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2018 Florida Statutes
Chapter 627
INSURANCE RATES AND CONTRACTS
INSURANCE RATES AND CONTRACTS
CHAPTER 627
INSURANCE RATES AND CONTRACTS
PART I
RATES AND RATING ORGANIZATIONS(ss. 627.011-627.381)
PART II
THE INSURANCE CONTRACT(ss. 627.401-627.442)
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. 627.601-627.64995)
PART VII
GROUP, BLANKET, AND FRANCHISE HEALTH INSURANCEPOLICIES
(ss. 627.651-627.66997)
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. 627.701-627.7151)
PART XI
MOTOR VEHICLE AND CASUALTY INSURANCECONTRACTS
(ss. 627.7261-627.748)
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 RETENTIONGROUPS
(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)
PART I
RATES AND RATING ORGANIZATIONS627.011 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.
627.0621 Transparency in rate regulation.
627.0625 Commercial property and casualty risk management plans.
627.0628 Florida Commission on Hurricane Loss Projection Methodology; public records exemption; public meetings exemption.
627.06281 Public hurricane loss projection model; reporting of data by insurers.
627.0629 Residential property insurance; rate filings.
627.06291 Excess profits of residential property insurer; return.
627.06292 Reports of hurricane loss data and associated exposure data; public records exemption.
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.
627.0655 Policyholder loss or expense-related premium discounts.
627.066 Excessive profits for motor vehicle insurance prohibited.
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 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.
627.285 Independent actuarial peer review of workers’ compensation rating organization.
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; public records and public meetings exemptions.
627.312 Transitional provisions.
627.3121 Public records and public meetings exemptions.
627.313 Workers’ Compensation Joint Underwriting Plan; audit requirements.
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 Citizens Property Insurance Corporation.
627.3512 Recoupment of residual market deficit assessments.
627.3513 Standards for sale of bonds by Citizens Property Insurance Corporation.
627.3515 Market assistance plan; property and casualty risks.
627.3517 Consumer choice.
627.3518 Citizens Property Insurance Corporation policyholder eligibility clearinghouse program.
627.35191 Required reports.
627.35193 Consumer reporting agency request for claims data from Citizens Property Insurance Corporation.
627.352 Security of data and information technology in Citizens Property Insurance Corporation.
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 office to regulate such rates. If at any time the office 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 part IX 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; s. 54, ch. 2001-63; s. 1061, ch. 2003-261.
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 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; s. 1, ch. 2015-158.
627.0612 Administrative proceedings in rating determinations.—
(1) 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 office if the office 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.
(2) In an administrative hearing to determine whether an insurer’s rates, rating schedules, rating manuals, premium credits, discount schedules, surcharge schedules, or changes thereto, for property insurance comply with the law, in addition to any other findings of fact, findings on the following matters shall be considered findings of fact:
(a) Whether a factor or factors used in a rate filing or applied by the office are consistent with standard actuarial techniques or practices or are otherwise based on reasonable actuarial judgment.
(b) Whether a factor for underwriting profit and contingencies is reasonable or excessive.
(c) Whether the cost of reinsurance is reasonable or excessive.
(3) In an administrative hearing to determine whether an insurer’s rates, rating schedules, rating manuals, premium credits, discount schedules, surcharge schedules, or changes thereto, for property insurance comply with the law, a recommended order may be entered that approves, modifies, or rejects the requested change. A recommended order modifying the requested rate change shall recommend such change as is supported by the record in the case.
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; s. 1062, ch. 2003-261; s. 9, ch. 2008-66.
627.0613 Consumer advocate.—The Chief Financial Officer must appoint a consumer advocate who must represent the general public of the state before the department and the office. The consumer advocate must report directly to the Chief Financial Officer, 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 or office, by petition, the commencement of any proceeding or action; appear in any proceeding or action before the department or office; or appear in any proceeding before the Division of Administrative Hearings relating to subject matter under the jurisdiction of the department or office.
(2) Have access to and use of all files, records, and data of the department or office.
(3) Examine rate and form filings submitted to the office, hire consultants as necessary to aid in the review process, and recommend to the department or office 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; s. 1063, ch. 2003-261; s. 8, ch. 2006-12; s. 17, ch. 2007-1; s. 8, ch. 2007-90; s. 24, ch. 2008-66; s. 11, ch. 2011-39.
627.062 Rate standards.—
(1) The rates for all classes of insurance to which the provisions of this part are applicable may 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 that allow the insurer a reasonable rate of return on the 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, must be filed with the office under one of the following procedures:
1. If the filing is made at least 90 days before the proposed effective date and is not implemented during the office’s review of the filing and any proceeding and judicial review, such filing is considered a “file and use” filing. In such case, the office 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 office of its preliminary findings does not toll the 90-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office 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 subparagraph 1., such filing must be made as soon as practicable, but within 30 days after the effective date, and is considered a “use and file” filing. An insurer making a “use and file” filing is potentially subject to an order by the office to return to policyholders those portions of rates found to be excessive, as provided in paragraph (h).
3. For all property insurance filings made or submitted after January 25, 2007, but before May 1, 2012, an insurer seeking a rate that is greater than the rate most recently approved by the office shall make a “file and use” filing. For purposes of this subparagraph, motor vehicle collision and comprehensive coverages are not considered property coverages.
(b) Upon receiving a rate filing, the office shall review the filing to determine if a rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the office 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 commission may adopt rules using reasonable techniques of actuarial science and economics to specify the manner in which insurers calculate investment income attributable to classes of insurance written in this state and the manner in which investment income is used to calculate insurance rates. Such manner must contemplate allowances for an underwriting profit factor and full consideration of investment income that produces a reasonable rate of return; however, investment income from invested surplus may not be considered.
5. The reasonableness of the judgment reflected in the filing.
6. Dividends, savings, or unabsorbed premium deposits allowed or returned to policyholders, members, or subscribers in this state.
