoid, or repudiate any exercise of a right or privilege thereunder, except that such a minor, not otherwise emancipated, shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on any such annuity or insurance contract.

(3)  If any minor mentioned in subsection (2) is possessed of an estate that is being administered by a guardian or curator, no such contract shall be binding upon such estate as to payment of premiums, except as and when consented to by the guardian or curator and approved by the probate court of the county in which the administration of the estate is pending; and such consent and approval shall be required as to each premium payment.

(4)  Any annuity contract or policy of life or health insurance procured by or for a minor under subsection (2) shall be made payable either to the minor or his or her estate or to a person having an insurable interest in the life of such minor.

History.--s. 455, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 360, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 323, ch. 97-102.

627.407  Alteration of application.--No alteration of any written application for any life or health insurance policy shall be made by any person other than the applicant without his or her written consent, except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant.

History.--s. 456, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 361, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 324, ch. 97-102.

627.408  Application as evidence.--

(1)  An application for the issuance of any life or health insurance policy or annuity contract is not admissible in evidence in an action relative to the policy or contract unless a true copy of the application was attached to or otherwise made a part of the policy or contract when issued.

(2)  After reinstatement or renewal of a policy of insurance delivered or issued for delivery in this state, the insured may, in writing, request from the insurer a copy of the original application, or the application for renewal or reinstatement, if any. The insured or the beneficiary or assignee of a life or health insurance policy may request the application. Within 30 days after receiving the request, the insurer must deliver or mail a legible copy of the application to the person requesting it. If the request is made by a beneficiary, the 30-day period does not begin to run until after receipt of evidence satisfactory to the insurer of the beneficiary's vested interest in the policy or contract.

History.--s. 457, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 362, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 29, 114, ch. 92-318.

627.4085  Insurer name, agent name, and license identification number required on application.--

(1)  All applications for an insurance policy or annuity contract shall prominently display the name of the insuring entity on the first page of the application form at the time the coverage is bound or premium is quoted. Such applications shall also disclose the name and license identification number of the agent as shown on the agent's license issued by the department, which information may be typed, printed, stamped, or handwritten if legible.

(2)  This section does not apply to surplus lines business under the provisions of ss. 626.913-626.937.

History.--ss. 34, 65, ch. 88-166; s. 39, ch. 92-146; s. 114, ch. 92-318.

627.409  Representations in applications; warranties.--

(1)  Any statement or description made by or on behalf of an insured or annuitant in an application for an insurance policy or annuity contract, or in negotiations for a policy or contract, is a representation and is not a warranty. A misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply:

(a)  The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.

(b)  If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.

(2)  A breach or violation by the insured of any warranty, condition, or provision of any wet marine or transportation insurance policy, contract of insurance, endorsement, or application therefor does not void the policy or contract, or constitute a defense to a loss thereon, unless such breach or violation increased the hazard by any means within the control of the insured.

History.--s. 458, ch. 59-205; s. 2, ch. 71-45; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 363, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 30, 114, ch. 92-318.

627.4091  Specific reasons for denial, cancellation, or nonrenewal.--

(1)  The denial of an application for an insurance policy must be accompanied by the specific reasons for denial, including the specific underwriting reasons, if applicable.

(2)  Each notice of nonrenewal or cancellation must be accompanied by the specific reasons for nonrenewal or cancellation, including the specific underwriting reasons, if applicable.

(3)  No cause of action in the nature of defamation, invasion of privacy, or negligence shall arise against any person for disclosing personal or privileged information in accordance with this section, nor shall such a cause of action arise against any person for furnishing personal or privileged information to an insurance institution, agent, or insurance-support organization; however, this section shall provide no immunity for disclosing or furnishing false information through gross negligence or with malice or willful intent to injure any person.

(4)  The provisions of any other statute respecting disclosure of personal information control to the extent of any conflict with this section.

History.--s. 31, ch. 92-318.

627.410  Filing, approval of forms.--

(1)  No basic insurance policy or annuity contract form, or application form where written application is required and is to be made a part of the policy or contract, or group certificates issued under a master contract delivered in this state, or printed rider or endorsement form or form of renewal certificate, shall be delivered or issued for delivery in this state, unless the form has been filed with the department at its offices in Tallahassee by or in behalf of the insurer which proposes to use such form and has been approved by the department. This provision does not apply to surety bonds or to policies, riders, endorsements, or forms of unique character which are designed for and used with relation to insurance upon a particular subject (other than as to health insurance), or which relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or health insurance policies and are used at the request of the individual policyholder, contract holder, or certificateholder. As to group insurance policies effectuated and delivered outside this state but covering persons resident in this state, the group certificates to be delivered or issued for delivery in this state shall be filed with the department for information purposes only.

(2)  Every such filing must be made not less than 30 days in advance of any such use or delivery. At the expiration of such 30 days, the form so filed will be deemed approved unless prior thereto it has been affirmatively approved or disapproved by order of the department. The approval of any such form by the department constitutes a waiver of any unexpired portion of such waiting period. The department may extend by not more than an additional 15 days the period within which it may so affirmatively approve or disapprove any such form, by giving notice of such extension before expiration of the initial 30-day period. At the expiration of any such period as so extended, and in the absence of such prior affirmative approval or disapproval, any such form shall be deemed approved.

(3)  The department may, for cause, withdraw a previous approval. No insurer shall issue or use any form disapproved by the department, or as to which the department has withdrawn approval, after the effective date of the order of the department.

(4)  The department may, by order, exempt from the requirements of this section for so long as it deems proper any insurance document or form or type thereof as specified in such order, to which, in its opinion, this section may not practicably be applied, or the filing and approval of which are, in its opinion, not desirable or necessary for the protection of the public.

(5)  This section also applies to any such form used by domestic insurers for delivery in a jurisdiction outside this state if the insurance supervisory official of such jurisdiction informs the department that such form is not subject to approval or disapproval by such official, and upon the order of the department requiring the form to be submitted to it for the purpose. The applicable same standards apply to such forms as apply to forms for domestic use.

(6)(a)  An insurer shall not deliver or issue for delivery or renew in this state any health insurance policy form until it has filed with the department a copy of every applicable rating manual, rating schedule, change in rating manual, and change in rating schedule; if rating manuals and rating schedules are not applicable, the insurer must file with the department applicable premium rates and any change in applicable premium rates.

(b)  The department may establish by rule, for each type of health insurance form, procedures to be used in ascertaining the reasonableness of benefits in relation to premium rates and may, by rule, exempt from any requirement of paragraph (a) any health insurance policy form or type thereof (as specified in such rule) to which form or type such requirements may not be practically applied or to which form or type the application of such requirements is not desirable or necessary for the protection of the public. With respect to any health insurance policy form or type thereof which is exempted by rule from any requirement of paragraph (a), premium rates filed pursuant to ss. 627.640 and 627.662 shall be for informational purposes.

(c)  Every filing made pursuant to this subsection shall be made within the same time period provided in, and shall be deemed to be approved under the same conditions as those provided in, subsection (2).

(d)  Every filing made pursuant to this subsection, except disability income policies and accidental death policies, shall be prohibited from applying the following rating practices:

1.  Select and ultimate premium schedules.

2.  Premium class definitions which classify insured based on year of issue or duration since issue.

3.  Attained age premium structures on policy forms under which more than 50 percent of the policies are issued to persons age 65 or over.

(e)  Except as provided in subparagraph 1., an insurer shall continue to make available for purchase any individual policy form issued on or after October 1, 1993. A policy form shall not be considered to be available for purchase unless the insurer has actively offered it for sale in the previous 12 months.

1.  An insurer may discontinue the availability of a policy form if the insurer provides to the department in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the department, the insurer shall no longer offer for sale the policy form or certificate form in this state.

2.  An insurer that discontinues the availability of a policy form pursuant to subparagraph 1. shall not file for approval a new policy form providing similar benefits as the discontinued form for a period of 5 years after the insurer provides notice to the department of the discontinuance. The period of discontinuance may be reduced if the department determines that a shorter period is appropriate.

3.  The experience of all policy forms providing similar benefits shall be combined for all rating purposes.

(7)(a)  Each insurer subject to the requirements of subsection (6) shall make an annual filing with the department no later than 12 months after its previous filing, demonstrating the reasonableness of benefits in relation to premium rates. The department, after receiving a request to be exempted from the provisions of this section, may, for good cause due to insignificant numbers of policies in force or insignificant premium volume, exempt a company, by line of coverage, from filing rates or rate certification as required by this section.

(b)  The filing required by this subsection shall be satisfied by one of the following methods:

1.  A rate filing prepared by an actuary which contains documentation demonstrating the reasonableness of benefits in relation to premiums charged in accordance with the applicable rating laws and rules promulgated by the department.

2.  If no rate change is proposed, a filing which consists of a certification by an actuary that benefits are reasonable in relation to premiums currently charged in accordance with applicable laws and rules promulgated by the department.

(c)  As used in this section, "actuary" means an individual who is a member of the Society of Actuaries or the American Academy of Actuaries. If an insurer does not employ or otherwise retain the services of an actuary, the insurer's certification shall be prepared by insurer personnel or consultants with a minimum of 5 years' experience in insurance ratemaking. The chief executive officer of the insurer shall review and sign the certification indicating his or her agreement with its conclusions.

(d)  If at the time a filing is required under this section an insurer is in the process of completing a rate review, the insurer may apply to the department for an extension of up to an additional 30 days in which to make the filing. The request for extension must be received by the department in its offices in Tallahassee no later than the date the filing is due.

(e)  If an insurer fails to meet the filing requirements of this subsection and does not submit the filing within 60 days following the date the filing is due, the department may, in addition to any other penalty authorized by law, order the insurer to discontinue the issuance of policies for which the required filing was not made, until such time as the department determines that the required filing is properly submitted.

(8)(a)  For the purposes of subsections (6) and (7), benefits of an individual accident and health insurance policy form, including Medicare supplement policies as defined in s. 627.672, when authorized by rules adopted by the department, and excluding long-term care insurance policies as defined in s. 627.9404, and other policy forms under which more than 50 percent of the policies are issued to individuals age 65 and over, are deemed to be reasonable in relation to premium rates if the rates are filed pursuant to a loss ratio guarantee and both the initial rates and the durational and lifetime loss ratios have been approved by the department, and such benefits shall continue to be deemed reasonable for renewal rates while the insurer complies with such guarantee, provided the currently expected lifetime loss ratio is not more than 5 percent less than the filed lifetime loss ratio as certified to by an actuary. The department shall have the right to bring an administrative action should it deem that the lifetime loss ratio will not be met. For Medicare supplement filings, the department may withdraw a previously approved filing which was made pursuant to a loss ratio guarantee if it determines that the filing is not in compliance with ss. 627.671-627.675 or the currently expected lifetime loss ratio is less than the filed lifetime loss ratio as certified by an actuary in the initial guaranteed loss ratio filing. If this section conflicts with ss. 627.671-627.675, ss. 627.671-627.675 shall control.

(b)  The renewal premium rates shall be deemed to be approved upon filing with the department if the filing is accompanied by the most current approved loss ratio guarantee. The loss ratio guarantee shall be in writing, shall be signed by an officer of the insurer, and shall contain at least:

1.  A recitation of the anticipated lifetime and durational target loss ratios contained in the actuarial memorandum filed with the policy form when it was originally approved. The durational target loss ratios shall be calculated for 1-year experience periods. If statutory changes have rendered any portion of such actuarial memorandum obsolete, the loss ratio guarantee shall also include an amendment to the actuarial memorandum reflecting current law and containing new lifetime and durational loss ratio targets.

2.  A guarantee that the applicable loss ratios for the experience period in which the new rates will take effect, and for each experience period thereafter until new rates are filed, will meet the loss ratios referred to in subparagraph 1.

3.  A guarantee that the applicable loss ratio results for the experience period will be independently audited at the insurer's expense. The audit shall be performed in the second calendar quarter of the year following the end of the experience period, and the audited results shall be reported to the department no later than the end of such quarter. The department shall establish by rule the minimum information reasonably necessary to be included in the report. The audit shall be done in accordance with accepted accounting and actuarial principles.

4.  A guarantee that affected policyholders in this state shall be issued a proportional refund, based on the premium earned, of the amount necessary to bring the applicable experience period loss ratio up to the durational target loss ratio referred to in subparagraph 1. The refund shall be made to all policyholders in this state who are insured under the applicable policy form as of the last day of the experience period, except that no refund need be made to a policyholder in an amount less than $10. Refunds less than $10 shall be aggregated and paid pro rata to the policyholders receiving refunds. The refund shall include interest at the then-current variable loan interest rate for life insurance policies established by the National Association of Insurance Commissioners, from the end of the experience period until the date of payment. Payments shall be made during the third calendar quarter of the year following the experience period for which a refund is determined to be due. However, no refunds shall be made until 60 days after the filing of the audit report in order that the department has adequate time to review the report.

5.  A guarantee that if the applicable loss ratio exceeds the durational target loss ratio for that experience period by more than 20 percent, provided there are at least 2,000 policyholders on the form nationwide or, if not, then accumulated each calendar year until 2,000 policyholder years is reached, the insurer, if directed by the department, shall withdraw the policy form for the purposes of issuing new policies.

(c)  As used in this subsection:

1.  "Loss ratio" means the ratio of incurred claims to earned premium.

2.  "Applicable loss ratio" means the loss ratio attributable solely to this state if there are 2,000 or more policyholders in the state. If there are 500 or more policyholders in this state but less than 2,000, it is the linear interpolation of the nationwide loss ratio and the loss ratio for this state. If there are less than 500 policyholders in this state, it is the nationwide loss ratio.

3.  "Experience period" means the period, ordinarily a calendar year, for which a loss ratio guarantee is calculated.

History.--s. 459, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 71-17; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 364, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 2, ch. 84-235; s. 3, ch. 89-360; s. 20, ch. 90-249; s. 12, ch. 90-366; s. 1, ch. 91-73; ss. 32, 114, ch. 92-318; s. 62, ch. 93-129; s. 22, ch. 93-260; s. 325, ch. 97-102; s. 3, ch. 98-159; s. 4, ch. 98-173.

627.4105  Life and health insurance; reduced premiums upon rigorous physical examination.--Upon request, the department may approve special life and health insurance policy forms providing for reduced premiums for each applicant passing a rigorous physical examination.

History.--s. 1, ch. 78-248; s. 2, ch. 81-318; ss. 365, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.411  Grounds for disapproval.--

(1)  The department shall disapprove any form filed under s. 627.410, or withdraw any previous approval thereof, only if the form:

(a)  Is in any respect in violation of, or does not comply with, this code.

(b)  Contains or incorporates by reference, where such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses, or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract.

(c)  Has any title, heading, or other indication of its provisions which is misleading.

(d)  Is printed or otherwise reproduced in such manner as to render any material provision of the form substantially illegible.

(e)  Is for health insurance, and provides benefits which are unreasonable in relation to the premium charged, contains provisions which are unfair or inequitable or contrary to the public policy of this state or which encourage misrepresentation, or which apply rating practices which result in premium escalations that are not viable for the policyholder market or result in unfair discrimination in sales practices.

(f)  Excludes coverage for human immunodeficiency virus infection or acquired immune deficiency syndrome or contains limitations in the benefits payable, or in the terms or conditions of such contract, for human immunodeficiency virus infection or acquired immune deficiency syndrome which are different than those which apply to any other sickness or medical condition.

(2)  In determining whether the benefits are reasonable in relation to the premium charged, the department, in accordance with reasonable actuarial techniques, shall consider:

(a)  Past loss experience and prospective loss experience within and without this state.

(b)  Allocation of expenses.

(c)  Risk and contingency margins, along with justification of such margins.

(d)  Acquisition costs.

History.--s. 460, ch. 59-205; ss. 13, 35, 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 366, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 48, ch. 88-380; s. 114, ch. 92-318; s. 63, ch. 93-129.

627.412  Standard provisions, in general.--

(1)  Insurance contracts shall contain such standard or uniform provisions as are required by the applicable provisions of this code pertaining to contracts of particular kinds of insurance. The department may waive the required use of a particular provision in a particular insurance policy form if:

(a)  It finds such provision unnecessary for the protection of the insured and inconsistent with the purposes of the policy; and

(b)  The policy is otherwise approved by it.

(2)  No policy shall contain any provision inconsistent with or contradictory to any standard or uniform provision used or required to be used, but the department may approve any substitute provision which is, in its opinion, not less favorable in any particular to the insured or beneficiary than the provisions otherwise required.

(3)  In lieu of the provisions required by this code for contracts for particular kinds of insurance, substantially similar provisions required by the law of the domicile of a foreign or alien insurer may be used when approved by the department.

History.--s. 461, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.413  Contents of policies, in general; identification.--

(1)  Every policy shall specify:

(a)  The names of the parties to the contract.

(b)  The subject of the insurance.

(c)  The risks insured against.

(d)  The time when the insurance thereunder takes effect and the period during which the insurance is to continue.

(e)  The premium.

(f)  The conditions pertaining to the insurance.

(g)  The form numbers and edition dates or numeric code indicating edition dates, when such code has been supplied to the department, of all endorsements attached to a policy. This requirement applies to life insurance policies and health insurance policies only at the time of original issue.

(2)  If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included.

(3)  Subsections (1) and (2) do not apply to surety contracts or to group insurance policies.

(4)  All policies and annuity contracts issued by insurers, and the forms thereof filed with the department, shall have printed thereon an appropriate designating letter or figure, or combination of letters or figures or terms identifying the respective forms of policies or contracts. Whenever any change is made in any such form, the designating letters, figures, or terms thereon shall be correspondingly changed.

(5)  Any policy that is a minimum premium policy issued by an insurer pursuant to the minimum premium provisions of rules adopted by rating organizations licensed by the Department of Insurance, shall have typed, printed, stamped, or legibly handwritten on the certificate the words "minimum premium policy" or equivalent language. The department may impose an administrative fine pursuant to s. 624.4211 if the department finds any violation of this subsection.

History.--s. 462, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 367, 377, 809(2nd), ch. 82-243; ss. 50, 79, ch. 82-386; s. 114, ch. 92-318; s. 16, ch. 98-174.

627.4131  Telephone number required.--Each insurer issuing a policy subject to this part, or issuing a policy of title insurance, credit life insurance, or credit disability insurance in this state, must make a telephone number available for policyholders and certificateholders to present inquiries or obtain information about coverage and to provide assistance in resolving complaints. The policy or certificate must provide notice of the telephone number and its purposes.

History.--s. 34, ch. 92-318.

627.4132  Stacking of coverages prohibited.--If an insured or named insured is protected by any type of motor vehicle insurance policy for liability, personal injury protection, or other coverage, the policy shall provide that the insured or named insured is protected only to the extent of the coverage she or he has on the vehicle involved in the accident. However, if none of the insured's or named insured's vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with applicable coverage. Coverage on any other vehicles shall not be added to or stacked upon that coverage. This section does not apply:

(1)  To uninsured motorist coverage which is separately governed by s. 627.727.

(2)  To reduce the coverage available by reason of insurance policies insuring different named insureds.

History.--s. 10, ch. 76-266; s. 1, ch. 80-364; s. 2, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 14, ch. 88-370; s. 114, ch. 92-318; s. 326, ch. 97-102.

627.4133  Notice of cancellation, nonrenewal, or renewal premium.--

(1)  Except as provided in subsection (2):

(a)  An insurer issuing a policy providing coverage for workers' compensation and employer's liability insurance, property, casualty, except mortgage guaranty, surety, or marine insurance, other than motor vehicle insurance subject to s. 627.728, shall give the named insured at least 45 days' advance written notice of nonrenewal or of the renewal premium. If the policy is not to be renewed, the written notice shall state the reason or reasons as to why the policy is not to be renewed. This requirement applies only if the insured has furnished all of the necessary information so as to enable the insurer to develop the renewal premium prior to the expiration date of the policy to be renewed.

(b)  An insurer issuing a policy providing coverage for property, casualty, except mortgage guaranty, surety, or marine insurance, other than motor vehicle insurance subject to s. 627.728 or s. 627.7281, shall give the named insured written notice of cancellation or termination other than nonrenewal at least 45 days prior to the effective date of the cancellation or termination, including in the written notice the reason or reasons for the cancellation or termination, except that:

1.  When cancellation is for nonpayment of premium, at least 10 days' written notice of cancellation accompanied by the reason therefor shall be given; and

2.  When such cancellation or termination occurs during the first 90 days during which the insurance is in force and the insurance is canceled or terminated for reasons other than nonpayment of premium, at least 20 days' written notice of cancellation or termination accompanied by the reason therefor shall be given except where there has been a material misstatement or misrepresentation or failure to comply with the underwriting requirements established by the insurer.

After the policy has been in effect for 90 days, no such policy shall be canceled by the insurer except when there has been a material misstatement, a nonpayment of premium, a failure to comply with underwriting requirements established by the insurer within 90 days of the date of effectuation of coverage, or a substantial change in the risk covered by the policy or when the cancellation is for all insureds under such policies for a given class of insureds. The provisions of this subsection shall not apply to individually rated risks having a policy term of less than 90 days.

(c)  If an insurer fails to provide the 45-day or 20-day written notice required under this section, the coverage provided to the named insured shall remain in effect until 45 days after the notice is given or until the effective date of replacement coverage obtained by the named insured, whichever occurs first. The premium for the coverage shall remain the same during any such extension period except that, in the event of failure to provide notice of nonrenewal, if the rate filing then in effect would have resulted in a premium reduction, the premium during such extension of coverage shall be calculated based upon the later rate filing.

(2)  With respect to any personal lines or commercial residential property insurance policy, including, but not limited to, any homeowner's, mobile home owner's, farmowner's, condominium association, condominium unit owner's, apartment building, or other policy covering a residential structure or its contents:

(a)  The insurer shall give the named insured at least 45 days' advance written notice of the renewal premium.

(b)  The insurer shall give the named insured written notice of nonrenewal, cancellation, or termination at least 90 days prior to the effective date of the nonrenewal, cancellation, or termination. The notice must include the reason or reasons for the nonrenewal, cancellation, or termination, except that:

1.  When cancellation is for nonpayment of premium, at least 10 days' written notice of cancellation accompanied by the reason therefor shall be given.

2.  When such cancellation or termination occurs during the first 90 days during which the insurance is in force and the insurance is canceled or terminated for reasons other than nonpayment of premium, at least 20 days' written notice of cancellation or termination accompanied by the reason therefor shall be given except where there has been a material misstatement or misrepresentation or failure to comply with the underwriting requirements established by the insurer.

After the policy has been in effect for 90 days, the policy shall not be canceled by the insurer except when there has been a material misstatement, a nonpayment of premium, a failure to comply with underwriting requirements established by the insurer within 90 days of the date of effectuation of coverage, or a substantial change in the risk covered by the policy or when the cancellation is for all insureds under such policies for a given class of insureds. This paragraph does not apply to individually rated risks having a policy term of less than 90 days.

(c)  If the insurer fails to provide the notice required by this subsection, other than the 10-day notice, the coverage provided to the named insured shall remain in effect until the effective date of replacement coverage or until the expiration of a period of days after the notice is given equal to the required notice period, whichever occurs first. The premium for the coverage shall remain the same during any such extension period except that, in the event of failure to provide notice of nonrenewal, if the rate filing then in effect would have resulted in a premium reduction, the premium during such extension shall be calculated based on the later rate filing.

(3)  Claims on property insurance policies that are the result of an act of God may not be used as a cause for cancellation or nonrenewal, unless the insurer can demonstrate, by claims frequency or otherwise, that the insured has failed to take action reasonably necessary as requested by the insurer to prevent recurrence of damage to the insured property.

History.--s. 16, ch. 86-160; s. 2, ch. 87-50; s. 8, ch. 87-124; s. 12, ch. 90-119; ss. 35, 114, ch. 92-318; s. 15, ch. 93-410; s. 99, ch. 93-415.

627.4135  Casualty insurance contracts subject to general provisions for insurance contracts.--All contracts of casualty insurance covering subjects resident, located, or to be performed in this state shall be subject to the applicable provisions of this part and to the other applicable provisions of this code.

History.--s. 610, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 36, 114, ch. 92-318.

Note.--Former s. 627.726.

627.4136  Nonjoinder of insurers.--

(1)  It shall be a condition precedent to the accrual or maintenance of a cause of action against a liability insurer by a person not an insured under the terms of the liability insurance contract that such person shall first obtain a settlement or verdict against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.

(2)  Notwithstanding subsection (1), any insurer who pays any taxable costs or attorney's fees which would be recoverable by the insured but for the fact that such costs or fees were paid by the insurer shall be considered a party for the purpose of recovering such fees or costs. No person who is not an insured under the terms of a liability insurance policy shall have any interest in such policy, either as a third-party beneficiary or otherwise, prior to first obtaining a settlement or verdict against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.

(3)  Insurers are affirmatively granted the substantive right to insert in liability insurance policies contractual provisions that preclude persons who are not designated as insureds in such policies from joining a liability insurer as a party defendant with its insured prior to the rendition of a verdict. The contractual provisions authorized in this subsection shall be fully enforceable.

(4)  At the time a judgment is entered or a settlement is reached during the pendency of litigation, a liability insurer may be joined as a party defendant for the purposes of entering final judgment or enforcing the settlement by the motion of any party, unless the insurer denied coverage under the provisions of s. 627.426(2) or defended under a reservation of rights pursuant to s. 627.426(2). A copy of the motion to join the insurer shall be served on the insurer by certified mail. If a judgment is reversed or remanded on appeal, the insurer's presence shall not be disclosed to the jury in a subsequent trial.

History.--s. 12, ch. 76-266; s. 2, ch. 81-318; ss. 542, 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 38, ch. 90-119; ss. 37, 114, ch. 92-318.

Note.--Former s. 627.7262.

627.4137  Disclosure of certain information required.--

(1)  Each insurer which does or may provide liability insurance coverage to pay all or a portion of any claim which might be made shall provide, within 30 days of the written request of the claimant, a statement, under oath, of a corporate officer or the insurer's claims manager or superintendent setting forth the following information with regard to each known policy of insurance, including excess or umbrella insurance:

(a)  The name of the insurer.

(b)  The name of each insured.

(c)  The limits of the liability coverage.

(d)  A statement of any policy or coverage defense which such insurer reasonably believes is available to such insurer at the time of filing such statement.

(e)  A copy of the policy.

In addition, the insured, or her or his insurance agent, upon written request of the claimant or the claimant's attorney, shall disclose the name and coverage of each known insurer to the claimant and shall forward such request for information as required by this subsection to all affected insurers. The insurer shall then supply the information required in this subsection to the claimant within 30 days of receipt of such request.

(2)  The statement required by subsection (1) shall be amended immediately upon discovery of facts calling for an amendment to such statement.

History.--ss. 543, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 22, ch. 83-288; ss. 38, 114, ch. 92-318; s. 327, ch. 97-102.

Note.--Former s. 627.7264.

627.414  Additional policy contents.--A policy may contain additional provisions not inconsistent with this code and which are:

(1)  Required to be inserted by the laws of the insurer's domicile;

(2)  Necessary, on account of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties to the contract; or

(3)  Desired by the insurer and neither prohibited by law nor in conflict with any provisions required to be included therein.

History.--s. 463, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.4143  Outline of coverage.--

(1)  No private passenger automobile or basic homeowner's policy shall be delivered or issued for delivery in this state unless an appropriate outline of coverage has been delivered prior to issuance of the policy or accompanies the policy when issued.

(2)  The outline of coverage shall contain all of the following:

(a)  A brief description of the principal benefits and coverage provided in the policy, broken down by each class or type of coverage provided under the policy for which a premium is charged, and itemization of the applicable premium.

(b)  A summary statement of the principal exclusions and limitations or reductions contained in the policy by class or type, including, but not limited to, deductibles, coinsurance, and any other limitations or reductions.

(c)  A summary statement of any renewal or cancellation provisions.

(d)  A description of the credit or surcharge plan that is being applied. The description may display numerical or alphabetical codes on the declarations page or premium notice to enable the insured to determine the reason or reasons why her or his policy is being surcharged or is receiving a credit.

(e)  A list of any additional coverage provided through any rider or endorsement which accompanies the policy. The list shall contain a descriptive reference to each additional coverage, rather than solely a reference to a form or code number.

(f)  For a private passenger motor vehicle insurance policy, the extent of coverage provided to the insured in the event of collision damage to a rental vehicle rented by the insured. The proof-of-insurance card required by s. 316.646 must also specify whether rental car coverage is provided, and may refer to the outline of coverage as to the details or extent of coverage.

(3)  The outline of coverage is required only on the initial policy issued by an insurer.

(4)  An insurer must insert the following language on the outline of coverage:

"The following outline of coverage is for informational purposes only. Florida law prohibits this outline from changing any of the provisions of the insurance contract which is the subject of this outline. Any endorsement regarding changes in types of coverage, exclusions, limitations, reductions, deductibles, coinsurance, renewal provisions, cancellation provisions, surcharges, or credits will be sent separately."

(5)  Neither this section nor the outline of coverage mandated by this section alters or modifies the terms of the insurance contract, creates a cause of action, or is admissible in any civil action.

History.--s. 23, ch. 89-360; s. 1, ch. 90-192; ss. 39, 114, ch. 92-318; s. 328, ch. 97-102.

627.4145  Readable language in insurance policies.--

(1)  Every policy shall be readable as required by this section. For the purposes of this section, the term "policy" means a policy form or endorsement. A policy is deemed readable if:

(a)  The text achieves a minimum score of 45 on the Flesch reading ease test as computed in subsection (5) or an equivalent score on any other test comparable in result and approved by the department;

(b)  It uses layout and spacing which separate the paragraphs from each other and from the border of the paper;

(c)  It has section titles that are captioned in boldfaced type or that otherwise stand out significantly from the text;

(d)  It avoids the use of unnecessarily long, complicated, or obscure words, sentences, paragraphs, or constructions;

(e)  The style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text of the policy or to any endorsements or riders; and

(f)  It contains a table of contents or an index of the principal sections of the policy, if the policy has more than 3,000 words or more than three pages.

(2)  The department may authorize a lower score than the Flesch reading ease test score required in subsection (1) whenever it finds that a lower score will provide a more accurate reflection of the readability of a policy form, is warranted by the nature of a particular policy form or type or class of policy forms, or is the result of language which is used to conform to the requirements of any law.

(3)  A filing subject to this section shall be accompanied by a certification signed by an officer of the insurer stating that the policy meets the requirements of subsection (1). Such certification shall state that the policy meets the minimum reading ease test score on the test used or that the score is lower than the minimum required but should be approved in accordance with subsection (2). The department may require the submission of further information to verify any certification.

(4)  Any non-English language policy shall be deemed to be in compliance with this section if the insurer certifies that such policy is translated from an English language policy which complies with this section.

(5)  A Flesch reading ease test score shall be measured by the following method:

(a)  For policy forms containing 10,000 words or fewer of text, the entire form shall be analyzed. For policy forms containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least 20 printed lines.

(b)  The total number of words in the text shall be counted and divided by the total number of sentences, and the figure obtained shall be multiplied by a factor of 1.015.

(c)  The total number of syllables shall be counted and divided by the total number of words, and the figure obtained shall be multiplied by a factor of 84.6.

(d)  The sum of the figures computed under paragraphs (b) and (c) subtracted from 206.835 equals the Flesch reading ease test score for the policy form.

(e)  For purposes of this subsection:

1.  A contraction, hyphenated word, or numerals and letters, when separated by spaces, shall be counted as one word; and

2.  A unit of words ending with a period, semicolon, or colon, excluding headings and captions, shall be counted as one sentence.

(f)  The term "text" as used in this subsection includes all printed matter except:

1.  The name and address of the insurer; the name, number, or title of the policy; the table of contents or index; captions and subcaptions; specification pages; schedules; or tables;

2.  Policy language required by any collectively bargained agreement;

3.  Any medical terminology;

4.  Words which are defined in the policy; and

5.  Any policy language required by law, if the insurer identifies the language or terminology excepted by this paragraph and certifies to the department, in writing, that the language or terminology is entitled to be excepted under this paragraph.

(g)  At the option of the insurer, riders, endorsements, applications, and other forms made a part of the policy may be scored as separate forms or as part of the policy with which they are to be used.

(6)  This section does not apply to:

(a)  Any policy which is a security subject to federal jurisdiction;

(b)  Any group policy covering a group of 1,000 or more lives at date of issue, other than a group credit life insurance policy or a group credit health insurance policy; however, this paragraph does not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;

(c)  Any group annuity contract which serves as a funding vehicle for pension, profit-sharing, or deferred compensation plans;

(d)  Any form used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates such forms must be approved under this section;

(e)  Any policy or form, or partial revision thereof, or renewal thereof, which policy or form is filed prior to October 1, 1983; or

(f)  Endorsements filed on or after October 1, 1983, which modify policy forms prior to October 1, 1983.

(g)  Mortgage guaranty insurance policies, as defined in s. 635.011.

(7)  This section applies to forms filed on or after October 1, 1983.

History.--ss. 368, 809(2nd), ch. 82-243; ss. 51, 79, ch. 82-386; s. 96, ch. 83-216; s. 13, ch. 83-288; s. 2, ch. 84-352; s. 114, ch. 92-318.

627.4147  Medical malpractice insurance contracts.--

(1)  In addition to any other requirements imposed by law, each self-insurance policy as authorized under s. 627.357 or insurance policy providing coverage for claims arising out of the rendering of, or the failure to render, medical care or services, including those of the Florida Medical Malpractice Joint Underwriting Association, shall include:

(a)  A clause requiring the insured to cooperate fully in the review process prescribed under s. 766.106 if a notice of intent to file a claim for medical malpractice is made against the insured.

(b)1.  Except as provided in subparagraph 2., a clause authorizing the insurer or self-insurer to determine, to make, and to conclude, without the permission of the insured, any offer of admission of liability and for arbitration pursuant to s. 766.106, settlement offer, or offer of judgment, if the offer is within the policy limits. It is against public policy for any insurance or self-insurance policy to contain a clause giving the insured the exclusive right to veto any offer for admission of liability and for arbitration made pursuant to s. 766.106, settlement offer, or offer of judgment, when such offer is within the policy limits. However, any offer of admission of liability, settlement offer, or offer of judgment made by an insurer or self-insurer shall be made in good faith and in the best interests of the insured.

2.a.  With respect to dentists licensed under chapter 466, a clause clearly stating whether or not the insured has the exclusive right to veto any offer of admission of liability and for arbitration pursuant to s. 766.106, settlement offer, or offer of judgment if the offer is within policy limits. An insurer or self-insurer shall not make or conclude, without the permission of the insured, any offer of admission of liability and for arbitration pursuant to s. 766.106, settlement offer, or offer of judgment, if such offer is outside the policy limits. However, any offer for admission of liability and for arbitration made under s. 766.106, settlement offer, or offer of judgment made by an insurer or self-insurer shall be made in good faith and in the best interest of the insured.

b.  If the policy contains a clause stating the insured does not have the exclusive right to veto any offer or admission of liability and for arbitration made pursuant to s. 766.106, settlement offer or offer of judgment, the insurer or self-insurer shall provide to the insured or the insured's legal representative by certified mail, return receipt requested, a copy of the final offer of admission of liability and for arbitration made pursuant to s. 766.106, settlement offer or offer of judgment and at the same time such offer is provided to the claimant. A copy of any final agreement reached between the insurer and claimant shall also be provided to the insurer or his or her legal representative by certified mail, return receipt requested not more than 10 days after affecting such agreement.

(c)  A clause requiring the insurer or self-insurer to notify the insured no less than 60 days prior to the effective date of cancellation of the policy or contract and, in the event of a determination by the insurer or self-insurer not to renew the policy or contract, to notify the insured no less than 60 days prior to the end of the policy or contract period. If cancellation or nonrenewal is due to nonpayment or loss of license, 10 days' notice is required.

(2)  Each insurer covered by this section may require the insured to be a member in good standing, i.e., not subject to expulsion or suspension, of a duly recognized state or local professional society of health care providers which maintains a medical review committee. No professional society shall expel or suspend a member solely because he or she participates in a health maintenance organization licensed under part I of chapter 641.

(3)  This section shall apply to all policies issued or renewed after October 1, 1985.

History.--ss. 6, 44, ch. 85-175; s. 5, ch. 86-287; s. 114, ch. 92-318; s. 23, ch. 95-211; s. 1, ch. 96-361; s. 1733, ch. 97-102; s. 29, ch. 99-3.

627.4148  Medical malpractice insurers; required offer of coverage limits.--An insurer issuing policies of professional liability coverage for claims arising out of the rendering of, or the failure to render, medical care or services shall make available to physicians licensed under chapter 458 and to osteopathic physicians licensed under chapter 459 coverage with the following limits, subject to usual underwriting standards:

(1)  One hundred thousand dollars per claim, $300,000 annual aggregate; and

(2)  Two hundred fifty thousand dollars per claim, $750,000 annual aggregate.

History.--s. 46, ch. 86-160; s. 2, ch. 87-50; s. 1, ch. 90-249; s. 114, ch. 92-318.

Note.--Former s. 627.6057.

627.415  Charter, bylaw provisions.--No policy shall contain any provision purporting to make any portion of the charter, bylaws, or other constituent document of the insurer (other than the subscribers' agreement or power of attorney of a reciprocal insurer) a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section is invalid.

History.--s. 464, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.416  Execution of policies.--

(1)  Every insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney in fact, employee, or representative duly authorized by the insurer.

(2)  A facsimile signature of any such executing individual may be used in lieu of an original signature.

(3)  No insurance contract which is otherwise valid shall be rendered invalid by reason of the apparent execution thereof on behalf of the insurer by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the policy.

History.--s. 465, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 369, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.417  Underwriters' and combination policies.--

(1)  Two or more authorized insurers may jointly issue, and shall be jointly and severally liable on, an underwriters' policy bearing their names. Any one insurer may issue a policy in the name of an underwriter's department, and such policy shall plainly show the true name of the insurer.

(2)  Two or more authorized insurers may, with the approval of the department, issue a combination policy which shall contain provisions substantially as follows:

(a)  That the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy; and

(b)  That service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers.

(3)  This section does not apply to cosurety obligations.

History.--s. 466, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.418  Validity of noncomplying contracts.--

(1)  Any insurance policy, rider, or endorsement otherwise valid which contains any condition or provision not in compliance with the requirements of this code shall not be thereby rendered invalid, except as provided in s. 627.415, but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this code. In the event an insurer issues or delivers any policy for an amount which exceeds any limitations otherwise provided in this code, such insurer shall be liable to the insured or his or her beneficiary for the full amount stated in the policy in addition to any other penalties that may be imposed under this code.

(2)  Any insurance contract delivered or issued for delivery in this state covering a subject or subjects of insurance resident, located, or to be performed in this state, which subjects, pursuant to the provisions of this code, the insurer may not lawfully insure under such a contract, shall be cancelable at any time by the insurer, any provision of the contract to the contrary notwithstanding; and the insurer shall promptly cancel the contract in accordance with the request of the department therefor. No such illegality or cancellation shall be deemed to relieve the insurer of any liability incurred by it under the contract while in force, or to prohibit the insurer from retaining the pro rata earned premium thereon. This provision does not relieve the insurer from any penalty otherwise incurred by the insurer under this code on account of any such violation.

History.--s. 467, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 72-23; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 370, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 329, ch. 97-102.

Note.--Former s. 627.0117.

627.419  Construction of policies.--

(1)  Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any application therefor or any rider or endorsement thereto.

(2)  The word "physician" or "medical doctor," when used in any health insurance policy, health care services plan, or other contract providing for the payment of surgical procedures which are specified in the policy or contract or are performed in an accredited hospital in consultation with a licensed physician and are within the scope of a dentist's professional license, shall be construed to include a dentist who performs such specified procedures.

(3)  Notwithstanding any other provision of law, when any health insurance policy, health care services plan, or other contract provides for the payment for procedures specified in the policy or contract which are within the scope of an optometrist's or podiatric physician's professional license, such policy shall be construed to include payment to an optometrist or podiatric physician who performs such procedures. In the case of podiatric services, such payments shall be made in accordance with the coverage now provided for medical and surgical benefits.

(4)  Notwithstanding any other provision of law, when any health insurance policy, health care services plan, or other contract provides for the payment for medical expense benefits or procedures, such policy, plan, or contract shall be construed to include payment to a chiropractic physician who provides the medical service benefits or procedures which are within the scope of a chiropractic physician's license. Any limitation or condition placed upon payment to, or upon services, diagnosis, or treatment by, any licensed physician shall apply equally to all licensed physicians without unfair discrimination to the usual and customary treatment procedures of any class of physicians.

(5)  For purposes of coverage under a policy of disability income or credit disability insurance, no determination of disability shall be rejected solely on the basis of the chapter under which the physician is licensed; however, such determination may be rejected on the basis that the determination is outside the scope of the physician's authorized practice. However, the insurance carrier shall have the option after 30 days of disability to seek a second physician's opinion prior to paying additional benefits.

(6)  Notwithstanding any other provision of law, when any health insurance policy, health care services plan, or other contract provides for payment for surgical first assisting benefits or services, the policy, plan, or contract is to be construed as providing for payment to a registered nurse first assistant or employers of a physician assistant or nurse first assistant who performs such services that are within the scope of a physician assistant's or a registered nurse first assistant's professional license. The provisions of this subsection apply only if reimbursement for an assisting physician, licensed under chapter 458 or chapter 459, would be covered and a physician assistant or a registered nurse first assistant who performs such services is used as a substitute.

(7)  No health insurance policy, health care services plan, or other contract which provides coverage for any diagnostic or surgical procedure involving bones or joints of the skeleton shall discriminate against coverage for any similar diagnostic or surgical procedure involving bones or joints of the jaw and facial region, if, under accepted medical standards, such procedure or surgery is medically necessary to treat conditions caused by congenital or developmental deformity, disease, or injury. This subsection shall not be construed to affect any other coverage under this part or to restrict the scope of coverage under any policy, plan, or contract. Nothing in this subsection shall be construed to discourage appropriate nonsurgical procedures or to prohibit the continued coverage of nonsurgical procedures in the treatment of a bone or joint of the jaw and facial region. Furthermore, nothing in this subsection requires coverage for care or treatment of the teeth or gums, for intraoral prosthetic devices, or for surgical procedures for cosmetic purposes. This section does not apply to accident only, disability income, specified disease, hospital indemnity, credit, Medicare supplement, or long-term care insurance policies.

(8)  If an insurer or licensee advertises an insurance policy in a language other than English, the advertisements shall not be construed to modify or change the insurance policy written in English. The advertisement must disclose that the policy written in English controls in the event of a dispute and that statements contained in the advertisement do not necessarily, as a result of possible linguistic differences, reflect the contents of the policy written in English. Nothing in this subsection shall affect the provisions of s. 626.9541 relating to misrepresentations and false advertising of insurance policies.

History.--s. 468, ch. 59-205; s. 1, ch. 69-245; ss. 1, 2, ch. 72-11; s. 163A, ch. 73-333; s. 1, ch. 74-34; s. 1, ch. 74-87; s. 1, ch. 76-167; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 371, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 86-40; s. 3, ch. 90-255; s. 114, ch. 92-318; s. 5, ch. 94-96; s. 2, ch. 96-361; s. 1, ch. 97-5; s. 3, ch. 97-178; s. 223, ch. 98-166.

Note.--Former s. 627.0118.

627.4195  Health insurance; claims for payment of psychotherapeutic services; confidentiality.--An insurer must maintain strict confidentiality against unauthorized or inadvertent disclosure of confidential information to persons inside or outside the insurer's organization regarding claims for payment of psychotherapeutic services provided by psychotherapists licensed under chapter 490 or chapter 491 and psychotherapeutic records and reports related to the claims. A report, in lieu of records, may be submitted by a psychotherapist in support of a claim. Such report must include clear statements summarizing the insured's presenting symptoms, what transpired in any provided therapy, what progress, if any, was made by the insured and results obtained. However, the insurer may require the records upon which the report is based, if the report does not contain sufficient information for properly processing the claim. A psychotherapist submitting records in support of a claim may obscure portions to conceal the names, identities, or identifying information of people other than the insured if this information is unnecessary to utilization review, quality management, discharge planning, case management, or claims processing conducted by the insurer. An insurer may provide aggregate data which does not disclose subscriber identities or identities of other persons to entities such as payors, sponsors, researchers and accreditation bodies. As used in this section, "insurer" means an individual health insurance policy subject to this chapter, an insurer issuing a group health insurance policy or certificate pursuant to s. 627.651, a plan of self-insurance providing the health coverage benefits to residents of this state pursuant to s. 627.651, an insurer delivering a group health policy issued or delivered outside this state under which a resident of this state is provided coverage pursuant to s. 627.6515, a preferred provider organization as defined in s. 627.6471, an exclusive provider organization as defined in s. 627.6472, and prepaid health service organizations providing mental health services pursuant to chapter 636.

History.--s. 2, ch. 96-180.

Note.--Former s. 627.66995.

627.420  Binders.--Binders or other contracts for temporary property, marine, casualty, or surety insurance may be made orally or in writing, and shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder. No notice of cancellation or notice of nonrenewal otherwise required by this chapter shall be required unless the duration of the binder exceeds 60 days. However, for purposes of ss. 627.728 and 627.7281, an insurer shall give 5 days' prior notice of cancellation of a binder, unless the binder is replaced by a policy or another binder in the same or another company.

History.--s. 469, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 85-51; s. 114, ch. 92-318.

627.4205  Coverage identification number required.--An insurer shall provide to the named insured a coverage identification number no later than the time insurance coverage under a policy, binder, or other contract providing any insurance or surety coverage becomes effective. The coverage identification number shall be construed for regulatory purposes under this code as a policy number.

History.--s. 17, ch. 86-160; s. 2, ch. 87-50; s. 114, ch. 92-318.

627.421  Delivery of policy.--

(1)  Subject to the insurer's requirement as to payment of premium, every policy shall be mailed or delivered to the insured or to the person entitled thereto not later than 60 days after the effectuation of coverage.

(2)  In the event the original policy is delivered or is so required to be delivered to or for deposit with any vendor, mortgagee, or pledgee of any motor vehicle, and in which policy any interest of the vendee, mortgagor, or pledgor in or with reference to such vehicle is insured, a duplicate of such policy setting forth the name and address of the insurer, insurance classification of vehicle, type of coverage, limits of liability, premiums for the respective coverages, and duration of the policy, or memorandum thereof containing the same such information, shall be delivered by the vendor, mortgagee, or pledgee to each such vendee, mortgagor, or pledgor named in the policy or coming within the group of persons designated in the policy to be so included. If the policy does not provide coverage of legal liability for injury to persons or damage to the property of third parties, a statement of such fact shall be printed, written, or stamped conspicuously on the face of such duplicate policy or memorandum. This subsection does not apply to inland marine floater policies.

(3)  Any automobile liability or physical damage policy shall contain on the front page a summary of major coverages, conditions, exclusions, and limitations contained in that policy. Any such summary shall state that the issued policy should be referred to for the actual contractual governing provisions. The company may, in lieu of the summary, provide a readable policy.

History.--s. 470, ch. 59-205; s. 1, ch. 75-218; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 18, ch. 86-160; s. 114, ch. 92-318.

627.422  Assignment of policies.--A policy may be assignable, or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or health insurance policy under the terms of which the beneficiary may be changed upon the sole request of the policyowner may be assigned either by pledge or transfer of title, by an assignment executed by the policyowner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any such assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment, until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.

History.--s. 471, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 372, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.423  Payment discharges insurer.--Whenever the proceeds of or payments under a life or health insurance policy or annuity contract become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, and the insurer makes payment thereof in accordance with the terms of the policy or contract or in accordance with any written assignment thereof, the person then designated in the policy or contract or by such assignment as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor; and such payments shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.

History.--s. 472, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 373, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.4232  Health insurance out-of-hospital benefits.--No health insurance policy which provides coverage on a medical, hospital, or surgical expense-incurred basis shall be delivered or issued for delivery in this state unless coverage is provided for treatment performed outside a hospital for any accident or illness as defined in the policy, provided that such treatment would be covered on an inpatient basis and is provided by a health care provider whose services would be covered under the policy if the treatment were performed in a hospital and provided that treatment of the accident or illness is medically necessary and is provided as an alternative to inpatient treatment in a hospital. Reimbursement may be limited to amounts that are reasonable for the treatment or services provided and may be limited by any deductible and coinsurance provisions of the policy.

History.--ss. 6, 10, ch. 84-235; s. 114, ch. 92-318.

627.4233  Total disability defined.--

(1)  If an individual or group policy of disability income insurance provides for the waiver of premiums or payment of claims upon total disability:

(a)  The policy must, at a minimum, provide that for the first 12 months of the disability, a person is totally disabled if the person is unable to perform the material and substantial duties of the person's regular occupation, or must include a provision at least as favorable to the insured.

(b)  The policy may provide that after the first 12 months of disability as described in paragraph (a), the insurer may predicate the continuance of benefits on the person's ability to perform any work or occupation for which the person is reasonably qualified or trained.

(2)  If an individual or group policy of life insurance provides for the waiver of premiums or payment of claims upon total disability, the definition of total disability may not be more restrictive than the person's inability to perform any work or occupation for which the person is reasonably qualified or trained.

(3)  If an individual or group policy of medical expense insurance provides for extension of benefits for persons who are totally disabled on the date their insurance terminates, the definition of totally disabled may not be more restrictive than:

(a)  For an employee, the person's inability to perform any work or occupation for which the person is reasonably qualified or trained; or

(b)  For a dependent, the person's inability to engage in most normal activities of a person of like age and sex in good health.

History.--s. 119, ch. 92-33; s. 1, ch. 95-364.

627.4234  Health insurance cost containment provisions required.--A health insurance policy or health care services plan which provides medical, hospital, or surgical expense coverage delivered or issued for delivery in this state must contain one or more of the following procedures or provisions to contain health insurance costs or cost increases:

(1)  Coinsurance.

(2)  Deductible amounts.

(3)  Utilization review.

(4)  Audits of provider bills to verify that services and supplies billed were furnished and that proper charges were made.

(5)  Scheduled benefits.

(6)  Benefits for preadmission testing.

(7)  Any lawful measure or combination of measures for which the insurer provides to the department information demonstrating that the measure or combination of measures is reasonably expected to have an effect toward containing health insurance costs or cost increases.

History.--ss. 4, 10, ch. 84-235; ss. 40, 114, ch. 92-318.

627.4235  Coordination of benefits.--

(1)  A group hospital, medical, or surgical expense policy, group health care services plan, or group-type self-insurance plan that provides protection or insurance against hospital, medical, or surgical expenses delivered or issued for delivery in this state must contain a provision for coordinating its benefits with any similar benefits provided by any other group hospital, medical, or surgical expense policy, any group health care services plan, or any group-type self-insurance plan that provides protection or insurance against hospital, medical, or surgical expenses for the same loss.

(2)  A hospital, medical, or surgical expense policy, health care services plan, or self-insurance plan that provides protection or insurance against hospital, medical, or surgical expenses issued in this state or issued for delivery in this state may contain a provision whereby the insurer may reduce or refuse to pay benefits otherwise payable thereunder solely on account of the existence of similar benefits provided under insurance policies issued by the same or another insurer, health care services plan, or self-insurance plan which provides protection or insurance against hospital, medical, or surgical expenses only if, as a condition of coordinating benefits with another insurer, the insurers together pay 100 percent of the total reasonable expenses actually incurred of the type of expense within the benefits described in the policies and presented to the insurer for payment.

(3)  The standards provided in subsection (2) apply to coordination of benefits payable under Medicare, Title XVIII of the Social Security Act.

(4)  If a claim is submitted in accordance with any group hospital, medical, or surgical expense policy, or in accordance with any group health care service plan or group-type self-insurance plan, that provides protection, insurance, or indemnity against hospital, medical, or surgical expenses, and the policy or any other document that provides coverage includes a coordination-of-benefits provision and the claim involves another policy or plan which has a coordination-of-benefits provision, the following rules determine the order in which benefits under the respective health policies or plans will be determined:

(a)1.  The benefits of a policy or plan which covers the person as an employee, member, or subscriber, other than as a dependent, are determined before those of the policy or plan which covers the person as a dependent.

2.  However, if the person is also a Medicare beneficiary, and if the rule established under the Social Security Act of 1965, as amended, makes Medicare secondary to the plan covering the person as a dependent of an active employee, the order of benefit determination is:

a.  First, benefits of a plan covering a person as an employee, member, or subscriber.

b.  Second, benefits of a plan of an active worker covering a person as a dependent.

c.  Third, Medicare benefits.

(b)  Except as stated in paragraph (c), if two or more policies or plans cover the same child as a dependent of different parents:

1.  The benefits of the policy or plan of the parent whose birthday, excluding year of birth, falls earlier in a year are determined before the benefits of the policy or plan of the parent whose birthday, excluding year of birth, falls later in that year; but

2.  If both parents have the same birthday, the benefits of the policy or plan which covered the parent for a longer period of time are determined before those of the policy or plan which covered the parent for a shorter period of time.

However, if a policy or plan subject to the rule based on the birthdays of the parents coordinates with an out-of-state policy or plan which contains provisions under which the benefits of a policy or plan which covers a person as a dependent of a male are determined before those of a policy or plan which covers the person as a dependent of a female and if, as a result, the policies or plans do not agree on the order of benefits, the provisions of the other policy or plan determine the order of benefits.

(c)  If two or more policies or plans cover a dependent child of divorced or separated parents, benefits for the child are determined in this order:

1.  First, the policy or plan of the parent with custody of the child.

2.  Second, the policy or plan of the spouse of the parent with custody of the child.

3.  Third, the policy or plan of the parent not having custody of the child.

However, if the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child and if the entity obliged to pay or provide the benefits of the policy or plan of that parent has actual knowledge of those terms, the benefits of that policy or plan are determined first, except with respect to any claim determination period or plan or policy year during which any benefits are actually paid or provided before the entity has the actual knowledge.

(d)  The benefits of a policy or plan which covers a person as an employee who is neither laid off nor retired, or as that employee's dependent, are determined before those of a policy or plan which covers the person as a laid-off or retired employee or as the employee's dependent. If the other policy or plan is not subject to this rule, and if, as a result, the policies or plans do not agree on the order of benefits, this paragraph does not apply.

(e)  If none of the rules in paragraph (a), paragraph (b), paragraph (c), or paragraph (d) determine the order of benefits, the benefits of the policy or plan which covered an employee, member, or subscriber for a longer period of time are determined before those of the policy or plan which covered the person for the shorter period of time.

(5)  Coordination of benefits is not permitted against an indemnity-type policy, an excess insurance policy as defined in s. 627.635, a policy with coverage limited to specified illnesses or accidents, or a Medicare supplement policy.

(6)  If an individual is covered under a COBRA continuation plan as a result of the purchase of coverage as provided under the Consolidation Omnibus Budget Reconciliation Act of 1987 (Pub. L. No. 99-272), and also under another group plan, the following order of benefits applies:

(a)  First, the plan covering the person as an employee, or as the employee's dependent.

(b)  Second, the coverage purchased under the plan covering the person as a former employee, or as the former employee's dependent provided according to the provisions of COBRA.

History.--s. 1, ch. 74-367; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 374, 377, 809(2nd), ch. 82-243; ss. 52, 79, ch. 82-386; s. 5, ch. 84-235; s. 2, ch. 85-244; ss. 41, 114, ch. 92-318.

627.4236  Coverage for bone marrow transplant procedures.--

(1)  As used in this section, the term "bone marrow transplant" means human blood precursor cells administered to a patient to restore normal hematological and immunological functions following ablative therapy with curative intent. Human blood precursor cells may be obtained from the patient in an autologous transplant or from a medically acceptable related or unrelated donor, and may be derived from bone marrow, circulating blood, or a combination of bone marrow and circulating blood. If chemotherapy is an integral part of the treatment involving bone marrow transplantation, the term "bone marrow transplant" includes both the transplantation and the chemotherapy.

(2)  An insurer or a health maintenance organization may not exclude coverage for bone marrow transplant procedures recommended by the referring physician and the treating physician under a policy exclusion for experimental, clinical investigative, educational, or similar procedures contained in any individual or group health insurance policy or health maintenance organization contract issued, amended, delivered, or renewed in this state that covers treatment for cancer, if the particular use of the bone marrow transplant procedure is determined to be accepted within the appropriate oncological specialty and not experimental pursuant to subsection (3). Covered bone marrow transplant procedures must include costs associated with the donor-patient to the same extent and limitations as costs associated with the insured, except the reasonable costs of searching for the donor may be limited to immediate family members and the National Bone Marrow Donor Program.

(3)(a)  The Agency for Health Care Administration shall adopt rules specifying the bone marrow transplant procedures that are accepted within the appropriate oncological specialty and are not experimental for purposes of this section. The rules must be based upon recommendations of an advisory panel appointed by the secretary of the agency, composed of:

1.  One adult oncologist, selected from a list of three names recommended by the Florida Medical Association;

2.  One pediatric oncologist, selected from a list of three names recommended by the Florida Pediatric Society;

3.  One representative of the J. Hillis Miller Health Center at the University of Florida;

4.  One representative of the H. Lee Moffitt Cancer Center and Research Institute, Inc.;

5.  One consumer representative, selected from a list of three names recommended by the Insurance Commissioner;

6.  One representative of the Health Insurance Association of America;

7.  Two representatives of health insurers, one of whom represents the insurer with the largest Florida health insurance premium volume and one of whom represents the insurer with the second largest Florida health insurance premium volume; and

8.  One representative of the insurer with the largest Florida small group health insurance premium volume.

(b)  The director shall also appoint a member of the advisory panel to serve as chairperson.

(c)  The agency shall provide, within existing resources, staff support to enable the panel to carry out its responsibilities under this section.

(d)  In making recommendations and adopting rules under this section, the advisory panel and the director shall:

1.  Take into account findings, studies, or research of the federal Agency for Health Care Policy, National Cancer Institute, National Academy of Sciences, Health Care Financing Administration, and Congressional Office of Technology Assessment, and any other relevant information.

2.  Consider whether the federal Food and Drug Administration or National Cancer Institute is conducting or sponsoring assessment procedures to determine the safety and efficacy of the procedure or substantially similar procedures, or of any part of such procedures.

3.  Consider practices of providers with respect to requesting or requiring patients to sign a written acknowledgment that a bone marrow transplant procedure is experimental.

(e)  The advisory panel shall conduct, at least biennially, a review of scientific evidence to ensure that its recommendations are based on current research findings and that insurance policies offer coverage for the latest medically acceptable bone marrow transplant procedures.

(4)  Any rule adopted under this section applies only to claims filed under policies issued or renewed after the effective date of the rule.

History.--s. 42, ch. 92-318; s. 84, ch. 93-129; s. 5, ch. 95-188; s. 79, ch. 97-237; s. 2, ch. 99-299; s. 21, ch. 2000-305.

627.4237  Sickness disability or disability due to sickness.--Notwithstanding any provision of law to the contrary, the term "sickness disability" or "disability due to sickness," as used in individual or group disability insurance policies ¹issued in this state on or after October 1, 1992, includes any restriction of a health care practitioner's ability to perform her or his ²occupation because of action taken by the state licensing board as a result of the practitioner's testing positive on a human immunodeficiency virus test. The provisions of this section do not require payment of disability income benefits under any policy without the insured experiencing an actual loss of income as may be required under the terms of the policy as a condition of receiving such benefits.

History.--s. 120, ch. 92-33; s. 1, ch. 92-171; s. 330, ch. 97-102.

¹Note.--Section 1, ch. 92-171, used the word "delivered" instead of "issued."

²Note.--Section 1, ch. 92-171, used the word "profession" instead of "occupation."

627.4238  Health insurer examinations.--The department may examine each authorized health insurer which transacts health insurance in this state. The purpose of the examination is to ascertain compliance by the insurer with the applicable provisions of this chapter. In lieu of the examination, the department may accept the report of a similar examination made by the insurance supervisory official of this state or another state. The reasonable cost of the examination shall be paid by the person examined, and such person is subject to the provisions of s. 624.320. Any examination is also subject to the applicable provisions of ss. 624.318, 624.319, 624.321, and 624.322. An examination under this section may not exceed 10 working days in length, may not be conducted more often than annually, and may not be conducted during the same calendar year as a market conduct examination conducted by the department, except in a case in which the department has prima facie evidence of a violation of this chapter or of chapter 626, which violation is of a nature so as to provide an immediate danger to the insurance-consuming public.

History.--ss. 3, 10, ch. 84-235; s. 114, ch. 92-318.

627.4239  Coverage for use of drugs in treatment of cancer.--

(1)  DEFINITIONS.--As used in this section, the term:

(a)  "Medical literature" means scientific studies published in a United States peer-reviewed national professional journal.

(b)  "Standard reference compendium" means:

1.  The United States Pharmacopeia Drug Information;

2.  The American Medical Association Drug Evaluations; or

3.  The American Hospital Formulary Service Drug Information.

(2)  COVERAGE FOR TREATMENT OF CANCER.--

(a)  An insurer may not exclude coverage in any individual or group insurance policy issued, amended, delivered, or renewed in this state which covers the treatment of cancer for any drug prescribed for the treatment of cancer on the ground that the drug is not approved by the United States Food and Drug Administration for a particular indication, if that drug is recognized for treatment of that indication in a standard reference compendium or recommended in the medical literature.

(b)  Coverage for a drug required by this section also includes the medically necessary services associated with the administration of the drug.

(3)  APPLICABILITY AND SCOPE.--This section may not be construed to:

(a)  Alter any other law with regard to provisions limiting coverage for drugs that are not approved by the United States Food and Drug Administration.

(b)  Require coverage for any drug if the United States Food and Drug Administration has determined that the use of the drug is contraindicated.

(c)  Require coverage for a drug that is not otherwise approved for any indication by the United States Food and Drug Administration.

(d)  Affect the determination as to whether particular levels, dosages, or usage of a medication associated with bone marrow transplant procedures are covered under an individual or group health insurance policy or health maintenance organization contract.

(e)  Apply to specified disease or supplemental policies.

(4)  Nothing in this section is intended, expressly or by implication, to create, impair, alter, limit, modify, enlarge, abrogate, prohibit, or withdraw any authority to provide reimbursement for drugs used in the treatment of any other disease or condition.

History.--s. 1, ch. 95-268.

627.42395  Coverage for certain prescription and nonprescription enteral formulas.--Notwithstanding any other provision of law, any health insurance policy delivered or issued for delivery, to any person in this state or any group, blanket, or franchise health insurance policy delivered or issued for delivery in this state shall make available to the policyholder as part of the application, for an appropriate additional premium, coverage for prescription and nonprescription enteral formulas for home use which are physician prescribed as medically necessary for the treatment of inherited diseases of amino acid, organic acid, carbohydrate, or fat metabolism as well as malabsorption originating from congenital defects present at birth or acquired during the neonatal period. Coverage for inherited diseases of amino acids and organic acids shall include food products modified to be low protein, in an amount not to exceed $2,500 annually for any insured individual, through the age of 24. This section applies to any person or family notwithstanding the existence of any preexisting condition.

History.--s. 1, ch. 95-340.

Note.--Former s. 627.64195.

627.424  Minor may give acquittance.--

(1)  Any minor domiciled in this state who has attained the age of 16 years shall be deemed competent to receive and to give full acquittance and discharge for a payment or payments in aggregate amount not exceeding $3,000 in any one year made by a life insurer under the maturity, death, or settlement agreement provisions in effect or elected by such minor under a life insurance policy or annuity contract, if such policy, contract, or agreement provides for the payment to such minor. No such minor shall be deemed competent to alienate the right to or to anticipate or commute such payments. This section shall not be deemed to restrict the rights of minors set forth in s. 627.406.

(2)  If a guardian of the property of any such minor is duly appointed and written notice thereof is given to the insurer at its home office, any such payment thereafter falling due shall be paid to the guardian for the account of the minor, unless the policy or contract under which the payment is made expressly provides otherwise.

(3)  This section shall not be deemed to require any insurer making any such payment to determine whether any other insurer may be effecting a similar payment to the same minor.

History.--s. 473, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.425  Forms for proof of loss to be furnished.--An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such person, but such insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of such proof or the manner of any such completion or attempted completion.

History.--s. 474, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.426  Claims administration.--

(1)  Without limitation of any right or defense of an insurer otherwise, none of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder:

(a)  Acknowledgment of the receipt of notice of loss or claim under the policy.

(b)  Furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss, or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted.

(c)  Investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.

(2)  A liability insurer shall not be permitted to deny coverage based on a particular coverage defense unless:

(a)  Within 30 days after the liability insurer knew or should have known of the coverage defense, written notice of reservation of rights to assert a coverage defense is given to the named insured by registered or certified mail sent to the last known address of the insured or by hand delivery; and

(b)  Within 60 days of compliance with paragraph (a) or receipt of a summons and complaint naming the insured as a defendant, whichever is later, but in no case later than 30 days before trial, the insurer:

1.  Gives written notice to the named insured by registered or certified mail of its refusal to defend the insured;

2.  Obtains from the insured a nonwaiver agreement following full disclosure of the specific facts and policy provisions upon which the coverage defense is asserted and the duties, obligations, and liabilities of the insurer during and following the pendency of the subject litigation; or

3.  Retains independent counsel which is mutually agreeable to the parties. Reasonable fees for the counsel may be agreed upon between the parties or, if no agreement is reached, shall be set by the court.

History.--s. 475, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 375(1st), 377, 809(2nd), ch. 82-243; ss. 53, 79, ch. 82-386; s. 97, ch. 83-216; s. 114, ch. 92-318.

627.4265  Payment of settlement.--In any case in which a person and an insurer have agreed in writing to the settlement of a claim, the insurer shall tender payment according to the terms of the agreement no later than 20 days after such settlement is reached. The tender of payment may be conditioned upon execution by such person of a release mutually agreeable to the insurer and the claimant, but if the payment is not tendered within 20 days, or such other date as the agreement may provide, it shall bear interest at a rate of 12 percent per year from the date of the agreement; however, if the tender of payment is conditioned upon the execution of a release, the interest shall not begin to accrue until the executed release is tendered to the insurer.

History.--s. 12, ch. 83-288; s. 3, ch. 84-94; s. 114, ch. 92-318.

627.427  Payment of judgment by insurer; penalty for failure.--

(1)  Every judgment or decree for the recovery of money entered in any of the courts of this state against any authorized insurer shall be fully satisfied within 60 days from and after the entry thereof or, in the case of an appeal from such judgment or decree, within 60 days from and after the affirmance of the same by the appellate court.

(2)  If the judgment or decree is not satisfied as required under subsection (1), and proof of such failure to satisfy is made by filing with the department a certified transcript of the docket of the judgment or decree together with a certificate by the clerk of the court wherein the judgment or decree was entered that the judgment or decree remains unsatisfied, in whole or in part, after the time aforesaid, the department shall forthwith revoke the insurer's certificate of authority. The department shall not issue to such insurer any new certificate of authority until the judgment or decree is wholly paid and satisfied and proof thereof filed with the department under the official certificate of the clerk of the court wherein the judgment was recovered, showing that the same is satisfied of record, and until the expenses and fees incurred in the case are also paid by the insurer.

History.--s. 476, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 375(2nd), 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.428  Attorney's fee.--

(1)  Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured's or beneficiary's attorney prosecuting the suit in which the recovery is had.

(2)  As to suits based on claims arising under life insurance policies or annuity contracts, no such attorney's fee shall be allowed if such suit was commenced prior to expiration of 60 days after proof of the claim was duly filed with the insurer.

(3)  When so awarded, compensation or fees of the attorney shall be included in the judgment or decree rendered in the case.

History.--s. 477, ch. 59-205; s. 1, ch. 67-400; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 376, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.429  Medical tests for HIV infection and AIDS for insurance purposes.--

(1)  PURPOSE.--The purpose of this section is to prohibit unfair practices in the underwriting of insurance with respect to exposure to the human immunodeficiency virus infection and related matters, and thereby to reduce the possibility that a person may suffer unfair discrimination when purchasing insurance.

(2)  SCOPE.--

(a)  This section applies to all insurance policies, and the underwriting thereof, which are issued in this state or are issued outside this state pursuant to s. 627.5515 or s. 627.6515 covering residents of this state; to prepaid limited health organizations; and to multiple-employer welfare arrangements defined in s. 624.437. For the purposes of this section, "insurer" includes authorized multiple-employer welfare arrangements.

(b)  This section does not prohibit an insurer from contesting a policy or claim to the extent allowed by law.

(3)  DEFINITIONS.--As used in this section:

(a)  "AIDS" means acquired immune deficiency syndrome.

(b)  "ARC" means AIDS-related complex.

(c)  "HIV" means the human immunodeficiency virus identified as the causative agent of AIDS.

(4)  USE OF MEDICAL TESTS FOR UNDERWRITING.--

(a)  With respect to the issuance of or the underwriting of a policy regarding exposure to the HIV infection and sickness or medical conditions derived from HIV infection, the insurer may use only medical tests that are reliable predictors of risk. A test which is recommended by the Centers for Disease Control and Prevention or by the federal Food and Drug Administration is reliable for the purposes of this section. A test which is rejected or not recommended by the Centers for Disease Control and Prevention or the federal Food and Drug Administration is not reliable for the purposes of this section. If a specific test recommended by the Centers for Disease Control and Prevention or the federal Food and Drug Administration indicates the existence or potential existence of exposure to the HIV infection or a sickness or medical condition related to the HIV infection, the insurer shall, before relying on a single test result to deny or limit coverage or to rate the coverage, follow the applicable Centers for Disease Control and Prevention or federal Food and Drug Administration recommended test protocol and shall use any applicable followup tests or series of tests recommended by the Centers for Disease Control and Prevention or federal Food and Drug Administration to confirm the indication.

(b)  Prior to testing, the insurer shall disclose its intent to test the person for the HIV infection or for a specific sickness or medical condition derived therefrom and shall obtain the person's written informed consent to administer the test. The written informed consent required by this paragraph shall include a fair explanation of the test, including its purpose, potential uses, and limitations, and the meaning of its results and the right to confidential treatment of information. Use of a form approved by the department raises a conclusive presumption of informed consent.

(c)  An applicant shall be notified of a positive test result by a physician designated by the applicant or, in the absence of such designation, by the Department of Health. Notification must include all of the following:

1.  Face-to-face posttest counseling on the meaning of the test results, the possible need for additional testing, and the need to eliminate behavior which might spread the disease to others.

2.  The availability in the person's geographic area of any appropriate health care services, including mental health care, and appropriate social and support services.

3.  The benefits of locating and counseling any individual by whom the infected individual may have been exposed to human immunodeficiency virus and any individual whom the infected individual may have exposed to the virus.

4.  The availability, if any, of the services of public health authorities with respect to locating and counseling any individual described in subparagraph 3.

(d)  A medical test for exposure to the HIV infection or for a sickness or medical condition derived from such infection may be required of or given to a person only if the test is based on the person's current medical condition or medical history or if the test is triggered by threshold coverage amounts which apply to all persons within the risk class. Sexual orientation may not be used in the underwriting process or in the determination of which applicants shall be tested for exposure to the HIV infection. The marital status, living arrangements, occupation, gender, beneficiary designation, or zip code or other territorial classification of an applicant may not be used to establish the applicant's sexual orientation.

(e)  An insurer may inquire whether a person has been tested positive for exposure to the HIV infection or been diagnosed as having ARC or AIDS caused by the HIV infection or other sickness or condition derived from such infection. An insurer may not inquire whether the person has been tested for or has received a negative result from a specific test for exposure to the HIV infection or for a sickness or a medical condition derived from such infection.

(f)  Insurers shall maintain strict confidentiality regarding medical test results with respect to exposure to the HIV infection or a specific sickness or medical condition derived from such exposure. The insurer may not disclose information regarding specific test results outside of the insurance company or its employees, insurance affiliates, agents, or reinsurers, except to the person tested and to persons designated in writing by the person tested. The insurer may not furnish specific test results for exposure to the HIV infection to an insurer industry data bank if a review of the information would identify the individual and the specific test results.

(g)  A laboratory may be used by an insurer or insurance support organization for the processing of HIV-related tests only if it is certified by the United States Department of Health and Human Services under the Clinical Laboratories Improvement Act of 1967, permitting testing of specimens obtained in interstate commerce, and only if the laboratory subjects itself to ongoing proficiency testing by the College of American Pathologists, the American Association of Bio Analysts, or an equivalent program approved by the Centers for Disease Control and Prevention of the United States Department of Health and Human Services.

(5)  RESTRICTIONS ON COVERAGE EXCLUSIONS AND LIMITATIONS.--

(a)  An insurer of a group policy may not exclude coverage of an eligible individual because of a positive test result for exposure to the HIV infection or a specific sickness or medical condition derived from such exposure, either as a condition for or subsequent to the issuance of the policy. This paragraph does not apply to individuals applying for coverage where individual underwriting is otherwise allowed by law.

(b)  Subject to the total benefits limits in a health insurance policy, no health insurance policy shall contain an exclusion or limitation with respect to coverage for exposure to the HIV infection or a specific sickness or medical condition derived from such infection, except as provided in a preexisting condition clause. This paragraph does not prohibit the issuance of accident-only or specified disease health policies.

(c)  Except for preexisting conditions specifically applying to a sickness or medical condition of the insured, benefits under a life insurance policy shall not be denied or limited based on the fact that the insured's death was caused, directly or indirectly, by exposure to the HIV infection or a specific sickness or medical condition derived from such infection. This paragraph does not prohibit the issuance of accidental death only or specified disease policies.

(d)  Any major medical or comprehensive accident and health policy for which individual underwriting is authorized by law may contain a provision excluding coverage for expenses related to AIDS or ARC if, in the opinion of a legally qualified physician, the insured, prior to the first anniversary of the insured's coverage under the policy, first exhibited objective manifestations of AIDS or ARC, as defined by the Centers for Disease Control and Prevention, which objective manifestations are attributable to no other cause or was diagnosed as having AIDS or ARC if all of the following apply:

1.  The applicant for the policy is not required to submit to any medical test for HIV infection.

2.  The policy provision:

a.  Is set forth separately from the other exclusion and limitation provisions of the policy.

b.  Has an appropriate caption or heading.

c.  Is disclosed and referenced in a conspicuous manner on the policy data page.

d.  Contains a statement that the exclusion will not apply to any person if the insurer does not assert the defense before the person has been insured under the policy for 2 years.

3.  The insurer must notify the insured in writing of a determination that the insured would be subject to the effect of the exclusion within 90 days after the insurer first determines that an insured would be subject to the effect of the exclusion, even if there are no claims for AIDS or ARC. Failure to provide timely written notice under this subparagraph bars the insurer from using the exclusion.

4.  Objective manifestations of AIDS or ARC first exhibited after the 12-month manifestation period must be covered the same as any other illness.

History.--ss. 47, 53, ch. 88-380; s. 13, ch. 89-350; ss. 110, 114, ch. 92-318; s. 8, ch. 97-93; s. 259, ch. 99-8; s. 9, ch. 2000-370.

627.4295  Dental procedures; anesthesia and hospitalization coverage.--For purposes of this section, dental treatment or surgery shall be considered necessary when the dental condition is likely to result in a medical condition if left untreated. Any individual health insurance policy issued or issued for delivery in this state which provides coverage for general anesthesia and hospitalization services to a covered person shall not preclude such coverage in assuring the safe delivery of necessary dental care provided to a covered person who:

(1)  Is under 8 years of age and is determined by a licensed dentist, and the child's physician licensed under chapter 458 or chapter 459, to require necessary dental treatment in a hospital or ambulatory surgical center due to a significantly complex dental condition or a developmental disability in which patient management in the dental office has proved to be ineffective; or

(2)  Has one or more medical conditions that would create significant or undue medical risk for the individual in the course of delivery of any necessary dental treatment or surgery if not rendered in a hospital or ambulatory surgical center.

As provided herein, all terms and conditions of the covered person's health insurance policy shall apply to such services, and this section does not require coverage for the diagnosis or treatment of dental disease. An insurer may require prior authorization for general anesthesia and hospital services required under this section in the same manner the insurer requires prior authorization for hospitalization for other covered services. This section shall not apply to Medicare supplement, long-term care, disability, limited benefit, accident only, or specified disease policies.

History.--s. 1, ch. 98-312.

627.4301  Genetic information for insurance purposes.--

(1)  DEFINITIONS.--As used in this section, the term:

(a)  "Genetic information" means information derived from genetic testing to determine the presence or absence of variations or mutations, including carrier status, in an individual's genetic material or genes that are scientifically or medically believed to cause a disease, disorder, or syndrome, or are associated with a statistically increased risk of developing a disease, disorder, or syndrome, which is asymptomatic at the time of testing. Such testing does not include routine physical examinations or chemical, blood, or urine analysis, unless conducted purposefully to obtain genetic information, or questions regarding family history.

(b)  "Health insurer" means an authorized insurer offering health insurance as defined in s. 624.603, a self-insured plan as defined in s. 624.031, a multiple-employer welfare arrangement as defined in s. 624.437, a prepaid limited health service organization as defined in s. 636.003, a health maintenance organization as defined in s. 641.19, a prepaid health clinic as defined in s. 641.402, a fraternal benefit society as defined in s. 632.601, or any health care arrangement whereby risk is assumed.

(2)  USE OF GENETIC INFORMATION.--

(a)  In the absence of a diagnosis of a condition related to genetic information, no health insurer authorized to transact insurance in this state may cancel, limit, or deny coverage, or establish differentials in premium rates, based on such information.

(b)  Health insurers may not require or solicit genetic information, use genetic test results, or consider a person's decisions or actions relating to genetic testing in any manner for any insurance purpose.

(c)  This section does not apply to the underwriting or issuance of a life insurance policy, disability income policy, long-term care policy, accident-only policy, hospital indemnity or fixed indemnity policy, dental policy, or vision policy or any other actions of an insurer directly related to a life insurance policy, disability income policy, long-term care policy, accident-only policy, hospital indemnity or fixed indemnity policy, dental policy, or vision policy.

History.--s. 1, ch. 97-182; s. 43, ch. 2000-256; s. 10, ch. 2000-296.

PART III
LIFE INSURANCE AND ANNUITY CONTRACTS

627.451  Scope of this part.

627.452  Standard provisions required.

627.453  Grace period.

627.454  Entire contract; statements in application.

627.455  Incontestability.

627.4555  Secondary notice.

627.4556  Life insurance automatic policy loan provision.

627.456  Misstatement of age or sex.

627.457  Dividends.

627.458  Policy loan.

627.4585  Maximum rate of interest on policy loans.

627.459  Reinstatement.

627.460  Authority to alter contract.

627.461  Settlement on proof of death.

627.4615  Interest payable on death claim payments.

627.462  Table of installments.

627.463  Excluded or restricted coverage.

627.464  Annuity contracts, pure endowment contracts; standard provisions.

627.465  Annuity contracts, pure endowment contracts; grace period.

627.466  Annuity contracts, pure endowment contracts; incontestability.

627.467  Annuity contracts, pure endowment contracts; entire contract.

627.468  Annuity contracts, pure endowment contracts; misstatement of age or sex.

627.469  Annuity contracts, pure endowment contracts; dividends.

627.470  Annuity contracts, pure endowment contracts; reinstatement.

627.471  Reversionary annuities; standard provisions.

627.472  Incontestability after reinstatement.

627.473  Policy settlements.

627.474  Policy must contain entire contract.

627.475  Nonforfeiture benefits; certain interim policies.

627.476  Standard Nonforfeiture Law for Life Insurance.

627.479  Prohibited policy plans.

627.480  Cash payments of single-premium life policies.

627.481  Requirements for certain annuity agreements.

627.482  Interest payable on cash surrender of policy.

627.451  Scope of this part.--This part applies to life insurance and annuity contracts, other than reinsurance, group life insurance, group annuities, and industrial life insurance; except that ss. 627.463, 627.472, 627.476, and 627.479 also apply to industrial life insurance. This part does not apply to credit life insurance except as provided in part IX of chapter 627.

History.--s. 478, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 378, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.452  Standard provisions required.--

(1)  No policy of life insurance, except as stated in subsection (3), shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions as required by ss. 627.453-627.462 inclusive and ss. 627.475 and 627.476, or provisions which in the opinion of the department are more favorable to the policyholder.

(2)  Any of such provisions or portions thereof not applicable to single-premium or term policies shall to that extent not be incorporated therein.

(3)  This section does not apply to annuity contracts, or to any provision of a life insurance policy or contract supplemental thereto relating to health benefits or to additional benefits in the event of death by accident or accidental means.

(4)  Except as otherwise required under this code or rules adopted pursuant thereto, the style, arrangement, and overall appearance of the policy shall give no undue prominence to any portion of the text. Every printed portion of the text of the policy and any endorsements or attached papers shall be plainly printed in lightfaced type of a style in general use, the size of which shall be uniform and not less than 10 points with a lowercase, unspaced alphabet length of not less than 120 points. As used in this subsection, "text" includes all printed matter except the name and address of the insurer, the name or title of the policy, the brief description of the coverage provided, if any, and captions and subcaptions.

History.--s. 479, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 379, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 4, ch. 91-296; s. 114, ch. 92-318.

627.453  Grace period.--Every insurance contract shall provide that the insured is entitled to a grace period of not less than 30 days within which payment of any premium after the first may be made. The payment may, at the option of the insurer, be subject to an interest charge not in excess of 8 percent per year for the number of days of grace elapsing before the payment of the premium, during which period of grace the policy shall continue in force. If the policy becomes a claim during the grace period before the overdue premium is paid, or the deferred premiums of the current policy year, if any, are paid, the amount of such premium or premiums with interest not in excess of 8 percent per year thereon may be deducted in any settlement under the policy.

History.--s. 480, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 380, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.454  Entire contract; statements in application.--Every insurance contract shall provide that the policy, or the policy and the application therefor if a copy of such application is endorsed upon or attached to the policy when issued, shall constitute the entire contract between the parties, and that all statements contained in the application shall, in the absence of fraud, be deemed representations and not warranties.

History.--s. 481, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 381, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.455  Incontestability.--Every insurance contract shall provide that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of 2 years from its date of issue except for nonpayment of premiums and except, at the option of the insurer, as to provisions relative to benefits in event of disability and as to provisions which grant additional insurance specifically against death by accident or accidental means.

History.--s. 482, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 382, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.4555  Secondary notice.--Except as provided in this section, a contract for life insurance issued or issued for delivery in this state on or after October 1, 1997, covering a natural person 64 years of age or older, which has been in force for at least 1 year, may not be lapsed for nonpayment of premium unless, after expiration of the grace period, and at least 21 days before the effective date of any such lapse, the insurer has mailed a notification of the impending lapse in coverage to the policyowner and to a specified secondary addressee if such addressee has been designated in writing by name and address by the policyowner. An insurer issuing a life insurance contract on or after October 1, 1997, shall notify the applicant of the right to designate a secondary addressee at the time of application for the policy, on a form provided by the insurer, and at any time the policy is in force, by submitting a written notice to the insurer containing the name and address of the secondary addressee. For purposes of any life insurance policy that provides a grace period of more than 51 days for nonpayment of premiums, the notice of impending lapse in coverage required by this section must be mailed to the policyowner and the secondary addressee at least 21 days before the expiration of the grace period provided in the policy. This section does not apply to any life insurance contract under which premiums are payable monthly or more frequently and are regularly collected by a licensed agent or are paid by credit card or any preauthorized check processing or automatic debit service of a financial institution.

History.--s. 1, ch. 95-142; s. 11, ch. 97-292.

627.4556  Life insurance automatic policy loan provision.--If an application for an individual life insurance policy provides an option to the applicant for an automatic policy loan against the cash value of the policy to pay the premium on the policy in the event of nonpayment of premium, such option shall be deemed to be elected by the applicant unless the applicant makes an affirmative election not to include this provision in the policy.

History.--s. 2, ch. 95-142.

627.456  Misstatement of age or sex.--Every insurance contract shall provide that if it is found that the age or sex of the insured, or of any other individual considered in determining the premium or benefit, has been misstated, the amount payable or benefit accruing under the policy shall be such as the premium would have purchased according to the correct age or sex. Such calculations shall be in accordance with the insurer's rate at date of issue, and at the option of the insurer this may be so specified in the policy.

History.--s. 483, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 383, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.457  Dividends.--

(1)  Every participating policy shall provide that, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy provided the policy is in force and all premiums to that date are paid.

(2)  Except as provided in this section, any dividend so apportioned shall, at the option of the party entitled to elect such option, be either payable in cash or applied to any one of such other dividend options as may be provided by the policy. If any such other dividend options are provided, the policy shall further state which option shall be automatically effective if such party has not elected some other option. If the policy specifies a period within which such other option may be elected, such period shall be not less than 30 days following the date on which such dividend is due and payable.

(3)  The annually apportioned dividend shall be deemed to be payable in cash within the meaning of subsection (2) even though the policy provides that payment of such dividend is to be deferred for a specified period, provided such period does not exceed 6 years from the date of apportionment and that interest will be added to such dividend at a specified rate.

(4)  If a participating policy provides that the benefit under any paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus apportioned while the insurance is in force under such nonforfeiture provision be applied in the manner set forth in the policy.

History.--s. 484, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 384, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.458  Policy loan.--

(1)  There shall be a provision that after the policy has a cash surrender value and while no premium is in default, the insurer will advance, on proper assignment or pledge of the policy and on the sole security thereof, at a rate of interest not exceeding 10 percent per year, for policies issued prior to October 1, 1981, payable in advance, an amount equal to or, at the option of the party entitled thereto, less than the loan value of the policy. The loan value of the policy shall be at least equal to the cash surrender value at the end of the then-current policy year, except that the insurer may deduct, either from such loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining such cash surrender value, including any interest then accrued but not due, any unpaid balance of the premium for the current policy year, and interest on the loan to the end of the current policy year. However, as a condition for approval of a policy loan interest rate in excess of 6 percent per year, the department shall require the insurer to furnish such assurances as the department deems necessary that the interest rate on such loans will bear a reasonable relationship to other interest rates and that the holders of such policies will benefit through higher dividends or lower premiums, or both.

(2)  The policy may also provide that, if interest on any indebtedness is not paid when due, such interest shall then be added to the existing indebtedness and shall bear interest at the same rate and that, if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of loan value thereof, then the policy shall terminate and become void, but not until at least 30 days' notice has been mailed by the insurer to the last known address of the insured or policyowner and of any assignee of record at the home office of the insurer.

(3)  The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for 6 months after application therefor.

(4)  This section does not apply to term policies or to term insurance benefits provided by riders or supplemental policy provisions.

History.--s. 485, ch. 59-205; s. 3, ch. 76-168; ss. 1, 3, ch. 77-324; s. 1, ch. 77-457; ss. 2, 6, ch. 81-289; ss. 2, 3, ch. 81-318; ss. 385, 404, 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.4585  Maximum rate of interest on policy loans.--

(1)  For the purposes of this section, the "published monthly average" means the value of the interest rate index, as defined in s. 625.121(6)(e).

(2)  Policies issued on or after October 1, 1981, shall provide for policy loan interest rates through:

(a)  A provision permitting a maximum interest rate of not more than 10 percent a year; or

(b)  A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.

(3)  The rate of interest charged on a policy loan made under paragraph (2)(b) shall not exceed the higher of the following:

(a)  The published monthly average for the calendar month ending 2 months before the date on which the rate is determined; or

(b)  The rate used to compute the cash surrender values under the policy during the applicable period plus 1 percent a year.

(4)  If the maximum rate of interest is determined pursuant to paragraph (2)(b), the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.

(5)  The maximum rate for each policy must be determined at regular intervals at least once every 12 months, but not more frequently than once in any 3-month period. At the intervals specified in the policy:

(a)  The rate being charged may be increased whenever such increase as determined under subsection (3) would increase that rate by 50 basis points or more a year.

(b)  The rate being charged must be reduced whenever such reduction as determined under subsection (3) would decrease that rate by 50 basis points or more a year.

(6)  The life insurer shall:

(a)  Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan.

(b)  Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practicable to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in paragraph (c).

(c)  Send to policyholders with loans reasonable advance notice of any increase or decrease in the rate.

(d)  Include in the notices required in this section the substance of the pertinent provisions of subsections (2) and (4).

(7)  No policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.

(8)  The substance of the pertinent provisions of subsections (2) and (4) shall be set forth in the policies to which they apply.

(9)  For purposes of this section:

(a)  The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy.

(b)  The term "policy loan" includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due.

(c)  The term "policyholder" includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer.

(d)  The term "policy" includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans.

(10)  No other provision of law shall apply to policy loan interest rates unless made specifically applicable to such rates.

History.--ss. 3, 6, ch. 81-289; ss. 386, 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386; s. 65, ch. 91-108; s. 114, ch. 92-318.

627.459  Reinstatement.--Every contract shall provide that the policy may be reinstated upon written application therefor at any time within 3 years after the date of default in the payment of any premiums, unless the policy has been surrendered for its cash value or unless the paid-up term insurance, if any, has expired, upon evidence of insurability satisfactory to the insurer and the payment of all overdue premiums and payment (or, within the limits permitted by the then cash value of the policy, reinstatement) of any other indebtedness to the insurer upon the policy with interest as to both premiums and indebtedness at a rate not exceeding 6 percent per year compounded annually or, as to indebtedness for a policy issued on or after October 1, 1981, at an interest rate as provided for in s. 627.4585.

History.--s. 486, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 4, 6, ch. 81-289; ss. 2, 3, ch. 81-318; ss. 387, 404, 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.460  Authority to alter contract.--Every contract shall provide, at the option of the insurer, that no agent shall have the power or authority to waive, change, or alter any of the terms or conditions of any policy; except that, at the option of the insurer, the terms or conditions may be changed by an endorsement or rider signed by a duly authorized officer of the insurer.

History.--s. 487, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 388, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.461  Settlement on proof of death.--Every contract shall provide that, when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and surrender of the policy.

History.--s. 488, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 389, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 14, ch. 83-288; s. 114, ch. 92-318.

627.4615  Interest payable on death claim payments.--When a policy provides for payment of its proceeds in a lump sum upon the death of the insured, the payment must include interest, at an annual rate equal to or greater than the Moody's Corporate Bond Yield Average-Monthly Average Corporate as of the day the claim was received, from the date the insurer receives written due proof of death of the insured. If the method of calculating such index is substantially changed from the method of calculation in use on January 1, 1993, the rate must not be less than 8 percent.

History.--s. 15, ch. 83-288; s. 3, ch. 84-94; ss. 43, 114, ch. 92-318.

627.462  Table of installments.--If a policy provides for payment of its proceeds in installments, a table showing the amount and period of such installments shall be included in the policy; except that certain tables may be omitted from the policy if in the judgment of the department it is not practical to include them.

History.--s. 489, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.463  Excluded or restricted coverage.--A clause in any policy of life insurance providing that such policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy and shall not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not such restrictions or exclusions are excepted in such clause.

History.--s. 490, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.464  Annuity contracts, pure endowment contracts; standard provisions.--

(1)  No fixed-dollar annuity, variable annuity, or pure endowment contract, other than a reversionary annuity, survivorship annuity, or group annuity, shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions set forth in ss. 627.465-627.470, inclusive, or provisions which in the opinion of the department are more favorable to the policyholder. Any of such provisions not applicable to single-premium annuities or single-premium pure endowment contracts shall not to that extent be incorporated therein.

(2)  This section does not apply to contracts for annuities included in or upon the lives of beneficiaries under life insurance policies.

History.--s. 491, ch. 59-205; s. 10, ch. 61-441; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.465  Annuity contracts, pure endowment contracts; grace period.--In a fixed-dollar annuity, variable annuity, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that there shall be a period of grace of 1 month but not less than 30 days, within which any stipulated payment to the insurer falling due after the first may be made, subject, at the option of the insurer, to an interest charge thereon at a rate to be specified in the contract but not exceeding 6 percent per year for the number of days of grace elapsing before such payment, during which period of grace the contract shall continue in full force. If a claim arises under the contract on account of death prior to expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are paid, the amount of such payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement.

History.--s. 492, ch. 59-205; s. 11, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 390, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.466  Annuity contracts, pure endowment contracts; incontestability.--If any statements, other than those relating to age, sex, and identity, are required as a condition to issuing a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, and subject to s. 627.468, the contract shall provide that it shall be incontestable after it has been in force during the lifetime of the person, or of each of the persons as to whom such statements are required, for a period of 2 years from its date of issue except for nonpayment of stipulated payments to the insurer; and, at the option of the insurer, the contract may also except any provisions relative to benefits in the event of disability and any provisions which grant insurance specifically against death by accident or accidental means.

History.--s. 493, ch. 59-205; s. 12, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 391, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.467  Annuity contracts, pure endowment contracts; entire contract.--In a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that it shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the contract when issued, that the contract and the application therefor shall constitute the entire contract between the parties.

History.--s. 494, ch. 59-205; s. 13, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 392, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.468  Annuity contracts, pure endowment contracts; misstatement of age or sex.--In a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that if the age or sex of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age or sex; and that if the insurer shall make or has made any overpayment or overpayments on account of any such misstatement, the amount thereof, with interest at the rate to be specified in the contract but not exceeding 6 percent per year, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.

History.--s. 495, ch. 59-205; s. 14, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 393, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.469  Annuity contracts, pure endowment contracts; dividends.--If a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract is participating, the contract shall contain a provision that, beginning not later than the end of the third contract year, the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.

History.--s. 496, ch. 59-205; s. 15, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 394, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.470  Annuity contracts, pure endowment contracts; reinstatement.--In a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that it may be reinstated upon written application therefor at any time within 1 year from the date of default in making stipulated payments to the insurer, unless the cash surrender value has been paid, but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated, with interest thereon at a rate to be specified in the contract but not exceeding 6 percent per year payable annually; and, when applicable, the insurer may also include a requirement of evidence of insurability satisfactory to the insurer.

History.--s. 497, ch. 59-205; s. 16, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 395, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.471  Reversionary annuities; standard provisions.--

(1)  Except as stated in this section, no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance:

(a)  Those provisions specified in ss. 627.465-627.469, except that under s. 627.465 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue or deferred payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract; and

(b)  A provision that the contract may be reinstated at any time within 3 years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract are paid (or, within the limits permitted by the then cash value of the contract, reinstated) with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding 8 percent per year compounded annually.

(2)  This section does not apply to group annuities or to annuities included in life insurance policies, and any of such provisions not applicable to single-premium annuities shall not to that extent be incorporated therein.

History.--s. 498, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 396, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.472  Incontestability after reinstatement.--A reinstated policy of life insurance, fixed-dollar annuity contract, or variable annuity contract may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance.

History.--s. 499, ch. 59-205; s. 17, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.473  Policy settlements.--Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets.

History.--s. 500, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.474  Policy must contain entire contract.--No life insurer or its agent shall make any contract of insurance or agreement as to such contract other than as plainly expressed in the policy.

History.--s. 501, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 397, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.475  Nonforfeiture benefits; certain interim policies.--Each life insurance policy issued between the effective date of this code and the operative date of s. 627.476 shall provide:

(1)  That, in the event of default in any premium, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy.

(2)  That, upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least 3 full years, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value at least equal to the minimum cash surrender value hereinafter specified. The minimum cash surrender value shall be equal to:

(a)  The reserve on the date of default of the premium less a sum of not more than 2.5 percent of the face amount; or

(b)  An amount as defined in s. 627.476 but on the basis of the Commissioners' 1941 Standard Ordinary Mortality Table in lieu of the Commissioners' 1958 Standard Ordinary Mortality Table therein specified. The policy shall reserve to the insurer the right to defer the granting of any cash surrender value for 6 months after demand therefor with surrender of the policy.

(3)  That a specified paid-up nonforfeiture benefit, the present value of which shall be at least equal to the cash surrender value, shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default; however, when the mortality table used is the Commissioners' 1941 Standard Ordinary Mortality Table, the rates of mortality to be assumed in calculating any extended term insurance with accompanying pure endowment, if any, may be not more than 130 percent of the rates of mortality according to such table.

(4)  A statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter.

This section does not apply to term policies of uniform amount of 15 years' duration or less, to increasing term policies of 15 years' duration or less, or to decreasing term policies.

History.--s. 502, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.476  Standard Nonforfeiture Law for Life Insurance.--

(1)  SHORT TITLE.--This section shall be known as the "Standard Nonforfeiture Law for Life Insurance."