7. The adequacy of loss reserves.
8. The cost of reinsurance. The office may not disapprove a rate as excessive solely due to the insurer having obtained catastrophic reinsurance to cover the insurer’s estimated 250-year probable maximum loss or any lower level of loss.
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. Projected hurricane losses, if applicable, which must be estimated using a model or method found to be acceptable or reliable by the Florida Commission on Hurricane Loss Projection Methodology, and as further provided in s. 627.0628.
12. Projected flood losses for personal residential property insurance, if applicable, which may be estimated using a model or method, or a straight average of model results or output ranges, independently found to be acceptable or reliable by the Florida Commission on Hurricane Loss Projection Methodology and as further provided in s. 627.0628.
13. A reasonable margin for underwriting profit and contingencies.
14. The cost of medical services, if applicable.
15. Other relevant factors that affect the frequency or severity of claims or expenses.
(c) In the case of fire insurance rates, consideration must 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 considered 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 maintain the premium in a catastrophe reserve. Removal of such premiums from the reserve for purposes other than paying claims associated with a catastrophe or purchasing reinsurance for catastrophes must be approved by the office. Any ceding commission received by an insurer purchasing reinsurance for catastrophes must be placed in the catastrophe reserve.
(e) After consideration of the rate factors provided in paragraphs (b), (c), and (d), the office may find a rate 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 which 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, if 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 office 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 office 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 office finds on a preliminary basis that a rate may be excessive, inadequate, or unfairly discriminatory, the office shall initiate proceedings to disapprove the rate and shall so notify the insurer. However, the office may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for 1 year after the effective date of the filing unless the office finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being notified, the insurer or rating organization shall, within 60 days, file with the office all information that, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. The office shall issue a notice of intent to approve or a notice of intent to disapprove pursuant to 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 office notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the office withdraws the notification, the insurer may not alter the rate except to conform to the office’s notice until the earlier of 120 days after the date the notification was provided or 180 days after the date of implementing the rate. The office, subject to chapter 120, may 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) If the office finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the office shall issue an order of disapproval specifying that a new rate or rate schedule, which responds to the findings of the office, be filed by the insurer. The office 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 the policyholder in the form of a credit or refund. If the office finds that an insurer’s rate or rate change is inadequate, the new rate or rate schedule filed with the office in response to such a finding is 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, for property and casualty insurance the office may not directly or indirectly:
1. 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; or
2. Impede, abridge, or otherwise compromise an insurer’s right to acquire policyholders, advertise, or appoint agents, including the calculation, manner, or amount of such agent commissions, if any.
(j) With respect to residential property insurance rate filings, the rate filing must account for mitigation measures undertaken by policyholders to reduce hurricane losses.
(k)1. A residential property insurer may make a separate filing limited solely to an adjustment of its rates for reinsurance, the cost of financing products used as a replacement for reinsurance, financing costs incurred in the purchase of reinsurance, and the actual cost paid due to the application of the cash build-up factor pursuant to s. 215.555(5)(b) if the insurer:
a. Elects to purchase financing products such as a liquidity instrument or line of credit, in which case the cost included in filing for the liquidity instrument or line of credit may not result in a premium increase exceeding 3 percent for any individual policyholder. All costs contained in the filing may not result in an overall premium increase of more than 15 percent for any individual policyholder.
b. Includes in the filing a copy of all of its reinsurance, liquidity instrument, or line of credit contracts; proof of the billing or payment for the contracts; and the calculation upon which the proposed rate change is based demonstrating that the costs meet the criteria of this section.
2. An insurer that purchases reinsurance or financing products from an affiliated company may make a separate filing only if the costs for such reinsurance or financing products are charged at or below charges made for comparable coverage by nonaffiliated reinsurers or financial entities making such coverage or financing products available in this state.
3. An insurer may make only one filing per 12-month period under this paragraph.
4. An insurer that elects to implement a rate change under this paragraph must file its rate filing with the office at least 45 days before the effective date of the rate change. After an insurer submits a complete filing that meets all of the requirements of this paragraph, the office has 45 days after the date of the filing to review the rate filing and determine if the rate is excessive, inadequate, or unfairly discriminatory.
The provisions of this subsection do not apply to workers’ compensation, employer’s liability insurance, and 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 office and that 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 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.
(d)1. The following categories or kinds of insurance and types of commercial lines risks are not subject to paragraph (2)(a) or paragraph (2)(f):
a. Excess or umbrella.
b. Surety and fidelity.
c. Boiler and machinery and leakage and fire extinguishing equipment.
d. Errors and omissions.
e. Directors and officers, employment practices, fiduciary liability, and management liability.
f. Intellectual property and patent infringement liability.
g. Advertising injury and Internet liability insurance.
h. Property risks rated under a highly protected risks rating plan.
i. General liability.
j. Nonresidential property, except for collateral protection insurance as defined in s. 624.6085.
k. Nonresidential multiperil.
l. Excess property.
m. Burglary and theft.
n. Travel insurance, if issued as a master group policy with a situs in another state where each certificateholder pays less than $30 in premium for each covered trip and where the insurer has written less than $1 million in annual written premiums in the travel insurance product in this state during the most recent calendar year.
o. Medical malpractice for a facility that is not a hospital licensed under chapter 395, a nursing home licensed under part II of chapter 400, or an assisted living facility licensed under part I of chapter 429.
p. Medical malpractice for a health care practitioner who is not a dentist licensed under chapter 466, 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, a pharmacist licensed under chapter 465, or a pharmacy technician registered under chapter 465.
q. Any other commercial lines categories or kinds of insurance or types of commercial lines risks that the office determines should not be subject to paragraph (2)(a) or paragraph (2)(f) because of the existence of a competitive market for such insurance or similarity of such insurance to other categories or kinds of insurance not subject to paragraph (2)(a) or paragraph (2)(f), or to improve the general operational efficiency of the office.
2. Insurers or rating organizations shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on insurance and risks described in subparagraph 1. which are written in this state.