(2)  NONFORFEITURE PROVISIONS.--In the case of policies issued on or after the operative date of this section as defined in subsection (14), no policy of life insurance, except as set forth in subsection (13), shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the department are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements hereinafter specified and are essentially in compliance with subsection (12):

(a)  That in the event of default in any premium payment, after premiums have been paid for at least 1 full year in the case of ordinary insurance or 3 full years in the case of industrial insurance, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified. In lieu of such stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits. With respect to all policy forms filed on or after October 1, 1990, the policy forms shall include, but not be limited to, a reduced paid-up nonforfeiture benefit. For the purposes of this subsection, the term "reduced paid-up nonforfeiture benefit" means a benefit whereby the policy may be continued at the option of the insured as reduced paid-up life insurance, the amount of which shall be as much as the surrender value of the policy will provide on the date of default, calculated using the surrender value of the policy as a net single premium on the due date of the first unpaid premium at the then-current age of the insured.

(b)  That upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least 3 full years in the case of ordinary insurance or 5 full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified.

(c)  That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default.

(d)  That if the policy becomes paid up by completion of all premium payments, or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified.

(e)  In the case of a policy which causes on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of any other policy, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy.

(f)  A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of this state; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy.

(3)  OMITTED PROVISIONS.--Any of the provisions or portions thereof set forth in paragraphs (2)(a)-(f) which are not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of any cash surrender value for a period of 6 months after demand therefor with surrender of the policy.

(4)  CASH SURRENDER VALUE.--

(a)  Any cash surrender value available under the policy in the event of default in the premium payment due on any policy anniversary, whether or not required by subsection (2), shall be an amount not less than the excess, if any, of the present value on such anniversary of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of:

1.  The then-present value of the adjusted premiums as defined in subsections (6) and (9), corresponding to premiums which would have fallen due on and after such anniversary, and

2.  The amount of any indebtedness to the insurer on account of or secured by the policy.

(b)  For any policy issued on or after the operative date of subsection (9), as defined therein, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in paragraph (a) shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision. For any family policy issued on or after the operative date of subsection (9), as defined therein, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse reaches age 71, the cash surrender value referred to in paragraph (a) shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse.

(c)  Any cash surrender value available within 30 days after any policy anniversary under any policy paid up by completion of all premium payments, or any policy continued under any paid-up nonforfeiture benefits, whether or not required by subsection (2), shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy.

(5)  PAID-UP NONFORFEITURE BENEFITS.--Any paid-up nonforfeiture benefit available under the policy in the event of default in the premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy, or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the condition that premiums shall have been paid for at least a specified period.

(6)  THE ADJUSTED PREMIUM.--This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. The adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:

(a)  The then-present value of the future guaranteed benefits provided for by the policy;

(b)  Two percent of the amount of the insurance if the insurance is uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with the duration of the policy;

(c)  Forty percent of the adjusted premium for the first policy year; and

(d)  Twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.

However, in applying the percentages specified in paragraphs (c) and (d), no adjusted premium shall be deemed to exceed 4 percent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.

(7)  EQUIVALENT UNIFORM AMOUNT.--This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. In the case of a policy providing an amount of insurance varying with the duration of the policy, the equivalent uniform amount thereof for the purpose of subsection (6) shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy, except that, in the case of a policy for a varying amount of insurance issued on the life of a child under age 10, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age 10 were the amount provided by such policy at age 10.

(8)  MORTALITY TABLES; INTEREST.--This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners' 1958 Standard Ordinary Mortality Table, except that, for any category of such policies issued on female risks, adjusted premiums and present values may be calculated according to an age not more than 6 years younger than the actual age of the insured. Such calculations for all policies of industrial insurance shall be made on the basis of the following tables:

(a)  For policies issued on and after the operative date of this section but before January 1, 1968, the 1941 Standard Industrial Mortality Table, unless the Commissioners' 1961 Standard Industrial Mortality Table is applicable according to subsection (14);

(b)  For policies issued on and after January 1, 1968, the Commissioners' 1961 Standard Industrial Mortality Table.

All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; however, such rate of interest shall not exceed 3.5 percent per year, except that a rate of interest not exceeding 4 percent per year may be used for policies issued on or after July 1, 1973, and prior to October 1, 1979, and a rate of interest not exceeding 4.5 percent per year may be used for policies issued on or after October 1, 1979, and a rate of interest not exceeding 5.5 percent per year may be used for policies issued on or after October 1, 1980. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1958 Extended Term Insurance Table, for ordinary policies. In the case of industrial policies:

(c)  For policies issued on and after the operative date of this section but before January 1, 1968, not more than 130 percent of the rates of mortality according to the 1941 Standard Industrial Mortality Table, unless the Commissioners' 1961 Industrial Extended Term Insurance Table is applicable according to subsection (14), in which case not more than those of the latter table;

(d)  For policies issued on and after January 1, 1968, not more than those of the Commissioners' 1961 Industrial Extended Term Insurance Table.

For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the department.

(9)  CALCULATION OF ADJUSTED PREMIUMS AND PRESENT VALUES FOR POLICIES ISSUED AFTER OPERATIVE DATE OF THIS SUBSECTION.--

(a)  This subsection shall apply to all policies issued on or after the operative date of this subsection, as defined herein. Except as provided in paragraph (g), the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of:

1.  The then-present value of the future guaranteed benefits provided for by the policy;

2.  One percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and

3.  One hundred and twenty-five percent of the nonforfeiture net-level premium as hereinafter defined.

However, in applying the percentage specified in subparagraph 3., no nonforfeiture net-level premium shall be deemed to exceed 4 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.

(b)  The nonforfeiture net-level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due.

(c)  In the case of a policy which causes on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums, the future adjusted premiums, nonforfeiture net-level premiums, and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.

(d)  Except as otherwise provided in paragraph (g), the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of the sum of the then-present value of the then future guaranteed benefits provided for by the policy and the additional expense allowance, if any, over the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.

(e)  The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of 1 percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first 10 policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and 125 percent of the increase, if positive, in the nonforfeiture net-level premium.

(f)  The recalculated nonforfeiture net-level premium shall be equal to the result obtained by dividing (A) and (B) where:

1.  (A) equals the sum of:

a.  The nonforfeiture net-level premium applicable prior to the change times the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and

b.  The present value of the increase in future guaranteed benefits provided for by the policy; and

2.  (B) equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.

(g)  Notwithstanding any other provisions of this subsection to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis.

(h)  All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners' 1980 Standard Ordinary Mortality Table or, at the election of the insurer for any one or more specified plans of life insurance, the Commissioners' 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners' 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year. However:

1.  At the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year.

2.  Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by subsection (2), shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any.

3.  An insurer may calculate the amount of any guaranteed paid-up nonforfeiture benefit, including any paid-up additions under the policy, on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values.

4.  In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners' 1961 Industrial Extended Term Insurance Table for policies of industrial insurance.

5.  In lieu of the mortality tables specified in this section, at the option of the insurance company and subject to rules adopted by the department, the insurance company may substitute:

a.  The 1958 CSO or CET Smoker and Nonsmoker Mortality Tables, whichever is applicable, for policies issued on or after the operative date of this subsection and before January 1, 1989;

b.  The 1980 CSO or CET Smoker and Nonsmoker Mortality Tables, whichever is applicable, for policies issued on or after the operative date of this subsection;

c.  A mortality table that is a blend of the sex-distinct 1980 CSO or CET mortality table standard, whichever is applicable, or a mortality table that is a blend of the sex-distinct 1980 CSO or CET smoker and nonsmoker mortality table standards, whichever is applicable, for policies that are subject to the United States Supreme Court decision in Arizona Governing Committee v. Norris to prevent unfair discrimination in employment situations.

6.  For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables.

(i)  The nonforfeiture interest rate per year for any policy issued in a particular calendar year shall be equal to 125 percent of the calendar year statutory valuation interest rate for such policy as defined in the Standard Valuation Law, rounded to the nearest one-fourth of 1 percent.

(j)  Notwithstanding any other provision in this code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.

(k)  After October 1, 1981, any insurer may file with the department a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1989, which shall be the operative date of this subsection for that insurer. If an insurer makes no such election, the operative date of this subsection for the insurer shall be January 1, 1989.

(10)  INDETERMINATE PREMIUMS OR MINIMUM VALUES.--In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in subsections (2)-(9):

(a)  The department must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by subsections (2)-(9);

(b)  The department must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; and

(c)  The cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by rules promulgated by the department.

(11)  CALCULATION OF VALUES.--Any cash surrender value and any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections (4)-(9) may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. If term insurance benefits are provided by a rider or by a supplemental policy provision to which, if issued as a separate policy, this section would apply, additional cash surrender values and additional paid-up nonforfeiture benefits, if any, at least equal to those required if issued as a separate policy, may be provided by the insurer and shall be deemed to be in compliance with this section. Notwithstanding the provisions of subsection (4), additional benefits payable:

(a)  In the event of death or dismemberment by accident or accidental means,

(b)  In the event of total and permanent disability,

(c)  As reversionary annuity or deferred reversionary annuity benefits,

(d)  As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply,

(e)  As term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child's age is 26, is uniform in amount after the child's age is 1, and has not become paid up by reason of the death of a parent of the child, and

(f)  As other policy benefits additional to life insurance by endowment benefits,

and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section; and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits.

(12)  CALCULATION OF VALUES FOR POLICIES ISSUED AFTER 1984.--This subsection, in addition to all other applicable subsections of this section, shall apply to all policies issued on or after January 1, 1985. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than 0.2 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years, from the sum of the greater of zero and the basic cash value hereinafter specified and the present value of any existing paid-up additions less the amount of any indebtedness to the insurer under the policy. The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer, if there had been no default, less the then-present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary. However, the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection (4), shall be the same as are the effects specified in subsection (4) on the cash surrender values defined in that subsection. The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection (6) or subsection (9), whichever is applicable. Except as is required by the next succeeding sentence of this paragraph, such percentage:

(a)  Must be the same percentage for each policy year between the second policy anniversary and the later of the fifth policy anniversary and the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least 0.2 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and

(b)  Must be such that no percentage after the later of the two policy anniversaries specified in paragraph (a) may apply to fewer than 5 consecutive policy years.

However, no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in subsection (6) or subsection (9), whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value. All adjusted premiums and present values referred to in this subsection shall be calculated for a particular policy on the same mortality and interest bases as are used in demonstrating the compliance of the policy with the other subsections of this law. The cash surrender values referred to in this subsection shall include any endowment benefits provided for by the policy. Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment, shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in subsections (2), (3), (4), (5), (9), and (11). The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed in paragraphs (11)(a)-(f) shall conform with the principles of this subsection.

(13)  EXCEPTIONS.--This section does not apply to any:

(a)  Reinsurance;

(b)  Group insurance;

(c)  Pure endowment contract;

(d)  Annuity or reversionary annuity contract;

(e)  Term policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of, 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy;

(f)  Term policy of decreasing amount which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium calculated as specified in subsections (6)-(9) is less than the adjusted premium so calculated on a policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, issued at the same age and for the same initial amount of insurance for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy; or

(g)  Policy which provides no guaranteed nonforfeiture or endowment benefits for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in subsections (4)-(9) exceeds 2.5 percent of the amount of insurance at the beginning of the same policy year.

For purposes of determining the applicability of this section, the age at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.

(14)  OPERATIVE DATE.--After the effective date of this code, any insurer may file with the department a written notice or notices of its election to comply with the provisions of this section on and after a specified date or dates before January 1, 1966, as to either or both of its policies of ordinary and industrial insurance, in which case such specified date or dates shall be the operative date of this section with respect to such policies. The operative date of this section for policies of both ordinary and industrial insurance shall be the earlier of January 1, 1966, and any prior operative date or dates resulting from such previously filed written notices. With respect to policies of industrial insurance issued on and after the operative date of this section for such policies but before January 1, 1968, any insurer may file with the department written notice of its election to have the Commissioners' 1961 Standard Industrial Mortality Table and the Commissioners' 1961 Industrial Extended Term Insurance Table applicable with respect to subsection (8) for policies issued on and after the date specified in such election.

History.--s. 503, ch. 59-205; s. 3, ch. 61-106; ss. 2, 3, ch. 65-11; ss. 13, 35, ch. 69-106; s. 3, ch. 73-324; s. 3, ch. 76-168; s. 2, ch. 77-324; s. 1, ch. 77-457; ss. 2, 3, ch. 79-356; ss. 1, 2, ch. 80-137; ss. 5, 6, ch. 81-289; ss. 2, 3, ch. 81-318; ss. 398, 404, 809(2nd), 810, ch. 82-243; ss. 54, 79, ch. 82-386; s. 13, ch. 90-119; s. 114, ch. 92-318; s. 10, ch. 97-292.

627.479  Prohibited policy plans.--

(1)  No insurer shall issue policies, certificates, or contracts to policyholders or members providing for the grouping of its policyholders or members into groups and divisions, classified according to age, and providing for payment of contingent endowment benefits, by whatever name called, from special funds created for such purpose to the oldest member in seniority of the group or division, or under any other similar plan.

(2)  No insurer shall issue policies containing annual endowments or other specialty-type policies such as founder's policies or coupon-bearing policies. The department shall, by rule, define such prohibited policies.

(3)  The department shall revoke the certificate of authority of any insurer which violates this section.

History.--s. 506, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 74-50; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 401, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.480  Cash payments of single-premium life policies.--Premiums for single-premium life insurance policies shall be paid in cash. This section is not applicable to the use of dividends to purchase paid-up additional insurance or to such other usual and customary methods of paying for life insurance as may be permitted by rule of the department.

History.--s. 1, ch. 70-66; s. 1, ch. 70-439; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 402, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.481  Requirements for certain annuity agreements.--

(1)  Any duly organized domestic or foreign nonstock corporation, or any unincorporated charitable trust, if such corporation or trust:

(a)  Has been in active operation for at least 5 years prior thereto and has qualified as an exempt organization under the Internal Revenue Code, 26 U.S.C. s. 501(c)(3), or

(b)  Has been wholly controlled for at least 10 years by a corporation or trust qualified under paragraph (a), if the subunit has been a corporation or trust for at least 2 years, and has engaged in the selling of annuity agreements authorized under this section in at least three other states without complaint,

may enter into annuity agreements with donors in accordance with this section. Such corporation or trust may receive gifts conditioned upon, or in return for, its agreement to pay an annuity to the donor or other designated beneficiary or beneficiaries and to make and carry out such annuity agreement. Annuity benefits under any such annuity agreement must be calculated to return to such corporation or trust upon the death of the annuitant a residue at least equal to one-half the original gift or other consideration for such annuity.

(2)  Every such domestic corporation or such domestic or foreign trust shall have and maintain admitted assets at least equal to the sum of the reserves on its outstanding annuity agreements, calculated in accordance with the United States Internal Revenue Code as set forth in s. 220.03(1)(n), and a surplus of 25 percent of such reserves. In determining the reserves of any such corporation or trust, a deduction shall be made for all or any portion of an annuity risk which is reinsured by a life insurance company authorized to do business in this state. The assets of such corporation or trust in an amount at least equal to the sum of such reserves and surplus shall be invested only in securities permitted under part II of chapter 625 for the investment of the reserves of authorized life insurance companies; and such assets shall be segregated as separate and distinct funds, independent of all other funds of such corporation or trust, and shall not be applied for the payment of the debts and obligations of the corporation or trust or for any purpose other than the annuity benefits specified in this section.

(3)  No such foreign corporation shall make these annuity agreements in this state unless it complies with all the requirements of this section imposed upon like domestic corporations, except that the corporation may invest its reserve and surplus funds in the kind of securities permitted by the laws of the state in which it was incorporated or organized.

(4)  Any corporation or trust that engages in the business of issuing these annuity agreements shall notify the department in writing by the later of 90 days after the effective date of this act or the date on which it enters into the first of these annuity agreements. The notice must:

(a)  Be signed by two or more officers or directors of the organization;

(b)  Identify the organization; and

(c)  Certify that the organization meets the requirements of this section.

(5)  Any annuity agreement entered into by a corporation or trust must contain the following clause: "This annuity is not issued by an insurance company, is subject only to limited regulation by the State of Florida and is not protected or otherwise guaranteed by any government agency."

(6)  If the department finds that any such corporation or trust has failed to comply with the requirements of this section, it may order such corporation or trust to cease making any new annuity agreements until such requirements have been satisfied. The department may, in its discretion, require annual statements by such corporation or trust and may accept in lieu thereof a sworn statement by two or more of the principal officers thereof, in such form as will satisfy the department that the requirements of this section are being complied with.

(7)  Except as provided in this section, every such corporation or trust shall be exempt from the provisions of this code in making annuity agreements issued under this section.

(8)  Any annuity agreement entered into by a corporation or trust the sole purpose of which is to support a state institution of higher learning shall contain the following clause:

"This agreement is the entire contract between the parties, with rights and responsibilities of each party to the other as set forth herein. The donor or annuitant shall not have recourse against any assets of the state other than any funds or assets donated by, or funds derived from any assets donated by, the donor as set forth herein."

(9)  Agreements in the form of a charitable remainder unitrust trust, charitable remainder annuity trust, charitable lead trust, pooled income fund or other similar charitable split interest trust arrangement (not including a charitable gift annuity), described in ss. 170(f)(2)(A) and (B), 664(d)(1) and (2), and 642(c)(5) of the Internal Revenue Code are exempt from the provisions of subsections (1), (2), (3), and (5).

(10)  The provisions of ¹part X of chapter 626, apply to issuers of annuity agreements under this section.

(11)  The department shall adopt rules and forms for the filing of annual statements and agreements pertaining to donor annuity organizations.

History.--s. 1, ch. 74-149; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 403, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 44, 114, ch. 92-318; s. 16, ch. 96-168; s. 25, ch. 97-93; s. 15, ch. 99-307; s. 10, ch. 2000-370.

¹Note.--Redesignated as part IX of ch. 626 to conform to the transfer of ss. 626.941-626.945, comprising former part IX, by ch. 98-89.

627.482  Interest payable on cash surrender of policy.--

(1)  If an insured requests payment of the cash surrender value of a policy from its insurer, such payment shall include interest at the rate of interest specified in s. 625.121(6)(e), unless such payment is made by the insurer within 30 days of receipt of the insurance policy and request for cash surrender.

(2)  An insurer shall be exempt from the requirements of this section if, upon petition by the insurer to the department, it is determined by the department that payment of such interest threatens the solvency of the insurer.

History.--s. 1, ch. 89-360; s. 1, ch. 90-192; s. 66, ch. 91-108; s. 114, ch. 92-318.

PART IV
INDUSTRIAL LIFE INSURANCE
POLICIES

627.501  Scope of this part.

627.502  "Industrial life insurance" defined; reporting.

627.503  Required provisions.

627.504  Grace period.

627.5045  Secondary notice.

627.505  Entire contract; statements in application.

627.506  Incontestability.

627.507  Misstatement of age or sex.

627.508  Dividends.

627.509  Reinstatement.

627.510  Settlement on proof of death.

627.511  Authority to alter contract.

627.512  Beneficiary.

627.513  Facility of payment.

627.514  Nonforfeiture benefits; certain interim policies.

627.515  Title of industrial life insurance policy.

627.516  Advance payment of premiums.

627.517  Conversion.

627.521  Disclosure statements.

627.522  Policy requirements and prohibitions.

627.501  Scope of this part.--The provisions of this part apply only to industrial life insurance policies. Sections 627.463, 627.472, 627.476, and 627.479 also apply to industrial life insurance policies.

History.--s. 507, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.502  "Industrial life insurance" defined; reporting.--

(1)  For the purposes of this code, "industrial life insurance" is that form of life insurance written under policies under which premiums are payable monthly or more often, bearing the words "industrial policy" or "weekly premium policy" or words of similar import imprinted upon the policies as part of the descriptive matter, and issued by an insurer which, as to such industrial life insurance, is operating under a system of collecting a debit by its agent.

(2)  Every life insurer transacting industrial life insurance shall report to the department all annual statement data regarding the exhibit of life insurance, including relevant information for industrial life insurance.

History.--s. 508, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 405, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.503  Required provisions.--

(1)  No policy of industrial life insurance shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions as required in s. 627.476 and ss. 627.504-627.521, or provisions which in the opinion of the department are more favorable to the policyholder.

(2)  Any such provisions or portions not applicable to single-premium or term policies shall to that extent not be incorporated therein.

History.--s. 509, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 406, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.504  Grace period.--The policy shall provide that the insured is entitled to a grace period of 4 weeks within which the payment of any premiums due after the first premium payment may be made, except that in policies the premiums for which are payable monthly, the grace period shall be 1 month, but not less than 30 days; and that during the grace period the policy shall continue in full force, but if during the grace period there is a claim under the policy, then any premiums due and unpaid may be deducted from any settlement under the policy.

History.--s. 510, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 407, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.5045  Secondary notice.--Except as provided in this section, a contract for an industrial life insurance policy issued or issued for delivery in this state on or after October 1, 1997, for which premiums are paid monthly, covering a natural person 64 years of age or older or owned by a natural person 64 years of age or older, which has been in force for at least 1 year, may not be lapsed for nonpayment of premium unless, after expiration of the grace period, and at least 21 days before the effective date of such lapse, the insurer has mailed a notification of the impending lapse in coverage to the policyowner and to a specified secondary addressee if such addressee has been designated in writing by name and address by the policyowner. An insurer issuing an industrial life insurance contract on or after October 1, 1997, shall notify the applicant of the right to designate a secondary addressee at the time of application for the policy on a form provided by the insurer and at any time the policy is in force by submitting a written notice to the insurer containing the name and address of the secondary addressee. This section does not apply to any life insurance contract under which premiums are payable monthly or more frequently and are regularly collected by a licensed agent.

History.--s. 3, ch. 95-142; s. 12, ch. 97-292.

627.505  Entire contract; statements in application.--The policy shall provide that the policy shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the policy when issued, that the policy and the application therefor shall constitute the entire contract. If the application is so made a part of the contract, the policy shall also provide that all statements made by the applicant in such application shall, in the absence of fraud, be deemed to be representations and not warranties.

History.--s. 511, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 408, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.506  Incontestability.--The policy shall provide that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of 2 years from its date of issue except for nonpayment of premiums and except, at the option of the insurer, as to provisions providing benefits for disability or specifically for death by accident or accidental means.

History.--s. 512, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 409, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.507  Misstatement of age or sex.--The policy shall provide that if it is found that the age or sex of the insured, or of any other individual considered in determining the premium, has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased according to the correct sex or age. The calculations shall be in accordance with the insurer's rate at the date of issue, and at the insurer's option this may be so specified in the policy.

History.--s. 513, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 410, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.508  Dividends.--Every participating policy shall provide that the insurer shall annually ascertain and apportion any divisible surplus accruing on the policy. This provision shall not prohibit the payment of additional dividends on default of payment of premiums or termination of the policy.

History.--s. 514, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 411, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.509  Reinstatement.--The policy shall provide that the policy may be reinstated at any time within 3 years after the date of default in the payment of any premium, unless the policy has been surrendered for its cash value or unless the paid-up term insurance, if any, has expired, upon evidence of insurability satisfactory to the insurer and the payment of all overdue premiums and payment (or, within the limits permitted by the then cash value of the policy, reinstatement) of any other indebtedness to the insurer upon the policy with interest as to both premiums and indebtedness at a rate not exceeding 6 percent per year compounded annually.

History.--s. 515, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 412, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.510  Settlement on proof of death.--

(1)  The policy shall provide that when the policy becomes a claim by the death of the insured, settlement shall be made upon surrender of the policy and receipt of due proof of death or after a specified period not exceeding 60 days after such surrender and receipt of such proof. At the insurer's option, surrender of the premium receipt book may also be required.

(2)  Insurers transacting industrial life insurance business in the state who require a claim form to be filed by a claimant for settlement of a policy shall allow the claimant to file the claim using the uniform life insurance claim form developed by the department. The department shall establish by rule a uniform life insurance claim form to be used by claimants for settlement of any industrial life insurance policy issued by an insurer transacting life insurance business in this state.

History.--s. 516, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 413, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 87-37; s. 114, ch. 92-318.

627.511  Authority to alter contract.--The policy shall provide that no agent shall have the power or authority to waive, change, or alter any of the terms or conditions of any policy; except that, at the option of the insurer, the terms or conditions may be changed by an endorsement or rider signed by a duly authorized officer of the insurer.

History.--s. 517, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 414, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.512  Beneficiary.--The policy shall provide a space for the name of the beneficiary designated with a reservation of the right to designate or change the beneficiary after the issuance of the policy. The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured.

History.--s. 518, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 415, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.513  Facility of payment.--The policy may also provide that if the beneficiary designated in the policy does not make a claim under the policy or does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than 30 days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor, or dies before the insured or is not legally competent to give valid release, then the insurer may make payment to the executor or administrator of the insured; to any of the insured's relatives by blood or legal adoption or connection by marriage; to any person appearing to the insurer to be equitably entitled thereto; or to any person who has incurred expense for the maintenance, medical attention, or burial of the insured. The policy may also include a similar provision applicable to any other payment due under the policy.

History.--s. 519, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 416, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.514  Nonforfeiture benefits; certain interim policies.--Each industrial life insurance policy delivered or issued for delivery between the effective date of this code and the operative date of s. 627.476 shall provide:

(1)  That, in the event of default in any premiums, the insurer will grant, upon proper request not later than 13 weeks or 3 months after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy.

(2)  That, upon surrender of the policy within 13 weeks or 3 months after the due date of any premium payment in default after premiums have been paid for at least 5 full years, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value at least equal to the minimum cash surrender value hereinafter specified. The minimum cash surrender value shall be equal to:

(a)  The reserve on the date of default of the premium less a sum of not more than 2.5 percent of the face amount; or

(b)  An amount as defined in s. 627.476. The policy shall reserve to the insurer the right to defer the granting of any cash surrender value for 6 months after demand therefor with surrender of the policy.

(3)  That a specified paid-up nonforfeiture benefit, the present value of which shall be at least equal to the cash surrender value, shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 13 weeks or 3 months after the due date of the premium in default; however, when the mortality table used is the 1941 Standard Industrial Mortality Table, the rates of mortality to be assumed in calculating any extended term insurance with accompanying pure endowment, if any, may be not more than 130 percent of the rates of mortality according to such table.

(4)  A statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefits, if any, available under the policy on each policy anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter.

This section does not apply to term policies of uniform amount of 15 years' duration or less, to increasing term policies of 15 years' duration or less, or to decreasing term policies.

History.--s. 520, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 417, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.515  Title of industrial life insurance policy.--There shall be a title on the face of each such policy briefly describing its form.

History.--s. 521, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.516  Advance payment of premiums.--Each insurer shall allow a refund or discount on advance premiums paid for an industrial life insurance policy if such premiums are paid in a single sum covering a period of at least 13 weeks. Such refund or discount shall reflect the difference in costs between weekly or monthly premium payment and the advance premiums being paid, with an interest factor used to reflect the time value of money.

History.--s. 522, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 2, ch. 80-156; ss. 2, 3, ch. 81-318; ss. 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.517  Conversion.--Each industrial life insurance policy delivered or issued for delivery on or after January 1, 1981, shall provide that if, upon the sale of any new industrial life insurance policy, the combined face value of all industrial life insurance policies, including the new policy, issued by any one insurer, insuring any one life and owned by any one person, would exceed $3,000, then the owner shall have the option of merging and converting such industrial life insurance policies into one regularly offered ordinary life insurance policy with the same insurer with no further evidence of insurability required.

History.--s. 523, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 3, ch. 80-156; ss. 2, 3, ch. 81-318; ss. 418, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.521  Disclosure statements.--Each industrial life insurance premium receipt book delivered in this state on or after January 1, 1983, shall contain the following disclosure statement: "You are entitled to a discount or refund from the company if you make your premium payment 13 weeks in advance."

History.--ss. 419, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.522  Policy requirements and prohibitions.--

(1)  An industrial life insurance policy may not exclude or restrict the payment of the face amount by reason of the fact that the death of the insured occurred due to the act of another.

(2)  Each of the optional benefits and charges provided under an industrial life insurance policy must be separately priced. The prices must be set forth in the policy in a clear, conspicuous, and understandable manner.

(3)  This section does not limit the rights of any assignee of any industrial life insurance policy to enforce any assignment pursuant to its terms and does not prohibit an insurer from recognizing any such assignment pursuant to its terms.

History.--s. 45, ch. 92-318.

PART V
GROUP LIFE INSURANCE POLICIES

627.551  Group contracts and plans of self-insurance must meet group requirements.

627.5515  Out-of-state groups.

627.552  Employee groups.

627.553  Debtor groups.

627.554  Labor union groups.

627.555  Trustee groups.

627.556  Credit union groups.

627.5565  Additional groups.

627.5567  Group life insurance; association groups.

627.5575  Group life insurance for dependents.

627.558  Provisions required in group contracts.

627.559  Grace period.

627.560  Incontestability.

627.561  Application; statements deemed representations.

627.562  Insurability.

627.563  Misstatement of age.

627.564  Payment of benefits.

627.565  Certificate.

627.566  Conversion on termination of eligibility.

627.567  Conversion on termination of policy.

627.568  Death pending conversion.

627.5685  Continuance of coverage during disability.

627.5686  Waiver of premium for disabled insured.

627.569  Use of dividends, refunds, rate reductions, commissions, service fees.

627.570  Premium rates.

627.571  Assignment of incidents of ownership in group life insurance policies, including conversion privileges.

627.5725  Notification to insureds of cancellation or expiration.

627.573  Replacement or termination of group life insurance; liability of prior insurer.

627.574  Liability of succeeding insurer on replacement of group policy.

627.575  Extension of benefits.

627.551  Group contracts and plans of self-insurance must meet group requirements.--

(1)(a)  A life insurance policy insuring the lives of more than one individual may be delivered or issued for delivery in this state only if the policy is issued to one of the groups specified in ss. 627.552-627.5575, and only if the policy complies with the other applicable provisions of this part.

(b)  A plan of self-insurance providing benefits in the event of death to residents of this state may be established or maintained only if the plan complies with the applicable provisions of this part relating to the rights of individuals to specified benefits and coverages.

(2)  Subsection (1) does not apply to life insurance policies or plans of self-insurance:

(a)  Insuring or providing benefits only to individuals related by blood, marriage, or legal adoption.

(b)  Insuring or providing benefits only to individuals who have a common interest through ownership of a business enterprise, or a substantial legal interest or equity therein, and who are actively engaged in the management of the business enterprise.

(c)  Insuring or providing benefits only to individuals otherwise having an insurable interest in each other's lives.

(3)  As used in this part:

(a)  "Policy," "insurance policy," and "group life insurance policy" include plans of self-insurance providing death benefits.

(b)  "Amount of insurance" and "insurance" include the death benefits provided under a plan of self-insurance.

(c)  "Insurer" includes any person or governmental unit providing a plan of self-insurance.

(4)  A nongovernmental self-insurance plan providing life insurance may not be contributory by participants.

(5)  This section does not apply to any plan which is established or maintained by an individual employer in accordance with the Employee Retirement Income Security Act of 1974. This subsection does not allow an authorized insurer to issue a group life insurance policy or certificate which does not comply with this part.

History.--s. 524, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 3, 10, ch. 80-341; ss. 2, 3, ch. 81-318; ss. 421, 448, 809(2nd), ch. 82-243; ss. 55, 79, ch. 82-386; s. 5, ch. 83-203; s. 16, ch. 83-288; ss. 46, 114, ch. 92-318.

627.5515  Out-of-state groups.--

(1)  Any group life insurance policy issued or delivered outside this state under which a resident of this state is provided coverage shall comply with the provisions of this part in the same manner as group life policies issued in this state.

(2)  This part does not apply to a group life insurance policy issued or delivered outside this state under which a resident of this state is provided coverage if:

(a)  The policy is issued to an employee group the composition of which is substantially as described in s. 627.552; a labor union group the composition of which is substantially as described in s. 627.554; a trustee group the composition of which is substantially as described in s. 627.555; a credit union group the composition of which is substantially as described in s. 627.556; an additional group complying with s. 627.5565; an association group the composition of which is substantially as described in s. 627.5567; an association group to cover persons associated in any other common group, which common group is formed primarily for purposes other than providing insurance; a group which is established primarily for the purpose of providing group insurance, provided the benefits are reasonable in relation to the premiums charged thereunder and issuance of the group policy has resulted, or will result, in economies of administration; or a group of insurance agents of an insurer, which insurer is the policyholder;

(b)  Certificates evidencing coverage under the policy are issued to residents of this state and contain in contrasting color and not less than 10-point type the following statement:  "The benefits of the policy providing your coverage are governed primarily by the law of a state other than Florida."; and

(c)  The policy provides the benefits specified in s. 627.566.

(3)  Section 624.428 is not applicable when residents of this state are enrolled for coverage under a policy or certificate issued in accordance with subsection (2).

(4)  Prior to solicitation in this state, a copy of the master policy and a copy of the form of the certificate evidencing coverage that will be issued to residents of this state shall be filed with the department for informational purposes.

(5)  Prior to solicitation in this state, an officer of the insurer shall truthfully certify to the department that the policy and certificates evidencing coverage have been reviewed and approved by the state in which the group policy is issued.

(6)  Any insurer who provides coverage under certificates of insurance issued to residents of this state shall designate one Florida-licensed resident agent as agent of record for the service of such certificates, unless the policy is issued to a group substantially as described in s. 627.552, s. 627.554, s. 627.555, s. 627.556, s. 627.5565, or s. 627.5567.

History.--ss. 422, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 98, ch. 83-216; s. 114, ch. 92-318; s. 30, ch. 99-3.

627.552  Employee groups.--Subject to all of the requirements of this section, the lives of a group of individual employees of an employer may be insured, for the benefit of persons other than the employer, under a policy issued to the employer or to the trustees of a fund established by an employer, which employer or board of trustees is deemed to be the policyholder.

(1)(a)  The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes of employees determined by conditions pertaining to their employment.

(b)  The policy may provide that the term "employees" includes the employees of one or more subsidiary corporations, and includes the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors, or partnerships if the business of the employer and of the affiliated corporations, proprietors, or partnerships is under common control. The policy may provide that the term "employees" includes the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term "employees" includes directors of a corporate employer, former employees, or retired employees.

(c)  A policy issued to insure the employees of a public body may provide that the term "employees" includes elected or appointed officials.

(2)  The premium for the policy shall be paid by the policyholder, either from the employer's funds or from funds contributed by the insured employees, or from both. A policy on which no part of the premium is derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer, except those employees who reject coverage in writing.

(3)  The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the employer or trustees.

This section does not affect the provisions of ss. 112.08-112.14.

History.--s. 525, ch. 59-205; s. 1, ch. 63-187; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 423, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 47, 114, ch. 92-318.

627.553  Debtor groups.--The lives of a group of individuals may be insured under a policy issued to a creditor or its parent holding company, or to a trustee or trustees or agent designated by two or more creditors, which creditor, holding company, affiliate, trustee or trustees, or agent shall be deemed the policyholder, to insure debtors of the creditor or creditors, subject to the following requirements:

(1)  The debtors eligible for insurance under the policy shall be all of the debtors of the creditor or creditors or all of any class or classes thereof. The policy may provide that the term "debtors" includes:

(a)  Borrowers of money or purchasers or lessees of goods, services, or property for which payment is arranged through a credit transaction;

(b)  The debtors of one or more subsidiary corporations; and

(c)  The debtors of one or more affiliated corporations, proprietorships, or partnerships if the business of the policyholder and of such affiliated corporations, proprietorships, or partnerships is under common control.

(2)  The premium for the policy shall be paid either from the creditor's funds or from charges collected from the insured debtors, or from both. A policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors shall not include, in the class or classes of debtors eligible for insurance, debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least 75 percent of the then eligible debtors elect to pay the required charges. A policy on which no part of the premium is to be derived from the collection of such identifiable charges must insure all eligible debtors, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. The policy may be issued only if the group of eligible debtors is then receiving new entrants at the rate of at least 100 persons yearly, or may reasonably be expected to receive at least 100 new entrants during the first policy year, and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than 75 percent of the new entrants become insured. The policy may exclude from the classes eligible for insurance classes of debtors determined by age.

(3)  The amount of insurance on the life of any debtor shall at no time exceed the amount owed by her or him which is repayable in installments to the creditor or $50,000, whichever is less, except that loans not exceeding 1 year's duration shall not be subject to such limits. However, on such loans not exceeding 1 year's duration, the limit of coverage shall not exceed $50,000 with any one insurer.

(4)  The policy shall provide that the insurer will furnish to the policyholder, for delivery to each insured debtor under the policy, a certificate of insurance describing the coverage and specifying that the death benefit shall first be applied to reduce or extinguish the indebtedness. The remainder, if any, shall be paid to the designated second beneficiary or the insured's estate.

History.--s. 526, ch. 59-205; s. 1, ch. 67-131; s. 3, ch. 76-168; s. 1, ch. 77-246; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 424, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 89-75; s. 114, ch. 92-318; s. 331, ch. 97-102.

627.554  Labor union groups.--Subject to all of the requirements of this section, the lives of a group of individual labor union members or labor union members and their dependents may be insured, for the benefit of persons other than the union or any of its officials, representatives, or agents, under a policy issued to the labor union or to the trustees of a fund established in this state by the labor union, which labor union or board of trustees is deemed to be the policyholder.

(1)  The individuals eligible for insurance under the policy shall be all of the members of the union, or all of the members of any class or classes of union members determined by conditions pertaining to their employment or to membership in the union, or to both. A policy issued to the trustees of a fund established in this state by a labor union may provide that the trustees or their employees, or both, may be insured under the policy if their duties are principally connected with such trusteeship.

(2)  The premium for the policy shall be paid by the policyholder either wholly from the policyholder's funds or from funds contributed by the employer or employers of the insured persons or by the labor union, or by both, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer or except as to those who reject the coverage in writing.

(3)  The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the union.

History.--s. 527, ch. 59-205; s. 1, ch. 61-107; s. 2, ch. 63-187; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 425, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 48, 114, ch. 92-318.

627.555  Trustee groups.--Subject to all of the requirements of this section, the lives of a group of individual employees of employers or members of labor unions may be insured, for the benefit of persons other than the employers or unions, under a policy issued to the trustees of a fund established by two or more employers in the same industry or by two or more labor unions, or to the trustees of a fund established by one or more employers in the same industry and one or more labor unions or by one or more employers and one or more labor unions whose members are in the same or related occupations or trades, which board of trustees is deemed to be the policyholder.

(1)  A policy may not be issued under this section:

(a)  To insure employees of any employer whose eligibility to participate in the fund as an employer arises out of considerations directly related to the employer being a commercial correspondent or business client or patron of another employer, regardless of whether the other employer is or is not participating in the fund.

(b)  To insure employees of any employer not located in this state, unless the majority of the employers whose employees are to be insured are located in this state, or unless the employer has assumed obligations through a collective bargaining agreement and is participating in the fund either pursuant to those obligations with regard to one or more classes of employees encompassed in the collective bargaining agreement or as a method of providing insurance benefits for other classes of employees, or unless the policy is issued to the trustees of a fund established by two or more labor unions.

(2)(a)  The persons eligible for insurance shall be all of the employees of the employers or all of the members of the unions, or all of the members of any class or classes of employees or union members determined by conditions pertaining to their employment or to membership in the unions, or both. The policy may provide that the term "employees" includes retired employees, former employees, directors of a corporate employer, and the individual proprietor or partners if an employer is an individual proprietor or a partnership. The policy may provide that the term "employees" includes the employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietorships, or partnerships if the business of the employer and of the affiliated corporations, proprietorships, or partnerships is under common control.

(b)  Except as provided in paragraph (a) as to retired employees, an individual proprietor or partner is not eligible for insurance under the policy as an employee unless she or he is actively engaged in and devotes a substantial part of her or his time to the conduct of the business of the proprietor or partnership. The policy may provide that the term "employees" includes the trustees or their employees, or both, if their duties are principally connected with such trusteeship.

(3)  The premium for the policy shall be paid by the policyholder either wholly from the policyholder's funds or from funds contributed by the employer or employers of the insured persons or by the union or unions, or by both, or partly from such funds and partly from funds contributed by the insured persons. A policy may not be issued if the entire gross premium charged for the insurance by the insurer is derived from funds contributed by the insured employees or members specifically for their insurance. A policy on which no part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance must insure all eligible persons, or all except any who reject the coverage in writing or as to whom evidence of individual insurability is not satisfactory to the insurer. For the purpose of determining the number of eligible persons who must be covered under a policy, dependents may not be included as eligible persons.

(4)  The policy must cover at date of issue not less than five individuals, other than individual proprietors or partners, from each employer unit unless:

(a)  The policy is issued to the trustees of a fund established by employers that have assumed obligations through a collective bargaining agreement and are participating in the fund either pursuant to those obligations with regard to one or more classes of their employees which are encompassed in the collective bargaining agreement or as a method of providing insurance benefits for other classes of their employees.

(b)  The employer unit is a subsidiary corporation of an employer in the group or is an affiliated corporation, proprietorship, or partnership of an employer in the group whose business and that of such employer is under common control.

(c)  The policy is issued to the trustees of a fund established by two or more labor unions.

(5)  In addition to the requirements of subsection (4), if the fund is established by the members of a group of employers, the policy may be issued only if the participating employers constitute at the date of issue at least 60 percent of those employer members whose employees are not already covered for group life insurance or if the total number of persons covered at date of issue exceeds 600. The policy may not require that if a participating employer discontinues membership in the group of employers, the insurance of the employer's employees ceases solely by reason of the discontinuance.

(6)  The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the insured persons or by the policyholder, employers, or unions.

History.--s. 528, ch. 59-205; s. 2, ch. 61-107; s. 1, ch. 65-19; s. 1, ch. 67-96; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 426, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 49, 114, ch. 92-318; s. 332, ch. 97-102.

627.556  Credit union groups.--The lives of a group of individual credit union members may be insured under a policy issued to the credit union, which is deemed to be the policyholder. The premium shall be paid by the credit union insuring all of its eligible members for the amounts of insurance, not in excess of the share balance, as to each member. The policy shall be for the benefit of the share account of the member or some person or persons other than the credit union or its officials. All eligible members of a credit union may be insured.

History.--s. 529, ch. 59-205; s. 1, ch. 63-6; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 427, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 50, 114, ch. 92-318.

627.5565  Additional groups.--

(1)  An insurer may afford coverage under a group policy issued under this subsection if all of the following conditions are satisfied:

(a)  The issuance of the group policy is not contrary to the best interests of the public.

(b)  Coverage under the group policy is afforded on an actuarially sound basis.

(c)  The group policy results in economies of acquisition or administration of a magnitude comparable to other group policies under this part.

(d)  The premium for the policy is paid by the policyholder either from policyholder funds or from funds contributed by the covered persons, or from both.

(e)  The group consists at all times of not less than five persons.

(f)  Eligibility for participation in the group is not based on the health of an individual participant.

(g)  The group was organized and exists primarily for purposes other than the procurement of insurance.

(h)  The composition of the group to which the policy is to be issued is not substantially similar to one of the groups specified in ss. 627.5515-627.5567.

(2)  An insurer shall inform the department of the effectuation of any coverage under this section within 30 days after effectuation of coverage. The insurer is responsible for establishing that the criteria of subsection (1) have been satisfied.

History.--ss. 428, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 51, 114, ch. 92-318.

627.5567  Group life insurance; association groups.--Subject to all of the requirements of this section, the lives of a group of individual members of an association or members and their employees or dependents may be insured, for the benefit of persons other than the association or any of its official representatives or agents, under a policy issued to the association or to the board of trustees of a fund established in this state for the association, if the members of the association are engaged in a particular profession and are licensed to engage in the profession in this state and if the association has been in existence for at least 2 years and holds regular meetings not less than annually to further the purposes of the association members. The association or board of trustees is deemed to be the policyholder of the group life insurance policy.

(1)  The members eligible for insurance under the policy shall be all of the members of the association, or all of any class or classes of members of the association determined by conditions pertaining to their profession or to membership in the association, or to both. A policy issued to the trustees of a fund established in this state by an association may provide that the trustees or their employees, or both, may be insured under the policy if their duties are principally connected with the trusteeship.

(2)  The premium for the policy shall be paid by the policyholder either wholly from the policyholder's funds or funds contributed by the insured persons or by the association, or by both, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance, subject to the following:

(a)  A policy on which part of the premium is derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least 100 of the then eligible members elect to make the required contributions. The policy may contain a provision requiring evidence of insurability of individual members.

(b)  A policy on which no part of the premium is derived from funds contributed by the insured members specifically for their insurance must insure all eligible members.

(3)  The association must have been in existence for at least 2 years prior to the issuance of the policy; its annual dues must actually be collected from its members; and it must not have been organized for the sole and exclusive purpose of qualifying for insurance under this section.

(4)  If a dividend, premium refund, rate reduction, commission, or service fee is received by any association or by the trustees of a fund established in whole or in part by an association, under any group insurance policy issued for delivery in this state, with respect to which they are the policyholder, covering the members of the association, to which the members contribute to the cost of the premiums for the insurance, the excess, if any, of the aggregate of the dividends, premium refunds, rate reductions, commissions, and service fees over the aggregate expenditure of the association or trustees towards the cost of such insurance, including its administration, for the current and preceding 2 years, to the extent that they were not defrayed by dividends, premium refunds, rate reductions, commissions, and service fees, shall be applied by the policyholder for the sole benefit of insured members on a basis which precludes individual selection and unfair discrimination.

History.--s. 1, ch. 72-57; s. 164, ch. 73-333; s. 1, ch. 74-283; s. 1, ch. 75-141; s. 3, ch. 76-168; s. 212, ch. 77-104; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 445, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 52, 114, ch. 92-318.

Note.--Former s. 627.572.

627.5575  Group life insurance for dependents.--Except for a policy issued under s. 627.553, a group life insurance policy may be extended to insure the employees or members against loss due to the deaths of their spouses and dependent children or any class or classes thereof, subject to the following:

(1)  The premium for the insurance shall be paid either from funds contributed by the employer, union, association, or other person to whom the policy has been issued or from funds contributed by the covered persons, or from both. Except as provided in subsection (2), a policy on which no part of the premium for the spouse's and dependent child's coverage is to be derived from funds contributed by the covered persons shall insure all eligible employees or members with respect to their spouses and dependent children or any class or classes thereof.

(2)  An insurer may exclude or limit the coverage on any spouse or dependent child as to whom evidence of individual insurability is not satisfactory to the insurer.

(3)  The amounts of insurance for any covered spouse or dependent child under the policy may not exceed 50 percent of the amount of insurance for which the employee or member is insured.

History.--ss. 429, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.558  Provisions required in group contracts.--No policy of group life insurance shall be delivered in this state unless it contains in substance the provisions set forth in ss. 627.559-627.568 or provisions which in the opinion of the department are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder; except that:

(1)  Sections 627.564-627.568 inclusive do not apply to policies issued to a creditor to insure debtors of such creditor;

(2)  The standard provisions required for individual life insurance policies do not apply to group life insurance policies; and

(3)  If the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the department is or are equitable to the insured persons and to the policyholder, but nothing in this section shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.

History.--s. 531, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 430, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.559  Grace period.--A group life insurance policy shall provide that the policyholder is entitled to a grace period of 31 days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period.

History.--s. 532, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 431, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.560  Incontestability.--A group life insurance policy shall provide that the validity of the policy shall not be contested, except for nonpayment of premium, after it has been in force for 2 years from its date of issue. No statement made by any person insured under the policy relating to that person's insurability shall be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of 2 years during that person's lifetime nor unless it is contained in a written instrument signed by her or him.

History.--s. 533, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 432, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 333, ch. 97-102.

627.561  Application; statements deemed representations.--A group life insurance policy shall provide that a copy of the application, if any, of the policyholder be attached to the policy when issued, that all statements made by the policyholder or by the persons insured be deemed representations and not warranties, and that no statement made by any person insured be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or to her or his beneficiary.

History.--s. 534, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 433, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 334, ch. 97-102.

627.562  Insurability.--A group life insurance policy shall contain a provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of her or his coverage.

History.--s. 535, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 335, ch. 97-102.

627.563  Misstatement of age.--A group life insurance policy shall contain a provision specifying an equitable adjustment of premiums or of benefits, or of both, to be made in the event the age of a person insured has been misstated. The provision shall contain a clear statement of the method of adjustment to be used.

History.--s. 536, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 434, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.564  Payment of benefits.--A group life insurance policy shall provide that any sum becoming due by reason of the death of the person insured be payable to the beneficiary designated by the person insured, except that, when the policy contains conditions pertaining to family status, the beneficiary may be the family member specified by the policy terms, subject to the provisions of the policy in the event there is no designated beneficiary living at the time of death of the person insured; all or any part of such sum shall be subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of the sum not exceeding $2,000 to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured.

History.--s. 537, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 435, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 99, ch. 83-216; s. 114, ch. 92-318.

627.565  Certificate.--A group life insurance policy shall provide that the insurer will issue to the policyholder for delivery to each person insured an individual certificate containing the group number and describing the insurance protection to which the certificateholder is entitled, those to whom the insurance benefits are payable, any dependent's coverage included in the certificate, the rights and conditions set forth in ss. 627.566, 627.567, and 627.568, the person to whom the insurance benefits are payable, and the person insured; except that for employee groups as defined in s. 627.552 the certificate may, in lieu of including the name of the person insured and the person to whom benefits are payable, contain the following statement prominently displayed in 10-point type or larger and in a contrasting color: "This certificate provides life insurance for the employees and dependents, if applicable, of (employer's name and address) under (group contract number). The employee shall be given a copy of the group enrollment application. The benefits are payable to the beneficiaries of record designated by the employee." Current records shall be maintained by the employer and the insurer of all insured persons and beneficiaries.

History.--s. 538, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 436, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 86-43; s. 114, ch. 92-318.

627.566  Conversion on termination of eligibility.--A group life insurance policy shall provide that, if the insurance, or any portion of it, on a person covered under the policy or on the dependent of a person covered ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, such person is entitled to have issued to her or him by the insurer, without evidence of insurability, an individual policy of life insurance without health or other supplementary benefits, provided application for the individual policy is made, and the first premium is paid, to the insurer within 31 days after such termination, and provided further that:

(1)  The individual policy shall, at the option of such person, be on any one of the forms then customarily issued by the insurer at the age and for the amount applied for, except that the group policy may exclude the option to elect term insurance;

(2)  The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination, less, in the case of a person whose membership in the class or classes eligible for coverage terminates but who continues in employment in another class, the amount of any life insurance for which such person is or becomes eligible under any other group policy within 31 days after such termination, provided that any amount of insurance which has matured on or before the date of such termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination; and

(3)  The premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to such person's age attained on the effective date of the individual policy. A conversion privilege shall be available to a surviving dependent, if any, at the death of the employee or member, with respect to the coverage under the group policy which terminates by reason of such death, and to the dependent of the employee or member upon termination of coverage of the dependent, while the employee or member remains insured under the group policy, by reason of the dependent ceasing to be a qualified family member under the group policy.

History.--s. 539, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 437, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 336, ch. 97-102.

627.567  Conversion on termination of policy.--A group life insurance policy shall provide that, if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured thereunder at the date of such termination whose insurance terminates, including the insured dependent of a covered person, and who has been so insured for at least 5 years prior to such termination date is entitled to have issued to her or him by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by s. 627.566, except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of:

(1)  The amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which she or he is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after such termination; or

(2)  Ten thousand dollars.

History.--s. 540, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 438, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 337, ch. 97-102.

627.568  Death pending conversion.--A group life insurance policy shall provide that, if a person insured under the policy dies during the period within which she or he would have been entitled to have an individual policy issued in accordance with s. 627.566 or s. 627.567 and before such an individual policy has become effective, the amount of life insurance which she or he would have been entitled to have issued under the individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made.

History.--s. 541, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 439, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 338, ch. 97-102.

627.5685  Continuance of coverage during disability.--When active employment is a condition of group life insurance, the policy shall provide that an insured may continue coverage during the insured's total disability by timely payment to the policyholder of that portion, if any, of the premium that would have been required from the insured had total disability not occurred. The continuation shall be for a period of at least 6 months from the date on which the total disability started.

History.--ss. 440, 809(2nd), ch. 82-243; ss. 56, 79, ch. 82-386; s. 114, ch. 92-318.

627.5686  Waiver of premium for disabled insured.--A waiver of premium for any insured who is totally disabled for a period of at least 6 months shall be made available to the policyholder as a part of the application for any group life insurance policy.

History.--ss. 441, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.569  Use of dividends, refunds, rate reductions, commissions, service fees.--If a dividend, premium refund, rate reduction, commission, or service fee is received by any employer, labor union, or association, under any and all group insurance policies whenever issued and delivered in this state, with respect to which the employer, labor union, or association is the policyholder, or an affiliate or subsidiary of the policyholder, covering the employees of one or more employers or the members of one or more labor unions or associations, or any combination thereof, to which such employees or members contribute to the cost of the premiums for such insurance, the excess, if any, of the aggregate of such dividends, premium refunds, rate reductions, commissions, and service fees over the aggregate expenditure of such employer, labor union, or association towards the cost of such insurance, including its administration, for the current and preceding 2 years to the extent that they were not defrayed by dividends, premium refunds, rate reductions, commissions, and service fees, shall be applied by the policyholder for the sole benefit of insured employees or members on a basis which precludes individual selection and unfair discrimination. If such dividend, premium refund, rate reduction, commission, or service fee is received by a trusteed fund, it shall be applied by the trustees for the sole purposes of the trust.

History.--s. 542, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 442, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.570  Premium rates.--A life insurer may issue insurance policies under the provisions of this part at premium rates less than the usual rates or premiums for individual insurance policies.

History.--s. 543, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 443, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.571  Assignment of incidents of ownership in group life insurance policies, including conversion privileges.--

(1)  Nothing in this code or in any other law shall be construed to prohibit any person insured under a group life insurance policy from making an assignment of all or any part of her or his incidents of ownership under such policy, including, but not limited to, the privilege of having issued to the person an individual policy of life insurance pursuant and subject to the provisions of ss. 627.566 and 627.567 and the right to name a beneficiary. Subject to the terms of the policy, agreement, or arrangement among the insured, the group policyholder, and the insurer, relating to assignment of incidents of ownership thereunder, such an assignment by an insured, whenever made, is valid for the purpose of vesting in the assignee, in accordance with any provisions included therein as to the time at which it is to be effective, all of such incidents of ownership so assigned, but without prejudice to the insurer on account of any payment it may make or individual policy it may issue in accordance with ss. 627.566 and 627.567 prior to receipt of notice of the assignment.

(2)  The purpose of subsection (1) is to declare and codify existing rights under policies of the types described therein.

History.--ss. 1, 3, ch. 70-10; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 444, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 339, ch. 97-102.

627.5725  Notification to insureds of cancellation or expiration.--Every insurer delivering or issuing for delivery a group life insurance policy under the provisions of this part shall notify each certificateholder when the master policy has expired or when the master policy has been canceled. The insurer may take such action through the policyholder; and, if the insurer elects to take such action through the policyholder, the insurer shall be deemed to have complied with the provisions of this section upon notifying the policyholder of the requirements of this section and requesting the policyholder to forward to the certificateholders the notice required in this section. Upon receipt of such a request, the policyholder shall forward, as soon as practicable, the notice of expiration or cancellation to each certificateholder covered under the policy.

History.--ss. 1, 3, ch. 83-157; s. 114, ch. 92-318.

627.573  Replacement or termination of group life insurance; liability of prior insurer.--When an insurance purchaser replaces or terminates an existing group life contract, the prior insurer remains liable only to the extent of its accrued liabilities and extensions of benefits as required by s. 627.575.

History.--s. 1, ch. 74-72; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 1, 3, ch. 79-179; ss. 2, 3, ch. 81-318; ss. 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.574  Liability of succeeding insurer on replacement of group policy.--

(1)  Each person who is eligible for coverage in accordance with the succeeding insurer's plan of benefits shall be covered by that insurer's plan of benefits unless such coverage would result in duplication of benefits payable under the prior insurer's plan.

(2)  Each person not covered under the succeeding insurer's plan of benefits in accordance with subsection (1) must be covered by the succeeding insurer in accordance with the following provisions if such individual was validly covered, including benefit extensions, under the prior plan on the date of discontinuance of the prior plan and if such individual is a member of the class or classes of individuals eligible for coverage under the succeeding insurer's plan.

(a)  The minimum level of benefits to be provided by the succeeding insurer shall be the applicable level of benefits of the prior insurer's plan reduced by any benefits payable by the prior plan.

(b)  Coverage must be provided by the succeeding insurer until at least the earliest of the following dates:

1.  The date the individual becomes eligible under the succeeding insurer's plan as described in subsection (1).

2.  The date the individual's coverage would terminate in accordance with the succeeding insurer's plan provisions applicable to individual termination of coverage, for example, at termination of employment.

3.  When an individual was totally disabled immediately prior to the date the succeeding insurer's coverage became effective and the policy of the prior insurer did not conform to s. 627.575, the date of the end of any period of extension or accrued liability which would have been required of the prior insurer by s. 627.575, had s. 627.575 been applicable.

History.--ss. 2, 3, ch. 79-179; s. 2, ch. 81-318; ss. 446, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 100, ch. 83-216; s. 114, ch. 92-318.

627.575  Extension of benefits.--

(1)  Every group life policy which is delivered or issued for delivery in this state or under which benefits are altered, modified, or amended shall provide a reasonable provision for extension of benefits for those individuals who become totally disabled while insured under the policy and who continue to be totally disabled at the date of discontinuance of the policy, as required by subsection (2).

(2)  A reasonable provision for extension of benefits in the case of a group life plan is either premium waiver extension, extended death benefit for a period of at least 12 months in the event of total disability, or payment of income for a specified period during total disability. The discontinuance of the group policy shall not operate to terminate such extension.

History.--ss. 2, 3, ch. 79-179; s. 2, ch. 81-318; ss. 447, 448, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

PART VI
HEALTH INSURANCE POLICIES

627.601  Scope of this part.

627.602  Scope, format of policy.

627.603  Death benefits.

627.604  Nonresident insured.

627.6041  Handicapped children; continuation of coverage.

627.6043  Notification of cancellation, nonrenewal, or change in rates.

627.6044  Use of a specific methodology for payment of claims.

627.6045  Preexisting condition.

627.605  Required provisions; captions, omissions, substitutions.

627.6056  Coverage for ambulatory surgical center service.

627.606  Entire contract; changes.

627.607  Time limit on certain defenses.

627.608  Grace period.

627.609  Reinstatement.

627.610  Notice of claim.

627.611  Claim forms.

627.612  Proof of loss.

627.613  Time of payment of claims.

627.614  Payment of claims.

627.6141  Denial of claims.

627.615  Physical examination, autopsy.

627.616  Legal actions.

627.617  Change of beneficiary.

627.618  Optional policy provisions.

627.619  Change of occupation.

627.620  Misstatement of age or sex.

627.621  Other insurance with this insurer.

627.622  Insurance with other insurers.

627.623  Insurance with other insurers; other benefits.

627.624  Relation of earnings to insurance.

627.625  Unpaid premiums.

627.6265  Cancellation or nonrenewal prohibited.

627.627  Conformity with statutes.

627.628  Illegal occupation.

627.629  Intoxicants and narcotics.

627.630  Order of certain provisions.

627.631  Third-party ownership.

627.632  Requirements of other jurisdictions.

627.633  Other policy provisions.

627.634  Age limit.

627.635  Excess insurance.

627.636  Industrial health insurance.

627.637  Construction of noncomplying contracts.

627.638  Direct payment for hospital, medical services.

627.639  Application signed by agent.

627.640  Filing of classifications and rates.

627.6401  Refunds for persons age 64.

627.6403  Payment of acupuncture benefits to certified acupuncturists.

627.6406  Maternity care.

627.6407  Massage.

627.6408  Diabetes treatment services.

627.6409  Coverage for osteoporosis screening, diagnosis, treatment, and management.

627.641  Coverage for newborn children.

627.6415  Coverage for natural-born, adopted, and foster children; children in insured's custodial care.

627.6416  Coverage for child health supervision services.

627.6417  Coverage for surgical procedures and devices incident to mastectomy.

627.64171  Coverage for length of stay and outpatient postsurgical care.

627.64172  Requirements with respect to breast cancer and routine followup care.

627.6418  Coverage for mammograms.

627.6419  Requirements with respect to breast cancer.

627.64193  Required coverage for cleft lip and cleft palate.

627.642  Outline of coverage.

627.6425  Renewability of individual coverage.

627.643  Uniform minimum standards.

627.644  Discrimination against handicapped prohibited.

627.645  Denial of health insurance claims restricted.

627.646  Conversion on termination of eligibility.

627.647  Standard health claim form.

627.6471  Contracts for reduced rates of payment; limitations; coinsurance and deductibles.

627.6472  Exclusive provider organizations.

627.64725  Health maintenance organization or exclusive provider organization; disclosure of terms and conditions of plan.

627.6473  Combined preferred provider and exclusive provider policies.

627.6475  Individual reinsurance pool.

627.648  Florida Comprehensive Health Association Act.

627.6482  Definitions.

627.6484  Termination of enrollment; availability of other coverage.

627.6486  Eligibility.

627.6487  Guaranteed availability of individual health insurance coverage to eligible individuals.

627.64871  Certification of coverage.

627.6488  Florida Comprehensive Health Association.

627.6489  Disease Management Program.

627.649  Administrator.

627.6492  Participation of insurers.

627.6494  Assessments; deferment, limitation.

627.6496  Issuing of policies.

627.6498  Minimum benefits coverage; exclusions; premiums; deductibles.

627.6499  Reporting by insurers and third-party administrators.

627.601  Scope of this part.--Nothing in this part applies to or affects:

(1)  Any policy of liability insurance or workers' compensation insurance, with or without supplementary expense coverage.

(2)  Any group or blanket policy, except as provided in ss. 627.648-627.6499.

(3)  Life insurance, endowment, or annuity contracts, or contracts supplemental thereto, which contain only provisions relating to health insurance that:

(a)  Provide additional benefits in case of death or dismemberment or loss of sight by accident or accidental means; or

(b)  Operate to safeguard the contract against lapse, or to give a special surrender value or special benefit or an annuity if the insured or annuitant becomes totally and permanently disabled, as defined by the contract or supplemental contract.

(4)  Reinsurance.

History.--s. 544, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 109, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 449, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 11, ch. 90-334; ss. 53, 114, ch. 92-318.

627.602  Scope, format of policy.--

(1)  Each health insurance policy delivered or issued for delivery to any person in this state must comply with all applicable provisions of this code and all of the following requirements:

(a)  The monetary and other considerations shall be expressed in the policy.

(b)  The time when the insurance takes effect and terminates shall be expressed in the policy.

(c)  The policy may purport to insure only one person, except that upon the application of an adult member of a family, who is deemed to be the policyholder, a policy may insure, either originally or by subsequent amendment, any eligible members of that family, including husband, wife, any children or any person dependent upon the policyholder.

(d)  The style, arrangement, and overall appearance of the policy may not give any undue prominence to any portion of the text. Every printed portion of the text of the policy and of any endorsements or attached papers shall be plainly printed in lightfaced type of a style in general use, the size of which is uniform and is not less than 10 points with a lowercase, unspaced alphabet length of not less than 120 points. As used in this paragraph, "text" includes all printed matter except the name and address of the insurer, the name or title of the policy, the brief description of the coverage provided, if any, and captions and subcaptions.

(e)  The exceptions and reductions of indemnity shall be set forth in the policy and, other than those contained in ss. 627.606-627.629, shall be printed, at the insurer's option, either included with the benefit provisions to which they apply, or under an appropriate caption such as "Exceptions," or "Exceptions and Reductions." However, if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies.

(f)  Each form, including outlines of coverage, applications, riders, and endorsements, shall be identified by a form identification number in the lower left-hand corner of the first page of the form.

(g)  The policy may not contain any provision purporting to make any portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless the portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates, statement of classification of risks, or short-rate table filed with the department.

(2)  The department may require any health insurance policy or certificate containing a provision commonly known as a "deductible provision" to have printed or stamped on such policy or certificate: "This policy or certificate contains a deductible provision."; or appropriate words of similar import approved by the department. The statement shall appear on the first page of the policy or certificate in at least 18-point type and may be printed or stamped either as an overprint or by means of a rubber stamp impression.

History.--s. 545, ch. 59-205; s. 1, ch. 61-423; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 57, ch. 77-121; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 450, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 101, ch. 83-216; ss. 121, 149, ch. 92-33; s. 114, ch. 92-318.

627.603  Death benefits.--Any health insurance policy may contain a provision for paying a benefit for death from any cause in an amount not exceeding $1,000, which benefit shall not relieve such policy from the requirements of this chapter. This provision shall not limit benefits for death by accident.

History.--s. 546, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 451, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.604  Nonresident insured.--If any health insurance policy is issued by an insurer domiciled in this state for delivery to a person residing in another state, and if the official having responsibility for the administration of the insurance laws of such other state has advised the department that any such policy is not subject to approval or disapproval by such official, the department may by rule require that such policy meet the standards set forth in this part.

History.--s. 547, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 452, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6041  Handicapped children; continuation of coverage.--A hospital or medical expense insurance policy or health care services plan contract that is delivered or issued for delivery in this state and that provides that coverage of a dependent child will terminate upon attainment of the limiting age for dependent children specified in the policy or contract shall also provide in substance that attainment of the limiting age does not terminate the coverage of the child while the child continues to be both:

(1)  Incapable of self-sustaining employment by reason of mental retardation or physical handicap; and

(2)  Chiefly dependent upon the policyholder or subscriber for support and maintenance.

If a claim is denied under a policy or contract for the stated reason that the child has attained the limiting age for dependent children specified in the policy or contract, the notice of denial must state that the policyholder has the burden of establishing that the child continues to meet the criteria specified in subsections (1) and (2).

History.--s. 1, ch. 70-187; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 453, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 18, ch. 83-288; ss. 122, 149, ch. 92-33; s. 114, ch. 92-318.

Note.--Former s. 627.6055.

627.6043  Notification of cancellation, nonrenewal, or change in rates.--

(1)  Any insurer delivering or issuing an individual health insurance policy subject to this part shall give the policyholder at least 45 days' advance written notice of cancellation, nonrenewal, or a change in rates. Such notice shall be mailed to the policyholder's last address as shown by the records of the insurer. However, if cancellation is for nonpayment of premium, at least 10 days' written notice accompanied by the reason therefor shall be given. Written notice of cancellation for nonpayment of premium shall not be required for health insurance policies under which premiums are payable monthly or more frequently and regularly collected by a licensed agent.

(2)  In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.

(3)  If the insurer fails to provide the 45 days' notice required by this section, the coverage shall remain in effect at the existing premium until 45 days after the notice is given or until the effective date of replacement coverage obtained by the insured, whichever occurs first.

History.--s. 569, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 476, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 89-222; s. 12, ch. 90-249; s. 1, ch. 91-106; ss. 54, 114, ch. 92-318.

Note.--Former s. 627.626; s. 627.6085.

627.6044  Use of a specific methodology for payment of claims.--

(1)  Each insurance policy that provides for payment of claims based on a specific methodology, including, but not limited to, usual and customary charges, reasonable and customary charges, or charges based upon the prevailing rate in the community, shall specify the formula or criteria used by the insurer in determining the amount to be paid.

(2)  Each insurer issuing a policy that provides for payment of claims based on a specific methodology shall provide to an insured, upon her or his written request, an estimate of the amount the insurer will pay for a particular medical procedure or service. The estimate may be in the form of a range of payments or an average payment. The insurer may require the insured to provide detailed information regarding the procedure or service to be performed, including the procedure or service code number provided by the health care provider and the health care provider's estimated charge. An insurer that provides an insured with a good faith estimate is not bound by the estimate. However, a pattern of providing estimates that vary significantly from the ultimate insurance payment constitutes a violation of this code.

History.--ss. 9, 12, ch. 91-296; ss. 55, 114, ch. 92-318; s. 340, ch. 97-102.

Note.--Former s. 627.6145.

627.6045  Preexisting condition.--A health insurance policy must comply with the following:

(1)  A preexisting condition provision may not exclude coverage for a period beyond 24 months following the individual's effective date of coverage and may relate only to:

(a)  Conditions that, during the 24-month period immediately preceding the effective date of coverage, had manifested themselves in such a manner as would cause an ordinarily prudent person to seek medical advice, diagnosis, care, or treatment or for which medical advice, diagnosis, care, or treatment was recommended or received; or

(b)  A pregnancy existing on the effective date of coverage.

(2)  In determining whether a preexisting condition provision applies to an eligible insured or dependent, credit must be given for the time the person was covered under previous coverage if the previous coverage was similar to or exceeded the coverage provided under the new policy and if the previous coverage was continuous to a date not more than 62 days before the effective date of the new coverage, exclusive of any applicable waiting period under the plan.

(3)  This section does not apply to short-term, nonrenewable health insurance policies of no more than a 6-month policy term, provided that it is clearly disclosed to the applicant in the advertising and application, in 10-point contrasting type, that "This policy does not meet the definition of qualifying previous coverage or qualifying existing coverage as defined in ¹s. 627.6699. As a result, if purchased in lieu of a conversion policy or other group coverage, you may have to meet a preexisting condition requirement when renewing or purchasing other coverage."

(4)  This section does not apply to disability income insurance or income replacement insurance coverage.

History.--s. 1, ch. 96-223.

¹Note.--Former s. 627.6699(3)(r), which defined the terms "qualifying previous coverage" and "qualifying existing coverage," was deleted by s. 15, ch. 97-179.

627.605  Required provisions; captions, omissions, substitutions.--

(1)  Except as provided in subsection (2), each such policy delivered or issued for delivery to any person in this state shall contain the provisions specified in ss. 627.606-627.617, inclusive, in the words in which the same appear; except that the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the department which are in each instance not less favorable in any respect to the insured or the beneficiary. Each such provision shall be preceded individually by the applicable caption shown or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the department may approve.

(2)  If any such provision is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the department, shall omit from such policy any inapplicable provision or part of a provision and shall modify any inconsistent provision or part of a provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy.

History.--s. 548, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6056  Coverage for ambulatory surgical center service.--No individual health insurance policy providing coverage on an expense-incurred basis or individual service or indemnity-type contract issued by a nonprofit corporation, of any kind or description, shall be issued unless coverage provided for any service performed in an ambulatory surgical center, as defined in s. 395.002, is provided if such service would have been covered under the terms of the policy or contract as an eligible inpatient service.

History.--s. 12, ch. 77-24; s. 2, ch. 81-318; ss. 26, 30, ch. 82-182; ss. 454, 809(2nd), ch. 82-243; ss. 57, 79, ch. 82-386; s. 102, ch. 83-216; s. 114, ch. 92-318.

Note.--Former s. 395.22.

627.606  Entire contract; changes.--The contract shall include the following provision:

"Entire Contract; Changes: This policy, with the application and attached papers, is the entire contract between the insured and the insurer. No change in this policy will be effective until approved by an officer of the insurer. This approval must be noted on or attached to this policy. No agent may change this policy or waive any of its provisions."

History.--s. 549, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 455, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.607  Time limit on certain defenses.--

(1)  The contract shall include the following provision:

"Time Limit on Certain Defenses: After 2 years from the issue date, only fraudulent misstatements in the application may be used to void the policy or deny any claim for loss incurred or disability starting after the 2-year period."

(2)  A policy may, in place of the provision set forth in subsection (1), include the following provision:

"Incontestable:

(a)  Misstatements in the Application: After this policy has been in force for 2 years during the insured's lifetime (excluding any period during which the insured is disabled), the insurer cannot contest the statements in the application.

(b)  Preexisting Conditions: No claim for loss incurred or disability starting after 2 years from the issue date will be reduced or denied because a sickness or physical condition, not excluded by name or specific description before the date of loss, had existed before the effective date of coverage."

History.--s. 550, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 456, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 56, 114, ch. 92-318.

627.608  Grace period.--

(1)  If the insurer reserves the right to refuse renewal, the contract shall include the following provision:

"Grace Period: This policy has a  (insert a number not less than '7' for a weekly premium policy, '10' for a monthly premium policy, or '31' for all other policies)  day grace period. This provision means that if a renewal premium is not paid on or before the date it is due, it may be paid during the following grace period. The grace period will not apply if, at least 30 days before the premium due date, the insurer has delivered or mailed to the insured's last address shown in the insurer's records written notice of the insurer's intent not to renew this policy. During the grace period, the policy will stay in force."

(2)  If the insurer does not reserve the right to refuse renewal, the contract shall include the following provision:

"Grace Period: This policy has a  (insert a number not less than '7' for a weekly premium policy, '10' for a monthly premium policy, or '31' for all other policies)  day grace period. This provision means that if a renewal premium is not paid on or before the date it is due, it may be paid during the following grace period. During the grace period, the policy will stay in force."

History.--s. 551, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 457, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.609  Reinstatement.--

(1)  The contract shall include the following provision:

"Reinstatement: If the renewal premium is not paid before the grace period ends, the policy will lapse. Later acceptance of the premium by the insurer, or by an agent authorized to accept payment without requiring an application for reinstatement, will reinstate this policy. If the insurer or its agent requires an application, the insured will be given a conditional receipt for the premium. If the application is approved, the policy will be reinstated as of the approval date. Lacking such approval, the policy will be reinstated on the 45th day after the date of the conditional receipt unless the insurer has previously written the insured of its disapproval. The reinstated policy will cover only loss that results from an injury sustained after the date of reinstatement or sickness that starts more than 10 days after such date. In all other respects, the rights of the insured and the insurer will remain the same, subject to any provisions noted on or attached to the reinstated policy. Any premiums the insurer accepts for a reinstatement will be applied to a period for which premiums have not been paid. No premiums will be applied to any period more than 60 days before the reinstatement date."

(2)  The last two sentences of the above provision may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age 50 or, in the case of a policy issued after age 44, for at least 5 years from its date of issue.

History.--s. 552, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 458, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.610  Notice of claim.--

(1)  The contract shall include the following provision:

"Notice of Claim: Written notice of claim must be given within 20 days after a covered loss starts or as soon as reasonably possible. The notice may be given to the insurer at its home office or to the insurer's agent. Notice should include the name of the insured and the policy number."

(2)  The contract may include the following provision:

"If the insured has a disability for which benefits may be payable for at least 2 years, at least once every 6 months after the insured has given notice of claim, the insured must give the insurer notice that the disability has continued. The insured need not do this if legally incapacitated. The first 6 months after any filing of proof by the insured or any payment or denial of a claim by the insurer will not be counted in applying this provision. If the insured delays in giving this notice, the insured's right to any benefits for the 6 months before the date which the insured gives notice will not be impaired."

History.--s. 553, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 459, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.611  Claim forms.--The contract shall include the following provision:

"Claim Forms: When the insurer receives the notice of claim, it will send the claimant forms for filing proof of loss. If these forms are not given to the claimant within 15 days, the claimant may meet the proof of loss requirements by giving the insurer a written statement of the nature and extent of the loss within the time limit stated in the 'Proof of Loss' provision."

History.--s. 554, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 460, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.612  Proof of loss.--The contract shall include the following provision:

"Proof of Loss: If the policy provides for periodic payment for a continuing loss, written proof of loss must be given the insurer within 90 days after the end of each period for which the insurer is liable. For any other loss, written proof must be given within 90 days after such loss. If it was not reasonably possible to give written proof in the time required, the insurer shall not reduce or deny the claim for this reason if the proof is filed as soon as reasonably possible. In any event, the proof required must be given no later than 1 year from the time specified unless the claimant was legally incapacitated."

History.--s. 555, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 461, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.613  Time of payment of claims.--

(1)  The contract shall include the following provision:

"Time of Payment of Claims: After receiving written proof of loss, the insurer will pay monthly all benefits then due for  (type of benefit) . Benefits for any other loss covered by this policy will be paid as soon as the insurer receives proper written proof."

(2)  Health insurers shall reimburse all claims or any portion of any claim from an insured or an insured's assignees, for payment under a health insurance policy, within 45 days after receipt of the claim by the health insurer. If a claim or a portion of a claim is contested by the health insurer, the insured or the insured's assignees shall be notified, in writing, that the claim is contested or denied, within 45 days after receipt of the claim by the health insurer. The notice that a claim is contested shall identify the contested portion of the claim and the reasons for contesting the claim.

(3)  A health insurer, upon receipt of the additional information requested from the insured or the insured's assignees shall pay or deny the contested claim or portion of the contested claim, within 60 days.

(4)  An insurer shall pay or deny any claim no later than 120 days after receiving the claim.

(5)  Payment shall be treated as being made on the date a draft or other valid instrument which is equivalent to payment was placed in the United States mail in a properly addressed, postpaid envelope or, if not so posted, on the date of delivery.

(6)  All overdue payments shall bear simple interest at the rate of 10 percent per year.

(7)  Upon written notification by an insured, an insurer shall investigate any claim of improper billing by a physician, hospital, or other health care provider. The insurer shall determine if the insured was properly billed for only those procedures and services that the insured actually received. If the insurer determines that the insured has been improperly billed, the insurer shall notify the insured and the provider of its findings and shall reduce the amount of payment to the provider by the amount determined to be improperly billed. If a reduction is made due to such notification by the insured, the insurer shall pay to the insured 20 percent of the amount of the reduction up to $500.

History.--s. 556, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 462, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 2, ch. 90-85; s. 5, ch. 91-296; s. 114, ch. 92-318.

627.614  Payment of claims.--

(1)  The contract shall include the following provision:

"Payment of Claims: Benefits will be paid to the insured. Loss-of-life benefits are payable in accordance with the beneficiary designation in effect at the time of payment. If none is then in effect, the benefits will be paid to the insured's estate. Any other benefits unpaid at death may be paid, at the insurer's option, either to the insured's beneficiary or estate."

(2)  The following provisions, or either of them, may be included with the foregoing provision at the option of the insurer:

(a)  "If benefits are payable to the insured's estate or a beneficiary who cannot execute a valid release, the insurer can pay benefits up to $3,000 to someone related to the insured or beneficiary by blood or marriage whom the insurer considers to be entitled to the benefits. The insurer will be discharged to the extent of any such payment made in good faith."

(b)  "The insurer may pay all or a portion of any indemnities provided for health care services to the provider, unless the insured directs otherwise in writing by the time proofs of loss are filed. The insurer cannot require that the services be rendered by a particular provider."

History.--s. 557, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 463, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6141  Denial of claims.--Each claimant, or provider acting for a claimant, who has had a claim denied as not medically necessary must be provided an opportunity for an appeal to the insurer's licensed physician who is responsible for the medical necessity reviews under the plan or is a member of the plan's peer review group. The appeal may be by telephone, and the insurer's licensed physician must respond within a reasonable time, not to exceed 15 business days.

History.--s. 7, ch. 96-223.

627.615  Physical examination, autopsy.--The contract shall include the following provision:

"Physical Examinations and Autopsy: The insurer at its expense has the right to have the insured examined as often as reasonably necessary while a claim is pending. It may also have an autopsy made unless prohibited by law."

History.--s. 558, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 464, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.616  Legal actions.--The contract shall include the following provision:

"Legal Actions: No legal action may be brought to recover on this policy within 60 days after written proof of loss has been given as required by this policy. No such action may be brought after the expiration of the applicable statute of limitations from the time written proof of loss is required to be given."

History.--s. 559, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 465, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.617  Change of beneficiary.--The contract shall include the following provision:

"Change of Beneficiary: The insured can change the beneficiary at any time by giving the insurer written notice. The beneficiary's consent is not required for this or any other change in the policy, unless the designation of the beneficiary is irrevocable."

History.--s. 560, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 466, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.618  Optional policy provisions.--Except as provided in s. 627.605(2), no health insurance policy delivered or issued for delivery to any person in this state shall contain any provision respecting the matters set forth in ss. 627.619-627.629, inclusive, unless such provision is in the words in which the same appears in the applicable section, except that the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording approved by the department which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the department may approve.

History.--s. 561, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 468, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.619  Change of occupation.--There may be a provision as follows:

"Change of Occupation: If the insured is injured or contracts sickness after having changed his or her occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his or her occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change in occupation."

History.--s. 562, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 341, ch. 97-102.

627.620  Misstatement of age or sex.--The contract may include the following provision:

"Misstatement of Age or Sex: If the age or sex of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased according to the correct age or sex."

History.--s. 563, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 469, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.621  Other insurance with this insurer.--The contract may include the following provision:

"Other Insurance with This Insurer: If two or more health insurance policies, exclusive of guaranteed-issue policies, are issued by the insurer covering the same insured, the insurer shall pay the total benefits payable under all policies issued; provided that when guaranteed-issue policies are in force concurrently either with or without other health insurance policies, resulting in coverage in excess of covered claims, the excess insurance provided under such guaranteed-issue policies shall be void and all premiums paid for such excess shall be returned to the insured or to the insured's estate; provided further that full payment of all covered claims is made."

History.--s. 564, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 470, 497, 809(2nd), ch. 82-243; ss. 59, 79, ch. 82-386; s. 114, ch. 92-318; s. 342, ch. 97-102.

627.622  Insurance with other insurers.--

(1)  The contract may include the following provision:

"Insurance with Other Insurers: If there is other valid coverage, not with this insurer, providing benefits for the same loss on a provision-of-service basis or on an expense-incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense-incurred or service coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss, and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision-of-service basis, the 'like amount' of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage."

(2)  If the foregoing policy provision is included in a policy which also contains the policy provision set out in s. 627.623, there shall be added to the caption of the foregoing provision the phrase: "--Expense-incurred Benefits." The insurer may, at its option, include in this provision a definition of "other valid coverage," approved as to form by the department, which definition shall be limited to coverage provided by organizations subject to regulation by the insurance law of any jurisdiction. In the absence of such definition, such term does not include group insurance, automobile medical payments insurance, or coverage provided by health care services plans or by union welfare plans or employer or employee benefit organizations. Any benefit provided for an insured pursuant to any compulsory benefit statute shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing policy provision, no third-party liability coverage shall be included as "other valid coverage."

History.--s. 565, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 110, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 471, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.623  Insurance with other insurers; other benefits.--

(1)  The contract may include the following provision:

"Insurance With Other Insurers: If there is other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense-incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss, and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined."

(2)  If the foregoing policy provision is included in a policy which also contains the policy provision set out in s. 627.622, there shall be added to the caption of the foregoing provision the phrase: "--Other Benefits." The insurer may, at its option, include in this provision a definition of "other valid coverage," approved as to form by the department, which definition shall be limited to coverage provided by organizations subject to regulation by the insurance law of any jurisdiction. In the absence of such definition, such term does not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. Any benefit provided for an insured pursuant to any compulsory benefit statute shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing policy provision, no third-party liability coverage shall be included as "other valid coverage."

History.--s. 566, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 111, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 473, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.624  Relation of earnings to insurance.--

(1)  The contract may include the following provision:

"Relation of Earnings to Insurance: If the total monthly amount of loss-of-time benefits promised for the same loss under all valid loss-of-time coverage upon the insured, whether payable on a weekly or monthly basis, exceeds the monthly earnings of the insured at the time disability commenced or his or her average monthly earnings for the period of 2 years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such 2 years as exceeds the pro rata amount of the premiums for the benefits actually paid hereunder; but this provision shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of $500 or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time."

(2)  The foregoing policy provision may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age 50 or, in the case of a policy issued after age 44, for at least 5 years from its date of issue. The insurer may, at its option, include in this provision a definition of "valid loss-of-time coverage," approved as to form by the department, which definition shall be limited to coverage provided by governmental agencies or by organizations subject to regulation by insurance law, or any combination of such coverages. In the absence of such definition, such term does not include any coverage provided for such insured pursuant to any compulsory benefit statute or benefits provided by union welfare plans or by employer or employee benefit organizations.

History.--s. 567, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 112, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 474, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 343, ch. 97-102.

627.625  Unpaid premiums.--The contract may include the following provision:

"Unpaid Premium: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom."

History.--s. 568, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 475, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6265  Cancellation or nonrenewal prohibited.--Notwithstanding any other provision of law to the contrary, no insurer shall cancel or nonrenew the health insurance policy of any insured because of diagnosis or treatment of human immunodeficiency virus infection or acquired immune deficiency syndrome.

History.--ss. 49, 53, ch. 88-380; s. 114, ch. 92-318.

627.627  Conformity with statutes.--The contract may include the following provision:

"Conformity with State Statutes: Any provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes."

History.--s. 570, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 477, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.628  Illegal occupation.--The contract may include the following provision:

"Illegal Occupation: The insurer will not be liable for any loss which results from the insured committing or attempting to commit a felony or from the insured engaging in an illegal occupation."

History.--s. 571, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 478, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.629  Intoxicants and narcotics.--The contract may include the following provision:

"Intoxicants and Narcotics: The insurer will not be liable for any loss resulting from the insured being drunk or under the influence of any narcotic unless taken on the advice of a physician."

History.--s. 572, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 479, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.630  Order of certain provisions.--The provisions which are the subject of ss. 627.606-627.629, inclusive, shall be printed in the consecutive order of the provisions in such sections; or, at the option of the insurer, any such provision may appear as a unit in any part of the policy, with other provisions to which it may be logically related, provided that the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered, or issued.

History.--s. 573, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 480, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.631  Third-party ownership.--The word "insured," as used in this part, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such a policy to any indemnities, benefits, and rights provided therein.

History.--s. 574, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 481, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.632  Requirements of other jurisdictions.--

(1)  Any policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this state, may contain any provision which is not less favorable to the insured or the beneficiary than the provisions of this chapter and which is prescribed or required by the law of the state or country under which the insurer is organized.

(2)  Any policy of a domestic insurer may, when issued for delivery in any other state or country, contain any provision permitted or required by the laws of such other state or country.

History.--s. 575, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.633  Other policy provisions.--No policy provision which is not subject to this part shall be less favorable in any respect to the insured or the beneficiary than the policy provisions which are subject to this chapter.

History.--s. 576, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 482, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.634  Age limit.--If any health insurance policy contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if such date falls within a period for which a premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy will continue in force subject to any right of cancellation until the end of the period for which the premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective, or would have ceased prior to the acceptance of such premium or premiums, then the liability of the insurer shall, upon discovery of the error, be limited to the refund of all premiums paid for the period not covered by the policy.

History.--s. 577, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 483, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.635  Excess insurance.--

(1)  No provision of this chapter shall be deemed to prohibit an insurer from issuing a health insurance policy as, or including in a policy a provision providing for, excess insurance; that is, to the effect that the insurer's liability for benefits payable on account of expense incurred for any hospitalization, medical, surgical, and other services resulting from covered sickness or injury of the insured shall be limited to that part of that expense, if any, which is in excess of all benefits payable on account thereof by the same insurer under any other policy or policies covering the same insured and by all other insurers and service organizations by whom benefits are payable as to the same such expense.

(2)  Any excess insurance policy, or any policy containing any excess insurance provision, shall have imprinted or stamped conspicuously upon the face thereof the designation "excess insurance" or appropriate words of similar import approved by the department.

History.--s. 578, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 484, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.636  Industrial health insurance.--Industrial health insurance is that form of individual health insurance for which the premium is payable weekly. No policy of industrial health insurance may be delivered or issued for delivery in this state unless it has printed thereon the words "industrial policy" or "weekly premium policy" or words of similar import. Each policy shall be subject to the provisions of this chapter except that:

(1)  Any policy may contain a provision requiring proof of continuance of disability. If such provision is used, it shall be in the following words: "Affirmative proof of continuance of disability must be furnished at the expiration of each period for which a claim is filed."

(2)  The insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured.

History.--s. 579, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 485, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.637  Construction of noncomplying contracts.--If any insurer writes or issues in this state any health insurance contract, as contemplated by this chapter, and the form of such contract is not authorized by or in conformity with the provisions of this chapter, the contract shall nevertheless be a valid and binding contract of the insurer, and shall be construed as though its terms and provisions were in conformity with those required by this chapter, any provision in the contract to the contrary notwithstanding.

History.--s. 580, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 486, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.638  Direct payment for hospital, medical services.--

(1)  Any health insurance policy insuring against loss or expense due to hospital confinement or to medical and related services may provide for payment of benefits directly to any recognized hospital, doctor, or other person who provided the services, in accordance with the provisions of the policy. To comply with this section, the words "or to the hospital, doctor, or person rendering services covered by this policy," or similar words appropriate to the terms of the policy, shall be added to applicable provisions of the policy.

(2)  Whenever, in any health insurance claim form, an insured specifically authorizes payment of benefits directly to any recognized hospital or physician, the insurer shall make such payment to the designated provider of such services, unless otherwise provided in the insurance contract.

History.--s. 581, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 487, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 85-160; s. 114, ch. 92-318.

627.639  Application signed by agent.--If the application for a health insurance policy is to be made a part of the contract of insurance, the insurer's agent who completed the application shall sign the same in the capacity of soliciting agent.

History.--s. 582, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 488, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.640  Filing of classifications and rates.--An insurer shall not deliver or issue for delivery in this state any health insurance policy until it has filed with the department a copy of any applicable classification of risks and premium rates.

History.--s. 583, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 489, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6401  Refunds for persons age 64.--If an insured who has reached his or her 64th birthday but who is not yet 65 years of age pays an annual or semiannual premium that would otherwise pay for coverage beyond his or her 65th birthday, such person shall be entitled to an appropriate refund of unearned premium from the insurer in the event that coverage terminates or is reduced upon the insured's attainment of age 65.

History.--s. 1, ch. 85-136; s. 1, ch. 86-286; s. 114, ch. 92-318; s. 344, ch. 97-102.

627.6403  Payment of acupuncture benefits to certified acupuncturists.--Any policy of individual health insurance that provides coverage for acupuncture shall cover the services of an acupuncturist certified pursuant to chapter 457 under the same conditions that apply to services of a licensed physician.

History.--ss. 1, 3, ch. 87-176; s. 114, ch. 92-318.

627.6406  Maternity care.--

(1)  Any policy of health insurance that provides coverage for maternity care must also cover the services of certified nurse-midwives and midwives licensed pursuant to chapter 467, and the services of birth centers licensed under ss. 383.30-383.335.

(2)  An insurer issuing a health insurance policy that provides maternity and newborn coverage may not limit coverage for the length of a maternity and newborn stay in a hospital or for followup care outside of a hospital to any time period that is less than that determined to be medically necessary, in accordance with prevailing medical standards and consistent with guidelines for perinatal care of the American Academy of Pediatrics or the American College of Obstetricians and Gynecologists, by the treating obstetrical care provider or the pediatric care provider.

(3)  This section does not affect any agreement between an insurer and a hospital or other health care provider with respect to reimbursement for health care services provided, rate negotiations with providers, or capitation of providers, and this section does not prohibit appropriate utilization review or case management by an insurer.

(4)  Any policy of health insurance that provides coverage, benefits, or services for maternity or newborn care must provide coverage for postdelivery care for a mother and her newborn infant. The postdelivery care must include a postpartum assessment and newborn assessment and may be provided at the hospital, at the attending physician's office, at an outpatient maternity center, or in the home by a qualified licensed health care professional trained in mother and baby care. The services must include physical assessment of the newborn and mother, and the performance of any medically necessary clinical tests and immunizations in keeping with prevailing medical standards.

(5)  An insurer subject to subsection (1) shall communicate active case questions and concerns regarding postdelivery care directly to the treating physician or hospital in written form, in addition to other forms of communication. Such insurers shall also use a process that includes a written protocol for utilization review and quality assurance.

(6)  An insurer subject to subsection (1) may not:

(a)  Deny to a mother or her newborn infant eligibility, or continued eligibility, to enroll or to renew coverage under the terms of the policy for the purpose of avoiding the requirements of this section.

(b)  Provide monetary payments or rebates to a mother to encourage the mother to accept less than the minimum protections available under this section.

(c)  Penalize or otherwise reduce or limit the reimbursement of an attending provider solely because the attending provider provided care to an individual participant or beneficiary in accordance with this section.

(d)  Provide incentives, monetary or otherwise, to an attending provider solely to induce the provider to provide care to an individual participant or beneficiary in a manner inconsistent with this section.

(e)  Subject to paragraph (7)(c), restrict benefits for any portion of a period within a hospital length of stay required under subsection (2) in a manner that is less favorable than the benefits provided for any preceding portion of such stay.

(7)(a)  This section does not require a mother who is a participant or beneficiary to:

1.  Give birth in a hospital.

2.  Stay in the hospital for a fixed period of time following the birth of her infant.

(b)  This section does not apply with respect to any health insurance coverage that does not provide benefits for hospital lengths of stay in connection with childbirth for a mother or her newborn infant.

(c)  This section does not prevent a policy from imposing deductibles, coinsurance, or other cost-sharing in relation to benefits for hospital lengths of stay in connection with childbirth for a mother or her newborn infant, except that such coinsurance or other cost-sharing for any portion of a period within a hospital length of stay required under subsection (2) may not be greater than such coinsurance or cost-sharing for any preceding portion of such stay.

History.--s. 20, ch. 83-288; s. 3, ch. 84-94; s. 1, ch. 89-190; s. 114, ch. 92-318; s. 1, ch. 96-195; s. 1, ch. 97-179.

627.6407  Massage.--Any policy of health insurance that provides coverage for massage shall also cover the services of persons licensed to practice massage pursuant to chapter 480, where the massage, as defined in chapter 480, has been prescribed by a physician licensed under chapter 458, chapter 459, chapter 460, or chapter 461, as being medically necessary and the prescription specifies the number of treatments.

History.--s. 57, ch. 92-318; s. 241, ch. 98-166.

627.6408  Diabetes treatment services.--

(1)  A health insurance policy or group health insurance policy sold in this state must provide coverage for all medically appropriate and necessary equipment, supplies, and diabetes outpatient self-management training and educational services used to treat diabetes, if the patient's treating physician or a physician who specializes in the treatment of diabetes certifies that such services are necessary.

(2)  The policy may require that diabetes outpatient self-management training and educational services be provided under the direct supervision of a certified diabetes educator or a board-certified endocrinologist. The policy may further require that nutrition counseling be provided by a licensed dietitian.

(3)  The Agency for Health Care Administration shall adopt standards for diabetes outpatient self-management training and educational services, taking into consideration standards approved by the American Diabetes Association.

History.--s. 3, ch. 95-268; s. 1, ch. 96-279.

627.6409  Coverage for osteoporosis screening, diagnosis, treatment, and management.--Any health insurance policy that covers a resident of this state and that is issued, amended, delivered, or renewed in this state after October 1, 1996, must provide coverage for the medically necessary diagnosis and treatment of osteoporosis for high-risk individuals, including, but not limited to, estrogen-deficient individuals who are at clinical risk for osteoporosis, individuals who have vertebral abnormalities, individuals who are receiving long-term glucocorticoid (steroid) therapy, individuals who have primary hyperparathyroidism, and individuals who have a family history of osteoporosis. This section does not apply to specified-accident, specified-disease, hospital-indemnity, Medicare supplement, or long-term-care health insurance policies or to the state employee health insurance program.

History.--s. 2, ch. 96-282.

627.641  Coverage for newborn children.--

(1)  A health insurance policy that provides coverage on an expense-incurred basis for a member of the family of the insured or subscriber shall, as to the family member's coverage, also provide that the health insurance benefits applicable for children will be payable with respect to a newborn child of the insured or subscriber, or covered family member of the insured or subscriber, from the moment of birth. However, with respect to a newborn child of a covered family member other than the spouse of the insured or subscriber, the coverage for the newborn child terminates 18 months after the birth of the newborn child.

(2)  The coverage for newborn children required by this section consists of coverage for injury or sickness, including the necessary care or treatment of medically diagnosed congenital defects, birth abnormalities, or prematurity, and transportation costs of the newborn to and from the nearest available facility appropriately staffed and equipped to treat the newborn's condition, when such transportation is certified by the attending physician as necessary to protect the health and safety of the newborn child. The coverage of such transportation costs may not exceed the usual and customary charges, up to $1,000.

(3)  This section does not apply to disability income or hospital indemnity policies or to normal maternity policy provisions applicable to the mother.

(4)  A policy may require the insured, subscriber, or covered family member to notify the insurer of the birth of a child within a time period, as specified in the policy, of not less than 30 days after the birth. If timely notice is given, the insurer may not charge an additional premium for coverage of the newborn child for the duration of the notice period. If timely notice is not given, the insurer may charge an additional premium from the date of birth. The insurer may not deny coverage for a child due to the failure of the insured to timely notify the insurer of the birth of the child.

(5)  If the policy does not require the insured to notify the insurer of the birth of a child within a specified time period, the insurer may not deny coverage for such child or retroactively charge the insured an additional premium for such child. However, the insurer may prospectively charge the insured an additional premium for the child if the insurer provides at least 45 days' notice of the additional premium required.

History.--s. 1, ch. 72-82; s. 1, ch. 74-8; s. 3, ch. 76-168; s. 1, ch. 77-174; s. 1, ch. 77-457; s. 1, ch. 80-177; ss. 2, 3, ch. 81-318; ss. 490, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 84-202; ss. 123, 149, ch. 92-33; s. 114, ch. 92-318.

627.6415  Coverage for natural-born, adopted, and foster children; children in insured's custodial care.--

(1)  A health insurance policy that provides coverage for a member of the family of the insured shall, as to the family member's coverage, provide that the health insurance benefits applicable to children of the insured also apply to an adopted child or a foster child of the insured placed in compliance with chapter 63, prior to the child's 18th birthday, from the moment of placement in the residence of the insured. Except in the case of a foster child, the policy may not exclude coverage for any preexisting condition of the child. In the case of a newborn child, coverage begins at the moment of birth if a written agreement to adopt the child has been entered into by the insured prior to the birth of the child, whether or not the agreement is enforceable. This section does not require coverage for an adopted child who is not ultimately placed in the residence of the insured in compliance with chapter 63.

(2)  A policy may require the insured to notify the insurer of the birth or placement of an adopted child within a specified time period of not less than 30 days after the birth or placement in the residence of a child adopted by the insured. If timely notice is given, the insurer may not charge an additional premium for coverage of the child for the notice period. If timely notice is not given, the insurer may charge an additional premium from the date of birth or placement. If notice is given within 60 days of the birth or placement of the child, the insurer may not deny coverage for the child due to the failure of the insured to timely notify the insurer of the birth or placement of the child.

(3)  If the policy does not require the insured to notify the insurer of the birth or placement of an adopted child within a specified time period, the insurer may not deny coverage for such child or retroactively charge the insured an additional premium for such child. However, the insurer may prospectively charge the insured an additional premium for the child if the insurer provides at least 45 days' notice of the additional premium required.

(4)  In order to increase access to postnatal, infant, and pediatric health care for all children placed in court-ordered custody, including foster children, all health insurance policies that provide coverage for a member of the family of the insured shall, as to such family member's coverage, also provide that the health insurance benefits applicable for children shall be payable with respect to a foster child or other child in court-ordered temporary or other custody of the insured, prior to the child's 18th birthday.

History.--ss. 3, 5, ch. 85-189; s. 1, ch. 88-269; s. 1, ch. 91-185; ss. 124, 149, ch. 92-33; s. 5, ch. 92-278; s. 114, ch. 92-318; s. 9, ch. 98-159.

627.6416  Coverage for child health supervision services.--

(1)  All health insurance policies providing coverage on an expense-incurred basis which provide coverage for a member of a family of the insured or subscriber must, as to such family member's coverage, also provide that the health insurance benefits applicable for children include coverage for child health supervision services from the moment of birth to age 16 years. Such services must be exempt from any deductible provisions that are in force in such policies or contracts.

(2)  As used in this section, the term "child health supervision services" means physician-delivered or physician-supervised services that include, at a minimum, services delivered at the intervals and scope stated in this section.

(a)  Child health supervision services must include periodic visits which shall include a history, a physical examination, a developmental assessment and anticipatory guidance, and appropriate immunizations and laboratory tests. Such services and periodic visits shall be provided in accordance with prevailing medical standards consistent with the Recommendations for Preventive Pediatric Health Care of the American Academy of Pediatrics.

(b)  Minimum benefits may be limited to one visit payable to one provider for all of the services provided at each visit cited in this section.

(3)  This section does not apply to disability income, specified disease, Medicare supplement, or hospital indemnity policies.

History.--ss. 2, 6, ch. 86-122; s. 1, ch. 88-329; s. 114, ch. 92-318; s. 1, ch. 97-166.

627.6417  Coverage for surgical procedures and devices incident to mastectomy.--

(1)  Any health insurance policy that provides coverage for mastectomies must also provide coverage for prosthetic devices and breast reconstructive surgery incident to the mastectomy. The insurer may charge an appropriate additional premium for the coverage required by this subsection. The coverage for prosthetic devices and breast reconstructive surgery shall be subject to any deductible and coinsurance conditions and all other terms and conditions applicable to other benefits. Breast reconstructive surgery must be in a manner chosen by the treating physician, consistent with prevailing medical standards, and in consultation with the patient.

(2)  As used in this section, the term "mastectomy" means the removal of all or part of the breast for medically necessary reasons as determined by a licensed physician, and the term "breast reconstructive surgery" means surgery to reestablish symmetry between the two breasts.

(3)  This section does not apply to disability income, specified disease other than cancer, or hospital indemnity policies.

History.--ss. 2, 4, ch. 87-262; s. 4, ch. 88-269; ss. 58, 114, ch. 92-318; s. 1, ch. 97-48.

627.64171  Coverage for length of stay and outpatient postsurgical care.--

(1)  Any health insurance policy that is issued, amended, delivered, or renewed in this state which provides coverage for breast cancer treatment may not limit inpatient hospital coverage for mastectomies to any period that is less than that determined by the treating physician to be medically necessary in accordance with prevailing medical standards and after consultation with the insured patient.

(2)  Any health insurance policy that provides coverage for mastectomies under subsection (1) must also provide coverage for outpatient postsurgical followup care in keeping with prevailing medical standards by a licensed health care professional qualified to provide postsurgical mastectomy care. The treating physician, after consultation with the insured patient, may choose that the outpatient care be provided at the most medically appropriate setting, which may include the hospital, treating physician's office, outpatient center, or home of the insured patient.

(3)  An insurer subject to subsection (1) may not:

(a)  Deny to an insured eligibility, or continued eligibility, to enroll or to renew coverage under the terms of the policy for the purpose of avoiding the requirements of this section;

(b)  Provide monetary payments or rebates to an insured patient to accept less than the minimum protections available under this section;

(c)  Penalize or otherwise reduce or limit the reimbursement of an attending provider solely because the attending provider provided care to an insured patient under this section;

(d)  Provide incentives, monetary or otherwise, to an attending provider solely to induce the provider to provide care to an insured patient in a manner inconsistent with this section; or

(e)  Subject to the other provisions of this section, restrict benefits for any portion of a period within a hospital length of stay or outpatient care as required by this section in a manner that is less than favorable than the benefits provided for any preceding portion of such stay.

(4)(a)  This section does not require an insured patient to have the mastectomy in the hospital or stay in the hospital for a fixed period of time following the mastectomy.

(b)  This section does not prevent a policy from imposing deductibles, coinsurance, or other cost-sharing in relation to benefits under this section, except that such cost-sharing may not exceed cost-sharing with other benefits.

(5)  Except as provided in subsection (3), this section does not affect any agreement between an insurer and a hospital or other health care provider with respect to reimbursement for health care services provided, rate negotiations with providers, or capitation of providers, and does not prohibit appropriate utilization review or case management by the insurer.

(6)  This section does not apply to disability income, specified diseases other than cancer, or hospital indemnity policies.

(7)  As used in this section, the term "mastectomy" means the removal of all or part of the breast for medically necessary reasons as determined by a licensed physician.

History.--s. 2, ch. 97-48.

627.64172  Requirements with respect to breast cancer and routine followup care.--Routine followup care to determine whether a breast cancer has recurred in a person who has been previously determined to be free of breast cancer does not constitute medical advice, diagnosis, care, or treatment for purposes of determining preexisting conditions, unless evidence of breast cancer is found during or as a result of the followup care.

History.--s. 3, ch. 97-48.

627.6418  Coverage for mammograms.--

(1)  An accident or health insurance policy issued, amended, delivered, or renewed in this state must provide coverage for at least the following:

(a)  A baseline mammogram for any woman who is 35 years of age or older, but younger than 40 years of age.

(b)  A mammogram every 2 years for any woman who is 40 years of age or older, but younger than 50 years of age, or more frequently based on the patient's physician's recommendation.

(c)  A mammogram every year for any woman who is 50 years of age or older.

(d)  One or more mammograms a year, based upon a physician's recommendation, for any woman who is at risk for breast cancer because of a personal or family history of breast cancer, because of having a history of biopsy-proven benign breast disease, because of having a mother, sister, or daughter who has or has had breast cancer, or because a woman has not given birth before the age of 30.

It is the intent of the Legislature that, when practice parameters for the delivery of mammography services are developed pursuant to s. 408.02(7), the Legislature review the requirements of this section and conform to the practice parameters.

(2)  Except as provided in paragraph (1)(b), for mammograms done more frequently than every 2 years for women 40 years of age or older but younger than 50 years of age, the coverage required by subsection (1) applies, with or without a physician prescription, if the insured obtains a mammogram in an office, facility, or health testing service that uses radiological equipment registered with the Department of Health for breast cancer screening. The coverage is subject to the deductible and coinsurance provisions applicable to outpatient visits, and is also subject to all other terms and conditions applicable to other benefits. This section does not affect any requirements or prohibitions relating to who may perform, analyze, or interpret a mammogram or the persons to whom the results of a mammogram may be furnished or released.

(3)  This section does not apply to disability income, specified disease, or hospital indemnity policies.

(4)  Every insurer subject to the requirements of this section shall make available to the policyholder as part of the application, for an appropriate additional premium, the coverage required in this section without such coverage being subject to the deductible or coinsurance provisions of the policy.

History.--s. 4, ch. 88-269; s. 125, ch. 92-33; s. 6, ch. 95-188; s. 260, ch. 99-8.

627.6419  Requirements with respect to breast cancer.--

(1)  An insurer may not deny the issuance or renewal of, or cancel, a policy of accident insurance or health insurance, nor include any exception or exclusion of benefits in a policy solely because the insured has been diagnosed as having a fibrocystic condition or a nonmalignant lesion that demonstrates a predisposition, or solely due to the family history of the insured related to breast cancer, or solely due to any combination of these factors, unless the condition is diagnosed through a breast biopsy that demonstrates an increased disposition to developing breast cancer.

(2)  An insurer may not deny the issuance or renewal of, or cancel, a policy of accident insurance or health insurance, nor include any exception or exclusion of benefits in a policy solely due to breast cancer, if the insured has been free from breast cancer for more than 2 years before the applicant's request for health insurance coverage.

(3)  This section also applies to a policy of group, blanket, or franchise accident or health insurance and to a contract or evidence of coverage issued by a health maintenance organization.

History.--s. 59, ch. 92-318; s. 7, ch. 95-188; s. 4, ch. 97-48; s. 2, ch. 97-182.

627.64193  Required coverage for cleft lip and cleft palate.--A health insurance policy that covers a child under the age of 18 must provide coverage for treatment of cleft lip and cleft palate for the child. The coverage must include medical, dental, speech therapy, audiology, and nutrition services only if such services are prescribed by the treating physician or surgeon and such physician or surgeon certifies that such services are medically necessary and consequent to treatment of the cleft lip or cleft palate. The coverage required by this section is subject to terms and conditions applicable to other benefits. This section does not apply to specified-accident, specified-disease, hospital indemnity, limited benefit disability income, or long-term care insurance policies.

History.--s. 1, ch. 98-66.

627.642  Outline of coverage.--

(1)  No individual or family accident and health insurance policy shall be delivered, or issued for delivery, in this state unless:

(a)  It is accompanied by an appropriate outline of coverage; or

(b)  An appropriate outline of coverage is completed and delivered to the applicant at the time application is made, and an acknowledgment of receipt or certificate of delivery of such outline is provided to the insurer with the application.

In the case of a direct response, such as a written application to the insurance company from an applicant, the outline of coverage shall accompany the policy when issued.

(2)  The outline of coverage shall contain:

(a)  A statement identifying the applicable category of coverage afforded by the policy, based on the minimum basic standards set forth in the rules issued to effect compliance with s. 627.643.

(b)  A brief description of the principal benefits and coverage provided in the policy.

(c)  A summary statement of the principal exclusions and limitations or reductions contained in the policy, including, but not limited to, preexisting conditions, probationary periods, elimination periods, deductibles, coinsurance, and any age limitations or reductions.

(d)  A summary statement of the renewal and cancellation provisions, including any reservation of the insurer of a right to change premiums.

(e)  A statement that the outline contains a summary only of the details of the policy as issued or of the policy as applied for and that the issued policy should be referred to for the actual contractual governing provisions.

(f)  When home health care coverage is provided, a statement that such benefits are provided in the policy.

History.--s. 1, ch. 74-69; s. 1, ch. 74-281; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 491, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6425  Renewability of individual coverage.--

(1)  Except as otherwise provided in this section, an insurer that provides individual health insurance coverage to an individual shall renew or continue in force such coverage at the option of the individual. For the purpose of this section, the term "individual health insurance" means health insurance coverage, as described in s. 627.6561(5)(a)2., offered to an individual in this state, including certificates of coverage offered to individuals in this state as part of a group policy issued to an association outside this state, but the term does not include short-term limited duration insurance or excepted benefits specified in subsection (6) or subsection (7).

(2)  An insurer may nonrenew or discontinue health insurance coverage of an individual in the individual market based only on one or more of the following:

(a)  The individual has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the insurer has not received timely premium payments.

(b)  The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage.

(c)  The insurer is ceasing to offer coverage in the individual market in accordance with subsection (3) and applicable state law.

(d)  In the case of a health insurer that offers health insurance coverage in the market through a network plan, the individual no longer resides, lives, or works in the service area, or in an area for which the insurer is authorized to do business, but only if such coverage is terminated under this paragraph uniformly without regard to any health-status-related factor of covered individuals.

(e)  In the case of health insurance coverage that is made available in the individual market only through one or more bona fide associations, as defined in s. 627.6571(5), the membership of the individual in the association, on the basis of which the coverage is provided, ceases, but only if such coverage is terminated under this paragraph uniformly without regard to any health-status-related factor of covered individuals.

(3)(a)  In any case in which an insurer decides to discontinue offering a particular policy form for health insurance coverage offered in the individual market, coverage under such form may be discontinued by the insurer only if:

1.  The insurer provides notice to each covered individual provided coverage under this policy form in the individual market of such discontinuation at least 90 days prior to the date of the nonrenewal of such coverage;

2.  The insurer offers to each individual in the individual market provided coverage under this policy form the option to purchase any other individual health insurance coverage currently being offered by the insurer for individuals in such market in the state; and

3.  In exercising the option to discontinue coverage of this policy form and in offering the option of coverage under subparagraph 2., the insurer acts uniformly without regard to any health-status-related factor of enrolled individuals or individuals who may become eligible for such coverage.

(b)1.  Subject to subparagraph (a)3., in any case in which an insurer elects to discontinue offering all health insurance coverage in the individual market in this state, health insurance coverage may be discontinued by the insurer only if:

a.  The insurer provides notice to the department and to each individual of such discontinuation at least 180 days prior to the date of the nonrenewal of such coverage; and

b.  All health insurance issued or delivered for issuance in the state in the individual market is discontinued and coverage under such health insurance coverage in such market is not renewed.

2.  In the case of a discontinuation under subparagraph 1. in the individual market, the insurer may not provide for the issuance of any individual health insurance coverage in this state during the 5-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed.

(4)  At the time of coverage renewal, an insurer may modify the health insurance coverage for a policy form offered to individuals in the individual market so long as such modification is consistent with the laws of this state and effective on a uniform basis among all individuals with that policy form.

(5)  In applying this section in the case of health insurance coverage that is made available by an insurer in the individual market to individuals only through one or more associations, a reference to an "individual" includes a reference to such an association of which the individual is a member.

(6)  The requirements of this section do not apply to any health insurance coverage in relation to its provision of excepted benefits described in s. 627.6561(5)(b).

(7)  The requirements of this section do not apply to any health insurance coverage in relation to its provision of excepted benefits described in s. 627.6561(5)(c), (d), or (e), if the benefits are provided under a separate policy, certificate, or contract of insurance.

(8)  This section applies to health insurance coverage offered, sold, issued, or renewed in the individual market on or after July 1, 1997.

History.--s. 2, ch. 96-223; s. 2, ch. 97-179; s. 4, ch. 98-159.

627.643  Uniform minimum standards.--

(1)  The department shall adopt rules which establish minimum standards for the general content of forms of individual and family health insurance policies. The rules must include terms of renewability, initial and subsequent conditions of eligibility, termination of insurance, probationary periods, exclusions, limitations, and reductions. The minimum standards are in addition to, and must comply with, the individual health insurance policy provisions provided in part II and in this part.

(2)  The department shall adopt rules which establish minimum standards of benefits and identification for each of the following categories of coverage in individual and family accident and health insurance policy forms, other than conversion policy forms:

(a)  Basic hospital expense insurance.

(b)  Basic medical expense insurance.

(c)  Basic surgical expense insurance.

(d)  Hospital confinement indemnity insurance.

(e)  Major medical expense insurance.

(f)  Disability income protection insurance.

(g)  Accident-only insurance.

(h)  Limited benefit insurance.

(i)  Supplemental insurance.

(j)  Home health care coverage.

(k)  Nonconventional coverage.

This subsection does not preclude the issuance of a policy which combines two or more of the categories of coverage enumerated in paragraphs (a)-(e). This subsection does not preclude the issuance of a policy that does not meet the prescribed minimum standards for categories of coverage in paragraphs (a)-(g) if the department determines that the policy is either experimental in nature or is demonstrated to be a type of coverage that fulfills a reasonable need of the person or persons to be insured. Any policy not meeting the minimum standards that is approved by the department must be identified as to category only as prescribed by the department.

(3)  The department may, within the time provided by law for the disapproval of an individual or family form of accident or health insurance, disapprove any form if it finds that the form does not comply with applicable law or it finds that the form is unjust, unfair, or inequitable to the policyholder, any insured, or any beneficiary. In acting upon any submission, the department shall consider whether the benefits afforded under the submitted policy or benefit form fulfill a reasonable need of a policyholder.

History.--s. 1, ch. 74-281; s. 3, ch. 76-168; s. 1, ch. 77-174; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 492, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 60, 114, ch. 92-318.

627.644  Discrimination against handicapped prohibited.--No health insurer shall refuse to provide, or shall charge unfairly discriminatory rates for, health insurance coverage for a person solely because the person is mentally or physically handicapped. Nothing in this section should be construed as requiring an insurer to provide insurance coverage against a handicap which the applicant or policyholder has already sustained.

History.--s. 1, ch. 76-127; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 493, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.645  Denial of health insurance claims restricted.--

(1)  No claim for payment under a health insurance policy or self-insured program of health benefits for treatment, care, or services in a licensed hospital which is accredited by the Joint Commission on the Accreditation of Hospitals, the American Osteopathic Association, or the Commission on the Accreditation of Rehabilitative Facilities shall be denied because such hospital lacks major surgical facilities and is primarily of a rehabilitative nature, if such rehabilitation is specifically for treatment of physical disability.

(2)  No claim for payment under a health insurance policy for medical care or treatment of a child in a licensed hospital which is nonprofit; which primarily provides diagnosis, treatment, or care for patients whose physical functions or movements are impaired by accident, disease, or congenital deformity; and which accepts patients for treatment without regard to race, color, national origin, sex, religion, or affiliation shall be denied because the hospital does not have facilities for major surgery or because the treatment and care are primarily of a charitable nature.

History.--s. 1, ch. 77-32; s. 12, ch. 78-106; ss. 1, 3, ch. 80-33; s. 2, ch. 81-318; ss. 494, 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

Note.--Former s. 391.11.

627.646  Conversion on termination of eligibility.--

(1)  Every health insurance policy providing hospital or medical expense coverage hereafter delivered or issued for delivery in this state or under which benefits are altered, modified, or amended shall contain a provision that, if the insurance on a person covered under the policy ceases because of the termination of such person's eligibility for coverage prior to his or her becoming eligible for Medicare or Medicaid benefits, then such person shall be entitled to have issued to him or her by the insurer, without evidence of insurability, a policy of health insurance, either individual or family, whichever is appropriate, provided application for the policy is made and the first premium is paid to the insurer within 31 days after such termination, and provided further that:

(a)  The coverage under the policy shall be in an amount equal to or, at the option of the insured, less than the amount of health insurance which ceases because of such termination.

(b)  The premium on the policy shall be at the insurer's then customary rate applicable to such policies, to the class of risk to which such person then belongs, and to his or her age attained on the effective date of the policy.

(c)  The policy of health insurance will not result in overinsurance on the basis of the company underwriting standards at the time of issue.

(d)  The policy of health insurance may be reduced by the amount of any benefits paid for the same injury or same sickness under the prior policy.

(e)  The policy of health insurance may exclude any condition excluded by the prior policy.

(2)  An insurer shall offer maternity benefits and dental benefits if those benefits were provided in the policy.

(3)  The provisions of this section shall be effectuated in such a way as to result in continuous coverage during the 31-day period for such insured.

(4)  This section does not apply to disability income, Medicare supplement, accident only, hospital indemnity, specified disease, limited benefit, nonconventional, or excess policies.

History.--s. 1, ch. 78-385; s. 2, ch. 81-318; ss. 495, 497, 809(2nd), ch. 82-243; ss. 60, 79, ch. 82-386; s. 3, ch. 90-249; s. 114, ch. 92-318; s. 345, ch. 97-102.

627.647  Standard health claim form.--

(1)  The department shall prescribe a standard health claim form to be used by all hospitals and a standard health claim form to be used by all physicians, dentists, and pharmacists. Such forms shall be in a format that allows for the use of generally accepted coding systems by providers in order to facilitate the processing of claims. Such forms shall provide for the disclosure by the claimant of the name, policy number, and address of every insurance policy which may cover the claimant with respect to the submitted claim except those policies specified in s. 627.4235(5). The required information on diagnosis, dental procedures, medical procedures, services, date of service, supplies, and fees may also be met by an attachment to the appropriate physician claim form. However, for the purpose of filing Medicaid claims, such attachments shall be prohibited. Such standard health claim forms shall be accepted by all insurers and all agencies, departments, and divisions of the state.

(2)  This section does not apply to claims submitted by electronic or electromechanical means, except that such claims must include disclosure of every insurance policy which may cover the claimant with respect to the submitted claim.

History.--s. 1, ch. 77-46; s. 1, ch. 79-175; s. 2, ch. 81-318; ss. 496(1st), 497, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 88-30; s. 114, ch. 92-318.

Note.--Former s. 627.6111.

627.6471  Contracts for reduced rates of payment; limitations; coinsurance and deductibles.--

(1)  As used in this section:

(a)  "Insurer" means an insurer as defined in s. 624.03 or a multiple-employer welfare arrangement as defined in s. 624.437.

(b)  "Preferred provider" means any licensed health care provider with which the insurer has directly or indirectly contracted for an alternative or a reduced rate of payment, which shall include any health care provider listed in s. 627.419(3) and (4) and shall provide reasonable access to such health care providers.

(c)  "Preferred provider network" means a group of licensed health care providers with each of which the insurer has directly or indirectly contracted for alternative or reduced rates of payment. If an insurer negotiates with providers practicing as a group, the insurer may contract with the group.

(2)  Any insurer issuing a policy of health insurance in this state, which insurance includes coverage for the services of a preferred provider, must provide each policyholder and certificateholder with a current list of preferred providers and must make the list available for public inspection during regular business hours at the principal office of the insurer within the state.

(3)  A policy may limit payments regardless of the providers chosen by an insured and may offer alternative or reduced rates to an insured who selects preferred providers.

(4)  Any policy that provides schedules of payments for services provided by preferred providers that differ from the schedules of payments for services provided by nonpreferred providers is subject to the following limitations:

(a)  The amount of any annual deductible per covered person or per family for treatment in a facility that is not a preferred provider may not exceed four times the amount of a corresponding annual deductible for treatment in a facility that is a preferred provider.

(b)  If the policy has no deductible for treatment in a preferred provider facility, the deductible for treatment received in a facility that is not a preferred provider facility may not exceed $500 per covered person per visit.

(c)  The amount of any annual deductible per covered person or per family for treatment, other than inpatient treatment, by a provider that is not a preferred provider may not exceed four times the amount of a corresponding annual deductible for treatment, other than inpatient treatment, by a preferred provider.

(d)  If the policy has no deductible for treatment by a preferred provider, the annual deductible for treatment received from a provider which is not a preferred provider shall not exceed $500 per covered person.

(e)  The percentage amount of any coinsurance to be paid by an insured to a provider that is not a preferred provider may not exceed by more than 50 percentage points the percentage amount of any coinsurance payment to be paid to a preferred provider.

(f)  The amount of any deductible and payment of coinsurance paid by the insured must be applied to the reduced charge negotiated between the insurer and the preferred provider.

(g)  Notwithstanding the limitations of deductibles and coinsurance provisions in this section, an insurer may require the insured to pay a reasonable copayment per visit for inpatient or outpatient services.

(h)  If any service or treatment is not within the scope of services provided by the network of preferred providers, but is within the scope of services or treatment covered by the policy, the service or treatment shall be reimbursed at a rate not less than 10 percentage points lower than the percentage rate paid to preferred providers. The reimbursement rate must be applied to the usual and customary charges in the area.

(5)  Any policy issued under this section which does not provide direct patient access to a dermatologist must conform to the requirements of s. 627.6472(16). This subsection shall not be construed to affect the amount the insured or patient must pay as a deductible or coinsurance amount authorized under this section.

(6)  If psychotherapeutic services are covered by a policy issued by the insurer, the insurer shall provide eligibility criteria for each group of health care providers licensed under chapter 458, chapter 459, chapter 490, or chapter 491, which include psychotherapy within the scope of their practice as provided by law, or for any person who is certified as an advanced registered nurse practitioner in psychiatric mental health under s. 464.012. When psychotherapeutic services are covered, eligibility criteria shall be established by the insurer to be included in the insurer's criteria for selection of network providers. The insurer may not discriminate against a health care provider by excluding such practitioner from its provider network solely on the basis of the practitioner's license.

History.--ss. 8, 12, ch. 91-296; ss. 126, 149, ch. 92-33; s. 114, ch. 92-318; s. 1, ch. 96-344; s. 3, ch. 99-393.

Note.--Former s. 627.4134.

627.6472  Exclusive provider organizations.--

(1)  As used in this section, the term:

(a)  "Complaint" means any dissatisfaction expressed by a policyholder concerning an insurer or its network providers.

(b)  "Emergency care" means medical services provided after the sudden or unexpected onset of a medical condition manifesting itself by acute symptoms, including injury caused by an accident, which are severe enough that the lack of immediate medical attention could reasonably be expected to result in any of the following:

1.  The patient's life or health would be placed in serious jeopardy.

2.  Vital bodily functions would be seriously impaired.

3.  There would be serious and permanent dysfunction of a bodily organ or part.

(c)  "Exclusive provider" means a provider of health care, or a group of providers of health care, that has entered into a written agreement with the insurer to provide benefits under a health insurance policy issued under this section, which agreement shall include any health care provider listed in s. 627.419(3) and (4) and shall provide reasonable access to such health care providers.

(d)  "Exclusive provider provision" means any provision that conditions the payment of benefits, in whole or in part, on the use of exclusive providers.

(e)  "Agency" means the Agency for Health Care Administration.

(f)  "Grievance" means dissatisfaction with the administration, claims practices, or provisions of services concerning an insurer or its network providers, expressed in writing by a policyholder under a health insurance policy or certificate.

(g)  "Service area" means the geographic area approved by the agency within which an insurer is authorized to offer a health insurance policy.

(2)  The agency may authorize a health insurer to offer a health insurance policy or certificate under this section if the agency finds that the insurer has satisfied all of the requirements of this section.

(3)  An insurer may not issue a policy or certificate in this state that is subject to an exclusive provider provision until its plan of operation has been approved by the agency. If the insurer files a plan of operation which states that the insurer will be utilizing a health maintenance organization provider network, subscriber grievance procedure, and internal and external quality assurance program, all of which have been approved by the agency, the insurers plan of operation shall be deemed to have met the requirements of subsections (4), (5), (12), and (14).

(4)  An insurer must file a proposed plan of operation with the agency in a format prescribed by the agency. The plan of operation must contain evidence that all covered services that are subject to exclusive provider provisions are available and accessible through exclusive providers, including a demonstration that:

(a)  Such services can be provided by exclusive providers with reasonable promptness with respect to geographic location, hours of operation, and after-hour care. The hours of operation and availability of after-hour care must reflect usual practice in the local area. Geographic availability must reflect the usual travel times within the community.

(b)  The number of exclusive providers in the service area is sufficient, with respect to current and expected policyholders, either:

1.  To deliver adequately all services that are subject to an exclusive provider provision; or

2.  To make appropriate referrals.

(c)  There are written agreements with exclusive providers describing specific responsibilities.

(d)  Emergency care is available 24 hours a day and 7 days a week.

(e)  In the case of covered services that are subject to an exclusive provider provision, there are written agreements with exclusive providers prohibiting such providers from billing or otherwise seeking reimbursement from or recourse against any policyholders. This paragraph does not apply to supplemental charges or coinsurance amounts stated in the policy or certificate.

(5)  The proposed plan of operation must include:

(a)  A statement or map providing a clear description of the service area.

(b)  A description of the grievance procedure to be used.

(c)  A description of the quality assurance program, including all of the following:

1.  The formal organizational structure.

2.  The written criteria for selection, retention, and removal of exclusive providers.

3.  The procedures for evaluating quality of care provided by exclusive providers, and the process to initiate corrective action when warranted.

(d)  A list and description, by specialty, of the exclusive providers.

(e)  The written information proposed to be used by the insurer to comply with subsection (10).

(f)  Any other information requested by the agency.

(6)  An insurer must file any proposed changes to the plan of operation, except for changes to the list of exclusive providers, with the agency prior to implementing the changes. The changes are considered approved by the agency after 30 days unless specifically disapproved.

(7)  An updated list of exclusive providers must be filed with the agency at least semiannually.

(8)  A health insurance policy or certificate may not restrict payment for covered services provided by nonexclusive providers if:

(a)  The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury, or condition; and

(b)  A network provider is not reasonably accessible.

(9)  If any service or treatment is not within the scope of services provided by the network or exclusive providers, but is within the scope of services or treatment covered by the policy, the service or treatment shall be reimbursed at a rate not less than 10 percentage points lower than the percentage rate paid to network providers. The reimbursement rate must be applied to the usual and customary charges in the area.

(10)  An insurer must make full and fair disclosure in writing of the provisions, restrictions, and limitations of the policy or certificate to each policyholder and certificateholder, including at least the following:

(a)  A description (including address and phone number) of the exclusive providers, including primary care physicians, specialty physicians, hospitals, and other providers.

(b)  A description of the exclusive provider provisions, including coinsurance and deductible levels if providers other than exclusive providers are used.

(c)  A description of coverage for emergency and urgently needed care and other out-of-service area coverage.

(d)  A description of limitations on referrals to restricted exclusive providers and to other providers.

(e)  A description of the insurer's quality assurance program and grievance procedure.

(11)  Prior to or at the time of the sale of a policy or certificate that is subject to an exclusive provider organization, the insurer must obtain from the policyholder or certificateholder a signed and dated form stating that the policyholder or certificateholder has received the information provided pursuant to subsection (10) and that the policyholder or certificateholder understands the restrictions of the policy or certificate.

(12)(a)  An insurer issuing policies or certificates that are subject to an exclusive provider organization must have and use procedures for hearing complaints and resolving written grievances from the policyholders. The procedures must be aimed at mutual agreement for settlement and may include arbitration procedures.

(b)  The grievance procedure must be described in the policy and certificates.

(c)  At the time the policy or certificate is issued, the insurer must provide detailed information to the policyholder describing how a grievance may be registered with the insurer.

(d)  Grievances must be considered in a timely manner and must be transmitted to appropriate decisionmakers who have the authority to fully investigate the issue and take corrective action.

(e)  If a grievance is found to be valid, corrective action must be taken promptly.

(f)  All concerned parties must be notified about the results of a grievance.

(g)  The insurer must report no later than each March 31 to the agency regarding its grievance procedure. The report must be in a format prescribed by the agency and must contain the number of grievances filed in the past year and a summary of the subject, nature, and resolution of such grievances.

(13)  At the time of initial purchase, an insurer issuing policies or certificates that are subject to an exclusive provider organization must offer to each policyholder the opportunity to purchase a policy otherwise offered by the insurer that is not subject to an exclusive provider network.

(14)(a)  There is imposed on every authorized insurer that offers exclusive provider policies under this section an annual assessment payable to the agency. The assessment must be determined and collected pursuant to the procedures specified in s. 641.58, and may not exceed 0.1 percent of the gross premium collected by the insurer in the prior year for exclusive provider policies issued in this state under this section. The assessment does not apply to policies issued pursuant to s. 627.6473.

(b)  The agency must deposit the assessments in the Health Care Trust Fund. Assessments deposited under this subsection must be used to defray the expenses of the agency connected with implementation of this section. Prior to collection of assessments under this subsection, the agency may use moneys in the Health Care Trust Fund, as appropriated by the Legislature, to defray the expenses of the agency connected with implementation of this section.

(c)  The failure of the insurer to pay the assessment within the time specified in s. 641.58 constitutes grounds for suspension or revocation of the insurer's certificate of authority by the Department of Insurance.

(15)  If psychotherapeutic services are covered by a policy issued by the insurer, the insurer shall provide eligibility criteria for all groups of health care providers licensed under chapter 458, chapter 459, chapter 490, or chapter 491, which include psychotherapy within the scope of their practice as provided by law, or for any person who is certified as an advanced registered nurse practitioner in psychiatric mental health under s. 464.012. When psychotherapeutic services are covered, eligibility criteria shall be established by the insurer to be included in the insurer's criteria for selection of network providers. The insurer may not discriminate against a health care provider by excluding such practitioner from its provider network solely on the basis of the practitioner's license.

(16)  Notwithstanding any provision of this section to the contrary, an exclusive provider organization which offers dermatological services shall provide direct patient access, for office visits and minor procedures and testing, to a dermatologist who is under contract with the exclusive provider organization. The term "direct patient access" means the ability of an insured to obtain such services without a referral or other authorization before receiving services. The exclusive provider organization shall, by July 1, 1997, develop criteria for compliance with the provisions of this subsection which do not impede or inhibit access to dermatological services for policyholders of the exclusive provider organization. The criteria may include a maximum of five office visits to a dermatologist without prior authorization for a dermatologic problem within a 12-month period.

(17)  An exclusive provider organization shall not discriminate with respect to participation as to any advanced registered nurse practitioner licensed and certified pursuant to s. 464.012, who is acting within the scope of such license and certification, solely on the basis of such license or certification. This subsection shall not be construed to prohibit a plan from including providers only to the extent necessary to meet the needs of the plan's enrollees or from establishing any measure designed to maintain quality and control costs consistent with the responsibilities of the plan.

(18)  Each organization shall allow, without prior authorization, a female subscriber to visit a contracted obstetrician/gynecologist for one annual visit and medically necessary followup care detected at that visit. Nothing in this subsection shall prevent an organization from requiring that an obstetrician/gynecologist treating a covered patient coordinate the medical care through the patient's primary care physician, if applicable.

History.--s. 127, ch. 92-33; s. 111, ch. 92-318; s. 2, ch. 96-344; s. 25, ch. 96-418; s. 1, ch. 97-171; s. 1, ch. 98-285; s. 13, ch. 99-356.

¹627.64725  Health maintenance organization or exclusive provider organization; disclosure of terms and conditions of plan.--Each health maintenance organization or exclusive provider organization shall provide prospective enrollees with written information about the terms and conditions of the plan in accordance with s. 641.31(4) so that the prospective enrollees can make informed decisions about accepting a managed-care system of health care delivery; however, information about where, in what manner, and from whom the comprehensive health care services or specific health care services can be obtained need be disclosed only upon request by the prospective enrollee. All marketing materials distributed by the health maintenance organization or exclusive provider organization must contain a notice in boldfaced type which states that the information required under this section is available to the prospective enrollee upon request.

History.--s. 8, ch. 96-223.

¹Note.--Also published at s. 641.31015.

627.6473  Combined preferred provider and exclusive provider policies.--An insurer may issue a policy that provides coverage for certain benefits through a preferred provider network and other benefits through an exclusive provider network. With regard to the coverage provided through a preferred provider network, the requirements of s. 627.6471 apply, and with regard to the coverage provided through an exclusive provider network, the requirements of s. 627.6472 apply.

History.--s. 128, ch. 92-33.

627.6475  Individual reinsurance pool.--

(1)  PURPOSE.--The purpose of this section is to provide for the establishment of a reinsurance program for coverage of individuals who are eligible for issuance of individual health insurance from a health insurance issuer pursuant to s. 627.6487.

(2)  DEFINITIONS.--As used in this section:

(a)  "Board," "carrier," and "health benefit plan" have the same meaning ascribed in s. 627.6699(3).

(b)  "Health insurance issuer," "issuer," and "individual health insurance" have the same meaning ascribed in s. 627.6487(2).

(c)  "Reinsuring carrier" means a health insurance issuer that elects to comply with the requirements set forth in subsection (7).

(d)  "Risk-assuming carrier" means a health insurance issuer that elects to comply with the requirements set forth in subsection (6).

(e)  "Eligible individual" has the same meaning ascribed in s. 627.6487(3).

(3)  APPLICABILITY AND SCOPE.--This section applies to individual health insurance offered by a health insurance issuer to an eligible individual.

(4)  MAINTENANCE OF RECORDS.--Each health insurance issuer that offers individual health insurance must maintain at its principal place of business a complete and detailed description of its rating practices and renewal practices, as required for small employer carriers pursuant to s. 627.6699(8).

(5)  ISSUER'S ELECTION TO BECOME A RISK-ASSUMING CARRIER.--

(a)  Each health insurance issuer that offers individual health insurance must elect to become a risk-assuming carrier or a reinsuring carrier for purposes of this section. Each such issuer must make an initial election, binding through December 31, 1999. The issuer's initial election must be made no later than October 31, 1997. By October 31, 1997, all issuers must file a final election, which is binding for 2 years, from January 1, 1998, through December 31, 1999, after which an election shall be binding for a period of 5 years. The department may permit an issuer to modify its election at any time for good cause shown, after a hearing.

(b)  The department shall establish an application process for issuers seeking to change their status under this subsection.

(c)  An election to become a risk-assuming carrier is subject to approval under this subsection.

(d)  An issuer that elects to cease participating as a reinsuring carrier and to become a risk-assuming carrier may not reinsure or continue to reinsure any individual health benefits plan under subsection (7) once the issuer becomes a risk-assuming carrier, and the issuer must pay a prorated assessment based upon business issued as a reinsuring carrier for any portion of the year that the business was reinsured. An issuer that elects to cease participating as a risk-assuming carrier and to become a reinsuring carrier may reinsure individual health insurance under the terms set forth in subsection (7) and must pay a prorated assessment based upon business issued as a reinsuring carrier for any portion of the year that the business was reinsured.

(6)  ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.--

(a)1.  A health insurance issuer that offers individual health insurance may become a risk-assuming carrier by filing with the department a designation of election under this subsection in a format and manner prescribed by the department. The department shall approve the election of a health insurance issuer to become a risk-assuming carrier if the department finds that the issuer is capable of assuming that status pursuant to the criteria set forth in paragraph (b).

2.  The department must approve or disapprove any designation as a risk-assuming carrier within 60 days after a filing.

(b)  In determining whether to approve an application by an issuer to become a risk-assuming carrier, the department shall consider:

1.  The issuer's financial ability to support the assumption of the risk of individuals.

2.  The issuer's history of rating and underwriting individuals.

3.  The issuer's commitment to market fairly to all individuals in the state or its service area, as applicable.

4.  The issuer's ability to assume and manage the risk of enrolling individuals without the protection of the reinsurance program provided in subsection (7).

(c)  The department shall provide public notice of an issuer's designation of election under this subsection to become a risk-assuming carrier and shall provide at least a 21-day period for public comment prior to making a decision on the election. The department shall hold a hearing on the election at the request of the issuer.

(d)  The department may rescind the approval granted to a risk-assuming carrier under this subsection if the department finds that the carrier no longer meets the criteria of paragraph (b).

(7)  INDIVIDUAL HEALTH REINSURANCE PROGRAM.--

(a)  The individual health reinsurance program shall operate subject to the supervision and control of the board of the small employer health reinsurance program established pursuant to s. 627.6699(11). The board shall establish a separate, segregated account for eligible individuals reinsured pursuant to this section, which account may not be commingled with the small employer health reinsurance account.

(b)  A reinsuring carrier may reinsure with the program coverage of an eligible individual, subject to each of the following provisions:

1.  A reinsuring carrier may reinsure an eligible individual within 60 days after commencement of the coverage of the eligible individual.

2.  The program may not reimburse a participating carrier with respect to the claims of a reinsured eligible individual until the carrier has paid incurred claims of at least $5,000 in a calendar year for benefits covered by the program. In addition, the reinsuring carrier is responsible for 10 percent of the next $50,000 and 5 percent of the next $100,000 of incurred claims during a calendar year, and the program shall reinsure the remainder.

3.  The board shall annually adjust the initial level of claims and the maximum limit to be retained by the carrier to reflect increases in costs and utilization within the standard market for health benefit plans within the state. The adjustment may not be less than the annual change in the medical component of the "Commerce Price Index for All Urban Consumers" of the Bureau of Labor Statistics of the United States Department of Labor, unless the board proposes and the department approves a lower adjustment factor.

4.  A reinsuring carrier may terminate reinsurance for all reinsured eligible individuals on any plan anniversary.

5.  The premium rate charged for reinsurance by the program to a health maintenance organization that is approved by the Secretary of Health and Human Services as a federally qualified health maintenance organization pursuant to 42 U.S.C. s. 300e(c)(2)(A) and that, as such, is subject to requirements that limit the amount of risk that may be ceded to the program, which requirements are more restrictive than subparagraph 2., shall be reduced by an amount equal to that portion of the risk, if any, which exceeds the amount set forth in subparagraph 2., which may not be ceded to the program.

6.  The board may consider adjustments to the premium rates charged for reinsurance by the program or carriers that use effective cost-containment measures, including high-cost case management, as defined by the board.

7.  A reinsuring carrier shall apply its case-management and claims-handling techniques, including, but not limited to, utilization review, individual case management, preferred provider provisions, other managed-care provisions, or methods of operation consistently with both reinsured business and nonreinsured business.

(c)1.  The board, as part of the plan of operation, shall establish a methodology for determining premium rates to be charged by the program for reinsuring eligible individuals pursuant to this section. The methodology must include a system for classifying individuals which reflects the types of case characteristics commonly used by carriers in this state. The methodology must provide for the development of basic reinsurance premium rates, which shall be multiplied by the factors set for them in this paragraph to determine the premium rates for the program. The basic reinsurance premium rates shall be established by the board, subject to the approval of the department, and shall be set at levels that reasonably approximate gross premiums charged to eligible individuals for individual health insurance by health insurance issuers. The premium rates set by the board may vary by geographical area, as determined under this section, to reflect differences in cost. An eligible individual may be reinsured for a rate that is five times the rate established by the board.

2.  The board shall periodically review the methodology established, including the system of classification and any rating factors, to ensure that it reasonably reflects the claims experience of the program. The board may propose changes to the rates that are subject to the approval of the department.

(d)  If individual health insurance for an eligible individual is entirely or partially reinsured with the program pursuant to this section, the premium charged to the eligible individual for any rating period for the coverage issued must be the same premium that would have been charged to that individual if the health insurance issuer elected not to reinsure coverage for that individual.

(e)1.  Before March 1 of each calendar year, the board shall determine and report to the department the program net loss in the individual account for the previous year, including administrative expenses for that year and the incurred losses for that year, taking into account investment income and other appropriate gains and losses.

2.  Any net loss in the individual account for the year shall be recouped by assessing the carriers as follows:

a.  The operating losses of the program shall be assessed in the following order subject to the specified limitations. The first tier of assessments shall be made against reinsuring carriers in an amount that may not exceed 5 percent of each reinsuring carrier's premiums for individual health insurance. If such assessments have been collected and additional moneys are needed, the board shall make a second tier of assessments in an amount that may not exceed 0.5 percent of each carrier's health benefit plan premiums.

b.  Except as provided in paragraph (f), risk-assuming carriers are exempt from all assessments authorized pursuant to this section. The amount paid by a reinsuring carrier for the first tier of assessments shall be credited against any additional assessments made.

c.  The board shall equitably assess reinsuring carriers for operating losses of the individual account based on market share. The board shall annually assess each carrier a portion of the operating losses of the individual account. The first tier of assessments shall be determined by multiplying the operating losses by a fraction, the numerator of which equals the reinsuring carrier's earned premium pertaining to direct writings of individual health insurance in the state during the calendar year for which the assessment is levied, and the denominator of which equals the total of all such premiums earned by reinsuring carriers in the state during that calendar year. The second tier of assessments shall be based on the premiums that all carriers, except risk-assuming carriers, earned on all health benefit plans written in this state. The board may levy interim assessments against reinsuring carriers to ensure the financial ability of the plan to cover claims expenses and administrative expenses paid or estimated to be paid in the operation of the plan for the calendar year prior to the association's anticipated receipt of annual assessments for that calendar year. Any interim assessment is due and payable within 30 days after receipt by a carrier of the interim assessment notice. Interim assessment payments shall be credited against the carrier's annual assessment. Health benefit plan premiums and benefits paid by a carrier that are less than an amount determined by the board to justify the cost of collection may not be considered for purposes of determining assessments.

d.  Subject to the approval of the department, the board shall adjust the assessment formula for reinsuring carriers that are approved as federally qualified health maintenance organizations by the Secretary of Health and Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent, if any, that restrictions are placed on them which are not imposed on other carriers.

3.  Before March 1 of each year, the board shall determine and file with the department an estimate of the assessments needed to fund the losses incurred by the program in the individual account for the previous calendar year.

4.  If the board determines that the assessments needed to fund the losses incurred by the program in the individual account for the previous calendar year will exceed the amount specified in subparagraph 2., the board shall evaluate the operation of the program and report its findings and recommendations to the department in the format established in s. 627.6699(11) for the comparable report for the small employer reinsurance program.

(f)  Notwithstanding paragraph (e), the administrative expenses of the program shall be recouped by assessing risk-assuming carriers and reinsuring carriers, and such amounts may not be considered part of the operating losses of the plan for the purposes of this paragraph. Each carrier's portion of such administrative expenses shall be determined by multiplying the total of such administrative expenses by a fraction, the numerator of which equals the carrier's earned premium pertaining to direct writing of individual health benefit plans in the state during the calendar year for which the assessment is levied, and the denominator of which equals the total of such premiums earned by all carriers in the state during such calendar year.

(g)  Except as otherwise provided in this section, the board and the department shall have all powers, duties, and responsibilities with respect to carriers that issue and reinsure individual health insurance, as specified for the board and the department in s. 627.6699(11) with respect to small employer carriers, including, but not limited to, the provisions of s. 627.6699(11) relating to:

1.  Use of assessments that exceed the amount of actual losses and expenses.

2.  The annual determination of each carrier's proportion of the assessment.

3.  Interest for late payment of assessments.

4.  Authority for the department to approve deferment of an assessment against a carrier.

5.  Limited immunity from legal actions or carriers.

6.  Development of standards for compensation to be paid to agents. Such standards shall be limited to those specifically enumerated in s. 627.6699(13)(d).

7.  Monitoring compliance by carriers with this section.

(8)  STANDARDS TO ASSURE FAIR MARKETING.--

(a)  Each health insurance issuer that offers individual health insurance shall actively market coverage to eligible individuals in the state. The provisions of s. 627.6699(13) that apply to small employer carriers that market policies to small employers shall also apply to health insurance issuers that offer individual health insurance with respect to marketing policies to individuals.

(b)  A violation of this section by a health insurance issuer or an agent is an unfair trade practice under s. 626.9541 or ss. 641.3903 and 641.3907.

(9)  RULEMAKING AUTHORITY.--The department may adopt rules to administer this section, including rules governing compliance by carriers.

History.--s. 3, ch. 97-179.

627.648  Florida Comprehensive Health Association Act.--Sections 627.648-627.6498 may be cited and known as the "Florida Comprehensive Health Association Act."

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 20, ch. 89-167; ss. 1, 13, 14, ch. 90-334; s. 4, ch. 91-429.

¹627.6482  Definitions.--As used in ss. 627.648-627.6498, the term:

(1)  "Agent" means a person who is licensed to sell health insurance in this state.

(2)  "Association" means the Florida Comprehensive Health Association created in s. 627.6488.

(3)  "Case management" means the specific supervision and management of the medical care provided or prescribed for a specific individual, which may include the use of health care providers designated by the plan case manager.

(4)  "Plan case manager" means the person or persons employed by the association to supervise and manage or coordinate with the administrator the supervision and management of the medical care provided or prescribed for a specific individual.

(5)  "Board" means the board of directors of the association.

(6)  "Health insurance" means any hospital and medical expense incurred policy, minimum premium plan, stop-loss coverage, health maintenance organization contract, prepaid health clinic contract, multiple-employer welfare arrangement contract, or fraternal benefit society health benefits contract, whether sold as an individual or group policy or contract. The term does not include any policy covering medical payment coverage or personal injury protection coverage in a motor vehicle policy, coverage issued as a supplement to liability insurance, or workers' compensation.

(7)  "Insurer" means any insurance company authorized to transact health insurance in this state, any insurance company authorized to transact health insurance or casualty insurance in this state that is offering a minimum premium plan or stop-loss coverage for any person or entity providing health care benefits, health maintenance organization authorized to transact business in this state pursuant to part I of chapter 641, prepaid health clinic authorized to transact business in this state pursuant to part II of chapter 641, multiple-employer welfare arrangement authorized to transact business in this state pursuant to ss. 624.436-624.45, or fraternal benefit society providing health benefits to its members as authorized pursuant to chapter 632.

(8)  "Medicare" means coverage under both parts A and B of Title XVIII of the Social Security Act, 42 U.S.C. ss. 1395 et seq., as amended.

(9)  "Minimum premium plan" means an arrangement whereby the expected amount of health care claims is self-funded, but the insurance company assumes the risk that claims will exceed that amount.

(10)  "Physician" means a physician licensed under chapter 458; an osteopathic physician licensed under chapter 459; a chiropractic physician licensed under chapter 460; a podiatric physician licensed under chapter 461; or, for purposes of oral surgery only, a dental surgeon licensed under chapter 466.

(11)  "Plan" means the comprehensive health insurance plan adopted by the association or by rule of the Department of Insurance.

(12)  "Premium" means the entire cost of an insurance plan, including the administrative fee, the risk assumption charge, and, in the instance of a minimum premium plan or stop-loss coverage, the incurred claims whether or not such claims are paid directly by the insurer. "Premium" shall not include a health maintenance organization's annual earned premium revenue for Medicare and Medicaid contracts for any assessment due for calendar years 1990 and 1991. For assessments due for calendar year 1992 and subsequent years, a health maintenance organization's annual earned premium revenue for Medicare and Medicaid contracts is subject to assessments unless the department determines that the health maintenance organization has made a reasonable effort to amend its Medicare or Medicaid government contract for 1992 and subsequent years to provide reimbursement for any assessment on Medicare or Medicaid premiums paid by the health maintenance organization and the contract does not provide for such reimbursement.

(13)  "Resident" means a person who is legally domiciled in this state.

(14)  "Stop-loss coverage" means an arrangement whereby an insurer insures against the risk that any one claim will exceed a specific dollar amount or that an entire self-insurance plan's loss will exceed a specific amount.

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 83-28; s. 103, ch. 83-216; s. 20, ch. 89-167; ss. 2, 13, 14, ch. 90-334; s. 1, ch. 91-304; s. 4, ch. 91-429; s. 24, ch. 95-211; s. 59, ch. 97-264; ss. 224, 292, ch. 98-166.

¹Note.--

A.  Section 12, ch. 90-334, provides that "[i]f an [assessment] against any insurer or insurers under the Florida Comprehensive Health Association Act is determined by a court of competent jurisdiction to be unlawful or prohibited, it is the intent of the Legislature that all provisions in ss. 627.648-627.6498 relating to assessments for funding the deficit of the association that were in effect on January 1, 1990 be reenacted and reinstated."

B.  As amended by s. 1, ch. 91-304. Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

¹627.6484  Termination of enrollment; availability of other coverage.--

(1)  The association shall accept applications for insurance only until June 30, 1991, after which date no further applications may be accepted. Upon receipt of an application for insurance, the association shall issue coverage for an eligible applicant. When appropriate, the administrator shall forward a copy of the application to a market assistance plan created by the department, which shall conduct a diligent search of the private marketplace for a carrier willing to accept the application.

(2)  The department shall, after consultation with the health insurers licensed in this state, adopt a market assistance plan to assist in the placement of risks of Florida Comprehensive Health Association applicants. All health insurers and health maintenance organizations licensed in this state shall participate in the plan.

(3)  Guidelines for the use of such program shall be a part of the association's plan of operation. The guidelines shall describe which types of applications are to be exempt from submission to the market assistance plan. An exemption shall be based upon a determination that due to a specific health condition an applicant is ineligible for coverage in the standard market. The guidelines shall also describe how the market assistance plan is to be conducted, and how the periodic reviews to depopulate the association are to be conducted.

(4)  If a carrier is found through the market assistance plan, the individual shall apply to that company. If the individual's application is accepted, association coverage shall terminate upon the effective date of the coverage with the private carrier. For the purpose of applying a preexisting condition limitation or exclusion, any carrier accepting a risk pursuant to this section shall provide coverage as if it began on the date coverage was effectuated on behalf of the association, and shall be indemnified by the association for claims costs incurred as a result of utilizing such effective date.

(5)  The association shall establish a policyholder assistance program by July 1, 1991, to assist in placing eligible policyholders in other coverage programs, including Medicare and Medicaid.

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 2, ch. 83-28; s. 20, ch. 89-167; ss. 3, 13, 14, ch. 90-334; s. 2, ch. 91-304; s. 4, ch. 91-429.

¹Note.--

A.  Section 12, ch. 90-334, provides that "[i]f an [assessment] against any insurer or insurers under the Florida Comprehensive Health Association Act is determined by a court of competent jurisdiction to be unlawful or prohibited, it is the intent of the Legislature that all provisions in ss. 627.648-627.6498 relating to assessments for funding the deficit of the association that were in effect on January 1, 1990 be reenacted and reinstated."

B.  As amended by s. 2, ch. 91-304. Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

¹627.6486  Eligibility.--

(1)  Except as provided in subsection (2), any resident of this state shall be eligible for coverage under the plan, including:

(a)  The insured's spouse.

(b)  Any dependent unmarried child of the insured, from the moment of birth. Subject to the provisions of s. 627.6041, such coverage shall terminate at the end of the premium period in which the child marries, ceases to be a dependent of the insured, or attains the age of 19, whichever occurs first. However, if the child is a full-time student at an accredited institution of higher learning, the coverage may continue while the child remains unmarried and a full-time student, but not beyond the premium period in which the child reaches age 23.

(c)  The former spouse of the insured whose coverage would otherwise terminate because of annulment or dissolution of marriage, if the former spouse is dependent upon the insured for financial support. The former spouse shall have continued coverage and shall not be subject to waiting periods because of the change in policyholder status.

(2)(a)  The board or administrator shall require verification of residency and shall require any additional information or documentation, or statements under oath, when necessary to determine residency upon initial application and for the entire term of the policy.

(b)  No person who is currently eligible for health care benefits under Florida's Medicaid program is eligible for coverage under the plan unless:

1.  He or she has an illness or disease which requires supplies or medication which are covered by the association but are not included in the benefits provided under Florida's Medicaid program in any form or manner; and

2.  He or she is not receiving health care benefits or coverage under Florida's Medicaid program.

(c)  No person who is covered under the plan and terminates the coverage is again eligible for coverage.

(d)  No person on whose behalf the plan has paid out $500,000 in covered benefits is eligible for coverage under the plan.

(e)  The coverage of any person who ceases to meet the eligibility requirements of this section may be terminated immediately. If such person again becomes eligible for subsequent coverage under the plan, any previous claims payments shall be applied towards the $500,000 lifetime maximum benefit and any limitation relating to preexisting conditions in effect at the time such person again becomes eligible shall apply to such person. However, no such person may again become eligible for coverage after June 30, 1991.

(f)  No person is eligible for coverage under the plan unless such person has been rejected by two insurers for coverage substantially similar to the plan coverage and no insurer has been found through the market assistance plan pursuant to s. 627.6484 that is willing to accept the application. As used in this paragraph, "rejection" includes an offer of coverage with a material underwriting restriction or an offer of coverage at a rate greater than the association plan rate.

(g)  No person is eligible for coverage under the plan if such person has, on the date of issue of coverage under the plan, substantially similar coverage under another contract or policy, unless such coverage is provided pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat. 82 (1986) (COBRA), as amended, and scheduled to end at a time certain and the person meets all other requirements of eligibility. Coverage provided by the association shall be secondary to any coverage provided by an insurer pursuant to COBRA.

(h)  All eligible persons who are classified as high-risk individuals pursuant to s. 627.6498(4)(a)4. shall, upon application or renewal, agree to be placed in a case management system when it is determined by the board and the plan case manager that such system will be cost-effective and provide quality care to the individual.

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 3, ch. 83-28; s. 104, ch. 83-216; s. 20, ch. 89-167; ss. 4, 13, 14, ch. 90-334; s. 3, ch. 91-304; s. 4, ch. 91-429; s. 25, ch. 95-211; s. 346, ch. 97-102.

¹Note.--

A.  Section 12, ch. 90-334, provides that "[i]f an [assessment] against any insurer or insurers under the Florida Comprehensive Health Association Act is determined by a court of competent jurisdiction to be unlawful or prohibited, it is the intent of the Legislature that all provisions in ss. 627.648-627.6498 relating to assessments for funding the deficit of the association that were in effect on January 1, 1990 be reenacted and reinstated."

B.  As amended by s. 3, ch. 91-304. Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

627.6487  Guaranteed availability of individual health insurance coverage to eligible individuals.--

(1)  Subject to the requirements of this section, each health insurance issuer that offers individual health insurance coverage in this state may not, with respect to an eligible individual who desires to enroll in individual health insurance coverage:

(a)  Decline to offer such coverage to, or deny enrollment of, such individual; or

(b)  Impose any preexisting condition exclusion with respect to such coverage. For purposes of this section, the term "preexisting condition" means, with respect to coverage, a limitation of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date.

(2)  For the purposes of this section:

(a)  "Health insurance issuer" and "issuer" mean an authorized insurer or a health maintenance organization.

(b)  "Individual health insurance" means health insurance, as defined in s. 627.6561(5)(a)2., which is offered to an individual, including certificates of coverage offered to individuals in this state as part of a group policy issued to an association outside this state, but the term does not include short-term limited duration insurance or excepted benefits specified in ¹s. 624.6561(5)(b) or, if the benefits are provided under a separate policy, certificate, or contract, the term does not include excepted benefits specified in s. 627.6561(5)(c), (d), or (e).

(3)  For the purposes of this section, the term "eligible individual" means an individual:

(a)1.  For whom, as of the date on which the individual seeks coverage under this section, the aggregate of the periods of creditable coverage, as defined in s. 627.6561(5) and (6), is 18 or more months; and

2.a.  Whose most recent prior creditable coverage was under a group health plan, governmental plan, or church plan, or health insurance coverage offered in connection with any such plan; or

b.  Whose most recent prior creditable coverage was under an individual plan issued in this state by a health insurer or health maintenance organization, which coverage is terminated due to the insurer or health maintenance organization becoming insolvent or discontinuing the offering of all individual coverage in the State of Florida, or due to the insured no longer living in the service area in the State of Florida of the insurer or health maintenance organization that provides coverage through a network plan in the State of Florida;

(b)  Who is not eligible for coverage under:

1.  A group health plan, as defined in s. 2791 of the Public Health Service Act;

2.  A conversion policy or contract issued by an authorized insurer or health maintenance organization under s. 627.6675 or s. 641.3921, respectively, offered to an individual who is no longer eligible for coverage under either an insured or self-insured employer plan;

3.  Part A or part B of Title XVIII of the Social Security Act; or

4.  A state plan under Title XIX of such act, or any successor program, and does not have other health insurance coverage;

(c)  With respect to whom the most recent coverage within the coverage period described in paragraph (a) was not terminated based on a factor described in s. 627.6571(2)(a) or (b), relating to nonpayment of premiums or fraud, unless such nonpayment of premiums or fraud was due to acts of an employer or person other than the individual;

(d)  Who, having been offered the option of continuation coverage under a COBRA continuation provision or under s. 627.6692, elected such coverage; and

(e)  Who, if the individual elected such continuation provision, has exhausted such continuation coverage under such provision or program.

(4)(a)  The health insurance issuer may elect to limit the coverage offered under subsection (1) if the issuer offers at least two different policy forms of health insurance coverage, both of which:

1.  Are designed for, made generally available to, actively marketed to, and enroll both eligible and other individuals by the issuer; and

2.  Meet the requirement of paragraph (b).

For purposes of this subsection, policy forms that have different cost-sharing arrangements or different riders are considered to be different policy forms.

(b)  The requirement of this subsection is met for health insurance coverage policy forms offered by an issuer in the individual market if the issuer offers the policy forms for individual health insurance coverage with the largest, and next to largest, premium volume of all such policy forms offered by the issuer in this state or applicable marketing or service area, as prescribed in rules adopted by the department, in the individual market in the period involved. To the greatest extent possible, such rules must be consistent with regulations adopted by the United States Department of Health and Human Services.

(5)(a)  In the case of a health insurance issuer that offers individual health insurance coverage through a network plan, the issuer may:

1.  Limit the individuals who may be enrolled under such coverage to those who live, reside, or work within the service area for such network plan; and

2.  Within the service area of such plan, deny such coverage to such individuals if the issuer has demonstrated to the department that:

a.  It will not have the capacity to deliver services adequately to additional individual enrollees because of its obligations to existing group contract holders and enrollees and individual enrollees; and

b.  It is applying this paragraph uniformly to individuals without regard to any health-status-related factor of such individuals and without regard to whether the individuals are eligible individuals.

(b)  An issuer, upon denying individual health insurance coverage in any service area in accordance with subparagraph (a)2., may not offer coverage in the individual market within such service area for a period of 180 days after such coverage is denied.

(6)(a)  A health insurance issuer may deny individual health insurance coverage to an eligible individual if the issuer has demonstrated to the department that:

1.  It does not have the financial reserves necessary to underwrite additional coverage; and

2.  It is applying this paragraph uniformly to all individuals in the individual market in this state consistent with the laws of this state and without regard to any health-status-related factor of such individuals and without regard to whether the individuals are eligible individuals.

(b)  An issuer, upon denying individual health insurance coverage in any service area in accordance with paragraph (a), may not offer such coverage in the individual market within such service area for a period of 180 days after the date such coverage is denied or until the issuer has demonstrated to the department that the issuer has sufficient financial reserves to underwrite additional coverage, whichever occurs later.

(7)(a)  Subsection (1) does not require that a health insurance issuer that offers health insurance coverage only in connection with group health plans or through one or more bona fide associations, as defined in s. 627.6571(5), or both, offer such health insurance coverage in the individual market.

(b)  A health insurance issuer that offers health insurance coverage in connection with group health plans is not deemed to be a health insurance issuer offering individual health insurance coverage solely because such issuer offers a conversion policy.

(8)  This section does not:

(a)  Restrict the amount of the premium rates that an issuer may charge an individual for individual health insurance coverage; or

(b)  Prevent a health insurance issuer that offers individual health insurance coverage from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.

(9)  Each health insurance issuer that offers individual health insurance coverage to an eligible individual shall elect to become a risk-assuming carrier or a reinsuring carrier, as provided by s. 627.6475.

(10)  This section applies to individual health insurance coverage offered on or after January 1, 1998. An individual who would have been eligible for coverage on July 1, 1997, shall be eligible for coverage on January 1, 1998, and shall remain eligible for the same period of time after January 1, 1998, that the individual would have remained eligible for coverage after July 1, 1997.

History.--s. 4, ch. 97-179; s. 5, ch. 98-159; s. 4, ch. 2000-365.

¹Note.--The cited provision does not exist; the correct reference may be to s. 627.6561(5)(b), which relates to excepted benefits.

627.64871  Certification of coverage.--

(1)  Section 627.6561(8) applies to health insurance coverage offered by an insurer in the individual market in the same manner as it applies to health insurance coverage offered by an insurer in connection with a group health plan in the small-group market or large-group market.

(2)  This section does not apply to any health insurance coverage in relation to its provision of excepted benefits described in s. 627.6561(5)(b).

(3)  This section does not apply to any health insurance coverage in relation to its provision of excepted benefits described in s. 627.6561(5)(c), (d), or (e), if the benefits are provided under a separate policy, certificate, or contract of insurance.

(4)  This section applies to health insurance coverage offered, sold, issued, renewed, or in effect on or after July 1, 1997.

History.--s. 5, ch. 97-179.

¹627.6488  Florida Comprehensive Health Association.--

(1)  There is created a nonprofit legal entity to be known as the "Florida Comprehensive Health Association." All insurers, as a condition of doing business, shall be members of the association.

(2)(a)  The association shall operate subject to the supervision and approval of a three-member board of directors. The board of directors shall be appointed by the Insurance Commissioner as follows:

1.  The chair of the board shall be the Insurance Commissioner or his or her designee.

2.  One representative of policyholders who is not associated with the medical profession, a hospital, or an insurer.

3.  One representative of insurers.

The administrator or his or her affiliate shall not be a member of the board. Any board member appointed by the commissioner may be removed and replaced by him or her at any time without cause.

(b)  All board members, including the chair, shall be appointed to serve for staggered 3-year terms beginning on a date as established in the plan of operation.

(c)  The board of directors shall have the power to employ or retain such persons as are necessary to perform the administrative and financial transactions and responsibilities of the association and to perform other necessary and proper functions not prohibited by law.

(d)  Board members may be reimbursed from moneys of the association for actual and necessary expenses incurred by them as members, but may not otherwise be compensated for their services.

(e)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, or its agents or employees, agents or employees of the association, members of the board of directors of the association, or the departmental representatives for any act or omission taken by them in the performance of their powers and duties under this act, unless such act or omission by such person is in intentional disregard of the rights of the claimant.

(f)  Meetings of the board are subject to s. 286.011.

(3)  The association shall adopt a plan pursuant to this act and submit its articles, bylaws, and operating rules to the department for approval. If the association fails to adopt such plan and suitable articles, bylaws, and operating rules within 180 days after the appointment of the board, the department shall adopt rules to effectuate the provisions of this act; and such rules shall remain in effect until superseded by a plan and articles, bylaws, and operating rules submitted by the association and approved by the department.

(4)  The association shall:

(a)  Establish administrative and accounting procedures for the operation of the association.

(b)  Establish procedures under which applicants and participants in the plan may have grievances reviewed by an impartial body and reported to the board.

(c)  Select an administrator in accordance with s. 627.649.

(d)  Collect assessments from all insurers to provide for operating losses incurred or estimated to be incurred during the period for which the assessment is made. The level of payments shall be established by the board, as formulated in s. 627.6492(1). Annual assessment of the insurers for each calendar year shall occur as soon thereafter as the operating results of the plan for the calendar year and the earned premiums of insurers being assessed for that year are known. Annual assessments are due and payable within 30 days of receipt of the assessment notice by the insurer.

(e)  Require that all policy forms issued by the association conform to standard forms developed by the association. The forms shall be approved by the department.

(f)  Develop and implement a program to publicize the existence of the plan, the eligibility requirements for the plan, and the procedures for enrollment in the plan and to maintain public awareness of the plan.

(g)  Design and employ cost containment measures and requirements which may include preadmission certification, home health care, hospice care, negotiated purchase of medical and pharmaceutical supplies, and individual case management.

(h)  Contract with preferred provider organizations and health maintenance organizations giving due consideration to the preferred provider organizations and health maintenance organizations which have contracted with the state group health insurance program pursuant to s. 110.123. If cost-effective and available in the county where the policyholder resides, the board, upon application or renewal of a policy, shall place a high-risk individual, as established under s. 627.6498(4)(a)4., with the plan case manager who shall determine the most cost-effective quality care system or health care provider and shall place the individual in such system or with such health care provider. If cost-effective and available in the county where the policyholder resides, the board, with the consent of the policyholder, may place a low-risk or medium-risk individual, as established under s. 627.6498(4)(a)4., with the plan case manager who may determine the most cost-effective quality care system or health care provider and shall place the individual in such system or with such health care provider. Prior to and during the implementation of case management, the plan case manager shall obtain input from the policyholder, parent, or guardian.

(i)  Make a report to the Governor, the President of the Senate, the Speaker of the House of Representatives, and the Minority Leaders of the Senate and the House of Representatives not later than October 1 of each year. The report shall summarize the activities of the plan for the 12-month period ending July 1 of that year, including then-current data and estimates as to net written and earned premiums, the expense of administration, and the paid and incurred losses for the year. The report shall also include analysis and recommendations for legislative changes regarding utilization review, quality assurance, an evaluation of the administrator of the plan, access to cost-effective health care, and cost containment/case management policy and recommendations concerning the opening of enrollment to new entrants as of July 1, 1992.

(j)  Make a report to the Governor, the Insurance Commissioner, the President of the Senate, the Speaker of the House of Representatives, and the Minority Leaders of the Senate and House of Representatives, not later than 45 days after the close of each calendar quarter, which includes, for the prior quarter, current data and estimates of net written and earned premiums, the expenses of administration, and the paid and incurred losses. The report shall identify any statutorily mandated program that has not been fully implemented by the board.

(k)  To facilitate preparation of assessments and for other purposes, the board shall direct preparation of annual audited financial statements for each calendar year as soon as feasible following the conclusion of that calendar year, and shall, within 30 days after rendition of such statements, file with the department the annual report containing such information as required by the department to be filed on March 1 of each year.

(l)  Employ a plan case manager or managers to supervise and manage the medical care or coordinate the supervision and management of the medical care, with the administrator, of specified individuals. The plan case manager, with the approval of the board, shall have final approval over the case management for any specific individual.

(5)  The association may:

(a)  Exercise powers granted to insurers under the laws of this state.

(b)  Sue or be sued.

(c)  In addition to imposing annual assessments under paragraph (4)(d), levy interim assessments against insurers to ensure the financial ability of the plan to cover claims expenses and administrative expenses paid or estimated to be paid in the operation of the plan for a calendar year prior to the association's anticipated receipt of annual assessments for that calendar year. Any interim assessment shall be due and payable within 30 days of receipt by an insurer of an interim assessment notice. Interim assessment payments shall be credited against the insurer's annual assessment.

(d)  Prepare or contract for a performance audit of the administrator of the association.

(6)  The department shall examine and investigate the association in the manner provided in part II of chapter 624.

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 4, ch. 83-28; s. 105, ch. 83-216; s. 1, ch. 89-131; s. 20, ch. 89-167; ss. 5, 13, 14, ch. 90-334; s. 4, ch. 91-304; s. 4, ch. 91-429; s. 347, ch. 97-102.

¹Note.--

A.  Section 12, ch. 90-334, provides that "[i]f an [assessment] against any insurer or insurers under the Florida Comprehensive Health Association Act is determined by a court of competent jurisdiction to be unlawful or prohibited, it is the intent of the Legislature that all provisions in ss. 627.648-627.6498 relating to assessments for funding the deficit of the association that were in effect on January 1, 1990 be reenacted and reinstated."

B.  As amended by s. 4, ch. 91-304. Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

627.6489  Disease Management Program.--

(1)  The association may contract with insurers to provide disease management services for insurers that elect to participate in the association disease management program.

(2)  An insurer that elects to contract for such services shall provide the association with all medical records and claims information necessary for the association to effectively manage the services.

(3)  Moneys collected by the association for providing disease management services shall be used by the association to pay administrative expenses associated with the disease management program and to reduce any deficits incurred by the association. No funds received at any time by the association as a result of assessments against insurers may be used in connection with the disease management program. No costs related to the disease management program provided to an insurer shall be assessed against any other insurer.

History.--s. 6, ch. 97-179.

627.649  Administrator.--

(1)  The board shall select an administrator, through a competitive bidding process, to administer the plan. The board shall evaluate bids submitted under this subsection based on criteria established by the board, which criteria shall include:

(a)  The administrator's proven ability to handle large group accident and health insurance, and due consideration shall be given to any administrator who has acted as a third-party administrator for the state group health insurance program pursuant to s. 110.123.

(b)  The extent to which the administrator has developed a network of health care providers for providing managed health care on a statewide basis.

(c)  The efficiency of the administrator's claims-paying procedures.

(d)  An estimate of total charges for administering the plan.

(2)  The administrator shall serve for a period of 3 years. At least 1 year prior to the expiration of each 3-year period of service by an administrator, the board shall invite all insurers, including the current administering insurer, to submit bids to serve as the administrator for the succeeding 3-year period. The selection of the administrator for the succeeding period shall be made at least 6 months prior to the end of the current 3-year period.

(3)  The administrator shall:

(a)  Perform all eligibility and administrative claims-payment functions relating to the plan.

(b)  Pay an agent's referral fee as established by the board to each insurance agent who refers an applicant to the plan, if the applicant's application is accepted. The selling or marketing of plans shall not be limited to the administrator or its agents. The referral fees shall be paid by the administrator from moneys received as premiums for the plan.

(c)  Establish a premium-billing procedure for collection of premiums from insured persons. Billings shall be made periodically as determined by the board.

(d)  Perform all necessary functions to assure timely payment of benefits under the plan, including:

1.  Making available information relating to the proper manner of submitting a claim for benefits under the plan and distributing forms upon which submissions shall be made.

2.  Evaluating the eligibility of each claim for payment under the plan.

3.  Notifying each claimant within the time limits prescribed by law as to insurers after receiving a properly completed and executed proof of loss whether the claim is accepted, rejected, or compromised.

(e)  Submit regular reports to the board regarding the operation of the plan. The frequency, content, and form of the reports shall be as determined by the board.

(f)  Following the close of each calendar year, determine net premiums, reinsurance premiums less administrative expense allowance, the expense of administration pertaining to the reinsurance operations of the association, and the incurred losses of the year and report this information to the association and the department.

(g)  Pay claims expenses from the premium payments received from or on behalf of covered persons under the plan. If the payments by the administrator for claims expenses exceed the portion of premiums allocated by the board for payment of claims expenses, the board shall provide the administrator with additional funds for payment of claims expenses to the extent that such funds are available.

(4)(a)  The administrator shall be paid, as provided in the contract of the association, for its direct and indirect expenses incurred in the performance of its services.

(b)  As used in this subsection, the term "direct and indirect expenses" includes that portion of the audited administrative costs, printing expenses, claims administration expenses, management expenses, building overhead expenses, and other actual operating and administrative expenses of the administering insurer which are approved by the board as allocable to the administration of the plan and included in the bid specifications.

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 5, ch. 83-28; s. 106, ch. 83-216; s. 20, ch. 89-167; ss. 6, 13, 14, ch. 90-334; s. 4, ch. 91-429.

¹627.6492  Participation of insurers.--

(1)(a)  As a condition of doing business in this state an insurer shall pay an assessment to the board, in the amount prescribed by this section. For operating losses incurred on July 1, 1991, and thereafter, each insurer shall annually be assessed by the board in the following calendar year a portion of such incurred operating losses of the plan; such portion shall be determined by multiplying such operating losses by a fraction, the numerator of which equals the insurer's earned premium pertaining to direct writings of health insurance in the state during the calendar year preceding that for which the assessment is levied, and the denominator of which equals the total of all such premiums earned by participating insurers in the state during such calendar year.

(b)  For operating losses incurred from July 1, 1991, through December 31, 1991, the total of all assessments upon a participating insurer shall not exceed .375 percent of such insurer's health insurance premiums earned in this state during 1990. For operating losses incurred in 1992 and thereafter, the total of all assessments upon a participating insurer shall not exceed 1 percent of such insurer's health insurance premium earned in this state during the calendar year preceding the year for which the assessments were levied.

(c)  For operating losses incurred from October 1, 1990, through June 30, 1991, the board shall assess each insurer in the amount and manner prescribed by chapter 90-334, Laws of Florida. The maximum assessment against an insurer, as provided in such act, shall apply separately to the claims incurred in 1990 (October 1 through December 31) and the claims incurred in 1991 (January 1 through June 30). For operating losses incurred on January 1, 1991, through June 30, 1991, the maximum assessment against an insurer shall be one-half of the amount of the maximum assessment specified for such insurer in former s. 627.6492(1)(b), 1990 Supplement, as amended by chapter 90-334, Laws of Florida.

(d)  All rights, title, and interest in the assessment funds collected shall vest in this state. However, all of such funds and interest earned shall be used by the association to pay claims and administrative expenses.

(2)  If assessments and other receipts by the association, board, or administrator exceed the actual losses and administrative expenses of the plan, the excess shall be held at interest and used by the board to offset future losses. As used in this subsection, the term "future losses" includes reserves for claims incurred but not reported.

(3)  Each insurer's assessment shall be determined annually by the association based on annual statements and other reports deemed necessary by the association and filed with it by the insurer. Any deficit incurred under the plan shall be recouped by assessments against participating insurers by the board in the manner provided in subsection (1); and the insurers may recover the assessment in the normal course of their respective businesses without time limitation.

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 6, ch. 83-28; s. 107, ch. 83-216; s. 2, ch. 89-131; ss. 9, 20, ch. 89-167; ss. 7, 13, 14, ch. 90-334; s. 5, ch. 91-304; s. 4, ch. 91-429.

¹Note.--

A.  Section 12, ch. 90-334, provides that "[i]f an [assessment] against any insurer or insurers under the Florida Comprehensive Health Association Act is determined by a court of competent jurisdiction to be unlawful or prohibited, it is the intent of the Legislature that all provisions in ss. 627.648-627.6498 relating to assessments for funding the deficit of the association that were in effect on January 1, 1990 be reenacted and reinstated."

B.  As amended by s. 5, ch. 91-304. Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

¹627.6494  Assessments; deferment, limitation.--

(1)  Notwithstanding the provisions of s. 624.509, premiums for coverage issued or reinsured through the association shall, as to the association and participating insurers, be exempt from premium taxation.

(2)  The association, upon approval of the department, may abate or defer, in whole or in part, the assessment of a participating insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the participating insurer to fulfill its contractual obligations. In the event that an assessment against a participating insurer is abated or deferred, in whole or in part, the amount by which such assessment is abated or deferred may be assessed against the other participating insurers in a manner consistent with the basis for assessments set forth in s. 627.6492; and the insurer receiving such abatement or deferment shall remain liable to the association for the deficiency for 4 years.

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 20, ch. 89-167; ss. 8, 13, 14, ch. 90-334; s. 6, ch. 91-304; s. 4, ch. 91-429.

¹Note.--

A.  Section 12, ch. 90-334, provides that "[i]f an [assessment] against any insurer or insurers under the Florida Comprehensive Health Association Act is determined by a court of competent jurisdiction to be unlawful or prohibited, it is the intent of the Legislature that all provisions in ss. 627.648-627.6498 relating to assessments for funding the deficit of the association that were in effect on January 1, 1990 be reenacted and reinstated."

B.  As amended by s. 6, ch. 91-304. Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

¹627.6496  Issuing of policies.--The coverage provided by this plan shall be directly insured by the association, and the policies shall be issued through the administrator pursuant to s. 627.6498(1)(a).

History.--ss. 496(2nd), 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 20, ch. 89-167; ss. 9, 13, 14, ch. 90-334; s. 7, ch. 91-304; s. 4, ch. 91-429.

¹Note.--

A.  Section 12, ch. 90-334, provides that "[i]f an [assessment] against any insurer or insurers under the Florida Comprehensive Health Association Act is determined by a court of competent jurisdiction to be unlawful or prohibited, it is the intent of the Legislature that all provisions in ss. 627.648-627.6498 relating to assessments for funding the deficit of the association that were in effect on January 1, 1990 be reenacted and reinstated."

B.  As amended by s. 7, ch. 91-304. Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

¹627.6498  Minimum benefits coverage; exclusions; premiums; deductibles.--

(1)  COVERAGE OFFERED.--

(a)  The plan shall offer in a semiannually renewable policy the coverage specified in this section for each eligible person. For applications accepted on or after June 7, 1991, but before July 1, 1991, coverage shall be effective on July 1, 1991, and shall be renewable on January 1, 1992, and every 6 months thereafter. Policies in existence on June 7, 1991, shall, upon renewal, be for a term of less than 6 months that terminates and becomes subject to subsequent renewal on the next succeeding January 1 or July 1, whichever is sooner.

(b)  If an eligible person is also eligible for Medicare coverage, the plan shall not pay or reimburse any person for expenses paid by Medicare.

(c)  Any person whose health insurance coverage is involuntarily terminated for any reason other than nonpayment of premium may apply for coverage under the plan. If such coverage is applied for within 60 days after the involuntary termination and if premiums are paid for the entire period of coverage, the effective date of the coverage shall be the date of termination of the previous coverage.

(d)  The plan shall provide that, upon the death or divorce of the individual in whose name the contract was issued, every other person then covered in the contract may elect within 60 days to continue under the same or a different contract.

(e)  No coverage provided to a person who is eligible for Medicare benefits shall be issued as a Medicare supplement policy as defined in s. 627.672.

(2)  BENEFITS.--

(a)  The plan shall offer major medical expense coverage similar to that provided by the state group health insurance program as defined in s. 110.123 except as specified in subsection (3) to every eligible person who is not eligible for Medicare. Major medical expense coverage offered under the plan shall pay an eligible person's covered expenses, subject to limits on the deductible and coinsurance payments authorized under subsection (4), up to a lifetime limit of $500,000 per covered individual. The maximum limit under this paragraph shall not be altered by the board, and no actuarially equivalent benefit may be substituted by the board.

(b)  The plan shall provide that any policy issued to a person eligible for Medicare shall be separately rated to reflect differences in experience reasonably expected to occur as a result of Medicare payments.

(3)  COVERED EXPENSES.--The coverage to be issued by the association shall be patterned after the state group health insurance program as defined in s. 110.123, including its benefits, exclusions, and other limitations, except as otherwise provided in this act. The plan may cover the cost of experimental drugs which have been approved for use by the Food and Drug Administration on an experimental basis if the cost is less than the usual and customary treatment. Such coverage shall only apply to those insureds who are in the case management system upon the approval of the insured, the case manager, and the board.

(4)  PREMIUMS, DEDUCTIBLES, AND COINSURANCE.--

(a)  The plan shall provide for annual deductibles for major medical expense coverage in the amount of $1,000 or any higher amounts proposed by the board and approved by the department, plus the benefits payable under any other type of insurance coverage or workers' compensation. The schedule of premiums and deductibles shall be established by the association. With regard to any preferred provider arrangement utilized by the association, the deductibles provided in this paragraph shall be the minimum deductibles applicable to the preferred providers and higher deductibles, as approved by the department, may be applied to providers who are not preferred providers.

1.  Separate schedules of premium rates based on age may apply for individual risks.

2.  Rates are subject to approval by the department.

3.  Standard risk rates for coverages issued by the association shall be established by the department, pursuant to s. 627.6675(3).

4.  The board shall establish separate premium schedules for low-risk individuals, medium-risk individuals, and high-risk individuals and shall revise premium schedules annually beginning January 1999. No rate shall exceed 200 percent of the standard risk rate for low-risk individuals, 225 percent of the standard risk rate for medium-risk individuals, or 250 percent of the standard risk rate for high-risk individuals. For the purpose of determining what constitutes a low-risk individual, medium-risk individual, or high-risk individual, the board shall consider the anticipated claims payment for individuals based upon an individual's health condition.

(b)  If the covered costs incurred by the eligible person exceed the deductible for major medical expense coverage selected by the person in a policy year, the plan shall pay in the following manner:

1.  For individuals placed under case management, the plan shall pay 90 percent of the additional covered costs incurred by the person during the policy year for the first $10,000, after which the plan shall pay 100 percent of the covered costs incurred by the person during the policy year.

2.  For individuals utilizing the preferred provider network, the plan shall pay 80 percent of the additional covered costs incurred by the person during the policy year for the first $10,000, after which the plan shall pay 90 percent of covered costs incurred by the person during the policy year.

3.  If the person does not utilize either the case management system or the preferred provider network, the plan shall pay 60 percent of the additional covered costs incurred by the person for the first $10,000, after which the plan shall pay 70 percent of the additional covered costs incurred by the person during the policy year.

(5)  PREEXISTING CONDITIONS.--An association policy may contain provisions under which coverage is excluded during a period of 12 months following the effective date of coverage with respect to a given covered individual for any preexisting condition, as long as:

(a)  The condition manifested itself within a period of 6 months before the effective date of coverage; or

(b)  Medical advice or treatment was recommended or received within a period of 6 months before the effective date of coverage.

(6)  OTHER SOURCES PRIMARY.--

(a)  No amounts paid or payable by Medicare or any other governmental program or any other insurance, or self-insurance maintained in lieu of otherwise statutorily required insurance, may be made or recognized as claims under such policy or be recognized as or towards satisfaction of applicable deductibles or out-of-pocket maximums or to reduce the limits of benefits available.

(b)  The association has a cause of action against a participant for any benefits paid to the participant which should not have been claimed or recognized as claims because of the provisions of this subsection or because otherwise not covered.

History.--ss. 496(2nd), 809(2nd), ch. 82-243; ss. 61, 79, ch. 82-386; s. 8, ch. 83-28; s. 109, ch. 83-216; s. 2, ch. 87-345; s. 20, ch. 89-167; ss. 10, 13, 14, ch. 90-334; s. 8, ch. 91-304; s. 4, ch. 91-429; s. 6, ch. 98-159.

¹Note.--

A.  Section 12, ch. 90-334, provides that "[i]f an [assessment] against any insurer or insurers under the Florida Comprehensive Health Association Act is determined by a court of competent jurisdiction to be unlawful or prohibited, it is the intent of the Legislature that all provisions in ss. 627.648-627.6498 relating to assessments for funding the deficit of the association that were in effect on January 1, 1990 be reenacted and reinstated."

B.  As amended by s. 8, ch. 91-304. Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

¹627.6499  Reporting by insurers and third-party administrators.--The department may require any insurer, third-party administrator, or service company to report any information reasonably required to assist the board in assessing insurers as required by this act.

History.--s. 9, ch. 91-304.

¹Note.--Section 10(2) and (3), ch. 91-304, provides that:

"(2)  In the event that the application of the assessment to minimum premium plans, stop-loss plans or any other specific type of insurer or health insurance is determined by a court of competent jurisdiction to be unlawful, then the assessment method specified in this act shall continue to apply to all other insurers.

"(3)  The provisions of section 12 of chapter 90-335 [The reference is apparently in error. Section 12, ch. 90-335, concerns public printing; ch. 90-334 is relevant], Laws of Florida, shall continue in full force and effect, but the provisions of this section shall control to the extent of any conflict."

PART VII
GROUP, BLANKET, AND FRANCHISE
HEALTH INSURANCE POLICIES

627.651  Group contracts and plans of self-insurance must meet group requirements.

627.6512  Exemption of certain group health insurance policies.

627.6515  Out-of-state groups.

627.6516  Trustee groups.

627.652  Group health insurance; definitions.

627.653  Employee groups.

627.654  Labor union, association, and small employer health alliance groups.

627.655  Debtor groups.

627.6551  Teacher and student groups.

627.656  Additional groups.

627.6561  Preexisting conditions.

627.65615  Special enrollment periods.

627.6562  Dependent coverage.

627.65625  Prohibiting discrimination against individual participants and beneficiaries based on health status.

627.6563  Full-time employment defined.

627.657  Provisions of group health insurance policies.

627.6571  Guaranteed renewability of coverage.

627.65735  Nondiscrimination of coverage for surgical procedures.

627.6574  Maternity care.

627.65745  Diabetes treatment services.

627.6575  Coverage for newborn children.

627.65755  Dental procedures; anesthesia and hospitalization coverage.

627.6577  Dental care.

627.6578  Coverage for natural-born, adopted, and foster children; children in insured's custodial care.

627.6579  Coverage for child health supervision services.

627.658  Use of dividends, refunds, rate reductions, commissions, service fees; premium rates.

627.659  Blanket health insurance; eligible groups.

627.660  Conditions and provisions of blanket health insurance policies.

627.661  School accident insurance claims; policy service.

627.6612  Coverage for surgical procedures and devices incident to mastectomy.

627.66121  Coverage for length of stay and outpatient postsurgical care.

627.66122  Requirements with respect to breast cancer and routine followup care.

627.6613  Coverage for mammograms.

627.6615  Handicapped children; continuation of coverage under group policy.

627.6616  Coverage for ambulatory surgical center service.

627.6617  Coverage for home health care services.

627.6618  Payment of acupuncture benefits to certified acupuncturists.

627.6619  Massage.

627.662  Other provisions applicable.

627.663  Franchise health insurance.

627.664  Assignment of incidents of ownership in group, blanket, or franchise health policies.

627.6645  Notification of cancellation, expiration, nonrenewal, or change in rates.

627.6646  Cancellation or nonrenewal prohibited.

627.6647  Release of claims experience.

627.6651  Replacement or termination of group, blanket, or franchise health policy or contract; liability of prior insurer.

627.666  Liability of succeeding insurer on replacement of group, blanket, or franchise health insurance policy.

627.667  Extension of benefits.

627.6675  Conversion on termination of eligibility.

627.668  Optional coverage for mental and nervous disorders required; exception.

627.6685  Mental health coverage.

627.669  Optional coverage required for substance abuse impaired persons; exception.

627.6691  Coverage for osteoporosis screening, diagnosis, treatment, and management.

627.66911  Required coverage for cleft lip and cleft palate.

627.6692  Florida Health Insurance Coverage Continuation Act.

627.6698  Attorney's fees.

627.6699  Employee Health Care Access Act.

627.651  Group contracts and plans of self-insurance must meet group requirements.--

(1)  Except as otherwise provided by law, a group health insurance policy or certificate insuring more than one individual delivered or issued for delivery in this state must be delivered or issued for delivery to one of the groups provided for in ss. 627.653-627.656. A plan of self-insurance providing health coverage benefits to residents of this state must comply with s. 627.419 and the applicable provisions of this part relating to the rights of individuals to specified benefits and coverages.

(2)  Subsection (1) does not apply to health insurance policies or plans of self-insurance:

(a)  Insuring or providing benefits only to individuals related by blood, marriage, or legal adoption.

(b)  Insuring or providing benefits only to individuals who have a common interest through ownership of a business enterprise, or a substantial legal interest or equity in the business enterprise, and who are actively engaged in the management of the business enterprise.

(c)  Insuring or providing benefits only to individuals otherwise having an insurable interest in each other's lives.

(d)  Issued as blanket insurance pursuant to s. 627.659.

(3)  A nongovernmental self-insurance plan for health benefits may not be contributory by participants.

(4)  This section does not apply to any plan which is established or maintained by an individual employer in accordance with the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, or to a multiple-employer welfare arrangement as defined in s. 624.437(1), except that a multiple-employer welfare arrangement shall comply with ss. 627.419, 627.657, 627.6575, 627.6578, 627.6579, 627.6612, 627.66121, 627.66122, 627.6615, 627.6616, and 627.662(6). This subsection does not allow an authorized insurer to issue a group health insurance policy or certificate which does not comply with this part.

History.--s. 584, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 4, 10, ch. 80-341; ss. 2, 3, ch. 81-318; ss. 498, 500, 523, 809(2nd), ch. 82-243; ss. 62, 79, ch. 82-386; s. 6, ch. 83-203; s. 1, ch. 83-213; s. 17, ch. 83-288; s. 1, ch. 84-50; s. 4, ch. 86-122; s. 1, ch. 90-255; ss. 61, 114, ch. 92-318; s. 26, ch. 95-211; s. 5, ch. 97-48; s. 82, ch. 2000-154.

627.6512  Exemption of certain group health insurance policies.--Sections 627.6561, 627.65615, 627.65625, and 627.6571 do not apply to:

(1)  Any group insurance policy in relation to its provision of excepted benefits described in s. 627.6561(5)(b).

(2)  Any group health insurance policy in relation to its provision of excepted benefits described in s. 627.6561(5)(c), if the benefits:

(a)  Are provided under a separate policy, certificate, or contract of insurance; or

(b)  Are otherwise not an integral part of the policy.

(3)  Any group health insurance policy in relation to its provision of excepted benefits described in s. 627.6561(5)(d), if all of the following conditions are met:

(a)  The benefits are provided under a separate policy, certificate, or contract of insurance;

(b)  There is no coordination between the provision of such benefits and any exclusion of benefits under any group policy maintained by the same policyholder; and

(c)  Such benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health policy maintained by the same policyholder.

(4)  Any group health policy in relation to its provision of excepted benefits described in s. 627.6561(5)(e), if the benefits are provided under a separate policy, certificate, or contract of insurance.

History.--s. 7, ch. 97-179.

627.6515  Out-of-state groups.--

(1)  Any group health insurance policy issued or delivered outside this state under which a resident of this state is provided coverage shall comply with the provisions of this part in the same manner as group health policies issued in this state.

(2)  This part does not apply to a group health insurance policy issued or delivered outside this state under which a resident of this state is provided coverage if:

(a)  The policy is issued to an employee group the composition of which is substantially as described in s. 627.653; a labor union group or association group the composition of which is substantially as described in s. 627.654; an additional group the composition of which is substantially as described in s. 627.656; a group insured under a blanket health policy when the composition of the group is substantially in compliance with s. 627.659; a group insured under a franchise health policy when the composition of the group is substantially in compliance with s. 627.663; an association group to cover persons associated in any other common group, which common group is formed primarily for purposes other than providing insurance; a group that is established primarily for the purpose of providing group insurance, provided the benefits are reasonable in relation to the premiums charged thereunder and the issuance of the group policy has resulted, or will result, in economies of administration; or a group of insurance agents of an insurer, which insurer is the policyholder;

(b)  Certificates evidencing coverage under the policy are issued to residents of this state and contain in contrasting color and not less than 10-point type the following statement: "The benefits of the policy providing your coverage are governed primarily by the law of a state other than Florida"; and

(c)  The policy provides the benefits specified in ss. 627.419, 627.6574, 627.6575, 627.6579, 627.6612, 627.66121, 627.66122, 627.6613, 627.667, 627.6675, 627.6691, and 627.66911.

(3)  Section 624.428 is not applicable when residents of this state are enrolled for coverage under a policy or certificate issued in accordance with subsection (2).

(4)  Prior to solicitation in this state, a copy of the master policy and a copy of the form of the certificate evidencing coverage that will be issued to residents of this state shall be filed with the department for informational purposes.

(5)  Prior to solicitation in this state, an officer of the insurer shall truthfully certify to the department that the policy and certificates evidencing coverage have been reviewed and approved by the state in which the group policy is issued.

(6)  Any insurer who provides coverage under certificates of insurance issued to residents of this state shall designate one Florida-licensed resident agent as agent of record for the service of such certificates, unless the policy is issued to a group substantially as described in s. 627.653, s. 627.654, s. 627.656, s. 627.659, or s. 627.663.

(7)  No group, franchise, or blanket health insurance policy issued or delivered outside this state, under which policy a resident of this state is provided coverage for any diagnostic or surgical procedure involving bones or joints of the skeleton, shall discriminate against coverage for any similar diagnostic or surgical procedure involving bones or joints of the jaw and facial region, if, under accepted medical standards, such procedure or surgery is medically necessary to treat conditions caused by congenital or developmental deformity, disease, or injury. This subsection shall not be construed to affect any other coverage under this part or to restrict the scope of coverage under any policy, plan, or contract. Nothing in this subsection shall be construed to discourage appropriate nonsurgical procedures or to prohibit the continued coverage of nonsurgical procedures in the treatment of a bone or joint of the jaw and facial region. Furthermore, nothing in this subsection requires coverage for care or treatment of the teeth or gums, for intraoral prosthetic devices, or for surgical procedures for cosmetic purposes.

(8)  For purposes of this subsection, dental treatment or surgery shall be considered necessary when the dental condition is likely to result in a medical condition if left untreated. Any group, franchise, or blanket health insurance policy issued or delivered outside this state, under which policy a resident of this state is provided coverage for general anesthesia and hospitalization services to a covered person, shall not preclude such coverage in assuring the safe delivery of necessary dental care provided to a covered person who:

(a)  Is under 8 years of age and is determined by a licensed dentist, and the child's physician licensed under chapter 458 or chapter 459, to require necessary dental treatment in a hospital or ambulatory surgical center due to a significantly complex dental condition or a developmental disability in which patient management in the dental office has proved to be ineffective; or

(b)  Has one or more medical conditions that would create significant or undue medical risk for the individual in the course of delivery of any necessary dental treatment or surgery if not rendered in a hospital or ambulatory surgical center.

As provided herein, all terms and conditions of the covered person's health insurance policy shall apply to such services, and this section does not require coverage for the diagnosis or treatment of dental disease. An insurer may require prior authorization for general anesthesia and hospital services required under this section in the same manner the insurer requires prior authorization for hospitalization for other covered services. This subsection shall not apply to Medicare supplement, long-term care, disability, limited benefit, accident only, or specified disease policies.