3. An insurer shall notify the office of any changes to rates for insurance and risks described in subparagraph 1. within 30 days after the effective date of the change. The notice must include the name of the insurer, the type or kind of insurance subject to rate change, and the average statewide percentage change in rates. Actuarial data with regard to rates for such risks must be maintained by the insurer for 2 years after the effective date of changes to those rates and are subject to examination by the office. The office may require the insurer to incur the costs associated with an examination. Upon examination, the office, in accordance with generally accepted and reasonable actuarial techniques, shall consider the rate factors in paragraphs (2)(b), (c), and (d) and the standards in paragraph (2)(e) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
4. A rating organization shall notify the office of any changes to loss cost for insurance and risks described in subparagraph 1. within 30 days after the effective date of the change. The notice must include the name of the rating organization, the type or kind of insurance subject to a loss cost change, loss costs during the immediately preceding year for the type or kind of insurance subject to the loss cost change, and the average statewide percentage change in loss cost. Actuarial data with regard to changes to loss cost for risks not subject to paragraph (2)(a) or paragraph (2)(f) must be maintained by the rating organization for 2 years after the effective date of the change and are subject to examination by the office. The office may require the rating organization to incur the costs associated with an examination. Upon examination, the office, in accordance with generally accepted and reasonable actuarial techniques, shall consider the rate factors in paragraphs (2)(b)-(d) and the standards in paragraph (2)(e) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
(4) The establishment of any rate, rating classification, rating plan or schedule, or variation thereof in violation of part IX 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 fund, together with reasonable costs of other reinsurance; however, except as otherwise provided in this section, the insurer may not recoup reinsurance costs that duplicate coverage provided by the fund. An insurer may not recoup more than 1 year of reimbursement premium at a time. Any under-recoupment from the prior year may be added to the following year’s reimbursement premium, and any over-recoupment must be subtracted from the following year’s reimbursement premium.
(6)(a) If an insurer requests an administrative hearing pursuant to s. 120.57 related to a rate filing under this section, the director of the Division of Administrative Hearings shall expedite the hearing and assign an administrative law judge who shall commence the hearing within 30 days after the receipt of the formal request and enter a recommended order within 30 days after the hearing or within 30 days after receipt of the hearing transcript by the administrative law judge, whichever is later. Each party shall have 10 days in which to submit written exceptions to the recommended order. The office shall enter a final order within 30 days after the entry of the recommended order. The provisions of this paragraph may be waived upon stipulation of all parties.
(b) Upon entry of a final order, the insurer may request an expedited appellate review pursuant to the Florida Rules of Appellate Procedure. It is the intent of the Legislature that the First District Court of Appeal grant an insurer’s request for an expedited appellate review.
(7) The provisions of this subsection apply only to rates for medical malpractice insurance and control to the extent of any conflict with other provisions of this section.
(a) Any portion of a judgment entered or settlement paid 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 may not be included in the insurer’s rate base and used to justify a rate or rate change. Any common-law bad faith action identified as such, any portion of a settlement entered as a result of a statutory or common-law action, or any portion of a settlement wherein an insurer agrees to pay specific punitive damages may 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 may not be included in the insurer’s rate base and used to justify a rate or rate change.
(b) Upon reviewing a rate filing and determining whether the rate is excessive, inadequate, or unfairly discriminatory, the office shall consider, in accordance with generally accepted and reasonable actuarial techniques, past and present prospective loss experience, using loss experience solely for this state or giving greater credibility to this state’s loss data after applying actuarially sound methods of assigning credibility to such data.
(c) Rates shall be deemed excessive if, among other standards established by this section, the rate structure provides for replenishment of reserves or surpluses from premiums when the replenishment is attributable to investment losses.
(d) The insurer must apply a discount or surcharge based on the health care provider’s loss experience or establish an alternative method giving due consideration to the provider’s loss experience. The insurer must include in the filing a copy of the surcharge or discount schedule or a description of the alternative method used, and provide a copy, as approved by the office, to policyholders at the time of renewal and to prospective policyholders at the time of application for coverage.
(e) For medical malpractice rates subject to paragraph (2)(a), the medical malpractice insurer shall make an annual base rate filing in accordance with s. 627.0645, sworn to by at least two executive officers of the insurer.
(8)(a) The chief executive officer or chief financial officer of a property insurer and the chief actuary of a property insurer must certify under oath and subject to the penalty of perjury, on a form approved by the commission, the following information, which must accompany a property rate filing subject to paragraph (2)(a):
1. The signing officer and actuary have reviewed the rate filing;
2. Based on the signing officer’s and actuary’s knowledge, the rate filing does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading;
3. Based on the signing officer’s and actuary’s knowledge, the information and other factors described in paragraph (2)(b), including, but not limited to, investment income, fairly present in all material respects the basis of the rate filing for the periods presented in the filing; and
4. Based on the signing officer’s and actuary’s knowledge, the rate filing reflects all premium savings that are reasonably expected to result from legislative enactments and are in accordance with generally accepted and reasonable actuarial techniques.
(b) A signing officer or actuary who knowingly makes a false certification under this subsection commits a violation of s. 626.9541(1)(e) and is subject to the penalties under s. 626.9521.
(c) Failure to provide such certification by the officer and actuary shall result in the rate filing being disapproved without prejudice to be refiled.
(d) The certification made pursuant to paragraph (a) is not rendered false if, after making the subject rate filing, the insurer provides the office with additional or supplementary information pursuant to a formal or informal request from the office. However, the actuary who is primarily responsible for preparing and submitting such information must certify the information in accordance with the certification required under paragraph (a) and the penalties in paragraph (b), except that the chief executive officer, chief financial officer, or chief actuary need not certify the additional or supplementary information.
(e) The commission may adopt rules and forms to administer this subsection.
(9) The burden is on the office to establish that rates are excessive for personal lines residential coverage with a dwelling replacement cost of $1 million or more or for a single condominium unit with a combined dwelling and contents replacement cost of $1 million or more. Upon request of the office, the insurer shall provide such loss and expense information as the office reasonably needs to meet this burden.
(10) Any interest paid pursuant to s. 627.70131(5) may not be included in the insurer’s rate base and may not be used to justify a rate or rate change.