History.--ss. 499, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 110, ch. 83-216; s. 3, ch. 84-202; s. 5, ch. 86-122; s. 2, ch. 89-190; s. 7, ch. 90-249; s. 2, ch. 90-255; ss. 129, 149, ch. 92-33; s. 114, ch. 92-318; s. 5, ch. 96-282; s. 3, ch. 96-361; s. 6, ch. 97-48; s. 2, ch. 98-66; s. 2, ch. 98-312.

627.6516  Trustee groups.--A group of employees of employers or members of labor unions may be insured for the benefit of persons other than the employers or unions under a policy issued to the trustees of a fund established by two or more employers in the same industry or by two or more labor unions, or to the trustees of a fund established by one or more employers in the same industry and one or more labor unions or by one or more employers and one or more labor unions whose members are in the same or related occupations or trades, which trustees are deemed to be the policyholder, subject to the following requirements:

(1)  A policy may not be issued:

(a)  To insure employees of any employer whose eligibility to participate in the fund as an employer arises out of considerations directly related to the employer being a commercial correspondent or business client or patron of another employer, regardless of whether the other employer is or is not participating in the fund; or

(b)  To insure employees of any employer not located in this state, unless the majority of the employers whose employees are to be insured are located in this state, or unless the employer has assumed obligations through a collective bargaining agreement and is participating in the fund either pursuant to those obligations with regard to one or more classes of its employees that are encompassed in the collective bargaining agreement or as a method of providing insurance benefits for other classes of its employees, or unless the policy is issued to the trustees of a fund established by two or more labor unions.

(2)(a)  The persons eligible for insurance must be all of the employees of the employers or all of the members of the unions, or all of the members of any class or classes of employees or members determined by conditions pertaining to their employment or to membership in the unions, or both. The policy may provide that the term "employees" includes corporate directors, former employees, or retired employees and the individual proprietor or partners if an employer is an individual proprietor or a partnership.

(b)  Except as provided in paragraph (a) as to retired employees, an individual proprietor or partner is not eligible for insurance under the policy as an employee unless he or she is actively engaged in and devotes a substantial part of his or her time to the conduct of the business of the proprietor or partnership. The policy may provide that the term "employees" includes the trustees or their employees, or both, if their duties are principally connected with such trusteeship.

(c)  A policy may insure the spouse or dependent children with or without the employee of the employer or member of the union being insured.

(3)  The premium for the policy must be paid by the policyholder either wholly from the policyholder's funds or from funds contributed by the employer or employers of the insured persons or by the union or unions, or by both, or partly from such funds and partly from funds contributed by the insured persons.

(4)(a)  The policy must cover at date of issue not less than five persons, other than individual proprietors or partners, from each employer unit unless any of the following apply:

1.  The policy is issued to the trustees of a fund established by employers who have assumed obligations through a collective bargaining agreement and are participating in the fund either pursuant to those obligations with regard to one or more classes of their employees encompassed in the collective bargaining agreement or as a method of providing insurance benefits for other classes of their employees.

2.  The employer unit is a subsidiary corporation of an employer in the group or is an affiliated corporation, proprietorship, or partnership of an employer in the group whose business is under common control with the business of the employer.

3.  The policy is issued to the trustees of a fund established by two or more labor unions.

(b)  If the fund is established by the members of a group of employers:

1.  The policy may be issued only if the participating employers constitute at date of issue at least 60 percent of those employer members whose employees are not already covered for group health insurance or if the total number of persons covered at date of issue exceeds 600.

2.  The policy may not require that, if a participating employer discontinues membership in such group of employers, the insurance of its employees will cease solely by reason of such discontinuance.

(5)  The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the insured persons or by the policyholder, employer, or unions.

History.--s. 62, ch. 92-318; s. 27, ch. 95-211; s. 348, ch. 97-102.

627.652  Group health insurance; definitions.--As used in this part:

(1)  Group health insurance is that form of health insurance covering groups of persons under a master group health insurance policy issued to any one of the groups listed in ss. 627.653-627.656.

(2)(a)  The terms "policy," "insurance policy," "health insurance policy," "group health policy," and "group health insurance policy" include plans of self-insurance providing health insurance benefits.

(b)  The terms "amount of insurance" and "insurance" include the benefits provided under a plan of self-insurance.

(c)  The term "insurer" includes any person or governmental unit providing a plan of self-insurance.

History.--s. 585, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 500, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.653  Employee groups.--

(1)(a)  A group of individual employees of an employer, or employees and their dependents, may be insured, for the benefit of persons other than the employer, under a policy issued to the employer or to the trustees of a fund established by an employer, which employer or board of trustees is deemed to be the policyholder, insuring employees of the employer for the benefit of persons other than the employer.

(b)  Employees insured under a policy issued pursuant to this section may include any of the following:

1.  Directors of a corporate employer, former employees, or retired employees.

2.  The individual proprietor or partners if the employer is a proprietor or partnership.

3.  Elected or appointed officials if the policy is issued to insure employees of a public body.

(c)  A policy issued pursuant to this section may insure the employees of one or more subsidiary or affiliated corporations, proprietors, and partnerships if the business of the employer and the subsidiary or affiliated corporations, proprietors, or partnerships are under common control.

(2)  A policy may not be issued pursuant to this section unless all employees of the employer are declared eligible and acceptable to the insurer at the time of issuance of the policy, or unless all members of any class or classes of the employees, determined by conditions pertaining to their employment, but not determined so as to exclude those in the more hazardous employment solely because of their hazardous employment, are declared eligible and acceptable to the insurer at the time of issuance of the policy.

(3)  A policy issued pursuant to this section may insure the spouse or dependent children with or without the employee being insured.

(4)  This section does not affect the provisions of ss. 112.08-112.14.

History.--s. 586, ch. 59-205; s. 1, ch. 63-218; s. 1, ch. 72-17; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 501, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 63, 114, ch. 92-318.

Note.--Former s. 627.0602.

627.654  Labor union, association, and small employer health alliance groups.--

(1)(a)  A group of individuals may be insured under a policy issued to an association, including a labor union, which association has a constitution and bylaws and not less than 25 individual members and which has been organized and has been maintained in good faith for a period of 1 year for purposes other than that of obtaining insurance, or to the trustees of a fund established by such an association, which association or trustees shall be deemed the policyholder, insuring at least 15 individual members of the association for the benefit of persons other than the officers of the association, the association, or trustees.

(b)  A small employer, as defined in s. 627.6699 and including the employer's eligible employees and the spouses and dependents of such employees, may be insured under a policy issued to a small employer health alliance by a carrier as defined in s. 627.6699. A small employer health alliance must be organized as a not-for-profit corporation under chapter 617. Notwithstanding any other law, if a small employer member of an alliance loses eligibility to purchase health care through the alliance solely because the business of the small employer member expands to more than 50 and fewer than 75 eligible employees, the small employer member may, at its next renewal date, purchase coverage through the alliance for not more than 1 additional year. A small employer health alliance shall establish conditions of participation in the alliance by a small employer, including, but not limited to:

1.  Assurance that the small employer is not formed for the purpose of securing health benefit coverage.

2.  Assurance that the employees of a small employer have not been added for the purpose of securing health benefit coverage.

(2)  No such policy of insurance as defined in subsection (1) may be issued to any such association or alliance, unless all individual members of such association, or all small employer members of an alliance, or all of any class or classes thereof, are declared eligible and acceptable to the insurer at the time of issuance of the policy.

(3)  Any such policy issued under paragraph (1)(a) may insure the spouse or dependent children with or without the member being insured.

(4)  A single master policy issued to an association, labor union, or small employer health alliance may include more than one health plan from the same insurer or affiliated insurer group as alternatives for an employer, employee, or member to select.

History.--s. 587, ch. 59-205; s. 1, ch. 61-368; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 502, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 35, ch. 2000-256; s. 2, ch. 2000-296.

627.655  Debtor groups.--A group of individual debtors of a creditor may be insured under a policy issued to a creditor under which the debtors are indemnified in connection with a specific loan or credit transaction against loss of time resulting from bodily injury or sickness. The creditor is deemed the policyholder of a policy issued pursuant to this section. Two types of insurance may be used to insure against the occurrence of disability of the lives of a group of individual debtors pursuant to this section as follows:

(1)  Credit disability insurance as defined in s. 627.677. The debtors eligible for insurance under this section are all of the debtors of the creditor, or all members of any class or classes of debtors of the creditor, determined by conditions pertaining to the indebtedness or to the credit transaction giving rise to the indebtedness. A policy issued pursuant to this section may insure the debtors of one or more subsidiary or affiliated corporations, proprietors, or partnerships, if the business of the creditor and of such subsidiary or affiliated corporations, proprietors, or partnerships is under common control. A policy may be issued pursuant to this section only if the group of eligible debtors is then receiving new entrants at the rate of at least 100 persons yearly, or may reasonably be expected to receive at least 100 new entrants during the first policy year, and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than 75 percent of the new entrants become insured.

(2)  Mortgage insurance as defined in s. 627.982. The debtors eligible for insurance under the policy are all of the debtors of the creditor, or all of any class or classes of debtors of the creditor. The term "debtors" includes borrowers of money in connection with an indebtedness of more than 10 years' duration, which indebtedness is secured by a first real estate mortgage and which indebtedness is not subject to part IX.

History.--s. 588, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 64, 114, ch. 92-318.

627.6551  Teacher and student groups.--A group of teachers or students of an institution of learning may be insured under a policy issued by an insurer authorized under chapter 624 or a health maintenance organization authorized under chapter 641 to a school, district school systems, college, university, or other institution of learning. Any policy or contract issued may insure the spouse, dependent children, parents, or siblings of the insured student or teacher.

History.--ss. 6, 7, ch. 89-190; s. 114, ch. 92-318.

627.656  Additional groups.--

(1)  A group of individuals, other than the groups defined in s. 627.556, may be insured under a policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this state to insure any class or classes of individuals for health insurance that could be insured under such group life policy. Any such policy may insure the spouse and dependent children with or without the employee being insured.

(2)  A credit union group, as defined in s. 627.556, may purchase health insurance for its members under a policy issued to the credit union. The benefits shall be limited to a maximum of $10,000.

History.--s. 1, ch. 61-377; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 503, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

¹627.6561  Preexisting conditions.--

(1)  As used in this section, the term:

(a)  "Enrollment date" means, with respect to an individual covered under a group health policy, the date of enrollment of the individual in the plan or coverage or, if earlier, the first day of the waiting period of such enrollment.

(b)  "Late enrollee" means, with respect to coverage under a group health policy, a participant or beneficiary who enrolls under the policy other than during:

1.  The first period in which the individual is eligible to enroll under the policy.

2.  A special enrollment period, as provided under s. 627.65615.

(c)  "Waiting period" means, with respect to a group health policy and an individual who is a potential participant or beneficiary of the policy, the period that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the policy.

(2)  Subject to the exceptions specified in subsection (4), an insurer that offers group health insurance coverage may, with respect to a participant or beneficiary, impose a preexisting condition exclusion only if:

(a)  Such exclusion relates to a physical or mental condition, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the 6-month period ending on the enrollment date;

(b)  Such exclusion extends for a period of not more than 12 months, or 18 months in the case of a late enrollee, after the enrollment date; and

(c)  The period of any such preexisting condition exclusion is reduced by the aggregate of the periods of creditable coverage, as defined in subsection (5), applicable to the participant or beneficiary as of the enrollment date.

(3)  Genetic information may not be treated as a condition described in paragraph (2)(a) in the absence of a diagnosis of the condition related to such information.

(4)(a)  Subject to paragraph (b), an insurer that offers group health insurance coverage may not impose any preexisting condition exclusion in the case of:

1.  An individual who, as of the last day of the 30-day period beginning with the date of birth, is covered under creditable coverage.

2.  A child who is adopted or placed for adoption before attaining 18 years of age and who, as of the last day of the 30-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. This provision does not apply to coverage before the date of such adoption or placement for adoption.

3.  Pregnancy.

(b)  ²Subparagraphs 1. and 2. do not apply to an individual after the end of the first 63-day period during all of which the individual was not covered under any creditable coverage.

(5)(a)  The term, "creditable coverage," means, with respect to an individual, coverage of the individual under any of the following:

1.  A group health plan, as defined in s. 2791 of the Public Health Service Act.

2.  Health insurance coverage consisting of medical care, provided directly, through insurance or reimbursement, or otherwise and including terms and services paid for as medical care, under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance contract offered by a health insurance issuer.

3.  Part A or part B of Title XVIII of the Social Security Act.

4.  Title XIX of the Social Security Act, other than coverage consisting solely of benefits under s. 1928.

5.  Chapter 55 of Title 10, United States Code.

6.  A medical care program of the Indian Health Service or of a tribal organization.

7.  The Florida Comprehensive Health Association or another state health benefit risk pool.

8.  A health plan offered under chapter 89 of Title 5, United States Code.

9.  A public health plan as defined by rules adopted by the department. To the greatest extent possible, such rules must be consistent with regulations adopted by the United States Department of Health and Human Services.

10.  A health benefit plan under s. 5(e) of the Peace Corps Act (22 U.S.C. s. 2504(e)).

(b)  Creditable coverage does not include coverage that consists solely of one or more or any combination thereof of the following excepted benefits:

1.  Coverage only for accident, or disability income insurance, or any combination thereof.

2.  Coverage issued as a supplement to liability insurance.

3.  Liability insurance, including general liability insurance and automobile liability insurance.

4.  Workers' compensation or similar insurance.

5.  Automobile medical payment insurance.

6.  Credit-only insurance.

7.  Coverage for on-site medical clinics, including prepaid health clinics under part II of chapter 641.

8.  Other similar insurance coverage, specified in rules adopted by the department, under which benefits for medical care are secondary or incidental to other insurance benefits. To the extent possible, such rules must be consistent with regulations adopted by the United States Department of Health and Human Services.

(c)  The following benefits are not subject to the creditable coverage requirements, if offered separately:

1.  Limited scope dental or vision benefits.

2.  Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof.

3.  Such other similar, limited benefits as are specified in rules adopted by the department.

(d)  The following benefits are not subject to creditable coverage requirements if offered as independent, noncoordinated benefits:

1.  Coverage only for a specified disease or illness.

2.  Hospital indemnity or other fixed indemnity insurance.

(e)  Benefits provided through a Medicare supplemental health insurance, as defined under s. 1882(g)(1) of the Social Security Act, coverage supplemental to the coverage provided under chapter 55 of Title 10, United States Code, and similar supplemental coverage provided to coverage under a group health plan are not considered creditable coverage if offered as a separate insurance policy.

(6)(a)  A period of creditable coverage may not be counted, with respect to enrollment of an individual under a group health plan, if, after such period and before the enrollment date, there was a 63-day period during all of which the individual was not covered under any creditable coverage.

(b)  Any period during which an individual is in a waiting period for any coverage under a group health plan or for group health insurance coverage may not be taken into account in determining the 63-day period under paragraph (a) or paragraph (4)(b).

(7)(a)  Except as otherwise provided under paragraph (b), an insurer shall count a period of creditable coverage without regard to the specific benefits covered under the period.

(b)  An insurer may elect to count, as creditable coverage, coverage of benefits within each of several classes or categories of benefits specified in rules adopted by the department rather than as provided under paragraph (a). To the extent possible, such rules must be consistent with regulations adopted by the United States Department of Health and Human Services. Such election shall be made on a uniform basis for all participants and beneficiaries. Under such election, an insurer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category.

(c)  In the case of an election with respect to an insurer under paragraph (b), the insurer shall:

1.  Prominently state in 10-point type or larger in any disclosure statements concerning the policy, and state to each certificateholder at the time of enrollment under the policy, that the insurer has made such election; and

2.  Include in such statements a description of the effect of this election.

(8)(a)  Periods of creditable coverage with respect to an individual shall be established through presentation of certifications described in this subsection or in such other manner as is specified in rules adopted by the department. To the extent possible, such rules must be consistent with regulations adopted by the United States Department of Health and Human Services.

(b)  An insurer that offers group health insurance coverage shall provide the certification described in paragraph (a):

1.  At the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision or continuation pursuant to s. 627.6692.

2.  In the case of an individual becoming covered under a COBRA continuation provision or pursuant to s. 627.6692, at the time the individual ceases to be covered under such a provision.

3.  Upon the request on behalf of an individual made not later than 24 months after the date of cessation of the coverage described in this paragraph.

The certification under subparagraph 1. may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision or continuation pursuant to s. 627.6692.

(c)  The certification described in this section is a written certification that must include:

1.  The period of creditable coverage of the individual under the policy and the coverage, if any, under such COBRA continuation provision or continuation pursuant to s. 627.6692; and

2.  The waiting period, if any, imposed with respect to the individual for any coverage under such policy.

(d)  In the case of an election described in subsection (7) by an insurer, if the insurer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual, as provided in this subsection:

1.  Upon request of such insurer, the insurer that issued the certification provided by the individual shall promptly disclose to such requesting plan or insurer information on coverage of classes and categories of health benefits available under such insurer's plan or coverage.

2.  Such insurer may charge the requesting insurer for the reasonable cost of disclosing such information.

(e)  The department shall adopt rules to prevent an insurer's failure to provide information under this subsection with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage. To the greatest extent possible, such rules must be consistent with regulations adopted by the United States Department of Health and Human Services.

(9)(a)  Except as provided in paragraph (b), no period before July 1, 1996, shall be taken into account in determining creditable coverage.

(b)  The department shall adopt rules that provide a process whereby individuals who need to establish creditable coverage for periods before July 1, 1996, and who would have such coverage credited but for paragraph (a), may be given credit for creditable coverage for such periods through the presentation of documents or other means. To the greatest extent possible, such rules must be consistent with regulations adopted by the United States Department of Health and Human Services.

(10)  Except as otherwise provided in this subsection, paragraph (8)(b) applies to events that occur on or after July 1, 1996.

(a)  In no case is a certification required to be provided under paragraph (8)(b) prior to June 1, 1997.

(b)  In the case of an event that occurred on or after July 1, 1996, and before October 1, 1996, a certification is not required to be provided under paragraph (8)(b), unless an individual, with respect to whom the certification is required to be made, requests such certification in writing.

(11)  In the case of an individual who seeks to establish creditable coverage for any period for which certification is not required because it relates to an event that occurred before July 1, 1996:

(a)  The individual may present other creditable coverage in order to establish the period of creditable coverage.

(b)  An insurer is not subject to any penalty or enforcement action with respect to the insurer's crediting, or not crediting, such coverage if the insurer has sought to comply in good faith with applicable provisions of this section.

(12)  For purposes of subsection (9), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement of this section may not be treated as a termination of such collective bargaining agreement.

(13)  This section does not apply to any health insurance coverage in relation to its provision of excepted benefits described in paragraph (5)(b).

(14)  This section does not apply to any health insurance coverage in relation to its provision of excepted benefits described in paragraphs (5)(c), (d), or (e), if the benefits are provided under a separate policy, certificate, or contract of insurance.

(15)  This section applies to health insurance coverage offered, sold, issued, renewed, or in effect on or after July 1, 1997.

History.--s. 130, ch. 92-33; s. 2, ch. 95-364; s. 8, ch. 97-179.

¹Note.--Section 34(2), ch. 97-179, provides that:

"(2)  Except as provided in section 627.6561(9), (10), and (11), and section 641.31071(10), (11), and (12), Florida Statutes, in the case of a group health plan or group health insurance contract maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers which is ratified before this act becomes a law, sections 627.6561, 627.65615, 627.65625, 627.6571, 627.6699, 641.31071, 641.31072, 641.31073, and 641.31074, Florida Statutes, except for section 627.6561(8)(b), Florida Statutes, as amended or created by this act, apply to policies or contracts with plan years that begin on or after the later of:

"(a)  The date on which the last of any collective bargaining agreement that relates to the plan terminates, determined without regard to any extension thereof, which is agreed to after the date this act becomes a law; or

"(b)  July 1, 1997."

²Note.--Paragraph (b) is not divided into subparagraphs. The reference may be to subparagraphs (a)1. and (a)2.

¹627.65615  Special enrollment periods.--

(1)  An insurer that issues a group health insurance policy shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the policy, or a dependent of such an employee if the dependent is eligible but not enrolled for coverage under such terms, to enroll for coverage under the terms of the policy if each of the following conditions is met:

(a)  The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent. For the purpose of this section, the terms "group health plan" and "health insurance coverage" have the same meaning ascribed in s. 2791 of the Public Health Service Act.

(b)  The employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or insurer, if applicable, required such a statement at such time and provided the employee with notice of such requirement and the consequences of such requirement at such time.

(c)  The employee's or dependent's coverage described in paragraph (a):

1.  Was under a COBRA continuation provision or continuation pursuant to s. 627.6692, and the coverage under such provision was exhausted; or

2.  Was not under such a provision and the coverage was terminated as a result of loss of eligibility for the coverage, including legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment, or the coverage was terminated as a result of the termination of employer contributions toward such coverage.

(d)  Under the terms of the plan, the employee requests such enrollment not later than 30 days after the date of exhaustion of coverage described in subparagraph (c)1., or termination or employer contribution described in subparagraph (c)2.

(2)  For dependent beneficiaries, if:

(a)  A group health insurance policy makes coverage available with respect to a dependent of an individual;

(b)  The individual is a participant under the policy, or has met any waiting period applicable to becoming a participant under the policy, and is eligible to be enrolled under the policy but for a failure to enroll during a previous enrollment period; and

(c)  A person becomes such a dependent of the individual through marriage, birth, or adoption or placement for adoption,

the insurer shall provide for a dependent special enrollment period described in subsection (3) during which the person, or, if not otherwise enrolled, the individual, may be enrolled under the policy as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage.

(3)  A dependent special enrollment period under subsection (2) shall be a period of not less than 30 days and shall begin on the later of:

(a)  The date that dependent coverage is made available; or

(b)  The date of the marriage, birth, or adoption or placement for adoption described in paragraph (2)(c).

(4)  If an individual seeks to enroll a dependent during the first 30 days of such a dependent special enrollment period, the coverage of the dependent shall become effective:

(a)  In the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received.

(b)  In the case of a dependent's birth, as of the date of such birth.

(c)  In the case of dependent's adoption or placement for adoption, the date of such adoption or placement for adoption.

History.--s. 9, ch. 97-179.

¹Note.--Section 34(2), ch. 97-179, provides that:

"(2)  Except as provided in section 627.6561(9), (10), and (11), and section 641.31071(10), (11), and (12), Florida Statutes, in the case of a group health plan or group health insurance contract maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers which is ratified before this act becomes a law, sections 627.6561, 627.65615, 627.65625, 627.6571, 627.6699, 641.31071, 641.31072, 641.31073, and 641.31074, Florida Statutes, except for section 627.6561(8)(b), Florida Statutes, as amended or created by this act, apply to policies or contracts with plan years that begin on or after the later of:

"(a)  The date on which the last of any collective bargaining agreement that relates to the plan terminates, determined without regard to any extension thereof, which is agreed to after the date this act becomes a law; or

"(b)  July 1, 1997."

627.6562  Dependent coverage.--

(1)  If an insurer offers coverage that insures dependent children of the policyholder or certificateholder, the policy must insure a dependent child of the policyholder or certificateholder at least until the end of the calendar year in which the child reaches the age of 25, if the child meets all of the following:

(a)  The child is dependent upon the policyholder or certificateholder for support.

(b)  The child is living in the household of the policyholder or certificateholder, or the child is a full-time or part-time student.

(2)  Nothing in this section affects or preempts an insurer's right to medically underwrite or charge the appropriate premium.

History.--s. 131, ch. 92-33.

¹627.65625  Prohibiting discrimination against individual participants and beneficiaries based on health status.--

(1)  Subject to subsection (2), an insurer that offers a group health insurance policy may not establish rules for eligibility, including continued eligibility, of an individual to enroll under the terms of the policy based on any of the following health-status-related factors in relation to the individual or a dependent of the individual:

(a)  Health status.

(b)  Medical condition, including physical and mental illnesses.

(c)  Claims experience.

(d)  Receipt of health care.

(e)  Medical history.

(f)  Genetic information.

(g)  Evidence of insurability, including conditions arising out of acts of domestic violence.

(h)  Disability.

(2)  Subsection (1) does not:

(a)  Require an insurer to provide particular benefits other than those provided under the terms of such plan or coverage.

(b)  Prevent such a plan or coverage from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan or coverage.

(3)  For purposes of subsection (1), rules for eligibility to enroll under a policy include rules for defining any applicable waiting periods of enrollment.

(4)(a)  An insurer that offers health insurance coverage may not require any individual, as a condition of enrollment or continued enrollment under the policy, to pay a premium or contribution that is greater than such premium or contribution for a similarly situated individual enrolled under the policy on the basis of any health-status-related factor in relation to the individual or to an individual enrolled under the policy as a dependent of the individual.

(b)  This subsection does not:

1.  Restrict the amount that an employer may be charged for coverage under a group health insurance policy; or

2.  Prevent an insurer that offers group health insurance coverage from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.

History.--s. 10, ch. 97-179.

¹Note.--Section 34(2), ch. 97-179, provides that:

"(2)  Except as provided in section 627.6561(9), (10), and (11), and section 641.31071(10), (11), and (12), Florida Statutes, in the case of a group health plan or group health insurance contract maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers which is ratified before this act becomes a law, sections 627.6561, 627.65615, 627.65625, 627.6571, 627.6699, 641.31071, 641.31072, 641.31073, and 641.31074, Florida Statutes, except for section 627.6561(8)(b), Florida Statutes, as amended or created by this act, apply to policies or contracts with plan years that begin on or after the later of:

"(a)  The date on which the last of any collective bargaining agreement that relates to the plan terminates, determined without regard to any extension thereof, which is agreed to after the date this act becomes a law; or

"(b)  July 1, 1997."

627.6563  Full-time employment defined.--Upon the request of the policyholder, a group, blanket, or franchise health insurance policy issued or delivered in this state that provides coverage to an employer for the benefit of its employees shall include in the definition of "full-time employee" an employee who has a normal workweek of 25 or more hours. This section does not prohibit an insurer from excluding coverage for a temporary or substitute employee.

History.--s. 132, ch. 92-33.

627.657  Provisions of group health insurance policies.--

(1)  Each group health insurance policy shall contain in substance the following provisions:

(a)  A provision that, in the absence of fraud, all statements made by applicants or the policyholder or by an insured person shall be deemed representations and not warranties and that no statement made for the purpose of effecting insurance shall avoid such insurance or reduce benefits unless contained in a written instrument signed by the policyholder or the insured person, a copy of which has been furnished to such policyholder or to such person or his or her beneficiary.

(b)  A provision that the insurer will furnish to the policyholder, for delivery to each employee or member of the insured group, a certificate containing the group number and setting forth the essential features of the insurance coverage of such employee or member and those to whom benefits are payable. If dependents are included in the coverage, only one certificate need be issued for each family unit.

(c)  A provision that eligible new employees or members or dependents may be added to the group, in accordance with the terms of the policy.

(2)  Unless stated otherwise in this part, the provisions of part VI of this chapter do not apply to group health insurance policies, but no such policy shall contain any provision relative to notice or proof of loss, to the time for paying benefits, or to the time within which suit may be brought on the policy, which provision is less favorable to the individuals insured than would be permitted by the comparable provision required for individual health insurance policies.

History.--s. 589, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 504, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 349, ch. 97-102.

¹627.6571  Guaranteed renewability of coverage.--

(1)  Except as otherwise provided in this section, an insurer that issues a group health insurance policy must renew or continue in force such coverage at the option of the policyholder.

(2)  An insurer may nonrenew or discontinue a group health insurance policy based only on one or more of the following conditions:

(a)  The policyholder has failed to pay premiums or contributions in accordance with the terms of the policy or the insurer has not received timely premium payments.

(b)  The policyholder has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the policy.

(c)  The policyholder has failed to comply with a material provision of the plan which relates to rules for employer contributions or group participation.

(d)  The insurer is ceasing to offer a particular type of coverage in a market in accordance with subsection (3).

(e)  In the case of an insurer that offers health insurance coverage through a network plan, there is no longer any enrollee in connection with such plan who lives, resides, or works in the service area of the insurer or in the area in which the insurer is authorized to do business and, in the case of the small-group market, the insurer would deny enrollment with respect to such plan under s. 627.6699(5)(i).

(f)  In the case of health insurance coverage that is made available only through one or more bona fide associations as defined in subsection (5) or through one or more small employer health alliances as described in s. 627.654(1)(b), the membership of an employer in the association or in the small employer health alliance, on the basis of which the coverage is provided, ceases, but only if such coverage is terminated under this paragraph uniformly without regard to any health-status-related factor that relates to any covered individuals.

(3)(a)  An insurer may discontinue offering a particular policy form of group health insurance coverage offered in the small-group market or large-group market only if:

1.  The insurer provides notice to each policyholder provided coverage of this form in such market, and to participants and beneficiaries covered under such coverage, of such discontinuation at least 90 days prior to the date of the nonrenewal of such coverage;

2.  The insurer offers to each policyholder provided coverage of this form in such market the option to purchase all, or in the case of the large-group market, any other health insurance coverage currently being offered by the insurer in such market; and

3.  In exercising the option to discontinue coverage of this form and in offering the option of coverage under subparagraph 2., the insurer acts uniformly without regard to the claims experience of those policyholders or any health-status-related factor that relates to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for such coverage.

(b)1.  In any case in which an insurer elects to discontinue offering all health insurance coverage in the small-group market or the large-group market, or both, in this state, health insurance coverage may be discontinued by the insurer only if:

a.  The insurer provides notice to the department and to each policyholder, and participants and beneficiaries covered under such coverage, of such discontinuation at least 180 days prior to the date of the nonrenewal of such coverage; and

b.  All health insurance issued or delivered for issuance in this state in such market is discontinued and coverage under such health insurance coverage in such market is not renewed.

2.  In the case of a discontinuation under subparagraph 1. in a market, the insurer may not provide for the issuance of any health insurance coverage in the market in this state during the 5-year period beginning on the date of the discontinuation of the last insurance coverage not renewed.

(c)  A mailing to one household constitutes a mailing to all covered persons residing in that household. A separate mailing is required for each separate household.

(4)  At the time of coverage renewal, an insurer may modify the health insurance coverage for a product offered:

(a)  In the large-group market; or

(b)  In the small-group market if, for coverage that is available in such market other than only through one or more bona fide associations as defined in subsection (5) or through one or more small employer health alliances as described in s. 627.654(1)(b), such modification is consistent with s. 627.6699 and effective on a uniform basis among group health plans with that product.

(5)  As used in this section, the term "bona fide association" means an association that:

(a)  Has been actively in existence for at least 5 years;

(b)  Has been formed and maintained in good faith for purposes other than obtaining insurance;

(c)  Does not condition membership in the association on any health-status-related factor that relates to an individual, including an employee of an employer or a dependent of an employee;

(d)  Makes health insurance coverage offered through the association available to all members regardless of any health-status-related factor that relates to such members or individuals eligible for coverage through a member; and

(e)  Does not make health insurance coverage offered through the association available other than in connection with a member of the association.

(6)  In applying this section in the case of health insurance coverage that is made available by an insurer in the small-group market or large-group market to employers only through one or more associations or through one or more small employer health alliances as described in s. 627.654(1)(b), a reference to "policyholder" is deemed, with respect to coverage provided to an employer member of the association, to include a reference to such employer.

History.--s. 11, ch. 97-179; s. 7, ch. 98-159; s. 36, ch. 2000-256; s. 3, ch. 2000-296.

¹Note.--Section 34(2), ch. 97-179, provides that:

"(2)  Except as provided in section 627.6561(9), (10), and (11), and section 641.31071(10), (11), and (12), Florida Statutes, in the case of a group health plan or group health insurance contract maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers which is ratified before this act becomes a law, sections 627.6561, 627.65615, 627.65625, 627.6571, 627.6699, 641.31071, 641.31072, 641.31073, and 641.31074, Florida Statutes, except for section 627.6561(8)(b), Florida Statutes, as amended or created by this act, apply to policies or contracts with plan years that begin on or after the later of:

"(a)  The date on which the last of any collective bargaining agreement that relates to the plan terminates, determined without regard to any extension thereof, which is agreed to after the date this act becomes a law; or

"(b)  July 1, 1997."

627.65735  Nondiscrimination of coverage for surgical procedures.--No group, franchise, or blanket health insurance contract or policy which provides coverage on a group or individual basis for any diagnostic or surgical procedure involving bones or joints of the skeleton shall discriminate against coverage for any similar diagnostic or surgical procedure involving bones or joints of the jaw and facial region, if, under accepted medical standards, such procedure or surgery is medically necessary to treat conditions caused by congenital or developmental deformity, disease, or injury. This section shall not be construed to affect any other coverage under this part or to restrict the scope of coverage under any policy, plan, or contract. Nothing in this section shall be construed to discourage appropriate nonsurgical procedures or to prohibit the continued coverage of nonsurgical procedures in the treatment of a bone or joint of the jaw and facial region. Furthermore, nothing in this section requires coverage for care or treatment of the teeth or gums, for intraoral prosthetic devices, or for surgical procedures for cosmetic purposes. This section does not apply to accident-only disability income, specified disease, hospital indemnity, credit, Medicare supplement, or long-term care insurance policies.

History.--s. 4, ch. 96-361.

627.6574  Maternity care.--

(1)  Any group, blanket, or franchise policy of health insurance that provides coverage for maternity care must also cover the services of certified nurse-midwives and midwives licensed pursuant to chapter 467, and the services of birth centers licensed under ss. 383.30-383.335.

(2)  Any group, blanket, or franchise policy of health insurance that provides maternity and newborn coverage may not limit coverage for the length of a maternity and newborn stay in a hospital or for followup care outside of a hospital to any time period that is less than that determined to be medically necessary, in accordance with prevailing medical standards and consistent with guidelines for perinatal care of the American Academy of Pediatrics or the American College of Obstetricians and Gynecologists, by the treating obstetrical care provider or the pediatric care provider.

(3)  This section does not affect any agreement between an insurer and a hospital or other health care provider with respect to reimbursement for health care services provided, rate negotiations with providers, or capitation of providers, and this section does not prohibit appropriate utilization review or case management by an insurer.

(4)  Any group, blanket, or franchise policy of health insurance that provides coverage, benefits, or services for maternity or newborn care must provide coverage for postdelivery care for a mother and her newborn infant. The postdelivery care must include a postpartum assessment and newborn assessment and may be provided at the hospital, at the attending physician's office, at an outpatient maternity center, or in the home by a qualified licensed health care professional trained in mother and baby care. The services must include physical assessment of the newborn and mother, and the performance of any medically necessary clinical tests and immunizations in keeping with prevailing medical standards.

(5)  An insurer subject to subsection (1) shall communicate active case questions and concerns regarding postdelivery care directly to the treating physician or hospital in written form, in addition to other forms of communication. Such insurers shall also use a process that includes a written protocol for utilization review and quality assurance.

(6)  An insurer subject to subsection (1) may not:

(a)  Deny to a mother or her newborn infant eligibility, or continued eligibility, to enroll or to renew coverage under the terms of the policy for the purpose of avoiding the requirements of this section.

(b)  Provide monetary payments or rebates to a mother to encourage the mother to accept less than the minimum protections available under this section.

(c)  Penalize or otherwise reduce or limit the reimbursement of an attending provider solely because the attending provider provided care to an individual participant or beneficiary in accordance with this section.

(d)  Provide incentives, monetary or otherwise, to an attending provider solely to induce the provider to provide care to an individual participant or beneficiary in a manner inconsistent with this section.

(e)  Subject to paragraph (7)(c), restrict benefits for any portion of a period within a hospital length of stay required under subsection (2) in a manner that is less favorable than the benefits provided for any preceding portion of such stay.

(7)(a)  This section does not require a mother who is a participant or beneficiary to:

1.  Give birth in a hospital.

2.  Stay in the hospital for a fixed period of time following the birth of her infant.

(b)  This section does not apply with respect to any health insurance coverage that does not provide benefits for hospital lengths of stay in connection with childbirth for a mother or her newborn infant.

(c)  This section does not prevent a policy from imposing deductibles, coinsurance, or other cost-sharing in relation to benefits for hospital lengths of stay in connection with childbirth for a mother or her newborn infant, except that such coinsurance or other cost-sharing for any portion of a period within a hospital length of stay required under subsection (2) may not be greater than such coinsurance or cost-sharing for any preceding portion of such stay.

History.--s. 21, ch. 83-288; s. 3, ch. 84-94; s. 3, ch. 89-190; s. 114, ch. 92-318; s. 2, ch. 96-195; s. 12, ch. 97-179.

627.65745  Diabetes treatment services.--

(1)  A health insurance policy or group health insurance policy sold in this state, including a health benefit plan issued pursuant to s. 627.6699, must provide coverage for all medically appropriate and necessary equipment, supplies, and diabetes outpatient self-management training and educational services used to treat diabetes, if the patient's treating physician or a physician who specializes in the treatment of diabetes certifies that such services are necessary.

(2)  The policy or health benefit plan may require that diabetes outpatient self-management training and educational services be provided under the direct supervision of a certified diabetes educator or a board-certified endocrinologist. The policy or health benefit plan may further require that nutrition counseling be provided by a licensed dietitian.

(3)  The Agency for Health Care Administration shall adopt standards for diabetes outpatient self-management training and educational services, taking into consideration standards approved by the American Diabetes Association.

History.--s. 3, ch. 95-268; s. 2, ch. 96-279.

627.6575  Coverage for newborn children.--

(1)  Any group, blanket, or franchise health insurance policy providing coverage on an expense-incurred basis that provides coverage for a family member of the certificateholder or subscriber, or any group, blanket, or franchise health care services plan contract issued by a nonprofit corporation that provides coverage for a family member of the certificateholder or subscriber, must, with respect to the family member's coverage, also provide that the health insurance benefits applicable for children will be payable with respect to a newborn child of the certificateholder, subscriber, or covered family member from the moment of birth. However, the coverage for a newborn child of a covered family member of the certificateholder or subscriber terminates 18 months after the birth of the newborn child.

(2)  The coverage for newborn children required by this section consists of coverage for injury or sickness, including the necessary care or treatment of medically diagnosed congenital defects, birth abnormalities, or prematurity, and also includes transportation costs of the newborn to and from the nearest available facility appropriately staffed and equipped to treat the newborn's condition if the transportation is certified by the attending physician as necessary to protect the health and safety of the newborn child. The coverage of transportation costs may not exceed the usual and customary charges, up to $1,000.

(3)  The benefits required by this section also apply to holders of group certificates delivered or issued for delivery to residents of this state under group policies effectuated or delivered outside this state.

(4)  A policy or contract may require the insured to notify the insurer of the birth of a child within a time period, as specified in the policy, of not less than 30 days after the birth. If timely notice is given, the insurer may not charge an additional premium for coverage of the newborn child for the duration of the notice period. If timely notice is not given, the insurer may charge an additional premium from the date of birth. If notice is given within 60 days of the birth of the child, the insurer may not deny coverage for a child due to the failure of the insured to timely notify the insurer of the birth of the child.

(5)  If the policy or contract does not require the insured to notify the insurer of the birth within a specified time period, the insurer may not deny coverage for such child or retroactively charge the insured an additional premium for the child. However, the insurer may prospectively charge the insured an additional premium for the child if the insurer provides at least 45 days' notice of the additional premium required.

(6)  This section does not apply to disability income or hospital indemnity policies or to normal maternity policy provisions applicable to the mother.

History.--s. 2, ch. 74-8; s. 3, ch. 76-168; s. 1, ch. 77-162; s. 1, ch. 77-174; s. 1, ch. 77-457; s. 2, ch. 80-177; ss. 2, 3, ch. 81-318; ss. 505, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 2, ch. 84-202; ss. 133, 149, ch. 92-33; ss. 65, 114, ch. 92-318; s. 8, ch. 98-159.

627.65755  Dental procedures; anesthesia and hospitalization coverage.--For purposes of this section, dental treatment or surgery shall be considered necessary when the dental condition is likely to result in a medical condition if left untreated. Any group, blanket, or franchise health insurance policy issued or issued for delivery in this state which provides coverage for general anesthesia and hospitalization services to a covered person shall not preclude such coverage in assuring the safe delivery of necessary dental care provided to a covered person who:

(1)  Is under 8 years of age and is determined by a licensed dentist, and the child's physician licensed under chapter 458 or chapter 459, to require necessary dental treatment in a hospital or ambulatory surgical center due to a significantly complex dental condition or a developmental disability in which patient management in the dental office has proved to be ineffective; or

(2)  Has one or more medical conditions that would create significant or undue medical risk for the individual in the course of delivery of any necessary dental treatment or surgery if not rendered in a hospital or ambulatory surgical center.

As provided herein, all terms and conditions of the covered person's health insurance policy shall apply to such services, and this section does not require coverage for the diagnosis or treatment of dental disease. An insurer may require prior authorization for general anesthesia and hospital services required under this section in the same manner the insurer requires prior authorization for hospitalization for other covered services. This section shall not apply to Medicare supplement, long-term care, disability, limited benefit, accident only, or specified disease policies.

History.--s. 3, ch. 98-312.

627.6577  Dental care.--

(1)  Any employer, group, or organization that pays or contributes to the premium of a group health insurance plan or dental service plan corporation which provides dental coverage only upon the condition that services be rendered by an exclusive list of dentists or groups of dentists shall provide an alternative to enable the insured to have a free choice of dentist. The employer, group, or organization shall pay or contribute an equal dollar amount toward either alternative elected by the insured. The provisions of this section do not require the commingling of costs and claims experience between the two alternative plans.

(2)  Each insurer or dental service plan corporation in this state that transacts group insurance or provides prepaid health care which includes dental care only upon the condition that services be rendered by an exclusive list of dentists or groups of dentists shall advise the employer, group, or organization of the requirements of subsection (1) during the course of marketing or renewal of such health care policies.

(3)  This section does not apply to contracts entered into pursuant to part I of chapter 641.

History.--s. 1, ch. 84-301; s. 1, ch. 85-65; s. 36, ch. 92-78; s. 114, ch. 92-318; s. 28, ch. 95-211.

627.6578  Coverage for natural-born, adopted, and foster children; children in insured's custodial care.--

(1)  A group, blanket, or franchise health insurance policy that provides coverage for a family member of the certificateholder or subscriber shall, as to such family member's coverage, provide that benefits applicable to children of the certificateholder or subscriber also apply to an adopted child or a foster child of the certificateholder or subscriber placed in compliance with chapter 63, from the moment of placement in the residence of the certificateholder or subscriber. Except in the case of a foster child, the policy may not exclude coverage for any preexisting condition of the child. In the case of a newborn child, coverage begins at the moment of birth if a written agreement to adopt such child has been entered into by the certificateholder or subscriber prior to the birth of the child, whether or not the agreement is enforceable. This section does not require coverage for an adopted child who is not ultimately placed in the residence of the certificateholder or subscriber in compliance with chapter 63.

(2)  A policy or contract may require the insured to notify the insurer of the birth or placement of an adopted child within a specified time period of not less than 30 days after the birth or placement in the residence of a child adopted by the insured. If timely notice is given, the insurer may not charge an additional premium for coverage of the child for the duration of the notice period. If timely notice is not given, the insurer may charge an additional premium from the date of birth or placement. If notice is given within 60 days of the birth or placement of the child, the insurer may not deny coverage for the child due to the failure of the insured to timely notify the insurer of the birth or placement of the child.

(3)  If the policy does not require the insured to notify the insurer of the birth or placement of an adopted child within a specified time period, the insurer may not deny coverage for such child or retroactively charge the insured an additional premium for such child. However, the insurer may prospectively charge the insured an additional premium for the child if the insurer provides at least 45 days' notice of the additional premium required.

(4)  In order to increase access to postnatal, infant, and pediatric health care for all children placed in court-ordered custody, including foster children, all group, blanket, and franchise health insurance policies that provide coverage for a family member of the certificateholder or subscriber shall, as to such family member's coverage, provide that benefits applicable for children shall be payable with respect to a foster child or other child in court-ordered temporary or other custody of the certificateholder or subscriber.

History.--ss. 4, 5, ch. 85-189; s. 2, ch. 88-269; s. 2, ch. 91-185; ss. 134, 149, ch. 92-33; s. 6, ch. 92-278; s. 114, ch. 92-318; s. 10, ch. 98-159.

627.6579  Coverage for child health supervision services.--

(1)  All group, blanket, or franchise health insurance policies providing coverage on an expense-incurred basis which provide coverage for a family member of the certificateholder or subscriber must, as to such family member's coverage, also provide that the health insurance benefits applicable for children include coverage for child health supervision services from the moment of birth to age 16 years. Such services must be exempt from any deductible provisions that are in force in such policies or contracts.

(2)  As used in this section, the term "child health supervision services" means physician-delivered or physician-supervised services that include, at a minimum, benefit coverage for services delivered at the intervals and scope stated in this section.

(a)  Child health supervision services must include periodic visits which shall include a history, a physical examination, a developmental assessment and anticipatory guidance, and appropriate immunizations and laboratory tests. Such services and periodic visits shall be provided in accordance with prevailing medical standards consistent with the Recommendations for Preventive Pediatric Health Care of the American Academy of Pediatrics.

(b)  Minimum benefits may be limited to one visit payable to one provider for all of the services provided at each visit cited in this section.

(3)  This section does not apply to disability income, specified disease, Medicare supplement, or hospital indemnity policies.

History.--ss. 3, 6, ch. 86-122; s. 1, ch. 88-329; s. 114, ch. 92-318; s. 2, ch. 97-166.

627.658  Use of dividends, refunds, rate reductions, commissions, service fees; premium rates.--

(1)  Section 627.569 also applies to group health insurance policies.

(2)  An insurer may issue a group health insurance policy at a premium rate less than the usual rate or premium for an individual insurance policy.

History.--s. 590, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 508, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.659  Blanket health insurance; eligible groups.--Blanket health insurance is that form of health insurance which covers special groups of individuals as enumerated in one of the following subsections:

(1)  Under a policy or contract issued to any common carrier, which shall be deemed the policyholder, covering a group defined as all persons who may become passengers on such common carrier.

(2)  Under a policy or contract issued to an employer, who shall be deemed the policyholder, covering any group of employees defined by reference to exceptional hazards incident to such employment, or under a policy or contract issued to an employer when all employees are covered under any such policy or contract.

(3)  Under a policy issued to a school, district school system, college, university, or other institution of learning, or to the official or officials of such institution insuring the students and teachers. Any such policy issued may insure the spouse or dependent children of the insured student.

(4)  Under a policy or contract issued in the name of any volunteer fire department or first aid group or other such volunteer group, which shall be deemed the policyholder, covering all of the members of such department or group.

(5)  Under a policy or contract issued to an organization, or branch thereof, such as the Boy Scouts of America, the Future Farmers of America, religious or educational bodies, or similar organizations, or to an individual, firm, or corporation, holding or operating meetings such as summer camps or other meetings for religious, instructive, or recreational purposes, covering all those attending such camps or meetings, including counselors, instructors, and persons in other administrative positions.

(6)  Under a policy or contract issued in the name of a newspaper, which shall be deemed the policyholder, covering independent contractor newspaper delivery persons.

(7)  Under a policy or contract issued in the name of a health care provider, which shall be deemed the policyholder, covering patients. This coverage may be offered to patients of a health care provider but may not be made a condition of receiving care. The benefits provided under such policy or contract shall not be assignable to any health care provider.

(8)  Under a policy or contract issued to any health maintenance organization licensed pursuant to the provisions of part I of chapter 641, which shall be deemed the policyholder, covering the subscribers of the health maintenance organization. Payment may be made directly to the health maintenance organization by the blanket health insurer for health care services rendered by providers pursuant to the health care delivery plan.

History.--s. 591, ch. 59-205; s. 2, ch. 65-10; s. 1, ch. 69-300; s. 1, ch. 75-10; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 509, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 7, ch. 84-235; s. 5, ch. 89-190; s. 114, ch. 92-318; s. 9, ch. 97-93.

627.660  Conditions and provisions of blanket health insurance policies.--

(1)  An individual application shall not be required from a person covered under a blanket health insurance policy or contract, nor shall it be necessary for the insurer to furnish such person a certificate, except as provided in subsection (6).

(2)  Any benefit under a blanket health policy shall be payable as provided in s. 627.614.

(3)  No such policy shall contain any provision relative to notice or proof of loss, to the time for paying benefits, or to the time within which suit may be brought on the policy, which provision is less favorable to the individuals insured than would be permitted by the comparable provision required for individual health insurance policies.

(4)  The provisions of part VI of this chapter do not apply to blanket health insurance policies, but no such policy shall contain any provision relative to notice or proof of loss, to the time for paying benefits, or to the time within which suit may be brought on the policy, which provision is less favorable to the individuals insured than would be permitted by the comparable provision required for individual health insurance policies.

(5)  Nothing contained in s. 627.659 or in this section shall be deemed to affect the legal liability of policyholders for the death or injury to any person insured under a blanket disability policy.

(6)  The insurer shall issue, or cause to be issued, to each insured person covered under a policy issued pursuant to s. 627.659(3) a written certificate setting forth the essential features of the insurance coverage. The certificate shall be subject to filing and approval in accordance with ss. 627.410 and 627.640.

History.--s. 592, ch. 59-205; s. 3, ch. 65-10; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 510, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.661  School accident insurance claims; policy service.--An insurer issuing a school accident policy referred to in s. 627.659(3) shall maintain an office or offices in this state for the processing and payment of claims, and to render service to insureds, or shall appoint a duly licensed adjuster or resident agent for that purpose; except that processing and payment of claims and service may be performed at the insurer's home office.

History.--s. 4, ch. 65-10; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6612  Coverage for surgical procedures and devices incident to mastectomy.--

(1)  Any group, blanket, or franchise accident or health insurance policy that provides coverage for mastectomies must also provide coverage for prosthetic devices and breast reconstructive surgery incident to the mastectomy. The insurer may charge an appropriate additional premium for the coverage required by this subsection. The coverage for prosthetic devices and breast reconstructive surgery shall be subject to any deductible and coinsurance conditions, and all other terms and conditions applicable to other benefits. Breast reconstructive surgery must be in a manner chosen by the treating physician under contract with the health maintenance organization, consistent with prevailing medical standards, and in consultation with the patient.

(2)  As used in this section, the term "mastectomy" means the removal of all or part of the breast for medically necessary reasons as determined by a licensed physician, and the term "breast reconstructive surgery" means surgery to reestablish symmetry between the two breasts.

History.--ss. 3, 4, ch. 87-262; s. 5, ch. 88-269; ss. 66, 114, ch. 92-318; s. 7, ch. 97-48.

627.66121  Coverage for length of stay and outpatient postsurgical care.--

(1)  Any group, blanket, or franchise accident or health insurance policy that is issued, amended, delivered, or renewed in this state which provides coverage for breast cancer treatment may not limit inpatient hospital coverage for mastectomies to any period that is less than that determined by the treating physician to be medically necessary in accordance with prevailing medical standards and after consultation with the insured patient.

(2)  Any group, blanket, or franchise accident or health insurance policy that provides coverage for mastectomies under subsection (1) must also provide coverage for outpatient postsurgical followup care in keeping with prevailing medical standards by a licensed health care professional qualified to provide postsurgical mastectomy care. The treating physician, after consultation with the insured patient, may choose that the outpatient care be provided at the most medically appropriate setting, which may include the hospital, treating physician's office, outpatient center, or home of the insured patient.

(3)  An insurer subject to subsection (1) may not:

(a)  Deny to an insured eligibility, or continued eligibility, to enroll or to renew coverage under the terms of the policy for the purpose of avoiding the requirements of this section;

(b)  Provide monetary payments or rebates to an insured patient to accept less than the minimum protections available under this section;

(c)  Penalize or otherwise reduce or limit the reimbursement of an attending provider solely because the attending provider provided care to an insured patient under this section;

(d)  Provide incentives, monetary or otherwise, to an attending provider solely to induce the provider to provide care to an insured patient in a manner inconsistent with this section; or

(e)  Subject to the other provisions of this section, restrict benefits for any portion of a period within a hospital length of stay or outpatient care as required by this section in a manner that is less than favorable than the benefits provided for any preceding portion of such stay.

(4)(a)  This section does not require an insured patient to have the mastectomy in the hospital or stay in the hospital for a fixed period of time following the mastectomy.

(b)  This section does not prevent a policy from imposing deductibles, coinsurance, or other cost-sharing in relation to benefits under this section, except that such cost-sharing may not exceed cost-sharing with other benefits.

(5)  Except as provided in subsection (3), this section does not affect any agreement between an insurer and a hospital or other health care provider with respect to reimbursement for health care services provided, rate negotiations with providers, or capitation of providers and does not prohibit appropriate utilization review or case management by the insurer.

(6)  This section does not apply to disability income, specified diseases other than cancer, or hospital indemnity policies.

(7)  As used in this section, the term "mastectomy" means the removal of all or part of the breast for medically necessary reasons as determined by a licensed physician.

History.--s. 8, ch. 97-48.

627.66122  Requirements with respect to breast cancer and routine followup care.--Routine followup care to determine whether a breast cancer has recurred in a person who has been previously determined to be free of breast cancer does not constitute medical advice, diagnosis, care, or treatment for purposes of determining preexisting conditions unless evidence of breast cancer is found during or as a result of the followup care.

History.--s. 9, ch. 97-48.

627.6613  Coverage for mammograms.--

(1)  A group, blanket, or franchise accident or health insurance policy issued, amended, delivered, or renewed in this state must provide coverage for at least the following:

(a)  A baseline mammogram for any woman who is 35 years of age or older, but younger than 40 years of age.

(b)  A mammogram every 2 years for any woman who is 40 years of age or older, but younger than 50 years of age, or more frequently based on the patient's physician's recommendation.

(c)  A mammogram every year for any woman who is 50 years of age or older.

(d)  One or more mammograms a year, based upon a physician's recommendation, for any woman who is at risk for breast cancer because of a personal or family history of breast cancer, because of having a history of biopsy-proven benign breast disease, because of having a mother, sister, or daughter who has or has had breast cancer, or because a woman has not given birth before the age of 30.

It is the intent of the Legislature that, when practice parameters for the delivery of mammography services are developed pursuant to s. 408.02(7), the Legislature review the requirements of this section and conform to the practice parameters.

(2)  Except as provided in paragraph (1)(b), for mammograms done more frequently than every 2 years for women 40 years of age or older but younger than 50 years of age, the coverage required by subsection (1) applies, with or without a physician prescription, if the insured obtains a mammogram in an office, facility, or health testing service that uses radiological equipment registered with the Department of Health for breast cancer screening. The coverage is subject to the deductible and coinsurance provisions applicable to outpatient visits, and is also subject to all other terms and conditions applicable to other benefits. This section does not affect any requirements or prohibitions relating to who may perform, analyze, or interpret a mammogram or the persons to whom the results of a mammogram may be furnished or released.

(3)  Every insurer referred to in subsection (1) shall make available to the policyholder as part of the application, for an appropriate additional premium, the coverage required in this section without such coverage being subject to the deductible or coinsurance provisions of the policy.

History.--s. 5, ch. 88-269; s. 135, ch. 92-33; s. 8, ch. 95-188; s. 261, ch. 99-8.

627.6615  Handicapped children; continuation of coverage under group policy.--A group health insurance policy or health care services plan contract that is delivered or issued for delivery in this state and that provides that coverage of a dependent child of an employee or other member of the covered group will terminate upon attainment of the limiting age for dependent children specified in the policy or contract shall also provide in substance that attainment of the limiting age does not terminate the coverage of the child while the child continues to be both:

(1)  Incapable of self-sustaining employment by reason of mental retardation or physical handicap; and

(2)  Chiefly dependent upon the employee or member for support and maintenance.

If a claim is denied under a policy or contract for the stated reason that the child has attained the limiting age for dependent children specified in the policy or contract, the notice of denial must state that the certificateholder or subscriber has the burden of establishing that the child continues to meet the criteria specified in subsections (1) and (2).

History.--s. 1, ch. 70-187; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 511, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 19, ch. 83-288; ss. 136, 149, ch. 92-33; s. 114, ch. 92-318.

627.6616  Coverage for ambulatory surgical center service.--No group health insurance policy providing coverage on an expense-incurred basis, or group service or indemnity-type contract issued by a nonprofit corporation, or self-insured group health benefit plan or trust, of any kind or description, shall be issued unless coverage provided for any service performed in an ambulatory surgical center, as defined in s. 395.002, is provided if such service would have been covered under the terms of the policy or contract as an eligible inpatient service.

History.--s. 12, ch. 77-24; s. 2, ch. 81-318; ss. 26, 30, ch. 82-182; ss. 512, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 111, ch. 83-216; s. 114, ch. 92-318.

Note.--Former s. 395.22.

627.6617  Coverage for home health care services.--

(1)  Any group health insurance policy providing coverage on an expense-incurred basis shall provide coverage for home health care by a home health care agency licensed pursuant to part IV of chapter 400. Such coverage may be limited to home health care under a plan of treatment prescribed by a licensed physician. Services may be performed by a registered graduate nurse, a licensed practical nurse, a physical therapist, a speech therapist, an occupational therapist, or a home health aide. Provisions for utilization review may be imposed, provided that similar provisions apply to all other types of health care services.

(2)  Carriers providing coverage pursuant to this section may establish a maximum length of care for any policy year, but in no event shall reimbursement be limited to an amount less than $1,000 per year.

(3)  In the case of persons insured under a group policy receiving benefits pursuant to Medicare, the coverage provided in this section shall be considered supplemental and in addition to any such benefits.

(4)  The provisions of this section shall not apply to a multiple-employer welfare arrangement as defined in s. 624.437(1) and in the State Health Plan as provided in s. 110.123.

History.--ss. 1, 4, ch. 87-262; s. 114, ch. 92-318; s. 31, ch. 99-3.

627.6618  Payment of acupuncture benefits to certified acupuncturists.--Any policy of group health insurance that provides coverage for acupuncture shall cover the services of an acupuncturist certified pursuant to chapter 457 under the same conditions that apply to services of a licensed physician.

History.--ss. 2, 3, ch. 87-176; s. 114, ch. 92-318.

627.6619  Massage.--Any policy of health insurance that provides coverage for massage shall also cover the services of persons licensed to practice massage pursuant to chapter 480, where the massage, as defined in chapter 480, has been prescribed by a physician licensed under chapter 458, chapter 459, chapter 460, or chapter 461, as being medically necessary and the prescription specifies the number of treatments.

History.--s. 67, ch. 92-318; s. 242, ch. 98-166.

627.662  Other provisions applicable.--The following provisions apply to group health insurance, blanket health insurance, and franchise health insurance:

(1)  Section 627.569, relating to use of dividends, refunds, rate reductions, commissions, and service fees.

(2)  Section 627.602(1)(f) and (2), relating to identification numbers and statement of deductible provisions.

(3)  Section 627.635, relating to excess insurance.

(4)  Section 627.638, relating to direct payment for hospital or medical services.

(5)  Section 627.640, relating to filing and classification of rates.

(6)  Section 627.645(1), relating to denial of claims.

(7)  Section 627.613, relating to time of payment of claims.

(8)  Section 627.6471, relating to preferred provider organizations.

(9)  Section 627.6472, relating to exclusive provider organizations.

(10)  Section 627.6473, relating to combined preferred provider and exclusive provider policies.

History.--s. 593, ch. 59-205; s. 2, ch. 61-423; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 80-33; ss. 2, 3, ch. 81-318; ss. 513, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 3, ch. 90-85; s. 6, ch. 91-296; ss. 137, 149, ch. 92-33; s. 114, ch. 92-318.

627.663  Franchise health insurance.--

(1)  "Franchise health insurance," also known as "franchise group insurance," is that form of health insurance issued to:

(a)  Two or more employees of any corporation, professional association, copartnership, or individual employer or of any governmental corporation, agency, or department; or

(b)  Ten or more individuals who are members of any trade association or labor union or any other association having had an active existence for at least 2 years if such association or union has a constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance; when such persons, with or without their dependents, are issued the same form of an individual policy varying only as to amounts and kinds of coverage applied for by such persons under an arrangement whereby the premiums on such policies may be paid to the insurer periodically by the employer, with or without payroll deductions, or by the association, or by some designated person acting on behalf of such employer or association. Notwithstanding the provisions of any state antidiscriminatory law, such provisions shall not prohibit different rates charged or benefits payable or a different underwriting procedure for individuals insured under a franchise plan provided the rates charged, benefits payable, or underwriting procedure used does not discriminate between franchise plans.

(2)  The provisions of part VI of this chapter also apply to franchise insurance.

History.--s. 594, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 1, ch. 79-67; ss. 2, 3, ch. 81-318; ss. 514, 523, 809(2nd), ch. 82-243; ss. 63, 79, ch. 82-386; s. 114, ch. 92-318.

627.664  Assignment of incidents of ownership in group, blanket, or franchise health policies.--

(1)  No provision of the insurance code or any other law shall be construed to prohibit an insured under any group, blanket, or franchise health insurance policy, or any other person who may be the owner of any incidents of ownership under such policy, from making an assignment of all or any part of his or her incidents of ownership under the policy, including specifically, but not by way of limitation, any right to designate a beneficiary and the right, if any, to have an individual policy issued in accordance with the terms thereof. Subject to the terms of the policy or any contract relating thereto, an assignment by an insured or by any other owner of rights under the policy is valid for the purpose of vesting in the assignee, in accordance with any provisions included therein as to the time at which it is to be effective, all incidents of ownership so assigned, but without prejudice to the company on account of any payment it may make or individual policy it may issue prior to receipt of notice of the assignment.

(2)  The purpose of subsection (1) is to declare and codify existing rights under policies of the types described therein.

History.--ss. 2, 3, ch. 70-10; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 515, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 350, ch. 97-102.

627.6645  Notification of cancellation, expiration, nonrenewal, or change in rates.--

(1)  Every insurer delivering or issuing for delivery a group health insurance policy under the provisions of this part shall give the policyholder at least 45 days' advance notice of cancellation, expiration, nonrenewal, or a change in rates. Such notice shall be mailed to the policyholder's last address as shown by the records of the insurer. However, if cancellation is for nonpayment of premium, only the requirements of subsection (5) apply. Upon receipt of such notice, the policyholder shall forward, as soon as practicable, the notice of expiration, cancellation, or nonrenewal to each certificateholder covered under the policy.

(2)  If an insurer bills any certificateholder directly at his or her home address for collection of any premiums due, the notice required by subsection (1) shall be provided by the insurer directly to each such certificateholder covered under the policy.

(3)  If the insurer fails to provide the 45 days' notice required by this section, the coverage shall remain in effect at the existing rates until 45 days after the notice is given or until the effective date of replacement coverage obtained by the insured, whichever occurs first.

(4)  In the event of cancellation, the insurer must return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.

(5)  If cancellation is due to nonpayment of premium, the insurer may not retroactively cancel the policy to a date prior to the date that notice of cancellation was provided to the policyholder unless the insurer mails notice of cancellation to the policyholder prior to 45 days after the date the premium was due. Such notice must be mailed to the policyholder's last address as shown by the records of the insurer and may provide for a retroactive date of cancellation no earlier than midnight of the date that the premium was due.

History.--ss. 2, 3, ch. 83-157; s. 2, ch. 89-222; s. 4, ch. 90-249; s. 114, ch. 92-318; s. 351, ch. 97-102; s. 12, ch. 99-204; s. 6, ch. 99-275; s. 11, ch. 99-393.

627.6646  Cancellation or nonrenewal prohibited.--Notwithstanding any other provision of law to the contrary, no insurer shall cancel or nonrenew the health insurance policy of any insured because of diagnosis or treatment of human immunodeficiency virus infection or acquired immune deficiency syndrome.

History.--ss. 50, 53, ch. 88-380; s. 114, ch. 92-318.

627.6647  Release of claims experience.--

(1)  Any insurer issuing or delivering group health insurance policies in this state must provide to a policyholder, within 21 days after a written request, information required for bid, including, but not limited to, the following information for the previous 3 years or for the entire period of coverage, whichever is shorter:

(a)  Claims experience.

(b)  Premiums paid.

(c)  Number of insureds on a monthly basis.

(d)  Dependent status.

(2)  This section does not require the insurer to disclose any information that is required by law to be confidential.

History.--s. 112, ch. 92-318.

627.6651  Replacement or termination of group, blanket, or franchise health policy or contract; liability of prior insurer.--When a purchaser of insurance terminates or replaces an existing group, blanket, or franchise health insurance policy or contract with another such policy, the prior insurer shall remain liable only to the extent of its accrued liabilities and extensions of benefits as required by s. 627.667.

History.--s. 4, ch. 75-279; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 516, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 7, ch. 90-249; s. 114, ch. 92-318.

627.666  Liability of succeeding insurer on replacement of group, blanket, or franchise health insurance policy.--Upon replacement of a group, blanket, or franchise health insurance policy:

(1)  Each person who was covered by the prior insurer must be covered by the succeeding insurer; however, the prior insurer is liable for any extension of benefits in accordance with s. 627.667.

(2)  The succeeding insurer, in applying any deductible, out-of-pocket limitation, or waiting period in its plan, shall give credit for the satisfaction or partial satisfaction of the same or similar provisions under a prior plan. As to deductible provisions, the credit applies for expenses actually incurred and applied against the deductible provisions of the prior insurer's plan during the 90 days preceding the effective date of the succeeding insurer's plan, but only to the extent that the expenses actually incurred are recognized under the terms of the succeeding insurer's plan and are subject to a similar deductible provision.

(3)  If a determination of the prior insurer's benefit is required by the succeeding insurer, the prior insurer shall, at the succeeding insurer's request, furnish a statement of the benefits available or pertinent information sufficient to permit verification of the benefit determination, or the determination itself, by the succeeding insurer. For the purposes of this subsection, benefits of the prior plan must be determined in accordance with all of the definitions, conditions, and covered expense provisions of the prior plan, rather than in accordance with the comparable provisions of the succeeding plan. The benefit determination must be made as if coverage had not been replaced by the succeeding insurer.

(4)  This section also applies upon the issuance of an insurance policy to a group whose benefits had previously been self-insured or to a self-insurer providing coverage to a group that had been previously covered by an insurer or another self-insurer.

History.--s. 5, ch. 75-279; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 5, 6, 10, ch. 80-341; ss. 2, 3, ch. 81-318; ss. 517, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 68, 114, ch. 92-318.

627.667  Extension of benefits.--

(1)  Each group, blanket, or franchise policy or contract renewed, delivered, or issued for delivery in this state shall contain a reasonable provision for extension of benefits in the event of the total disability of a certificateholder at the date of discontinuance of the policy or contract. The extension is required regardless of whether the group policyholder or other entity secures replacement coverage from a new insurer or foregoes the provision of coverage.

(2)  Each disability income or indemnity-type group, blanket, or franchise plan must contain a reasonable extension of benefits or accrued liability provision that provides for continuation of policy benefits in connection with the disability.

(3)(a)  In the case of hospital, medical, or surgical expense coverage other than for dental or maternity expense, a reasonable extension-of-benefits or accrued liability provision is required. The required provision must provide for continuation of policy benefits in connection with the treatment of a specific accident or illness incurred while the policy was in effect. The required provision is reasonable if it provides an extension of at least 12 months under "major medical" type of coverage and, under other types of hospital, medical, or surgical coverage, provides an extension of at least 90 days or an accrued liability for expenses incurred during a period of disability.

(b)1.  An extension of benefits is required in a group, blanket, or franchise policy or contract that provides coverage for dental procedures either in the form of reimbursed expenses or services performed.

2.  The extension required by subparagraph 1. applies if all of the following apply:

a.  The course of treatment or dental procedures were recommended in writing and commenced, in connection with a specific accident or illness incurred while the policy was in effect, by the attending physician or dentist to the patient while the patient was covered by the policy or contract.

b.  The dental procedures were procedures for other than routine examinations, prophylaxis, X rays, sealants, or orthodontic services.

c.  The dental procedures were performed within 90 days after the patient's coverage ceased under the policy or contract and the termination of coverage did not occur as a result of the patient's, or, in the case of a dependent child, the child's parent's, voluntary termination of coverage.

3.  The extension of benefits terminates upon the earlier of:

a.  The end of the 90-day period specified in sub-subparagraph 2.c.

b.  The date the patient becomes covered under the succeeding policy or contract providing coverage or services for similar dental procedures.

4.  If coverage or services for the dental procedures referred to in sub-subparagraph 2.a. are excluded by the succeeding policy or contract through the use of an elimination period, the patient is not covered by the succeeding policy or contract and the extension of benefits does not terminate.

5.  All policy or contractual limitations, exclusions, or reductions that would have applied to the specific dental procedures had the coverage on the patient not terminated apply during the extension of benefits.

(c)  In the case of maternity expense coverage, a reasonable extension of benefits or accrued liability provision is required. The required provision must provide for continuation of policy benefits in connection with maternity expenses for a pregnancy which commenced while the policy was in effect. The extension shall be for the period of that pregnancy and may not be based upon total disability.

(4)  Any applicable extension of benefits or accrued liability provision shall be described in both the policy or contract involved and the group insurance certificates.

(5)  The benefits payable during any period of extension or accrued liability may be subject to the regular benefit limits of the policy or contract, but may not provide benefit limits lower than the limits provided in the policy or contract.

(6)  This section also applies to holders of group certificates which are renewed, delivered, or issued for delivery to residents of this state under group policies effectuated or delivered outside this state, unless a succeeding carrier under a group policy has agreed to assume liability for the benefits.

History.--s. 6, ch. 75-279; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 1, 2, ch. 80-344; s. 427, ch. 81-259; ss. 2, 3, ch. 81-318; ss. 518, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 5, ch. 90-249; ss. 69, 114, ch. 92-318.

627.6675  Conversion on termination of eligibility.--Subject to all of the provisions of this section, a group policy delivered or issued for delivery in this state by an insurer or nonprofit health care services plan that provides, on an expense-incurred basis, hospital, surgical, or major medical expense insurance, or any combination of these coverages, shall provide that an employee or member whose insurance under the group policy has been terminated for any reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy, and under any group policy providing similar benefits that the terminated group policy replaced, for at least 3 months immediately prior to termination, shall be entitled to have issued to him or her by the insurer a policy or certificate of health insurance, referred to in this section as a "converted policy." A group insurer may meet the requirements of this section by contracting with another insurer, authorized in this state, to issue an individual converted policy, which policy has been approved by the department under s. 627.410. An employee or member shall not be entitled to a converted policy if termination of his or her insurance under the group policy occurred because he or she failed to pay any required contribution, or because any discontinued group coverage was replaced by similar group coverage within 31 days after discontinuance.

(1)  TIME LIMIT.--Written application for the converted policy shall be made and the first premium must be paid to the insurer, not later than 63 days after termination of the group policy. However, if termination was the result of failure to pay any required premium or contribution and such nonpayment of premium was due to acts of an employer or policyholder other than the employee or certificateholder, written application for the converted policy must be made and the first premium must be paid to the insurer not later than 63 days after notice of termination is mailed by the insurer or the employer, whichever is earlier, to the employee's or certificateholder's last address as shown by the record of the insurer or the employer, whichever is applicable. In such case of termination due to nonpayment of premium by the employer or policyholder, the premium for the converted policy may not exceed the rate for the prior group coverage for the period of coverage under the converted policy prior to the date notice of termination is mailed to the employee or certificateholder. For the period of coverage after such date, the premium for the converted policy is subject to the requirements of subsection (3).

(2)  EVIDENCE OF INSURABILITY.--The converted policy shall be issued without evidence of insurability.

(3)  CONVERSION PREMIUM; EFFECT ON PREMIUM RATES FOR GROUP COVERAGE.--

(a)  The premium for the converted policy shall be determined in accordance with premium rates applicable to the age and class of risk of each person to be covered under the converted policy and to the type and amount of insurance provided. However, the premium for the converted policy may not exceed 200 percent of the standard risk rate as established by the department, pursuant to this subsection.

(b)  Actual or expected experience under converted policies may be combined with such experience under group policies for the purposes of determining premium and loss experience and establishing premium rate levels for group coverage.

(c)  The department shall annually determine standard risk rates, using reasonable actuarial techniques and standards adopted by the department by rule. The standard risk rates must be determined as follows:

1.  Standard risk rates for individual coverage must be determined separately for indemnity policies, preferred provider/exclusive provider policies, and health maintenance organization contracts.

2.  The department shall survey insurers and health maintenance organizations representing at least an 80 percent market share, based on premiums earned in the state for the most recent calendar year, for each of the categories specified in subparagraph 1.

3.  Standard risk rate schedules must be determined, computed as the average rates charged by the carriers surveyed, giving appropriate weight to each carrier's statewide market share of earned premiums.

4.  The rate schedule shall be determined from analysis of the one county with the largest market share in the state of all such carriers.

5.  The rate for other counties must be determined by using the weighted average of each carrier's county factor relationship to the county determined in subparagraph 4.

6.  The rate schedule must be determined for different age brackets and family size brackets.

(4)  EFFECTIVE DATE OF COVERAGE.--The effective date of the converted policy shall be the day following the termination of insurance under the group policy.

(5)  SCOPE OF COVERAGE.--The converted policy shall cover the employee or member and his or her dependents who were covered by the group policy on the date of termination of insurance. At the option of the insurer, a separate converted policy may be issued to cover any dependent.

(6)  OPTIONAL COVERAGE.--The insurer shall not be required to issue a converted policy covering any person who is or could be covered by Medicare. The insurer shall not be required to issue a converted policy covering a person if paragraphs (a) and (b) apply to the person:

(a)  If any of the following apply to the person:

1.  The person is covered for similar benefits by another hospital, surgical, medical, or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan, or by any other plan or program.

2.  The person is eligible for similar benefits, whether or not actually provided coverage, under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis.

3.  Similar benefits are provided for or are available to the person under any state or federal law.

(b)  If the benefits provided under the sources referred to in subparagraph (a)1. or the benefits provided or available under the sources referred to in subparagraphs (a)2. and 3., together with the benefits provided by the converted policy, would result in overinsurance according to the insurer's standards. The insurer's standards must bear some reasonable relationship to actual health care costs in the area in which the insured lives at the time of conversion and must be filed with the department prior to their use in denying coverage.

(7)  INFORMATION REQUESTED BY INSURER.--

(a)  A converted policy may include a provision under which the insurer may request information, in advance of any premium due date, of any person covered thereunder as to whether:

1.  The person is covered for similar benefits by another hospital, surgical, medical, or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan or by any other plan or program.

2.  The person is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis.

3.  Similar benefits are provided for or are available to the person under any state or federal law.

(b)  The converted policy may provide that the insurer may refuse to renew the policy or the coverage of any person only for one or more of the following reasons:

1.  Either the benefits provided under the sources referred to in subparagraphs (a)1. and 2. for the person or the benefits provided or available under the sources referred to in subparagraph (a)3. for the person, together with the benefits provided by the converted policy, would result in overinsurance according to the insurer's standards on file with the department.

2.  The converted policyholder fails to provide the information requested pursuant to paragraph (a).

3.  Fraud or intentional misrepresentation in applying for any benefits under the converted policy.

4.  Other reasons approved by the department.

(8)  BENEFITS OFFERED.--

(a)  An insurer shall not be required to issue a converted policy that provides benefits in excess of those provided under the group policy from which conversion is made.

(b)  An insurer shall offer the benefits specified in s. 627.668 and the benefits specified in s. 627.669 if those benefits were provided in the group plan.

(c)  An insurer shall offer maternity benefits and dental benefits if those benefits were provided in the group plan.

(9)  PREEXISTING CONDITION PROVISION.--The converted policy shall not exclude a preexisting condition not excluded by the group policy. However, the converted policy may provide that any hospital, surgical, or medical benefits payable under the converted policy may be reduced by the amount of any such benefits payable under the group policy after the termination of ¹covered under the group policy. The converted policy may also provide that during the first policy year the benefits payable under the converted policy, together with the benefits payable under the group policy, shall not exceed those that would have been payable had the individual's insurance under the group policy remained in force.

(10)  REQUIRED OPTION FOR MAJOR MEDICAL COVERAGE.--Subject to the provisions and conditions of this part, the employee or member shall be entitled to obtain a converted policy providing major medical coverage under a plan meeting the following requirements:

(a)  A maximum benefit equal to the lesser of the policy limit of the group policy from which the individual converted or $500,000 per covered person for all covered medical expenses incurred during the covered person's lifetime.

(b)  Payment of benefits at the rate of 80 percent of covered medical expenses which are in excess of the deductible, until 20 percent of such expenses in a benefit period reaches $2,000, after which benefits will be paid at the rate of 90 percent during the remainder of the contract year unless the insured is in the insurer's case management program, in which case benefits shall be paid at the rate of 100 percent during the remainder of the contract year. For the purposes of this paragraph, "case management program" means the specific supervision and management of the medical care provided or prescribed for a specific individual, which may include the use of health care providers designated by the insurer. Payment of benefits for outpatient treatment of mental illness, if provided in the converted policy, may be at a lesser rate but not less than 50 percent.

(c)  A deductible for each calendar year that must be $500, $1,000, or $2,000, at the option of the policyholder.

(d)  The term "covered medical expenses," as used in this subsection, shall be consistent with those customarily offered by the insurer under group or individual health insurance policies but is not required to be identical to the covered medical expenses provided in the group policy from which the individual converted.

(11)  ALTERNATIVE PLANS.--The insurer shall, in addition to the option required by subsection (10), offer the standard health benefit plan, as established pursuant to s. 627.6699(12). The insurer may, at its option, also offer alternative plans for group health conversion in addition to the plans required by this section.

(12)  RETIREMENT COVERAGE.--If coverage would be continued under the group policy on an employee following the employee's retirement prior to the time he or she is or could be covered by Medicare, the employee may elect, instead of such continuation of group insurance, to have the same conversion rights as would apply had his or her insurance terminated at retirement by reason or termination of employment or membership.

(13)  REDUCTION OF COVERAGE DUE TO MEDICARE.--The converted policy may provide for reduction of coverage on any person upon his or her eligibility for coverage under Medicare or under any other state or federal law providing for benefits similar to those provided by the converted policy.

(14)  CONVERSION PRIVILEGE ALLOWED.--The conversion privilege shall also be available to any of the following:

(a)  The surviving spouse, if any, at the death of the employee or member, with respect to the spouse and the children whose coverages under the group policy terminate by reason of the death, otherwise to each surviving child whose coverage under the group policy terminates by reason of such death, or, if the group policy provides for continuation of dependents' coverages following the employee's or member's death, at the end of such continuation.

(b)  The former spouse whose coverage would otherwise terminate because of annulment or dissolution of marriage, if the former spouse is dependent for financial support.

(c)  The spouse of the employee or member upon termination of coverage of the spouse, while the employee or member remains insured under the group policy, by reason of ceasing to be a qualified family member under the group policy, with respect to the spouse and the children whose coverages under the group policy terminate at the same time.

(d)  A child solely with respect to himself or herself upon termination of his or her coverage by reason of ceasing to be a qualified family member under the group policy, if a conversion privilege is not otherwise provided in this subsection with respect to such termination.

(15)  BENEFIT LEVELS.--If the benefit levels required in subsection (10) exceed the benefit levels provided under the group policy, the conversion policy may offer benefits which are substantially similar to those provided under the group policy in lieu of those required in subsection (10).

(16)  GROUP COVERAGE INSTEAD OF INDIVIDUAL COVERAGE.--The insurer may elect to provide group insurance coverage instead of issuing a converted individual policy.

(17)  NOTIFICATION.--A notification of the conversion privilege shall be included in each certificate of coverage. The insurer shall mail an election and premium notice form, including an outline of coverage, on a form approved by the department, within 14 days after an individual who is eligible for a converted policy gives notice to the insurer that the individual is considering applying for the converted policy or otherwise requests such information. The outline of coverage must contain a description of the principal benefits and coverage provided by the policy and its principal exclusions and limitations, including, but not limited to, deductibles and coinsurance.

(18)  OUTSIDE CONVERSIONS.--A converted policy that is delivered outside of this state must be on a form that could be delivered in the other jurisdiction as a converted policy had the group policy been issued in that jurisdiction.

(19)  APPLICABILITY.--This section does not require conversion on termination of eligibility for a policy or contract that provides benefits for specified diseases, or for accidental injuries only, disability income, Medicare supplement, hospital indemnity, limited benefit, nonconventional, or excess policies.

(20)  Nothing in this section or in the incorporation of it into insurance policies shall be construed to require insurers to provide benefits equal to those provided in the group policy from which the individual converted; provided, however, that comprehensive benefits are offered which shall be subject to approval by the Insurance Commissioner.

History.--s. 2, ch. 78-385; ss. 1, 10, ch. 80-341; s. 2, ch. 81-318; ss. 519, 523, 809(2nd), ch. 82-243; ss. 64, 79, ch. 82-386; s. 112, ch. 83-216; s. 3, ch. 85-177; s. 6, ch. 90-249; ss. 138, 149, ch. 92-33; ss. 114, 116, ch. 92-318; s. 352, ch. 97-102; s. 13, ch. 97-179; s. 11, ch. 98-159; s. 13, ch. 99-204; s. 7, ch. 99-275; s. 12, ch. 99-393.

¹Note.--The word "covered" appears as enacted by s. 138, ch. 92-33.

627.668  Optional coverage for mental and nervous disorders required; exception.--

(1)  Every insurer, health maintenance organization, and nonprofit hospital and medical service plan corporation transacting group health insurance or providing prepaid health care in this state shall make available to the policyholder as part of the application, for an appropriate additional premium under a group hospital and medical expense-incurred insurance policy, under a group prepaid health care contract, and under a group hospital and medical service plan contract, the benefits or level of benefits specified in subsection (2) for the necessary care and treatment of mental and nervous disorders, as defined in the standard nomenclature of the American Psychiatric Association, subject to the right of the applicant for a group policy or contract to select any alternative benefits or level of benefits as may be offered by the insurer, health maintenance organization, or service plan corporation provided that, if alternate inpatient, outpatient, or partial hospitalization benefits are selected, such benefits shall not be less than the level of benefits required under paragraph (2)(a), paragraph (2)(b), or paragraph (2)(c), respectively.

(2)  Under group policies or contracts, inpatient hospital benefits, partial hospitalization benefits, and outpatient benefits consisting of durational limits, dollar amounts, deductibles, and coinsurance factors shall not be less favorable than for physical illness generally, except that:

(a)  Inpatient benefits may be limited to not less than 30 days per benefit year as defined in the policy or contract. If inpatient hospital benefits are provided beyond 30 days per benefit year, the durational limits, dollar amounts, and coinsurance factors thereto need not be the same as applicable to physical illness generally.

(b)  Outpatient benefits may be limited to $1,000 for consultations with a licensed physician, a psychologist licensed pursuant to chapter 490, a mental health counselor licensed pursuant to chapter 491, a marriage and family therapist licensed pursuant to chapter 491, and a clinical social worker licensed pursuant to chapter 491. If benefits are provided beyond the $1,000 per benefit year, the durational limits, dollar amounts, and coinsurance factors thereof need not be the same as applicable to physical illness generally.

(c)  Partial hospitalization benefits shall be provided under the direction of a licensed physician. For purposes of this part, the term "partial hospitalization services" is defined as those services offered by a program accredited by the Joint Commission on Accreditation of Hospitals (JCAH) or in compliance with equivalent standards. Alcohol rehabilitation programs accredited by the Joint Commission on Accreditation of Hospitals or approved by the state and licensed drug abuse rehabilitation programs shall also be qualified providers under this section. In any benefit year, if partial hospitalization services or a combination of inpatient and partial hospitalization are utilized, the total benefits paid for all such services shall not exceed the cost of 30 days of inpatient hospitalization for psychiatric services, including physician fees, which prevail in the community in which the partial hospitalization services are rendered. If partial hospitalization services benefits are provided beyond the limits set forth in this paragraph, the durational limits, dollar amounts, and coinsurance factors thereof need not be the same as those applicable to physical illness generally.

(3)  Insurers must maintain strict confidentiality regarding psychiatric and psychotherapeutic records submitted to an insurer for the purpose of reviewing a claim for benefits payable under this section. These records submitted to an insurer are subject to the limitations of s. 456.057, relating to the furnishing of patient records.

History.--ss. 1, 2, ch. 76-160; s. 3, ch. 76-168; s. 1, ch. 77-174; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 521, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 113, ch. 83-216; ss. 1, 2, ch. 83-268; s. 149, ch. 92-33; ss. 70, 114, ch. 92-318; s. 158, ch. 98-166; s. 219, ch. 2000-160.

627.6685  Mental health coverage.--

(1)  DEFINITIONS.--As used in this section, the term:

(a)  "Aggregate lifetime limit" means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount that may be paid with respect to such benefits under the plan or health insurance coverage with respect to an individual or other coverage unit.

(b)  "Annual limit" means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount of benefits that may be paid with respect to such benefits in a 12-month period under the plan or health insurance coverage with respect to an individual or other coverage unit.

(c)  "Medical or surgical benefits" means benefits with respect to medical or surgical services, as defined under the terms of the plan or coverage, but does not include mental health benefits.

(d)  "Mental health benefits" means benefits with respect to mental health services, as defined under the terms of the plan or coverage, but does not include benefits with respect to treatment of substance abuse or chemical dependency.

(e)  "Health insurance coverage" means coverage provided by an authorized insurer or by a health maintenance organization.

(2)  BENEFITS.--

(a)1.  In the case of a group health plan, or health insurance coverage offered in connection with such a plan, which provides both medical and surgical benefits and mental health benefits:

a.  If the plan or coverage does not include an aggregate lifetime limit on substantially all medical and surgical benefits, the plan or coverage may not impose any aggregate lifetime limit on mental health benefits.

b.  If the plan or coverage includes an aggregate lifetime limit on substantially all medical and surgical benefits, the plan or coverage must:

(I)  Apply that applicable lifetime limit both to the medical and surgical benefits to which it otherwise would apply and to mental health benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health benefits; or

(II)  Not include any aggregate lifetime limit on mental health benefits which is less than that applicable lifetime limit.

c.  For any plan or coverage that is not described in sub-subparagraph a. or sub-subparagraph b. and that includes no or different aggregate lifetime limits on different categories of medical and surgical benefits, the department shall establish rules under which sub-subparagraph b. is applied to such plan or coverage with respect to mental health benefits by substituting for the applicable lifetime limit an average aggregate lifetime limit that is computed taking into account the weighted average of the aggregate lifetime limits applicable to such categories.

2.  In the case of a group health plan, or health insurance coverage offered in connection with such a plan, which provides both medical and surgical benefits and mental health benefits:

a.  If the plan or coverage does not include an annual limit on substantially all medical and surgical benefits, the plan or coverage may not impose any annual limit on mental health benefits.

b.  If the plan or coverage includes an annual limit on substantially all medical and surgical benefits, the plan or coverage must:

(I)  Apply that applicable annual limit both to medical and surgical benefits to which it otherwise would apply and to mental health benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health benefits; or

(II)  Not include any annual limit on mental health benefits which is less than the applicable annual limit.

c.  For any plan or coverage that is not described in sub-subparagraph a. or sub-subparagraph b. and that includes no or different annual limits on different categories of medical and surgical benefits, the department shall establish rules under which sub-subparagraph b. is applied to such plan or coverage with respect to mental health benefits by substituting for the applicable annual limit an average annual limit that is computed taking into account the weighted average of the annual limits applicable to such categories.

(b)  This section may not be construed:

1.  As requiring a group health plan, or health insurance coverage offered in connection with such a plan, to provide any mental health benefits; or

2.  In the case of a group health plan, or health insurance coverage offered in connection with such a plan, which provides mental health benefits, as affecting the terms and conditions, including cost-sharing, limits on numbers of visits or days of coverage, and requirements relating to medical necessity, relating to the amount, duration, or scope of mental health benefits under the plan or coverage, except as specifically provided in paragraph (a) with respect to parity in the imposition of aggregate lifetime limits and annual limits for mental health benefits.

(3)  EXEMPTIONS.--

(a)  This section does not apply to any group health plan, or group health insurance coverage offered in connection with a group health plan, for any plan year of a small employer as defined in s. 627.6699.

(b)  This section does not apply with respect to a group health plan, or health insurance coverage offered in connection with a group health plan, if the application of this section to such plan or coverage results in an increase in the cost under the plan or for such coverage of at least 1 percent.

(4)  SEPARATE APPLICATION TO EACH OPTION OFFERED.--For any group health plan that offers a participant or beneficiary two or more benefit-package options under the plan, the requirements of this section apply separately with respect to each such option.

(5)  DURATION.--This section does not apply to benefits for services furnished on or after September 30, 2001.

(6)  CONFLICTING PROVISIONS.--The provisions of this section prevail over any conflicting provision of s. 627.668.

History.--s. 12, ch. 98-159.

627.669  Optional coverage required for substance abuse impaired persons; exception.--

(1)  Insurers, health maintenance organizations, and nonprofit health care services plans transacting group health insurance or providing prepaid health care in this state shall make available to the policyholder as part of the application for any such policy of insurance issued or delivered in this state or contract executed or operative in this state the level of benefits specified in subsection (2) for the necessary care and treatment of substance abuse impaired persons, subject to the right of the applicant for a group policy or contract to select any alternative benefits or level of benefits as may be offered by the insurer, health maintenance organization, or plan. For the purposes of this section, the term "substance abuse impaired" has the same meaning ascribed in s. 397.311.

(2)  Inpatient benefits or outpatient benefits shall consist of:

(a)  Basic benefit.--Intensive treatment program for the treatment of substance abuse impaired persons.

(b)  Limitations.--

1.  Benefits shall be available only to covered individuals in a group health plan.

2.  There shall be a minimum lifetime benefit of $2,000.

3.  There shall be allowable a maximum of 44 outpatient visits.

4.  The maximum benefit payable for an outpatient visit shall not exceed $35.

5.  Detoxification shall not be considered as a benefit under the outpatient program.

(3)  The benefits provided under this section shall be applicable only if treatment is provided by, or under the supervision of, or is prescribed by, a licensed physician or licensed psychologist and if services are provided in a program accredited by the Joint Commission on Accreditation of Hospitals or approved by the state.

History.--ss. 1, 2, 3, ch. 79-392; s. 2, ch. 81-318; ss. 522, 523, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 83-216; s. 114, ch. 92-318; s. 35, ch. 93-39.

627.6691  Coverage for osteoporosis screening, diagnosis, treatment, and management.--Any group, blanket, or franchise health insurance policy that covers a resident of this state and that is issued, amended, delivered, or renewed in this state after October 1, 1996, must provide coverage for the medically necessary diagnosis and treatment of osteoporosis for high-risk individuals, including, but not limited to, estrogen-deficient individuals who are at clinical risk for osteoporosis, individuals who have vertebral abnormalities, individuals who are receiving long-term glucocorticoid (steroid) therapy, individuals who have primary hyperparathyroidism, and individuals who have a family history of osteoporosis. This section does not apply to specified-accident, specified-disease, hospital-indemnity, Medicare supplement, or long-term-care health insurance policies or to the state employee health insurance program.

History.--s. 3, ch. 96-282.

627.66911  Required coverage for cleft lip and cleft palate.--A health insurance policy that covers a child under the age of 18 must provide coverage for treatment of cleft lip and cleft palate for the child. The coverage must include medical, dental, speech therapy, audiology, and nutrition services only if such services are prescribed by the treating physician or surgeon and such physician or surgeon certifies that such services are medically necessary and consequent to treatment of the cleft lip or cleft palate. The coverage required by this section is subject to terms and conditions applicable to other benefits. This section does not apply to specified-accident, specified-disease, hospital indemnity, limited benefit disability income, or long-term care insurance policies.

History.--s. 3, ch. 98-66.

627.6692  Florida Health Insurance Coverage Continuation Act.--

(1)  SHORT TITLE.--This section may be cited as the "Florida Health Insurance Coverage Continuation Act."

(2)  PURPOSE AND INTENT.--The purpose and intent of this section is to ensure continued access to affordable health insurance coverage for employees of small employers and their dependents and other qualified beneficiaries not currently protected by the Consolidated Omnibus Budget Reconciliation Act of 1985.

(3)  APPLICABILITY.--This section does not apply if continuation of coverage benefits are available to covered employees or other qualified beneficiaries pursuant to s. 4980B of the Internal Revenue Code, Chapter 18 of the Employee Retirement Income Security Act, 29 U.S.C. ss. 1161 et seq., or Chapter 6A of the Public Health Service Act, 42 U.S.C. ss. 300bb-1 et seq.

(4)  DEFINITIONS.--As used in this section, the term:

(a)  "Applicable premium" means, with respect to any period of continuation of coverage for qualified beneficiaries, the premium charged by the group health plan for such period of coverage for beneficiaries with respect to whom a qualifying event has not occurred, regardless of whether such premium is paid by the employer or employee.

(b)  "Carrier" means a carrier, as defined in s. 627.6699 and subject to s. 627.6699, which issued the small employer's group health plan.

(c)  "Continuation coverage" means coverage under the group health plan which meets the requirements of paragraph (5)(a).

(d)  "Covered employee" means an eligible employee, as defined in s. 627.6699 and subject to s. 627.6699, who is or was provided coverage under a group health plan by virtue of the individual's employment or previous employment with a small employer.

(e)  "Group health plan" means any health benefit plan, as defined in s. 627.6699 and subject to s. 627.6699, maintained by a small employer, which health benefit plan provides health care benefit coverage for the employer's employees or former employees, or for the dependents of such employees or former employees.

(f)  "Qualified beneficiary" means any individual who, on the day before the qualifying event for the covered employee, is a beneficiary under the group health plan by virtue of the individual being:

1.  The covered employee, except if the employee is terminated for gross misconduct. The employer's decision to terminate for gross misconduct is conclusive as to the carrier.

2.  The spouse of the covered employee, as defined in s. 627.6699 as a dependent.

3.  The dependent child of the covered employee, as defined in s. 627.6699 as a dependent.

(g)  "Qualifying event" means, with respect to any covered employee, any of the following events which, but for the election of continuation coverage, would result in a loss of coverage to a qualified beneficiary:

1.  The death of the covered employee.

2.  The termination or reduction of hours of the covered employee's employment, except that termination of an employee for gross misconduct does not constitute a qualifying event. The employer's decision to terminate for gross misconduct is conclusive as to the carrier.

3.  The divorce or legal separation of the covered employee from the covered employee's spouse.

4.  A covered employee's becoming entitled to benefits under either part A or part B of Title XVIII of the Social Security Act (Medicare).

5.  A dependent child's ceasing to be a dependent child under the generally applicable requirements of the group health plan.

6.  A retiree or the spouse or child of a retiree losing coverage within 1 year before or after commencement of a bankruptcy proceeding under Title XI of the United States Code by the employer from whose employment the covered employee retired.

(h)  "Small employer" means any person who meets the definition of "small employer" as set forth in s. 627.6699 and subject to s. 627.6699, who for purposes of this section employs fewer than 20 employees.

(5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.--

(a)  A group health plan issued to a small employer must provide that each qualified beneficiary who would lose coverage under the group health plan because of a qualifying event is entitled, without evidence of insurability, to elect, within the election period provided in this section, continuation coverage under the employer's group health plan. A qualified beneficiary who elects continuation coverage is subject to all the terms and conditions applicable under the group health plan.

(b)  Coverage under the group health plan must, at a minimum, extend for the period beginning on the date of the qualifying event and ending not earlier than the earliest of the following:

1.  The date that is 18 months after the date on which the qualified beneficiary's benefits under the group health plan would otherwise have ceased because of a qualifying event.

2.  The date on which coverage ceases under the group health plan by reason of a failure to make timely payment of the applicable premium with respect to any qualified beneficiary.

3.  The date a qualified beneficiary becomes covered under any other group health plan, if the qualified beneficiary will not be subject to any exclusion or limitation because of a preexisting condition of that beneficiary.

4.  The date a qualified beneficiary is entitled to benefits under either part A or part B of Title XVIII of the Social Security Act (Medicare).

5.  The date on which the employer terminates coverage under the group health plan for all employees. If the employer terminates coverage under the group health plan for all employees and if such group health plan is replaced by similar coverage under another group health plan, the qualified beneficiary shall have the right to become covered under the new group health plan for the balance of the period that she or he would have remained covered under the prior group health plan. A qualified beneficiary is to be treated in the same manner as an active beneficiary for whom a qualifying event has not taken place.

(c)  A qualified beneficiary who is determined, under Title II or Title XVI of the Social Security Act, to have been disabled at the time of a qualifying event, may be eligible to continue coverage for an additional 11 months (29 months total) if the qualified beneficiary provides the written determination of disability from the Social Security Administration to the insurance carrier within 60 days of the date of determination of disability by the Social Security Administration and prior to the end of the 18-month continuation period. The insurance carrier can charge up to 150 percent of the group rate during the 11-month disability extension. The qualified beneficiary must notify the insurance carrier within 30 days upon the determination that the qualified beneficiary is no longer disabled under Title II or Title XVI of the Social Security Act.

(d)1.  A qualified beneficiary must give written notice to the insurance carrier within 30 days after the occurrence of a qualifying event. Unless otherwise specified in the notice, a notice by any qualified beneficiary constitutes notice on behalf of all qualified beneficiaries. The written notice must inform the insurance carrier of the occurrence and type of the qualifying event giving rise to the potential election by a qualified beneficiary of continuation of coverage under the group health plan issued by that insurance carrier, except that in cases where the covered employee has been involuntarily discharged, the nature of such discharge need not be disclosed. The written notice must, at a minimum, identify the employer, the group health plan number, the name and address of all qualified beneficiaries, and such other information required by the insurance carrier under the terms of the group health plan or the department by rule, to the extent that such information is known by the qualified beneficiary.

2.  Within 14 days after the receipt of written notice under subparagraph 1., the insurance carrier shall send each qualified beneficiary by certified mail an election and premium notice form, approved by the department, which form must provide for the qualified beneficiary's election or nonelection of continuation of coverage under the group health plan and the applicable premium amount due after the election to continue coverage. This subparagraph does not require separate mailing of notices to qualified beneficiaries residing in the same household, but requires a separate mailing for each separate household.

(e)1.  A covered employee or other qualified beneficiary who wishes continuation of coverage must pay the initial premium and elect such continuation in writing to the insurance carrier issuing the employer's group health plan within 30 days after receiving notice from the insurance carrier under paragraph (d). Subsequent premiums are due by the grace period expiration date. The insurance carrier or the insurance carrier's designee shall process all elections promptly and provide coverage retroactively to the date coverage would otherwise have terminated. The premium due shall be for the period beginning on the date coverage would have otherwise terminated due to the qualifying event. The first premium payment must include the coverage paid to the end of the month in which the first payment is made. After the election, the insurance carrier must bill the qualified beneficiary for premiums once each month, with a due date on the first of the month of coverage and allowing a 30-day grace period for payment.

2.  Except as otherwise specified in an election, any election by a qualified beneficiary shall be deemed to include an election of continuation of coverage on behalf of any other qualified beneficiary residing in the same household who would lose coverage under the group health plan by reason of a qualifying event. This subparagraph does not preclude a qualified beneficiary from electing continuation of coverage on behalf of any other qualified beneficiary.

(f)  The premium paid for continuation of coverage may not exceed 115 percent of the applicable premium.

(g)  If an insurance carrier fails to comply with the notice requirements of subparagraph (d)2. and such noncompliance results in the failure of an eligible qualified beneficiary to elect continuation under the group health plan, the qualified beneficiary shall be deemed to have timely elected continuation of coverage within the election period and shall be covered under the group health plan at the expense of the noncomplying insurance carrier. The liability exposure of a noncomplying insurance carrier under this paragraph shall be limited to that period which includes the effective date of coverage pursuant to an affirmative election through the date on which the qualified beneficiary receives actual notice. This paragraph does not apply to the extent that the failure of the insurance carrier to comply with applicable notice requirements was due to noncompliance by the qualified beneficiary with notice requirements applicable to the qualified beneficiary.

(6)  ADMINISTRATOR CERTIFICATE OF AUTHORITY REQUIRED.--

(a)  An insurance carrier may contract with an administrator, as defined in s. 626.88, to meet the administrative requirements of this section. An administrator is required to have a certificate of authority pursuant to part VII of chapter 626.

(b)  An insurance carrier may contract with the covered employee's employer, and the employer may contract with the employer's designee, provided that the carrier consents to the designee for the employer or such designee, for the employer to perform the administrative requirements of this section, including collecting and forwarding premiums to the insurance carrier, in return for consideration from the insurance carrier. Such an agreement must be arranged in a separate addendum to the policy contract. Such agreement does not relieve the insurance carrier of its duties and responsibilities to qualified beneficiaries as required by this section. An insurance carrier may not, as a condition of providing coverage to a small employer, require the employer to perform duties related to this section.

(c)  An administrator certificate of authority is not required for a person who does not adjudicate or process claims and is not controlled by any licensed insurance company, prepaid hospital or medical plan, health maintenance organization, or multiple employer welfare arrangement, but who solely performs administrative services to provide the benefits required pursuant to this section; to the Consolidated Omnibus Budget Reconciliation Act (COBRA) as amended, 29 U.S.C. ss. 1161 et seq.; or to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. ss. 1001 et seq., or Chapter 6A of the Public Health Service Act, 42 U.S.C. ss. 300bb-1 et seq.; or for an employer pursuant to a contract with the insurance carrier who meets the requirements of this section or the employer's designee, provided that the carrier consents to the designee pursuant to a contract with the carrier that meets the requirements of this section or subject to this section.

(7)  NOTICE REQUIRED IN POLICIES, CONTRACTS, CERTIFICATES, AND PLAN BOOKLETS.--The insurance carrier shall include at the time of the first renewal of the policy after February 1, 1997, a notification of the right to continue coverage as provided by this section and the procedures for requesting such continuation in each policy, contract, and certificate of coverage and in the plan booklet. The plan booklet must also contain all information necessary for a qualified beneficiary to comply with the notice requirements of subparagraph (5)(e)1., and must contain a form for such notice.

(8)  NOTICE TO COVERED EMPLOYEES.--The insurance carrier shall mail an initial notice to each covered employee, covered spouse, and covered dependent describing their rights under this section. A mailing to one household constitutes a mailing to all covered persons residing in that household. A separate mailing is required for each separate household.

(9)  RULES.--The department shall adopt rules establishing standards for the initial notice of rights and as otherwise necessary to administer this section.

History.--s. 1, ch. 96-319; s. 1734, ch. 97-102.

627.6698  Attorney's fees.--

(1)  Upon the rendition of a judgment by any of the courts of this state against an insurer and in favor of any resident of this state who is one of a group of persons insured under a master group health insurance policy executed by the insurer and covering residents of this state, whether issued or delivered inside or outside this state, the trial court or, in the event of an appeal in which the insured prevails, the appellate court shall award the insured a reasonable attorney's fee. However, attorney's fees shall not be allowed if the suit was commenced prior to the expiration of 60 days after proof of the claim was duly filed with the insurer.

(2)  When so awarded, the attorney's fee shall be included in the judgment or decree rendered in the case.

History.--ss. 2, 3, ch. 87-278; s. 114, ch. 92-318.

¹627.6699  Employee Health Care Access Act.--

(1)  SHORT TITLE.--This section may be cited as the "Employee Health Care Access Act."

(2)  PURPOSE AND INTENT.--The purpose and intent of this section is to promote the availability of health insurance coverage to small employers regardless of their claims experience or their employees' health status, to establish rules regarding renewability of that coverage, to establish limitations on the use of exclusions for preexisting conditions, to provide for development of a standard health benefit plan and a basic health benefit plan to be offered to all small employers, to provide for establishment of a reinsurance program for coverage of small employers, and to improve the overall fairness and efficiency of the small group health insurance market.

(3)  DEFINITIONS.--As used in this section, the term:

(a)  "Actuarial certification" means a written statement, by a member of the American Academy of Actuaries or another person acceptable to the department, that a small employer carrier is in compliance with subsection (6), based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the carrier in establishing premium rates for applicable health benefit plans.

(b)  "Basic health benefit plan" and "standard health benefit plan" mean low-cost health care plans developed pursuant to subsection (12).

(c)  "Board" means the board of directors of the program.

(d)  "Carrier" means a person who provides health benefit plans in this state, including an authorized insurer, a health maintenance organization, a multiple-employer welfare arrangement, or any other person providing a health benefit plan that is subject to insurance regulation in this state. However, the term does not include a multiple-employer welfare arrangement, which multiple-employer welfare arrangement operates solely for the benefit of the members or the members and the employees of such members, and was in existence on January 1, 1992.

(e)  "Case management program" means the specific supervision and management of the medical care provided or prescribed for a specific individual, which may include the use of health care providers designated by the carrier.

(f)  "Creditable coverage" has the same meaning ascribed in s. 627.6561.

(g)  "Dependent" means the spouse or child of an eligible employee, subject to the applicable terms of the health benefit plan covering that employee.

(h)  "Eligible employee" means an employee who works full time, having a normal workweek of 25 or more hours, and who has met any applicable waiting-period requirements or other requirements of this act. The term includes a self-employed individual, a sole proprietor, a partner of a partnership, or an independent contractor, if the sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer, but does not include a part-time, temporary, or substitute employee.

(i)  "Established geographic area" means the county or counties, or any portion of a county or counties, within which the carrier provides or arranges for health care services to be available to its insureds, members, or subscribers.

(j)  "Guaranteed-issue basis" means an insurance policy that must be offered to an employer, employee, or dependent of the employee, regardless of health status, preexisting conditions, or claims history.

(k)  "Health benefit plan" means any hospital or medical policy or certificate, hospital or medical service plan contract, or health maintenance organization subscriber contract. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, vision-only, Medicare supplement, long-term care, or disability income insurance; similar supplemental plans provided under a separate policy, certificate, or contract of insurance, which cannot duplicate coverage under an underlying health plan and are specifically designed to fill gaps in the underlying health plan, coinsurance, or deductibles; coverage issued as a supplement to liability insurance; workers' compensation or similar insurance; or automobile medical-payment insurance.

(l)  "Late enrollee" means an eligible employee or dependent as defined under s. 627.6561(1)(b).

(m)  "Limited benefit policy or contract" means a policy or contract that provides coverage for each person insured under the policy for a specifically named disease or diseases, a specifically named accident, or a specifically named limited market that fulfills an experimental or reasonable need, such as the small group market.

(n)  "Modified community rating" means a method used to develop carrier premiums which spreads financial risk across a large population; allows the use of separate rating factors for age, gender, family composition, tobacco usage, and geographic area as determined under paragraph (5)(j); and allows adjustments for: claims experience, health status, or duration of coverage as ²permitted under subparagraph (6)(b)5.; and administrative and acquisition expenses as ²permitted under subparagraph (6)(b)5.

(o)  "Participating carrier" means any carrier that issues health benefit plans in this state except a small employer carrier that elects to be a risk-assuming carrier.

(p)  "Plan of operation" means the plan of operation of the program, including articles, bylaws, and operating rules, adopted by the board under subsection (11).

(q)  "Program" means the Florida Small Employer Carrier Reinsurance Program created under subsection (11).

(r)  "Rating period" means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect.

(s)  "Reinsuring carrier" means a small employer carrier that elects to comply with the requirements set forth in subsection (11).

(t)  "Risk-assuming carrier" means a small employer carrier that elects to comply with the requirements set forth in subsection (10).

(u)  "Self-employed individual" means an individual or sole proprietor who derives his or her income from a trade or business carried on by the individual or sole proprietor which results in taxable income as indicated on IRS Form 1040, schedule C or F, and which generated taxable income in one of the 2 previous years.

(v)  "Small employer" means, in connection with a health benefit plan with respect to a calendar year and a plan year, any person, sole proprietor, self-employed individual, independent contractor, firm, corporation, partnership, or association that is actively engaged in business, has its principal place of business in this state, employed an average of at least 1 but not more than 50 eligible employees on business days during the preceding calendar year, and employs at least 1 employee on the first day of the plan year. For purposes of this section, a sole proprietor, an independent contractor, or a self-employed individual is considered a small employer only if all of the conditions and criteria established in this section are met.

(w)  "Small employer carrier" means a carrier that offers health benefit plans covering eligible employees of one or more small employers.

(4)  APPLICABILITY AND SCOPE.--

(a)  This section applies to a health benefit plan that provides coverage to a small employer in this state, unless the policy is marketed directly to the individual employee, and the employer does not participate in the collection or distribution of premiums or facilitate the administration of the policy in any manner.

(b)  With respect to a group of affiliated carriers or a group of carriers that is eligible to file a consolidated tax return, any restrictions, limitations, or requirements of this section that apply to one of the carriers applies to all of the carriers as if they were one carrier. However, with respect to affiliated companies, all of which are in existence and affiliated on January 1, 1992, the group of affiliated companies is considered one carrier only after one member of the group transfers any small employer business to another member of the group.

(c)  An affiliated carrier that is a health maintenance organization having a certificate of authority under part I of chapter 641 may be considered a separate carrier for the purposes of this section.

(d)  This section shall not apply to a carrier that does not issue new health benefit plans to small employers on or after January 1, 1994, except that it shall apply to any such carrier that renews a health benefit plan on or after January 1, 1995.

(5)  AVAILABILITY OF COVERAGE.--

(a)  Beginning January 1, 1993, every small employer carrier issuing new health benefit plans to small employers in this state must, as a condition of transacting business in this state, offer to eligible small employers a standard health benefit plan and a basic health benefit plan. Such a small employer carrier shall issue a standard health benefit plan or a basic health benefit plan to every eligible small employer that elects to be covered under such plan, agrees to make the required premium payments under such plan, and to satisfy the other provisions of the plan.

(b)  In the case of a small employer carrier which does not, on or after January 1, 1993, offer coverage but which does, on or after January 1, 1993, renew or continue coverage in force, such carrier shall be required to provide coverage to newly eligible employees and dependents on the same basis as small employer carriers which are offering coverage on or after January 1, 1993.

(c)  Every small employer carrier must, as a condition of transacting business in this state:

1.  Beginning July 1, 2000, offer and issue all small employer health benefit plans on a guaranteed-issue basis to every eligible small employer, with 2 to 50 eligible employees, that elects to be covered under such plan, agrees to make the required premium payments, and satisfies the other provisions of the plan. A rider for additional or increased benefits may be medically underwritten and may only be added to the standard health benefit plan. The increased rate charged for the additional or increased benefit must be rated in accordance with this section.

³2.  Beginning July 1, 2000, and until July 31, 2001, offer and issue basic and standard small employer health benefit plans on a guaranteed-issue basis to every eligible small employer which is eligible for guaranteed renewal, has less than two eligible employees, is not formed primarily for the purpose of buying health insurance, elects to be covered under such plan, agrees to make the required premium payments, and satisfies the other provisions of the plan. A rider for additional or increased benefits may be medically underwritten and may be added only to the standard benefit plan. The increased rate charged for the additional or increased benefit must be rated in accordance with this section. For purposes of this subparagraph, a person, his or her spouse, and his or her dependent children shall constitute a single eligible employee if that person and spouse are employed by the same small employer and either one has a normal work week of less than 25 hours.

3.  Beginning August 1, 2001, offer and issue basic and standard small employer health benefit plans on a guaranteed-issue basis, during a 31-day open enrollment period of August 1 through August 31 of each year, to every eligible small employer, with fewer than two eligible employees, which small employer is not formed primarily for the purpose of buying health insurance and which elects to be covered under such plan, agrees to make the required premium payments, and satisfies the other provisions of the plan. Coverage provided under this subparagraph shall begin on October 1 of the same year as the date of enrollment, unless the small employer carrier and the small employer agree to a different date. A rider for additional or increased benefits may be medically underwritten and may only be added to the standard health benefit plan. The increased rate charged for the additional or increased benefit must be rated in accordance with this section. For purposes of this subparagraph, a person, his or her spouse, and his or her dependent children constitute a single eligible employee if that person and spouse are employed by the same small employer and either that person or his or her spouse has a normal work week of less than 25 hours.

4.  This paragraph does not limit a carrier's ability to offer other health benefit plans to small employers if the standard and basic health benefit plans are offered and rejected.

(d)  A small employer carrier must file with the department, in a format and manner prescribed by the committee, a standard health care plan and a basic health care plan to be used by the carrier.

(e)  The department at any time may, after providing notice and an opportunity for a hearing, disapprove the continued use by the small employer carrier of the standard or basic health benefit plan on the grounds that such plan does not meet the requirements of this section.

(f)  Except as provided in paragraph (g), a health benefit plan covering small employers must comply with preexisting condition provisions specified in s. 627.6561 or, for health maintenance contracts, in s. 641.31071.

(g)  A health benefit plan covering small employers, issued or renewed on or after January 1, 1994, must comply with the following conditions:

1.  All health benefit plans must be offered and issued on a guaranteed-issue basis, except that benefits purchased through riders as provided in paragraph (c) may be medically underwritten for the group, but may not be individually underwritten as to the employees or the dependents of such employees. Additional or increased benefits may only be offered by riders.

2.  The provisions of paragraph (f) apply to health benefit plans issued to a small employer who has two or more eligible employees, and to health benefit plans that are issued to a small employer who has fewer than two eligible employees and that cover an employee who has had creditable coverage continually to a date not more than 63 days before the effective date of the new coverage.

3.  For health benefit plans that are issued to a small employer who has fewer than two employees and that cover an employee who has not been continually covered by creditable coverage within 63 days before the effective date of the new coverage, preexisting condition provisions must not exclude coverage for a period beyond 24 months following the employee's effective date of coverage and may relate only to:

a.  Conditions that, during the 24-month period immediately preceding the effective date of coverage, had manifested themselves in such a manner as would cause an ordinarily prudent person to seek medical advice, diagnosis, care, or treatment or for which medical advice, diagnosis, care, or treatment was recommended or received; or

b.  A pregnancy existing on the effective date of coverage.

(h)  All health benefit plans issued under this section must comply with the following conditions:

1.  For employers who have fewer than two employees, a late enrollee may be excluded from coverage for no longer than 24 months if he or she was not covered by creditable coverage continually to a date not more than 63 days before the effective date of his or her new coverage.

2.  Any requirement used by a small employer carrier in determining whether to provide coverage to a small employer group, including requirements for minimum participation of eligible employees and minimum employer contributions, must be applied uniformly among all small employer groups having the same number of eligible employees applying for coverage or receiving coverage from the small employer carrier, except that a small employer carrier that participates in, administers, or issues health benefits pursuant to s. 381.0406 which do not include a preexisting condition exclusion may require as a condition of offering such benefits that the employer has had no health insurance coverage for its employees for a period of at least 6 months. A small employer carrier may vary application of minimum participation requirements and minimum employer contribution requirements only by the size of the small employer group.

3.  In applying minimum participation requirements with respect to a small employer, a small employer carrier shall not consider as an eligible employee employees or dependents who have qualifying existing coverage in an employer-based group insurance plan or an ERISA qualified self-insurance plan in determining whether the applicable percentage of participation is met. However, a small employer carrier may count eligible employees and dependents who have coverage under another health plan that is sponsored by that employer.

4.  A small employer carrier shall not increase any requirement for minimum employee participation or any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage, unless the employer size has changed, in which case the small employer carrier may apply the requirements that are applicable to the new group size.

5.  If a small employer carrier offers coverage to a small employer, it must offer coverage to all the small employer's eligible employees and their dependents. A small employer carrier may not offer coverage limited to certain persons in a group or to part of a group, except with respect to late enrollees.

6.  A small employer carrier may not modify any health benefit plan issued to a small employer with respect to a small employer or any eligible employee or dependent through riders, endorsements, or otherwise to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the health benefit plan.

7.  An initial enrollment period of at least 30 days must be provided. An annual 30-day open enrollment period must be offered to each small employer's eligible employees and their dependents. A small employer carrier must provide special enrollment periods as required by s. 627.65615.

(i)1.  A small employer carrier need not offer coverage or accept applications pursuant to paragraph (a):

a.  To a small employer if the small employer is not physically located in an established geographic service area of the small employer carrier, provided such geographic service area shall not be less than a county;

b.  To an employee if the employee does not work or reside within an established geographic service area of the small employer carrier; or

c.  To a small employer group within an area in which the small employer carrier reasonably anticipates, and demonstrates to the satisfaction of the department, that it cannot, within its network of providers, deliver service adequately to the members of such groups because of obligations to existing group contract holders and enrollees.

2.  A small employer carrier that cannot offer coverage pursuant to sub-subparagraph 1.c. may not offer coverage in the applicable area to new cases of employer groups having more than 50 eligible employees or small employer groups until the later of 180 days following each such refusal or the date on which the carrier notifies the department that it has regained its ability to deliver services to small employer groups.

3.a.  A small employer carrier may deny health insurance coverage in the small-group market if the carrier has demonstrated to the department that:

(I)  It does not have the financial reserves necessary to underwrite additional coverage; and

(II)  It is applying this sub-subparagraph uniformly to all employers in the small-group market in this state consistent with this section and without regard to the claims experience of those employers and their employees and their dependents or any health-status-related factor that relates to such employees and dependents.

b.  A small employer carrier, upon denying health insurance coverage in connection with health benefit plans in accordance with sub-subparagraph a., may not offer coverage in connection with group health benefit plans in the small-group market in this state for a period of 180 days after the date such coverage is denied or until the insurer has demonstrated to the department that the insurer has sufficient financial reserves to underwrite additional coverage, whichever is later. The department may provide for the application of this sub-subparagraph on a service-area-specific basis.

4.  Beginning in 1994, the department shall, by rule, require each small employer carrier to report, on or before March 1 of each year, its gross annual premiums for all health benefit plans issued to small employers during the previous calendar year, and also to report its gross annual premiums for new, but not renewal, standard and basic health benefit plans subject to this section issued during the previous calendar year. No later than May 1 of each year, the department shall calculate each carrier's percentage of all small employer group health premiums for the previous calendar year and shall calculate the aggregate gross annual premiums for new, but not renewal, standard and basic health benefit plans for the previous calendar year.

(j)  The boundaries of geographic areas used by a small employer carrier must coincide with county lines. A carrier may not apply different geographic rating factors to the rates of small employers located within the same county.

(6)  RESTRICTIONS RELATING TO PREMIUM RATES.--

(a)  The department may, by rule, establish regulations to administer this section and to assure that rating practices used by small employer carriers are consistent with the purpose of this section, including assuring that differences in rates charged for health benefit plans by small employer carriers are reasonable and reflect objective differences in plan design, not including differences due to the nature of the groups assumed to select particular health benefit plans.

(b)  For all small employer health benefit plans that are subject to this section and are issued by small employer carriers on or after January 1, 1994, premium rates for health benefit plans subject to this section are subject to the following:

1.  Small employer carriers must use a modified community rating methodology in which the premium for each small employer must be determined solely on the basis of the eligible employee's and eligible dependent's gender, age, family composition, tobacco use, or geographic area as determined under paragraph (5)(j) and in which the premium may be adjusted as permitted by subparagraphs 5. and 6.

2.  Rating factors related to age, gender, family composition, tobacco use, or geographic location may be developed by each carrier to reflect the carrier's experience. The factors used by carriers are subject to department review and approval.

3.  Small employer carriers may not modify the rate for a small employer for 12 months from the initial issue date or renewal date, unless the composition of the group changes or benefits are changed. However, a small employer carrier may modify the rate one time prior to 12 months after the initial issue date for a small employer who enrolls under a previously issued group policy that has a common anniversary date for all employers covered under the policy if:

a.  The carrier discloses to the employer in a clear and conspicuous manner the date of the first renewal and the fact that the premium may increase on or after that date.

b.  The insurer demonstrates to the department that efficiencies in administration are achieved and reflected in the rates charged to small employers covered under the policy.

4.  A carrier may issue a group health insurance policy to a small employer health alliance or other group association with rates that reflect a premium credit for expense savings attributable to administrative activities being performed by the alliance or group association if such expense savings are specifically documented in the insurer's rate filing and are approved by the department. Any such credit may not be based on different morbidity assumptions or on any other factor related to the health status or claims experience of any person covered under the policy. Nothing in this subparagraph exempts an alliance or group association from licensure for any activities that require licensure under the insurance code. A carrier issuing a group health insurance policy to a small employer health alliance or other group association shall allow any properly licensed and appointed agent of that carrier to market and sell the small employer health alliance or other group association policy. Such agent shall be paid the usual and customary commission paid to any agent selling the policy.

5.  Any adjustments in rates for claims experience, health status, or duration of coverage may not be charged to individual employees or dependents. For a small employer's policy, such adjustments may not result in a rate for the small employer which deviates more than 15 percent from the carrier's approved rate. Any such adjustment must be applied uniformly to the rates charged for all employees and dependents of the small employer. A small employer carrier may make an adjustment to a small employer's renewal premium, not to exceed 10 percent annually, due to the claims experience, health status, or duration of coverage of the employees or dependents of the small employer. Semiannually, small group carriers shall report information on forms adopted by rule by the department, to enable the department to monitor the relationship of aggregate adjusted premiums actually charged policyholders by each carrier to the premiums that would have been charged by application of the carrier's approved modified community rates. If the aggregate resulting from the application of such adjustment exceeds the premium that would have been charged by application of the approved modified community rate by 5 percent for the current reporting period, the carrier shall limit the application of such adjustments only to minus adjustments beginning not more than 60 days after the report is sent to the department. For any subsequent reporting period, if the total aggregate adjusted premium actually charged does not exceed the premium that would have been charged by application of the approved modified community rate by 5 percent, the carrier may apply both plus and minus adjustments. A small employer carrier may provide a credit to a small employer's premium based on administrative and acquisition expense differences resulting from the size of the group. Group size administrative and acquisition expense factors may be developed by each carrier to reflect the carrier's experience and are subject to department review and approval.

6.  A small employer carrier rating methodology may include separate rating categories for one dependent child, for two dependent children, and for three or more dependent children for family coverage of employees having a spouse and dependent children or employees having dependent children only. A small employer carrier may have fewer, but not greater, numbers of categories for dependent children than those specified in this subparagraph.

7.  Small employer carriers may not use a composite rating methodology to rate a small employer with fewer than 10 employees. For the purposes of this subparagraph, a "composite rating methodology" means a rating methodology that averages the impact of the rating factors for age and gender in the premiums charged to all of the employees of a small employer.

(c)  For all small employer health benefit plans that are subject to this section, that are issued by small employer carriers before January 1, 1994, and that are renewed on or after January 1, 1995, renewal rates must be based on the same modified community rating standard applied to new business.

(d)  Notwithstanding s. 627.401(2), this section and ss. 627.410 and 627.411 apply to any health benefit plan provided by a small employer carrier that is an insurer, and this section and s. 641.31 apply to any health benefit provided by a small employer carrier that is a health maintenance ⁴organization, that provides coverage to one or more employees of a small employer regardless of where the policy, certificate, or contract is issued or delivered, if the health benefit plan covers employees or their covered dependents who are residents of this state.

(7)  RENEWABILITY OF COVERAGE.--A health benefit plan that is subject to this section is renewable for all eligible employees and dependents pursuant to s. 627.6571.

(8)  MAINTENANCE OF RECORDS.--

(a)  Each small employer carrier must maintain at its principal place of business a complete and detailed description of its rating practices and renewal practices, including information and documentation that demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles.

(b)  Each small employer carrier must file with the department on or before March 15 of each year an actuarial certification that the carrier is in compliance with this section and that the rating methods of the carrier are actuarially sound. The certification must be in a form and manner and contain the information prescribed by the department. The carrier must retain a copy of the certification at its principal place of business.

(c)  A small employer carrier must make the information and documentation described in paragraph (a) available to the department upon request. The information constitutes proprietary and trade secret information and may not be disclosed by the department to persons outside the department, except as agreed to by the carrier or as ordered by a court of competent jurisdiction.

(d)  Each small employer carrier must file with the department quarterly an enrollment report as directed by the department. Such report shall not constitute proprietary or trade secret information.

(9)  SMALL EMPLOYER CARRIER'S ELECTION TO BECOME A RISK-ASSUMING CARRIER OR A REINSURING CARRIER.--

(a)  A small employer carrier must elect to become either a risk-assuming carrier or a reinsuring carrier. Each small employer carrier must make an initial election, binding through January 1, 1994. The carrier's initial election must be made no later than October 31, 1992. By October 31, 1993, all small employer carriers must file a final election, which is binding for 2 years, from January 1, 1994, through December 31, 1995, after which an election shall be binding for a period of 5 years. Any carrier that is not a small employer carrier on October 31, 1992, and intends to become a small employer carrier after October 31, 1992, must file its designation when it files the forms and rates it intends to use for small employer group health insurance; such designation shall be binding for 2 years after the date of approval of the forms and rates, and any subsequent designation is binding for 5 years. The department may permit a carrier to modify its election at any time for good cause shown, after a hearing.

(b)  The department shall establish an application process for small employer carriers seeking to change their status under this subsection.

(c)  An election to become a risk-assuming carrier is subject to approval under subsection (10).

(d)  A small employer carrier that elects to cease participating as a reinsuring carrier and to become a risk-assuming carrier is prohibited from reinsuring or continuing to reinsure any small employer health benefits plan under subsection (11) as soon as the carrier becomes a risk-assuming carrier and must pay a prorated assessment based upon business issued as a reinsuring carrier for any portion of the year that the business was reinsured. A small employer carrier that elects to cease participating as a risk-assuming carrier and to become a reinsuring carrier is permitted to reinsure small employer health benefit plans under the terms set forth in subsection (11) and must pay a prorated assessment based upon business issued as a reinsuring carrier for any portion of the year that the business was reinsured.

(10)  ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.--

(a)1.  A small employer carrier may become a risk-assuming carrier by filing with the department a designation of election under subsection (9) in a format and manner prescribed by the department. The department shall approve the election of a small employer carrier to become a risk-assuming carrier if the department finds that the carrier is capable of assuming that status pursuant to the criteria set forth in paragraph (b).

2.  The department must approve or disapprove any designation as a risk-assuming carrier within 60 days after filing.

(b)  In determining whether to approve an application by a small employer carrier to become a risk-assuming carrier, the department shall consider:

1.  The carrier's financial ability to support the assumption of the risk of small employer groups.

2.  The carrier's history of rating and underwriting small employer groups.

3.  The carrier's commitment to market fairly to all small employers in the state or its service area, as applicable.

4.  The carrier's ability to assume and manage the risk of enrolling small employer groups without the protection of the reinsurance program provided in subsection (11).

(c)  A small employer carrier that becomes a risk-assuming carrier pursuant to this subsection is not subject to the assessment provisions of subsection (11).

(d)  The department shall provide public notice of a small employer carrier's designation of election under subsection (9) to become a risk-assuming carrier and shall provide at least a 21-day period for public comment prior to making a decision on the election. The department shall hold a hearing on the election at the request of the carrier.

(e)  The department may rescind the approval granted to a risk-assuming carrier under this subsection if the department finds that the carrier no longer meets the criteria of paragraph (b).

(11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--

(a)  There is created a nonprofit entity to be known as the "Florida Small Employer Health Reinsurance Program."

(b)1.  The program shall operate subject to the supervision and control of the board.

2.  Effective upon this act becoming a law, the board shall consist of the commissioner or his or her designee, who shall serve as the chairperson, and 13 additional members who are representatives of carriers and insurance agents and are appointed by the commissioner and serve as follows:

a.  The commissioner shall include representatives of small employer carriers subject to assessment under this subsection. If two or more carriers elect to be risk-assuming carriers, the membership must include at least two representatives of risk-assuming carriers; if one carrier is risk-assuming, one member must be a representative of such carrier. At least one member must be a carrier who is subject to the assessments, but is not a small employer carrier. Subject to such restrictions, at least five members shall be selected from individuals recommended by small employer carriers pursuant to procedures provided by rule of the department. Three members shall be selected from a list of health insurance carriers that issue individual health insurance policies. At least two of the three members selected must be reinsuring carriers. Two members shall be selected from a list of insurance agents who are actively engaged in the sale of health insurance.

b.  A member appointed under this subparagraph shall serve a term of 4 years and shall continue in office until the member's successor takes office, except that, in order to provide for staggered terms, the commissioner shall designate two of the initial appointees under this subparagraph to serve terms of 2 years and shall designate three of the initial appointees under this subparagraph to serve terms of 3 years.

3.  The commissioner may remove a member for cause.

4.  Vacancies on the board shall be filled in the same manner as the original appointment for the unexpired portion of the term.

5.  The commissioner may require an entity that recommends persons for appointment to submit additional lists of recommended appointees.

(c)1.  No later than August 15, 1992, the board shall submit to the department a plan of operation to assure the fair, reasonable, and equitable administration of the program. The board may at any time submit to the department any amendments to the plan that the board finds to be necessary or suitable.

2.  No later than September 15, 1992, the department shall, after notice and hearing, approve the plan of operation if it determines that the plan submitted by the board is suitable to assure the fair, reasonable, and equitable administration of the program and provides for the sharing of program gains and losses equitably and proportionately in accordance with paragraph (j).

3.  The plan of operation, or any amendment thereto, becomes effective upon written approval of the department.

(d)  The plan of operation must, among other things:

1.  Establish procedures for handling and accounting for program assets and moneys and for an annual fiscal reporting to the department.

2.  Establish procedures for selecting an administering carrier and set forth the powers and duties of the administering carrier.

3.  Establish procedures for reinsuring risks.

4.  Establish procedures for collecting assessments from participating carriers to provide for claims reinsured by the program and for administrative expenses, other than amounts payable to the administrative carrier, incurred or estimated to be incurred during the period for which the assessment is made.

5.  Provide for any additional matters at the discretion of the board.

(e)  The board shall recommend to the department market conduct requirements and other requirements for carriers and agents, including requirements relating to:

1.  Registration by each carrier with the department of its intention to be a small employer carrier under this section;

2.  Publication by the department of a list of all small employer carriers, including a requirement applicable to agents and carriers that a health benefit plan may not be sold by a carrier that is not identified as a small employer carrier;

3.  The availability of a broadly publicized, toll-free telephone number for access by small employers to information concerning this section;

4.  Periodic reports by carriers and agents concerning health benefit plans issued; and

5.  Methods concerning periodic demonstration by small employer carriers and agents that they are marketing or issuing health benefit plans to small employers.

(f)  The program has the general powers and authority granted under the laws of this state to insurance companies and health maintenance organizations licensed to transact business, except the power to issue health benefit plans directly to groups or individuals. In addition thereto, the program has specific authority to:

1.  Enter into contracts as necessary or proper to carry out the provisions and purposes of this act, including the authority to enter into contracts with similar programs of other states for the joint performance of common functions or with persons or other organizations for the performance of administrative functions.

2.  Sue or be sued, including taking any legal action necessary or proper for recovering any assessments and penalties for, on behalf of, or against the program or any carrier.

3.  Take any legal action necessary to avoid the payment of improper claims against the program.

4.  Issue reinsurance policies, in accordance with the requirements of this act.

5.  Establish rules, conditions, and procedures for reinsurance risks under the program participation.

6.  Establish actuarial functions as appropriate for the operation of the program.

7.  Assess participating carriers in accordance with paragraph (j), and make advance interim assessments as may be reasonable and necessary for organizational and interim operating expenses. Interim assessments shall be credited as offsets against any regular assessments due following the close of the calendar year.

8.  Appoint appropriate legal, actuarial, and other committees as necessary to provide technical assistance in the operation of the program, and in any other function within the authority of the program.

9.  Borrow money to effect the purposes of the program. Any notes or other evidences of indebtedness of the program which are not in default constitute legal investments for carriers and may be carried as admitted assets.

10.  To the extent necessary, increase the $5,000 deductible reinsurance requirement to adjust for the effects of inflation.

(g)  A reinsuring carrier may reinsure with the program coverage of an eligible employee of a small employer, or any dependent of such an employee, subject to each of the following provisions:

1.  With respect to a standard and basic health care plan, the program must reinsure the level of coverage provided; and, with respect to any other plan, the program must reinsure the coverage up to, but not exceeding, the level of coverage provided under the standard and basic health care plan.

2.  Except in the case of a late enrollee, a reinsuring carrier may reinsure an eligible employee or dependent within 60 days after the commencement of the coverage of the small employer. A newly employed eligible employee or dependent of a small employer may be reinsured within 60 days after the commencement of his or her coverage.

3.  A small employer carrier may reinsure an entire employer group within 60 days after the commencement of the group's coverage under the plan. The carrier may choose to reinsure newly eligible employees and dependents of the reinsured group pursuant to subparagraph 1.

4.  The program may not reimburse a participating carrier with respect to the claims of a reinsured employee or dependent until the carrier has paid incurred claims of at least $5,000 in a calendar year for benefits covered by the program. In addition, the reinsuring carrier shall be responsible for 10 percent of the next $50,000 and 5 percent of the next $100,000 of incurred claims during a calendar year and the program shall reinsure the remainder.

5.  The board annually shall adjust the initial level of claims and the maximum limit to be retained by the carrier to reflect increases in costs and utilization within the standard market for health benefit plans within the state. The adjustment shall not be less than the annual change in the medical component of the "Consumer Price Index for All Urban Consumers" of the Bureau of Labor Statistics of the Department of Labor, unless the board proposes and the department approves a lower adjustment factor.

6.  A small employer carrier may terminate reinsurance for all reinsured employees or dependents on any plan anniversary.

7.  The premium rate charged for reinsurance by the program to a health maintenance organization that is approved by the Secretary of Health and Human Services as a federally qualified health maintenance organization pursuant to 42 U.S.C. s. 300e(c)(2)(A) and that, as such, is subject to requirements that limit the amount of risk that may be ceded to the program, which requirements are more restrictive than subparagraph 4., shall be reduced by an amount equal to that portion of the risk, if any, which exceeds the amount set forth in subparagraph 4. which may not be ceded to the program.

8.  The board may consider adjustments to the premium rates charged for reinsurance by the program for carriers that use effective cost containment measures, including high-cost case management, as defined by the board.

9.  A reinsuring carrier shall apply its case-management and claims-handling techniques, including, but not limited to, utilization review, individual case management, preferred provider provisions, other managed care provisions or methods of operation, consistently with both reinsured business and nonreinsured business.

(h)1.  The board, as part of the plan of operation, shall establish a methodology for determining premium rates to be charged by the program for reinsuring small employers and individuals pursuant to this section. The methodology shall include a system for classification of small employers that reflects the types of case characteristics commonly used by small employer carriers in the state. The methodology shall provide for the development of basic reinsurance premium rates, which shall be multiplied by the factors set for them in this paragraph to determine the premium rates for the program. The basic reinsurance premium rates shall be established by the board, subject to the approval of the department, and shall be set at levels which reasonably approximate gross premiums charged to small employers by small employer carriers for health benefit plans with benefits similar to the standard and basic health benefit plan. The premium rates set by the board may vary by geographical area, as determined under this section, to reflect differences in cost. The multiplying factors must be established as follows:

a.  The entire group may be reinsured for a rate that is 1.5 times the rate established by the board.

b.  An eligible employee or dependent may be reinsured for a rate that is 5 times the rate established by the board.

2.  The board periodically shall review the methodology established, including the system of classification and any rating factors, to assure that it reasonably reflects the claims experience of the program. The board may propose changes to the rates which shall be subject to the approval of the department.

(i)  If a health benefit plan for a small employer issued in accordance with this subsection is entirely or partially reinsured with the program, the premium charged to the small employer for any rating period for the coverage issued must be consistent with the requirements relating to premium rates set forth in ⁵s. 627.4106.

(j)1.  Before March 1 of each calendar year, the board shall determine and report to the department the program net loss for the previous year, including administrative expenses for that year, and the incurred losses for the year, taking into account investment income and other appropriate gains and losses.

2.  Any net loss for the year shall be recouped by assessment of the carriers, as follows:

a.  The operating losses of the program shall be assessed in the following order subject to the specified limitations. The first tier of assessments shall be made against reinsuring carriers in an amount which shall not exceed 5 percent of each reinsuring carrier's premiums from health benefit plans covering small employers. If such assessments have been collected and additional moneys are needed, the board shall make a second tier of assessments in an amount which shall not exceed 0.5 percent of each carrier's health benefit plan premiums. Except as provided in paragraph (n), risk-assuming carriers are exempt from all assessments authorized pursuant to this section. The amount paid by a reinsuring carrier for the first tier of assessments shall be credited against any additional assessments made.

b.  The board shall equitably assess carriers for operating losses of the plan based on market share. The board shall annually assess each carrier a portion of the operating losses of the plan. The first tier of assessments shall be determined by multiplying the operating losses by a fraction, the numerator of which equals the reinsuring carrier's earned premium pertaining to direct writings of small employer health benefit plans in the state during the calendar year for which the assessment is levied, and the denominator of which equals the total of all such premiums earned by reinsuring carriers in the state during that calendar year. The second tier of assessments shall be based on the premiums that all carriers, except risk-assuming carriers, earned on all health benefit plans written in this state. The board may levy interim assessments against carriers to ensure the financial ability of the plan to cover claims expenses and administrative expenses paid or estimated to be paid in the operation of the plan for the calendar year prior to the association's anticipated receipt of annual assessments for that calendar year. Any interim assessment is due and payable within 30 days after receipt by a carrier of the interim assessment notice. Interim assessment payments shall be credited against the carrier's annual assessment. Health benefit plan premiums and benefits paid by a carrier that are less than an amount determined by the board to justify the cost of collection may not be considered for purposes of determining assessments.

c.  Subject to the approval of the department, the board shall make an adjustment to the assessment formula for reinsuring carriers that are approved as federally qualified health maintenance organizations by the Secretary of Health and Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent, if any, that restrictions are placed on them that are not imposed on other small employer carriers.

3.  Before March 1 of each year, the board shall determine and file with the department an estimate of the assessments needed to fund the losses incurred by the program in the previous calendar year.

4.  If the board determines that the assessments needed to fund the losses incurred by the program in the previous calendar year will exceed the amount specified in subparagraph 2., the board shall evaluate the operation of the program and report its findings, including any recommendations for changes to the plan of operation, to the department within 90 days following the end of the calendar year in which the losses were incurred. The evaluation shall include an estimate of future assessments, the administrative costs of the program, the appropriateness of the premiums charged and the level of carrier retention under the program, and the costs of coverage for small employers. If the board fails to file a report with the department within 90 days following the end of the applicable calendar year, the department may evaluate the operations of the program and implement such amendments to the plan of operation the department deems necessary to reduce future losses and assessments.

5.  If assessments exceed the amount of the actual losses and administrative expenses of the program, the excess shall be held as interest and used by the board to offset future losses or to reduce program premiums. As used in this paragraph, the term "future losses" includes reserves for incurred but not reported claims.

6.  Each carrier's proportion of the assessment shall be determined annually by the board, based on annual statements and other reports considered necessary by the board and filed by the carriers with the board.

7.  Provision shall be made in the plan of operation for the imposition of an interest penalty for late payment of an assessment.

8.  A carrier may seek, from the commissioner, a deferment, in whole or in part, from any assessment made by the board. The department may defer, in whole or in part, the assessment of a carrier if, in the opinion of the department, the payment of the assessment would place the carrier in a financially impaired condition. If an assessment against a carrier is deferred, in whole or in part, the amount by which the assessment is deferred may be assessed against the other carriers in a manner consistent with the basis for assessment set forth in this section. The carrier receiving such deferment remains liable to the program for the amount deferred and is prohibited from reinsuring any individuals or groups in the program if it fails to pay assessments.

(k)  Neither the participation in the program as reinsuring carriers, the establishment of rates, forms, or procedures, nor any other joint or collective action required by this act, may be the basis of any legal action, criminal or civil liability, or penalty against the program or any of its carriers either jointly or separately.

(l)  The board, as part of the plan of operation, shall develop standards setting forth the manner and levels of compensation to be paid to agents for the sale of basic and standard health benefit plans. In establishing such standards, the board shall take into consideration the need to assure the broad availability of coverages, the objectives of the program, the time and effort expended in placing the coverage, the need to provide ongoing service to the small employer, the levels of compensation currently used in the industry, and the overall costs of coverage to small employers selecting these plans.

(m)  The board shall monitor compliance with this section, including the market conduct of small employer carriers, and shall report to the department any unfair trade practices and misleading or unfair conduct by a small employer carrier that has been reported to the board by agents, consumers, or any other person. The department shall investigate all reports and, upon a finding of noncompliance with this section or of unfair or misleading practices, shall take action against the small employer carrier as permitted under the insurance code or chapter 641. The board is not given investigatory or regulatory powers, but must forward all reports of cases or abuse or misrepresentation to the department.

(n)  Notwithstanding paragraph (j), the administrative expenses of the program shall be recouped by assessment of risk-assuming carriers and reinsuring carriers and such amounts shall not be considered part of the operating losses of the plan for the purposes of this paragraph. Each carrier's portion of such administrative expenses shall be determined by multiplying the total of such administrative expenses by a fraction, the numerator of which equals the carrier's earned premium pertaining to direct writing of small employer health benefit plans in the state during the calendar year for which the assessment is levied, and the denominator of which equals the total of such premiums earned by all carriers in the state during such calendar year.

(12)  STANDARD, BASIC, AND LIMITED HEALTH BENEFIT PLANS.--

(a)1.  By May 15, 1993, the commissioner shall appoint a health benefit plan committee composed of four representatives of carriers which shall include at least two representatives of HMOs, at least one of which is a staff model HMO, two representatives of agents, four representatives of small employers, and one employee of a small employer. The carrier members shall be selected from a list of individuals recommended by the board. The commissioner may require the board to submit additional recommendations of individuals for appointment.

2.  The plans shall comply with all of the requirements of this subsection.

3.  The plans must be filed with and approved by the department prior to issuance or delivery by any small employer carrier.

4.  After approval of the revised health benefit plans, if the department determines that modifications to a plan might be appropriate, the commissioner shall appoint a new health benefit plan committee in the manner provided in subparagraph 1. to submit recommended modifications to the department for approval.

(b)1.  Each small employer carrier issuing new health benefit plans shall offer to any small employer, upon request, a standard health benefit plan and a basic health benefit plan that meets the criteria set forth in this section.

2.  For purposes of this subsection, the terms "standard health benefit plan" and "basic health benefit plan" mean policies or contracts that a small employer carrier offers to eligible small employers that contain:

a.  An exclusion for services that are not medically necessary or that are not covered preventive health services; and

b.  A procedure for preauthorization by the small employer carrier, or its designees.

3.  A small employer carrier may include the following managed care provisions in the policy or contract to control costs:

a.  A preferred provider arrangement or exclusive provider organization or any combination thereof, in which a small employer carrier enters into a written agreement with the provider to provide services at specified levels of reimbursement or to provide reimbursement to specified providers. Any such written agreement between a provider and a small employer carrier must contain a provision under which the parties agree that the insured individual or covered member has no obligation to make payment for any medical service rendered by the provider which is determined not to be medically necessary. A carrier may use preferred provider arrangements or exclusive provider arrangements to the same extent as allowed in group products that are not issued to small employers.

b.  A procedure for utilization review by the small employer carrier or its designees.

This subparagraph does not prohibit a small employer carrier from including in its policy or contract additional managed care and cost containment provisions, subject to the approval of the department, which have potential for controlling costs in a manner that does not result in inequitable treatment of insureds or subscribers. The carrier may use such provisions to the same extent as authorized for group products that are not issued to small employers.

4.  The standard health benefit plan shall include:

a.  Coverage for inpatient hospitalization;

b.  Coverage for outpatient services;

c.  Coverage for newborn children pursuant to s. 627.6575;

d.  Coverage for child care supervision services pursuant to s. 627.6579;

e.  Coverage for adopted children upon placement in the residence pursuant to s. 627.6578;

f.  Coverage for mammograms pursuant to s. 627.6613;

g.  Coverage for handicapped children pursuant to s. 627.6615;

h.  Emergency or urgent care out of the geographic service area; and

i.  Coverage for services provided by a hospice licensed under s. 400.602 in cases where such coverage would be the most appropriate and the most cost-effective method for treating a covered illness.

5.  The standard health benefit plan and the basic health benefit plan may include a schedule of benefit limitations for specified services and procedures. If the committee develops such a schedule of benefits limitation for the standard health benefit plan or the basic health benefit plan, a small employer carrier offering the plan must offer the employer an option for increasing the benefit schedule amounts by 4 percent annually.

6.  The basic health benefit plan shall include all of the benefits specified in subparagraph 4.; however, the basic health benefit plan shall place additional restrictions on the benefits and utilization and may also impose additional cost containment measures.

7.  Sections 627.419(2), (3), and (4), 627.6574, 627.6612, 627.66121, 627.66122, 627.6616, 627.6618, 627.668, and 627.66911 apply to the standard health benefit plan and to the basic health benefit plan. However, notwithstanding said provisions, the plans may specify limits on the number of authorized treatments, if such limits are reasonable and do not discriminate against any type of provider.

8.  Each small employer carrier that provides for inpatient and outpatient services by allopathic hospitals may provide as an option of the insured similar inpatient and outpatient services by hospitals accredited by the American Osteopathic Association when such services are available and the osteopathic hospital agrees to provide the service.

(c)  If a small employer rejects, in writing, the standard health benefit plan and the basic health benefit plan, the small employer carrier may offer the small employer a limited benefit policy or contract.

(d)1.  Upon offering coverage under a standard health benefit plan, a basic health benefit plan, or a limited benefit policy or contract for any small employer, the small employer carrier shall provide such employer group with a written statement that contains, at a minimum:

a.  An explanation of those mandated benefits and providers that are not covered by the policy or contract;

b.  An explanation of the managed care and cost control features of the policy or contract, along with all appropriate mailing addresses and telephone numbers to be used by insureds in seeking information or authorization; and

c.  An explanation of the primary and preventive care features of the policy or contract.

Such disclosure statement must be presented in a clear and understandable form and format and must be separate from the policy or certificate or evidence of coverage provided to the employer group.

2.  Before a small employer carrier issues a standard health benefit plan, a basic health benefit plan, or a limited benefit policy or contract, it must obtain from the prospective policyholder a signed written statement in which the prospective policyholder:

a.  Certifies as to eligibility for coverage under the standard health benefit plan, basic health benefit plan, or limited benefit policy or contract;

b.  Acknowledges the limited nature of the coverage and an understanding of the managed care and cost control features of the policy or contract;

c.  Acknowledges that if misrepresentations are made regarding eligibility for coverage under a standard health benefit plan, a basic health benefit plan, or a limited benefit policy or contract, the person making such misrepresentations forfeits coverage provided by the policy or contract; and

d.  If a limited plan is requested, acknowledges that the prospective policyholder had been offered, at the time of application for the insurance policy or contract, the opportunity to purchase any health benefit plan offered by the carrier and that the prospective policyholder had rejected that coverage.

A copy of such written statement shall be provided to the prospective policyholder no later than at the time of delivery of the policy or contract, and the original of such written statement shall be retained in the files of the small employer carrier for the period of time that the policy or contract remains in effect or for 5 years, whichever period is longer.

3.  Any material statement made by an applicant for coverage under a health benefit plan which falsely certifies as to the applicant's eligibility for coverage serves as the basis for terminating coverage under the policy or contract.

4.  Each marketing communication that is intended to be used in the marketing of a health benefit plan in this state must be submitted for review by the department prior to use and must contain the disclosures stated in this subsection.

(e)  A small employer carrier may not use any policy, contract, form, or rate under this section, including applications, enrollment forms, policies, contracts, certificates, evidences of coverage, riders, amendments, endorsements, and disclosure forms, until the insurer has filed it with the department and the department has approved it under ss. 627.410, ⁵627.4106, and 627.411.

(13)  STANDARDS TO ASSURE FAIR MARKETING.--

(a)  Each small employer carrier shall actively market health benefit plan coverage, including the basic and standard health benefit plans, including any subsequent modifications or additions to those plans, to eligible small employers in the state. Before January 1, 1994, if a small employer carrier denies coverage to a small employer on the basis of the health status or claims experience of the small employer or its employees or dependents, the small employer carrier shall offer the small employer the opportunity to purchase a basic health benefit plan and a standard health benefit plan. Beginning January 1, 1994, small employer carriers must offer and issue all plans on a guaranteed-issue basis.

(b)  No small employer carrier or agent shall, directly or indirectly, engage in the following activities:

1.  Encouraging or directing small employers to refrain from filing an application for coverage with the small employer carrier because of the health status, claims experience, industry, occupation, or geographic location of the small employer.

2.  Encouraging or directing small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation, or geographic location of the small employer.

(c)  The provisions of paragraph (a) shall not apply with respect to information provided by a small employer carrier or agent to a small employer regarding the established geographic service area or a restricted network provision of a small employer carrier.

(d)  No small employer carrier shall, directly or indirectly, enter into any contract, agreement, or arrangement with an agent that provides for or results in the compensation paid to an agent for the sale of a health benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer except if the compensation arrangement provides compensation to an agent on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.

(e)  A small employer carrier shall provide reasonable compensation, as provided under the plan of operation of the program, to an agent, if any, for the sale of a basic or standard health benefit plan.

(f)  No small employer carrier shall terminate, fail to renew, or limit its contract or agreement of representation with an agent for any reason related to the health status, claims experience, occupation, or geographic location of the small employers placed by the agent with the small employer carrier unless the agent consistently engages in practices that violate this section or s. 626.9541.

(g)  No small employer carrier or agent shall induce or otherwise encourage a small employer to separate or otherwise exclude an employee from health coverage or benefits provided in connection with the employee's employment.

(h)  Denial by a small employer carrier of an application for coverage from a small employer shall be in writing and shall state the reason or reasons for the denial.

(i)  The department may establish regulations setting forth additional standards to provide for the fair marketing and broad availability of health benefit plans to small employers in this state.

(j)  A violation of this section by a small employer carrier or an agent shall be an unfair trade practice under s. 626.9541 or ss. 641.3903 and 641.3907.

(k)  If a small employer carrier enters into a contract, agreement, or other arrangement with a third-party administrator to provide administrative, marketing, or other services relating to the offering of health benefit plans to small employers in this state, the third-party administrator shall be subject to this section.

(14)  DISCLOSURE OF INFORMATION.--

(a)  In connection with the offering of a health benefit plan to a small employer, a small employer carrier:

1.  Shall make a reasonable disclosure to such employer, as part of its solicitation and sales materials, of the availability of information described in paragraph (b); and

2.  Upon request of the small employer, provide such information.

(b)1.  Subject to subparagraph 3., with respect to a small employer carrier that offers a health benefit plan to a small employer, information described in this paragraph is information that concerns:

a.  The provisions of such coverage concerning an insurer's right to change premium rates and the factors that may affect changes in premium rates;

b.  The provisions of such coverage that relate to renewability of coverage;

c.  The provisions of such coverage that relate to any preexisting condition exclusions; and

d.  The benefits and premiums available under all health insurance coverage for which the employer is qualified.

2.  Information required under this subsection shall be provided to small employers in a manner determined to be understandable by the average small employer, and shall be sufficient to reasonably inform small employers of their rights and obligations under the health insurance coverage.

3.  An insurer is not required under this subsection to disclose any information that is proprietary or a trade secret under state law.

(15)  APPLICABILITY OF OTHER STATE LAWS.--

(a)  Except as expressly provided in this section, a law requiring coverage for a specific health care service or benefit, or a law requiring reimbursement, utilization, or consideration of a specific category of licensed health care practitioner, does not apply to a standard or basic health benefit plan policy or contract or a limited benefit policy or contract offered or delivered to a small employer unless that law is made expressly applicable to such policies or contracts.

(b)  Except as provided in this section, a standard or basic health benefit plan policy or contract or limited benefit policy or contract offered to a small employer is not subject to any provision of this code which:

1.  Inhibits a small employer carrier from contracting with providers or groups of providers with respect to health care services or benefits;

2.  Imposes any restriction on a small employer carrier's ability to negotiate with providers regarding the level or method of reimbursing care or services provided under a health benefit plan; or

3.  Requires a small employer carrier to either include a specific provider or class of providers when contracting for health care services or benefits or to exclude any class of providers that is generally authorized by statute to provide such care.

(c)  Any second tier assessment paid by a carrier pursuant to paragraph (11)(j) may be credited against assessments levied against the carrier pursuant to s. 627.6494.

(d)  Notwithstanding chapter 641, a health maintenance organization is authorized to issue contracts providing benefits equal to the standard health benefit plan, the basic health benefit plan, and the limited benefit policy authorized by this section.

(16)  RULEMAKING AUTHORITY.--The department may adopt rules to administer this section, including rules governing compliance by small employer carriers and small employers.

History.--s. 117, ch. 92-33; s. 71, ch. 92-318; s. 65, ch. 93-129; s. 1, ch. 95-123; s. 2, ch. 96-319; s. 380, ch. 96-406; s. 10, ch. 97-48; s. 1735, ch. 97-102; s. 3, ch. 97-166; s. 15, ch. 97-179; s. 4, ch. 98-66; s. 13, ch. 98-159; s. 32, ch. 99-3; s. 79, ch. 2000-158; ss. 37, 46, ch. 2000-256; s. 1, ch. 2000-268; s. 4, ch. 2000-296; s. 70, ch. 2000-318.

¹Note.--Section 34(2), ch. 97-179, provides that:

"(2)  Except as provided in section 627.6561(9), (10), and (11), and section 641.31071(10), (11), and (12), Florida Statutes, in the case of a group health plan or group health insurance contract maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers which is ratified before this act becomes a law, sections 627.6561, 627.65615, 627.65625, 627.6571, 627.6699, 641.31071, 641.31072, 641.31073, and 641.31074, Florida Statutes, except for section 627.6561(8)(b), Florida Statutes, as amended or created by this act, apply to policies or contracts with plan years that begin on or after the later of:

"(a)  The date on which the last of any collective bargaining agreement that relates to the plan terminates, determined without regard to any extension thereof, which is agreed to after the date this act becomes a law; or

"(b)  July 1, 1997."

²Note.--As amended by s. 1, ch. 2000-268, and s. 70, ch. 2000-318. Section 46, ch. 2000-256, used the words "provided in" instead of "permitted under."

³Note.--Subparagraph (5)(c)2. was redesignated as subparagraph (5)(c)3. and a new subparagraph (5)(c)2. was inserted by s. 70, ch. 2000-318. For a description of multiple acts in the same session affecting a statutory provision, see preface to the Florida Statutes, "Statutory Construction." Subparagraph (5)(c)2., as it existed in the Florida Statutes 1999, was also amended by s. 1, ch. 2000-268, and s. 46, ch. 2000-318, and no new subparagraph (5)(c)2. was created by those laws. As amended by s. 1, ch. 2000-268, and s. 46, ch. 2000-318, only, subparagraph (5)(c)2. reads:

2.  Beginning August 1, 2000, offer and issue basic and standard small employer health benefit plans on a guaranteed-issue basis, during a 31-day open enrollment period of August 1 through August 31 of each year, to every eligible small employer, with fewer than two eligible employees, which small employer is not formed primarily for the purpose of buying health insurance and which elects to be covered under such plan, agrees to make the required premium payments, and satisfies the other provisions of the plan. Coverage provided under this subparagraph shall begin on October 1 of the same year as the date of enrollment, unless the small employer carrier and the small employer agree to a different date. A rider for additional or increased benefits may be medically underwritten and may only be added to the standard health benefit plan. The increased rate charged for the additional or increased benefit must be rated in accordance with this section. For purposes of this subparagraph, a person, his or her spouse, and his or her dependent children constitute a single eligible employee if that person and spouse are employed by the same small employer and either that person or his or her spouse has a normal work week of less than 25 hours.

⁴Note.--As amended by s. 46, ch. 2000-256. The comma following the word "organization" does not appear in the version of the amendment by s. 1, ch. 2000-268, and s. 70, ch. 2000-318.

⁵Note.--Repealed by s. 83, ch. 93-129.

PART VIII
MEDICARE SUPPLEMENT POLICIES

627.671  Medicare supplement reform; short title.

627.672  Definitions.

627.673  Designation as Medicare supplement policy; penalties for violations.

627.6735  Order to discontinue certain advertising.

627.6736  Filing requirements for out-of-state group policies.

627.6737  Reporting of multiple policies.

627.674  Minimum standards; filing requirements.

627.6741  Issuance, cancellation, nonrenewal, and replacement.

627.6742  Permitted compensation arrangements.

627.6743  Standards for marketing.

627.6744  Recommended purchase and excessive insurance.

627.6745  Loss ratio standards; public rate hearings.

627.6746  Compliance with Omnibus Budget Reconciliation Acts.

627.675  Mandated coverages inapplicable to Medicare supplement policies unless specifically made applicable.

627.671  Medicare supplement reform; short title.--Sections 627.671-627.675 may be cited as the "Florida Medicare Supplement Reform Act."

History.--s. 4, ch. 80-156; s. 2, ch. 81-318; ss. 527, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.672  Definitions.--For the purposes of ss. 627.671-627.675:

(1)  A "Medicare supplement policy" is a health insurance policy or other health benefit plan offered by a private entity to individuals who are entitled to have payments for health care costs made under Medicare, Title XVIII of the Social Security Act ("Medicare"), as presently constituted and as may later be amended, which provides reimbursement for expenses incurred for services and items for which payment may be made under Medicare but which expenses are not reimbursable by reason of the applicability of deductibles, coinsurance amounts, or other limitations imposed by Medicare. The term does not include any such policy or plan of one or more labor organizations, or of the trustees of a fund established by one or more labor organizations, or a combination thereof, for employees or former employees, or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations.

(2)  The term "policy" includes a certificate issued or delivered in this state under a group Medicare supplement policy which has been effectuated within or outside this state.

(3)  "Applicant" means:

(a)  In the case of an individual Medicare supplement policy or subscriber contract, the person who seeks to contract for insurance benefits; and

(b)  In the case of a group Medicare supplement policy or subscriber contract, the proposed certificateholder.

History.--s. 5, ch. 80-156; s. 2, ch. 81-318; ss. 524, 527, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 5, ch. 86-271; s. 1, ch. 88-338; s. 114, ch. 92-318; s. 1, ch. 2000-202.

627.673  Designation as Medicare supplement policy; penalties for violations.--

(1)  An individual, group, blanket, or franchise health insurance policy may not be delivered or issued for delivery in this state as a Medicare supplement policy unless it complies with this part.

(2)  A violation of this part is punishable under s. 624.4211. In addition, the department may require insurers violating this part to cease marketing any Medicare supplement policy in this state which is related directly or indirectly to a violation of this part, or the department may require the insurer to take any action necessary to comply with this part.

(3)  This part does not prohibit or apply to insurance policies or health care benefit plans, including group conversion policies, provided to Medicare eligible persons if the policies are not marketed or held to be Medicare supplement policies or benefit plans.

(4)  The loss ratio requirement applicable to Medicare supplement policies that was in effect at the time of issuance of the policy applies to policies that were issued as Medicare supplement policies and have been redefined as limited benefit policies.

History.--s. 6, ch. 80-156; s. 2, ch. 81-318; ss. 525, 527, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 2, ch. 88-338; s. 1, ch. 90-257; ss. 139, 149, ch. 92-33; s. 114, ch. 92-318.

627.6735  Order to discontinue certain advertising.--An insurer must file with the department all advertisements for Medicare supplement policies pursuant to rules adopted by the department. If, in the opinion of the department, any advertisement by a Medicare supplement policy insurer violates any of the provisions of ¹part X of chapter 626 or any rule of the department, the department may enter an immediate order requiring that the use of the advertisement be discontinued. If requested by the insurer, the department shall conduct a hearing within 10 days of the entry of such order. If, after the hearing or by agreement with the insurer, a final determination is made that the advertising was in fact violative of any provision of ¹part X of chapter 626 or of any rule of the department, the department may, in lieu of revocation of the certificate of authority, require the publication of a corrective advertisement; impose an administrative penalty of up to $10,000; and, in the case of an initial solicitation, require that the insurer, prior to accepting any application received in response to the advertisement, provide an acceptable clarification of the advertisement to each individual applicant.

History.--ss. 6, 7, ch. 86-271; s. 93, ch. 89-360; s. 114, ch. 92-318.

¹Note.--Redesignated as part IX of ch. 626 to conform to the transfer of ss. 626.941-626.945, comprising former part IX, by ch. 98-89.

627.6736  Filing requirements for out-of-state group policies.--An insurer providing group Medicare supplement insurance benefits to a resident of this state shall file a copy of the master policy and any certificate used in this state in accordance with ss. 627.410 and 627.411, as if the policy were to be issued in this state.

History.--s. 3, ch. 88-338; s. 1, ch. 89-296; s. 2, ch. 90-257; ss. 140, 149, ch. 92-33; s. 114, ch. 92-318.

627.6737  Reporting of multiple policies.--

(1)  On or before March 1, every insurer or other entity providing Medicare supplement insurance coverage in this state shall report the following information for every individual resident of this state for which the insurer or entity has in force more than one Medicare supplement insurance policy or certificate:

(a)  Policy and certificate number.

(b)  Date of issuance.

(2)  The items set forth above must be grouped by individual policyholder.

History.--s. 3, ch. 90-257; s. 114, ch. 92-318.

627.674  Minimum standards; filing requirements.--

(1)  An insurance policy or subscriber contract may not be advertised, solicited, or issued for delivery in this state as a Medicare supplement policy unless it meets the minimum standards adopted under this section. The minimum standards do not preclude other provisions or benefits which are not inconsistent with the minimum standards.

(2)(a)  The department must adopt rules establishing minimum standards for Medicare supplement policies that, taken together with the requirements of this part, are no less comprehensive or beneficial to persons insured or covered under Medicare supplement policies issued, delivered, or issued for delivery in this state, including certificates under group or blanket policies issued, delivered, or issued for delivery in this state, than the standards provided in 42 U.S.C. s. 1395ss, or the most recent version of the NAIC Model Regulation To Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act adopted by the National Association of Insurance Commissioners.

(b)  The rules must establish specific standards, including standards of full and fair disclosure, that set forth the manner, content, and required disclosure for the sale of group, blanket, franchise, and individual Medicare supplement policies and Medicare supplement subscriber contracts of dental service plans and nonprofit health care services plans. The standards may cover, but not be limited to:

1.  Terms of renewability.

2.  Initial and subsequent conditions of eligibility.

3.  Nonduplication of coverage.

4.  Probationary periods.

5.  Benefit limitations, exceptions, and reductions.

6.  Elimination periods.

7.  Requirements for replacement coverage.

8.  Recurrent conditions.

9.  Definitions of terms.

10.  Application forms.

(c)  The department may adopt rules that specify prohibited policies or policy provisions, not otherwise specifically authorized by statute, which in the opinion of the department are unjust, unfair, or unfairly discriminatory to the policyholder, the person insured under the policy, or the beneficiary.

(d)  For policies issued on or after January 1, 1991, the department may adopt rules to establish minimum policy standards to authorize the types of policies specified by 42 U.S.C. s. 1395ss(p)(2)(C) and any optional benefits to facilitate policy comparisons.

(3)  A policy may not be filed with the department as a Medicare supplement policy unless the policy meets or exceeds the requirements of 42 U.S.C. s. 1395ss, or the most recent version of the NAIC Medicare Supplement Insurance Minimum Standards Model Act, adopted by the National Association of Insurance Commissioners.

(4)  A policy filed with the department as a Medicare supplement policy must:

(a)  Have a definition of "Medicare eligible expense" that is not more restrictive than health care expenses of the kinds covered by Medicare or to the extent recognized as reasonable by Medicare. Payment of benefits by insurers for Medicare eligible expenses may be conditioned upon the same or less restrictive payment conditions, including determinations of medical necessity, as apply to Medicare claims.

(b)  Provide that benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible amount and copayment percentage factor. Premiums may be modified to correspond with such changes, subject to prior approval by the department.

(c)  Be written in simplified language, be easily understood by purchasers, and otherwise comply with s. 627.602.

(d)  Contain a prominently displayed no-loss cancellation clause enabling the applicant to return the policy within 30 days after receiving the policy, or the certificate issued thereunder, with return in full of any premium paid. The insurer must, in a timely manner, pay a refund under this paragraph directly to the individual who paid the premium.

(e)  Contain a prominently displayed notice of any coordination-of-benefits clause which might in any way restrict payment under the policy.

(f)1.  Be accompanied by a copy of the Medicare Supplement Buyer's Guide developed jointly by the National Association of Insurance Commissioners and the Health Care Financing Administration of the United States Department of Health and Human Services.

2.  A policy referred to in subparagraph (g)4. that does not qualify as a Medicare supplement policy under this part must also be accompanied by the buyer's guide pursuant to this paragraph.

3.  Except in the case of a direct response insurer, delivery of the buyer's guide shall be made at the time of application, and acknowledgment of receipt or certification of delivery of the buyer's guide shall be provided to the insurer. Direct response insurers shall deliver the buyer's guide upon request, but not later than at the time the policy is delivered.

(g)1.  Be accompanied by an outline of coverage in the form prescribed by the National Association of Insurance Commissioners in the NAIC Model Regulation To Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act, adopted by the National Association of Insurance Commissioners on July 31, 1991, and as prescribed in s. 627.6743.

2.  The outline shall be delivered to the applicant at the time application is made, and, except for the direct response policy, acknowledgment of receipt or certification of delivery of the outline of coverage shall be provided to the insurer.

3.  If the policy is issued on a basis which would require revision of the outline, a substitute outline of coverage properly describing the policy, contract, or group certificate must accompany the policy, when it is delivered, and contain the following statement, in no less than 12-point type, immediately above the company name: "NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application, and the coverage originally applied for has not been issued."

4.  The following language must be printed on or attached to the first page of the outline of coverage delivered in conjunction with an individual policy of hospital confinement insurance, indemnity insurance, specified disease insurance, specified accident insurance, supplemental health insurance other than Medicare supplement insurance, or nonconventional health insurance coverage, as defined by law in this state, to a person eligible for Medicare: "This policy IS NOT A MEDICARE SUPPLEMENT policy. If you are eligible for Medicare, review the Medicare Supplement Buyer's Guide available from the company."

(5)  A Medicare supplement policy may not contain benefits which duplicate benefits provided by Medicare.

History.--s. 7, ch. 80-156; s. 428, ch. 81-259; s. 2, ch. 81-318; ss. 526, 527, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 4, ch. 88-338; s. 1, ch. 89-185; s. 94, ch. 89-360; s. 4, ch. 90-257; s. 14, ch. 91-296; ss. 141, 149, ch. 92-33; s. 114, ch. 92-318; s. 14, ch. 98-159.

627.6741  Issuance, cancellation, nonrenewal, and replacement.--

(1)  An insurer issuing Medicare supplement policies in this state shall offer the opportunity of enrolling in a Medicare supplement policy, without conditioning the issuance or effectiveness of the policy on, and without discriminating in the price of the policy based on, the medical or health status or receipt of health care by the individual:

(a)  To any individual who is 65 years of age or older and who resides in this state, upon the request of the individual during the 6-month period beginning with the first month in which the individual has attained 65 years of age and is enrolled in Medicare part B; or

(b)  To any individual who is 65 years of age or older and is enrolled in Medicare part B, who resides in this state, upon the request of the individual during the 2-month period following termination of coverage under a group health insurance policy.

A Medicare supplement policy issued to an individual under paragraph (a) or paragraph (b) may not exclude benefits based on a preexisting condition if the individual has a continuous period of creditable coverage, as defined in s. 627.6561(5), of at least 6 months as of the date of application for coverage.

(2)  For both individual and group Medicare supplement policies:

(a)  An insurer shall neither cancel nor nonrenew a Medicare supplement policy or certificate for any reason other than nonpayment of premium or material misrepresentation.

(b)  If it is not replacing an existing policy, a Medicare supplement policy shall not limit or preclude liability under the policy for a period longer than 6 months because of a health condition existing before the policy is effective. The policy may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.

(c)  If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate or creditable coverage as defined in s. 627.6561(5), the replacing insurer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods in the new Medicare supplement policy for similar benefits to the extent such time was spent under the original policy, subject to the requirements of s. 627.6561(6)-(11).

(3)  For group Medicare supplement policies:

(a)  If a group Medicare supplement insurance policy is terminated by the group policyholder and not replaced as provided in paragraph (c), the insurer shall offer certificateholders an individual Medicare supplement policy. The insurer shall offer the certificateholder at least the following choices:

1.  An individual Medicare supplement policy that provides for continuation of the benefits contained in the group policy.

2.  An individual Medicare supplement policy that provides only the benefits required to meet the minimum standards.

(b)  If membership in a group is terminated, the insurer shall:

1.  Offer the certificateholder conversion opportunities specified in paragraph (a); or

2.  At the option of the group policyholder, offer the certificateholder continuation of coverage under the group policy.

(c)  If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

(4)  If a policy is canceled, the insurer must return promptly the unearned portion of any premium paid. If the insured cancels the policy, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of the cancellation.

(5)  The department shall by rule prescribe standards relating to the guaranteed issue of coverage, without exclusions for preexisting conditions, for continuously covered individuals consistent with the provisions of 42 U.S.C. s. 1395ss(s)(3).

History.--s. 5, ch. 90-257; s. 18, ch. 91-201; s. 15, ch. 91-296; ss. 142, 149, ch. 92-33; s. 114, ch. 92-318; s. 15, ch. 98-159.

627.6742  Permitted compensation arrangements.--

(1)  The department shall adopt rules governing the permitted compensation arrangements between insurers and agents with respect to Medicare supplement policies.

(2)  The rules shall be based upon the format, interrelationships, and parameters relating to compensation arrangements as set forth in the NAIC Medicare Supplement Insurance Minimum Standards Model Act and Regulations adopted by the National Association of Insurance Commissioners on July 31, 1991.

History.--s. 6, ch. 90-257; s. 18, ch. 91-201; ss. 143, 149, ch. 92-33; s. 114, ch. 92-318.

627.6743  Standards for marketing.--

(1)  Every insurer, health care service plan, or other entity marketing Medicare supplement insurance coverage in this state, directly or through its producers, shall:

(a)  Establish marketing procedures to assure that any comparison of policies by its agents or other producers will be fair and accurate.

(b)  Establish marketing procedures to assure excessive insurance is not sold or issued.

(c)  Display prominently by type, stamp, or other appropriate means, on the first page of the outline of coverage and policy, the following:

"Notice to buyer: This policy may not cover all of the costs associated with medical care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations."

(d)  Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of any such insurance.

(2)  Every insurer or entity marketing Medicare supplement insurance shall establish auditable procedures for verifying compliance with this subsection.

(3)  In addition to the practices prohibited in s. 626.9541, the following acts and practices are prohibited:

(a)  Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer.

(b)  Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.

(c)  Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.

History.--s. 7, ch. 90-257; s. 18, ch. 91-20; s. 114, ch. 92-318.

627.6744  Recommended purchase and excessive insurance.--

(1)  Medicare supplement insurance may not be issued or sold, whether directly, through the mail, or otherwise, to an individual unless the issuer or seller obtains from the individual, as a part of the application, a written statement signed by the individual stating what Medicare supplement policies the individual has, from what source, and whether the individual has applied for and been determined to be entitled to Medicaid. The written statement must be accompanied by a written acknowledgment, signed by the seller, of the request for and receipt of the statement. The written acknowledgment does not constitute a verification or affirmation by the seller of the truth of any information supplied by the individual in the written statement. The written statement shall be on forms prescribed by the department in accordance with the Omnibus Budget Reconciliation Act of 1990 (Pub. L. No. 101-508).

(2)  Medicare supplement insurance may not be issued or sold to an individual if:

(a)  An individual's written statement indicates that the individual is entitled to Medicaid, unless this state's Medicaid plan under Title XIX pays the premiums for the policy, or pays less than an individual's full liability for Medicare cost sharing as defined under the federal Medicare law; or

(b)  The sale of Medicare supplement coverage will provide an individual more than one Medicare supplement policy or certificate.

(3)  This section does not prohibit the sale of a Medicare supplement policy to an individual who has another Medicare supplement policy if:

(a)  The individual indicates in writing that the policy replaces the other policy and indicates an intent to terminate the policy being replaced when the new policy becomes effective; and

(b)  The insurer providing the replacement policy forwards the statement to the insurer whose policy is being replaced.

(4)  Upon a request of the policyholder, an insurer shall suspend the benefits and premiums of the Medicare supplement policy for the period in which the policyholder indicates that he or she has applied for and been determined to be entitled to Medicaid. The period of suspension shall not exceed 24 months. If the policyholder loses entitlement to Medicaid and the policyholder provides notice within 90 days after the loss of entitlement, the policy shall be automatically reinstated as of the termination of Medicaid entitlement.

History.--s. 8, ch. 90-257; s. 18, ch. 91-201; s. 16, ch. 91-296; ss. 144, 149, ch. 92-33; s. 114, ch. 92-318.

627.6745  Loss ratio standards; public rate hearings.--

(1)  Medicare supplement policies shall return the following to policyholders in the form of aggregate benefits under the policy, with respect to the lifetime of the policy, on the basis of earned premiums and on the basis of incurred claims experience or, if coverage is provided by a health maintenance organization based on service rather than reimbursement, incurred health care expenses, and in accordance with accepted actuarial principles and practices:

(a)  At least 75 percent of the aggregate amount of premiums earned in the case of group policies.

(b)  For individual policies issued or renewed prior to July 1, 1989, at least 60 percent of the aggregate amount of premiums earned and for individual policies issued on or after July 1, 1989, at least 65 percent of the aggregate amount of premiums earned. For the purposes of this section, policies issued as a result of solicitations of individuals through the mail or by mass media advertising shall be deemed to be individual policies.

(2)  Each entity providing Medicare supplement policies or certificates in this state shall file annually its rates, rating schedules, and supporting documentation demonstrating that it is in compliance with the applicable loss ratio standards of this code. The filing of rates and rating schedules shall demonstrate that the actual and expected losses in relation to premiums comply with the requirements of this section.

(3)  For the purposes of this section, a policy form complies with the loss ratio standards if:

(a)  For the most recent year, the ratio of the incurred losses to earned premiums for policies or certificates which have been in force for 3 years or more is greater than or equal to the applicable percentages contained in this section; and

(b)  The expected losses in relation to premiums over the lifetime of the policy comply with the requirements of this section.

An expected third-year loss ratio that is greater than or equal to the applicable percentage must be demonstrated for policies or certificates in force less than 3 years. Loss ratios shall be calculated in accordance with a uniform methodology, including uniform reporting standards specified by the National Association of Insurance Commissioners pursuant to the Omnibus Budget Reconciliation Act of 1990 (Pub. L. No. 101-508).

(4)  Each insurer providing Medicare supplement insurance to residents of this state shall annually submit to the department information on actual loss ratios on forms prescribed by the National Association of Insurance Commissioners pursuant to the Omnibus Budget Reconciliation Act of 1990 (Pub. L. No. 101-508).

(5)  Each insurer providing Medicare supplement insurance to residents of this state shall provide a proportional refund, or a credit against future premiums of a proportional amount, based on premiums paid or based on the amount of premiums received necessary to assure that the loss ratio (net of any refunds or credits) complies with the loss ratio requirements. Such refunds or credits shall be applied to each type of policy by policy form number, and shall not apply for the first 2 years of a policy. The refund or credit shall be made to each policyholder insured under the policy as of the last day of the year involved. The refund or credit shall include interest from the end of the policy year involved until the date of the refund or credit at a rate that is not less than the average rate of interest for 13-week Treasury notes. Refunds or credits against premiums due shall be made no later than the third quarter of the succeeding policy year.

(6)  Each insurer providing Medicare supplement insurance to residents of this state shall maintain and make available to interested persons a copy of each Medicare supplement policy, its most recent premium, and its loss ratios for the most recent 3-year period.

(7)  The department shall adopt a written policy statement regarding the holding of public hearings prior to approval of any premium increases for Medicare supplement insurance policies.

History.--s. 5, ch. 88-338; s. 5, ch. 89-296; s. 95, ch. 89-360; s. 17, ch. 91-296; ss. 145, 149, ch. 92-33; s. 114, ch. 92-318.

627.6746  Compliance with Omnibus Budget Reconciliation Acts.--Each entity that provides Medicare supplement policies or contracts must comply with all provisions of s. 4081 of the Omnibus Budget Reconciliation Act of 1987 (Pub. L. No. 100-203) (OBRA) and the Omnibus Budget Reconciliation Act of 1990 (Pub. L. No. 101-508).

History.--s. 96, ch. 89-360; s. 1, ch. 90-192; s. 18, ch. 91-296; s. 114, ch. 92-318.

627.675  Mandated coverages inapplicable to Medicare supplement policies unless specifically made applicable.--No coverage which is required by a law of this state enacted on or after the effective date of this act to be included in group, individual, blanket, or franchise disability policies need be included in any Medicare supplement policy unless inclusion thereof is specifically made applicable to Medicare supplement policies by the terms of such law.

History.--s. 8, ch. 80-156; s. 2, ch. 81-318; ss. 527, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

PART IX
CREDIT LIFE AND DISABILITY
INSURANCES

627.676  Scope of this part.

627.677  Definitions.

627.678  Rules.

627.6785  Filing of rates with department.

627.679  Amount of insurance; disclosure.

627.681  Term and evidence of insurance.

627.682  Filing, approval of forms.

627.683  Licensed agent required.

627.684  Premium not deemed loan or finance charge.

627.6841  Credit insurance consolidations; general requirements.

627.6842  Group-to-group consolidations.

627.6843  Consolidation disclosure requirements.

627.6844  Replacement rules.

627.6845  Policy forms used in connection with consolidations.

627.676  Scope of this part.--This part applies only to credit life and credit disability insurances as defined in s. 627.677.

History.--s. 595, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 537, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.677  Definitions.--As used in this part, the term:

(1)  "Credit life insurance" means insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction. There are three recognized forms:

(a)  "Group credit life insurance" means insurance which is subject to the provisions of s. 627.553.

(b)  "Franchise credit life insurance" means insurance by which a master policy is issued to and in favor of a creditor and under which debtors are insured at the option of the creditor.

(c)  "Individual credit life insurance" means individual insurance upon the life of an individual debtor in favor of a creditor.

(2)  "Credit disability insurance" means insurance under which a borrower of money or a purchaser or a lessee of goods is insured in connection with a specific loan or credit transaction against loss of time resulting from accident or sickness.

(3)  "Creditor agent" means any lending or financing institution or other creditor, or a representative of such an institution or creditor, which writes credit life or disability insurance on the life or health of a debtor.

(4)  "Consolidation" means any transaction in which a financial institution or servicer makes its premium collection services available to its debtors in connection with a particular insurer's ("new insurer") offer of credit insurance, which offer is made to debtors who, immediately prior to the offer, had credit insurance with another insurer ("old insurer") and were paying premiums for that insurance on a monthly or other regular basis.

(5)  "Financial institution" or "servicer" means any entity or organization that services loans or credit obligations by collecting and accounting for payments.

(6)  "Loan transfer" means a transaction in which the servicing of a block of loans or credit obligations is transferred from one servicer to another.

(7)  "New coverage" or "new plan" means the credit insurance coverage or credit insurance plan for which the financial institution collects premiums beginning on the effective date of consolidation.

(8)  "Old coverage" or "old plan" means the credit insurance coverage or credit insurance plan the insured debtor had or participated in immediately prior to the consolidation.

History.--s. 596, ch. 59-205; s. 19, ch. 61-530; s. 1, ch. 73-363; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 6, 7, ch. 80-387; ss. 2, 3, ch. 81-318; ss. 528, 537, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 72, 114, ch. 92-318.

627.678  Rules.--

(1)  For the effective protection of the public interest, the department shall have full power and authority to adopt, promulgate, and enforce separate rules pertaining to issuance and use of each type of credit insurance defined in s. 627.677.

(2)  Rules made pursuant to this section shall be principally designed, and shall be promulgated with the purpose of protecting the borrower from excessive charges by or collected through the lender for insurance in relation to the amount of the loan, to avoid duplication or overlapping of insurance coverage and to avoid loss of the borrower's funds by short-rate cancellation or termination of such insurance. However, nothing in such rules shall be construed to authorize the department to prohibit operation of normal dividend distributions under participating insurance contracts.

History.--s. 597, ch. 59-205; ss. 10, 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 529, 537, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6785  Filing of rates with department.--

(1)  Credit disability and credit life insurers shall file with the department a copy of all rates and any rate changes used in this state.

(2)  No credit disability rate and no credit life rate shall exceed the maximum allowable rate promulgated by the department.

(3)  No credit life rate or credit disability rate shall be deemed to comply with the allowable rate criteria contained in this part if it contains age restrictions which make ineligible for credit life those debtors or lessors 70 years of age or under, or for credit disability those debtors or lessors 65 years of age or under, at the time the indebtedness is incurred. However, for credit life, the coverage shall be provided, at a minimum, until the earlier of the maturity date of the loan or the loan anniversary at age 71, and, for credit disability, the coverage shall be provided, at a minimum, until the earlier of the maturity date of the loan or the loan anniversary at age 66.

History.--ss. 530, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 14, ch. 90-119; s. 114, ch. 92-318.

627.679  Amount of insurance; disclosure.--

(1)(a)  The amount of credit life insurance written under one or more policies shall not exceed by more than $5 the total of the payments of the specific contracts of indebtedness in connection with which it is written, when the indebtedness is repayable in substantially equal installments or in one installment or a single payment.

(b)  The total amount of credit life insurance on the life of any debtor with respect to any loan or loans covered in one or more insurance policies shall at no time exceed $50,000 with any one creditor, except that loans not exceeding 1 year's duration shall not be subject to such limits, and on such loans not exceeding 1 year's duration, the limits of coverage shall not exceed $50,000 with any one insurer.

(c)  Before any credit life insurance may be sold, the creditor agent or agent shall obtain a separate written acknowledgment with respect to each of the following:

1.  That the borrower understands that he or she has the option of assigning any other policy or policies the borrower owns or may procure for the purpose of covering such loan and that the policy need not be purchased from the creditor agent in order to obtain the loan.

2.  That the borrower understands that the credit life coverage may be deferred if, at the time of application, the borrower is unable to engage in employment or unable to perform normal activities of a person of like age and sex, if the proposed credit life insurance policy contains this restriction.

3.  That the borrower understands that the benefits under the policy will terminate when the borrower reaches a certain age and that the borrower's age is accurately represented on the application or policy.

(2)  Notwithstanding the provisions of this section, credit life insurance in connection with agricultural loans not exceeding 1 year may be written up to the amount of the loan commitment on the nondecreasing or level-term plan.

(3)  The total indemnities provided under the terms of credit disability coverage shall not exceed by more than $5 the total of the payments when the indebtedness is repayable in substantially equal installments.

(4)  The total amount of credit disability insurance on the life of any debtor with respect to any loan covered in one or more insurance policies shall at no time exceed $50,000.

History.--s. 598, ch. 59-205; s. 1, ch. 71-150; s. 3, ch. 76-168; s. 2, ch. 77-246; s. 1, ch. 77-457; ss. 3, 7, ch. 80-387; s. 429, ch. 81-259; ss. 2, 3, ch. 81-318; ss. 531, 537, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 35, ch. 88-166; s. 2, ch. 89-75; s. 114, ch. 92-318; s. 353, ch. 97-102.

627.681  Term and evidence of insurance.--

(1)  The term of credit life insurance coverages shall not extend more than 15 days beyond the term of the indebtedness, except when extended without additional cost to the insured borrower or purchaser; and in no event shall the term of the insurance policy exceed 10 years from the date of issue thereof.

(2)  The term of credit disability insurance on any debtor insured under this section shall not exceed 10 years, and for credit transactions that exceed 60 months, coverage shall not exceed 60 monthly indemnities.

(3)  Notwithstanding s. 627.6785(3), the term of credit life or credit disability insurance may be for less than the term of the indebtedness. However, except for the age limitations referred to in s. 627.6785(3), the term shall extend for at least 5 years or for the term of the indebtedness, whichever is less.

(4)  All credit insurance sold shall be evidenced by a policy, certificate, or statement of insurance, which shall be delivered to the insured borrower or purchaser. Upon acceptance of the insurance by the insurer and within 60 days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificates of insurance to be delivered to the debtor. The policy, certificate, or statement of insurance shall set forth a description of the coverage, including any exceptions, limitations, or restrictions, and the amount of the premium in the case of individual or franchise insurance, or the amount of any identifiable charge in the case of group insurance, except that, in the case of group insurance, in lieu of setting forth the amount of identifiable charge in the certificate or statement of insurance, such identifiable charge may be set forth in an instrument in writing, which shall be delivered to the insured borrower or purchaser. The policy group certificate or statement of insurance shall state that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, whenever the amount exceeds the unpaid indebtedness, any such excess shall be payable to a beneficiary, other than the creditor, named by the debtor, or to his or her estate.

(5)  If the named insurer does not accept the risk and coverage is accepted by another insurer, the debtor shall receive a policy or certificate of insurance setting forth the name and home office address of the substituted insurer and the amount of the premium to be charged; and, if the amount of premium is less than that set forth in the notice of proposed insurance, an appropriate refund shall be made.

History.--s. 600, ch. 59-205; s. 3, ch. 71-150; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 5, 7, ch. 80-387; ss. 2, 3, ch. 81-318; ss. 533, 537, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 354, ch. 97-102; s. 83, ch. 98-199.

627.682  Filing, approval of forms.--All forms of policies, certificates of insurance, statements of insurance, applications for insurance, binders, endorsements, and riders of credit life or disability insurance delivered or issued for delivery in this state shall be filed with and approved by the department before use as provided in ss. 627.410 and 627.411. In addition to grounds as specified in s. 627.411, the department, upon compliance with the procedures set forth in s. 627.410, shall disapprove any such form and may withdraw any previous approval thereof if the benefits provided therein are not reasonable in relation to the premiums charged, or if it contains provisions which are unjust, unfair, inequitable, misleading, or deceptive or which encourage misrepresentation of such policy.

History.--s. 601, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 537, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.683  Licensed agent required.--All policies to which this chapter applies shall be issued through a licensed agent.

History.--s. 602, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 534, 537, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.684  Premium not deemed loan or finance charge.--The premium or cost of credit life or disability insurance, when written by or through any lender or other creditor, its affiliate or associate or subsidiary, or a director, officer, or employee of any of them shall not be deemed as interest or charges or consideration or an amount in excess of permitted charges in connection with the loan or credit transaction; and any gain or advantage to any lender or other creditor, its affiliate, associate, or subsidiary, or a director, officer, or employee of any of them, arising out of the premium or commission or dividend from the sale or provision of such insurance shall not be deemed a violation of any other law, general or special, civil or criminal, of this state or of any rule, regulation, or order issued by any regulatory authority.

History.--s. 603, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 537, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.6841  Credit insurance consolidations; general requirements.--An insurer may not participate in any consolidation unless it complies with all of the following requirements:

(1)  The offer of new coverage must be made on a timely basis as follows:

(a)  In a consolidation conducted in connection with a loan transfer, the offer of new coverage to the prospective insured must be made as soon as reasonably possible. If the offer of new coverage is not made within 30 days after the loan transfer, or at least 30 days before the proposed effective date of the new coverage, the insurer must notify the debtor, in writing, that he or she has the right to an unconditional refund of all premiums paid for the new coverage if he or she exercises that right, in writing, within 30 days after the date of the notification.

(b)  In all other consolidations, the offer of new coverage must be made to the prospective insured at least 30 days prior to the proposed effective date of the new coverage. If the offer is not made at least 30 days in advance, the insurer must notify the debtor, in writing, that he or she has the right to an unconditional refund of all premiums paid for the new coverage if he or she exercises that right, in writing, within 30 days after the date of the notification.

(2)  A group certificate or individual policy must be delivered to each debtor insured under the new plan. In addition to complying with all other applicable requirements of this code, the group certificate or individual policy must include all of the following information:

(a)  The name or names of the single or joint insureds.

(b)  Identification of the insured indebtedness.

(c)  The amount of insurance under the new plan.

(d)  The premium for the new coverage.

(e)  The effective date of the new coverage.

(f)  The beneficiary for the new coverage.

(3)  A group certificate or individual policy evidencing the new coverage may not include a contestability clause or, in the case of life insurance, a provision excluding suicide.

(4)  Except as provided in s. 627.6842, the new coverage must be effectuated for the prospective insured only after the new insurer receives an application which has been signed by the prospective insured.

(5)  Except as provided in s. 627.6842, the new insurer must calculate premiums for the new coverage on the basis of its own rates, the prospective insured's then-attained age, if applicable, and the amount of insurance offered.

(6)  Except for consolidations conducted in connection with a loan transfer, the new insurer must send written notice to the old insurer of its intent to conduct a consolidation at least 30 days before the effective date of the consolidation. The notice may be made on behalf of the new insurer by the financial institution or servicer.

(7)  Each insurer must maintain a list of certificateholders insured under each group credit insurance plan, which list must be provided upon request to the servicer that collects premiums for the plan.

History.--s. 73, ch. 92-318; s. 355, ch. 97-102.

627.6842  Group-to-group consolidations.--If both the old coverage and the new coverage are provided under group policies:

(1)  A signed application need not be obtained if all of the following apply:

(a)  The premium for the new plan is the same as or less than the premium for the old plan.

(b)  The amount of insurance and the level of benefits provided by the new plan are the same as or greater than under the old plan, and the age restrictions of the new plan, if any, are at least as favorable to the insured as those provided under the old plan.

(c)  The maximum term of insurance under the new plan is as long as or longer than the maximum term of insurance under the old plan.

(d)  There is a clear disclosure to the prospective insured that payment of the required premium constitutes acceptance of the offer.

(2)  If an insurer charges insureds the same premium for the new coverage as they were paying for their old coverage, and, as a result, insured debtors of a financial institution are charged different premium rates for the same coverage, such rate differences do not constitute unfair rate discrimination under s. 626.9541.

History.--s. 74, ch. 92-318.

627.6843  Consolidation disclosure requirements.--

(1)  In conjunction with any offer of new coverage made in any consolidation, the new insurer must disclose in writing to each prospective insured all of the following:

(a)  That the insured debtor may have the right to continue or convert his or her old coverage by paying premiums directly to the old insurer.

(b)  That the offer of new coverage is not conditioned upon either the termination or the replacement of the old coverage.

(c)  The name and address of the old insurer and the new insurer.

(d)  The effective date of the new coverage.

(e)  The beneficiary of the new coverage.

(f)  Whether premium rates under the new plan are guaranteed.

(g)  The amount of coverage for both the new plan and the old plan; or, if the amount of coverage for the old plan is not known, a statement that the amount may be scheduled and it may be less than or greater than the amount of the loan, and that the insured should check the policy schedule for an exact amount of coverage.

(h)  Material differences, if any, between the new plan and the old plan.

(i)  A statement as to whether the old plan was an individual or group plan and a statement as to whether the new plan is an individual or group plan.

(j)  A consumer information phone number to call with questions regarding the consolidation.

(2)  Disclosures required under this part may be made on behalf of the new insurer by the financial institution.

History.--s. 75, ch. 92-318; s. 356, ch. 97-102.

627.6844  Replacement rules.--Group-to-group consolidations are exempt from any rule of the department relating to the replacement of existing life or health insurance. Sections 627.6841-627.6845 do not create an exemption from any such rule for consolidations that involve individual policies.

History.--s. 76, ch. 92-318.

627.6845  Policy forms used in connection with consolidations.--A policy or group certificate of credit insurance used in connection with any consolidation, or an application, endorsement, or rider which becomes a part of any such policy or certificate, may not be issued or delivered in this state until a copy of the form has been filed with and approved by the department pursuant to s. 627.682.

History.--s. 77, ch. 92-318.

PART X
PROPERTY INSURANCE CONTRACTS

627.701  Liability of insureds; coinsurance; deductibles.

627.7011  Homeowners' policies; offer of replacement cost coverage and law and ordinance coverage.

627.7012  Pools of insurance adjusters.

627.7013  Orderly markets for personal lines residential property insurance.

627.7014  Orderly markets for condominium association residential property insurance.

627.7015  Alternative procedure for resolution of disputed property insurance claims.

627.7016  Insurer contracts with building contractors.

627.70161  Family day care insurance.

627.7017  Hurricane loss mitigation projects.

627.702  Valued policy law.

627.705  Return of unearned premium on overinsured personal property.

627.706  Sinkhole insurance.

627.7061  Coverage inquiries.

627.707  Minimum standards for investigation of sinkhole claims by insurers; nonrenewals.

627.701  Liability of insureds; coinsurance; deductibles.--

(1)  A property insurer may issue an insurance policy or contract covering either real or personal property in this state which contains provisions requiring the insured to be liable as a coinsurer with the insurer issuing the policy for any part of the loss or damage by covered peril to the property described in the policy only if:

(a)  The following words are printed or stamped on the face of the policy, or a form containing the following words is attached to the policy: "Coinsurance contract: The rate charged in this policy is based upon the use of the coinsurance clause attached to this policy, with the consent of the insured.";

(b)  The coinsurance clause in the policy is clearly identifiable; and

(c)  The rate for the insurance with or without the coinsurance clause is furnished the insured upon his or her request.

(2)  Unless the department determines that the deductible provision is clear and unambiguous, a property insurer may not issue an insurance policy or contract covering real property in this state which contains a deductible provision that:

(a)  Applies solely to hurricane losses.

(b)  States the deductible as a percentage rather than as a specific amount of money.