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; s. 55, ch. 2001-63; s. 1064, ch. 2003-261; ss. 40, 84, ch. 2003-416; s. 3, ch. 2005-111; s. 11, ch. 2006-12; s. 18, ch. 2007-1; s. 9, ch. 2007-90; s. 10, ch. 2008-66; s. 7, ch. 2009-87; s. 120, ch. 2010-5; s. 4, ch. 2010-175; s. 12, ch. 2011-39; s. 1, ch. 2011-160; s. 2, ch. 2013-66; s. 1, ch. 2014-80; s. 78, ch. 2015-2; s. 1, ch. 2015-135; s. 28, ch. 2016-132; s. 9, ch. 2017-132.
627.0621 Transparency in rate regulation.—
(1) DEFINITIONS.—As used in this section, the term:
(a) “Rate filing” means any original or amended rate residential property insurance filing.
(b) “Recommendation” means any proposed, preliminary, or final recommendation from an office actuary reviewing a rate filing with respect to the issue of approval or disapproval of the rate filing or with respect to rate indications that the office would consider acceptable.
(2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING INFORMATION.—
(a) With respect to any residential property rate filing, the office shall provide the following information on a publicly accessible Internet website:
1. The overall rate change requested by the insurer.
2. The rate change approved by the office along with all of the actuary’s assumptions and recommendations forming the basis of the office’s decision.
3. Certification by the office’s actuary that, based on the actuary’s knowledge, his or her recommendations are consistent with accepted actuarial principles.
(b) For any rate filing, whether or not the filing is subject to a public hearing, the office shall provide on its website a means for any policyholder who may be affected by a proposed rate change to send an e-mail regarding the proposed rate change. Such e-mail must be accessible to the actuary assigned to review the rate filing.
History.—s. 22, ch. 2008-66; s. 82, ch. 2009-21; s. 8, ch. 2009-87.
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 office 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; s. 1065, ch. 2003-261.
627.0628 Florida Commission on Hurricane Loss Projection Methodology; public records exemption; public meetings exemption.—
(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, subject to paragraph (3)(d), must 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.
(e) The Legislature finds that the authority to take final agency action with respect to insurance ratemaking is vested in the Office of Insurance Regulation and the Financial Services Commission, and that the processes, standards, and guidelines of the Florida Commission on Hurricane Loss Projection Methodology do not constitute final agency action or statements of general applicability that implement, interpret, or prescribe law or policy; accordingly, chapter 120 does not apply to the processes, standards, and guidelines of the Florida Commission on Hurricane Loss Projection Methodology.
(2) COMMISSION CREATED.—
(a) There is created the Florida Commission on Hurricane Loss Projection Methodology, which is assigned to the State Board of Administration. For the purposes of this section, the term “commission” means the Florida Commission on Hurricane Loss Projection Methodology. 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 12 members:
1. The insurance consumer advocate.
2. The senior employee of the State Board of Administration responsible for operations of the Florida Hurricane Catastrophe Fund.
3. The Executive Director of the Citizens Property Insurance Corporation.
4. The Director of the Division of Emergency Management.
5. The actuary member of the Florida Hurricane Catastrophe Fund Advisory Council.
6. An employee of the office who is an actuary responsible for property insurance rate filings and who is appointed by the director of the office.
7. Five members appointed by the Chief Financial Officer, as follows:
a. An actuary who is employed full time by a property and casualty insurer that was responsible for at least 1 percent of the aggregate statewide direct written premium for homeowner insurance in the calendar year preceding the member’s appointment to the commission.
b. 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.
c. 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.
d. An expert in computer system design who is a full-time member of the faculty of the State University System.
e. An expert in meteorology who is a full-time member of the faculty of the State University System and who specializes in hurricanes.
8. A licensed professional structural engineer who is a full-time faculty member in the State University System and who has expertise in wind mitigation techniques. This appointment shall be made by the Governor.
(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. The member appointed by the director of the office under subparagraph (b)6. shall serve on the commission until the end of the term of office of the director who appointed him or her, unless removed earlier by the director for cause. Members appointed by the Chief Financial Officer under subparagraph (b)7. shall serve on the commission until the end of the term of office of the Chief Financial Officer who appointed them, unless earlier removed by the Chief Financial Officer 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 and flood loss projections used in rate filings for personal lines residential flood insurance coverage. 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) The commission shall consider any actuarial methods, principles, standards, or models that have the potential for improving the accuracy of or reliability of projecting probable maximum loss levels. The commission shall adopt findings as to the accuracy or reliability of particular methods, principles, standards, or models related to probable maximum loss calculations.
(c) 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.
(d) With respect to a rate filing under s. 627.062, an insurer shall employ and may not modify or adjust actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable in determining hurricane loss factors and probable maximum loss levels for use in a rate filing under s. 627.062. An insurer may employ a model in a rate filing until 120 days after the expiration of the commission’s acceptance of that model and may not modify or adjust models found by the commission to be accurate or reliable in determining probable maximum loss levels. This paragraph does not prohibit an insurer from using a straight average of model results or output ranges for the purposes of a rate filing for personal lines residential flood insurance coverage under s. 627.062.
(e) The commission shall adopt actuarial methods, principles, standards, models, or output ranges for personal lines residential flood loss no later than July 1, 2017.
(f) The commission shall revise previously adopted actuarial methods, principles, standards, models, or output ranges every odd-numbered year for hurricane loss projections. The commission shall revise previously adopted actuarial methods, principles, standards, models, or output ranges no less than every 4 years for flood loss projections.
(g)1. A trade secret, as defined in s. 688.002, which is used in designing and constructing a hurricane or flood loss model and which is provided pursuant to this section, by a private company, to the commission, office, or consumer advocate appointed pursuant to s. 627.0613 is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
2.a. That portion of a meeting of the commission or of a rate proceeding on an insurer’s rate filing at which a trade secret made confidential and exempt by this paragraph is discussed is exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution. The closed meeting must be recorded, and no portion of the closed meeting may be off the record.
b. The recording of a closed portion of a meeting is exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
c. This paragraph is subject to the Open Government Sunset Review Act in accordance with s. 119.15 and shall stand repealed on October 2, 2019, unless reviewed and saved from repeal through reenactment by the Legislature.
History.—s. 6, ch. 95-276; s. 6, ch. 96-194; s. 3, ch. 97-55; s. 4, ch. 2000-333; s. 1066, ch. 2003-261; s. 79, ch. 2004-390; s. 4, ch. 2005-111; s. 3, ch. 2005-264; s. 12, ch. 2006-12; s. 145, ch. 2008-4; s. 11, ch. 2008-66; s. 83, ch. 2009-21; s. 10, ch. 2009-70; s. 16, ch. 2009-87; s. 1, ch. 2010-89; s. 431, ch. 2011-142; s. 76, ch. 2012-5; s. 5, ch. 2013-60; s. 2, ch. 2014-80; s. 1, ch. 2014-98; s. 2, ch. 2015-135; s. 1, ch. 2017-142.
627.06281 Public hurricane loss projection model; reporting of data by insurers.—
(1) Within 30 days after a written request for loss data and associated exposure data by the office or the Florida International University center established to study mitigation, residential property insurers and licensed rating and advisory organizations that compile residential property insurance loss data shall provide loss data and associated exposure data for residential property insurance policies to the office or the Florida International University center established to study mitigation, as directed by the office, for the purposes of developing, maintaining, and updating a public model for hurricane loss projections. The loss data and associated exposure data provided shall be in writing.
(2) The public model must be submitted to the Florida Commission on Hurricane Loss Projection Methodology for review under s. 627.0628 by March 1, 2007. The office may continue to use the model for its review of rate filings pursuant to ss. 627.062 and 627.351 until such time as the Florida Commission on Hurricane Loss Projection Methodology determines that the public model is not accurate or reliable pursuant to the same process and standards as the commission uses for the review of other hurricane loss projection models.
(3)(a) A residential property insurer may have access to and use the public hurricane loss projection model, including all assumptions and factors and all detailed loss results, for the purpose of calculating rate indications in a rate filing and for analytical purposes, including any analysis or evaluation of the model required under actuarial standards of practice.
(b) The fees charged for private sector access and use of the model shall be the reasonable costs associated with the operation and maintenance of the model by the office. Such fees do not apply to access and use of the model by the office.
History.—s. 6, ch. 2005-111; s. 13, ch. 2006-12; s. 59, ch. 2007-217; s. 18, ch. 2008-66; s. 13, ch. 2011-39.
627.0629 Residential property insurance; rate filings.—
(1) It is the intent of the Legislature that insurers provide savings to consumers who install or implement windstorm damage mitigation techniques, alterations, or solutions to their properties to prevent windstorm losses. 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 must include, but are not limited to, fixtures or construction techniques that 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, or appropriate reductions in deductibles, for fixtures and construction techniques that meet the minimum requirements of the Florida Building Code must be included in the rate filing. The office shall determine the discounts, credits, other rate differentials, and appropriate reductions in deductibles that reflect the full actuarial value of such revaluation, which may be used by insurers in rate filings.
(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 office 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 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 implement an approved rate filing for residential property insurance over a period of years. Such insurer must provide an informational notice to the office setting out its schedule for implementation of the phased-in rate filing.
(6) Any rate filing that is based in whole or part on data from a computer model may not exceed 15 percent unless there is a public hearing.
(7) 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.
(8) 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; ss. 34, 42, ch. 2001-186; ss. 3, 9, ch. 2001-372; s. 20, ch. 2002-293; s. 1067, ch. 2003-261; s. 5, ch. 2005-111; s. 14, ch. 2006-12; ss. 19, 44, ch. 2007-1; s. 12, ch. 2008-66; s. 9, ch. 2009-87; s. 1, ch. 2011-12; s. 14, ch. 2011-39; s. 432, ch. 2011-142; s. 6, ch. 2013-60; s. 39, ch. 2017-3.
627.06291 Excess profits of residential property insurer; return.—A residential property insurer shall return all excess profits to policyholders except as otherwise directed by the Office of Insurance Regulation. A residential property insurer shall be deemed to have earned an excess profit if its surplus exceeds its direct probable maximum loss for a 1-in-250-year return period and it has earned a net underwriting gain in Florida in excess of 10 percent of earned premiums above its anticipated underwriting profit over the most recent 10-year period.
History.—s. 26, ch. 2007-1.
627.06292 Reports of hurricane loss data and associated exposure data; public records exemption.—
(1) Reports of hurricane loss data and associated exposure data that are specific to a particular insurance company, as reported by an insurer or a licensed rating organization to the office or to a center at a state university pursuant to s. 627.06281, are exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
(2) For the purposes of this section, “loss data and associated exposure data” means the type, age, wind mitigation features, and location of each property insured; the amount and type of coverage written on each of those properties; the amount, date, and type of damage paid for by the insurer on each property; and the amount of any reserves held by an insurer for future payments or expenses on damages associated with the date or dates of occurrence of hurricanes.
(3) On October 1, 2011, and on each October 1 thereafter, the Florida International University center that develops, maintains, and updates the public model for hurricane loss projections shall publish a report summarizing loss data and associated exposure data collected from residential property insurers and licensed rating and advisory organizations. The Florida International University center shall submit the report annually, on or before October 1, to the Governor, the President of the Senate, and the Speaker of the House of Representatives.
(a) Such report must include a summary of the data supplied by residential property insurers and licensed rating and advisory organizations from September 1 of the prior year to August 31 of the current year, and must include the following information:
1. The total amount of insurance written by county.
2. The number of property insurance policies by county.
3. The number of property insurance policies by county and by construction type.
4. The number of property insurance policies by county and by decade of construction.
5. The number of property insurance policies by county and by deductible amount.
6. The number of property insurance policies by county and by wind mitigation features when the information is supplied by the residential property insurer or licensed rating and advisory organization.