(3)(a)  A policy of residential property insurance shall include a deductible amount applicable to hurricane or wind losses no lower than $500 and no higher than 2 percent of the policy dwelling limits with respect to personal lines residential risks, and no higher than 3 percent of the policy limits with respect to commercial lines residential risks; however, if a risk was covered on August 24, 1992, under a policy having a higher deductible than the deductibles allowed by this paragraph, a policy covering such risk may include a deductible no higher than the deductible in effect on August 24, 1992. Notwithstanding the other provisions of this paragraph, a personal lines residential policy covering a risk valued at $50,000 or less may include a deductible amount attributable to hurricane or wind losses no lower than $250, and a personal lines residential policy covering a risk valued at $100,000 or more may include a deductible amount attributable to hurricane or wind losses no higher than 5 percent of the policy limits unless subject to a higher deductible on August 24, 1992; however, no maximum deductible is required with respect to a personal lines residential policy covering a risk valued at more than $500,000. An insurer may require a higher deductible, provided such deductible is the same as or similar to a deductible program lawfully in effect on June 14, 1995. In addition to the deductible amounts authorized by this paragraph, an insurer may also offer policies with a copayment provision under which, after exhaustion of the deductible, the policyholder is responsible for 10 percent of the next $10,000 of insured hurricane or wind losses.

(b)1.  Except as otherwise provided in this paragraph, prior to issuing a personal lines residential property insurance policy on or after April 1, 1996, or prior to the first renewal of a residential property insurance policy on or after April 1, 1996, the insurer must offer alternative deductible amounts applicable to hurricane or wind losses equal to $500 and 2 percent of the policy dwelling limits, unless the 2 percent deductible is less than $500. The written notice of the offer shall specify the hurricane or wind deductible to be applied in the event that the applicant or policyholder fails to affirmatively choose a hurricane deductible. The insurer must provide such policyholder with notice of the availability of the deductible amounts specified in this paragraph in a form specified by the department in conjunction with each renewal of the policy. The failure to provide such notice constitutes a violation of this code but does not affect the coverage provided under the policy.

2.  This paragraph does not apply with respect to a deductible program lawfully in effect on June 14, 1995, or to any similar deductible program, if the deductible program requires a minimum deductible amount of no less than 2 percent of the policy limits.

3.  With respect to a policy covering a risk with dwelling limits of at least $100,000, but less than $250,000, the insurer may, in lieu of offering a policy with a $500 hurricane or wind deductible as required by subparagraph 1., offer a policy that the insurer guarantees it will not nonrenew for reasons of reducing hurricane loss for one renewal period and that contains up to a 2 percent hurricane or wind deductible as required by subparagraph 1.

4.  With respect to a policy covering a risk with dwelling limits of $250,000 or more, the insurer need not offer the $500 hurricane or wind deductible as required by subparagraph 1., but must, except as otherwise provided in this subsection, offer the 2 percent hurricane or wind deductible as required by subparagraph 1.

(c)  In order to provide for the transition from wind deductibles to hurricane deductibles as required by this subsection, an insurer is required to provide wind deductibles meeting the requirements of this subsection until the effective date of the insurer's first rate filing made after January 1, 1997, and is thereafter required to provide hurricane deductibles meeting the requirements of this subsection.

(4)  Any policy that contains a separate hurricane deductible must on its face include in boldfaced type no smaller than 18 points the following statement: "THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE LOSSES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU." A policy containing a coinsurance provision applicable to hurricane losses must on its face include in boldfaced type no smaller than 18 points the following statement: "THIS POLICY CONTAINS A CO-PAY PROVISION THAT MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU."

(5)(a)  It is the intent of the Legislature to encourage the use of higher hurricane deductibles as a means of increasing the effective capacity of the hurricane insurance market in this state and as a means of limiting the impact of rapidly changing hurricane insurance premiums. The Legislature finds that the hurricane deductibles specified in this subsection are reasonable when a property owner has made adequate provision for restoration of the property to its full value after a catastrophic loss.

(b)  A personal lines residential insurance policy providing hurricane coverage may, at the mutual option of the insured and insurer, include a secured hurricane deductible as described in paragraph (c) if the applicant presents the insurer a certificate of security as described in paragraph (d). An insurer may not directly or indirectly require a secured deductible under this subsection as a condition of issuing or renewing a policy. A certificate of security is not required with respect to an applicant who owns a 100 percent equity interest in the property.

(c)  A secured hurricane deductible must include the substance of the following:

1.  The first $500 of any claim, regardless of the peril causing the loss, is fully deductible.

2.  With respect to hurricane losses only, the next $5,000 in losses are fully insured, subject only to a copayment requirement of 10 percent.

3.  With respect to hurricane losses only, the remainder of the claim is subject to a deductible equal to a specified percentage of the policy dwelling limits in excess of the deductible allowed under paragraph (3)(a) but no higher than 10 percent of the policy dwelling limits.

4.  The insurer agrees to renew the coverage on a guaranteed basis for a period of years after initial issuance of the secured deductible equal to at least 1 year for each 2 percentage points of deductible specified in subparagraph 3. unless the policy is canceled for nonpayment of premium or the insured fails to maintain the certificate of security. Such renewal shall be at the same premium as the initial policy except for premium changes attributable to changes in the value of the property.

(d)  The department shall draft and formally propose as a rule the form for the certificate of security no later than July 1, 1996. The certificate of security may be issued in any of the following circumstances:

1.  A mortgage lender or other financial institution may issue a certificate of security after granting the applicant a line of credit, secured by equity in real property or other reasonable security, which line of credit may be drawn on only to pay for the deductible portion of insured construction or reconstruction after a hurricane loss. In the sole discretion of the mortgage lender or other financial institution, the line of credit may be issued to an applicant on an unsecured basis.

2.  A licensed insurance agent may issue a certificate of security after obtaining for an applicant a line of credit, secured by equity in real property or other reasonable security, which line of credit may be drawn on only to pay for the deductible portion of insured construction or reconstruction after a hurricane loss. The Florida Hurricane Catastrophe Fund shall negotiate agreements creating a financing consortium to serve as an additional source of lines of credit to secure deductibles. Any licensed insurance agent may act as the agent of such consortium.

3.  Any person qualified to act as a trustee for any purpose may issue a certificate of security secured by a pledge of assets, with the restriction that the assets may be drawn on only to pay for the deductible portion of insured construction or reconstruction after a hurricane loss.

4.  Any insurer, including any admitted insurer or any surplus lines insurer, may issue a certificate of security after issuing the applicant a policy of supplemental insurance that will pay for 100 percent of the deductible portion of insured construction or reconstruction after a hurricane loss.

5.  Any other method approved by the department upon finding that such other method provides a similar level of security as the methods specified in this paragraph and that such other method has no negative impact on residential property insurance catastrophic capacity. The legislative intent of this subparagraph is to provide the flexibility needed to achieve the public policy of expanding property insurance capacity while improving the affordability of property insurance.

(e)  An issuer of a certificate of security may terminate the certificate for failure to honor any of the terms of the underlying financial arrangement. The issuer must provide notice of termination to the insurer within 10 working days after termination. Unless the policyholder obtains a replacement certificate of security within an additional 20 working days after such notice, the deductible provision in the policy must revert to a lower deductible otherwise offered by the insurer and the policyholder is responsible for any additional premium required for a policy with such deductible.

(6)  Prior to issuing a personal lines residential property insurance policy on or after April 1, 1997, or prior to the first renewal of a residential property insurance policy on or after April 1, 1997, the insurer must offer a deductible equal to $500 applicable to losses from perils other than hurricane. The insurer must provide the policyholder with notice of the availability of the deductible specified in this subsection in a form specified by the department at least once every 3 years. The failure to provide such notice constitutes a violation of this code but does not affect the coverage provided under the policy. An insurer may require a higher deductible only as part of a deductible program lawfully in effect on June 1, 1996, or as part of a similar deductible program.

(7)(a)  The Legislature finds that property insurance coverage has become unaffordable for a significant number of mobile home owners, as evidenced by reports that up to 100,000 mobile home owners have terminated their insurance coverage because they cannot afford to pay approved rates charged in the voluntary or residual markets. The Legislature further finds that additional flexibility in available coverages will enable mobile home owners to obtain affordable insurance and increase capacity.

(b)  Notwithstanding the provisions of subsection (3), with respect to mobile home policies:

1.  The deductible for hurricane coverage may not exceed 10 percent of the property value if the property is not subject to any liens and may not exceed 5 percent of the property value if the property is subject to any liens.

2.  The insurer need not make the offers required by paragraph (3)(b).

(8)  Notwithstanding the other provisions of this section or of other law, but only as to hurricane coverage as defined in s. 627.4025 for commercial lines residential coverages, an insurer may offer a deductible in an amount not exceeding 5 percent of the insured value with respect to a condominium association or cooperative association policy, or in an amount not exceeding 10 percent of the insured value with respect to any other commercial lines residential policy, if, at the time of such offer and at each renewal, the insurer also offers to the policyholder a deductible in the amount of 3 percent of the insured value. Nothing in this subsection prohibits any deductible otherwise authorized by this section. All forms by which the offers authorized in this subsection are made or required to be made shall be on forms that are adopted or approved by the department.

History.--s. 605, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 538, 541, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 16, ch. 93-410; s. 13, ch. 95-276; s. 12, ch. 96-194; s. 11, ch. 97-55; s. 26, ch. 97-93; s. 1736, ch. 97-102.

627.7011  Homeowners' policies; offer of replacement cost coverage and law and ordinance coverage.--

(1)  Prior to issuing a homeowner's insurance policy on or after June 1, 1994, or prior to the first renewal of a homeowner's insurance policy on or after June 1, 1994, the insurer must offer each of the following:

(a)  A policy or endorsement providing that any loss which is repaired or replaced will be adjusted on the basis of replacement costs not exceeding policy limits as to the dwelling, rather than actual cash value, but not including costs necessary to meet applicable laws regulating the construction, use, or repair of any property or requiring the tearing down of any property, including the costs of removing debris.

(b)  A policy or endorsement providing that, subject to other policy provisions, any loss which is repaired or replaced at any location will be adjusted on the basis of replacement costs not exceeding policy limits as to the dwelling, rather than actual cash value, and also including costs necessary to meet applicable laws regulating the construction, use, or repair of any property or requiring the tearing down of any property, including the costs of removing debris; however, such additional costs necessary to meet applicable laws may be limited to 25 percent of the dwelling limit, and such coverage shall apply only to repairs of the damaged portion of the structure unless the total damage to the structure exceeds 50 percent of the replacement cost of the structure.

An insurer is not required to make the offers required by this subsection with respect to the issuance or renewal of a homeowner's policy that contains the provisions specified in paragraph (b). This subsection does not prohibit the offer of a guaranteed replacement cost policy.

(2)  Unless the insurer obtains the policyholder's written refusal of the policies or endorsements specified in subsection (1), any policy covering the dwelling is deemed to include the coverage specified in paragraph (1)(b). The rejection or selection of alternative coverage shall be made on a form approved by the department. The form shall fully advise the applicant of the nature of the coverage being rejected. If this form is signed by a named insured, it will be conclusively presumed that there was an informed, knowing rejection of the coverage or election of the alternative coverage on behalf of all insureds. Unless the policyholder requests in writing the coverage specified in this section, it need not be provided in or supplemental to any other policy that renews, insures, extends, changes, supersedes, or replaces an existing policy when the policyholder has rejected the coverage specified in this section or has selected alternative coverage. The insurer must provide such policyholder with notice of the availability of such coverage in a form specified by the department at least once every 3 years. The failure to provide such notice constitutes a violation of this code, but does not affect the coverage provided under the policy.

(3)  Nothing in this section shall be construed to apply to policies not considered to be "homeowners' policies," as that term is commonly understood in the insurance industry. This section specifically does not apply to mobile home policies. Nothing in this section shall be construed as limiting the ability of any insurer to reject or nonrenew any insured or applicant on the grounds that the structure does not meet underwriting criteria applicable to replacement cost or law and ordinance policies or for other lawful reasons.

History.--s. 17, ch. 93-410.

627.7012  Pools of insurance adjusters.--The Department of Insurance may, by rule, establish a pool of qualified insurance adjusters. The rules must provide that, if a hurricane occurs or an emergency is declared, the department may assign members of the pool to the affected area and that an insurer may request that a member of the pool adjust claims in the assigned area. The rules may not require that an insurer use those adjusters assigned by the department.

History.--s. 18, ch. 93-410.

627.7013  Orderly markets for personal lines residential property insurance.--

(1)  FINDINGS AND PURPOSE.--

(a)  The Legislature finds that personal lines residential property insurers, as a condition of doing business in this state, have a responsibility to contribute to an orderly market for personal lines residential property insurance and that there is a compelling state interest in maintaining an orderly market for personal lines residential property insurance. The Legislature further finds that Hurricane Andrew, which caused over $15 billion of insured losses in South Florida, has reinforced the need of consumers to have reliable homeowner's insurance coverage; however, the enormous monetary impact to insurers of Hurricane Andrew claims has prompted insurers to propose substantial cancellation or nonrenewal of their homeowner's insurance policyholders. The Legislature further finds that the massive cancellations and nonrenewals announced, proposed, or contemplated by certain insurers constitute a significant danger to the public health, safety, and welfare, and destabilize the insurance market. In furtherance of the overwhelming public necessity for an orderly market for property insurance, the Legislature, in chapter 93-401, Laws of Florida, imposed, for a limited time, a moratorium on cancellation or nonrenewal of personal lines residential property insurance policies. The Legislature further finds that upon expiration of the moratorium, additional actions are required to maintain an orderly market for personal lines residential property insurance in this state. The purposes of this section are to provide for a phaseout of the moratorium and to require advance planning and approval for programs of exposure reduction.

(b)  The Legislature finds, as of the beginning of the 1996 Regular Session of the Legislature, that:

1.  The conditions described in paragraph (a) remain applicable to the property insurance market in this state in 1996 and are likely to remain applicable for several years thereafter.

2.  The Residential Property and Casualty Joint Underwriting Association, a residual market mechanism created to alleviate temporary unavailability of property insurance coverage, remains the primary or exclusive source of new property insurance coverage in significant portions of the state.

3.  Recent enactments intended to restore a competitive, private sector property insurance market, including creation and enhancement of the Florida Hurricane Catastrophe Fund, incentives for depopulation of the Residential Property and Casualty Joint Underwriting Association, incentives for hurricane loss mitigation and prevention, creation of the Florida Commission on Hurricane Loss Projection Methodology, and revisions of laws relating to rates and coverages, are beginning to have their intended effects; however, the market instability that persists could frustrate these efforts to restore the market.

4.  The moratorium completion provided in this section is the least intrusive method for maintaining an orderly market, insofar as it applies only to hurricane-related cancellations and nonrenewals of personal lines residential policies that were in force on the effective date, and insofar as it allows an insurer annually to nonrenew up to 5 percent of the total number of such policies as of the effective date.

(c)  The Legislature finds, as of January 1, 1998, that:

1.  The conditions described in paragraphs (a) and (b) remain applicable to the property insurance market in this state in 1998 and are likely to remain applicable for several years thereafter.

2.  The general instability of the market is reflected by the following facts:

a.  In spite of depopulation efforts under which approximately 600,000 policies have been transferred from the Residential Property and Casualty Joint Underwriting Association to the voluntary market, the joint underwriting association, with approximately 500,000 policies in force, remains the primary or exclusive source of new property insurance coverage in significant portions of the state.

b.  The Florida Windstorm Underwriting Association is growing rapidly, with more than 400,000 policies in force, approximately half of which were initially issued in 1997.

3.  A further extension of the operation of this section until June 1, 2001, will provide an opportunity for the market to stabilize and for continuation of residual market depopulation efforts.

(2)  MORATORIUM COMPLETION.--

(a)  As used in this subsection, the term "total number of policies" means the number of an insurer's policies of a specified type that were in force on June 1, 1996, or the date on which this section became law, whichever was later.

(b)  The following restrictions apply only to cancellation or nonrenewal of personal lines residential property insurance policies that were in force on June 1, 1996, or the date on which this section became law, whichever was later.

1.  In any 12-month period, an insurer may not cancel or nonrenew more than 5 percent of such insurer's total number of homeowner's policies, 5 percent of such insurer's total number of mobile home owner's policies, or 5 percent of such insurer's total number of personal lines residential policies of all types and classes in the state for the purpose of reducing the insurer's exposure to hurricane claims and may not, with respect to any county, cancel or nonrenew more than 10 percent of its total number of homeowner's policies, 10 percent of its total number of mobile home owner's policies, or 10 percent of its total number of personal lines residential policies of all types and classes in the county for the purpose of reducing the insurer's exposure to hurricane claims. This subparagraph does not prohibit any cancellations or nonrenewals of such policies for any other lawful reason unrelated to the risk of loss from hurricane exposure.

2.a.  If, for any 12-month period, an insurer proposes to cancel or nonrenew personal lines residential policies to an extent not authorized by subparagraph 1. for the purpose of reducing exposure to hurricane claims, the insurer must file a phaseout plan with the department at least 90 days prior to the effective date of the plan. In the plan, the insurer must demonstrate to the department that the insurer is protecting market stability and the interests of its policyholders. The plan may not be implemented unless it is approved by the department. In developing the plan, the insurer must consider policyholder longevity, the use of voluntary incentives to accomplish the reduction, and geographic distribution. The insurer must demonstrate that under the plan the insurer will not cancel or nonrenew more policies in the 12-month period than the largest number of similar policies the insurer canceled or nonrenewed for any reason in any 12-month period between August 24, 1989, and August 24, 1992.

b.  If the insurer considers the number of cancellations and nonrenewals under sub-subparagraph a. to be insufficient, the insurer may apply for approval of additional cancellations or nonrenewals on the basis of an unreasonable risk of insolvency. In evaluating a request under this sub-subparagraph, the department shall consider and shall require the insurer to provide information relevant to: the insurer's size, market concentration, and general financial condition; the portion of the insurer's business in this state represented by personal lines residential property insurance; the reasonableness of assumptions with respect to size, frequency, severity, and path of hurricanes; the reinsurance available to the insurer and potential recoveries from the Florida Hurricane Catastrophe Fund; and the extent to which the insurer's assets have been voluntarily transferred by dividend or otherwise from the insurer to its stockholders, parent companies, or affiliated companies since June 1, 1996, or the date on which this section became law, whichever was later. In the implementation of exposure reductions under this sub-subparagraph, the department and the insurer shall consider such factors as policyholder longevity, the use of voluntary incentives to accomplish the exposure reduction, and geographic distribution.

c.  A policy shall not be counted as having been canceled or nonrenewed for purposes of this subsection if any of the following apply:

(I)  The policy was canceled or nonrenewed for an underwriting reason unrelated to the risk of loss from hurricane exposure, nonpayment of premium, or any other lawful reason that is unrelated to the risk of loss from hurricane exposure. The department shall consider the reason specified in the notice of cancellation or nonrenewal to be the reason for the cancellation or nonrenewal unless the department finds by a preponderance of the evidence that the stated reason was not the insurer's actual reason for the cancellation or nonrenewal.

(II)  The cancellation or nonrenewal was initiated by the insured.

(III)  The insurer has offered the policyholder replacement or alternative coverage at approved rates, which coverage meets the requirements of the secondary mortgage market.

d.  In addition to any other cancellations or nonrenewals subject to the limitations in this subsection, a policy shall be considered as having been canceled or nonrenewed for purposes of this subsection if:

(I)  The insurer implements a rate increase under the use-and-file provisions of s. 627.062(2)(a)2., which rate increase exceeds 150 percent of the increase ultimately approved by the department, and, while the rate filing was pending, the policyholder voluntarily canceled or nonrenewed the policy and obtained replacement coverage from another insurer, including the Residential Property and Casualty Joint Underwriting Association; or

(II)  The insurer reduces the commission to an agent by more than 25 percent and the agent thereafter places the risk with another insurer, including the Residential Property and Casualty Joint Underwriting Association, or the Florida Windstorm Underwriting Association.

e.  The department must approve or disapprove an application for a waiver within 90 days after the department receives the application for waiver.

3.  In addition to the cancellations or nonrenewals authorized under this section, an insurer may cancel or nonrenew policies to the extent authorized by an exemption from or waiver of either the moratorium created by chapter 93-401, Laws of Florida, or the moratorium phaseout under former s. 627.7013(2).

4.  Notwithstanding any provisions of this section to the contrary, this section does not apply to any insurer that, prior to August 24, 1992, filed notice of such insurer's intent to discontinue writing insurance in this state under s. 624.430, and for which a finding has been made by the department, the Division of Administrative Hearings of the Department of Management Services, or a court that such notice satisfied all requirements of s. 624.430. Nothing in this section shall be construed to authorize an insurer to withdraw from any line of property insurance business for the purpose of reducing exposure to risk of hurricane loss if such withdrawal commenced at any time that the moratorium under chapter 93-401, Laws of Florida, or the moratorium phaseout under this section is in effect.

5.  The following actions by an insurer do not constitute cancellations or nonrenewals for purposes of this subsection:

a.  The transfer of a risk from one admitted insurer to another admitted insurer, unless the terms of the new or replacement policy place the policyholder in default of a mortgage obligation.

b.  An increase in the hurricane deductible applicable to the policy, unless the new deductible places the policyholder in default of a mortgage obligation or the deductible exceeds the limits specified in s. 627.701.

c.  Any other lawful change in coverage that does not place the policyholder in default of a mortgage obligation.

d.  A cancellation or nonrenewal that is part of the same action as the removal of a policy including windstorm or hurricane coverage from the Residential Property and Casualty Joint Underwriting Association.

6.  In order to assure fair and effective enforcement of this subsection, each insurer shall, no later than October 1, 1996, report to the department the policy number of each policy subject to this subsection, arranged by county. The report shall include the policy number for each personal lines residential policy that was in force on June 1, 1996, or the date this section became law, whichever was later. Beginning October 1, 1996, each insurer shall also report, on a monthly basis, all cancellations and nonrenewals of policies included in such policy list and the reasons for the cancellations and nonrenewals.

(c)  The department may adopt rules to implement this subsection.

(d)  This section shall cease to operate at such time as the department determines that the insured value of all residential properties insured by the Florida Windstorm Underwriting Association and all properties insured by the Residential Property and Casualty Joint Underwriting Association under policies providing wind coverage, combined, has remained below $25 billion for 3 consecutive months, based on exposure data reported to the department by the associations.

(e)  This subsection is repealed on June 1, 2001.

History.--s. 19, ch. 93-410; s. 1, ch. 93-411; s. 14, ch. 95-276; s. 13, ch. 96-194; s. 273, ch. 96-410; s. 27, ch. 97-93; s. 5, ch. 98-173.

627.7014  Orderly markets for condominium association residential property insurance.--

(1)  FINDINGS AND PURPOSE.--

(a)  The Legislature finds:

1.  That residential property insurers providing condominium association coverage, as a condition of doing business in this state, have a responsibility to contribute to an orderly market for condominium association residential property insurance and that there is a compelling state interest in maintaining an orderly market for condominium association residential property insurance.

2.  That Hurricane Andrew, which caused over $15 billion of insured losses in South Florida, has reinforced the need of consumers to have reliable condominium association insurance coverage; however, even more than 3 years after Hurricane Andrew, the hurricane's enormous monetary impact is causing insurers to propose substantial cancellation or nonrenewal of their condominium association insurance policyholders.

3.  That the massive cancellations and nonrenewals announced, proposed, or contemplated by certain insurers constitute a significant danger to the public health, safety, and welfare and destabilize the insurance market.

4.  That the Residential Property and Casualty Joint Underwriting Association, a residual market mechanism created to alleviate temporary unavailability of property insurance coverage, remains the primary or exclusive source of new property insurance in significant portions of the state.

5.  That recent enactments intended to restore a competitive, private sector property insurance market, including creation and enhancement of the Florida Hurricane Catastrophe Fund, incentives for depopulation of the Residential Property and Casualty Joint Underwriting Association, incentives for hurricane loss mitigation and prevention, creation of the Florida Commission on Hurricane Loss Projection Methodology, and revisions of laws relating to rates and coverages, are beginning to have their intended effects; however, the market remains unstable.

6.  That the moratorium created by this section is the least intrusive method for maintaining an orderly market for condominium association insurance, insofar as it applies only to hurricane-related cancellations and nonrenewals of personal lines residential policies that were in force on the effective date of this section, and insofar as it allows an insurer annually to nonrenew up to 5 percent of the total number of such policies as of the effective date of this section.

(b)  The Legislature finds, as of January 1, 1998, that:

1.  The conditions described in paragraph (a) remain applicable to the commercial residential property insurance market in this state in 1998 and are likely to remain applicable for several years thereafter.

2.  The general instability of the market is reflected by the recent rapid growth of the Florida Windstorm Underwriting Association, which had more than 9,500 commercial residential policies in force as of December 31, 1997, representing a 58 percent increase over the number of commercial residential policies in force on December 31, 1996.

3.  An extension of the operation of this section until June 1, 2001, will provide an opportunity for the market to stabilize and for continuation of residual market depopulation efforts.

(c)  The purposes of this section are to provide for a temporary moratorium on hurricane-related cancellations and nonrenewals of condominium association coverage and to require advance planning and approval for programs of condominium association exposure reduction.

(2)  MORATORIUM.--

(a)  As used in this subsection, the term "total number of policies" means the number of an insurer's condominium association policies providing windstorm or hurricane coverage that were in force on the effective date of this section. The following restrictions apply to the cancellation or nonrenewal of condominium association residential property insurance policies that were in force on the effective date of this section:

1.  In any 12-month period, an insurer may not cancel or nonrenew more than 5 percent of its total number of condominium association policies in the state for the purpose of reducing the insurer's exposure to hurricane claims and may not, with respect to any county, cancel or nonrenew more than 10 percent of its total number of condominium association policies in the county for the purpose of reducing the insurer's exposure to hurricane claims. This subparagraph does not prohibit any cancellations or nonrenewals of such policies for any other lawful reason unrelated to the risk of loss from hurricane exposure.

2.a.  If, for any 12-month period, an insurer proposes to cancel or nonrenew condominium association policies to an extent not authorized by subparagraph 1. for the purpose of reducing exposure to hurricane claims, the insurer must file a phaseout plan with the department at least 90 days prior to the effective date of the plan. In the plan, the insurer must demonstrate to the department that the insurer is protecting market stability and the interests of its policyholders. The plan may not be implemented unless it is approved by the department. In developing the plan, the insurer must consider policyholder longevity, the use of voluntary incentives to accomplish the reduction, and geographic distribution. The insurer must demonstrate that under the plan the insurer will not cancel or nonrenew more policies in the 12-month period than the largest number of similar policies the insurer canceled or nonrenewed for any reason in any 12-month period between August 24, 1989, and August 24, 1992.

b.  If the insurer considers the number of cancellations and nonrenewals under sub-subparagraph a. to be insufficient, the insurer may apply for approval of additional cancellations or nonrenewals on the basis of an unreasonable risk of insolvency. In evaluating a request under this sub-subparagraph, the department shall consider, and shall require the insurer to provide information relevant to: the insurer's size, market concentration, and general financial condition; the portion of the insurer's business in this state represented by condominium association residential property insurance; the reasonableness of assumptions with respect to size, frequency, severity, and path of hurricanes; and the reinsurance available to the insurer and potential recoveries from the Florida Hurricane Catastrophe Fund. In the implementation of exposure reductions under this sub-subparagraph, the department and the insurer shall consider such factors as policyholder longevity, the use of voluntary incentives to accomplish the exposure reduction, and geographic distribution.

c.  A policy shall not be counted as having been canceled or nonrenewed for purposes of this subsection if any of the following apply:

(I)  The policy was canceled or nonrenewed for an underwriting reason unrelated to the risk of loss from hurricane exposure, nonpayment of premium, or any other lawful reason that is unrelated to the risk of loss from hurricane exposure. The department shall consider the reason specified in the notice of cancellation or nonrenewal to be the reason for the cancellation or nonrenewal unless the department finds by a preponderance of the evidence that the stated reason was not the insurer's actual reason for the cancellation or nonrenewal.

(II)  The cancellation or nonrenewal was initiated by the insured.

(III)  The insurer has offered the policyholder replacement or alternative coverage at approved rates.

(IV)  The risk is transferred from one admitted insurer to another admitted insurer, unless the terms of the new or replacement policy place the policyholder in default of a mortgage obligation.

(V)  The hurricane deductible applicable to the policy is increased unless the new deductible exceeds statutory limits or places the policyholder in default of a mortgage obligation.

(VI)  Any other lawful change in coverage that does not place the policyholder in default of a mortgage obligation is made.

d.  In addition to any other cancellations or nonrenewals subject to the limitations in this subsection, a policy shall be considered as having been canceled or nonrenewed for purposes of this subsection if:

(I)  The insurer implements a rate increase under the use-and-file provisions of s. 627.062(2)(a)2., which rate increase exceeds 150 percent of the increase ultimately approved by the department, and, while the rate filing was pending, the policyholder voluntarily canceled or nonrenewed the policy and obtained replacement coverage from another insurer, including the Residential Property and Casualty Joint Underwriting Association; or

(II)  The insurer reduces the commission to an agent by more than 25 percent and the agent thereafter places the risk with another insurer, including the Residential Property and Casualty Joint Underwriting Association.

e.  The department must approve or disapprove an application for a waiver within 90 days after the department receives the application for waiver.

3.  Notwithstanding any provisions of this section to the contrary, this section does not apply to any insurer that, prior to August 24, 1992, filed notice of such insurer's intent to discontinue writing insurance in this state under s. 624.430, and for which a finding has been made by the department, the Division of Administrative Hearings of the Department of Management Services, or a court that such notice satisfied all requirements of s. 624.430. This section also does not apply to any insurer that:

a.  Collects at least 75 percent of its Florida premiums from policies that include hurricane coverage provided to condominium associations in coastal counties.

b.  Collects at least 80 percent of its Florida premiums from policies that include hurricane coverage provided to condominium associations in Broward, Dade, and Palm Beach Counties.

c.  Has, annually since 1992:

(I)  Increased its aggregate Florida premium volume from policies that include hurricane coverage provided to condominium associations in coastal counties.

(II)  Increased its aggregate Florida premium volume from policies that include hurricane coverage provided to condominium associations in Broward, Dade, and Palm Beach Counties.

(III)  Increased its aggregate Florida exposure from policies that include hurricane coverage provided to condominium associations in coastal counties.

(IV)  Increased its aggregate Florida exposure from policies that include hurricane coverage provided to condominium associations in Broward, Dade, and Palm Beach Counties.

d.  Has surplus as to policyholders of no more than $200 million as reflected in its annual statement for 1995.

4.  In order to assure fair and effective enforcement of this subsection, each insurer shall, no later than October 1, 1996, report to the department the policy number of each policy subject to this subsection, arranged by county. The report shall include the policy number for each condominium association policy that was in force on the effective date of this section. Beginning October 1, 1996, each insurer shall also report, on a monthly basis, all cancellations and nonrenewals of policies included in such policy list and the reasons for the cancellations and nonrenewals.

(b)  The department may adopt rules to implement this subsection.

(c)  This section shall cease to operate at such time as the department determines that the insured value of all residential properties insured by the Florida Windstorm Underwriting Association and all properties insured by the Residential Property and Casualty Joint Underwriting Association under policies providing wind coverage, combined, has remained below $25 billion for 3 consecutive months, based on exposure data reported to the department by the associations.

(d)  This subsection is repealed on June 1, 2001.

History.--s. 14, ch. 96-194; s. 28, ch. 97-93; s. 6, ch. 98-173.

627.7015  Alternative procedure for resolution of disputed property insurance claims.--

(1)  PURPOSE AND SCOPE.--This section sets forth a nonadversarial alternative dispute resolution procedure for a mediated claim resolution conference prompted by the need for effective, fair, and timely handling of property insurance claims. There is a particular need for an informal, nonthreatening forum for helping parties who elect this procedure to resolve their claims disputes because most homeowner's insurance policies obligate insureds to participate in a potentially expensive and time-consuming adversarial appraisal process prior to litigation. The procedure set forth in this section is designed to bring the parties together for a mediated claims settlement conference without any of the trappings or drawbacks of an adversarial process. Before resorting to these procedures, insureds and insurers are encouraged to resolve claims as quickly and fairly as possible. This section is available with respect to claims under personal lines policies for all claimants and insurers prior to commencing the appraisal process, or commencing litigation. If requested by the insured, participation by legal counsel shall be permitted. Mediation under this section is also available to litigants referred to the department by a county court or circuit court. This section does not apply to commercial coverages, to private passenger motor vehicle insurance coverages, or to disputes relating to liability coverages in policies of property insurance.

(2)  At the time a first-party claim within the scope of this section is filed, the insurer shall notify all first-party claimants of their right to participate in the mediation program under this section. The department shall prepare a consumer information pamphlet for distribution to persons participating in mediation under this section.

(3)  The costs of mediation shall be reasonable, and the insurer shall bear all of the cost of conducting mediation conferences, except as otherwise provided in this section. If an insured fails to appear at the conference, the conference shall be rescheduled upon the insured's payment of the costs of a rescheduled conference. If the insurer fails to appear at the conference, the insurer shall pay the insured's actual cash expenses incurred in attending the conference if the insurer's failure to attend was not due to a good cause acceptable to the department. An insurer will be deemed to have failed to appear if the insurer's representative lacks authority to settle the full value of the claim. The insurer shall incur an additional fee for a rescheduled conference necessitated by the insurer's failure to appear at a scheduled conference. The fees assessed by the administrator shall include a charge necessary to defray the expenses of the department related to its duties under this section and shall be deposited in the Insurance Commissioner's Regulatory Trust Fund.

(4)  The department shall adopt by rule a property insurance mediation program to be administered by the department or its designee. The department may also adopt special rules which are applicable in cases of an emergency within the state. The rules shall be modeled after practices and procedures set forth in mediation rules of procedure adopted by the Supreme Court. The rules shall provide for:

(a)  Reasonable requirement for processing and scheduling of requests for mediation.

(b)  Qualifications of mediators as provided in s. 627.745 and in the Florida Rules of Certified and Court Appointed Mediators, and for such other individuals as are qualified by education, training, or experience as the department determines to be appropriate.

(c)  Provisions governing who may attend mediation conferences.

(d)  Selection of mediators.

(e)  Criteria for the conduct of mediation conferences.

(f)  Right to legal counsel.

(5)  All statements made and documents produced at a mediation conference shall be deemed to be settlement negotiations in anticipation of litigation within the scope of s. 90.408. All parties to the mediation must negotiate in good faith and must have the authority to immediately settle the claim. Mediators are deemed to be agents of the department and shall have the immunity from suit provided in s. 44.107.

(6)  Mediation is nonbinding; however, if a written settlement is reached, the insured has 3 business days within which the insured may rescind the settlement unless the insured has cashed or deposited any check or draft disbursed to the insured for the disputed matters as a result of the conference. If a settlement agreement is reached and is not rescinded, it shall be binding and act as a release of all specific claims that were presented in that mediation conference.

(7)  If the insurer requests the mediation, and the mediation results are rejected by either party, the insured shall not be required to submit to or participate in any contractual loss appraisal process of the property loss damage as a precondition to legal action for breach of contract against the insurer for its failure to pay the policyholder's claims covered by the policy.

(8)  The department may designate an entity or person to serve as administrator to carry out any of the provisions of this section and may take this action by means of a written contract or agreement.

History.--s. 20, ch. 93-410.

627.7016  Insurer contracts with building contractors.--An insurer who offers residential coverage, as defined in s. 627.4025, may contract with a building contractor skilled in techniques that mitigate hurricane damage. Insurers may offer policyholders the option to select the services of such building contractors to repair damage covered by the insurance policy. The insurer must guarantee the building contractor's work and may offer the policyholder any other terms, conditions, or benefits. The insurance company is not liable for the actions of the building contractor.

History.--s. 15, ch. 96-194.

627.70161  Family day care insurance.--

(1)  PURPOSE AND INTENT.--The Legislature recognizes that family day care homes fulfill a vital role in providing child care in Florida. It is the intent of the Legislature that residential property insurance coverage should not be canceled, denied, or nonrenewed solely on the basis of the family day care services at the residence. The Legislature also recognizes that the potential liability of residential property insurers is substantially increased by the rendition of child care services on the premises. The Legislature therefore finds that there is a public need to specify that contractual liabilities that arise in connection with the operation of the family day care home are excluded from residential property insurance policies unless they are specifically included in such coverage.

(2)  DEFINITIONS.--As used in this section, the term:

(a)  "Child care" means the care, protection, and supervision of a child, for a period of less than 24 hours a day on a regular basis, which supplements parental care, enrichment, and health supervision for the child, in accordance with his or her individual needs, and for which a payment, fee, or grant is made for care.

(b)  "Family day care home" means an occupied residence in which child care is regularly provided for children from at least two unrelated families and which receives a payment, fee, or grant for any of the children receiving care, whether or not operated for a profit.

(3)  FAMILY DAY CARE; COVERAGE.--A residential property insurance policy shall not provide coverage for liability for claims arising out of, or in connection with, the operation of a family day care home, and the insurer shall be under no obligation to defend against lawsuits covering such claims, unless:

(a)  Specifically covered in a policy; or

(b)  Covered by a rider or endorsement for business coverage attached to a policy.

(4)  DENIAL, CANCELLATION, REFUSAL TO RENEW PROHIBITED.--An insurer may not deny, cancel, or refuse to renew a policy for residential property insurance solely on the basis that the policyholder or applicant operates a family day care home. In addition to other lawful reasons for refusing to insure, an insurer may deny, cancel, or refuse to renew a policy of a family day care home provider if one or more of the following conditions occur:

(a)  The policyholder or applicant provides care for more children than authorized for family day care homes by s. 402.302;

(b)  The policyholder or applicant fails to maintain a separate commercial liability policy or an endorsement providing liability coverage for the family day care home operations;

(c)  The policyholder or applicant fails to comply with the family day care home licensure and registration requirements specified in s. 402.313; or

(d)  Discovery of willful or grossly negligent acts or omissions or any violations of state laws or regulations establishing safety standards for family day care homes by the named insured or his or her representative which materially increase any of the risks insured.

History.--s. 1, ch. 98-6; s. 43, ch. 99-7.

627.7017  Hurricane loss mitigation projects.--In addition to any other hurricane loss mitigation activities authorized or required by law, the department may contract with public or private entities for hurricane loss mitigation projects.

History.--s. 16, ch. 96-194.

627.702  Valued policy law.--

(1)  In the event of the total loss of any building, structure, mobile home as defined in s. 320.01(2), or manufactured building as defined in s. 553.36(11), located in this state and insured by any insurer as to a covered peril, in the absence of any change increasing the risk without the insurer's consent and in the absence of fraudulent or criminal fault on the part of the insured or one acting in her or his behalf, the insurer's liability, if any, under the policy for such total loss shall be in the amount of money for which such property was so insured as specified in the policy and for which a premium has been charged and paid.

(2)  In the case of a partial loss by fire or lightning of any such property, the insurer's liability, if any, under the policy shall be for the actual amount of such loss but shall not exceed the amount of insurance specified in the policy as to such property and such peril.

(3)  The provisions of subsections (1) and (2) do not apply when:

(a)  Insurance policies are issued or renewed by more than one company insuring the same building, structure, mobile home, or manufactured building, and the existence of such additional insurance is not disclosed by the insured to all insurers issuing such policies;

(b)  Two or more buildings, structures, mobile homes, or manufactured buildings are insured under a blanket form for a single amount of insurance; or

(c)  The completed value of a building, structure, mobile home, or manufactured building is insured under a builder's risk policy.

(4)  The amount of any loss referred to in subsection (1) or subsection (2) shall be subject to any coinsurance clause contained in the policy pursuant to s. 627.701.

(5)  This section does not apply as to personal property or any interest therein, except with respect to mobile homes as defined in s. 320.01(2) or manufactured buildings as defined in s. 553.36(11). Nor does this section apply to coverage of an appurtenant structure or other structure or any coverage or claim in which the dollar amount of coverage available as to the structure involved is not directly stated in the policy as a dollar amount specifically applicable to that particular structure.

(6)  With regard to mobile homes included in subsection (1), any total loss shall be adjusted on the basis of the amount of money for which such property was insured as specified in the policy, whether on an actual cash value basis, replacement cost basis, or stated amount, and for which a premium has been charged and paid only if the insured has elected to purchase such coverage at the inception of the policy. However, when coverage is written for a mobile home on any basis other than stated value, a complete disclosure of the relative cost between that policy and the stated value policy shall be made to the insured on a form and in a format approved by the department. Such forms shall disclose and describe the differences between the types of policies and shall be signed by the insured. Copies shall be maintained in the insurer's file, and a copy shall be made available to the insured. Each insurer licensed to write insurance covering mobile homes shall make such stated value coverage available at the option of the insured.

(7)  Nothing herein shall be construed as prohibiting an insurer from repairing or replacing damaged property at its own expense and without contribution on the part of the insured except, as provided in subsection (6), when an insured has elected to purchase stated value coverage. Such repair or replacement of damaged property shall be in lieu of any liability created by subsection (1); and any insurer so repairing or replacing shall have no liability pursuant to subsection (1), provided such insurer returns to the named insured a portion of the premium, for all policy terms during which the policy limits were the same as those in effect on the date on which the loss occurred, equal to that portion of the premium paid for limits of insurance on the structure in excess of the cost of replacement.

(8)  Any property insurer may, by an appropriate rider or endorsement or otherwise, provide insurance indemnifying the insured for the difference between the insurable value of the insured property at the time any loss or damage occurs, and the amount actually expended to repair, rebuild, or replace within this state, with new materials of like size, kind, and quality, such property as has been damaged or destroyed.

History.--ss. 606, 608, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 1, 2, ch. 79-237; ss. 1, 2, ch. 80-326; s. 1, ch. 81-280; ss. 2, 3, ch. 81-318; ss. 539, 541, 809(2nd), ch. 82-243; ss. 65, 79, ch. 82-386; s. 1, ch. 83-191; s. 114, ch. 92-318; s. 357, ch. 97-102.

Note.--Consolidation of s. 627.702 and former s. 627.704.

627.705  Return of unearned premium on overinsured personal property.--In the event of a total loss or destruction of any personal property on which the amount of the appraised or agreed loss is less than the total amount insured thereon, the insurer shall return to the insured the unearned premium for the excess of insurance over the appraised or agreed loss, to be paid at the same time and in the same manner as the loss shall be paid; and the unearned premium shall be a just and legal claim against the insurer.

History.--s. 609, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 541, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.706  Sinkhole insurance.--

(1)  Every insurer authorized to transact property insurance in this state shall make available coverage for insurable sinkhole losses on any structure, including contents of personal property contained therein, to the extent provided in the form to which the sinkhole coverage attaches.

(2)  "Loss" means structural damage to the building. Contents coverage shall apply only if there is structural damage to the building.

(3)  "Sinkhole loss" means actual physical damage to the property covered arising out of or caused by sudden settlement or collapse of the earth supporting such property only when such settlement or collapse results from subterranean voids created by the action of water on a limestone or similar rock formation.

(4)  Every insurer authorized to transact property insurance in this state shall make a proper filing with the department for the purpose of extending the appropriate forms of property insurance to include coverage for insurable sinkhole losses.

History.--s. 2, ch. 81-280; s. 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 8, ch. 2000-333.

627.7061  Coverage inquiries.--Inquiries about coverage on a property insurance contract are not claim activity, unless an actual claim is filed by the insured that results in a company investigation of the claim.

History.--s. 78, ch. 92-318.

627.707  Minimum standards for investigation of sinkhole claims by insurers; nonrenewals.--

(1)  Upon receipt of a claim for a sinkhole loss, an insurer must meet the following minimum standards in investigating a claim:

(a)  Upon receipt of a claim for a sinkhole loss, the insurer must make an inspection of the insured's premises to determine if there has been physical damage to the structure which might be the result of sinkhole activity.

(b)  If, upon the investigation pursuant to paragraph (a), the insurer discovers damage to a structure which is consistent with sinkhole activity or if the structure is located in close proximity to a structure in which sinkhole damage has been verified, then prior to denying a claim, the insurer must obtain a written certification from an individual qualified to determine the existence of sinkhole activity, stating that the cause of the claim is not sinkhole activity, and that the analysis conducted was of sufficient scope to eliminate sinkhole activity as the cause of damage within a reasonable professional probability. The written certification must also specify the professional discipline and professional licensure or registration under which the analysis was conducted.

(c)  If the insurer obtains, pursuant to paragraph (b), written certification that the cause of the claim was not sinkhole activity, and if the policyholder has submitted the sinkhole claim without good faith grounds for submitting such claim, the policyholder shall reimburse the insurer for 50 percent of the cost of the analysis under paragraph (b); however, a policyholder is not required to reimburse an insurer more than $2,500 with respect to any claim. A policyholder is required to pay reimbursement under this paragraph only if the insurer, prior to ordering the analysis under paragraph (b), informs the policyholder of the policyholder's potential liability for reimbursement and gives the policyholder the opportunity to withdraw the claim.

(2)  No insurer shall nonrenew any policy of property insurance on the basis of filing of claims for partial loss caused by sinkhole damage or clay shrinkage as long as the total of such payments does not exceed the current policy limits of coverage for property damage, and provided the insured has repaired the structure in accordance with the engineering recommendations upon which any payment or policy proceeds were based.

History.--s. 1, ch. 92-146; s. 4, ch. 93-401.

PART XI
MOTOR VEHICLE AND CASUALTY
INSURANCE CONTRACTS

627.7261  Refusal to issue policy.

627.7263  Rental and leasing driver's insurance to be primary; exception.

627.727  Motor vehicle insurance; uninsured and underinsured vehicle coverage; insolvent insurer protection.

627.7275  Motor vehicle property damage liability.

627.7276  Notice of limited coverage.

627.7277  Notice of renewal premium.

627.728  Cancellations; nonrenewals.

627.7281  Cancellation notice.

627.7282  Notice of additional premium; cancellation upon nonpayment.

627.7283  Cancellation; return of premium.

627.7285  Experience while operating a train.

627.7286  Renewal of policy and setting of rates; certain experience not a factor.

627.7288  Comprehensive coverage; deductible not to apply to motor vehicle glass.

627.7295  Motor vehicle insurance contracts.

627.72951  Temporary binding permitted.

627.730  Florida Motor Vehicle No-Fault Law.

627.731  Purpose.

627.732  Definitions.

627.733  Required security.

627.734  Proof of security; security requirements; penalties.

627.736  Required personal injury protection benefits; exclusions; priority; claims.

627.737  Tort exemption; limitation on right to damages; punitive damages.

627.739  Personal injury protection; optional limitations; deductibles.

627.7401  Notification of insured's rights.

627.7403  Mandatory joinder of derivative claim.

627.7405  Insurers' right of reimbursement.

627.7415  Commercial motor vehicles; additional liability insurance coverage.

627.742  Nonpublic sector buses; additional liability insurance coverage.

627.743  Payment of third-party claims.

627.744  Required preinsurance inspection of private passenger motor vehicles.

627.745  Mediation of claims.

627.7261  Refusal to issue policy.--No insurer may deny an application for automobile liability insurance solely on the ground that renewal of similar coverage has been denied by another insurer or on the ground of an applicant's failure to disclose that such denial has occurred.

History.--s. 2, ch. 71-7(B); s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.7263  Rental and leasing driver's insurance to be primary; exception.--

(1)  The valid and collectible liability insurance or personal injury protection insurance providing coverage for the lessor of a motor vehicle for rent or lease is primary unless otherwise stated in at least 10-point type on the face of the rental or lease agreement. Such insurance is primary for the limits of liability and personal injury protection coverage as required by ss. 324.021(7) and 627.736.

(2)  If the lessee's coverage is to be primary, the rental or lease agreement must contain the following language, in at least 10-point type:

"The valid and collectible liability insurance and personal injury protection insurance of any authorized rental or leasing driver is primary for the limits of liability and personal injury protection coverage required by ss. 324.021(7) and 627.736, Florida Statutes."

History.--s. 1, ch. 76-56; s. 3, ch. 76-168; s. 1, ch. 77-174; s. 1, ch. 77-457; s. 29, ch. 77-468; ss. 2, 3, ch. 81-318; ss. 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1, ch. 95-157.

627.727  Motor vehicle insurance; uninsured and underinsured vehicle coverage; insolvent insurer protection.--

(1)  No motor vehicle liability insurance policy which provides bodily injury liability coverage shall be delivered or issued for delivery in this state with respect to any specifically insured or identified motor vehicle registered or principally garaged in this state unless uninsured motor vehicle coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom. However, the coverage required under this section is not applicable when, or to the extent that, an insured named in the policy makes a written rejection of the coverage on behalf of all insureds under the policy. When a motor vehicle is leased for a period of 1 year or longer and the lessor of such vehicle, by the terms of the lease contract, provides liability coverage on the leased vehicle, the lessee of such vehicle shall have the sole privilege to reject uninsured motorist coverage or to select lower limits than the bodily injury liability limits, regardless of whether the lessor is qualified as a self-insurer pursuant to s. 324.171. Unless an insured, or lessee having the privilege of rejecting uninsured motorist coverage, requests such coverage or requests higher uninsured motorist limits in writing, the coverage or such higher uninsured motorist limits need not be provided in or supplemental to any other policy which renews, extends, changes, supersedes, or replaces an existing policy with the same bodily injury liability limits when an insured or lessee had rejected the coverage. When an insured or lessee has initially selected limits of uninsured motorist coverage lower than her or his bodily injury liability limits, higher limits of uninsured motorist coverage need not be provided in or supplemental to any other policy which renews, extends, changes, supersedes, or replaces an existing policy with the same bodily injury liability limits unless an insured requests higher uninsured motorist coverage in writing. The rejection or selection of lower limits shall be made on a form approved by the Insurance Commissioner. The form shall fully advise the applicant of the nature of the coverage and shall state that the coverage is equal to bodily injury liability limits unless lower limits are requested or the coverage is rejected. The heading of the form shall be in 12-point bold type and shall state: "You are electing not to purchase certain valuable coverage which protects you and your family or you are purchasing uninsured motorist limits less than your bodily injury liability limits when you sign this form. Please read carefully." If this form is signed by a named insured, it will be conclusively presumed that there was an informed, knowing rejection of coverage or election of lower limits on behalf of all insureds. The insurer shall notify the named insured at least annually of her or his options as to the coverage required by this section. Such notice shall be part of, and attached to, the notice of premium, shall provide for a means to allow the insured to request such coverage, and shall be given in a manner approved by the department. Receipt of this notice does not constitute an affirmative waiver of the insured's right to uninsured motorist coverage where the insured has not signed a selection or rejection form. The coverage described under this section shall be over and above, but shall not duplicate, the benefits available to an insured under any workers' compensation law, personal injury protection benefits, disability benefits law, or similar law; under any automobile medical expense coverage; under any motor vehicle liability insurance coverage; or from the owner or operator of the uninsured motor vehicle or any other person or organization jointly or severally liable together with such owner or operator for the accident; and such coverage shall cover the difference, if any, between the sum of such benefits and the damages sustained, up to the maximum amount of such coverage provided under this section. The amount of coverage available under this section shall not be reduced by a setoff against any coverage, including liability insurance. Such coverage shall not inure directly or indirectly to the benefit of any workers' compensation or disability benefits carrier or any person or organization qualifying as a self-insurer under any workers' compensation or disability benefits law or similar law.

(2)  The limits of uninsured motorist coverage shall be not less than the limits of bodily injury liability insurance purchased by the named insured, or such lower limit complying with the rating plan of the company as may be selected by the named insured. The limits set forth in this subsection, and the provisions of subsection (1) which require uninsured motorist coverage to be provided in every motor vehicle policy delivered or issued for delivery in this state, do not apply to any policy which does not provide primary liability insurance that includes coverage for liabilities arising from the maintenance, operation, or use of a specifically insured motor vehicle. However, an insurer issuing such a policy shall make available as a part of the application for such policy, and at the written request of an insured, limits up to the bodily injury liability limits contained in such policy or $1 million, whichever is less.

(3)  For the purpose of this coverage, the term "uninsured motor vehicle" shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle when the liability insurer thereof:

(a)  Is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency;

(b)  Has provided limits of bodily injury liability for its insured which are less than the total damages sustained by the person legally entitled to recover damages; or

(c)  Excludes liability coverage to a nonfamily member whose operation of an insured vehicle results in injuries to the named insured or to a relative of the named insured who is a member of the named insured's household.

(4)  An insurer's insolvency protection shall be applicable only to accidents occurring during a policy period in which its insured's uninsured motorist coverage is in effect when the liability insurer of the tortfeasor becomes insolvent within 4 years after such an accident. Nothing herein contained shall be construed to prevent any insurer from affording insolvency protection under terms and conditions more favorable to its insureds than is provided hereunder.

(5)  Any person having a claim against an insolvent insurer as defined in s. 631.54(6) under the provisions of this section shall present such claim for payment to the Florida Insurance Guaranty Association only. In the event of a payment to any person in settlement of a claim arising under the provisions of this section, the association is not subrogated or entitled to any recovery against the claimant's insurer. The association, however, has the rights of recovery as set forth in chapter 631 in the proceeds recoverable from the assets of the insolvent insurer.

(6)(a)  If an injured person or, in the case of death, the personal representative agrees to settle a claim with a liability insurer and its insured, and such settlement would not fully satisfy the claim for personal injuries or wrongful death so as to create an underinsured motorist claim, then written notice of the proposed settlement must be submitted by certified or registered mail to all underinsured motorist insurers that provide coverage. The underinsured motorist insurer then has a period of 30 days after receipt thereof to consider authorization of the settlement or retention of subrogation rights. If an underinsured motorist insurer authorizes settlement or fails to respond as required by paragraph (b) to the settlement request within the 30-day period, the injured party may proceed to execute a full release in favor of the underinsured motorist's liability insurer and its insured and finalize the proposed settlement without prejudice to any underinsured motorist claim.

(b)  If an underinsured motorist insurer chooses to preserve its subrogation rights by refusing permission to settle, the underinsured motorist insurer must, within 30 days after receipt of the notice of the proposed settlement, pay to the injured party the amount of the written offer from the underinsured motorist's liability insurer. Thereafter, upon final resolution of the underinsured motorist claim, the underinsured motorist insurer is entitled to seek subrogation against the underinsured motorist and the liability insurer for the amounts paid to the injured party.

(c)  The underinsured motorist insurer is entitled to a credit against total damages in the amount of the limits of the underinsured motorist's liability policy in all cases to which this subsection applies, even if the settlement with the underinsured motorist under paragraph (a) or the payment by the underinsured motorist insurer under paragraph (b) is for less than the underinsured motorist's full liability policy limits. The term "total damages" as used in this section means the full amount of damages determined to have been sustained by the injured party, regardless of the amount of underinsured motorist coverage. Nothing in this subsection, including any payment or credit under this subsection, reduces or affects the total amount of underinsured motorist coverage available to the injured party.

(7)  The legal liability of an uninsured motorist coverage insurer does not include damages in tort for pain, suffering, mental anguish, and inconvenience unless the injury or disease is described in one or more of paragraphs (a)-(d) of s. 627.737(2).

(8)  The provisions of s. 627.428 do not apply to any action brought pursuant to this section against the uninsured motorist insurer unless there is a dispute over whether the policy provides coverage for an uninsured motorist proven to be liable for the accident.

(9)  Insurers may offer policies of uninsured motorist coverage containing policy provisions, in language approved by the department, establishing that if the insured accepts this offer:

(a)  The coverage provided as to two or more motor vehicles shall not be added together to determine the limit of insurance coverage available to an injured person for any one accident, except as provided in paragraph (c).

(b)  If at the time of the accident the injured person is occupying a motor vehicle, the uninsured motorist coverage available to her or him is the coverage available as to that motor vehicle.

(c)  If the injured person is occupying a motor vehicle which is not owned by her or him or by a family member residing with her or him, the injured person is entitled to the highest limits of uninsured motorist coverage afforded for any one vehicle as to which she or he is a named insured or insured family member. Such coverage shall be excess over the coverage on the vehicle the injured person is occupying.

(d)  The uninsured motorist coverage provided by the policy does not apply to the named insured or family members residing in her or his household who are injured while occupying any vehicle owned by such insureds for which uninsured motorist coverage was not purchased.

(e)  If, at the time of the accident the injured person is not occupying a motor vehicle, she or he is entitled to select any one limit of uninsured motorist coverage for any one vehicle afforded by a policy under which she or he is insured as a named insured or as an insured resident of the named insured's household.

In connection with the offer authorized by this subsection, insurers shall inform the named insured, applicant, or lessee, on a form approved by the department, of the limitations imposed under this subsection and that such coverage is an alternative to coverage without such limitations. If this form is signed by a named insured, applicant, or lessee, it shall be conclusively presumed that there was an informed, knowing acceptance of such limitations. When the named insured, applicant, or lessee has initially accepted such limitations, such acceptance shall apply to any policy which renews, extends, changes, supersedes, or replaces an existing policy unless the named insured requests deletion of such limitations and pays the appropriate premium for such coverage. Any insurer who provides coverage which includes the limitations provided in this subsection shall file revised premium rates with the department for such uninsured motorist coverage to take effect prior to initially providing such coverage. The revised rates shall reflect the anticipated reduction in loss costs attributable to such limitations but shall in any event reflect a reduction in the uninsured motorist coverage premium of at least 20 percent for policies with such limitations. Such filing shall not increase the rates for coverage which does not contain the limitations authorized by this subsection, and such rates shall remain in effect until the insurer demonstrates the need for a change in uninsured motorist rates pursuant to s. 627.0651.

(10)  The damages recoverable from an uninsured motorist carrier in an action brought under s. 624.155 shall include the total amount of the claimant's damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney's fees and costs, and any damages caused by a violation of a law of this state. The total amount of the claimant's damages is recoverable whether caused by an insurer or by a third-party tortfeasor.

History.--s. 1, ch. 61-175; s. 1, ch. 63-148; ss. 13, 35, ch. 69-106; s. 19, ch. 70-20; s. 1, ch. 71-88; s. 182, ch. 71-355; s. 20, ch. 71-970; ss. 3, 4, ch. 73-180; s. 165, ch. 73-333; s. 3, ch. 76-168; s. 3, ch. 76-266; s. 1, ch. 77-457; s. 30, ch. 77-468; s. 1, ch. 78-374; s. 113, ch. 79-40; ss. 2, 3, ch. 79-241; ss. 1, 2, ch. 80-396; ss. 2, 3, ch. 81-318; ss. 544, 563, 809(2nd), ch. 82-243; ss. 66, 79, ch. 82-386; s. 1, ch. 84-41; s. 16, ch. 85-62; s. 7, ch. 86-182; s. 1, ch. 87-213; s. 15, ch. 88-370; s. 2, ch. 89-238; s. 1, ch. 89-243; s. 39, ch. 90-119; ss. 79, 114, ch. 92-318; s. 358, ch. 97-102.

627.7275  Motor vehicle property damage liability.--

(1)  No motor vehicle insurance policy providing personal injury protection as set forth in s. 627.736 shall be delivered or issued for delivery in this state with respect to any specifically insured or identified motor vehicle registered or principally garaged in this state unless the policy also provides coverage for property damage liability in the amount of at least $10,000 because of damage to, or destruction of, property of others in any one accident arising out of the use of the motor vehicle or provides coverage in the amount of at least $30,000 for combined property damage liability and bodily injury liability in any one accident arising out of the use of the motor vehicle. The policy, as to coverage of property damage liability, shall meet the applicable requirements of s. 324.151, subject to the usual policy exclusions such as have been approved in policy forms by the department.

(2)(a)  Insurers writing motor vehicle insurance in this state shall make available, subject to the insurers' usual underwriting restrictions, coverage under policies as described in subsection (1) of this section to any applicant for private passenger motor vehicle insurance coverage who is seeking the coverage in order to reinstate the applicant's driving privileges in this state when the driving privileges were revoked or suspended pursuant to s. 316.646 or s. 627.733 due to the failure of the applicant to maintain required security. The policy shall be issued for a period of at least 6 months and as to the minimum coverages required under this section shall not be cancelable by the insured for any reason or by the insurer after a period not to exceed 30 days during which the insurer must complete underwriting of the policy. After the insurer has completed underwriting the policy within the 30-day period, the insurer shall notify the Department of Highway Safety and Motor Vehicles that the policy is in full force and effect and the policy shall not be cancelable for the remainder of the policy period. A premium shall be collected and coverage shall be in effect for the 30-day period during which the insurer is completing the underwriting of the policy whether or not the person's driver license, motor vehicle tag, and motor vehicle registration are in effect. Once the noncancelable provisions of the policy become effective, the coverage or risk shall not be changed during the policy period and the premium shall be nonrefundable. If, during the pendency of the 2-year proof of insurance period required under s. 627.733(7), the insured obtains additional coverage or coverage for an additional risk or changes territories, the insured must obtain a new 6-month noncancelable policy in accordance with the provisions of this section. However, if the insured must obtain a new 6-month policy and obtains the policy from the same insurer, the policyholder shall receive credit on the new policy for any premium paid on the previously issued policy.

(b)  The provisions of this subsection shall control to the extent of any conflict with any other section.

History.--s. 16, ch. 88-370; s. 3, ch. 89-238; s. 1, ch. 89-296; s. 2, ch. 91-106; s. 114, ch. 92-318; s. 29, ch. 95-211; s. 359, ch. 97-102; s. 90, ch. 98-199.

627.7276  Notice of limited coverage.--

(1)  An automobile policy that does not contain coverage for bodily injury and property damage must be clearly stamped or printed to the effect that such coverage is not included in the policy in the following manner:

"THIS POLICY DOES NOT PROVIDE BODILY INJURY AND PROPERTY DAMAGE LIABILITY INSURANCE OR ANY OTHER COVERAGE FOR WHICH A SPECIFIC PREMIUM CHARGE IS NOT MADE, AND DOES NOT COMPLY WITH ANY FINANCIAL RESPONSIBILITY LAW."

(2)  This legend must appear on the policy declaration page and on the filing back of the policy and be printed in a contrasting color from that used on the policy and in type larger than the largest type used in the text thereof, as an overprint or by a rubber stamp impression.

History.--s. 11, ch. 2000-370.

627.7277  Notice of renewal premium.--

(1)  As used in this section, the terms "policy" and "renewal" have the meaning ascribed in s. 627.728.

(2)  An insurer shall mail or deliver to its policyholder at least 30 days' advance written notice of the renewal premium for the policy.

(3)  If the insurer fails to provide the 30 days' notice of a renewal premium that results in a premium increase, the coverage under the policy remains in effect at the existing rates until 30 days after the notice is given or until the effective date of replacement coverage obtained by the insured, whichever occurs first.

History.--s. 2, ch. 99-381.

627.728  Cancellations; nonrenewals.--

(1)  As used in this section, the term:

(a)  "Policy" means the bodily injury and property damage liability, personal injury protection, medical payments, comprehensive, collision, and uninsured motorist coverage portions of a policy of motor vehicle insurance delivered or issued for delivery in this state:

1.  Insuring a natural person as named insured or one or more related individuals resident of the same household; and

2.  Insuring only a motor vehicle of the private passenger type or station wagon type which is not used as a public or livery conveyance for passengers or rented to others; or insuring any other four-wheel motor vehicle having a load capacity of 1,500 pounds or less which is not used in the occupation, profession, or business of the insured other than farming; other than any policy issued under an automobile insurance assigned risk plan; insuring more than four automobiles; or covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards.

The term "policy" does not include a binder as defined in s. 627.420 unless the duration of the binder period exceeds 60 days.

(b)  "Renewal" or "to renew" means the issuance and delivery by an insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer, or the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term. Any policy with a policy period or term of less than 6 months or any policy with no fixed expiration date shall for the purpose of this section be considered as if written for successive policy periods or terms of 6 months.

(c)  "Nonpayment of premium" means failure of the named insured to discharge when due any of her or his obligations in connection with the payment of premiums on a policy or any installment of such premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit, or failure to maintain membership in an organization if such membership is a condition precedent to insurance coverage. "Nonpayment of premium" also means the failure of a financial institution to honor an insurance applicant's check after delivery to a licensed agent for payment of a premium, even if the agent has previously delivered or transferred the premium to the insurer; further, if the dishonored check represents the initial premium payment, the contract shall be void ab initio unless the nonpayment is cured within the earlier of 5 days after actual notice by certified mail is received by the applicant or 15 days after notice is sent to the applicant by certified mail or registered mail, and if the contract is void, any premium received by the insurer from a third party shall be refunded to that party in full. If a dishonored check is made payable to the insurer, the insurer may cancel the policy in accordance with paragraph (3)(a).

(2)  No notice of cancellation of a policy shall be effective unless it is based on one or more of the following grounds:

(a)  Nonpayment of premium.

(b)  Material misrepresentation or fraud.

(c)  The driver's license or motor vehicle registration of the named insured or of any other operator who either resides in the same household or customarily operates an automobile insured under the policy has been under suspension or revocation during the policy period or the 180 days immediately preceding its effective date or, if the policy is a renewal, during its policy period. This subsection shall not apply to any policy which has been in effect less than 60 days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy. Nothing in this subsection shall apply to nonrenewal.

(3)(a)  No notice of cancellation of a policy to which this section applies shall be effective unless mailed or delivered by the insurer to the named insured and to the named insured's insurance agent at least 45 days prior to the effective date of cancellation, except that, when cancellation is for nonpayment of premium, at least 10 days' notice of cancellation accompanied by the reason therefor shall be given. No notice of cancellation of a policy to which this section applies shall be effective unless the reason or reasons for cancellation accompany the notice of cancellation.

(b)  Nothing in this subsection shall apply to nonrenewal.

(c)  Nothing in this subsection shall apply in cases in which the premium has been financed and the premium finance company has complied with the notice provisions of s. 627.848.

(4)(a)  No insurer shall fail to renew a policy unless it mails or delivers to the named insured, at the address shown in the policy, and to the named insured's insurance agent at her or his business address, at least 45 days' advance notice of its intention not to renew; and the reasons for refusal to renew must accompany such notice. This subsection does not apply:

1.  If the insurer has manifested its willingness to renew; or

2.  In case of nonpayment of premium.

Notwithstanding the failure of an insurer to comply with this subsection, the policy shall terminate on the effective date of any other automobile liability insurance policy procured by the insured with respect to any automobile designated in both policies. Unless a written explanation for refusal to renew accompanies the notice of intention not to renew, the policy shall remain in full force and effect.

(b)  Renewal of a policy shall not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of such renewal.

(c)  No insurer shall fail to renew a policy for reasons based entirely on the sex, occupation, marital status, residence, military service, or age of the insured, or on the principal place of garaging the insured vehicle in this state, or based on any combination of such factors. No insurer shall fail to renew a policy for reasons based on the race, color, creed, or national origin of the insured or for any reason which is arbitrary or capricious.

(d)  Instead of canceling or nonrenewing a policy, an insurer may, upon expiration of the policy term, transfer a policy to another insurer under the same ownership or management as the transferring insurer, by giving the named insured at least 45 days' advance notice of its intent to transfer the policy and of the premium and the specific reasons for any increase in the premium.

(5)  United States postal proof of mailing or certified or registered mailing of notice of cancellation, of intention not to renew, or of reasons for cancellation, or of the intention of the insurer to issue a policy by an insurer under the same ownership or management, to the named insured at the address shown in the policy shall be sufficient proof of notice.

(6)  When a policy is canceled, other than for nonpayment of premium, or in the event of failure to renew a policy to which subsection (4) applies, the insurer shall notify the named insured of her or his possible eligibility for insurance through the Automobile Joint Underwriting Association. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew and shall state that such notice of availability of the Automobile Joint Underwriting Association is given pursuant to this section.

(7)  Except in the case of cancellation for nonpayment of premium or nonrenewal of the policy, the notice of cancellation as provided by this section must contain the following words which are to be prominently displayed: "You are permitted by law to appeal this cancellation. An appeal must be filed no later than 20 days before the effective date of cancellation set forth in this notice. Forms for such appeal and the regulations pertaining thereto may be obtained from the offices of the Department of Insurance. The Department of Insurance does not have the authority to extend the effective date of cancellation; therefore you should obtain replacement coverage prior to the effective date of cancellation."

(8)(a)  Within 2 working days after receipt of a timely appeal of the notice of cancellation, the department shall initiate a proceeding. If informal procedures fail to resolve the appeal, the department shall, upon request of the insured, call a hearing upon 10 days' notice to the parties to be held by a disinterested employee of the department. Proceedings pursuant to this subsection are not subject to the provisions of chapter 120.

(b)  Each insurer subject to this section shall maintain on file with the department the name and address of the person authorized to receive notices pursuant to this section on behalf of the insurer.

(c)  The department shall, at the conclusion of the proceeding or hearing or not later than 2 working days thereafter, issue its written findings to the parties; and, if it finds for the named insured, it shall either order the insurer to rescind its notice of cancellation or, if the date cancellation is to be effective has elapsed, order the policy reinstated from the date of cancellation, and such coverage shall be continuous to, and shall operate prospectively from, the date of cancellation. However, no policy shall be reinstated while the named insured is in arrears in payment of premium on such policy. If the department finds for the insurer, its written findings shall so state.

(d)  Reinstatement of a policy under this subsection shall not operate in any way to extend the expiration, termination, or anniversary date provided in the policy. Upon such reinstatement, costs and attorney's fees may be assessed by the department and paid to the named insured by an insurer who has wrongfully canceled a policy, as determined by the proceeding or hearing provided for in paragraph (c).

(9)  The department shall deposit all fees provided for in this section into the Insurance Commissioner's Regulatory Trust Fund.

(10)  No cause of action in the nature of defamation, invasion of privacy, or negligence shall arise against any person for disclosing personal or privileged information in accordance with this section, nor shall such a cause of action arise against any person for furnishing personal or privileged information to an insurance institution, agent, or insurance-support organization; however, this section shall provide no immunity for disclosing or furnishing false information through gross negligence or with malice or willful intent to injure any person.

(11)  There shall be no liability on the part of, and no cause of any action of any nature shall arise against, any insurer or its authorized representatives, agents, or employees of any firm, person, or corporation furnishing to the insurer or insured information as to reasons for cancellation or refusal to renew, for any statement made by any of them in any written notice of cancellation or refusal to renew, for the providing of information pertaining thereto, or for statements made or evidence submitted at any hearing conducted in connection therewith; provided that this subsection shall provide no immunity for disclosing or furnishing false information through gross negligence or with malice or willful intent to injure any person.

(12)  No later than 10 business days after termination of a policy subject to this section, the insurer must send written or electronic notice of the termination to all holders of liens on the subject vehicle which lienholders are known to the insurer. Electronic notice is valid only by prior agreement between the insurer and the lienholder.

History.--s. 1, ch. 67-148; ss. 13, 35, ch. 69-106; s. 1, ch. 70-213; s. 1, ch. 71-7(B); s. 1, ch. 71-8(B); s. 1, ch. 72-18; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 1, ch. 78-31; ss. 1, 3, 6, ch. 80-363; ss. 2, 3, ch. 81-318; ss. 545, 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 2, ch. 85-51; s. 1, ch. 88-211; s. 4, ch. 89-238; ss. 81, 114, ch. 92-318; s. 1, ch. 96-347; s. 4, ch. 96-377; s. 1737, ch. 97-102; s. 4, ch. 97-178.

Note.--Former s. 627.0852.

627.7281  Cancellation notice.--An insurer issuing a policy of motor vehicle insurance not covered under the cancellation provisions of s. 627.728 shall give the named insured notice of cancellation at least 45 days prior to the effective date of cancellation, except that, when cancellation is for nonpayment of premium, at least 10 days' notice of cancellation accompanied by the reason therefor shall be given. As used in this section, "policy" does not include a binder as defined in s. 627.420 unless the duration of the binder period exceeds 60 days.

History.--ss. 546, 809(2nd), ch. 82-243; ss. 67, 79, ch. 82-386; s. 3, ch. 85-51; s. 114, ch. 92-318.

627.7282  Notice of additional premium; cancellation upon nonpayment.--

(1)  Upon a determination by an insurer that, in accordance with its rate filings and the applicable laws of this state relating to private passenger motor vehicle insurance, a policyholder has been charged a premium that is incorrect for the coverage set forth in the insurance application, the insurer shall immediately provide notice to the policyholder of the amount of additional premium due to the insurer and that the policyholder has the following options:

(a)  The policyholder has a period of 10 days, or a longer period if specified by the insurer, from receipt of the notice within which to pay the additional amount of premium due and thereby maintain the policy in full force under its original terms.

(b)  The policyholder has a period of 10 days, or a longer period if specified by the insurer, from receipt of the notice within which to cancel the policy and demand a refund of any unearned premiums.

(c)  If the policyholder fails to timely respond to the notice, the insurer shall cancel the policy and return any unearned premium to the insured. The date on which the policy will be canceled shall be stated in the notice and shall in no case be less than 14 days after the date of the notice.

(2)  The amount of unearned premium due to the policyholder as a result of cancellation in accordance with subsection (1) shall be calculated on a pro rata basis.

(3)  No insurer shall unilaterally alter or modify the policy period for a private passenger automobile insurance policy to provide an expiration date that is prior to the date specified in the policyholder's application, except as provided in this section.

(4)  This section shall not be construed to limit insurers' rights to cancel in accordance with applicable provisions of the insurance code.

(5)  The department may adopt rules prescribing the format of the notice.

History.--s. 1, ch. 86-252; s. 2, ch. 87-50; s. 114, ch. 92-318; s. 12, ch. 2000-370.

627.7283  Cancellation; return of premium.--

(1)  If the insured or insurer cancels a policy of motor vehicle insurance, the insurer must return the unearned portion of any premium paid within 30 days after issuance or receipt by the insurer of notice of cancellation. If the unearned premium is not returned within the 30-day period, the insurer must pay 8 percent interest on the amount due. If the unearned premium is not returned within 45 days after receipt of the notice, the insured may bring an action against the insurer pursuant to s. 624.155.

(2)  If the insured cancels, the insurer may retain up to 10 percent of the unearned premium and must refund at least 90 percent of the unearned premium. If the insurer cancels, the insurer must refund 100 percent of the unearned premium. Cancellation is without prejudice to any claim originating prior to the effective date of the cancellation. For purposes of this section, unearned premiums must be computed on a pro rata basis.

History.--s. 1, ch. 86-262; s. 2, ch. 87-50; ss. 82, 114, ch. 92-318.

627.7285  Experience while operating a train.--The experience of any person while operating any vehicle or train as a public conveyance or acting as a member of the crew of such train shall not be a factor in the setting of such person's motor vehicle liability insurance rates, nor shall such person's personal motor vehicle liability insurance policy be canceled or nonrenewed due to such experience. As used in this section, the term "public conveyance" means any vehicle or train operated over fixed rails.

History.--s. 1, ch. 78-50; s. 2, ch. 81-318; ss. 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.7286  Renewal of policy and setting of rates; certain experience not a factor.--No insurer providing motor vehicle liability coverage shall refuse to renew any policy providing coverage for a personal motor vehicle of any person based solely on such person's experience while operating a vehicle as a part of her or his employment for any local transit system or as a part of her or his employment as a bus operator for any nonpublic sector bus company or as a law enforcement officer or firefighter; and no points assessed against such person under s. 322.27 in connection with such experience shall be considered as a factor in the setting of such person's personal motor vehicle liability insurance rates. The burden of demonstrating that such points were assessed in connection with such experience shall lie with the insured.

History.--s. 1, ch. 78-75; ss. 1, 2, ch. 79-389; ss. 1, 2, ch. 80-330; ss. 6, 8, ch. 81-209; ss. 1, 2, ch. 81-253; s. 2, ch. 81-318; ss. 563, 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 360, ch. 97-102.

627.7288  Comprehensive coverage; deductible not to apply to motor vehicle glass.--The deductible provisions of any policy of motor vehicle insurance, delivered or issued in this state by an authorized insurer, providing comprehensive coverage or combined additional coverage shall not be applicable to damage to the windshield of any motor vehicle covered under such policy.

History.--s. 1, ch. 79-241; s. 2, ch. 81-318; ss. 547, 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 15, ch. 90-119; s. 114, ch. 92-318; s. 5, ch. 97-178.

Note.--Former s. 627.7378.

627.7295  Motor vehicle insurance contracts.--

(1)  As used in this section, the term:

(a)  "Policy" means a motor vehicle insurance policy that provides personal injury protection and property damage liability coverage.

(b)  "Binder" means a binder that provides motor vehicle personal injury protection and property damage liability coverage.

(2)  A policy may not be issued for a term of less than 6 months unless it is:

(a)  Issued to achieve common expiration dates; or

(b)  Issued to complete the unexpired portion of a previous policy period.

(3)  Except as provided in s. 627.7282, an insured may not cancel a policy or binder during the first two months immediately following the effective date of the policy except:

(a)  Upon total destruction of the insured motor vehicle;

(b)  Upon transfer of ownership of the insured motor vehicle; or

(c)  After purchase of another policy or binder covering the motor vehicle that was covered under the policy being canceled.

(4)  The insurer may cancel the policy in accordance with this code except that, notwithstanding s. 627.728, an insurer may not cancel a new policy or binder during the first 60 days immediately following the effective date of the policy or binder for nonpayment of premium unless the reason for the cancellation is the issuance of a check for the premium that is dishonored for any reason.

(5)(a)  A licensed general lines agent may charge a per-policy fee not to exceed $10 to cover the administrative costs of the agent associated with selling the motor vehicle insurance policy if the policy covers only personal injury protection coverage as provided by s. 627.736 and property damage liability coverage as provided by s. 627.7275 and if no other insurance is sold or issued in conjunction with or collateral to the policy. The per-policy fee must be a component of the insurer's rate filing and may not be charged by an agent unless the fee is included in the filing. The fee is not considered part of the premium except for purposes of the department's review of expense factors in a filing made pursuant to s. 627.062.

(b)  To the extent that a licensed general agent's cost of obtaining motor vehicle reports on applicants for motor vehicle insurance is not otherwise compensated, the agent may, in addition to any other fees authorized by law, charge an applicant for motor vehicle insurance a reasonable, nonrefundable fee to reimburse the agent the actual cost of obtaining the report for each licensed driver when the motor vehicle report is obtained by the agent simultaneously with the preparation of the application for use in the calculation of premium or in the proper placement of the risk. The amount of the fee may not exceed the agent's actual cost in obtaining the report which is not otherwise compensated. Actual cost is the cost of obtaining the report on an individual driver basis when so obtained or the pro rata cost per driver when the report is obtained on more than one driver; however, in no case may actual cost include subscription or access fees associated with obtaining motor vehicle reports on-line through any electronic transmissions program.

(6)  If a motor vehicle owner's driver license, license plate, and registration have previously been suspended pursuant to s. 316.646 or s. 627.733, an insurer may cancel a new policy only as provided in s. 627.7275.

(7)  A policy of private passenger motor vehicle insurance or a binder for such a policy may be initially issued in this state only if the insurer or agent has collected from the insured an amount equal to 2 months' premium. An insurer, agent, or premium finance company may not directly or indirectly take any action resulting in the insured having paid from the insured's own funds an amount less than the 2 months' premium required by this subsection. This subsection applies without regard to whether the premium is financed by a premium finance company or is paid pursuant to a periodic payment plan of an insurer or an insurance agent. This subsection does not apply if an insured or member of the insured's family is renewing or replacing a policy or a binder for such policy written by the same insurer or a member of the same insurer group. This subsection does not apply to an insurer that issues private passenger motor vehicle coverage primarily to active duty or former military personnel or their dependents. This subsection does not apply if all policy payments are paid pursuant to a payroll deduction plan or an automatic electronic funds transfer payment plan from the policyholder, provided that the first policy payment is made by cash, cashier's check, check, or a money order. This subsection and subsection (4) do not apply if all policy payments to an insurer are paid pursuant to an automatic electronic funds transfer payment plan from an agent or a managing general agent and if the policy includes, at a minimum, personal injury protection pursuant to ss. 627.730-627.7405; motor vehicle property damage liability pursuant to s. 627.7275; and bodily injury liability in at least the amount of $10,000 because of bodily injury to, or death of, one person in any one accident and in the amount of $20,000 because of bodily injury to, or death of, two or more persons in any one accident. This subsection and subsection (4) do not apply if an insured has had a policy in effect for at least 6 months, the insured's agent is terminated by the insurer that issued the policy, and the insured obtains coverage on the policy's renewal date with a new company through the terminated agent.

(8)  Subsection (7) does not apply if an insured or family member has previously purchased and has in effect a policy of private passenger motor vehicle insurance and is purchasing additional coverage or adding coverage for an additional vehicle, with such coverage being written by the same insurer or a member of the same insurer group.

History.--s. 17, ch. 88-370; s. 5, ch. 89-238; s. 1, ch. 89-296; s. 12, ch. 90-248; s. 3, ch. 91-106; ss. 83, 114, ch. 92-318; s. 5, ch. 95-202; s. 1, ch. 95-424; s. 10, ch. 96-377; s. 4, ch. 98-103; s. 7, ch. 98-173; s. 1, ch. 98-270; s. 33, ch. 99-3; s. 3, ch. 99-381; s. 3, ch. 2000-192.

627.72951  Temporary binding permitted.--Notwithstanding any other provision of law, an insurer may temporarily bind coverage on a vehicle for a period not to exceed 3 business days without first collecting premium, if the policyholder has coverage on another vehicle with the same insurer or insurer group.

History.--s. 6, ch. 97-178.

627.730  Florida Motor Vehicle No-Fault Law.--Sections 627.730-627.7405 may be cited and known as the "Florida Motor Vehicle No-Fault Law."

History.--s. 1, ch. 71-252; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 549, 563, ch. 82-243.

627.731  Purpose.--The purpose of ss. 627.730-627.7405 is to provide for medical, surgical, funeral, and disability insurance benefits without regard to fault, and to require motor vehicle insurance securing such benefits, for motor vehicles required to be registered in this state and, with respect to motor vehicle accidents, a limitation on the right to claim damages for pain, suffering, mental anguish, and inconvenience.

History.--s. 2, ch. 71-252; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 550, 563, ch. 82-243.

627.732  Definitions.--As used in ss. 627.730-627.7405:

(1)  "Motor vehicle" means any self-propelled vehicle with four or more wheels which is of a type both designed and required to be licensed for use on the highways of this state and any trailer or semitrailer designed for use with such vehicle and includes:

(a)  A "private passenger motor vehicle," which is any motor vehicle which is a sedan, station wagon, or jeep-type vehicle and, if not used primarily for occupational, professional, or business purposes, a motor vehicle of the pickup, panel, van, camper, or motor home type.

(b)  A "commercial motor vehicle," which is any motor vehicle which is not a private passenger motor vehicle.

The term "motor vehicle" does not include a mobile home or any motor vehicle which is used in mass transit, other than public school transportation, and designed to transport more than five passengers exclusive of the operator of the motor vehicle and which is owned by a municipality, a transit authority, or a political subdivision of the state.

(2)  "Named insured" means a person, usually the owner of a vehicle, identified in a policy by name as the insured under the policy.

(3)  "Owner" means a person who holds the legal title to a motor vehicle; or, in the event a motor vehicle is the subject of a security agreement or lease with an option to purchase with the debtor or lessee having the right to possession, then the debtor or lessee shall be deemed the owner for the purposes of ss. 627.730-627.7405.

(4)  "Relative residing in the same household" means a relative of any degree by blood or by marriage who usually makes her or his home in the same family unit, whether or not temporarily living elsewhere.

(5)  "Recovery agent" means any person or agency who is licensed as a recovery agent or recovery agency and authorized under s. 324.202 to seize license plates.

History.--s. 3, ch. 71-252; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 2, ch. 78-374; ss. 2, 3, ch. 81-318; ss. 551, 563, ch. 82-243; s. 68, ch. 82-386; s. 1, ch. 85-320; s. 5, ch. 86-182; s. 6, ch. 95-202; s. 1, ch. 97-84; s. 361, ch. 97-102.

627.733  Required security.--

(1)  Every owner or registrant of a motor vehicle, other than a motor vehicle used as a taxicab, school bus as defined in s. 234.051, or limousine, required to be registered and licensed in this state shall maintain security as required by subsection (3) in effect continuously throughout the registration or licensing period.

(2)  Every nonresident owner or registrant of a motor vehicle which, whether operated or not, has been physically present within this state for more than 90 days during the preceding 365 days shall thereafter maintain security as defined by subsection (3) in effect continuously throughout the period such motor vehicle remains within this state.

(3)  Such security shall be provided:

(a)  By an insurance policy delivered or issued for delivery in this state by an authorized or eligible motor vehicle liability insurer which provides the benefits and exemptions contained in ss. 627.730-627.7405. Any policy of insurance represented or sold as providing the security required hereunder shall be deemed to provide insurance for the payment of the required benefits; or

(b)  By any other method authorized by s. 324.031(2), (3), or (4) and approved by the Department of Highway Safety and Motor Vehicles as affording security equivalent to that afforded by a policy of insurance or by self-insuring as authorized by s. 768.28(15). The person filing such security shall have all of the obligations and rights of an insurer under ss. 627.730-627.7405.

(4)  An owner of a motor vehicle with respect to which security is required by this section who fails to have such security in effect at the time of an accident shall have no immunity from tort liability, but shall be personally liable for the payment of benefits under s. 627.736. With respect to such benefits, such an owner shall have all of the rights and obligations of an insurer under ss. 627.730-627.7405.

(5)  In addition to other persons who are not required to provide required security as required under this section and s. 324.022, the owner or registrant of a motor vehicle is exempt from such requirements if she or he is a member of the United States Armed Forces and is called to or on active duty outside the United States in an emergency situation. The exemption provided by this subsection applies only as long as the member of the armed forces is on such active duty outside the United States and applies only while the vehicle covered by the security required by this section and s. 324.022 is not operated by any person. Upon receipt of a written request by the insured to whom the exemption provided in this subsection applies, the insurer shall cancel the coverages and return any unearned premium or suspend the security required by this section and s. 324.022. Notwithstanding subsection (6), the Department of Highway Safety and Motor Vehicles may not suspend the registration or operator's license of any owner or registrant of a motor vehicle during the time she or he qualifies for an exemption under this subsection. Any owner or registrant of a motor vehicle who qualifies for an exemption under this subsection shall immediately notify the department prior to and at the end of the expiration of the exemption.

(6)  The Department of Highway Safety and Motor Vehicles shall suspend, after due notice and an opportunity to be heard, the registration and driver's license of any owner or registrant of a motor vehicle with respect to which security is required under this section and s. 324.022:

(a)  Upon its records showing that the owner or registrant of such motor vehicle did not have in full force and effect when required security complying with the terms of this section; or

(b)  Upon notification by the insurer to the Department of Highway Safety and Motor Vehicles, in a form approved by the department, of cancellation or termination of the required security.

(7)  Any operator or owner whose driver's license or registration has been suspended pursuant to this section or s. 316.646 may effect its reinstatement upon compliance with the requirements of this section and upon payment to the Department of Highway Safety and Motor Vehicles of a nonrefundable reinstatement fee of $150 for the first reinstatement. Such reinstatement fee shall be $250 for the second reinstatement and $500 for each subsequent reinstatement during the 3 years following the first reinstatement. Any person reinstating her or his insurance under this subsection must also secure noncancelable coverage as described in s. 627.7275(2) and present to the appropriate person proof that the coverage is in force on a form promulgated by the Department of Highway Safety and Motor Vehicles, such proof to be maintained for 2 years. If the person does not have a second reinstatement within 3 years after her or his initial reinstatement, the reinstatement fee shall be $150 for the first reinstatement after that 3-year period. In the event that a person's license and registration are suspended pursuant to this section or s. 316.646, only one reinstatement fee shall be paid to reinstate the license and the registration. All fees shall be collected by the Department of Highway Safety and Motor Vehicles at the time of reinstatement. The Department of Highway Safety and Motor Vehicles shall issue proper receipts for such fees and shall promptly deposit those fees in the Highway Safety Operating Trust Fund. One-third of the fee collected under this subsection shall be distributed from the Highway Safety Operating Trust Fund to the local government entity or state agency which employed the law enforcement officer or the recovery agent who seizes a license plate pursuant to s. 324.201 or to s. 324.202. Such funds may be used by the local government entity or state agency for any authorized purpose.

History.--ss. 4, 6, ch. 71-252; s. 3, ch. 76-168; s. 8, ch. 77-118; s. 1, ch. 77-457; ss. 31, 32, ch. 77-468; s. 11, ch. 78-374; ss. 2, 3, ch. 81-318; ss. 552, 563, ch. 82-243; s. 69, ch. 82-386; ss. 4, 6, ch. 86-182; s. 18, ch. 88-370; s. 57, ch. 89-282; s. 5, ch. 91-106; s. 4, ch. 91-110; s. 1, ch. 91-128; s. 77, ch. 93-120; s. 7, ch. 95-202; s. 30, ch. 95-211; s. 2, ch. 97-84; s. 362, ch. 97-102; s. 14, ch. 98-223; s. 34, ch. 99-3; ss. 63, 317, ch. 99-248.

Note.--Consolidation of s. 627.733 and former s. 627.735.

627.734  Proof of security; security requirements; penalties.--

(1)  The provisions of chapter 324 which pertain to the method of giving and maintaining proof of financial responsibility and which govern and define a motor vehicle liability policy shall apply to filing and maintaining proof of security required by ss. 627.730-627.7405.

(2)  Any person who:

(a)  Gives information required in a report or otherwise as provided for in ss. 627.730-627.7405, knowing or having reason to believe that such information is false;

(b)  Forges or, without authority, signs any evidence of proof of security; or

(c)  Files, or offers for filing, any such evidence of proof, knowing or having reason to believe that it is forged or signed without authority,

is guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.

History.--ss. 5, 5A, ch. 71-252; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 553, 563, ch. 82-243; s. 155, ch. 91-224.

627.736  Required personal injury protection benefits; exclusions; priority; claims.--

(1)  REQUIRED BENEFITS.--Every insurance policy complying with the security requirements of s. 627.733 shall provide personal injury protection to the named insured, relatives residing in the same household, persons operating the insured motor vehicle, passengers in such motor vehicle, and other persons struck by such motor vehicle and suffering bodily injury while not an occupant of a self-propelled vehicle, subject to the provisions of subsection (2) and paragraph (4)(d), to a limit of $10,000 for loss sustained by any such person as a result of bodily injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle as follows:

(a)  Medical benefits.--Eighty percent of all reasonable expenses for necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices, and necessary ambulance, hospital, and nursing services. Such benefits shall also include necessary remedial treatment and services recognized and permitted under the laws of the state for an injured person who relies upon spiritual means through prayer alone for healing, in accordance with his or her religious beliefs.

(b)  Disability benefits.--Sixty percent of any loss of gross income and loss of earning capacity per individual from inability to work proximately caused by the injury sustained by the injured person, plus all expenses reasonably incurred in obtaining from others ordinary and necessary services in lieu of those that, but for the injury, the injured person would have performed without income for the benefit of his or her household. All disability benefits payable under this provision shall be paid not less than every 2 weeks.

(c)  Death benefits.--Death benefits of $5,000 per individual. The insurer may pay such benefits to the executor or administrator of the deceased, to any of the deceased's relatives by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled thereto.

Only insurers writing motor vehicle liability insurance in this state may provide the required benefits of this section, and no such insurer shall require the purchase of any other motor vehicle coverage other than the purchase of property damage liability coverage as required by s. 627.7275 as a condition for providing such required benefits. Insurers may not require that property damage liability insurance in an amount greater than $10,000 be purchased in conjunction with personal injury protection. Such insurers shall make benefits and required property damage liability insurance coverage available through normal marketing channels. Any insurer writing motor vehicle liability insurance in this state who fails to comply with such availability requirement as a general business practice shall be deemed to have violated ¹part X of chapter 626, and such violation shall constitute an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance; and any such insurer committing such violation shall be subject to the penalties afforded in such part, as well as those which may be afforded elsewhere in the insurance code.

(2)  AUTHORIZED EXCLUSIONS.--Any insurer may exclude benefits:

(a)  For injury sustained by the named insured and relatives residing in the same household while occupying another motor vehicle owned by the named insured and not insured under the policy or for injury sustained by any person operating the insured motor vehicle without the express or implied consent of the insured.

(b)  To any injured person, if such person's conduct contributed to his or her injury under any of the following circumstances:

1.  Causing injury to himself or herself intentionally; or

2.  Being injured while committing a felony.

Whenever an insured is charged with conduct as set forth in subparagraph 2., the 30-day payment provision of paragraph (4)(b) shall be held in abeyance, and the insurer shall withhold payment of any personal injury protection benefits pending the outcome of the case at the trial level. If the charge is nolle prossed or dismissed or the insured is acquitted, the 30-day payment provision shall run from the date the insurer is notified of such action.

(3)  INSURED'S RIGHTS TO RECOVERY OF SPECIAL DAMAGES IN TORT CLAIMS.--No insurer shall have a lien on any recovery in tort by judgment, settlement, or otherwise for personal injury protection benefits, whether suit has been filed or settlement has been reached without suit. An injured party who is entitled to bring suit under the provisions of ss. 627.730-627.7405, or his or her legal representative, shall have no right to recover any damages for which personal injury protection benefits are paid or payable. The plaintiff may prove all of his or her special damages notwithstanding this limitation, but if special damages are introduced in evidence, the trier of facts, whether judge or jury, shall not award damages for personal injury protection benefits paid or payable. In all cases in which a jury is required to fix damages, the court shall instruct the jury that the plaintiff shall not recover such special damages for personal injury protection benefits paid or payable.

(4)  BENEFITS; WHEN DUE.--Benefits due from an insurer under ss. 627.730-627.7405 shall be primary, except that benefits received under any workers' compensation law shall be credited against the benefits provided by subsection (1) and shall be due and payable as loss accrues, upon receipt of reasonable proof of such loss and the amount of expenses and loss incurred which are covered by the policy issued under ss. 627.730-627.7405. When the Agency for Health Care Administration provides, pays, or becomes liable for medical assistance under the Medicaid program related to injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle, benefits under ss. 627.730-627.7405 shall be subject to the provisions of the Medicaid program.

(a)  An insurer may require written notice to be given as soon as practicable after an accident involving a motor vehicle with respect to which the policy affords the security required by ss. 627.730-627.7405.

(b)  Personal injury protection insurance benefits paid pursuant to this section shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same. If such written notice is not furnished to the insurer as to the entire claim, any partial amount supported by written notice is overdue if not paid within 30 days after such written notice is furnished to the insurer. Any part or all of the remainder of the claim that is subsequently supported by written notice is overdue if not paid within 30 days after such written notice is furnished to the insurer. However, any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment, notwithstanding that written notice has been furnished to the insurer. For the purpose of calculating the extent to which any benefits are overdue, payment shall be treated as being made on the date a draft or other valid instrument which is equivalent to payment was placed in the United States mail in a properly addressed, postpaid envelope or, if not so posted, on the date of delivery.

(c)  All overdue payments shall bear simple interest at the rate of 10 percent per year.

(d)  The insurer of the owner of a motor vehicle shall pay personal injury protection benefits for:

1.  Accidental bodily injury sustained in this state by the owner while occupying a motor vehicle, or while not an occupant of a self-propelled vehicle if the injury is caused by physical contact with a motor vehicle.

2.  Accidental bodily injury sustained outside this state, but within the United States of America or its territories or possessions or Canada, by the owner while occupying the owner's motor vehicle.

3.  Accidental bodily injury sustained by a relative of the owner residing in the same household, under the circumstances described in subparagraph 1. or subparagraph 2., provided the relative at the time of the accident is domiciled in the owner's household and is not himself or herself the owner of a motor vehicle with respect to which security is required under ss. 627.730-627.7405.

4.  Accidental bodily injury sustained in this state by any other person while occupying the owner's motor vehicle or, if a resident of this state, while not an occupant of a self-propelled vehicle, if the injury is caused by physical contact with such motor vehicle, provided the injured person is not himself or herself:

a.  The owner of a motor vehicle with respect to which security is required under ss. 627.730-627.7405; or

b.  Entitled to personal injury benefits from the insurer of the owner or owners of such a motor vehicle.

(e)  If two or more insurers are liable to pay personal injury protection benefits for the same injury to any one person, the maximum payable shall be as specified in subsection (1), and any insurer paying the benefits shall be entitled to recover from each of the other insurers an equitable pro rata share of the benefits paid and expenses incurred in processing the claim.

(f)  Medical payments insurance, if available in a policy of motor vehicle insurance, shall pay the portion of any claim for personal injury protection medical benefits which is otherwise covered but is not payable due to the coinsurance provision of paragraph (1)(a), regardless of whether the full amount of personal injury protection coverage has been exhausted. The benefits shall not be payable for the amount of any deductible which has been selected.

(g)  It is a violation of the insurance code for an insurer to fail to timely provide benefits as required by this section with such frequency as to constitute a general business practice.

(5)  CHARGES FOR TREATMENT OF INJURED PERSONS.--

(a)  Any physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge only a reasonable amount for the products, services, and accommodations rendered, and the insurer providing such coverage may pay for such charges directly to such person or institution lawfully rendering such treatment, if the insured receiving such treatment or his or her guardian has countersigned the invoice, bill, or claim form approved by the Department of Insurance upon which such charges are to be paid for as having actually been rendered, to the best knowledge of the insured or his or her guardian. In no event, however, may such a charge be in excess of the amount the person or institution customarily charges for like products, services, or accommodations in cases involving no insurance, provided that charges for cephalic thermograms and peripheral thermograms shall not exceed the maximum reimbursement allowance for such procedures as set forth in the applicable fee schedule established pursuant to s. 440.13.

(b)  With respect to any treatment or service, other than medical services billed by a hospital for services rendered at a hospital-owned facility, the statement of charges must be furnished to the insurer by the provider and may not include, and the insurer is not required to pay, charges for treatment or services rendered more than 30 days before the postmark date of the statement, except for past due amounts previously billed on a timely basis under this paragraph, and except that, if the provider submits to the insurer a notice of initiation of treatment within 21 days after its first examination or treatment of the claimant, the statement may include charges for treatment or services rendered up to, but not more than, 60 days before the postmark date of the statement. The injured party is not liable for, and the provider shall not bill the injured party for, charges that are unpaid because of the provider's failure to comply with this paragraph. Any agreement requiring the injured person or insured to pay for such charges is unenforceable. For emergency services and care as defined in s. 395.002 rendered in a hospital emergency department or for transport and treatment rendered by an ambulance provider licensed pursuant to part III of chapter 401, the provider is not required to furnish the statement of charges within the time periods established by this paragraph; and the insurer shall not be considered to have been furnished with notice of the amount of covered loss for purposes of paragraph (4)(b) until it receives a statement complying with paragraph (5)(d), or copy thereof, which specifically identifies the place of service to be a hospital emergency department or an ambulance in accordance with billing standards recognized by the Health Care Finance Administration. Each notice of insured's rights under s. 627.7401 must include the following statement in type no smaller than 12 points:

BILLING REQUIREMENTS.--Florida Statutes provide that with respect to any treatment or services, other than certain hospital and emergency services, the statement of charges furnished to the insurer by the provider may not include, and the insurer and the injured party are not required to pay, charges for treatment or services rendered more than 30 days before the postmark date of the statement, except for past due amounts previously billed on a timely basis, and except that, if the provider submits to the insurer a notice of initiation of treatment within 21 days after its first examination or treatment of the claimant, the statement may include charges for treatment or services rendered up to, but not more than, 60 days before the postmark date of the statement.

(c)  Every insurer shall include a provision in its policy for personal injury protection benefits for binding arbitration of any claims dispute involving medical benefits arising between the insurer and any person providing medical services or supplies if that person has agreed to accept assignment of personal injury protection benefits. The provision shall specify that the provisions of chapter 682 relating to arbitration shall apply. The prevailing party shall be entitled to attorney's fees and costs. For purposes of the award of attorney's fees and costs, the prevailing party shall be determined as follows:

1.  When the amount of personal injury protection benefits determined by arbitration exceeds the sum of the amount offered by the insurer at arbitration plus 50 percent of the difference between the amount of the claim asserted by the claimant at arbitration and the amount offered by the insurer at arbitration, the claimant is the prevailing party.

2.  When the amount of personal injury protection benefits determined by arbitration is less than the sum of the amount offered by the insurer at arbitration plus 50 percent of the difference between the amount of the claim asserted by the claimant at arbitration and the amount offered by the insurer at arbitration, the insurer is the prevailing party.

3.  When neither subparagraph 1. nor subparagraph 2. applies, there is no prevailing party. For purposes of this paragraph, the amount of the offer or claim at arbitration is the amount of the last written offer or claim made at least 30 days prior to the arbitration.

4.  In the demand for arbitration, the party requesting arbitration must include a statement specifically identifying the issues for arbitration for each examination or treatment in dispute. The other party must subsequently issue a statement specifying any other examinations or treatment and any other issues that it intends to raise in the arbitration. The parties may amend their statements up to 30 days prior to arbitration, provided that arbitration shall be limited to those identified issues and neither party may add additional issues during arbitration.

(d)  All statements and bills for medical services rendered by any physician, hospital, clinic, or other person or institution shall be submitted to the insurer on a Health Care Finance Administration 1500 form, UB 92 forms, or any other standard form approved by the department for purposes of this paragraph. All billings for such services shall, to the extent applicable, follow the Physicians' Current Procedural Terminology (CPT) in the year in which services are rendered. No statement of medical services may include charges for medical services of a person or entity that performed such services without possessing the valid licenses required to perform such services. For purposes of paragraph (4)(b), an insurer shall not be considered to have been furnished with notice of the amount of covered loss or medical bills due unless the statements or bills comply with this paragraph.

(6)  DISCOVERY OF FACTS ABOUT AN INJURED PERSON; DISPUTES.--

(a)  Every employer shall, if a request is made by an insurer providing personal injury protection benefits under ss. 627.730-627.7405 against whom a claim has been made, furnish forthwith, in a form approved by the department, a sworn statement of the earnings, since the time of the bodily injury and for a reasonable period before the injury, of the person upon whose injury the claim is based.

(b)  Every physician, hospital, clinic, or other medical institution providing, before or after bodily injury upon which a claim for personal injury protection insurance benefits is based, any products, services, or accommodations in relation to that or any other injury, or in relation to a condition claimed to be connected with that or any other injury, shall, if requested to do so by the insurer against whom the claim has been made, furnish forthwith a written report of the history, condition, treatment, dates, and costs of such treatment of the injured person, together with a sworn statement that the treatment or services rendered were reasonable and necessary with respect to the bodily injury sustained and identifying which portion of the expenses for such treatment or services was incurred as a result of such bodily injury, and produce forthwith, and permit the inspection and copying of, his or her or its records regarding such history, condition, treatment, dates, and costs of treatment. Such sworn statement shall read as follows: "Under penalty of perjury, I declare that I have read the foregoing, and the facts alleged are true, to the best of my knowledge and belief." No cause of action for violation of the physician-patient privilege or invasion of the right of privacy shall be permitted against any physician, hospital, clinic, or other medical institution complying with the provisions of this section. The person requesting such records and such sworn statement shall pay all reasonable costs connected therewith. If an insurer makes a written request for documentation under this paragraph within 20 days after having received notice of the amount of a covered loss under paragraph (4)(a), the insurer shall pay the amount or partial amount of covered loss to which such documentation relates in accordance with paragraph (4)(b) or within 10 days after the insurer's receipt of the requested documentation, whichever occurs later. For purposes of this paragraph, the term "receipt" includes, but is not limited to, inspection and copying pursuant to this paragraph.

(c)  In the event of any dispute regarding an insurer's right to discovery of facts about an injured person's earnings or about his or her history, condition, or treatment, or the dates and costs of such treatment, the insurer may petition a court of competent jurisdiction to enter an order permitting such discovery. The order may be made only on motion for good cause shown and upon notice to all persons having an interest, and it shall specify the time, place, manner, conditions, and scope of the discovery. Such court may, in order to protect against annoyance, embarrassment, or oppression, as justice requires, enter an order refusing discovery or specifying conditions of discovery and may order payments of costs and expenses of the proceeding, including reasonable fees for the appearance of attorneys at the proceedings, as justice requires.

(d)  The injured person shall be furnished, upon request, a copy of all information obtained by the insurer under the provisions of this section, and shall pay a reasonable charge, if required by the insurer.

(e)  Notice to an insurer of the existence of a claim shall not be unreasonably withheld by an insured.

(7)  MENTAL AND PHYSICAL EXAMINATION OF INJURED PERSON; REPORTS.--

(a)  Whenever the mental or physical condition of an injured person covered by personal injury protection is material to any claim that has been or may be made for past or future personal injury protection insurance benefits, such person shall, upon the request of an insurer, submit to mental or physical examination by a physician or physicians. The costs of any examinations requested by an insurer shall be borne entirely by the insurer. Such examination shall be conducted within the municipality where the insured is receiving treatment, or in a location reasonably accessible to the insured, which, for purposes of this paragraph, means any location within the municipality in which the insured resides, or any location within 10 miles by road of the insured's residence, provided such location is within the county in which the insured resides. If the examination is to be conducted in a location reasonably accessible to the insured, and if there is no qualified physician to conduct the examination in a location reasonably accessible to the insured, then such examination shall be conducted in an area of the closest proximity to the insured's residence. Personal protection insurers are authorized to include reasonable provisions in personal injury protection insurance policies for mental and physical examination of those claiming personal injury protection insurance benefits. An insurer may not withdraw payment of a treating physician without the consent of the injured person covered by the personal injury protection, unless the insurer first obtains a report by a physician licensed under the same chapter as the treating physician whose treatment authorization is sought to be withdrawn, stating that treatment was not reasonable, related, or necessary.

(b)  If requested by the person examined, a party causing an examination to be made shall deliver to him or her a copy of every written report concerning the examination rendered by an examining physician, at least one of which reports must set out the examining physician's findings and conclusions in detail. After such request and delivery, the party causing the examination to be made is entitled, upon request, to receive from the person examined every written report available to him or her or his or her representative concerning any examination, previously or thereafter made, of the same mental or physical condition. By requesting and obtaining a report of the examination so ordered, or by taking the deposition of the examiner, the person examined waives any privilege he or she may have, in relation to the claim for benefits, regarding the testimony of every other person who has examined, or may thereafter examine, him or her in respect to the same mental or physical condition. If a person unreasonably refuses to submit to an examination, the personal injury protection carrier is no longer liable for subsequent personal injury protection benefits.

(8)  APPLICABILITY OF PROVISION REGULATING ATTORNEY'S FEES.--With respect to any dispute under the provisions of ss. 627.730-627.7405 between the insured and the insurer, the provisions of s. 627.428 shall apply.

(9)(a)  Each insurer which has issued a policy providing personal injury protection benefits shall report the renewal, cancellation, or nonrenewal thereof to the Department of Highway Safety and Motor Vehicles within 45 days from the effective date of the renewal, cancellation, or nonrenewal. Upon the issuance of a policy providing personal injury protection benefits to a named insured not previously insured by the insurer thereof during that calendar year, the insurer shall report the issuance of the new policy to the Department of Highway Safety and Motor Vehicles within 30 days. The report shall be in such form and format and contain such information as may be required by the Department of Highway Safety and Motor Vehicles which shall include a format compatible with the data processing capabilities of said department, and the Department of Highway Safety and Motor Vehicles is authorized to adopt rules necessary with respect thereto. Failure by an insurer to file proper reports with the Department of Highway Safety and Motor Vehicles as required by this subsection or rules adopted with respect to the requirements of this subsection constitutes a violation of the Florida Insurance Code. Reports of cancellations and policy renewals and reports of the issuance of new policies received by the Department of Highway Safety and Motor Vehicles are confidential and exempt from the provisions of s. 119.07(1). These records are to be used for enforcement and regulatory purposes only, including the generation by the department of data regarding compliance by owners of motor vehicles with financial responsibility coverage requirements. In addition, the Department of Highway Safety and Motor Vehicles shall release, upon a written request by a person involved in a motor vehicle accident, by the person's attorney, or by a representative of the person's motor vehicle insurer, the name of the insurance company and the policy number for the policy covering the vehicle named by the requesting party. The written request must include a copy of the appropriate accident form as provided in s. 316.065, s. 316.066, or s. 316.068.

(b)  Every insurer with respect to each insurance policy providing personal injury protection benefits shall notify the named insured or in the case of a commercial fleet policy, the first named insured in writing that any cancellation or nonrenewal of the policy will be reported by the insurer to the Department of Highway Safety and Motor Vehicles. The notice shall also inform the named insured that failure to maintain personal injury protection and property damage liability insurance on a motor vehicle when required by law may result in the loss of registration and driving privileges in this state, and the notice shall inform the named insured of the amount of the reinstatement fees required by s. 627.733(7). This notice is for informational purposes only, and no civil liability shall attach to an insurer due to failure to provide this notice.

(10)  An insurer may negotiate and enter into contracts with licensed health care providers for the benefits described in this section, referred to in this section as "preferred providers," which shall include health care providers licensed under chapters 458, 459, 460, 461, and 463. The insurer may provide an option to an insured to use a preferred provider at the time of purchase of the policy for personal injury protection benefits, if the requirements of this subsection are met. If the insured elects to use a provider who is not a preferred provider, whether the insured purchased a preferred provider policy or a nonpreferred provider policy, the medical benefits provided by the insurer shall be as required by this section. If the insured elects to use a provider who is a preferred provider, the insurer may pay medical benefits in excess of the benefits required by this section and may waive or lower the amount of any deductible that applies to such medical benefits. If the insurer offers a preferred provider policy to a policyholder or applicant, it must also offer a nonpreferred provider policy. The insurer shall provide each policyholder with a current roster of preferred providers in the county in which the insured resides at the time of purchase of such policy, and shall make such list available for public inspection during regular business hours at the principal office of the insurer within the state.

History.--s. 7, ch. 71-252; s. 3, ch. 76-168; s. 4, ch. 76-266; s. 1, ch. 77-457; s. 33, ch. 77-468; s. 3, ch. 78-374; s. 114, ch. 79-40; s. 165, ch. 79-164; s. 239, ch. 79-400; s. 3, ch. 80-206; s. 430, ch. 81-259; ss. 2, 3, ch. 81-318; ss. 554, 563, ch. 82-243; s. 31, ch. 87-226; s. 1, ch. 87-282; ss. 19, 20, 21, 22, ch. 88-370; s. 2, ch. 89-243; s. 1, ch. 89-313; s. 40, ch. 90-119; s. 7, ch. 90-232; s. 11, ch. 90-248; s. 36, ch. 90-295; s. 7, ch. 91-106; s. 66, ch. 91-282; s. 84, ch. 92-318; s. 7, ch. 93-289; s. 1, ch. 94-123; s. 8, ch. 95-202; s. 83, ch. 95-211; s. 381, ch. 96-406; s. 1738, ch. 97-102; s. 2, ch. 98-270; s. 262, ch. 99-8.

¹Note.--Redesignated as part IX of ch. 626 to conform to the transfer of ss. 626.941-626.945, comprising former part IX, by ch. 98-89.

627.737  Tort exemption; limitation on right to damages; punitive damages.--

(1)  Every owner, registrant, operator, or occupant of a motor vehicle with respect to which security has been provided as required by ss. 627.730-627.7405, and every person or organization legally responsible for her or his acts or omissions, is hereby exempted from tort liability for damages because of bodily injury, sickness, or disease arising out of the ownership, operation, maintenance, or use of such motor vehicle in this state to the extent that the benefits described in s. 627.736(1) are payable for such injury, or would be payable but for any exclusion authorized by ss. 627.730-627.7405, under any insurance policy or other method of security complying with the requirements of s. 627.733, or by an owner personally liable under s. 627.733 for the payment of such benefits, unless a person is entitled to maintain an action for pain, suffering, mental anguish, and inconvenience for such injury under the provisions of subsection (2).

(2)  In any action of tort brought against the owner, registrant, operator, or occupant of a motor vehicle with respect to which security has been provided as required by ss. 627.730-627.7405, or against any person or organization legally responsible for her or his acts or omissions, a plaintiff may recover damages in tort for pain, suffering, mental anguish, and inconvenience because of bodily injury, sickness, or disease arising out of the ownership, maintenance, operation, or use of such motor vehicle only in the event that the injury or disease consists in whole or in part of:

(a)  Significant and permanent loss of an important bodily function.

(b)  Permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement.

(c)  Significant and permanent scarring or disfigurement.

(d)  Death.

(3)  When a defendant, in a proceeding brought pursuant to ss. 627.730-627.7405, questions whether the plaintiff has met the requirements of subsection (2), then the defendant may file an appropriate motion with the court, and the court shall, on a one-time basis only, 30 days before the date set for the trial or the pretrial hearing, whichever is first, by examining the pleadings and the evidence before it, ascertain whether the plaintiff will be able to submit some evidence that the plaintiff will meet the requirements of subsection (2). If the court finds that the plaintiff will not be able to submit such evidence, then the court shall dismiss the plaintiff's claim without prejudice.

(4)  In any action brought against an automobile liability insurer for damages in excess of its policy limits, no claim for punitive damages shall be allowed.

History.--s. 8, ch. 71-252; s. 3, ch. 76-168; s. 5, ch. 76-266; s. 1, ch. 77-457; s. 35, ch. 77-468; s. 4, ch. 78-374; ss. 2, 3, ch. 81-318; ss. 555, 563, ch. 82-243; s. 363, ch. 97-102.

627.739  Personal injury protection; optional limitations; deductibles.--

(1)  The named insured may elect a deductible or modified coverage or combination thereof to apply to the named insured alone or to the named insured and dependent relatives residing in the same household, but may not elect a deductible or modified coverage to apply to any other person covered under the policy. Any person electing a deductible or modified coverage, or a combination thereof, or subject to such deductible or modified coverage as a result of the named insured's election, shall have no right to claim or to recover any amount so deducted from any owner, registrant, operator, or occupant of a vehicle or any person or organization legally responsible for any such person's acts or omissions who is made exempt from tort liability by ss. 627.730-627.7405.

(2)  Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, $1,000, and $2,000, such amount to be deducted from the benefits otherwise due each person subject to the deduction. However, this subsection shall not be applied to reduce the amount of any benefits received in accordance with s. 627.736(1)(c).

(3)  Insurers shall offer coverage wherein, at the election of the named insured, the benefits for loss of gross income and loss of earning capacity described in s. 627.736(1)(b) shall be excluded.

(4)  The named insured shall not be prevented from electing a deductible under subsection (2) and modified coverage under subsection (3). Each election made by the named insured under this section shall result in an appropriate reduction of premium associated with that election.

(5)  All such offers shall be made in clear and unambiguous language at the time the initial application is taken and prior to each annual renewal and shall indicate that a premium reduction will result from each election. At the option of the insurer, the requirements of the preceding sentence are met by using forms of notice approved by the department, or by providing the following notice in 10-point type in the insurer's application for initial issuance of a policy of motor vehicle insurance and the insurer's annual notice of renewal premium:

For personal injury protection insurance, the named insured may elect a deductible and to exclude coverage for loss of gross income and loss of earning capacity ("lost wages"). These elections apply to the named insured alone, or to the named insured and all dependent resident relatives. A premium reduction will result from these elections. The named insured is hereby advised not to elect the lost wage exclusion if the named insured or dependent resident relatives are employed, since lost wages will not be payable in the event of an accident.

History.--s. 10, ch. 71-252; s. 3, ch. 76-168; s. 6, ch. 76-266; s. 1, ch. 77-457; s. 37, ch. 77-468; s. 6, ch. 78-374; ss. 2, 3, ch. 81-318; ss. 557, 563, ch. 82-243; s. 1, ch. 99-381.

627.7401  Notification of insured's rights.--

(1)  The department, by rule, shall adopt a form for the notification of insureds of their right to receive personal injury protection benefits under the Florida Motor Vehicle No-Fault Law. Such notice shall include a description of the benefits provided by personal injury protection, including, but not limited to, the specific types of services for which medical benefits are paid, disability benefits, death benefits, significant exclusions from and limitations on personal injury protection benefits, when payments are due, how benefits are coordinated with other insurance benefits that the insured may have, penalties and interest that may be imposed on insurers for failure to make timely payments of benefits, and rights of parties regarding disputes as to benefits.

(2)  Each insurer issuing a policy in this state providing personal injury protection benefits must mail or deliver the notice as specified in subsection (1) to an insured within 21 days after receiving from the insured notice of an automobile accident or claim involving personal injury to an insured who is covered under the policy. The department may allow an insurer additional time to provide the notice specified in subsection (1) not to exceed 30 days, upon a showing by the insurer that an emergency justifies an extension of time.

(3)  The notice required by this section does not alter or modify the terms of the insurance contract or other requirements of this act.

History.--s. 2, ch. 94-123.

627.7403  Mandatory joinder of derivative claim.--In any action brought pursuant to the provisions of s. 627.737 claiming personal injuries, all claims arising out of the plaintiff's injuries, including all derivative claims, shall be brought together, unless good cause is shown why such claims should be brought separately.

History.--s. 38, ch. 77-468; s. 2, ch. 81-318; s. 563, ch. 82-243.

627.7405  Insurers' right of reimbursement.--Notwithstanding any other provisions of ss. 627.730-627.7405, any insurer providing personal injury protection benefits on a private passenger motor vehicle shall have, to the extent of any personal injury protection benefits paid to any person as a benefit arising out of such private passenger motor vehicle insurance, a right of reimbursement against the owner or the insurer of the owner of a commercial motor vehicle, if the benefits paid result from such person having been an occupant of the commercial motor vehicle or having been struck by the commercial motor vehicle while not an occupant of any self-propelled vehicle.

History.--s. 7, ch. 78-374; s. 2, ch. 81-318; ss. 558, 563, ch. 82-243.

627.7415  Commercial motor vehicles; additional liability insurance coverage.--Commercial motor vehicles, as defined in s. 207.002(2) or s. 320.01, operated upon the roads and highways of this state shall be insured with the following minimum levels of combined bodily liability insurance and property damage liability insurance in addition to any other insurance requirements:

(1)  Fifty thousand dollars per occurrence for a commercial motor vehicle with a gross vehicle weight of 26,000 pounds or more, but less than 35,000 pounds.

(2)  One hundred thousand dollars per occurrence for a commercial motor vehicle with a gross vehicle weight of 35,000 pounds or more, but less than 44,000 pounds.

(3)  Three hundred thousand dollars per occurrence for a commercial motor vehicle with a gross vehicle weight of 44,000 pounds or more.

(4)  All commercial motor vehicles subject to regulations of the United States Department of Transportation, Title 49 C.F.R. part 387, subpart A, and as may be hereinafter amended, shall be insured in an amount equivalent to the minimum levels of financial responsibility as set forth in such regulations.

A violation of this section is a noncriminal traffic infraction, punishable as a nonmoving violation as provided in chapter 318.

History.--s. 5, ch. 86-18; s. 47, ch. 87-198; s. 313, ch. 99-248.

627.742  Nonpublic sector buses; additional liability insurance coverage.--

(1)  In addition to any other insurance requirements, each nonpublic sector bus must carry:

(a)  Proof of ability to respond in damages for liability on account of accidents arising out of the use of the nonpublic sector bus:

1.  In the amount of $100,000 because of bodily injury to, or death of, one person in any accident;

2.  Subject to such limits for one person, in the amount of $300,000 because of bodily injury to, or death of, two or more persons in any one accident; and

3.  In the amount of $50,000 because of injury to, or destruction of, property of others in any one accident; or

(b)  A policy of insurance providing for bodily liability insurance and property damage liability in a sum of not less than $300,000.

(2)  School buses subject to the provisions of chapter 234 or s. 316.615 are exempt from the provisions of this section.

(3)  A violation of this section is a noncriminal traffic infraction, punishable as a nonmoving violation as provided in chapter 318.

History.--ss. 6, 7, 8, ch. 81-209; ss. 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 314, ch. 99-248.

627.743  Payment of third-party claims.--

(1)  Before making any payment on a claim for damage to an automobile for a total loss, regardless of amount, which automobile is owned by a person who is not named as an insured in the policy under which payment is made, the insurer shall first cause a search of the records of the Department of Highway Safety and Motor Vehicles to be made in order to determine whether the damaged vehicle is subject to any liens. If the search discloses the existence of any liens, payment of the claim shall be made jointly to the owner of the damaged vehicle and the first lienholder of record. The insurer shall not be subject to the requirements of this section if the owner of the damaged vehicle presents to the insurer a title certificate for such vehicle.

(2)  When making any payment on a third party claim for damage to an automobile for a partial loss, the insurer shall have printed on the loss estimate, if prepared by the insurer, the following: "Failure to use the insurance proceeds in accordance with the security agreement, if any, could be a violation of s. 812.014, Florida Statutes. If you have any questions, contact your lending institution." However, this subsection does not apply if the insurer does not prepare the loss estimate.

History.--ss. 560, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 24, ch. 83-288; s. 114, ch. 92-318; s. 76, ch. 99-248.

627.744  Required preinsurance inspection of private passenger motor vehicles.--

(1)  A private passenger motor vehicle insurance policy providing physical damage coverage, including collision or comprehensive coverage, may not be issued in this state unless the insurer has inspected the motor vehicle in accordance with this section.

(2)  This section does not apply:

(a)  To a policy for a policyholder who has been insured for 2 years or longer, without interruption, under a private passenger motor vehicle policy which provides physical damage coverage, if the agent of the insurer verifies the previous coverage.

(b)  To a new, unused motor vehicle purchased from a licensed motor vehicle dealer or leasing company, if the insurer is provided with:

1.  A bill of sale or buyer's order which contains a full description of the motor vehicle, including all options and accessories; or

2.  A copy of the title which establishes transfer of ownership from the dealer or leasing company to the customer and a copy of the window sticker or the dealer invoice showing the itemized options and equipment and the total retail price of the vehicle.

For the purposes of this paragraph, the physical damage coverage on the motor vehicle may not be suspended during the term of the policy due to the applicant's failure to provide the required documents. However, payment of a claim is conditioned upon the receipt by the insurer of the required documents, and no physical damage loss occurring after the effective date of the coverage is payable until the documents are provided to the insurer.

(c)  To a temporary substitute motor vehicle.

(d)  To a motor vehicle which is leased for less than 6 months, if the insurer receives the lease or rental agreement containing a description of the leased motor vehicle, including its condition. Payment of a physical damage claim is conditioned upon receipt of the lease or rental agreement.

(e)  To a vehicle that is 10 years old or older, as determined by reference to the model year.

(f)  To any renewal policy.

(g)  To a motor vehicle policy issued in a county with a 1988 estimated population of less than 500,000.

(h)  To any other vehicle or policy exempted by rule of the department. The department may base a rule under this paragraph only on a determination that the likelihood of a fraudulent physical damage claim is remote or that the inspection would cause a serious hardship to the insurer or the applicant.

(i)  When the insurer's authorized inspection service has no inspection facility either in the municipality in which the automobile is principally garaged or within 10 miles of such municipality.

(j)  When the insured vehicle is insured under a commercially rated policy that insures five or more vehicles.

(k)  When an insurance producer is transferring a book of business from one insurer to another.

(l)  When an individual insured's coverage is being transferred and initiated by a producer to a new insurer.

(3)  This subsection does not prohibit an insurer from requiring a preinsurance inspection of any motor vehicle as a condition of issuance of physical damage coverage.

(4)  The inspection required by this section shall be provided by the insurer or by a person or organization authorized by the insurer. The applicant may be required to pay the cost of the inspection, not to exceed $5. The inspection shall be recorded on a form prescribed by the department, and the form or a copy shall be retained by the insurer with its policy records for the insured. The insurer shall provide a copy of the form to the insured upon request. Any inspection fee paid directly by the applicant may not be considered part of the premium. However, an insurer that provides the inspection at no cost to the applicant may include the expense of the inspection within a rate filing.

(5)  The inspection shall include at least the following:

(a)  Taking a physical imprint of the vehicle identification number of the vehicle or otherwise recording the vehicle identification number in a manner prescribed by the department.

(b)  Recording the presence of accessories required by the department to be recorded.

(c)  Recording the locations of and a description of existing damage to the vehicle.

(6)  An insurer may defer an inspection for 30 calendar days following the effective date of coverage for a new policy, but not for a renewal policy, and for additional or replacement vehicles to an existing policy, if an inspection at the time of the request for coverage would create a serious inconvenience for the applicant and such hardship is documented in the insured's policy record.

(7)  The department may, by rule, establish such procedures and notice requirements that it finds necessary to implement this section.

History.--ss. 41, 52, ch. 90-119; ss. 85, 114, ch. 92-318; s. 28, ch. 95-146.

627.745  Mediation of claims.--

(1)(a)  In any claim filed with an insurer for personal injury in an amount of $10,000 or less or any claim for property damage in any amount, arising out of the ownership, operation, use, or maintenance of a motor vehicle, either party may demand mediation of the claim prior to the institution of litigation.

(b)  A request for mediation shall be filed with the department on a form approved by the department. The request for mediation shall state the reason for the request for mediation and the issues in dispute which are to be mediated. The filing of a request for mediation tolls the applicable time requirements for filing suit for a period of 60 days following the conclusion of the mediation process or the time prescribed in s. 95.11, whichever is later.

(c)  The insurance policy must specify in detail the terms and conditions for mediation of a first-party claim.

(d)  The mediation shall be conducted as an informal process in which formal rules of evidence and procedure need not be observed. Any party participating in a mediation must have the authority to make a binding decision. All parties must mediate in good faith.

(e)  The department shall randomly select mediators. Each party may once reject the mediator selected, either originally or after the opposing side has exercised its option to reject a mediator.

(f)  Costs of mediation shall be borne equally by both parties unless the mediator determines that one party has not mediated in good faith.

(g)  Only one mediation may be requested for each claim, unless all parties agree to further mediation.

(2)  Upon receipt of a request for mediation, the department shall refer the request to a mediator. The mediator shall notify the applicant and all interested parties, as identified by the applicant, and any other parties the mediator believes may have an interest in the mediation, of the date, time, and place of the mediation conference. The conference may be held by telephone, if feasible. The mediation conference shall be held within 45 days after the request for mediation.

(3)(a)  The department shall approve mediators to conduct mediations pursuant to this section. All mediators must file an application under oath for approval as a mediator.

(b)  To qualify for approval as a mediator, a person must meet the following qualifications:

1.  Possess a masters or doctorate degree in psychology, counseling, business, accounting, or economics, be a member of The Florida Bar, be licensed as a certified public accountant, or demonstrate that the applicant for approval has been actively engaged as a qualified mediator for at least 4 years prior to July 1, 1990.

2.  Within 4 years immediately preceding the date the application for approval is filed with the department, have completed a minimum of a 40-hour training program approved by the department and successfully passed a final examination included in the training program and approved by the department. The training program shall include and address all of the following:

a.  Mediation theory.

b.  Mediation process and techniques.

c.  Standards of conduct for mediators.

d.  Conflict management and intervention skills.

e.  Insurance nomenclature.

(4)  The department must adopt rules of procedure for claims mediation, taking into consideration a system which:

(a)  Is fair.

(b)  Promotes settlement.

(c)  Avoids delay.

(d)  Is nonadversarial.

(e)  Uses a framework for modern mediating technique.

(f)  Controls costs and expenses of mediation.

(5)  Disclosures and information divulged in the mediation process are not admissible in any subsequent action or proceeding relating to the claim or to the cause of action giving rise to the claim. A person demanding mediation under this section may not demand or request mediation after a suit is filed relating to the same facts already mediated.

History.--s. 42, ch. 90-119; s. 40, ch. 91-201; ss. 86, 114, ch. 92-318; s. 76, ch. 98-199.

PART XII
SURETY INSURANCE CONTRACTS

627.751  Surety on required bonds; release.

627.752  Bonds in judicial proceedings.

627.754  Sureties upon official bonds.

627.756  Bonds for construction contracts; attorney fees in case of suit.

627.758  Surety on auto club traffic arrest bond; conditions, limit; bail bond.

627.759  Estoppel to deny power.

627.751  Surety on required bonds; release.--

(1)  Subject to other provisions of this part, any authorized surety insurer may be accepted as surety on the bond of any person required by the laws of this state to give bond and may be the only surety necessary to render the bond valid; but other surety may, in the discretion of the official authorized to approve the bond, be required.

(2)  A surety insurer may be released from its liability on the same terms and conditions as are by law prescribed for the release of individuals and shall be subject to all the rights and liabilities of natural persons.

History.--s. 611, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 564, 573, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.752  Bonds in judicial proceedings.--

(1)  In any judicial proceeding, whenever it may become necessary for any party thereto to give a bond for any purpose, the bond of such party having as surety thereon any authorized surety insurer may be accepted, by any officer or court whose duty it is to approve such bond, without other surety. This section applies also to bonds given in connection with any appellate proceeding for the purpose of obtaining supersedeas or for any other purpose.

(2)  A surety insurer may become surety upon administrators', executors', and guardians' bonds; and in such cases there need be only one surety upon such bonds.

History.--s. 612, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 565, 573, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.754  Sureties upon official bonds.--

(1)  An authorized surety insurer having policyholder surplus of not less than $1 million shall, upon proper proof thereof and production of evidence of solvency, be acceptable as surety upon the bonds of all city, county, and state officers.

(2)  The various officers of this state whose duty it is to approve the sureties upon bonds may accept such an insurer as one of the sureties, or as the only surety, upon such bond as the solvency of the insurer may warrant.

(3)  No insurer shall be relieved of its liability upon any bond by reason of the fact that the books and accounts of the principal have been examined and approved as correct by the proper authorities when in fact there has been a breach of the bond and a loss accruing from the breach.

History.--s. 614, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 567, 573, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.756  Bonds for construction contracts; attorney fees in case of suit.--

(1)  Section 627.428 applies to suits brought by owners, subcontractors, laborers, and materialmen against a surety insurer under payment or performance bonds written by the insurer under the laws of this state to indemnify against pecuniary loss by breach of a building or construction contract. Owners, subcontractors, laborers, and materialmen shall be deemed to be insureds or beneficiaries for the purposes of this section.

(2)  A surety who issues a bid, performance, or payment bond in connection with construction activities where hazardous substances exist or are discovered is liable under ss. 376.308 and 403.727 only to the extent provided in this subsection. In case of a default, the surety is liable only for the cost of completion of the contract work in accordance with the plans and specifications, less the balance of funds remaining to be paid under the contract, up to the penal sum of the bond. The surety is not liable on a bond to indemnify or compensate the obligee for loss or liability arising from personal injury or property damage, whether or not caused by a breach of the bonded contract. Further, a right of action does not accrue on a bond to or for the use of any person other than the obligee named in the bond.

History.--s. 616, ch. 59-205; s. 1, ch. 70-334; s. 3, ch. 76-168; s. 17, ch. 77-353; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 569, 573, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 87, 114, ch. 92-318.

627.758  Surety on auto club traffic arrest bond; conditions, limit; bail bond.--

(1)  Any authorized surety insurer may, in any year, become surety in an amount not to exceed $1,000 with respect to any guaranteed traffic arrest bond certificate issued in such year by an automobile club or association by filing with the department an undertaking to become surety.

(2)  The undertaking shall be in the form prescribed by the department and shall state the following:

(a)  The name and address of the automobile club or association with respect to the guaranteed traffic arrest bond certificates for which the surety insurer undertakes to be surety.

(b)  The unqualified obligation of the surety insurer to pay the fine or forfeiture in an amount not to exceed $1,000 for any person who, after posting a guaranteed traffic arrest bond certificate with respect to which the insurer has undertaken to be surety, fails to make the appearance for which the certificate was posted.

(3)  The term "guaranteed traffic arrest bond certificate" means any printed card or other certificate issued by the automobile club or association to any of its members, which card or certificate is signed by such member and contains a printed statement that such automobile club or association and a named surety company guarantee the appearance of the person whose signature appears on the card or certificate and that they will, in the event of failure of the person to appear in court at the time of trial, pay any traffic fine or forfeiture imposed on the person in an amount not to exceed $1,000.

(4)  Notwithstanding the provisions of s. 626.311 or chapter 648, any surety insurer identified in a guaranteed traffic arrest bond certificate or any licensed general lines agent of the surety insurer may execute a bail bond for the automobile club or association member identified in the guaranteed traffic arrest bond certificate in an amount not in excess of $5,000 for any violation of chapter 316 or any similar traffic law or ordinance except for driving under the influence of alcoholic beverages, chemical substances, or controlled substances, as prohibited by s. 316.193.

History.--s. 618, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 571, 573, 809(2nd), ch. 82-243; ss. 70, 79, ch. 82-386; s. 1, ch. 85-48; s. 23, ch. 86-296; s. 1, ch. 88-309; s. 114, ch. 92-318.

627.759  Estoppel to deny power.--Any surety insurer which executes any bond or undertaking of surety under this part shall be estopped from denying its corporate or other power to execute such bond or assume such liability in any proceeding to enforce the liability which it has assumed.

History.--s. 619, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 572, 573, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

PART XIII
TITLE INSURANCE CONTRACTS

627.7711  Definitions.

627.776  Applicability or inapplicability of Florida Insurance Code provisions to title insurers.

627.777  Approval of forms.

627.7773  Accounting and auditing of forms by title insurers.

627.7776  Furnishing of supplies; civil liability.

627.778  Limit of risk.

627.780  Illegal dealings in risk premium.

627.782  Adoption of rates.

627.7825  Alternative rate adoption.

627.783  Rate deviation.

627.7831  Commitments; charges; collection.

627.784  Casualty title insurance prohibited.

627.7841  Insurance against adverse matters or defects in the title.

627.7842  Policy exceptions.

627.7843  Ownership and encumbrance reports.

627.7845  Determination of insurability required; preservation of evidence of title search and examination.

627.785  Preemption by state.

627.786  Transaction of title insurance and any other kind of insurance prohibited.

627.7865  Title insurer assessments.

627.791  Penalties against title insurers for violations by persons or entities not licensed.

627.792  Liability of title insurers for defalcation by title insurance agents or agencies.

627.793  Rulemaking authority.

627.796  Errors and omissions policy requirements.

627.797  Exempt agent list.

627.798  Rulemaking authority.

627.7711  Definitions.--As used in this part, the term:

(1)(a)  "Related title services" means services performed by a title insurer or title insurance agent or agency, in the agent's or agency's capacity as such, including, but not limited to, preparing or obtaining a title search, examining title, preparing documents necessary to close the transaction, conducting the closing, or handling the disbursing of funds related to the closing in a real estate closing transaction in which a title insurance commitment or policy is to be issued. The premium, together with the charge for related title services, constitutes the regular title insurance premium.

(b)  "Primary title services" means determining insurability in accordance with sound underwriting practices based upon evaluation of a reasonable search and examination of the title, determination and clearance of underwriting objections and requirements to eliminate risk, preparation and issuance of a title insurance commitment setting forth the requirements to insure, and preparation and issuance of the policy.

(2)  "Premium" means the charge, as specified by rule of the department, that is made by a title insurer for a title insurance policy, including the charge for performance of primary title services by a title insurer or title insurance agent or agency, and incurring the risks incident to such policy, under the several classifications of title insurance contracts and forms, and upon which charge a premium tax is paid under s. 624.509. As used in this part or in any other law, with respect to title insurance, the word "premium" does not include a commission.

(3)  "Title insurer" means any domestic company organized and authorized to do business under the provisions of chapter 624, for the purpose of issuing title insurance, or any insurer organized under the laws of another state, the District of Columbia, or a foreign country and holding a certificate of authority to transact business in this state, for the purpose of issuing title insurance.

History.--ss. 575, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 88, 114, ch. 92-318; s. 6, ch. 99-286.

627.776  Applicability or inapplicability of Florida Insurance Code provisions to title insurers.--

(1)  In addition to any other provisions of law applicable to title insurers, title insurers are subject to the following provisions of this code:

(a)  Section 624.406(3) (title insurer must be a stock insurer).

(b)  Section 624.407.

(c)  Section 624.408.

(d)  Section 624.411.

(e)  Section 624.608.

(f)  Section 625.031(4) (nonadmitted assets do not include certain properties of title insurers).

(g)  Section 625.051(5) (title insurers exempt from usual unearned premium reserve).

(h)  Section 625.111.

(i)  Section 625.330.

(j)  Section 626.9541(1)(h) (rebates prohibited; title insurance).

(k)  Section 627.401(4) (limited applicability of part II of chapter 627 as to title insurance).

(l)  Section 628.151.

(2)  The following provisions of this code do not apply to title insurance:

(a)  Part I of chapter 626 (insurance representatives; licensing procedures and general requirements).

(b)  Part II of chapter 626 (general lines agents and solicitors; qualifications and requirements).

(c)  Part III of chapter 626 (life insurance agents).

(d)  Part IV of chapter 626 (health insurance agents).

(e)  Part VI of chapter 626 (insurance adjusters).

(f)  Part I of chapter 627 (rates and rating organizations).

(g)  Part III of chapter 627 (life insurance policies and annuity contracts).

(h)  Part IV of chapter 627 (industrial life insurance policies).

(i)  Part V of chapter 627 (group life insurance).

(j)  Part VI of chapter 627 (health insurance policies).

(k)  Part VII of chapter 627 (group, blanket, and franchise health insurance).

(l)  Part IX of chapter 627 (credit life and disability insurances).

(m)  Part X of chapter 627 (property insurance contracts).

(n)  Part XI of chapter 627 (casualty insurance contracts).

(o)  Part XII of chapter 627 (surety insurance contracts).

(p)  Chapter 629.

(q)  Chapter 632.

(r)  Section 624.4095.

History.--s. 620, ch. 59-205; s. 2, ch. 61-141; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 574, 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 32, ch. 87-226; s. 10, ch. 90-249; ss. 89, 114, ch. 92-318.

627.777  Approval of forms.--A title insurer may not issue or agree to issue any form of title insurance commitment, title insurance policy, other contract of title insurance, or related form until it is filed with and approved by the department. The department may not disapprove a title guarantee or policy form on the ground that it has on it a blank form for an attorney's opinion on the title.

History.--s. 3, ch. 65-359; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 90, 114, ch. 92-318; s. 7, ch. 99-286.

627.7773  Accounting and auditing of forms by title insurers.--

(1)  Each title insurer authorized to do business in this state shall, at least once during each calendar year, require of each of its title insurance agents or agencies accountings of all outstanding forms in the agent's or agency's possession of the types that are specified in s. 627.777.

(2)  If the department has reason to believe that an audit of outstanding forms should be required of any title insurer as to a title insurance agent or agency, the department may require the title insurer to make a special audit of the forms. The title insurer shall complete the audit not later than 60 days after the request is received from the department, and shall report the results of the special audit to the department no later than 90 days after the request is received.

History.--s. 2, ch. 85-185; s. 1, ch. 86-286; ss. 91, 114, ch. 92-318; s. 8, ch. 99-286.

627.7776  Furnishing of supplies; civil liability.--

(1)  A title insurer may not furnish to any person any blank forms, applications, stationery, or other supplies to be used in soliciting, negotiating, or effecting contracts of title insurance on its behalf until that person has received from the insurer a contract to act as a title insurance agent or agency and has been licensed by the department, if required by s. 626.8417.

(2)  A title insurer or title insurance agent or agency that furnishes any supplies to a person not authorized by the title insurer as provided in subsection (1) is subject to civil liability to any insured of the title insurer to the same extent and in the same manner as if the person had been appointed or authorized by the title insurer to act in its behalf.

History.--s. 3, ch. 85-185; s. 1, ch. 86-286; ss. 92, 114, ch. 92-318; s. 9, ch. 99-286.

627.778  Limit of risk.--

(1)(a)  A title insurer may not issue any contract of title insurance, either as a primary insurer or as a coinsurer or reinsurer, upon an estate, lien, or interest in property located in this state unless:

1.  The contract shows on its face the dollar amount of the risk assumed; and

2.  The dollar amount of the risk assumed does not exceed one-half of its surplus as to policyholders, unless the excess is simultaneously reinsured in one or more approved insurers.

(b)  A title insurer may not circumvent the limitations of paragraph (a) by issuing two or more policies upon the same estate, lien, or interest.

(c)  This subsection does not prohibit:

1.  The simultaneous issuance of policies insuring different estates, liens, or interests in the same property, if each of the simultaneous policies excepts the paramount estates, liens, or interests to which the insured estate, lien, or interest is subject and if each of the simultaneous policies conforms to this subsection.

2.  Ceding portions of the total risk to authorized insurers. Insurance ceded, including coinsurance effected, is a retention of risk by the insurer assuming the ceded risk, and not by the insurer ceding the risk.

(2)  Surplus as to policyholders shall be determined from the last annual statement of the insurer filed under s. 624.424.

History.--s. 4, ch. 65-359; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 93, 114, ch. 92-318; s. 31, ch. 95-211.

627.780  Illegal dealings in risk premium.--

(1)  A person may not knowingly quote, charge, accept, collect, or receive a premium for title insurance other than the premium adopted by the department.

(2)  A title insurer may not knowingly accept, collect, or receive any sum as premium for title insurance, if the title insurance is not then provided or is not to be provided, subject to acceptance of the risk, in due course, unless the title insurer promptly enters the sum on its books of account as premium collected in advance.

History.--s. 6, ch. 65-359; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 577, 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 94, 114, ch. 92-318; s. 10, ch. 99-286.

627.782  Adoption of rates.--

(1)  Subject to the rating provisions of this code, the department must adopt a rule specifying the premium to be charged in this state by title insurers for the respective types of title insurance contracts and, for policies issued through agents or agencies, the percentage of such premium required to be retained by the title insurer which shall not be less than 30 percent. However, in a transaction subject to the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. ss. 2601 et seq., as amended, no portion of the premium attributable to providing a primary title service shall be paid to or retained by any person who does not actually perform or is not liable for the performance of such service. The department may, by rule, establish limitations on related title services charges made in addition to the premium based upon the expenses associated with the services rendered and other relevant factors.

(2)  In adopting premium rates, the department must give due consideration to the following:

(a)  The title insurers' loss experience and prospective loss experience under closing protection letters and policy liabilities.

(b)  A reasonable margin for underwriting profit and contingencies, including contingent liability under s. 627.7865, sufficient to allow title insurers, agents, and agencies to earn a rate of return on their capital that will attract and retain adequate capital investment in the title insurance business and maintain an efficient title insurance delivery system.

(c)  Past expenses and prospective expenses for administration and handling of risks.

(d)  Liability for defalcation.

(e)  Other relevant factors.

(3)  Rates may be grouped by classification or schedule and may differ as to class of risk assumed.

(4)  Rates may not be excessive, inadequate, or unfairly discriminatory.

(5)  The premium applies to each $100 of insurance issued to an insured.

(6)  The premium rates apply throughout this state.

(7)  The department shall, in accordance with the standards provided in subsection (2), review the premium as needed, but not less frequently than once every 3 years, and shall, based upon the review required by this subsection, revise the premium if the results of the review so warrant.

(8)  The department may, by rule, require licensees under this part to annually submit statistical information, including loss and expense data, as the department determines to be necessary to analyze premium rates, retention rates, and the condition of the title insurance industry.

History.--s. 8, ch. 65-359; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 579, 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 8, ch. 89-305; s. 16, ch. 90-119; ss. 95, 114, ch. 92-318; s. 11, ch. 99-286.

627.7825  Alternative rate adoption.--Notwithstanding s. 627.782(1) and (7), the premium rates to be charged by title insurers in this state from July 1, 1999, through June 30, 2002, for title insurance contracts shall be as set forth in this section. The rules related to premium rates for title insurance, including endorsements, adopted by the department and in effect on April 1, 1999, that do not conflict with the provisions of this section shall remain in effect until June 30, 2002. The department shall not grant a rate deviation pursuant to s. 627.783 for the premium rates established in this section and in department rules in effect on April 1, 1999, that do not conflict with this section.

(1)  ORIGINAL TITLE INSURANCE RATES.--

(a)  For owner and leasehold title insurance:

1.  The premium for the original owner's or for leasehold insurance shall be:

	Per Thousand	Minimum Insurer Retention
From $0 to $100,000 of liability written	$5.75	30%
From $100,000 to $1 million, add	$5.00	30%
Over $1 million and up to $5 million, add	$2.50	35%
Over $5 million and up to $10 million, add	$2.25	40%
Over $10 million, add	$2.00	40%

The minimum premium for all conveyances except multiple conveyances shall be $100. The minimum premium for multiple conveyances on the same property shall be $60.

2.  In all cases, the owner's policy shall be issued for the full insurable value of the premises.

(b)  For mortgage title insurance:

1.  The premium for the original mortgage title insurance shall be:

	Per Thousand	Minimum Insurer Retention
From $0 to $100,000 of liability written	$5.75	30%
From $100,000 to $1 million, add	$5.00	30%
Over $1 million and up to $5 million, add	$2.50	35%
Over $5 million and up to $10 million, add	$2.25	40%
Over $10 million, add	$2.00	40%

The minimum premium for all conveyances except multiple conveyances shall be $100. The minimum premium for multiple conveyances on the same property shall be $60.

2.  A mortgage title insurance policy shall not be issued for an amount less than the full principal debt. A policy may, however, be issued for an amount up to 25 percent in excess of the principal debt to cover interest and foreclosure costs.

(2)  REISSUE RATES.--

(a)  The reissue premium charge for owner's, mortgage, and leasehold title insurance policies shall be:

	Per Thousand
Up to $100,000 of liability written	$3.30
Over $100,000 and up to $1 million, add	$3.00
Over $1 million and up to $10 million, add	$2.00
Over $10 million, add	$1.50

The minimum premium shall be $100.

(b)  Provided a previous owner's policy was issued insuring the seller or the mortgagor in the current transaction and that both the reissuing agent and the reissuing underwriter retain for their respective files copies of the prior owner's policy or policies, the reissue premium rates in paragraph (a) shall apply to:

1.  Policies on real property which is unimproved except for roads, bridges, drainage facilities, and utilities if the current owner's title has been insured prior to the application for a new policy;

2.  Policies issued with an effective date of less than 3 years after the effective date of the policy insuring the seller or mortgagor in the current transaction; or

3.  Mortgage policies issued on refinancing of property insured by an original owner's policy which insured the title of the current mortgagor.

(c)  Any amount of new insurance, in the aggregate, in excess of the amount under the previous policy shall be computed at the original owner's or leasehold rates, as provided in subsection (1).

(3)  NEW HOME PURCHASE DISCOUNT.--Provided the seller has not leased or occupied the premises, the original premium for a policy on the first sale of residential property with a one to four family improvement that is granted a certificate of occupancy shall be discounted by the amount of premium paid for any prior loan policies insuring the lien of a mortgage executed by the seller on the premises. In the case of prior loan policies insuring the lien of a mortgage on multiple units or parcels, the discount shall be prorated by dividing the amount of the premium paid for the prior loan policies by the total number of units or parcels without regard to varying unit or parcel value. The minimum new home purchase premium shall be $200. The new home purchase discount may not be combined with any other reduction from original premium rates provided for in this section. The insurer shall reserve for unearned premiums only on the excess amount of the policy over the amount of the actual or prorated amount of the prior loan policy.

(4)  SUBSTITUTION LOANS RATES.--

(a)  When the same borrower and the same lender make a substitution loan on the same property, the title to which was insured by an insurer in connection with the previous loan, the following premium rates for substitution loans shall apply:

Age of Previous Loan	Premium Rates
3 years or under	30 percent of the original rates
From 3 to 4 years	40 percent of the original rates
From 4 to 5 years	50 percent of the original rates
From 5 to 10 years	60 percent of the original rates
Over 10 years	100 percent of original rates

The minimum premium for substitution loan rates shall be $100.

(b)  At the time a substitution loan is made, the unpaid principal balance of the previous loan will be considered the amount of insurance in force on which the foregoing premium rates shall be calculated. To these rates shall be added the original rates in the applicable schedules for any new insurance, including any difference between the unpaid principal balance of the previous loan and the amount of the new loan.

(c)  In the case of a substitution loan of $250,000 or more, when the same borrower and any lender make a substitution loan on the same property, the title to which was insured by an insurer in connection with the previous loan, the premium for such substitution loans shall be the rates as set forth in paragraphs (a) and (b).

History.--s. 12, ch. 99-286.

627.783  Rate deviation.--

(1)  A title insurer may petition the department for an order authorizing a specific deviation from the adopted premium, and a title insurer or title insurance agent may petition the department for an order authorizing and permitting a specific deviation above the reasonable charge for related title services rendered specified in s. 627.782(1). The petition shall be in writing and sworn to and shall set forth allegations of fact upon which the petitioner will rely, including the petitioner's reasons for requesting the deviation. Any authorized title insurer, agent, or agency may join in the petition for like authority to deviate or may file a separate petition praying for like authority or opposing the deviation. The department shall rule on all such petitions simultaneously.

(2)  If, in the judgment of the department, the requested deviation is not justified, the department may enter an order denying the petition. An order granting a petition constitutes an amendment to the adopted premium as to the petitioners named in the order, and is subject to s. 627.782.

History.--s. 9, ch. 65-359; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 580, 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 9, ch. 89-305; ss. 96, 114, ch. 92-318; s. 13, ch. 99-286.

627.7831  Commitments; charges; collection.--

(1)  When a title insurance commitment to insure a title or risk is issued at the request of the insured or the insured's representative, agent, or agency, a portion of the premium must be charged for the commitment when issued. The portion of the premium charged for the commitment must be credited to the premium due upon issuance of the title insurance policy.

(2)  The amount charged under subsection (1) must be collected no later than the date of the closing or 12 months after the date of the commitment, whichever occurs earlier, or another date agreed to in writing at the time of issuance of the commitment.

(3)  This section does not apply to a transaction involving a residential property.

History.--s. 97, ch. 92-318; s. 14, ch. 99-286.

627.784  Casualty title insurance prohibited.--A title insurance policy or guarantee of title may not be issued without regard to the possible existence of adverse matters or defects of title.

History.--s. 10, ch. 65-359; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 98, 114, ch. 92-318; s. 15, ch. 99-286.

627.7841  Insurance against adverse matters or defects in the title.--If a title insurer issuing a commitment or policy of title insurance upon an estate, lien, or interest in property located in this state through its officers, employees, agents, or agencies disburses settlement or closing funds, the title insurer shall insure against the possible existence of adverse matters or defects in the title which are recorded during the period of time between the effective date of the commitment and the date of recording of the document creating the estate or interest to be insured, except as to matters of which the insured has knowledge.

History.--s. 1, ch. 79-15; s. 2, ch. 81-318; ss. 581, 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 99, 114, ch. 92-318; s. 16, ch. 99-286.

627.7842  Policy exceptions.--

(1)(a)  If a survey meeting the minimum technical standards for surveying required by the Department of Business and Professional Regulation and certified to the title insurer by a registered Florida surveyor has been completed on the property within 90 days before the date of closing, the title policy may only except from coverage the encroachments, overlays, boundary line disputes, and other matters which are actually shown on the survey.

(b)  If at closing the seller signs an affidavit swearing that there is no person in possession of the property or with a claim of possession to the property except the seller, the title policy may not exclude from coverage rights or claims of parties in possession not shown by the public records.

(c)  If at closing the seller signs an affidavit swearing that no improvements have been made to the property within the past 90 days for which payment has not been made in full, the title policy may not except from coverage any lien or right to a lien for services, labor, or material furnished which is imposed by law and not shown by the public record.

(2)  The title insurer, agent, or agency issuing the title policy may except from coverage the items specified in subsection (1) if the title insurer, agent, or agency has knowledge of facts requiring the exceptions, notwithstanding the survey or affidavits, if the insurer, agent, or agency discloses such facts to the proposed insured.

History.--s. 1, ch. 85-20; s. 1, ch. 86-286; ss. 100, 114, ch. 92-318; s. 225, ch. 94-218; s. 17, ch. 99-286.

627.7843  Ownership and encumbrance reports.--

(1)  As used in this section, the term "ownership and encumbrance report" means a report that discloses certain defined documents imparting constructive notice and appearing in the official records relating to specified real property.

(2)  An ownership and encumbrance report may not directly or indirectly set forth or imply any opinion, warranty, guarantee, insurance, or other similar assurance as to the status of title to real property.

(3)  Any ownership and encumbrance report or similar report that is relied on or intended to be relied on by a consumer must be on forms approved by the department, and must provide for a maximum liability for incorrect information of not more than $1,000.

History.--s. 101, ch. 92-318.

627.7845  Determination of insurability required; preservation of evidence of title search and examination.--

(1)  A title insurer may not issue a title insurance commitment, endorsement, or title insurance policy until the title insurer has caused to be conducted a reasonable search and examination of the title and of such other information as may be necessary, and has caused to be made a determination of insurability of title, including endorsement coverages, in accordance with sound underwriting practices.

(2)  The title insurer shall cause the evidence of the reasonable search and examination of the title to be preserved and retained in its files or in the files of its title insurance agent or agency for a period of not less than 7 years after the title insurance commitment, title insurance policy, or guarantee of title was issued. The title insurer or agent or agency must produce the evidence required to be maintained by this subsection at its offices upon the demand of the department. Instead of retaining the original evidence, the title insurer or the title insurance agent or agency may, in the regular course of business, establish a system under which all or part of the evidence is recorded, copied, or reproduced by any photographic, photostatic, microfilm, microcard, miniature photographic, or other process which accurately reproduces or forms a durable medium for reproducing the original.

(3)  The title insurer or its agent or agency must maintain a record of the actual risk premium and related title service charges made for issuance of the policy and any endorsements in its files for a period of not less than 7 years. The title insurer, agent, or agency must produce the record at its office upon demand of the department.

(4)  This section does not apply to an insurer assuming no primary liability in a contract of reinsurance or to an insurer acting as a coinsurer if any other coinsuring insurer has complied with this section.

History.--ss. 582, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 4, ch. 85-185; ss. 102, 114, ch. 92-318; s. 18, ch. 99-286.

627.785  Preemption by state.--The regulation of title insurers and title insurance is preempted to the state.

History.--s. 11, ch. 65-359; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 103, 114, ch. 92-318.

627.786  Transaction of title insurance and any other kind of insurance prohibited.--

(1)  An insurer may not transact title insurance and any other kind of insurance in this state.

(2)  Subsection (1) does not apply to any insurer actively transacting title insurance and any other kind of insurance in this state on January 1, 1965.

(3)  Subsection (1) does not preclude a title insurer from providing instruments to any prospective insured, in the form and content approved by the department, under which the title insurer assumes liability for loss due to the fraud of, dishonesty of, misappropriation of funds by, or failure to comply with written closing instructions by, its contract agents, agencies, or approved attorneys in connection with a real property transaction for which the title insurer is to issue a title insurance policy.

History.--s. 12, ch. 65-359; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 1, 2, ch. 79-16; ss. 2, 3, ch. 81-318; ss. 584, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 104, 114, ch. 92-318; s. 19, ch. 99-286.

627.7865  Title insurer assessments.--As a condition of doing business in this state, each title insurer shall be liable for an assessment to pay all unpaid title insurance claims on real property in this state for any title insurer which is liquidated with unpaid outstanding claims. The department shall assess all title insurers on a pro rata basis determined by their writings in this state for amounts necessary to pay the claims. A title insurer is not required to pay an amount in excess of one-tenth of its surplus as to policyholders.

History.--ss. 583, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 105, 114, ch. 92-318; s. 32, ch. 95-211.

627.791  Penalties against title insurers for violations by persons or entities not licensed.--A title insurer is subject to the penalties in ss. 624.418(2) and 624.4211 for any violation of a lawful order or rule of the department, or for any violation of this code, committed by:

(1)  A person, firm, association, corporation, cooperative, joint-stock company, or other legal entity not licensed under this part when issuing and countersigning commitments or policies of title insurance on behalf of the title insurer.

(2)  An attorney when issuing and countersigning commitments or policies of title insurance on behalf of the title insurer.

History.--s. 23, ch. 85-185; s. 1, ch. 86-286; ss. 106, 114, ch. 92-318; s. 20, ch. 99-286.

627.792  Liability of title insurers for defalcation by title insurance agents or agencies.--A title insurer is liable for the defalcation, conversion, or misappropriation by a licensed title insurance agent or agency of funds held in trust by the agent or agency pursuant to s. 626.8473. If the agent or agency is an agent or agency for two or more title insurers, any liability shall be borne by the title insurer upon which a title insurance commitment or policy was issued prior to the illegal act. If no commitment or policy was issued, each title insurer represented by the agent or agency at the time of the illegal act shares in the liability in the same proportion that the premium remitted to it by the agent or agency during the 1-year period before the illegal act bears to the total premium remitted to all title insurers by the agent or agency during the same time period.

History.--s. 25, ch. 85-185; s. 1, ch. 86-81; s. 1, ch. 86-286; ss. 107, 114, ch. 92-318; s. 21, ch. 99-286.

627.793  Rulemaking authority.--The department is authorized to adopt rules implementing the provisions of this part.

History.--s. 22, ch. 99-286.

627.796  Errors and omissions policy requirements.--A title insurance policy may not be issued from a search performed by any person other than a title insurance agent, or an employee of a title insurer or title insurance agency, unless that person has in effect an errors and omissions policy that has minimum coverage limits of $250,000 and a deductible that does not exceed $10,000.

History.--s. 13, ch. 2000-370.

627.797  Exempt agent list.--

(1)  Every insurer shall file with the department a list containing the name and address of each appointed agent who is exempt from licensure under s. 626.8417(4) and who issues or countersigns binders, commitments, title insurance policies, or guarantees of title.

(2)  Each month thereafter, the insurer shall report to the department the name and address of any nonlicensed agent whose appointment is granted or terminated.

History.--s. 14, ch. 2000-370.

627.798  Rulemaking authority.--The department shall by rule adopt a form to be used to provide notice to a purchaser-mortgagor that the purchaser-mortgagor is not protected by the title policy of the mortgagee.

History.--s. 15, ch. 2000-370.

PART XIV
VARIABLE OR INDETERMINATE
VALUE CONTRACTS

627.801  Application of this part.

627.8015  "Indeterminate value contracts" and "variable contracts" defined.

627.802  Establishment and maintenance of separate accounts.

627.803  Statement of value of benefits.

627.804  Investment of assets.

627.805  Departmental regulation of variable and indeterminate value contracts; rules.

627.8055  Qualification of companies to issue variable or indeterminate value contracts.

627.806  Applicability of code to indeterminate value contracts and variable life insurance contracts and accounts.

627.807  Variable or indeterminate value contract reserve requirements.

627.801  Application of this part.--This part applies to annuity contracts, life insurance contracts, and contracts upon the lives of beneficiaries under life insurance contracts when such annuities or contracts provide for variable or indeterminate benefits, values, or premiums.

History.--s. 1, ch. 61-441; s. 1, ch. 73-30; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 585, 593, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.8015  "Indeterminate value contracts" and "variable contracts" defined.--For the purposes of this part:

(1)  "Indeterminate value contracts" means annuity contracts, life insurance contracts, and contracts upon the lives of beneficiaries under life insurance contracts when such annuities or contracts provide variable or indeterminate benefits, values, or premiums.

(2)  "Variable contracts" means indeterminate value contracts for which assets are held in a separate account.

History.--ss. 586, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.802  Establishment and maintenance of separate accounts.--A domestic life insurance company may establish one or more separate accounts and allocate thereto amounts, including without limitation proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or annuities, and benefits incidental thereto, payable in fixed or variable amounts or both. All amounts received by the company which are required by contract to be applied to provide variable benefits or values shall be added to the appropriate separate account. If so provided under applicable contracts, that portion of the assets of any such separate account equal to the reserves and other contract liabilities with respect to the account shall not be chargeable with liabilities arising out of any other business the company may conduct. Any deficit from mortality experience which may arise in any such separate account shall be adjusted by additions to the account by the company so that the assets of the account are always at least equal to the assets required to satisfy the obligations of the company.

History.--s. 2, ch. 61-441; ss. 13, 35, ch. 69-106; s. 1, ch. 73-30; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 587, 593, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.803  Statement of value of benefits.--Any contract or group certificate delivered or issued for delivery in this state which provides variable or indeterminate values shall contain a statement of the essential features of the procedure to be followed by the insurance company in determining the dollar amount of the benefits, values, or premiums and shall state in clear terms that the amount may decrease or increase according to such procedure. Any such contract delivered or issued for delivery in this state, and any such group certificate, shall contain on its first page, in a prominent position in contrasting color or boldfaced type, and in a type size as large as the type used in the text of the policy, a clear statement that the benefits, values, or premiums are on a variable basis and, if such is the fact, that the initial interest rate is guaranteed only for a limited period of time.

History.--s. 3, ch. 61-441; s. 1, ch. 73-30; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 588, 593, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 84-93; s. 17, ch. 90-119; s. 114, ch. 92-318.

627.804  Investment of assets.--An insurer which issues contracts providing for benefits, values, or premiums that vary directly according to investment experience and which has established a separate account or accounts in connection with such contracts may invest and reinvest the assets held in the separate account or accounts without regard to any state requirements or limitations governing the investments of life insurance companies. The investments in the separate account or accounts shall not be considered in applying the investment limitations otherwise applicable to the investments of the company.

History.--s. 4, ch. 61-441; s. 1, ch. 73-30; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 589, 593, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.805  Departmental regulation of variable and indeterminate value contracts; rules.--The department, notwithstanding any other provision of law, shall have the sole authority to regulate the issuance and sale of variable and indeterminate value contracts and has authority to adopt rules pursuant to ss. 120.536(1) and 120.54 to implement the provisions of this part.

History.--s. 5, ch. 61-441; ss. 13, 35, ch. 69-106; s. 1, ch. 73-30; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 590, 593, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 204, ch. 98-200.

627.8055  Qualification of companies to issue variable or indeterminate value contracts.--No insurance company shall issue or deliver any contract on a variable or indeterminate value basis until it has satisfied the department that its financial condition, management, history, and methods of operation are not such as would render its operation harmful to the public welfare.

History.--ss. 590, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.806  Applicability of code to indeterminate value contracts and variable life insurance contracts and accounts.--

(1)  Subject to the provisions of subsection (2), all pertinent provisions of the insurance code, including the provisions relating to reinsurance, apply to indeterminate value contracts.

(2)  Except for ss. 627.453, 627.458, 627.459, 627.462, 627.475, 627.476, and 627.559, and as otherwise provided in this part, all pertinent provisions of the insurance code apply to separate accounts and contracts relating to variable life insurance policies. Any individual variable life insurance contract delivered or issued for delivery in this state shall contain appropriate grace, reinstatement, and nonforfeiture provisions. Any group variable life insurance contract delivered or issued for delivery in this state shall contain an appropriate grace provision.

History.--s. 2, ch. 73-30; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 591, 593, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.807  Variable or indeterminate value contract reserve requirements.--The reserve liability for variable or indeterminate value contracts shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits, values, or premiums provided and any mortality guarantees.

History.--s. 2, ch. 73-30; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 592, 593, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

PART XV
PREMIUM FINANCE COMPANIES
AND AGREEMENTS

627.826  "Premium finance company" defined.

627.827  "Premium finance agreement" defined.

627.828  License required.

627.8281  Levy upon deposit.

627.829  Approval, disapproval of application; license renewal.

627.832  Grounds for refusal, suspension, or revocation of license.

627.833  Administrative fine and probation in lieu of suspension, revocation, or refusal to renew license.

627.834  Examinations.

627.835  Excessive premium finance charge; penalty.

627.836  Licensee's books and records; reports.

627.838  Filing and approval of forms; service charges.

627.839  Form and content of premium finance agreements.

627.840  Limitation on service and other charges.

627.8405  Prohibited acts; financing companies.

627.841  Delinquency, collection, cancellation, and check return charges; attorney's fees.

627.842  Restrictions on premium finance agreements.

627.843  Delivery of copy of premium finance agreement.

627.844  Assignment of premium finance agreement.

627.845  Statement of account; receipts.

627.847  Extensions or deferrals.

627.848  Cancellation of insurance contract upon default.

627.849  Fees.

627.826  "Premium finance company" defined.--

(1)  An "insurance premium finance company" is:

(a)  A person engaged, in whole or in part, in the business of entering into premium finance agreements with insureds; or

(b)  A person engaged, in whole or in part, in the business of acquiring premium finance agreements from other premium finance companies.

(2)  Credit unions, banks, savings and loan associations, and other lending institutions as defined under chapters 516, 657, 658, and 665 or their federally chartered counterparts are exempt from the provisions of this part.

(3)  The inclusion of a charge for insurance on a bona fide sale of goods or services on installments is not subject to the provisions of this part.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 166, ch. 79-164; s. 431, ch. 81-259; ss. 2, 3, ch. 81-318; ss. 594, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 204, ch. 92-303; s. 114, ch. 92-318.

627.827  "Premium finance agreement" defined.--"Premium finance agreement" means a promissory note or other written agreement by which an insured promises or agrees to pay to, or to the order of, a premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent, in payment of premiums on an insurance contract, together with a service charge as authorized and limited by law.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.828  License required.--

(1)  Except as provided in ss. 627.901 and 627.902, no person shall engage in the business of a premium finance company unless licensed by the department. Every premium finance company licensed under the provisions of this part shall maintain at all times a net worth of $35,000. However, in lieu of having a net worth of $35,000, a premium finance company that has a net worth of $10,000 may file a surety bond or other acceptable collateral with the department as approved by it in the amount of $35,000, which bond or collateral must be maintained.

(2)  The application for a license shall be in writing and in the form prescribed by the department. Every applicant shall provide evidence of a net worth of $35,000 attested by two officers of the company, or a $35,000 surety bond and evidence of a net worth of $10,000 attested by two officers of the company. Assets to be used in computing the required net worth shall be determined by rules adopted by the department.

(3)(a)  Each premium finance company authorized under the provisions of this part shall maintain at all times an errors and omissions insurance policy of no less than $500,000 covering the acts of its officers, employees, and agents. The policy may contain reasonable deductibles not to exceed 2 percent of the policy limits.

(b)1.  A premium finance company with an unencumbered net worth of at least $15 million may self-insure the errors and omissions coverage if it meets the requirements of this paragraph.

2.  To qualify as a self-insurer the premium finance company must:

a.  Have and maintain an unencumbered net worth of $15 million, which shall be determined based on assets permissible for insurers pursuant to ss. 625.012 and 625.031;

b.  Annually demonstrate as part of its annual report, to the satisfaction of the department, that the net-worth requirement is being met; and

c.  Obtain, as a part of its annual application for licensure as a premium finance company, a certificate of self-insurance from the department to be renewed annually.

3.  If the department finds that the premium finance company:

a.  Is not maintaining at all times an unencumbered net worth of at least $15 million; or

b.  Is not, in good faith, covering the errors and omissions of its officers, employees and agents,

the department shall, in addition to other penalties under this code, revoke or suspend the certificate of self-insurance, and the premium finance company shall be subject to the requirements of paragraph (a).

(c)  The department may adopt rules necessary to administer this subsection, including rules prescribing the necessary forms.

(4)  A single license shall entitle the holder to operate more than one office.

(5)  At the time of filing an application for a license, the applicant shall pay to the department the license fee and, upon original application or upon application subsequent to denial of application, or revocation, suspension or surrender of a license, an investigation fee.

(6)  Such license shall state the name and address of the licensee, and a copy shall be kept conspicuously posted in each office of the licensee and shall not be transferable or assignable.

(7)  Prior to moving an existing office to another location, a licensee shall notify the department in writing of its intention to do so.

History.--s. 1, ch. 63-16; ss. 13, 35, ch. 69-106; s. 2, ch. 69-197; s. 1, ch. 72-249; s. 1, ch. 73-134; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 595, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1, ch. 97-204.

Note.--Former s. 627.0992; consolidation of s. 627.828 and former ss. 627.830 and 627.831.

627.8281  Levy upon deposit.--No judgment creditor or other claimant of a premium finance company shall have the right to levy upon any of the assets or securities held in this state as a deposit under s. 627.828.

History.--s. 35, ch. 85-321; s. 1, ch. 86-286; s. 114, ch. 92-318.

627.829  Approval, disapproval of application; license renewal.--

(1)  The department shall issue the license, unless it finds that the management of the premium finance company filing the application is so lacking in managerial experience as to make the proposed operation hazardous to the insurance-buying public or unless it has good reason to believe the management of the premium finance company is affiliated directly or indirectly through ownership, control, or in other business relations with any person whose business operations are or have been marked as detrimental to the public, policyholders, stockholders, investors, or creditors by manipulation of assets or of accounts or by bad faith.

(2)  If the department refuses to issue a license, it shall notify the applicant of the denial and return to the applicant the sum paid as a license fee, but shall retain the investigation fee to cover the costs of investigating the applicant.

(3)  Each license shall remain in force until September 30 of the year for which issued, unless earlier surrendered, suspended, or revoked, and may be renewed for the ensuing license year upon the filing of an application therefor. If an application for renewal is filed with the department before October 1 of any year, the license sought to be renewed shall be continued in force either until the issuance by the department of the renewal license applied for or until 5 days after the department refuses to renew the license.

History.--s. 1, ch. 63-16; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 596, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 48, ch. 85-321; s. 8, ch. 86-182; s. 114, ch. 92-318.

627.832  Grounds for refusal, suspension, or revocation of license.--

(1)  The department may deny, suspend, revoke, or refuse to renew any license, if it finds:

(a)  That the licensee has failed to pay the annual license fee or any sum of money lawfully demanded under authority of any other section of this part or has failed to comply with any order of the department.

(b)  That the licensee has violated any provision of this part or any rule of the department.

(c)  That any fact or condition exists which, if it had existed at the time of the original application, clearly would have warranted a refusal to issue the license.

(d)  Material misstatement, misrepresentation, or fraud in obtaining the license or permit, or in attempting to obtain the license or permit.

(e)  That the license or permit is being willfully used, or is to be used, to circumvent any of the requirements or prohibitions of this code.

(f)  Willful misrepresentation of any premium finance contract or willful deception with regard to any such contract, accomplished either in person or by any form of dissemination of information.

(g)  A demonstrated lack of fitness or trustworthiness.

(h)  Fraudulent or dishonest practices in the conduct of business.

(i)  Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers, insureds, or beneficiaries or to others and received in the conduct of business.

(j)  That the licensee has been found guilty of, or has pleaded guilty to, a felony in this state or any other state.

(2)  A licensee may surrender a license by delivering to the department written notice that she or he thereby surrenders such license, but such surrender shall not affect such licensee's civil or criminal liability for acts committed prior to such surrender.

(3)  No revocation, suspension, or surrender of a license shall impair or affect the obligation of any insured under any lawful premium finance agreement previously acquired or held by the licensee.

(4)  Every license issued hereunder shall remain in force and effect until it has been surrendered, revoked, or suspended or expires in accordance with the provisions of this part; but the department shall have authority to reinstate a suspended license or to issue a new license to a licensee whose license has been revoked, if no fact or condition then exists which clearly would have warranted departmental refusal originally to issue such license under this part.

History.--s. 1, ch. 63-16; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 597, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 115, ch. 83-216; s. 114, ch. 92-318; s. 364, ch. 97-102.

627.833  Administrative fine and probation in lieu of suspension, revocation, or refusal to renew license.--The department may, in its discretion in lieu of a suspension, revocation, or refusal to renew or continue any license, impose on the licensee an administrative penalty or place such licensee on probation pursuant to ss. 626.681 and 626.691.

History.--s. 1, ch. 63-16; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.834  Examinations.--

(1)  The department may conduct examinations and investigations of premium finance companies under the provisions of ss. 624.307 and 626.601.

(2)  As often as it deems necessary and not less frequently than each 3 years, the department shall examine each licensed premium finance company. The examination shall be for the purpose of ascertaining compliance by the person examined with the applicable provisions of this code.

History.--s. 1, ch. 63-16; ss. 13, 35, ch. 69-106; s. 2, ch. 72-249; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 598, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

Note.--Former s. 627.0998.

627.835  Excessive premium finance charge; penalty.--Any person, premium finance company, or other legal entity who or which knowingly takes, receives, reserves, or charges a premium finance charge other than that authorized by this part shall thereby forfeit the entire premium finance charge to which such person, premium finance company, or legal entity would otherwise be entitled; and any person who has paid such unlawful finance charge may personally or by her or his legal or personal representative, by suit for recovery thereof, recover from such person, premium finance company, or legal entity twice the entire amount of the premium finance charge so paid.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 599, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 365, ch. 97-102.

627.836  Licensee's books and records; reports.--

(1)  The licensee shall keep and use in her or his business such books, accounts, and records as will enable the department to determine whether the licensee is complying with the provisions of this part and with the rules pertaining thereto. Every licensee shall preserve such books, accounts, and records, including cards used in a card system, if any, for at least 3 years after making the final entry in respect to any premium finance agreement recorded therein; however, the preservation of photographic reproductions thereof or records in photographic form shall constitute compliance with this requirement.

(2)  Each licensee shall annually, on or before March 1, file a report with the department giving such information as the department may require. The report shall be made under oath and in the form prescribed by the department and shall be accompanied by the annual report filing fee specified in s. 627.849. The department may make and publish annually an analysis and recapitulation of such reports. In addition, the department may require such additional regular or special reports as it may deem necessary.

History.--s. 1, ch. 63-16; ss. 13, 35, ch. 69-106; s. 4, ch. 72-249; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 600, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 366, ch. 97-102.

Note.--Former s. 627.1000.

627.838  Filing and approval of forms; service charges.--

(1)  No premium finance agreement form or related form shall be used in this state by a premium finance company unless it has been filed with and approved by the department. Every filing shall be made within 30 days of issuance or use.

(2)  Each premium finance company shall file with the department the service charge and interest rate plan, including all modifications thereto, for informational purposes only. Every filing shall be made within 30 days of its effective date.

(3)  Each filing shall be accompanied by the filing fee specified in s. 627.849.

History.--s. 1, ch. 63-16; ss. 13, 35, ch. 69-106; s. 3, ch. 72-249; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 602, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

Note.--Former s. 627.1002.

627.839  Form and content of premium finance agreements.--

(1)  A premium finance agreement shall be in writing, dated, and signed by or on behalf of the insured; and the printed portion thereof shall be in at least 8-point type.

(2)  It shall contain the entire agreement of the parties with respect to the insurance contract, the premiums for which are advanced or to be advanced under it, and:

(a)  At its top, the words "PREMIUM FINANCE AGREEMENT" in at least 10-point bold type; and

(b)  A notice in at least 8-point bold type, reading as follows:

"NOTICE:

1.  Do not sign this agreement before you read it or if it contains any blank space.

2.  You are entitled to a completely filled-in copy of this agreement.

3.  Under the law, you have the right to pay off in advance the full amount due and under certain conditions to obtain a partial refund of the service charge."

(3)  A premium finance agreement shall:

(a)  Contain the name and place of business of the insurance agent negotiating the related insurance contract; the name and residence or place of business of the insured as specified by her or him; the name and place of business of the premium finance company to which installment or other payments are to be made; a description of the insurance contract, the premiums for which are advanced or to be advanced under the agreement; and the amounts of the premiums for such insurance contract; and

(b)  Set forth the following items:

1.  The total amount of the premiums;

2.  The amount of the down payment;

3.  The principal balance, which is the difference between the amounts of subparagraphs 1. and 2.;

4.  The amount of the service charge; and

5.  The balance, which is the sum of the amounts of subparagraphs 3. and 4., payable by the insured; the number of installments required; the amount of each installment expressed in dollars; and the due date or period thereof.

The items need not be stated in the sequence or order set forth above; inapplicable items may be omitted; and additional items may be included to explain the computations made in determining the amount to be paid by the insured.

(4)  No premium finance agreement shall be signed by an insured when it contains any blank space to be filled in after it has been signed; however, if the insurance contract, the premiums for which are advanced or to be advanced under the agreement, has not been issued at the time of its signature by the insured and it so provides, the name of the authorized insurer by whom such insurance contract is issued, the policy number, and the due date of the first installment may be left blank and later inserted in the original of the agreement after it has been signed by the insured.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 603, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 116, ch. 83-216; s. 114, ch. 92-318; s. 367, ch. 97-102.

627.840  Limitation on service and other charges.--

(1)  A premium finance company shall not charge, contract for, receive, or collect a service charge other than as permitted by this part.

(2)  A premium finance company may, in a premium finance agreement, contract for, charge, receive, and collect a service charge for financing the premiums under the agreement computed as provided in subsection (3).

(3)(a)  The service charge provided for in this section shall be computed on the balance of the premiums due, after subtracting the down payment made by the insured in accordance with the premium finance agreement, from the effective date of the insurance coverage for which the premiums are being advanced to and including the date when the final payment of the premium finance agreement is payable.

(b)  The service charge shall be a maximum of $12 per $100 per year plus an additional charge not exceeding $20, which additional charge need not be refunded upon prepayment. Such additional charge may be charged only once in a 12-month period for any one customer unless that customer's policy has been canceled due to nonpayment within the immediately preceding 12-month period. However, any insured may prepay her or his premium finance agreement in full at any time before the due date of the final payment; and in such event the unearned service charge shall be refunded in accordance with the "Rule of 78ths," or any other method at least as beneficial to the insured and approved by the department, and shall represent at least as great a proportion of the service charge, if any, as the sum of the periodic balances after the month in which prepayment is made bears to the sum of all periodic balances under the schedule of payments in the agreement. When the amount of the refund is less than $1, no refund need be made if the agreement so states.

(c)  Such service charge shall be inclusive of all charges incident to the premium finance agreement and for the extension of credit provided for therein.

(d)  Paragraphs (a)-(c) apply if the premiums under only one insurance contract are advanced or to be advanced under a premium finance agreement; if premiums under more than one insurance contract are advanced or to be advanced under a premium finance agreement, the service charge shall be computed from the inception date of such insurance contracts, or from the due date of such premiums; however, not more than one minimum service charge shall apply to each premium finance agreement.

(e)  No insurance agent or premium finance company shall induce an insured to become obligated under more than one premium finance agreement for the purpose of obtaining more than one minimum service charge.

History.--s. 1, ch. 63-16; s. 1, ch. 69-224; s. 1, ch. 76-126; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 3, 4, 6, ch. 80-363; ss. 2, 3, ch. 81-318; ss. 604, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 368, ch. 97-102.

627.8405  Prohibited acts; financing companies.--No premium finance company shall, in a premium finance agreement or other agreement, finance the cost of or otherwise provide for the collection or remittance of dues, assessments, fees, or other periodic payments of money for the cost of:

(1)  A membership in an automobile club. The term "automobile club" means a legal entity which, in consideration of dues, assessments, or periodic payments of money, promises its members or subscribers to assist them in matters relating to the ownership, operation, use, or maintenance of a motor vehicle; however, this definition of "automobile club" does not include persons, associations, or corporations which are organized and operated solely for the purpose of conducting, sponsoring, or sanctioning motor vehicle races, exhibitions, or contests upon racetracks, or upon racecourses established and marked as such for the duration of such particular events. The words "motor vehicle" used herein have the same meaning as defined in chapter 320.

(2)  An accidental death and dismemberment policy sold in combination with a personal injury protection and property damage only policy.

(3)  Any product not regulated under the provisions of this insurance code.

This section also applies to premium financing by any insurance agent or insurance company under part XVI. The department shall adopt rules to assure disclosure, at the time of sale, of coverages financed with personal injury protection and shall prescribe the form of such disclosure.

History.--ss. 604, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 117, ch. 83-216; s. 114, ch. 92-318; s. 21, ch. 93-410; s. 3, ch. 95-424; s. 2, ch. 97-204; s. 16, ch. 2000-370.

627.841  Delinquency, collection, cancellation, and check return charges; attorney's fees.--

(1)  A premium finance agreement may provide for the payment by the insured of a delinquency and collection charge on each installment in default for a period of not less than 5 days in an amount not to exceed $10 or 5 percent of the delinquent installment, whichever is greater; provided that if the premium finance agreement is primarily for personal, family, or household purposes, the delinquency and collection charge shall not exceed $10. Only one such delinquency and collection charge may be collected on any such installment regardless of the period during which it remains in default.

(2)  A premium finance agreement may also provide for the payment of attorney's fees not exceeding 20 percent of the amount due and payable under the agreement if it is referred for collection to an attorney not a salaried employee of the premium finance company holding the agreement.

(3)  Notwithstanding the provisions of this section, a premium finance company shall not take, receive from, or charge an insured any cancellation charge or attorney's fees unless, within 10 days after default in the payment of any installment of a premium finance agreement, the premium finance company has mailed a notice of the default to the insured at her or his address as shown on the agreement and to any insurance agent named therein at her or his place of business as shown giving the insured at least 5 days within which to make the payment in default.

(4)  In the event that a payment is made to a premium finance company by check or draft and the instrument is returned because of insufficient funds to pay it, the premium finance company may, if the premium finance agreement so provides, impose a charge of $15.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 605, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 23, ch. 88-370; s. 114, ch. 92-318; s. 4, ch. 95-424; s. 369, ch. 97-102.

627.842  Restrictions on premium finance agreements.--No premium finance agreement or contract ancillary thereto shall contain any provision by which:

(1)  In the absence of default of the insured, the premium finance company holding the agreement may, arbitrarily and without reasonable cause, accelerate the maturity of any part or all of the amount owing thereunder;

(2)  A power of attorney is given to confer any authority to perform any act other than to request cancellation for nonpayment of premium; or

(3)  The insured relieves the insurance agent or the premium finance company holding the agreement from liability for any legal rights or remedies which the insured may otherwise have against her or him.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 606, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 370, ch. 97-102.

627.843  Delivery of copy of premium finance agreement.--Before the due date of the first installment payable under a premium finance agreement, the premium finance company holding the agreement or the insurance agent shall deliver to the insured, or mail to the insured at her or his address as shown in the agreement, a copy thereof or, if the agreement contained any blank space when it was signed and such blank space was subsequently filled in, in accordance with s. 627.839(4), a copy of the agreement as so filled in.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 607, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 371, ch. 97-102.

627.844  Assignment of premium finance agreement.--

(1)  A premium finance company may purchase or otherwise acquire a premium finance agreement from another premium finance company with recourse against the other premium finance company on such terms and conditions as may be mutually agreed upon.

(2)  No filing of an assignment or notice thereof to the insured shall be necessary to the validity of the written assignment of a premium finance agreement as against creditors or subsequent purchasers, pledgees, or encumbrancers of the assignor.

(3)  Unless the insured has notice of an actual or intended assignment of a premium finance agreement, payment thereunder by the insured to the last known holder of the agreement shall be binding upon all subsequent holders or assignees.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 608, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 118, ch. 83-216; s. 114, ch. 92-318; s. 372, ch. 97-102.

627.845  Statement of account; receipts.--

(1)  At any time after the execution of a premium finance agreement, but not later than 1 year after the last payment thereunder, the premium finance company holding the premium finance agreement shall, upon written request of the insured, give or mail to her or him a written statement of the dates and amounts of payments and the total amount, if any, unpaid thereunder. A statement shall be supplied once each year without charge; if any additional statement is requested, the premium finance company shall supply the statement at a charge not exceeding $1 for each additional statement so supplied. An insured shall be given a receipt for a payment when made in cash.

(2)  After the payment of all sums for which an insured is obligated under a premium finance agreement, and upon the insured's written demand, the premium finance company holding the agreement shall deliver, or mail to the insured at her or his last known address, such one or more good and sufficient instruments as may be necessary to acknowledge payment in full and to release all interest in or rights to the insurance contracts, the premiums for which were advanced or are to be advanced under the agreement.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 609, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 373, ch. 97-102.

627.847  Extensions or deferrals.--A premium finance company may, upon agreement with the insured, extend the scheduled due date or defer the scheduled payment of all or any part of any installment or installments payable thereunder. The agreement for such extension or deferment must be in writing and signed by the parties thereto. The premium finance company may charge and contract for the payment of an extension or deferral charge by the insured and collect and receive the same; but such charge may not exceed an amount equal to 1 percent per month simple interest on the amount of the installment or installments, or part thereof, extended or deferred for the period of extension or deferral or $1, whichever is the greater amount. The period shall not exceed the period from the date when the extended or deferred installment or installments, or part thereof, would have been payable in the absence of an extension or deferral, to the date when the installment or installments, or part thereof, are made payable under the agreement of extension or deferment.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 610, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.848  Cancellation of insurance contract upon default.--

(1)  When a premium finance agreement contains a power of attorney or other authority enabling the premium finance company to cancel any insurance contract listed in the agreement, the insurance contract shall not be canceled unless cancellation is in accordance with the following provisions:

(a)1.  Not less than 10 days' written notice shall be mailed to each insured shown on the premium finance agreement of the intent of the premium finance company to cancel her or his insurance contract unless the defaulted installment payment is received within 10 days.

2.  After expiration of such period, the premium finance company shall mail to the insurer a request for cancellation, specifying the effective date of cancellation and the unpaid premium balance due under the finance contract, and shall mail a copy thereof to the insured at her or his last known address as shown on the premium finance agreement.

(b)  Every notice of cancellation shall include, in type or print of which its face shall not be smaller than 12 points, a statement that, if the insurance contract or contracts provide motor vehicle liability insurance required by the financial responsibility law, proof of financial responsibility is required to be maintained continuously for a period of 3 years, pursuant to chapter 324, and the operation of a vehicle without such financial responsibility is unlawful.

(c)  Upon receipt of a copy of the cancellation notice by the insurer or insurers, the insurance contract shall be canceled as of the date specified in the cancellation notice with the same force and effect as if the notice of cancellation had been submitted by the insured herself or himself, whether or not the premium finance company has complied with the notice requirement of this subsection, without requiring any further notice to the insured or the return of the insurance contract.

(d)  All statutory, regulatory, and contractual restrictions providing that the insured may not cancel her or his insurance contract unless she or he or the insurer first satisfies such restrictions by giving a prescribed notice to a governmental agency, the insurance carrier, a mortgagee, an individual, or a person designated to receive such notice for such governmental agency, insurance carrier, or individual shall apply when cancellation is effected under the provisions of this section. The insurer, in accordance with such prescribed notice when it is required to give such notice in behalf of itself or the insured, shall give notice to such governmental agency, person, mortgagee, or individual; and it shall determine and calculate the effective date of cancellation from the day it receives the copy of the notice of cancellation from the premium finance company.

(e)  Whenever an insurance contract is canceled in accordance with this section, the insurer shall promptly return the unpaid balance due under the finance contract, up to the gross amount available upon the cancellation of the policy, to the premium finance company and any remaining unearned premium to the agent or the insured, or both, for the benefit of the insured or insureds. The insurer shall notify the insured and the agent of the amount of unearned premium returned to the premium finance company and the amount of unearned commission held by the agent. The premium finance company within 15 days shall notify the insured and the agent of the amount of unearned premium. Within 15 days of receipt of notification from the premium finance company, the agent shall return such amount including any unearned commission to the insured or with the written approval of the insured apply such amount to the purchase of other insurance products regulated by the department. The department may adopt rules necessary to implement the provisions of this subsection.

(f)  If an insurance contract is canceled by an insurer upon the receipt of a copy of the cancellation notice from a premium finance company, and if such premium finance company has failed to provide the notice required by this subsection, the insured shall have a cause of action against the premium finance company for damages caused by such failure to provide notice.

(2)  Any court of this state rendering or affirming a judgment or decree against a premium finance company and in favor of any named or omnibus insured or beneficiary arising out of a wrongful or improper cancellation of an insurance policy by such premium finance company shall award reasonable attorney's fees to the insured or beneficiary.

(3)  The department shall adopt a standard cancellation notice for use by premium finance companies in canceling insurance policies. The department shall specify the color of the notice so as to promote usability and standardization.

History.--s. 1, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, 6, ch. 80-363; ss. 2, 3, ch. 81-318; ss. 611, 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 23, ch. 83-288; s. 114, ch. 92-318; s. 22, ch. 93-410; s. 11, ch. 96-377; s. 1739, ch. 97-102; s. 3, ch. 97-204; s. 35, ch. 99-3; s. 17, ch. 2000-370.

627.849  Fees.--

(1)  The department shall collect in advance, and the persons so served shall pay to it in advance, the following fees:

(a)  Annual license fee ....... $250

(b)  Investigation fee ....... 100

(c)  Annual report filing fee ....... 25

(d)  Form filing fee ....... 10

(2)  The fees received under this section shall be credited to the Insurance Commissioner's Regulatory Trust Fund.

History.--s. 5, ch. 72-249; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 612, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

PART XVI
PREMIUM FINANCING

627.901  Premium financing by an insurance agent or agency.

627.902  Premium financing by an insurer or subsidiary.

627.903  Premium finance cost specified.

627.904  Insurer filing; approval of forms; service charge filing.

627.901  Premium financing by an insurance agent or agency.--

(1)  A general lines agent may make reasonable service charges for financing insurance premiums on policies issued or business produced by such an agent or agency, s. 626.9541 notwithstanding. The service charge shall not exceed $1 per installment, or a $6 total service charge per year, for any premium balance of $120 or less. For any premium balance greater than $120 but not more than $220, the service charge shall not exceed $9 per year. The maximum service charge for any premium balance greater than $220 shall not exceed $12 per year. In lieu of such service charges, an insurance agent or agency may charge a rate of interest not to exceed 18 percent simple interest per year on the unpaid balance.

(2)  Every such agent or agency engaging in premium financing whose total service charge per year or rate of interest is more than as provided in subsection (1) shall be subject to part XV of this chapter.

History.--s. 2, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 3, 5, 6, ch. 80-363; ss. 2, 3, ch. 81-318; ss. 613, 617, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 5, ch. 2000-365.

627.902  Premium financing by an insurer or subsidiary.--An insurer, a subsidiary of an insurer, or a corporation under substantially the same management or control as an authorized insurer or group of authorized insurers may finance property, casualty, surety, and marine insurance premiums on policies issued or business produced by such insurer or insurers; however, any such insurer, subsidiary, or corporation or group of insurers the total service charge per year or rate of interest of which is substantially more than that provided in s. 627.901 shall be subject to part XV of this chapter.

History.--s. 2, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 614, 617, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 6, ch. 2000-365.

627.903  Premium finance cost specified.--

(1)  When premium financing service charges or interest is included in the overall price or cost of insurance, the insurer, insurance agent, or agency shall separately state and identify the amount of service charges or interest to be paid for the financing of such premiums.

(2)  All service charges or interest shall be separately stated and identified in all invoices issued to the policyholder and in the records or accounts maintained by the insurer or corporation, as provided in s. 627.902, or by the agent or agency.

History.--s. 2, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 615, 617, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.904  Insurer filing; approval of forms; service charge filing.--An insurer, a subsidiary of an insurer, or a corporation under substantially the same management or control as an authorized insurer or group of authorized insurers shall file premium finance agreement forms or related forms and the service charge or interest rate plan to be charged as provided in s. 627.838 separately from rates and filings required under part I of this chapter.

History.--s. 2, ch. 63-16; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 616, 617, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

PART XVII
INSURER REPORTING

627.911  Scope of this part.

627.912  Professional liability claims and actions; reports by insurers.

627.9122  Officers' and directors' liability claims; reports by insurers.

627.9126  Reports by liability insurers.

627.913  Reports by products liability insurers.

627.914  Reports of information by workers' compensation insurers required.

627.915  Insurer experience reporting.

627.917  Uniform risk classification reporting system for motor vehicle insurance.

627.9175  Reports of information on health insurance.

627.918  Reporting formats.

627.919  Maintenance of insurance data.

627.911  Scope of this part.--Any insurer transacting insurance in this state shall report information as required by this part.

History.--ss. 618, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.912  Professional liability claims and actions; reports by insurers.--

(1)  Each self-insurer authorized under s. 627.357 and each insurer or joint underwriting association providing professional liability insurance to a practitioner of medicine licensed under chapter 458, to a practitioner of osteopathic medicine licensed under chapter 459, to a podiatric physician licensed under chapter 461, to a dentist licensed under chapter 466, to a hospital licensed under chapter 395, to a crisis stabilization unit licensed under part IV of chapter 394, to a health maintenance organization certificated under part I of chapter 641, to clinics included in chapter 390, to an ambulatory surgical center as defined in s. 395.002, or to a member of The Florida Bar shall report in duplicate to the Department of Insurance any claim or action for damages for personal injuries claimed to have been caused by error, omission, or negligence in the performance of such insured's professional services or based on a claimed performance of professional services without consent, if the claim resulted in:

(a)  A final judgment in any amount.

(b)  A settlement in any amount.

Reports shall be filed with the department and, if the insured party is licensed under chapter 458, chapter 459, chapter 461, or chapter 466, with the Department of Health, no later than 30 days following the occurrence of any event listed in paragraph (a) or paragraph (b). The Department of Health shall review each report and determine whether any of the incidents that resulted in the claim potentially involved conduct by the licensee that is subject to disciplinary action, in which case the provisions of s. 456.073 shall apply. The Department of Health, as part of the annual report required by s. 456.026, shall publish annual statistics, without identifying licensees, on the reports it receives, including final action taken on such reports by the Department of Health or the appropriate regulatory board.

(2)  The reports required by subsection (1) shall contain:

(a)  The name, address, and specialty coverage of the insured.

(b)  The insured's policy number.

(c)  The date of the occurrence which created the claim.

(d)  The date the claim was reported to the insurer or self-insurer.

(e)  The name and address of the injured person. This information is confidential and exempt from the provisions of s. 119.07(1), and must not be disclosed by the department without the injured person's consent, except for disclosure by the department to the Department of Health. This information may be used by the department for purposes of identifying multiple or duplicate claims arising out of the same occurrence.

(f)  The date of suit, if filed.

(g)  The injured person's age and sex.

(h)  The total number and names of all defendants involved in the claim.

(i)  The date and amount of judgment or settlement, if any, including the itemization of the verdict, together with a copy of the settlement or judgment.

(j)  In the case of a settlement, such information as the department may require with regard to the injured person's incurred and anticipated medical expense, wage loss, and other expenses.

(k)  The loss adjustment expense paid to defense counsel, and all other allocated loss adjustment expense paid.