7. The total amount of hurricane losses by county and by decade of construction.
8. The total amount of hurricane losses by county and by deductible amount.
9. The total amount of hurricane losses by county and by wind mitigation features when the information is supplied by the residential property insurer or licensed rating and advisory organization.
(b) Separate compilations of the data obtained shall be presented in order to use the public model for calculating rate indications and to update, validate, or calibrate the public model. Additional detail and a description of the operation and maintenance of the public model may be included in the report.
(c) The report may not contain any information that identifies a specific insurer or policyholder.
History.—s. 1, ch. 2005-264; s. 60, ch. 2007-217; s. 146, ch. 2008-4; s. 1, ch. 2010-137.
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;
(b) Insurance as defined in ss. 624.604 and 624.605, limited to coverage of commercial risks other than commercial residential multiperil and medical malpractice insurance that is subject to s. 627.062(2)(a) and (f); or
(c) Travel insurance, if issued as a master group policy with a situs in another state where each certificateholder pays less than $30 in premium for each covered trip and where the insurer has written less than $1 million in annual written premiums in the travel insurance product in this state during the most recent calendar year,
shall make an annual base rate filing for each such line with the office 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 office, 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 commission.
(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 office 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 office no later than the date the filing is due.
(7) Nothing in this section limits the office’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 office 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 office 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; s. 1068, ch. 2003-261; s. 3, ch. 2015-135; s. 29, ch. 2016-132; s. 10, ch. 2017-132.
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 office 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; s. 1069, ch. 2003-261.
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 office 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 office’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 office 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 office 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 office 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 office 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 office shall review the rate or rate change to determine if the rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the office 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 commission may adopt 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 adopting such rules, the commission 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 office has the responsibility to ensure that rates for private passenger vehicle insurance are adequate. To that end, the commission shall adopt rules establishing standards defining inadequate rates on private passenger vehicle insurance as defined in s. 627.041(8). In the event that the office finds that a rate or rate change is inadequate, the office 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 office 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 unless filed pursuant to paragraph (1)(a) and the justification for its rate incorporates sufficient actual or expected loss and loss adjustment expense experience so as to be actuarially sound. The office shall require that any rate filing resulting from the use of a single zip code as a rating territory does not contain a rate or rate change that is excessive, inadequate, or unfairly discriminatory.
(9) In reviewing the rate or rate change filed, the office 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 office may, at any time, review a rate or rate change, the pertinent records of the insurer, and market conditions; and, if the office finds on a preliminary basis that the rate or rate change may be excessive, inadequate, or unfairly discriminatory, the office shall so notify the insurer. However, the office 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 office 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 office 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 office notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the office 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 office 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 office finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the office shall issue an order of disapproval specifying that a new rate or rate schedule which responds to the findings of the office be filed by the insurer. The office 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 office finds that an insurer’s rate or rate change is inadequate, the new rate or rate schedule filed with the office 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 office 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 office, during usual business hours.
(14)(a) Commercial motor vehicle insurance is not subject to subsection (1), subsection (2), or subsection (9) or s. 627.0645.
(b) The rates for insurance described in this subsection may not be excessive, inadequate, or unfairly discriminatory.
(c) Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on commercial motor vehicle insurance written in this state.
(d) An insurer must notify the office of any changes to rates for type of insurance described in this subsection no later than 30 days after the effective date of the change. The notice shall include the name of the insurer, the type or kind of insurance subject to rate change, and the average statewide percentage change in rates. Actuarial data with regard to rates for risks described in this subsection shall be maintained by the insurer for 2 years after the effective date of changes to those rates and are subject to examination by the office. The office may require the insurer to incur the costs associated with an examination. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the factors in paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
(e) A rating organization must notify the office of any changes to loss cost for the type of insurance described in this subsection no later than 30 days after the effective date of the change. The notice shall include the name of the rating organization, the type or kind of insurance subject to a loss cost change, loss costs during the immediately preceding year for the type or kind of insurance subject to the loss cost change, and the average statewide percentage change in loss cost. Actuarial data with regard to changes to loss cost for risks not subject to subsection (1), subsection (2), or subsection (9) shall be maintained by the rating organization for 2 years after the effective date of the change and are subject to examination by the office. The office may require the rating organization to incur the costs associated with an examination. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the rate factors in paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
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; s. 1070, ch. 2003-261; s. 5, ch. 2010-175; s. 2, ch. 2011-160; s. 1, ch. 2016-133.
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 office 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; s. 1071, ch. 2003-261.
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 office 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 office. The commission shall adopt, by rule, procedures under which manufacturers, distributors, or sellers may apply to the office 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 office 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 commission may, by rule, set forth appropriate guidelines to implement this subsection.
(6) The Office of Insurance Regulation may approve a premium discount to 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 office if the insured vehicle is equipped with autonomous driving technology or electronic vehicle collision avoidance technology that is factory installed or a retrofitted system and that complies with National Highway Traffic Safety Administration standards.
History.—ss. 37, 52, ch. 90-119; ss. 23, 109, 114, ch. 92-318; s. 1072, ch. 2003-261; s. 42, ch. 2014-216.
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 office determines from actuarial data submitted to it that the surcharge is justified.
History.—s. 13, ch. 95-333; s. 1073, ch. 2003-261.
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.
627.0655 Policyholder loss or expense-related premium discounts.—An insurer or person authorized to engage in the business of insurance in this state may include, in the premium charged an insured for any policy, contract, or certificate of insurance, a discount based on the fact that another policy, contract, or certificate of any type has been purchased by the insured from the same insurer or insurer group, the Citizens Property Insurance Corporation created under s. 627.351(6) if the same insurance agent is servicing both policies, or an insurer that has removed the policy from the Citizens Property Insurance Corporation if the same insurance agent is servicing both policies.
History.—s. 20, ch. 2007-1; s. 10, ch. 2007-90; s. 19, ch. 2008-66.
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 office, prior to July 1 of each year on forms prescribed by the commission, 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.