(l)  The date and reason for final disposition, if no judgment or settlement.

(m)  A summary of the occurrence which created the claim, which shall include:

1.  The name of the institution, if any, and the location within the institution at which the injury occurred.

2.  The final diagnosis for which treatment was sought or rendered, including the patient's actual condition.

3.  A description of the misdiagnosis made, if any, of the patient's actual condition.

4.  The operation, diagnostic, or treatment procedure causing the injury.

5.  A description of the principal injury giving rise to the claim.

6.  The safety management steps that have been taken by the insured to make similar occurrences or injuries less likely in the future.

(n)  Any other information required by the department to analyze and evaluate the nature, causes, location, cost, and damages involved in professional liability cases.

(3)  Upon request by the Department of Health, the department shall provide the Department of Health with any information received under this section related to persons licensed under chapter 458, chapter 459, chapter 461, or chapter 466. For purposes of safety management, the department shall annually provide the Department of Health with copies of the reports in cases resulting in an indemnity being paid to the claimants.

(4)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer reporting hereunder or its agents or employees or the department or its employees for any action taken by them under this section. The department may impose a fine of $250 per day per case, but not to exceed a total of $1,000 per case, against an insurer that violates the requirements of this section. This subsection applies to claims accruing on or after October 1, 1997.

(5)  Any self-insurance program established under s. 240.213 shall report in duplicate to the Department of Insurance any claim or action for damages for personal injuries claimed to have been caused by error, omission, or negligence in the performance of professional services provided by the Board of Regents through an employee or agent of the Board of Regents, including practitioners of medicine licensed under chapter 458, practitioners of osteopathic medicine licensed under chapter 459, podiatric physicians licensed under chapter 461, and dentists licensed under chapter 466, or based on a claimed performance of professional services without consent if the claim resulted in a final judgment in any amount, or a settlement in any amount. The reports required by this subsection shall contain the information required by subsection (3) and the name, address, and specialty of the employee or agent of the Board of Regents whose performance or professional services is alleged in the claim or action to have caused personal injury.

History.--s. 1, ch. 74-219; s. 3, ch. 76-168; s. 1, ch. 77-174; s. 1, ch. 77-297; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 619, 625, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 119, ch. 83-216; s. 7, ch. 85-175; s. 6, ch. 86-287; s. 43, ch. 88-1; s. 22, ch. 88-277; s. 89, ch. 92-289; s. 114, ch. 92-318; s. 8, ch. 93-289; s. 226, ch. 94-218; s. 84, ch. 95-211; s. 382, ch. 96-406; s. 147, ch. 97-237; s. 105, ch. 97-261; s. 23, ch. 97-273; ss. 159, 225, ch. 98-166; s. 34, ch. 98-191; s. 36, ch. 99-3; s. 220, ch. 2000-160.

Note.--Former ss. 624.431, 768.55, 624.432.

627.9122  Officers' and directors' liability claims; reports by insurers.--

(1)  Each insurer providing coverage for officers' and directors' liability coverage shall report to the Department of Insurance any claim or action for damages claimed to have been caused by error, omission, or negligence in the performance of the officer's or director's services, if the claim resulted in:

(a)  A final judgment in any amount.

(b)  A settlement in any amount.

(c)  A final disposition not resulting in payment on behalf of the insured.

Reports shall be filed with the department no later than 60 days following the occurrence of any event listed in paragraph (a), paragraph (b), or paragraph (c).

(2)  The reports required by subsection (1) shall contain:

(a)  The name, address, and position held by the insured, and the type of corporation or organization, including classifications as provided in s. 501(c) of the Internal Revenue Code of 1986, as amended.

(b)  The insured's policy number.

(c)  The date of the occurrence which created the claim.

(d)  The date the claim was reported to the insurer.

(e)  The name of the injured person. This information is confidential and exempt from the provisions of s. 119.07(1), and must not be disclosed by the department without the consent of the injured person. This information may be used by the department for purposes of identifying multiple or duplicate claims arising out of the same occurrence.

(f)  The date of suit, if filed.

(g)  The total number and names of all defendants involved in the claim.

(h)  The date and amount of judgment or settlement, together with a copy of the settlement or judgment.

(i)  In the case of a settlement, such information as the department may require with regard to the claimant's anticipated future losses.

(j)  The loss adjustment expense paid to defense counsel, and all other allocated loss adjustment expenses paid.

(k)  The date and reason for final disposition, if no judgment or settlement.

(l)  A summary of the occurrence which created the claim, which shall include:

1.  Whether the injuries claimed were the result of physical damage to the claimant, were the result of damage to the reputation of the claimant, were based on self-dealing by the defendant, or were in the nature of a shareholder dispute.

2.  A description of the type of activity which caused the injury.

3.  The steps taken by the officers or directors to assure that similar occurrences are less likely in the future.

(m)  Any other information required by the department to analyze and evaluate the nature, causes, costs, and damages involved in officers' and directors' liability cases.

(3)  The department shall include a summary of this information in its annual report.

History.--s. 9, ch. 87-245; s. 9, ch. 93-289; s. 383, ch. 96-406.

627.9126  Reports by liability insurers.--

(1)  Each insurer transacting commercial multiperil, products liability, commercial automobile liability, private passenger automobile liability, or other line of liability insurance shall maintain information as specified in this section. Such information shall be maintained for each line of insurance and for direct Florida business only. The department may conduct a sampling of claims or actions for damages for personal injury or property damage claimed to have been caused by error, omission, or negligence of insureds if the claim resulted in:

(a)  A final judgment in any amount.

(b)  A settlement in any amount.

(c)  A final disposition not resulting in payment on behalf of the insured.

(2)  Upon request of the department, an insurer shall, within 60 days, submit to the department a report that contains:

(a)  A final judgment in any amount.

(b)  A settlement in any amount.

(c)  A final disposition not resulting in payment on behalf of the insured.

(3)  The reports required by subsection (2) shall contain:

(a)1.  The name, address, and class or line of coverage of the insured.

2.  The insured's policy number.

3.  The date of the occurrence which created the claim.

4.  The date the claim was reported to the insurer or self-insurer.

5.  The date of suit, if filed.

6.  The claimant's name, age, and sex; however, the name of the claimant is confidential and exempt from the provisions of s. 119.07(1).

7.  The total number and names of all defendants involved in the claim.

8.  Claims settled after a suit was filed.

9.  Claims paid based on a judgment.

10.  Judgments appealed by the insurer, together with the total results of such appeals.

11.  The date and amount of final judgment or settlement, if any, including the itemization of the verdict, together with a copy of the settlement or final judgment.

12.  In the case of a settlement, such information as the department may require with regard to the injured person's incurred and anticipated medical expense, wage loss, and other expenses.

13.  The loss adjustment expense paid to defense counsel and other allocated loss adjustment expense paid.

14.  The date and reason for final disposition, if no judgment or settlement.

(b)  A summary of the occurrence which created the claim, which shall include:

1.  The name of the facility, business, or institution, if any, and the location within the facility, business, or institution at which the injury occurred.

2.  A description of the principal injury giving rise to the claim.

3.  The safety management steps that have been taken by the insured to make similar occurrences or injuries less likely in the future.

(c)  Any other information required by the department to analyze and evaluate the nature, causes, location, cost, and damages involved in liability cases.

(4)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer reporting hereunder or its agents or employees or the department or its employees for any action taken by them pursuant to this section.

History.--s. 42, ch. 86-160; s. 2, ch. 87-50; s. 114, ch. 92-318; s. 10, ch. 93-289; s. 384, ch. 96-406; s. 91, ch. 98-199.

627.913  Reports by products liability insurers.--The department may require any insurer authorized to write a policy of products liability insurance in the state to transmit the following information, based on its statewide products liability insurance writings. Upon the request of the department, an insurer shall, within 60 days, submit to the department a report that contains:

(1)  Premiums written;

(2)  Premiums earned;

(3)  Unearned premiums;

(4)  The dollar amount of claims paid;

(5)  Incurred claims, not including claims incurred but not reported;

(6)  Claims closed without payment, and the amount reserved for such claims;

(7)  Loss reserves for all claims except claims incurred but not reported;

(8)  Reserves for claims incurred but not reported;

(9)  Losses paid as a percentage of the amount reserved for such losses;

(10)  Net investment gain or loss and other income gain or loss allocated to products liability lines according to the allocation formula used in the annual insurance expense exhibit;

(11)  Underwriting income or loss;

(12)  Actual expenses in detail, including, but not limited to, loss adjustment expense; commissions; general expense; and advertising, home office, and defense costs;

(13)  Claims settled after a suit was filed;

(14)  Claims paid based on a judgment; and

(15)  Judgments appealed by the insurer, together with the total results of such appeals.

History.--s. 1, ch. 78-224; s. 2, ch. 81-318; ss. 620, 625, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 92, ch. 98-199.

Note.--Former s. 624.433.

627.914  Reports of information by workers' compensation insurers required.--

(1)  The department shall promulgate rules and statistical plans which shall thereafter be used by each insurer in the recording and reporting of loss, expense, and claims experience, in order that the experience of all insurers and self-insurers may be made available at least annually in such form and detail as may be necessary to aid the department in determining whether Florida experience for workers' compensation insurance is sufficient for establishing rates.

(2)  Any insurer authorized to write a policy of workers' compensation insurance shall transmit the following information to the department each year with its annual report, and such information shall be reported on a net basis with respect to reinsurance for nationwide experience and on a direct basis for Florida experience:

(a)  Premiums written;

(b)  Premiums earned;

(c)  Dividends paid or credited to policyholders;

(d)  Losses paid;

(e)  Allocated loss adjustment expenses;

(f)  The ratio of allocated loss adjustment expenses to losses paid;

(g)  Unallocated loss adjustment expenses;

(h)  The ratio of unallocated loss adjustment expenses to losses paid;

(i)  The total of losses paid and unallocated and allocated loss adjustment expenses;

(j)  The ratio of losses paid and unallocated and allocated loss adjustment expenses to premiums earned;

(k)  The number of claims outstanding as of December 31 of each year;

(l)  The total amount of losses unpaid as of December 31 of each year;

(m)  The total amount of allocated and unallocated loss adjustment expenses unpaid as of December 31 of each year; and

(n)  The total of losses paid and allocated loss adjustment expenses and unallocated loss adjustment expenses, plus the total of losses unpaid as of December 31 of each year and loss adjustment expenses unpaid as of December 31 of each year.

(3)  A report of the information required in subsection (2) shall be filed no later than April 1 of each year and shall include the information for the preceding year ending December 31. All reports shall be on a calendar-accident year basis, and each calendar-accident year shall be reported at eight stages of development.

(4)  Each insurer authorized to write a policy of workers' compensation insurance shall transmit the information for paragraphs (a), (b), (d), and (e) annually on both Florida experience and nationwide experience separately:

(a)  Payrolls by classification.

(b)  Manual premiums by classification.

(c)  Standard premiums by classification.

(d)  Losses by classification and injury type.

(e)  Expenses.

A report of this information shall be filed no later than April 1 of each year. All reports shall be filed in accordance with standard reporting procedures for insurers, which procedures have received approval by the department, and shall contain data for the most recent policy period available. A rating organization may be used by insurers to report the data required by this section. The rating organization shall report each data element in the aggregate only for insurers required to report under this section who elect to have the rating organization report on their behalf. Such insurers shall be named in the report.

(5)  Self-insurers authorized to transact workers' compensation insurance as provided in s. 440.02 shall report only Florida data as prescribed in paragraphs (a)-(e) of subsection (4) to the Division of Workers' Compensation of the Department of Labor and Employment Security.

(a)  The Division of Workers' Compensation shall publish the dates and forms necessary to enable self-insurers to comply with this section.

(b)  The Division of Workers' Compensation shall report the information collected under this section to the Department of Insurance in a manner prescribed by the department.

(c)  A statistical or rating organization may be used by self-insurers for the purposes of reporting the data required by this section and calculating experience ratings.

(6)  The department shall provide a summary of information provided pursuant to subsections (2) and (4) in its annual report.

History.--s. 19, ch. 78-300; s. 81, ch. 79-40; s. 2, ch. 81-318; ss. 621, 625, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 120, ch. 83-216; s. 25, ch. 83-288; s. 114, ch. 92-318; s. 67, ch. 99-5.

Note.--Former s. 624.435.

627.915  Insurer experience reporting.--

(1)  Each insurer transacting private passenger automobile insurance in this state shall report certain information annually to the department. The information will be due on or before July 1 of each year. The information shall be divided into the following categories: bodily injury liability; property damage liability; uninsured motorist; personal injury protection benefits; medical payments; comprehensive and collision. The information given shall be on direct insurance writings in the state alone and shall represent total limits data. The information set forth in paragraphs (a)-(f) is applicable to voluntary private passenger and Joint Underwriting Association private passenger writings and shall be reported for each of the latest 3 calendar-accident years, with an evaluation date of March 31 of the current year. The information set forth in paragraphs (g)-(j) is applicable to voluntary private passenger writings and shall be reported on a calendar-accident year basis ultimately seven times at seven different stages of development.

(a)  Premiums earned for the latest 3 calendar-accident years.

(b)  Loss development factors and the historic development of those factors.

(c)  Policyholder dividends incurred.

(d)  Expenses for other acquisition and general expense.

(e)  Expenses for agents' commissions and taxes, licenses, and fees.

(f)  Profit and contingency factors as utilized in the insurer's automobile rate filings for the applicable years.

(g)  Losses paid.

(h)  Losses unpaid.

(i)  Loss adjustment expenses paid.

(j)  Loss adjustment expenses unpaid.

(2)  Each insurer transacting fire, homeowner's multiple peril, commercial multiple peril, medical malpractice, products liability, workers' compensation, private passenger automobile liability, commercial automobile liability, private passenger automobile physical damage, commercial automobile physical damage, officers' and directors' liability insurance, or other liability insurance shall report, for each such line of insurance, the information specified in this subsection to the department. The information shall be reported for direct Florida business only and shall be reported on a calendar-year basis annually by April 1 for the preceding calendar year:

(a)  Direct premiums written.

(b)  Direct premiums earned.

(c)  Loss reserves for all known claims:

1.  At beginning of the year.

2.  At end of the year.

(d)  Reserves for losses incurred but not reported:

1.  At beginning of the year.

2.  At end of the year.

(e)  Allocated loss adjustment expense:

1.  Reserve at beginning of the year.

2.  Reserve at end of the year.

3.  Paid during the year.

(f)  Unallocated loss adjustment expense:

1.  Reserve at beginning of the year.

2.  Reserve at end of the year.

3.  Paid during the year.

(g)  Direct losses paid.

(h)  Underwriting income or loss.

(i)  Commissions and brokerage fees.

(j)  Taxes, licenses, and fees.

(k)  Other acquisition costs.

(l)  General expenses.

(m)  Policyholder dividends.

(n)  Net investment gain or loss and other income gain or loss allocated pro rata by earned premium to Florida business utilizing the investment allocation formula contained in the National Association of Insurance Commissioner's Profitability Report by line by state.

(3)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer reporting hereunder or its agents or employees or the department or its employees for any action taken by them pursuant to this section unless such action otherwise constitutes a violation of this code.

(4)  The department shall provide a summary of information provided pursuant to subsections (1) and (2) in its annual report.

(5)  Any insurer or insurer group which does not write at least 0.5 percent of the Florida market based on premiums written shall not have to file any report required by subsection (2) other than a report indicating its percentage of the market share. That percentage shall be calculated by dividing the current premiums written by the preceding year's total premiums written in the state for that line of insurance.

History.--ss. 622, 809(2nd), ch. 82-243; ss. 71, 79, ch. 82-386; s. 121, ch. 83-216; s. 18, ch. 85-245; s. 2, ch. 86-140; s. 10, ch. 87-245; s. 18, ch. 90-119; s. 114, ch. 92-318.

627.917  Uniform risk classification reporting system for motor vehicle insurance.--

(1)  The department shall establish and promulgate a uniform statewide reporting system to classify risks for the purpose of evaluating rates and premiums and for the purpose of evaluating competition and the availability of motor vehicle insurance in the voluntary market. The system shall divide risks into classifications based upon variations in hazards or expenses of claims. The classification system may include any difference among risks that can be demonstrated to have a probable effect upon losses or expenses, but in no event shall the system adopted by the department discriminate among risks based upon race, creed, color, or national origin. The classification system shall divide the state into geographical areas based upon hazards or expenses of claims.

(2)  Each insurer shall annually file with the department a statement reflecting the total number of persons insured by the insurer within each classification by coverage, the premium volume in each classification by coverage, the paid and reserved losses incurred in each classification by coverage, the number of cancellations or nonrenewals by the insurer during the period, and the number of new insureds during the period. This statement shall be filed annually on a date determined by the department and shall cover a 1-year period.

(3)  The department may promulgate rules to require each insurer to report its loss and expense experience by classification, in such detail and as often as may be necessary to aid the department in determining the reasonableness of rates, the validity of loss projections, and the validity of the risk classification system.

History.--s. 9, ch. 78-374; s. 2, ch. 81-318; ss. 357, 623, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

Note.--Former s. 627.343.

627.9175  Reports of information on health insurance.--

(1)  Each health insurer shall submit annually to the department as to policies of individual health insurance:

(a)  A summary of typical benefits, exclusions, and limitations for each type of individual policy form currently being issued in the state. The summary shall include, as appropriate:

1.  The deductible amount;

2.  The coinsurance percentage;

3.  The out-of-pocket maximum;

4.  Outpatient benefits;

5.  Inpatient benefits; and

6.  Any exclusions for preexisting conditions.

The department shall determine other appropriate benefits, exclusions, and limitations to be reported for inclusion in the consumer's guide published pursuant to this section.

(b)  A schedule of rates for each type of individual policy form reflecting typical variations by age, sex, region of the state, or any other applicable factor which is in use and is determined to be appropriate for inclusion by the department.

The department shall provide by rule a uniform format for the submission of this information in order to allow for meaningful comparisons of premiums charged for comparable benefits. The department shall publish annually a consumer's guide which summarizes and compares the information required to be reported under this subsection.

(2)(a)  Every insurer transacting health insurance in this state shall report annually to the department, not later than April 1, information relating to any measure the insurer has implemented or proposes to implement during the next calendar year for the purpose of containing health insurance costs or cost increases. The reports shall identify each measure and the forms to which the measure is applied, shall provide an explanation as to how the measure is used, and shall provide an estimate of the cost effect of the measure.

(b)  The department shall promulgate forms to be used by insurers in reporting information pursuant to this subsection and shall utilize such forms to analyze the effects of health care cost containment programs used by health insurers in this state.

(c)  The department shall analyze the data reported under this subsection and shall annually make available to the public a summary of its findings as to the types of cost containment measures reported and the estimated effect of these measures.

History.--ss. 28, 31, ch. 84-35; ss. 8, 10, ch. 84-235; s. 36, ch. 88-166; s. 36, ch. 88-394; s. 114, ch. 92-318.

627.918  Reporting formats.--

(1)  The department shall require that the reporting provided for in this part be made on forms established by the department or in a format compatible with its electronic data processing equipment.

(2)  The reporting forms and formats established by the department shall not provide for repeated collection of identical information relating to a single independent data element except when repeated collection of such information is necessary to accomplish the purpose of the section under which the information is reported.

History.--ss. 624, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.919  Maintenance of insurance data.--The department shall maintain data elements required in insurers' annual statements and information reported by insurers pursuant to this part in a computer file which will be available for the generation of reports and calculations on a scheduled or demand basis by the department and Legislature. The acquisition by the department of data processing software, hardware, and services necessary to carry out the provisions of this section by the Treasurer's Management Information Center shall be exempt from the provisions of part I of chapter 287.

History.--ss. 624, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

PART XVIII
LONG-TERM CARE INSURANCE POLICIES

627.9401  Short title.

627.9402  Purpose.

627.9403  Scope.

627.9404  Definitions.

627.9405  Authorized groups; filing requirements.

627.9406  Out-of-state group long-term care insurance.

627.9407  Disclosure, advertising, and performance standards for long-term care insurance.

627.94071  Minimum standards for home health care benefits.

627.94072  Mandatory offers.

627.94073  Notice of cancellation; grace period.

627.94074  Standards for benefit triggers.

627.9408  Rules.

627.9401  Short title.--This part may be cited as the "Long-Term Care Insurance Act."

History.--ss. 1, 2, ch. 88-57; s. 114, ch. 92-318.

627.9402  Purpose.--The purpose of this part is to promote the public interest, to promote the availability of long-term care insurance policies, to protect applicants for long-term care insurance from unfair or deceptive sales or enrollment practices, to establish standards for long-term care insurance, to facilitate public understanding and comparison of long-term care insurance policies, and to facilitate flexibility and innovation in the development of long-term care insurance coverage.

History.--ss. 1, 2, ch. 88-57; s. 114, ch. 92-318.

627.9403  Scope.--The provisions of this part shall apply to long-term care insurance policies delivered or issued for delivery in this state, and to policies delivered or issued for delivery outside this state to the extent provided in s. 627.9406, by an insurer, a fraternal benefit society as defined in s. 632.601, a health care services plan as defined in ¹s. 641.01, a health maintenance organization as defined in s. 641.19, a prepaid health clinic as defined in s. 641.402, or a multiple-employer welfare arrangement as defined in s. 624.437. A policy which is advertised, marketed, or offered as a long-term care policy and as a Medicare supplement policy shall meet the requirements of this part and the requirements of ss. 627.671-627.675 and, to the extent of a conflict, be subject to the requirement that is more favorable to the policyholder or certificateholder. The provisions of this part shall not apply to a continuing care contract issued pursuant to chapter 651 and shall not apply to guaranteed renewable policies issued prior to October 1, 1988. Any limited benefit policy that limits coverage to care in a nursing home or to one or more lower levels of care required or authorized to be provided by this part or by department rule must meet all requirements of this part that apply to long-term care insurance policies, except ss. 627.9407(3)(c), (9), (10)(f), and (12) and 627.94073(2). If the limited benefit policy does not provide coverage for care in a nursing home, but does provide coverage for one or more lower levels of care, the policy shall also be exempt from the requirements of s. 627.9407(3)(d).

History.--ss. 1, 2, ch. 88-57; s. 1, ch. 89-239; s. 184, ch. 91-108; s. 114, ch. 92-318; s. 1, ch. 96-275; s. 16, ch. 98-159.

¹Note.--Repealed by s. 185, ch. 91-108.

627.9404  Definitions.--For the purposes of this part:

(1)  "Long-term care insurance policy" means any insurance policy or rider advertised, marketed, offered, or designed to provide coverage on an expense-incurred, indemnity, prepaid, or other basis for one or more necessary or medically necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital. Long-term care insurance shall not include any insurance policy which is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage.

(2)  "Applicant" means:

(a)  In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits.

(b)  In the case of a group long-term care insurance policy, the proposed certificateholder.

(3)  "Certificate" means any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this state.

(4)  "Chronically ill" means certified by a licensed health care practitioner as:

(a)  Being unable to perform, without substantial assistance from another individual, at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity; or

(b)  Requiring substantial supervision for protection from threats to health and safety due to severe cognitive impairment.

(5)  "Cognitive impairment" means a deficiency in a person's short-term or long-term memory, orientation as to person, place, and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

(6)  "Licensed health care practitioner" means any physician, nurse licensed under part I of chapter 464, or psychotherapist licensed under chapter 490 or chapter 491, or any individual who meets any requirements prescribed by rule by the department.

(7)  "Limited benefit policy" means any policy that limits coverage to care in a nursing home or to one or more lower levels of care required or authorized to be provided by this part or by department rule.

(8)  "Maintenance or personal care services" means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual, including the protection from threats to health and safety due to severe cognitive impairment.

(9)  "Policy" means any policy, contract, subscriber agreement, rider, or endorsement delivered or issued for delivery in this state by any of the entities specified in s. 627.9403.

(10)  "Qualified limited benefit insurance policy" means an accident and health insurance contract as defined in s. 7702B of the Internal Revenue Code and all applicable sections of this part.

(11)  "Qualified long-term care services" means necessary diagnostic, preventive, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services which are required by a chronically ill individual and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

(12)  "Qualified long-term care insurance policy" means an accident and health insurance contract as defined in s. 7702B of the Internal Revenue Code and all applicable sections of this part.

History.--ss. 1, 2, ch. 88-57; s. 114, ch. 92-318; s. 2, ch. 96-275; s. 16, ch. 97-179; s. 17, ch. 98-159; s. 141, ch. 2000-318.

627.9405  Authorized groups; filing requirements.--

(1)  No group long-term care insurance policy shall be delivered or issued for delivery in this state insuring more than one individual unless issued to one of the following groups:

(a)  One or more employers or labor organizations, or a trust or the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof, or for members or former members or a combination thereof, of such employers or labor organizations.

(b)  Any professional, trade, or occupational association for its members or former or retired members, or a combination thereof, if such association:

1.  Is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation; and

2.  Has been maintained in good faith for purposes other than obtaining insurance.

(c)  An association or a trust or the trustees of a fund established, created, or maintained for the benefit of members of one or more associations, which association or associations:

1.  Have at the outset a minimum of 100 persons;

2.  Have been organized and maintained in good faith for purposes other than that of obtaining insurance;

3.  Have been in active existence for at least 1 year; and

4.  Have a constitution and bylaws which provide that:

a.  The association or associations hold regular meetings not less than annually to further purposes of the members;

b.  Except for credit unions, the association or associations collect dues or solicit contributions from members; and

c.  The members have voting privileges and representation on the governing board and committees.

(d)  A group other than as described in paragraph (a), paragraph (b), or paragraph (c), subject to a determination by the department that:

1.  The issuance of the group policy is not contrary to the best interest of the public;

2.  The issuance of the group policy would result in economies of acquisition or administration; and

3.  The benefits are reasonable in relation to the premiums charged.

(2)  No group long-term care policy may be issued or issued for delivery in this state to any of the groups specified in subsection (1) unless all members of the group, or all of any class or classes thereof, are declared eligible and acceptable to the insurer at the time of issuance of the policy or unless the policy is issued to a policyholder who is sponsoring the policy without contributing premiums to it.

(3)  Prior to advertising, marketing, or soliciting a group long-term care insurance policy in this state, the insurer shall demonstrate to the department that the requirements of this section have been met pursuant to the filing procedures specified in s. 627.410.

History.--ss. 1, 2, ch. 88-57; s. 2, ch. 89-239; s. 114, ch. 92-318.

627.9406  Out-of-state group long-term care insurance.--No group long-term care insurance coverage may be offered to a resident of this state under a group policy issued in another state to a group described in s. 627.9405(1)(c) or (d), unless this state or such other state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this state has made a determination that such requirements have been met. Evidence to this effect shall be filed by the insurer with the department pursuant to the procedures specified in s. 627.410.

History.--ss. 1, 2, ch. 88-57; s. 114, ch. 92-318.

627.9407  Disclosure, advertising, and performance standards for long-term care insurance.--

(1)  STANDARDS.--The department shall adopt rules that include standards for full and fair disclosure setting forth the manner, content, and required disclosures of the sale of long-term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, disclosure of tax consequences, benefit triggers, prohibition against post-claims underwriting, reporting requirements, standards for marketing, and definitions of terms.

(2)  ADVERTISING.--The department shall adopt rules setting forth standards for advertising, marketing, and sale of long-term care policies in order to protect applicants from unfair or deceptive sales or enrollment practices. An insurer shall file with the department any long-term care insurance advertising material intended for use in this state at least 30 days before the date of use of the advertisement in this state. Within 30 days after the date of receipt of the advertising material, the department shall review the material and shall disapprove any advertisement if, in the opinion of the department, such advertisement violates any of the provisions of this part or of ¹part X of chapter 626 or any rule of the department. The department may disapprove an advertisement at any time and enter an immediate order requiring that the use of the advertisement be discontinued if it determines that the advertisement violates any of the provisions of this part or of ¹part X of chapter 626 or any rule of the department.

(3)  RESTRICTIONS.--A long-term care insurance policy may not:

(a)  Be canceled, nonrenewed, or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificateholder; however, the department may authorize nonrenewal for an insurer on a statewide basis on terms and conditions determined to be necessary by the department to protect the interests of the insureds, if the insurer demonstrates that renewal will jeopardize the insurer's solvency or that substantial and unexpected loss experience cannot reasonably be mitigated or remedied.

(b)  Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same insurer, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder.

(c)  Restrict its coverage to care only in a nursing home licensed pursuant to part II of chapter 400 or provide significantly more coverage for such care than coverage for lower levels of care. The department shall adopt rules defining what constitutes significantly more coverage in nursing homes licensed pursuant to part II of chapter 400 than for lower levels of care.

(d)  Provide coverage for less than 24 consecutive months for nursing home care for each covered person.

(e)  Contain an elimination period in excess of 180 days. As used in this paragraph, the term "elimination period" means the number of days at the beginning of a period of confinement for which no benefits are payable.

(4)  PREEXISTING CONDITION.--

(a)  A long-term care insurance policy or certificate, other than a policy or certificate issued to a group referred to in s. 627.9405(1)(a), may not use a definition of "preexisting condition" which is more restrictive than the following: "Preexisting condition" means a condition for which medical advice or treatment was recommended by or received from a provider of health care services within 6 months preceding the effective date of coverage of an insured person.

(b)  A long-term care insurance policy or certificate, other than a policy or certificate issued to a group referred to in s. 627.9405(1)(a), may not exclude coverage for a loss or confinement which is the result of a preexisting condition unless such loss or confinement begins within 6 months following the effective date of coverage of an insured person.

(c)  The department may extend the limitation periods set forth in paragraphs (a) and (b) as to specific age group categories in specific policy forms upon findings that the extension is in the best interest of the public.

(d)  The definition of "preexisting condition" specified in paragraph (a) does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in paragraph (b) expires. A long-term care insurance policy or certificate may not exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in paragraph (b).

(5)  PRIOR INSTITUTIONALIZATION.--

(a)  A long-term care insurance policy may not be delivered or issued for delivery in this state if the policy:

1.  Conditions eligibility for any benefits on a prior hospitalization requirement;

2.  Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or

3.  Conditions eligibility for any benefits other than waiver of premium, postconfinement, postacute care, or recuperative benefits on a prior institutionalization requirement.

(b)1.  A long-term care insurance policy containing postconfinement, postacute care, or recuperative benefits must clearly specify, in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits," the applicable limitations or conditions, including any required number of days of confinement.

2.  A long-term care insurance policy or rider that conditions eligibility for noninstitutional benefits on the prior receipt of institutional care may not require a prior institutional stay of more than 30 days.

(6)  LOSS RATIO AND RESERVE STANDARDS.--The department shall adopt rules establishing loss ratio and reserve standards for long-term care insurance policies. The rules must contain a specific reference to long-term care insurance policies. Such loss ratio and reserve standards shall be established at levels at which benefits are reasonable in relation to premiums and that provide for adequate reserving of the long-term care insurance risk.

(7)  RATE STRUCTURE.--A long-term care insurance policy may not be issued if the premiums to be charged are calculated to increase based solely on the age of the insured.

(8)  RIGHT TO RETURN; FREE LOOK.--An individual long-term care insurance policyholder has the right to return the policy within 30 days after its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. An individual long-term care insurance policy must have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the policyholder has the right to return the policy within 30 days after its delivery and to have the premium refunded directly to the policyholder if, after examination of the policy, the policyholder is not satisfied for any reason.

(9)  STAMPED AS "LONG-TERM CARE INSURANCE POLICY"; NOTICE TO BUYER.--A long-term care insurance policy must contain a stamp prominently displayed on the first page of the policy that the policy has been approved as a "Long-Term Care Insurance Policy" meeting the requirements of Florida law. In addition, the following statement shall be prominently displayed on the first page of the policy: "Notice to Buyer: This policy may not cover all of the costs associated with long-term care which may be incurred by the buyer during the period of coverage. The buyer is advised to periodically review this policy in relation to the changes in the cost of long-term care."

(10)  OUTLINE OF COVERAGE.--An outline of coverage shall be delivered to an applicant for an individual long-term care insurance policy at the time of application for an individual policy. In the case of direct response solicitations, the insurer shall deliver the outline of coverage upon the applicant's request, but regardless of request shall make such delivery no later than at the time of policy delivery. Such outline of coverage shall include:

(a)  A description of the principal benefits and coverage provided in the policy;

(b)  A statement of the principal exclusions, reductions, and limitations contained in the policy;

(c)  If the policy is not expected to cover 100 percent of the cost of services for which coverage is provided, a statement clearly describing any such limitation;

(d)  A statement of the renewal provisions, including any reservation in the policy of a right to change premiums;

(e)  A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions; and

(f)  A statement that the policy has been approved as a long-term care insurance policy meeting the requirements of Florida law.

(11)  CERTIFICATE.--A certificate issued pursuant to a group long-term care insurance policy, which policy is delivered or issued for delivery in this state, shall include:

(a)  A description of the principal benefits and coverage provided in the policy;

(b)  A statement of the principal exclusions, reductions, and limitations contained in the policy; and

(c)  A statement that the description of principal benefits is a summary of the policy and that the group master policy should be consulted to determine governing contractual provisions.

(12)  DISCLOSURE.--A qualified long-term care insurance policy must include a disclosure statement within the policy and within the outline of coverage that the policy is intended to be a qualified long-term contract. A long-term care insurance policy that is not intended to be a qualified long-term care insurance contract must include a disclosure statement within the policy and within the outline of coverage that the policy is not intended to be a qualified long-term care insurance contract. The disclosure shall be prominently displayed and shall read as follows: "This long-term care insurance policy is not intended to be a qualified long-term care insurance contract. You need to be aware that benefits received under this policy may create unintended, adverse income tax consequences to you. You may want to consult with a knowledgeable individual about such potential income tax consequences."

(13)  ADDITIONAL DISCLOSURE.--A limited benefit policy qualified under s. 7702B of the Internal Revenue Code must include a disclosure statement within the policy and within the outline of coverage that the policy is intended to be a qualified limited benefit insurance contract. A limited benefit policy that is not intended to be a qualified limited benefit insurance contract must include a disclosure statement within the policy and within the outline of coverage that the policy is not intended to be a qualified limited benefit insurance contract. The disclosure must be prominently displayed and must read as follows: "This limited benefit insurance policy is not intended to be a qualified limited benefit insurance contract. You need to be aware that benefits received under this policy may create unintended, adverse income tax consequences to you. You may want to consult with a knowledgeable individual about such potential income tax consequences."

History.--ss. 1, 2, ch. 88-57; s. 3, ch. 89-239; s. 7, ch. 91-296; ss. 146, 149, ch. 92-33; s. 114, ch. 92-318; s. 17, ch. 97-179; s. 18, ch. 98-159; s. 37, ch. 99-3.

¹Note.--Redesignated as part IX of ch. 626 to conform to the transfer of ss. 626.941-626.945, comprising former part IX, by ch. 98-89.

627.94071  Minimum standards for home health care benefits.--A long-term care insurance policy, certificate, or rider that contains a home health care benefit must meet or exceed the minimum standards specified in this section. The policy, certificate, or rider may not exclude benefits by any of the following means:

(1)  Providing that home health care cannot be covered unless the insured or claimant would, without the home health care, require skilled care in a skilled nursing facility.

(2)  Requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services in a home setting or community setting before home health care services are covered.

(3)  Limiting eligible services to services provided by registered nurses or licensed practical nurses.

(4)  Requiring that a nurse or therapist provide services covered by the policy that can be provided by a home health aide or by another licensed or certified home care worker acting within the scope of his or her license or certification.

(5)  Requiring that a licensed home health agency provide services covered by the policy that can be provided by a nurse registry licensed under chapter 400.

(6)  Excluding coverage for personal care services provided by a home health aide.

(7)  Requiring that the provision of home health care services be at a level of certification of licensure greater than that required by the eligible service.

(8)  Requiring that the insured/claimant have an acute condition before home health care services are covered.

(9)  Limiting benefits to services provided by Medicare-certified agencies or providers.

(10)  Excluding coverage for adult day care services.

History.--s. 147, ch. 92-33; s. 3, ch. 96-275; s. 18, ch. 97-179.

627.94072  Mandatory offers.--

(1)(a)  An insurer that offers a long-term care insurance policy, certificate, or rider in this state must offer, in addition to any other inflation protection, the option to purchase a policy that provides that benefit levels increase with benefit maximums or reasonable durations, to account for reasonably anticipated increases in the costs of services covered by the policy. The inflation protection option required by this paragraph must be no less favorable to the policyholder than one of the following:

1.  A provision that increases benefits annually at a rate of not less than 5 percent, compounded annually.

2.  A provision that guarantees to the insured person the right to periodically increase benefit levels without providing evidence of insurability or health status, if the option for the preceding period has not been declined. The total amount of benefits provided under this option must be equal to or greater than the existing benefit level increased by 5 percent compounded annually for the period beginning with the purchase of the existing benefits and ending with the year in which the offer is accepted.

3.  A provision that covers a specified percentage of actual or reasonable charges and does not include a specified indemnity amount or limit.

(b)  The following information must be included in or with the outline of coverage:

1.  A graphic comparison of the benefit levels of a policy that increases benefits over the policy period and a policy that does not increase benefits, showing benefit levels over a period of at least 20 years.

2.  Any premium increases or additional premiums required for automatic or optional benefit increases. If the amount of premium increases or additional premiums depends on the age of the applicant at the time of the increase, the insurer must also disclose the amount of the increased premiums or additional premiums for benefit increases that would be required of the applicant at the ages of 75 and 85 years.

The insurer may use a reasonable hypothetical or a graphic demonstration for the purposes of the disclosures required by this paragraph.

(2)  An insurer that offers a long-term care insurance policy, certificate, or rider in this state must offer a nonforfeiture protection provision providing reduced paid-up insurance, extended term, shortened benefit period, or any other benefits approved by the department if all or part of a premium is not paid. Nonforfeiture benefits and any additional premium for such benefits must be computed in an actuarially sound manner, using a methodology that has been filed with and approved by the department.

(3)  For purposes of this section, the nonforfeiture protection provision providing a shortened benefit period shall, at a minimum, provide the following:

(a)  The same benefits, amounts, and frequency in effect at the time of lapse but not increased thereafter, must be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in paragraph (b).

(b)  The standard nonforfeiture credit must be equal to 100 percent of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of subsection (5).

(c)  No policy or certificate shall begin a nonforfeiture benefit later than the end of the third year following the policy or certificate issue date.

(d)  Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.

(e)  All benefits paid by the insurer while the policy is in premium-paying status and in paid-up status may not exceed the maximum benefits which would have been payable if the policy or certificate had remained in premium-paying status.

(f)  There shall be no difference in the minimum nonforfeiture benefits as required under this subsection for group and individual policies.

(g)  The requirements set forth in this subsection shall become effective July 1, 1997, and shall apply as follows:

1.  Except as provided in subparagraph 2., the provisions of this subsection apply to any long-term care policy issued in this state on or after July 1, 1997.

2.  The provisions of this subsection shall not apply to certificates issued under a group long-term care insurance policy in force on July 1, 1997.

(h)  Premiums charged for a policy or certificate containing nonforfeiture benefits shall be subject to the loss ratio requirements of ¹s. 626.9407(6) treating the policy as a whole.

(i)  At the time of lapse, or upon request, the insurer must disclose to the insured the insured's then-accrued nonforfeiture values. At the time the policy is issued, the insurer must provide to the policyholder schedules demonstrating estimated values of nonforfeiture benefits; however, such schedules must state that the estimated values are not to be construed as guaranteed nonforfeiture values.

(4)  Any nonforfeiture protection provision authorized pursuant to subsection (2) that does not provide for a shortened benefit period must, at a minimum, provide a benefit that is actuarially equivalent to the minimum benefit required in subsection (3) for a shortened benefit period.

(5)  With respect to group policies, other than policies issued to groups specified in s. 627.555, s. 627.653, or s. 627.654, the insurer must make the offers required by subsections (1) and (2) to each proposed certificateholder, except that the insurer must make the offers to the policyholder in the case of a continuing care contract under chapter 651.

(6)  This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.

History.--s. 148, ch. 92-33; s. 4, ch. 96-275; s. 19, ch. 97-179.

¹Note.--The cited provision does not exist; the correct reference may be to s. 627.9407(6), which relates to loss ratio and reserve standards.

627.94073  Notice of cancellation; grace period.--

(1)  A long-term care policy shall provide that the insured is entitled to a grace period of not less than 30 days, within which payment of any premium after the first may be made. The insurer may require payment of an interest charge not in excess of 8 percent per year for the number of days elapsing before the payment of the premium, during which period the policy shall continue in force. If the policy becomes a claim during the grace period before the overdue premium is paid, the amount of such premium or premiums with interest not in excess of 8 percent per year may be deducted in any settlement under the policy.

(2)  A long-term care policy may not be canceled for nonpayment of premium unless, after expiration of the grace period in subsection (1), and at least 30 days prior to the effective date of such cancellation, the insurer has mailed a notification of possible lapse in coverage to the policyholder and to a specified secondary addressee if such addressee has been designated in writing by name and address by the policyholder. For policies issued or renewed on or after October 1, 1996, the insurer shall notify the policyholder, at least once every 2 years, of the right to designate a secondary addressee. The applicant has the right to designate at least one person who is to receive the notice of termination, in addition to the insured. Designation shall not constitute acceptance of any liability on the third party for services provided to the insured. The form used for the written designation must provide space clearly designated for listing at least one person. The designation shall include each person's full name and home address. In the case of an applicant who elects not to designate an additional person, the waiver shall state: "Protection against unintended lapse.--I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care or limited benefit insurance policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate any person to receive such notice." Notice shall be given by first class United States mail, postage prepaid, and notice may not be given until 30 days after a premium is due and unpaid. Notice shall be deemed to have been given as of 5 days after the date of mailing.

(3)  If a policy is canceled due to nonpayment of premium, the policyholder shall be entitled to have the policy reinstated if, within a period of not less than 5 months after the date of cancellation, the policyholder or any secondary addressee designated pursuant to subsection (2) demonstrates that the failure to pay the premium when due was unintentional and due to the cognitive impairment or loss of functional capacity of the policyholder. Policy reinstatement shall be subject to payment of overdue premiums. The standard of proof of cognitive impairment or loss of functional capacity shall not be more stringent than the benefit eligibility criteria for cognitive impairment or the loss of functional capacity, if any, contained in the policy and certificate. The insurer may require payment of an interest charge not in excess of 8 percent per year for the number of days elapsing before the payment of the premium, during which period the policy shall continue in force if the demonstration of cognitive impairment is made. If the policy becomes a claim during the 180-day period before the overdue premium is paid, the amount of the premium or premiums with interest not in excess of 8 percent per year may be deducted in any settlement under the policy.

(4)  When the policyholder or certificateholder pays premium for a long-term care insurance policy or certificate policy through a payroll or pension deduction plan, the requirements in subsection (2) need not be met until 60 days after the policyholder or certificateholder is no longer on such a payment plan. The application or enrollment form for such policies or certificates shall clearly indicate the payment plan selected by the applicant.

History.--s. 5, ch. 96-275; s. 20, ch. 97-179; s. 19, ch. 98-159.

627.94074  Standards for benefit triggers.--

(1)(a)  A long-term care insurance policy shall condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits shall not be more restrictive than requiring either a deficiency in the ability to perform not more than three of the activities of daily living or the presence of cognitive impairment; or

(b)  If a policy is a qualified long-term care insurance policy, the policy shall condition the payment of benefits on a determination of the insured's being chronically ill; having a level of disability similar, as provided by rule of the Insurance Commissioner, to the insured's ability to perform activities of daily living; or being cognitively impaired as described in paragraph (6)(b). Eligibility for the payment of benefits shall not be more restrictive than requiring a deficiency in the ability to perform not more than three of the activities of daily living.

(2)  Activities of daily living shall include at least:

(a)  "Bathing," which means washing oneself by sponge bath or in either a tub or shower, including the task of getting into or out of the tub or shower.

(b)  "Continence," which means the ability to maintain control of bowel and bladder function, or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene, including caring for catheter or colostomy bag.

(c)  "Dressing," which means putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs.

(d)  "Eating," which means feeding oneself by getting food into the body from a receptacle, such as a plate, cup, or table, or by a feeding tube or intravenously.

(e)  "Toileting," which means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.

(f)  "Transferring," which means moving into or out of a bed, chair, or wheelchair.

(3)  Insurers may use activities of daily living to trigger covered benefits in addition to those contained in subsection (2) as long as they are defined in the policy.

(4)  An issuer of qualified long-term care contracts is limited to considering only the activities of daily living listed in subsection (2).

(5)  An insurer may use additional provisions, for a policy described in paragraph (1)(a), for the determination of when benefits are payable under a policy or certificate; however, the provisions shall not restrict and are not in lieu of, the requirements contained in subsections (1) and (2).

(6)  For purposes of this section, the determination of a deficiency due to loss of functional capacity or cognitive impairment shall not be more restrictive than:

(a)  Requiring the hands-on assistance of another person to perform the prescribed activities of daily living, meaning physical assistance, minimal, moderate, or maximal, without which the individual would not be able to perform the activity of daily living; or

(b)  Due to the presence of a cognitive impairment, requiring supervision, including verbal cueing by another person in order to protect the insured or others.

(7)  Assessment of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses, or social workers.

(8)  Long-term care insurance policies shall include a clear description of the process for appealing and resolving the benefit determinations.

(9)  The requirement set forth in this section shall be effective on July 1, 1997, and shall apply as follows:

(a)  Except as provided in paragraph (b), the provisions of this section apply to a long-term care policy issued in this state on or after July 1, 1997.

(b)  The provisions of this section do not apply to certificates under a group long-term care insurance policy in force on July 1, 1997.

History.--s. 7, ch. 96-275; s. 21, ch. 97-179.

627.9408  Rules.--The department has authority to adopt rules pursuant to ss. 120.536(1) and 120.54 to implement the provisions of this part.

History.--ss. 1, 2, ch. 88-57; s. 114, ch. 92-318; s. 205, ch. 98-200.

PART XIX
PURCHASING GROUPS AND
RISK RETENTION GROUPS

627.941  Purpose.

627.942  Definitions.

627.943  Risk retention groups certified in Florida.

627.944  Risk retention groups not certificated in this state.

627.945  Compulsory association.

627.946  Countersignatures not required.

627.947  Purchasing groups; exemption from certain insurer provisions.

627.948  Notice and registration requirements of purchasing groups.

627.949  Restrictions on insurance purchased by purchasing groups.

627.950  Administrative and procedural authority regarding risk retention and purchasing groups.

627.951  Penalties; cease and desist orders; injunctions.

627.952  Risk retention and purchasing group agents.

627.953  Binding effect of orders issued in United States District Court.

627.954  Rules.

627.955  Limitation on deductibles.

627.941  Purpose.--The purpose of this part is to regulate the formation or operation of risk retention groups and purchasing groups in this state.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.942  Definitions.--As used in this part, unless the context otherwise requires:

(1)  "Completed operations liability" means liability arising out of the installation, maintenance, or repair of any product at a site which is not owned or controlled by:

(a)  Any person who performs that work; or

(b)  Any person who hires an independent contractor to perform that work; but shall include liability for activities which are completed or abandoned before the date of the occurrence giving rise to the liability.

(2)  "Domicile," for purposes of determining the state in which a purchasing group is domiciled, means:

(a)  For a corporation, the state in which the purchasing group is incorporated; or

(b)  For an unincorporated entity, the state of its principal place of business.

(3)  "Hazardous financial condition" means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able:

(a)  To meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or

(b)  To pay other obligations in the normal course of business.

(4)  "Liability" means legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses, because of injuries to other persons, damage to their property, or other damage or loss to such other persons resulting from or arising out of:

(a)  Any business, whether for profit or nonprofit, trade, product, services (including professional services), premises, or operations; or

(b)  Any activity of any state or local government, or any agency or political subdivision thereof.

The term "liability" does not include personal risk liability or workers' compensation and employer's liability with respect to employees other than legal liability under the federal Employers' Liability Act (45 U.S.C. ss. 51 et seq.).

(5)  "Personal risk liability" means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial, or household responsibilities or activities, rather than from responsibilities or activities referred to in subsection (4) under the definition of "liability."

(6)  "Plan of operation or a feasibility study" means an analysis which presents the expected activities and results of a risk retention group, including, at a minimum:

(a)  For each state in which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer.

(b)  Historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available.

(c)  Pro forma financial statements and projections.

(d)  Appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition.

(e)  Identification of management, underwriting procedures, managerial oversight methods, and investment policies.

(f)  Information sufficient to verify that the members are engaged in businesses or activities similar or related with respect to the liability to which such members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations.

(g)  Such other matters as may be requested by the department.

(7)  "Product liability" means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage, including damages resulting from the loss of use of property, arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of such a person when the incident giving rise to the claim occurred.

(8)  "Purchasing group" means any group which:

(a)  Has as one of its purposes the purchase of liability insurance on a group basis.

(b)  Purchases such insurance only for its group members and only to cover their similar or related liability exposure, as described in paragraph (c).

(c)  Is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations.

(d)  Is domiciled in any state.

(9)  "Risk retention group" means any corporation or other limited liability association:

(a)  Whose primary activity consists of assuming and spreading all or any portion of the liability exposure of its group members.

(b)  Which is organized for the primary purpose of conducting the activity described in paragraph (a).

(c)  Which:

1.  Is certificated or licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or

2.  Before January 1, 1985, was certificated or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and before such date had certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of such state, except that any such group shall be considered to be a risk retention group only if it has been engaged in business continuously since such date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability, as such terms were defined in the Product Liability Risk Retention Act of 1981, before the date of the enactment of the Risk Retention Act of 1986.

(d)  Which does not exclude any person from membership in the group solely to provide for members of such a group a competitive advantage over such a person.

(e)  Which:

1.  Has as its sole owners all persons who comprise the membership of the risk retention group and who are provided insurance by the risk retention group; or

2.  Has as its sole owner an organization which has as:

a.  Its members only persons who comprise the membership of the risk retention group.

b.  Its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the risk retention group.

(f)  Whose members are engaged in businesses or activities similar or related with respect to the liability to which such members are exposed by virtue of any related, similar, or common business, trade, products, services, premises, or operations.

(g)  Whose activities do not include the provision of insurance other than:

1.  Liability insurance for assuming and spreading all or any portion of the liability of its group members.

2.  Reinsurance with respect to the liability of any other risk retention group, or any members of such other group, which is engaged in businesses or activities so that the group or members meets the requirement described in paragraph (f) for membership in the risk retention group which provides such reinsurance.

(h)  The name of which includes the phrase "Risk Retention Group."

(10)  "State" means any state of the United States or the District of Columbia.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.943  Risk retention groups certified in Florida.--

(1)  A risk retention group seeking to be certified in this state shall first obtain a permit pursuant to chapter 628. The risk retention group shall then be organized as a limited liability association or corporation under the laws of this state and shall obtain and maintain a certificate of authority as a domestic insurer authorized to write only liability insurance by the Florida Insurance Code and, except as provided elsewhere in this part, shall comply with all of the provisions of the Florida Insurance Code, rules, statutes, and other laws applicable to domestic liability insurers, including requirements governing the use of agents, and with the provisions of s. 627.944 to the extent the provisions of s. 627.944 are not a limitation on the applicable provisions of the Florida Insurance Code and related rules or other statutory or legal requirements of this state.

(2)  Before it may offer insurance in any state, each risk retention group shall also submit for approval to the department a plan of operation or a feasibility study. Before additional lines of liability insurance are offered in this or any other state approval shall be obtained from the department.

(3)  A proposed risk retention group shall provide to the department a summary of the application for a certificate of authority at the time it files the application. The summary information shall include the name of the risk retention group, the identity of those individuals who organized the group or who will provide administrative services or otherwise influence or control the activities of the group, the amount and nature of initial capitalization, and the states in which the group intends to operate. A copy of the summary shall be provided by the department to the National Association of Insurance Commissioners.

(4)  Domestic risk retention groups shall be subject to all taxes imposed on domestic insurers.

(5)  Domestic risk retention groups shall be subject to the provisions of s. 627.944(7), (8), and (9).

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.944  Risk retention groups not certificated in this state.--Risk retention groups certificated or licensed in states other than this state and seeking to do business as a risk retention group in this state must observe and abide by the laws of this state as follows:

(1)  NOTICE OF OPERATIONS AND DESIGNATION OF COMMISSIONER AS AGENT.--Before offering insurance in this state, a risk retention group shall submit to the department:

(a)  A statement identifying the state or states in which the risk retention group is certificated or licensed as a liability insurance company, date of certification or licensing, its principal place of business, and such other information, including information on its membership, as the department may require to verify that the risk retention group is qualified as a risk retention group under the provisions of this part.

(b)  A copy of its plan of operations or a feasibility study and revisions of such plan or study submitted to its state of domicile; provided, however, that the provision relating to the submission of a plan of operation or a feasibility study shall not apply with respect to any line or classification of liability insurance which was defined in the Product Liability Risk Retention Act of 1981 before October 27, 1986, and which was offered before such date by any risk retention group which had been certificated or licensed and operating for not less than 3 years before such date.

(c)  A statement of registration which designates the Insurance Commissioner and Treasurer or her or his designee as its agent for the purpose of receiving service of legal documents of process.

(2)  FINANCIAL CONDITION.--Any risk retention group doing business in this state shall submit to the department:

(a)  A copy of the group's financial statement submitted to its state of domicile, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist under criteria established by rule of the department after considering any criteria established by the National Association of Insurance Commissioners.

(b)  A copy of each examination of the risk retention group as certified by the insurance commissioner or public official conducting the examination.

(c)  Upon request by the department, a copy of any audit performed with respect to the risk retention group.

(d)  Such information as may be required to verify its continuing qualification as a risk retention group under the provisions of this part.

(3)  TAXATION.--All premiums paid for insurance or coverages on risks located within this state to a risk retention group shall be subject to taxation at the same rate and subject to the same interest, fines, and penalties for nonpayment as that applicable to eligible surplus lines insurers. Each agent utilized in any transaction shall report and pay the taxes for the premiums for risks which they have placed with or on behalf of a risk retention group not certificated in this state. In the event that an agent fails to pay the tax, each risk retention group shall pay the tax for insured or covered risks located within this state. Further, each risk retention group shall report all premiums paid to it for insured or covered risks located within this state.

(4)  COMPLIANCE WITH UNFAIR CLAIM SETTLEMENT PRACTICES LAW.--Any risk retention group, its agents, and its representatives shall comply with the unfair claim settlement practices law of this state as set forth in s. 626.9541(1)(i).

(5)  DECEPTIVE, FALSE, OR FRAUDULENT PRACTICES.--Any risk retention group shall comply with and be subject to the laws of this state regarding deceptive, false, or fraudulent acts or practices, including the provisions of ¹part X of chapter 626. If the department seeks an injunction regarding conduct in violation of these laws, the injunction may be obtained from any Florida court of competent jurisdiction.

(6)  EXAMINATION REGARDING FINANCIAL CONDITION.--Any risk retention group must submit to an examination by the department to determine its financial condition if the insurance commissioner of the jurisdiction in which the group is certificated or licensed has not initiated an examination or does not initiate an examination within 30 days after a request by the department. Any examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner.

(7)  NOTICE TO PURCHASERS.--Any policy issued by a risk retention group shall contain in 10-point type on the front page and the declaration page, the following provision:

"Notice, this policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group."

(8)  PROHIBITED ACTS REGARDING SOLICITATION OR SALE.--The following acts by a risk retention group are hereby prohibited:

(a)  The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in the group.

(b)  The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition or is financially impaired.

(9)  PROHIBITED OWNERSHIP BY AN INSURANCE COMPANY.--No risk retention group shall be allowed to do business in this state if an insurer is directly or indirectly a member or owner of the risk retention group, other than in the case of a risk retention group all of whose members are insurers.

(10)  PROHIBITED COVERAGE.--No risk retention group may offer insurance coverage prohibited by the Florida Insurance Code or declared unlawful by the highest court of this state.

(11)  DELINQUENCY PROCEEDINGS.--A risk retention group not domiciled in this state but doing business in this state shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by the department if there has been a finding of financial impairment after an examination under subsection (6).

(12)  UTILIZATION OF AGENT.--A risk retention group shall utilize an agent licensed and appointed in this state in order to solicit, transact, underwrite, or provide insurance on a risk of a group member, which risk is located in this state.

History.--ss. 2, 5, ch. 87-282; s. 133, ch. 91-108; s. 114, ch. 92-318; s. 374, ch. 97-102.

¹Note.--Redesignated as part IX of ch. 626 to conform to the transfer of ss. 626.941-626.945, comprising former part IX, by ch. 98-89.

627.945  Compulsory association.--

(1)  No risk retention group shall be permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state, nor shall any risk retention group, or its insured, receive any benefit from any such fund for claims arising out of the operations of the risk retention group.

(2)  A risk retention group shall participate in this state's joint underwriting associations as established under ss. 627.311(3) and 627.351(1), (3), (4), and (5).

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.946  Countersignatures not required.--A policy of insurance issued to a risk retention group or any member of that group shall not be required to be countersigned by a resident agent notwithstanding any other provision of the Florida Insurance Code to the contrary.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.947  Purchasing groups; exemption from certain insurer provisions.--Any purchasing group meeting the criteria established under the provisions of the federal Liability Risk Retention Act of 1986 shall be exempt from any law of this state relating to the creation of groups for the purchase of insurance or to prohibition of group purchasing or to any law that would discriminate against a purchasing group or its members. In addition, an insurer shall be exempt from any law of this state which prohibits providing, or offering to provide, to a purchasing group or its members advantages based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages, or other matters. A purchasing group shall be subject to all other applicable laws of this state, including the provisions of the Florida Insurance Code not in conflict with the purposes of this part or with the provisions of the federal Liability Risk Retention Act of 1986.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.948  Notice and registration requirements of purchasing groups.--

(1)  A purchasing group which intends to do business in this state shall furnish notice to the department which shall:

(a)  Identify the state in which the group is domiciled.

(b)  Specify the lines and classifications of liability insurance which the purchasing group intends to purchase.

(c)  Identify the insurance company or companies from which the group intends to purchase its insurance and the domicile of such company or companies.

(d)  Identify the principal place of business of the group.

(e)  Provide such other information as may be required by the department to verify that the purchasing group is qualified as a purchasing group under the provisions of this part.

(2)  The purchasing group shall register with and designate the Insurance Commissioner and Treasurer or her or his designee as its agent solely for the purpose of receiving service of legal documents or process. This requirement shall not apply in the case of a purchasing group:

(a)  Which:

1.  Was domiciled before April 1, 1986.

2.  Is domiciled on and after October 27, 1986, in any state of the United States.

(b)  Which:

1.  Before October 27, 1986, purchased insurance from an insurance carrier licensed in any state; and

2.  Since October 27, 1986, purchased its insurance from an insurance carrier licensed in any state.

(c)  Which was a purchasing group under the requirements of the Product Liability Risk Retention Act of 1981 before October 27, 1986.

(d)  Which does not purchase insurance that was not authorized for purposes of an exemption under that act, as in effect before October 27, 1986.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318; s. 375, ch. 97-102.

627.949  Restrictions on insurance purchased by purchasing groups.--

(1)  In order to purchase insurance or coverage for a risk located in this state, which risk is a subject of insurance of a member of the purchasing group, a purchasing group shall only purchase insurance or coverage from:

(a)  A risk retention group that is certificated or licensed in one of the states of the United States;

(b)  An authorized insurer; or

(c)  An eligible surplus lines insurer.

(2)  A purchasing group shall utilize an agent licensed and appointed in this state in order to solicit, transact, or purchase insurance or coverage for a risk located in this state, which risk is a subject of insurance of a member of the purchasing group.

History.--ss. 2, 5, ch. 87-282; s. 134, ch. 91-108; s. 114, ch. 92-318.

627.950  Administrative and procedural authority regarding risk retention and purchasing groups.--The department is authorized to make use of any of the powers established under the Florida Insurance Code to enforce the laws of this state so long as those powers are not specifically preempted by the Product Liability Risk Retention Act of 1981 as amended by the Risk Retention Amendments of 1986. This includes, but is not limited to, the department's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, and impose penalties. With regard to any investigation, administrative proceedings, or litigation, the department may rely on the procedural law and regulations of the state. The injunctive authority of the department in regard to risk retention groups is restricted to the extent that any injunction shall be issued by a court of competent jurisdiction.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.951  Penalties; cease and desist orders; injunctions.--

(1)  A risk retention group which violates any applicable provision of the Florida Insurance Code shall be subject to fines and penalties applicable to licensed insurers generally, including revocation of its license or the right to do business in this state. In addition, any such risk retention group shall be subject to the issuance of a cease and desist order of the department or an injunction issued by a court of competent jurisdiction prohibiting such violation or prohibiting the soliciting, selling, or transacting of insurance or otherwise operating or conducting business in this state in violation of the laws of this state. The department may obtain an order from a court of competent jurisdiction to enjoin a risk retention group from further operation or from transacting insurance in this state if the risk retention group is in hazardous financial condition or financially impaired or to enjoin a risk retention group from the soliciting, selling, or transacting of insurance with respect to any person who is not eligible for membership in the group under state or federal law.

(2)  A purchasing group which violates any applicable provision of the Florida Insurance Code shall be subject to fines and penalties applicable to licensed insurers and agents generally. In addition, any such purchasing group shall be subject to the issuance of a cease and desist order of the department or an injunction issued by any court of competent jurisdiction prohibiting the soliciting, selling, transacting, or purchasing of insurance or otherwise operating or conducting business in this state.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.952  Risk retention and purchasing group agents.--

(1)  Any person offering, soliciting, selling, purchasing, administering, or otherwise servicing insurance contracts, certificates, or agreements for any purchasing group or risk retention group to any resident of this state, either directly or indirectly, by the use of mail, advertising, or other means of communication, shall obtain a license and appointment to act as a resident general lines agent, if a resident of this state, or a nonresident general lines agent if not a resident. Any such person shall be subject to all requirements of the Florida Insurance Code.

(a)  All books, records, statements, and accounts required to be established and maintained with respect to activities described in this subsection shall be established and maintained on a segregated basis, separate and apart from all other books, records, statements, and accounts regarding the agent's other transactions.

(b)  Any person required to be licensed and appointed by this subsection, in order to place business through Florida eligible surplus lines carriers, shall, if a resident of this state, be licensed and appointed as a surplus lines agent. Any such person, if not a resident of this state, shall be licensed and appointed as a surplus lines agent in her or his state of residence and shall file and thereafter maintain a fidelity bond in favor of the people of the State of Florida executed by a surety company admitted in this state and payable to the State of Florida; provided, however, any activities carried out by such nonresident pursuant to this part shall be limited to the provision of insurance for purchasing groups. The bond shall be continuous in form and maintained in the amount set out in s. 626.928. The bond shall remain in force and effect until the surety is released from liability by the department or until the bond is canceled by the surety. The surety may cancel the bond and be released from further liability thereunder upon 30 days' prior written notice to the department. The cancellation shall not affect any liability incurred or accrued thereunder before the termination of the 30-day period. Upon receipt of a notice of cancellation, the department shall immediately notify the agent.

(2)  In addition to any other lawful duties, any person engaging in the activities described in subsection (1) is obligated to exercise reasonable and customary skill and diligence to ascertain that any purchasing group or purchasing group member, to or for whom an offer or solicitation is made with respect to coverage being placed with a risk retention group, receives a written disclosure that the liability insurance coverage being offered may not be subject to all of the insurance laws and rules of this state and that insolvency guaranty fund protection is not available for the purchasing groups or purchasing group members.

(3)  Any insurance agent who breaches a fiduciary duty; who solicits, offers, sells, transacts, or purchases insurance coverage from a risk retention group which is not in compliance with the applicable provisions of this part; or who violates any provision of the Florida Insurance Code shall be subject to fine and revocation or suspension of her or his license and appointment, in accordance with the procedures established under the Florida Insurance Code and may be held liable for civil damages to any person or group resulting from such violation or breach of a fiduciary duty.

(4)  Any person retained or employed to solicit, offer, sell, or purchase memberships in a purchasing group may be ordered to cease any such enrollment activity in this state whenever the department has reason to believe that any such purchasing group has liability insurance coverage from a risk retention group or insurance company which is insolvent or in a hazardous financial condition. Orders entered under this subsection shall be issued in accordance with the procedures set forth in s. 627.951.

(5)  Any person licensed and appointed as an agent to act on behalf of a risk retention group or a purchasing group shall be appointed with at least one authorized property and casualty insurer.

(6)  Any person licensed and appointed as an agent to act on behalf of a risk retention group or a purchasing group shall, except as otherwise provided in this part, be subject to all provisions of the Florida Insurance Code applicable to the type of agent's license held by such person.

History.--ss. 2, 5, ch. 87-282; s. 135, ch. 91-108; s. 114, ch. 92-318; s. 376, ch. 97-102.

627.953  Binding effect of orders issued in United States District Court.--An order issued by any district court of the United States enjoining a risk retention group from transacting, soliciting, or selling insurance or from operating in any state or in all states or in any territory or possession of the United States, upon a finding that such a group is in a hazardous financial condition, shall be enforceable in the courts of this state.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.954  Rules.--The department may establish and from time to time amend such rules relating to risk retention groups and purchasing groups as may be necessary or desirable to carry out the provisions of this part.

History.--ss. 2, 5, ch. 87-282; s. 114, ch. 92-318.

627.955  Limitation on deductibles.--A purchasing group may not purchase insurance that provides for a deductible or self-insured retention that is applicable to the group as a whole. However, coverage may provide for a deductible or self-insured retention that is applicable to individual members.

History.--s. 18, ch. 2000-370.

PART XX
FINANCIAL GUARANTY INSURANCE

627.971  Definitions.

627.972  Organization; financial requirements.

627.973  Limitations.

627.974  Filing of policy forms and rates.

627.975  Reinsurance.

627.971  Definitions.--As used in this part:

(1)(a)  "Financial guaranty insurance" means a surety bond, insurance policy, an indemnity contract issued by an insurer, or any similar guaranty, under which loss is payable upon proof of occurrence of financial loss to an insured claimant, obligee, or indemnitee as a result of:

1.  The failure of an obligor on a debt instrument or other monetary obligation, including common or preferred stock guaranteed under a surety bond, insurance policy, or indemnity contract, to make principal, interest, premium, dividend, or purchase price payments when due, if the failure is the result of a financial default or insolvency, whether such obligation is incurred directly or as guarantor by or on behalf of another obligor who also defaulted;

2.  Changes in the levels of interest rates or the differential in interest rates between various markets or products;

3.  Changes in the rate of exchange of currency;

4.  Changes in the value of specific assets or commodities, financial or commodity indices, or price levels in general; or

5.  Other events which the department determines are substantially similar to any of the foregoing.

(b)  However, "financial guaranty insurance" does not include:

1.  Insurance of a loss resulting from an event described in paragraph (a), if the loss is payable only upon the occurrence of any of the following, as specified in a surety bond, insurance policy, or indemnity contract:

a.  A fortuitous physical event;

b.  A failure of or deficiency in the operation of equipment; or

c.  An inability to extract or recover a natural resource;

2.  An individual or schedule public official bond;

3.  A court bond required in connection with judicial, probate, bankruptcy, or equity proceedings, including a waiver, probate, open estate, or life tenant bond;

4.  A bond running to a federal, state, county, municipal government, or other political subdivision, as a condition precedent to the granting of a license to engage in a particular business or of a permit to exercise a particular privilege;

5.  A loss security bond or utility payment indemnity bond running to a governmental unit, railroad, or charitable organization;

6.  A lease, purchase and sale, or concessionaire surety bond;

7.  Credit unemployment insurance on a debtor in connection with a specific loan or other credit transaction, to provide payments to a creditor in the event of unemployment of the debtor for the installments or other periodic payments becoming due while a debtor is unemployed;

8.  Credit insurance indemnifying a manufacturer, merchant, or educational institution which extends credit against loss or damage resulting from nonpayment of debts owed to her or him for goods or services provided in the normal course of her or his business;

9.  Guaranteed investment contracts that are issued by life insurance companies and that provide that the life insurer will make specified payments in exchange for specific premiums or contributions;

10.  Mortgage guaranty insurance as defined in s. 635.011(1) or s. 635.021;

11.  Indemnity contracts or similar guaranties, to the extent that they are not otherwise limited or proscribed by this part, in which a life insurer guarantees:

a.  Its obligations or indebtedness or the obligations or indebtedness of a subsidiary of which it owns more than 50 percent, other than a financial guaranty insurance corporation, if:

(I)  For any such obligations or indebtedness that are backed by specific assets, such assets are at all times owned by the insurer or the subsidiary; and

(II)  For the obligations or indebtedness of the subsidiary that are not backed by specific assets of the life insurer, the guaranty terminates once the subsidiary ceases to be a subsidiary; or

b.  The obligations or indebtedness, including the obligation to substitute assets where appropriate, with respect to specific assets acquired by a life insurer in the course of normal investment activities and not for the purpose of resale with credit enhancement, or guarantees obligations or indebtedness acquired by its subsidiary, provided that the assets so acquired have been:

(I)  Acquired by a special purpose entity where the sole purpose is to acquire specific assets of the life insurer or the subsidiary and issue securities or participation certificates backed by such assets; or

(II)  Sold to an independent third party; or

c.  The obligations or indebtedness of an employee or agent of the life insurer;

12.  Any form of surety insurance as defined in s. 624.606; or

13.  Any other form of insurance covering risks which the department determines to be substantially similar to any of the foregoing.

(2)  "Affiliate" means a person that, directly or indirectly, owns at least 10 percent but less than 25 percent of the financial guaranty insurance corporation or that is at least 10 percent but less than 25 percent, directly or indirectly, owned by a financial guaranty insurance corporation.

(3)  "Average annual debt service" means the amount of insured unpaid principal and interest on an issue of obligations, multiplied by the number of the insured obligations in the issue, each obligation representing a $1,000 par value, divided by an amount equal to the aggregate life of all the obligations in the issue. The formula for bonds is:

Average Annual Debt Service =	Total Debt Service x Number of Bonds Bond Years
Total Debt Service =	Insured Unpaid Principal + Interest due over the remaining life of the bond
Number of Bonds =	Total Insured Principal 1,000

Bond Years = Number of Bonds x Term in Years

(4)  "Collateral" means:

(a)  Cash;

(b)  The market value of investment grade securities, other than securities evidencing an interest in the projects financed with the proceeds of the insured obligations;

(c)  The scheduled cash flow from investment grade obligations scheduled to be received on or prior to the date of scheduled debt service on the insured obligation;

(d)  A conveyance or mortgage of real property; or

(e)  A letter of credit;

if deposited with or held by the corporation; held in trust by a trustee, acceptable to the department, for the benefit of the corporation; or held in trust, pursuant to the bond indenture, by a trustee acceptable to the department, for the benefit of bondholders in the form of sinking funds or other reserves which may be used solely for the payment of debt service.

(5)  "Contingency reserve" means an additional liability reserve established to protect policyholders against the effects of adverse economic cycles or other unforeseen circumstances.

(6)  "Financial guaranty insurance corporation" means a stock insurer licensed to transact financial guaranty insurance business in this state.

(7)  "Governmental unit" means the United States, Canada, a state, territory, or possession of the United States, the District of Columbia, a province of Canada, a municipality, or a political subdivision of any of the foregoing, or any public agency or instrumentality thereof.

(8)  "Guaranties of consumer debt obligations" means insurance policies indemnifying against loss or damage resulting from nonpayment of debts owed for extensions of credit to individuals for nonbusiness purposes. Such extensions of credit include guaranties of securities backed by obligations of individuals. Policies that provide this coverage must contain a provision that all liability terminates upon the sale or transfer of the underlying obligation to any transferee which is not an insured of the financial guaranty insurance corporation under a similar policy.

(9)  "Industrial development bond" means any security, or other instrument under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project serving a private industrial, commercial, or manufacturing purpose and payable from the revenues of the project or by any private, for-profit entity.

(10)  An "investment grade obligation" means an obligation that:

(a)  Has been determined to be in one of the top four generic lettered rating classifications by a securities rating agency acceptable to the department;

(b)  Has been identified in writing by such a rating agency as an insurable risk deemed to be of investment grade quality for purposes of insurance;

(c)  Has received a "yes" rating by the Securities Valuation Office of the National Association of Insurance Commissioners; or

(d)  Has been submitted for review to the appropriate rating agency or Securities Valuation Office and will be qualified pursuant to paragraph (a), paragraph (b), or paragraph (c).

(11)  "Letter of credit" means:

(a)  The stated amount of a clean unconditional, irrevocable letter of credit issued by a bank or trust company whose debt rating applicable to the term of the insured obligation is in one of the two highest generic lettered rating classifications by a securities rating agency acceptable to the department; or

(b)  Fifty percent of the stated amount of a clean unconditional, irrevocable letter of credit issued by a bank or trust company whose debt rating applicable to the term of the insured obligation is in a rating classification other than as set forth in paragraph (a).

(c)  An issuing or confirming bank referred to in paragraph (a) or paragraph (b) shall be:

1.  Determined by the Securities Valuation office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of banks and trust companies whose letters of credit shall be acceptable to insurance regulatory authorities; provided, that the letter of credit is issued for the full term of the insured obligation, or the insured obligation is subject to mandatory call and redemption from the proceeds of the letter of credit if the letter of credit is not renewed or replaced; and

2.a.  A member of the federal reserve system or chartered by a state of the United States; or

b.  Organized and existing under the laws of a foreign country whose sovereign debt is rated in the highest major rating classification by a securities rating agency acceptable to the department; and which has been licensed as a domestic branch or agency by the Federal Government or a state of the United States; and which is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies.

(12)  "Municipal bonds" means municipal obligation bonds and industrial development bonds.

(13)  "Municipal obligation bond" means any security or other instrument, including a lease, under which a payment obligation is created, other than an industrial development bond, which is issued by or on behalf of or payable or guaranteed by a governmental unit, including certificates of participation evidencing proportionate ownership in payments to be made by a governmental unit, or issued by an entity other than a governmental unit if such security or instrument is eligible for issuance by a governmental unit but would not be an industrial development bond if so issued.

(14)  "Reinsurance" means cessions qualifying for credit under s. 627.975.

(15)  "Total liability of an insurer transacting financial guaranty insurance" means the aggregate amount of insured unpaid principal, interest, and other monetary payments, if any, of guaranteed obligations insured or assumed, less reinsurance and collateral. However, for guaranteed obligations insured or assumed where acceleration of payment of such obligation is at the sole option of the insurer, such total liability means the aggregate amount of the discounted present value of insured unpaid principal and unpaid interest up to the point of acceleration and other monetary payments, if any, of guaranteed obligations insured or assumed, less reinsurance and collateral. The discount rate to be applied shall be the average rate of return on the admitted assets of the insurer at the time of computation or the face rate of interest of the guaranteed obligation, whichever is less.

History.--ss. 1, 6, ch. 88-87; s. 114, ch. 92-318; s. 377, ch. 97-102.

627.972  Organization; financial requirements.--

(1)  A financial guaranty insurance corporation must be organized and licensed in the manner prescribed in this code for stock property and casualty insurers except that:

(a)  A corporation organized to transact financial guaranty insurance may, subject to the provisions of this code, be licensed to transact:

1.  Residual value insurance, as defined by s. 624.6081;

2.  Surety insurance, as defined by s. 624.606;

3.  Credit insurance, as defined by s. 624.605(1)(i); and

4.  Mortgage guaranty insurance as defined in s. 635.011, provided that the provisions of chapter 635 are met.

(b)1.  Prior to the issuance of a license, a corporation must submit to the department for approval, a plan of operation detailing:

a.  The types and projected diversification of guaranties to be issued;

b.  The underwriting procedures to be followed;

c.  The managerial oversight methods;

d.  The investment policies; and

e.  Any other matters prescribed by the department;

2.  An insurer which is writing only the types of insurance allowed under this part on July 1, 1988, and otherwise meets the requirements of this part, is exempt from the requirements of this paragraph.

(c)  An insurer transacting financial guaranty insurance is subject to all provisions of this code that are applicable to property and casualty insurers to the extent that those provisions are not inconsistent with this part.

(d)  The investments of an insurer transacting financial guaranty insurance in any entity insured by the corporation may not exceed 2 percent of its admitted assets as of the end of the prior calendar year.

(e)  An insurer transacting financial guaranty insurance may only assume those lines of insurance for which it is licensed to write direct business.

(2)  An insurer may not transact financial guaranty business unless it has surplus to policyholders of at least $50 million at the date of initial licensing for financial guaranty insurance and maintains a minimum surplus to policyholders of at least $35 million.

(3)  An insurer may not transact financial guaranty insurance unless it establishes a contingency reserve, net of reinsurance, as follows:

(a)  A contingency reserve, net of reinsurance, must be established in a minimum amount calculated by applying the following percentages to the net principal outstanding each calendar year of guaranties of:

1.  Municipal obligation bonds, 0.8 percent;

2.  Investment grade obligations with a term of less than 3 years, 1.0 percent;

3.  All other investment grade obligations, including investment grade industrial development bonds and investment grade consumer debt obligations, 1.6 percent;

4.  Noninvestment grade consumer debt obligations, 2.5 percent; and

5.  All other obligations guaranteed, 3.0 percent.

(b)1.  Quarterly additions to the reserve for subparagraph (a)1. must be equal to the greater of 1/80th of the amounts derived by applying the appropriate contribution specified in that subparagraph or 50 percent of the quarterly earned premiums on these guaranties, and must be maintained for a period of 20 years; and

2.  Quarterly additions to the reserve for subparagraphs (a)2., 3., and 4. must be equal to the greater of 1/40th of the amounts derived by applying the appropriate contribution specified in that subparagraph or 50 percent of the quarterly earned premiums on these guaranties and must be maintained for a period of 10 years, except that, for obligations with a term of less than 3 years, the reserve must be maintained for a period of at least 5 years.

(c)  The reserve may be released thereafter in the same manner, except that a part of the reserve may be released proportional to the reduction in net total liabilities resulting from reinsurance and the reinsurer must, on the effective date of the reinsurance, establish a reserve in an amount equal to the amount released.

(d)  Withdrawals from the contingency reserve, to the extent of any excess, may be made with the approval of the department from the earliest contributions to the reserve remaining therein:

1.  In any year in which the actual incurred losses exceed 35 percent of earned premiums, or

2.  If the contingency reserve has been in existence for 40 quarters for reserves subject to subparagraph (b)1., and 20 quarters for reserves subject to subparagraph (b)2., upon demonstration that the amount carried is excessive in relation to the insurer's outstanding obligations.

(4)  In addition to the contingency reserve, the case basis method or other method prescribed by the department is used to determine loss reserves, in a manner consistent with the requirements of part I of chapter 625, which must include a reserve for claims reported and unpaid net of collateral. A deduction from loss reserves shall be allowed for the time value of money by application of a discount rate equal to the average rate of return on the admitted assets of the insurer as of the date of the computation of any such reserve. The discount rate must be adjusted at the end of each calendar year.

(5)  The insurer maintains an unearned premium reserve, net of reinsurance, computed on the monthly pro rata basis, where the premiums are paid on an installment basis. All other such premiums paid must be earned proportionately with the expiration of exposure or by such other method the department prescribes or approves.

History.--ss. 1, 6, ch. 88-87; s. 114, ch. 92-318.

627.973  Limitations.--

(1)  Financial guaranty insurance shall be transacted in this state only by a corporation licensed for such purpose, except that a property and casualty insurer transacting business pursuant to the provisions of this code may transact financial guaranty insurance in this state if the following conditions are met:

(a)  Total policyholders' surplus exceeds $100 million;

(b)  Not more than 20 percent of total net premiums written are applicable to or for financial guaranty insurance;

(c)  The provisions of this part are applied to the insurer's financial guaranty insurance business;

(d)  Not more than 20 percent of the insurer's total policyholder's surplus is applied toward meeting the provisions of this part;

(e)  The policyholders' surplus once utilized to meet the requirements of this part shall not be available for meeting any policyholders' surplus requirements for any other type of insurance;

(f)  The insurer is licensed to write financial guaranty insurance; and

(g)  Unless the insurer is transacting financial guaranty insurance prior to July 1, 1988, and otherwise meets the requirements of this section, prior to the issuance of a license, the insurer must submit to the department for approval, a plan of operation complying with s. 627.972(1)(b).

(2)  Financial guaranty insurance shall be written only to insure obligations defined in s. 627.971(1)(a)1., except that obligations defined in s. 627.971(1)(a)2., 3., 4., and 5. may be written with the prior written approval of the department pursuant to limitations and restrictions promulgated by rule that the department deems appropriate and necessary to protect the policyholders of the insurer.

(3)  At least 95 percent of the outstanding total liability on municipal obligation bonds of an insurer transacting financial guaranty insurance must be investment grade.

(4)  An insurer transacting financial guaranty insurance must at all times maintain capital, surplus, and contingency reserves, subject to the restrictions in paragraph (1)(d) if applicable, in the aggregate no less than the sum of:

(a)  One-third of one percent of the total liabilities outstanding under guaranties of municipal obligation bonds;

(b)  One percent of the total liabilities outstanding under guaranties of investment grade obligations, including industrial development bonds and investment grade consumer debt obligations;

(c)  One and one-third percent of the total liabilities outstanding under guaranties of noninvestment grade consumer debt obligations;

(d)  Two percent of the total liabilities outstanding under guaranties of other obligations not of investment grade, other than consumer debt obligations; and

(e)  Surplus determined by the department to be adequate to support the writing of residual value insurance, surety insurance, and credit insurance, if the corporation has elected to transact these kinds of insurance pursuant to s. 627.972(1).

(5)  An insurer transacting financial guaranty insurance must limit its exposure to loss, net of collateral and reinsurance, as follows:

(a)  For municipal bonds:

1.  The insured average annual debt service with respect to any one entity and backed by a single revenue source may not exceed 10 percent of the aggregate of the corporation's capital, surplus, and contingency reserves, subject to the restrictions of paragraph (1)(d) if applicable; and

2.  The insured unpaid principal issued by a single entity and backed by a single revenue source may not exceed 75 percent of the aggregate of the corporation's capital, surplus, and contingency reserves, subject to the restrictions in paragraph (1)(d) if applicable; and

(b)  For all other financial guaranties, the insured unpaid principal for any one risk may not exceed 10 percent of the aggregate of the corporation's capital, surplus, and contingency reserves, subject to the restrictions in paragraph (1)(d) if applicable. Single risk liability shall be defined with respect to any one issuer, except that, if the risk is payable from a specified revenue source or adequately secured by loan obligations or other assets, such risk shall be defined by the revenue source.

(6)  If the exposure to loss of an insurer transacting financial guaranty insurance exceeds the limitations in subsection (4), it may not transact any new financial guaranty insurance business until its exposure to loss no longer exceeds those limitations.

(7)  An insurer which wrote financial guaranty insurance in this state during the 12-month period immediately preceding July 1, 1988, but which does not meet the requirements of subsection (1) or of s. 627.972(2), may, nevertheless, continue to write financial guaranty insurance as authorized by subsection (2) after July 1, 1988, subject to all other provisions of this part, provided:

(a)  Within 45 days after such date the insurer files with the department a statement of its intentions to limit its writings to financial guaranty, surety, and fidelity insurance. Effective upon such filing, the insurer shall be subject to the requirements of this part except that the surplus to policyholders requirement of s. 627.972(2) shall not apply to such insurer until July 1, 1998, at which time such insurer shall have and thereafter maintain the minimum surplus requirement of at least $35 million. Failure of the insurer to meet the conditions of such statement of intent filed with the department, until such time as it meets the requirements of subsection (1), shall be grounds to subject the insurer to the penalties provided under this code, including immediate suspension or revocation of its certificate of authority. If the insurer does not file such statement of intent, it shall cease writing any new financial guaranty insurance business within 6 months after the effective date of this act. The insurer may:

1.  Reinsure its net in-force business with a licensed financial guaranty insurance corporation or an insurer exempt under subsection (1);

2.  Subject to the prior approval of its domiciliary insurance commissioner, reinsure all or part of its net in-force business pursuant to s. 627.975(1)(b), except that subparagraphs 2. and 4. do not apply. The assuming insurer must maintain reserves for the reinsured business in the manner applicable to the ceding insurer under paragraph (b); or

3.  May continue the risks in force and, with 30 days prior written notice to its domiciliary insurance commissioner, write new financial guaranty policies if the writing of those policies is reasonably prudent to mitigate either the amount of or possibility of loss in connection with business written prior to July 1, 1988. However, an insurer must receive the prior approval of its domiciliary insurance commissioner before writing any new financial guaranty insurance policies that would increase its risk of loss.

(b)  Must, for all guaranties in force prior to July 1, 1988, including those which fall under the definition of financial guaranty insurance, maintain the reserves applicable for municipal bond guaranties in effect prior to July 1, 1988. If the insurer's contingency reserves maintained as of July 1, 1988, are less than those required for municipal bond guaranties, the insurer has 3 years to bring its reserves into compliance, except that a part of the reserve may be released proportional to the reduction in net total liabilities resulting from reinsurance if the reinsurer, on the effective date of the reinsurance, establishes a reserve in an amount equal to the amount released and except that a part of the reserve may be released with departmental approval, upon demonstration that the amount carried is excessive in relation to the corporation's outstanding obligations.

(c)  Shall be subject to the reserve requirements applicable to financial guaranty insurance corporations, for business written on or after July 1, 1988.

(d)  This subsection shall not apply to insurers permitted to write financial guaranty insurance pursuant to the exception set forth in subsection (1) and such insurers may write financial guaranty insurance subject to the requirements of the Florida Insurance Code.

History.--ss. 1, 6, ch. 88-87; s. 114, ch. 92-318.

627.974  Filing of policy forms and rates.--

(1)  Policy forms and any amendments thereto must be filed with the department within 30 days after their use by the insurer. A policy may not provide coverage of the acceleration of payments due under the guaranteed obligations, including any payment in advance of scheduled maturity to be made by the issuer of the guaranteed obligations at the sole option of the owner of the guaranteed obligations, unless the acceleration is at the sole option of the insurer. Each policy must disclose that the insurance provided by the policy is not covered by the Florida Insurance Guaranty Association created under part II of chapter 631. The department may prescribe additional minimum policy provisions which are determined by the department to be necessary or appropriate to protect policyholders, claimants, obligees, or indemnitees.

(2)  Rates may not be excessive, inadequate, unfairly discriminatory, destructive of competition, or detrimental to the solvency of the insurer.

(3)  Criteria and guidelines used by insurers transacting financial guaranty insurance in establishing rating categories and ranges of rates to be used must be filed with the department for information prior to their use by the insurer.

(4)  All such filings must be available for public inspection at the department.

(5)  This section is in lieu of the requirements of ss. 627.062 and 627.410.

History.--ss. 1, 6, ch. 88-87; s. 114, ch. 92-318.

627.975  Reinsurance.--

(1)  For financial guaranty insurance which takes effect on or after July 1, 1988, an insurer transacting financial guaranty insurance shall receive credit for reinsurance in accordance with the provisions of this code applicable to property and casualty insurers, as an asset or as a reduction from liabilities only if the reinsurance is subject to an agreement that, for its stated term and with respect to any financial guaranty insurance in force, the reinsurance agreement may only be terminated or amended at the option of the reinsurer or the ceding insurer; if the reinsurance agreement provides that the liability of the reinsurer with respect to policies in effect at the date of termination continues until the expiration or cancellation of each such policy with the consent of the ceding insurer; if the reinsurance agreement provides for a cutoff of the reinsurance in force at the date of termination or at the request of the ceding company or at the discretion of the department, acting as rehabilitator, liquidator, or receiver of the ceding or assuming company; and if such reinsurance either:

(a)  Is placed with another insurer licensed under this part or an insurer writing financial guaranty insurance as permitted under this part;

(b)  Is placed with another type of insurer licensed to write surety insurance, if such insurer:

1.  Has and maintains surplus to policyholders of at least $35 million;

2.  Establishes and maintains the reserves required in s. 627.972, except that if the reinsurance agreement is not pro rata, the contribution to the contingency reserve must be equal to 50 percent of the quarterly earned reinsurance premium;

3.  Complies with s. 627.973(4), (5), and (6); and

4.  If it is a parent, subsidiary, or affiliate of the insurer transacting financial guaranty insurance, the provisions of s. 627.973(4) and (5) shall be applied against the combined policyholders' surplus and contingency reserves of such parent, subsidiary, or affiliate reinsurers after elimination of equity investments of the insurer and such reinsurers in each other; or

(c)  Is placed with an unauthorized or unaccredited reinsurer which otherwise complies with the provisions of paragraph (a) or subparagraphs (b)1. and 4., in an amount not to exceed the liabilities carried by the ceding insurer for amounts withheld under a reinsurance treaty with the reinsurer or amounts deposited by the reinsurer as security for the payment of obligations under the treaty, if the funds or deposit are held subject to withdrawal by, and under the control of the ceding insurer.

(2)  In determining whether the insurer meets the limitations imposed by s. 627.973(4), in addition to credit for other types of qualifying reinsurance, the insurer's aggregate risk may be reduced to the extent of the limit for aggregate excess reinsurance, but in no event, in an amount greater than the amount of the aggregate risk which will become due during the unexpired term of the reinsurance agreement in excess of the insurer's retention pursuant to the reinsurance agreement.

History.--ss. 1, 6, ch. 88-87; s. 66, ch. 89-360; s. 114, ch. 92-318.

PART XXI
MORTGAGE INSURANCE CONSOLIDATIONS

627.981  Scope of part.

627.982  Definitions.

627.983  General requirements.

627.984  Group-to-group consolidations.

627.985  Disclosure requirements.

627.986  Replacement rules.

627.987  Policy forms.

627.981  Scope of part.--This part applies to all mortgage insurance offered, issued, or delivered in this state, by mail or otherwise, in connection with consolidations.

History.--ss. 1, 2, ch. 90-149; s. 114, ch. 92-318.

627.982  Definitions.--As used in this part:

(1)  "Consolidation" means any transaction in which a financial institution or servicer makes its premium collection services available to its mortgage debtors in connection with a particular insurer's ("new insurer") offer of mortgage insurance, which offer is made to debtors who, immediately prior to the offer, had mortgage insurance with another insurer ("old insurer") and were paying premiums for that insurance with their monthly mortgage payments.

(2)  "Financial institution" or "servicer" means any entity or organization that services mortgage loans by collecting and accounting for monthly mortgage payments.

(3)  "Loan transfer" means a transaction in which the servicing of a block of mortgage loans is transferred from one servicer to another.

(4)  "Mortgage" or "mortgage loan" means an indebtedness of more than 10 years' duration which is secured by a first real estate mortgage and which is not subject to part IX.

(5)  "Mortgage insurance" means life, accidental death, or disability insurance, or any combination thereof, designed to pay off all or a part of a mortgage loan in the event of the insured's death or disability.

(6)  "New coverage" or "new plan" means the mortgage insurance coverage or mortgage insurance plan for which the financial institution collects premiums beginning on the effective date of consolidation.

(7)  "Old coverage" or "old plan" means the mortgage insurance coverage or mortgage insurance plan the insured debtor had or participated in immediately prior to the consolidation.

History.--ss. 1, 2, ch. 90-149; s. 114, ch. 92-318.

627.983  General requirements.--No insurer shall participate in any consolidation unless it complies with the following requirements:

(1)  The offer of new coverage shall be made on a timely basis as follows:

(a)  In a consolidation conducted in connection with a loan transfer, the offer of new coverage to the prospective insured must be made as soon as reasonably possible. If the offer of new coverage is not made within 30 days after the loan transfer, or at least 30 days prior to the proposed effective date of the new coverage, the insurer shall notify the debtor, in writing, that she or he has the right to an unconditional refund of all premiums paid for the new coverage if she or he exercises that right, in writing, within 30 days after the date of the notification.

(b)  In all other consolidations, the offer of new coverage shall be made to the prospective insured at least 30 days prior to the proposed effective date of the new coverage. If the offer is not made at least 30 days in advance, the insurer shall notify the debtor, in writing, that she or he has the right to an unconditional refund of all premiums paid for the new coverage provided she or he exercises that right, in writing, within 30 days from the date of the notification.

(2)  A group certificate or individual policy shall be delivered to each debtor insured under the new plan. In addition to all other applicable requirements of the Florida Insurance Code, the group certificate or individual policy shall include the following information:

(a)  The name or names of the single or joint insureds.

(b)  Identification of the insured mortgage.

(c)  The amount of insurance under the new plan.

(d)  The premium for the new coverage.

(e)  The effective date of the new coverage.

(f)  The beneficiary for the new coverage.

(3)  No group certificate or individual policy evidencing the new coverage shall include a contestability clause or, in the case of life insurance, a provision excluding suicide.

(4)  All group life insurance certificates issued in connection with any consolidation shall include a conversion privilege permitting an insured to convert, without evidence of insurability, to an individual policy of decreasing term insurance within 30 days after the date the insured's group coverage is terminated for any reason other than the nonpayment of premiums. The initial amount of coverage under the individual policy shall be an amount equal to the amount of coverage terminated under the group policy and shall decrease over a term that corresponds with the scheduled term of the insured's mortgage loan. The premium for the individual policy shall be the same premium the insured was paying under the group policy.

(5)  Except as provided in s. 627.984, the new coverage shall be effectuated for the prospective insured only after the new insurer receives an application which has been signed by the prospective insured.

(6)  Except as provided in s. 627.984, the new insurer must calculate premiums for the new coverage on the basis of its own rates, the prospective insured's then-attained age, if applicable, and the amount of insurance offered.

(7)  Except for consolidations conducted in connection with a loan transfer, the new insurer shall send written notice to the old insurer of its intent to conduct a consolidation at least 30 days in advance of the effective date of the consolidation. Such notice may be made on behalf of the new insurer by the financial institution.

(8)  Insurers shall maintain a list of certificateholders insured under each group mortgage insurance plan, which list shall be provided upon request to the servicer who collects premiums for the plan.

History.--ss. 1, 2, ch. 90-149; s. 114, ch. 92-318; s. 378, ch. 97-102.

627.984  Group-to-group consolidations.--Where both the old coverage and the new coverage are provided under group policies:

(1)  A signed application need not be obtained if all of the following apply:

(a)  The premium for the new plan is the same as or less than the premium for the old plan.

(b)  The amount of insurance provided by the new plan is the same or greater than that provided by the old plan.

(c)  All supplemental benefits provided by the old plan, including, but not limited to, accidental death riders and waiver-of-premium benefits, are provided by the new plan.

(d)  The maximum term of insurance under the new plan is as long or longer than the maximum term of insurance under the old plan.

(e)  There is a clear disclosure to the prospective insured that payment of the required premium constitutes acceptance of the offer.

(2)  If an insurer charges insureds the same premium for the new coverage as they were paying for their old coverage, and, as a result, insured debtors of a financial institution are charged different premium rates for the same coverage, such rate differences shall not constitute unfair rate discrimination under s. 626.9541.

History.--ss. 1, 2, ch. 90-149; s. 114, ch. 92-318.

627.985  Disclosure requirements.--

(1)  In conjunction with any offer of new coverage made in any consolidation, the new insurer shall disclose in writing to each prospective insured all of the following:

(a)  That the insured debtor may have the right to continue or convert her or his old coverage by paying premiums directly to the old insurer.

(b)  That the offer of new coverage is not conditioned upon either the termination or replacement of the old coverage.

(c)  The name and address of the old insurer and the new insurer.

(d)  The effective date of the new coverage.

(e)  The beneficiary of the new coverage.

(f)  Whether premium rates under the new plan are guaranteed.

(g)  Amount of coverage for both the new and old plans. If the amount of coverage for the old plan is not known, a statement that the amount may be scheduled and it may be less than or greater than the amount of the loan and the insured should check the policy schedule for an exact amount of coverage.

(h)  Material differences, if any, between the new plan and the old plan.

(i)  A statement as to whether the old plan was an individual or group plan and a statement as to whether the new plan is an individual or group plan.

(j)  A consumer information phone number to call with questions regarding the consolidation.

(2)  Disclosures required under this part may be made on behalf of the new insurer by the financial institution.

History.--ss. 1, 2, ch. 90-149; s. 114, ch. 92-318; s. 379, ch. 97-102.

627.986  Replacement rules.--Group-to-group consolidations shall be exempt from any rule of the department relating to the replacement of existing life or health insurance. Nothing in this part shall be interpreted as creating an exemption for consolidations which involve individual policies.

History.--ss. 1, 2, ch. 90-149; s. 114, ch. 92-318.

627.987  Policy forms.--No policy or group certificate of mortgage insurance used in connection with any consolidation, and no application, endorsement, or rider which becomes a part of any such policy or certificate, shall be issued or delivered in this state until a copy of the form has been filed with and approved by the department.

History.--ss. 1, 2, ch. 90-149; s. 114, ch. 92-318.