(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 office 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 office 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 office 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 office 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.
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; s. 1074, ch. 2003-261; s. 84, ch. 2018-110.
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) A retrospective rating plan may contain a provision that allows for negotiation of a premium between the employer and the insurer for employers having exposure in more than one state and an estimated annual standard premium in this state of $100,000 or more and an estimated annual countrywide standard premium of $750,000 or more for workers’ compensation. Provisions within a retrospective rating plan authorizing negotiated premiums are exempt from subsection (1). Such plans and associated forms must be filed by a rating organization and approved by the office. However, a premium negotiated between the employer and the insurer pursuant to an approved retrospective rating plan is not subject to this part. Only insurers having at least $500 million in surplus as to policyholders may engage in the negotiation of premiums with eligible employers.
(3) 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.
(4) 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.
(5)(a) In the case of workers’ compensation and employer’s liability insurance, the office 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 office the accident year by calendar quarter data for paid-claim costs;
2. Each insurer shall submit financial reports to the rating bureau and the office 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 office 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:
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; s. 94, ch. 2002-1; s. 1075, ch. 2003-261; s. 2, ch. 2014-131.
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 office 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 office 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 office 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 office 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 office and shall provide at least 14 days’ prior notice of such meetings to the public by publication in the Florida Administrative Register.
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; s. 1076, ch. 2003-261; s. 53, ch. 2013-14.
627.0915 Rate filings; workers’ compensation, drug-free workplace, and safe employers.—
(1) The office shall approve rating plans for workers’ compensation and employer’s liability insurance that give specific identifiable consideration in the setting of rates to employers that either implement a drug-free workplace program pursuant to s. 440.102 and rules adopted under such section or implement a safety program pursuant to provisions of the rating plan or implement both a drug-free workplace program and a safety program. The plans must be actuarially sound and must state the savings anticipated to result from such drug-testing and safety programs.
(2) An insurer offering a rate plan approved under this section shall notify the employer at the time of the initial quote for the policy and at the time of each renewal of the policy of the availability of the premium discount where a drug-free workplace plan is used by the employer pursuant to s. 440.102 and rules adopted under such section. The Financial Services Commission may adopt rules to implement the provisions of this subsection.
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; s. 34, ch. 2001-91; s. 67, ch. 2002-194; s. 1077, ch. 2003-261; s. 26, ch. 2004-374.
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 office 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; s. 1078, ch. 2003-261.
627.092 Workers’ Compensation Administrator.—There is created within the office 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; s. 1079, ch. 2003-261.
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 office 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 office in its review of filings made by or on behalf of workers’ compensation and employer’s liability insurers.
(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 department or office 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; s. 1080, ch. 2003-261; s. 94, ch. 2013-18.
627.101 When filing becomes effective; workers’ compensation and employer’s liability insurances.—
(1) The office 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 office 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 office shall specifically approve the filing before it becomes effective, unless the office 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 office made as provided in s. 627.111. If the office 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 office, request a public hearing thereon. In such event, the office shall give notice of the hearing.
(4) If the office 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 office 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 office 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; s. 1081, ch. 2003-261.
627.111 Effective date of filing.—
(1) If, pursuant to s. 627.101(2), the office 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 office 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 office disapproves the filing, the filing shall not become effective during the effectiveness of such order. If the order of the office 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; s. 1082, ch. 2003-261.
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 office 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; s. 1083, ch. 2003-261.
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 office 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; s. 1084, ch. 2003-261.
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 $25 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; s. 33, ch. 2003-412.
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 office.
(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. In determining the 10-percent limitation for commercial insurance policies, the insurer shall exclude any workers’ compensation policy that was written for an employer who had coverage in the joint underwriting plan created by s. 627.311(5) immediately prior to the writing of the policy by the insurer and any workers’ compensation policy that was written for an employer who had been offered coverage in the joint underwriting plan but who was written a policy by the insurer in lieu of accepting the joint underwriting plan policy. These workers’ compensation policies shall be excluded from the 10-percent limitation for the first 3 years of coverage.
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; s. 1085, ch. 2003-261; s. 2, ch. 2004-82.
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 office, 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.
History.—s. 95, ch. 98-199; s. 95, ch. 2002-1; s. 1086, ch. 2003-261.
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 office 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 office 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 office 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 office shall give consideration to the applicable principles for ratemaking as set forth in ss. 627.062 and 627.072 and the financial condition of the insurer. In evaluating the financial condition of the insurer, the office 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 office. The office shall approve the deviation if it finds it to be justified, it would not endanger the financial condition of the insurer, and it would not constitute predatory pricing. The office 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 result in predatory pricing. The insurer may not use a deviation unless the deviation is specifically approved by the office. An insurer may apply the premiums approved pursuant to s. 627.091 or its uniform deviation approved pursuant to this section to a particular insured according to underwriting guidelines filed with and approved by the office, such approval to be based on ss. 627.062 and 627.072.
(4) 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 office. If at any time after a deviation has been approved the office 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.
(5) For purposes of this section, the office, 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 office which approves the assumption of the business and the liabilities.
(6) The office shall submit an annual report to the President of the Senate and the Speaker of the House of Representatives by January 15 of each year which evaluates competition in the workers’ compensation insurance market in this state. The report must contain an analysis of the availability and affordability of workers’ compensation coverage and whether the current market structure, conduct, and performance are conducive to competition, based upon economic analysis and tests. The purpose of this report is to aid the Legislature in determining whether changes to the workers’ compensation rating laws are warranted. The report must also document that the office has complied with the provisions of s. 627.096 which require the office to investigate and study all workers’ compensation insurers in the state and to study the data, statistics, schedules, or other information as it finds necessary to assist in its review of workers’ compensation rate filings.
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; s. 96, ch. 2002-1; s. 1087, ch. 2003-261; s. 3, ch. 2004-82; s. 5, ch. 2015-42.
627.212 Workplace safety program surcharge.—The office 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 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.
History.—s. 97, ch. 93-415; s. 12, ch. 99-240; s. 1088, ch. 2003-261; s. 95, ch. 2013-18.
627.215 Excessive profits for commercial property and commercial casualty insurance prohibited.—
(1)(a) Each insurer group writing 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 office before July 1 of each year, on a form prescribed by the commission, 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.
This paragraph does not 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 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.
(2)(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. 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.
(3) 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.
(4) 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.
(5)(a) Beginning with the July 1, 1991, report for commercial property insurance and commercial casualty insurance, an excessive profit has been realized if the net aggregate underwriting gain for 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.
(6) 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.
(7) If the insurer group has realized an excessive profit, the office 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 office 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) Any excess profit of an insurance company 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.
(9)(a) Cash refunds to policyholders may be rounded to the nearest dollar.
(b) Data in required reports to the office may be rounded to the nearest dollar.
(c) Rounding, if elected by the insurer, shall be applied consistently.
(10)(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 after 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 within 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 office that the refunds have been made.
(11) 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.
(12) 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; s. 1089, ch. 2003-261; s. 7, ch. 2012-213.
627.221 Rating organizations; licensing; fee.—
(1) A person, whether located within or outside this state, may make application to the office 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 office or process affecting such rating organization may be served; and
(d) A statement of its qualifications as a rating organization.
If the office 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 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; s. 1090, ch. 2003-261.
627.231 Subscribers to rating organizations.—
(1) Subject to rules and regulations which have been approved by the office 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 office. If the office 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 office as if the application had been rejected. If the office 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; s. 1091, ch. 2003-261.
627.241 Notice of changes.—Every rating organization shall notify the office 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 office 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; s. 1092, ch. 2003-261.
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 office 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 office 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 office 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(3), from the system of expense provisions included in a filing made by the rating organization, the office 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 office 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; s. 1093, ch. 2003-261; s. 4, ch. 2014-131.
627.285 Independent actuarial peer review of workers’ compensation rating organization.—The Financial Services Commission shall at least once every other year contract for an independent actuarial peer review and analysis of the ratemaking processes of any licensed rating organization that makes rate filings for workers’ compensation insurance, and the rating organization shall fully cooperate in the peer review. The contract shall require submission of a final report to the commission, the President of the Senate, and the Speaker of the House of Representatives by February 1. The costs of the independent actuarial peer review shall be paid from the Workers’ Compensation Administration Trust Fund.
History.—s. 34, ch. 2003-412; s. 85, ch. 2018-110.
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 office, 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; s. 1094, ch. 2003-261.
627.301 Advisory organizations.—
(1) No advisory organization shall conduct its operations in this state unless and until it has filed with the office:
(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 office or process may be served.
(2) Every such advisory organization shall notify the office 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 office 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; s. 1095, ch. 2003-261.
627.311 Joint underwriters and joint reinsurers; public records and public meetings exemptions.—
(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 office 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 office 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 office 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 office shall be subject to the provisions of chapter 120. The Florida Automobile Joint Underwriting Association is created under the plan. The plan and the association:
(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 Chief Financial Officer. Two of the Chief Financial Officer’s appointees must be chosen from the insurance industry. Any board member appointed by the Chief Financial Officer 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 office may, however, determine that an agent may be appointed to a servicing carrier if, after public hearing, the office 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, the Chief Financial Officer, or the office 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) May require from the insured proof that he or she has obtained the mandatory types and amounts of insurance from another admitted carrier prior to the cancellation of a policy the insured obtained from the plan and prior to the return of any unearned premium the insured paid for such coverage from the plan. This paragraph does not apply to any person who provides proof of sale or inoperability of the vehicle covered under the policy purchased from the plan or relocation outside the state.
(m) May cancel personal lines or commercial policies issued by the plan within the first 60 days after the effective date of the policy or binder for nonpayment of premium if the check issued for payment of the premium is dishonored for any reason or if any other form of payment is rejected or deemed invalid. An insured may not cancel a policy or binder within the first 90 days after its effective date, or within a lesser period as required by the plan, except:
1. Upon total destruction of the insured motor vehicle;
2. Upon transfer of ownership of the insured motor vehicle; or
3. After purchase of another policy or binder covering the motor vehicle that was covered under the policy being canceled.
(4) The Florida Automobile Joint Underwriting Association:
(a) Shall keep the following records confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution:
1. Underwriting files, except that a policyholder or an applicant shall have access to his or her own underwriting files.
2. Claims files, until termination of all litigation and settlement of all claims arising out of the same incident. Confidential and exempt claims files may be released to other governmental agencies in the furtherance of their duties and responsibilities. The receiving agency must maintain the confidential and exempt status of the claims files.
3. 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.
4. Proprietary information licensed to the association under contract when the contract provides for the confidentiality of such information.
5. All information relating to the medical condition or medical status of an association employee which is not relevant to that employee’s capacity to perform his or her duties, except as otherwise provided in this paragraph. Information which is confidential and exempt shall include, but is not limited to, information relating to workers’ compensation, insurance benefits, and retirement or disability benefits.
6. All records relating 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).
7. Information relating to negotiations for financing, reinsurance, depopulation, or contractual services, until the conclusion of the negotiations.
8. Minutes of closed meetings regarding confidential and exempt underwriting files or confidential and exempt claims files until termination of all litigation and settlement of all claims with regard to that claim, except that information otherwise made confidential or exempt by law must be redacted.
When an authorized insurer is considering underwriting a risk insured by the association, relevant confidential and exempt underwriting files and confidential and exempt claims files may be released to the insurer, provided the insurer agrees in writing, notarized and under oath, to maintain the confidential and exempt status 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 confidential and exempt underwriting files and confidential and exempt 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 maintain the confidential and exempt status of the information received.
(b) Shall keep portions of association meetings during which confidential and exempt underwriting files or confidential and exempt claims files are discussed exempt from the provisions of s. 286.011 and s. 24(b), Art. I of the State Constitution. All closed portions of association meetings 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(1)(d)-(f), 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 confidential and exempt information, of any closed meeting during which confidential and exempt claims files are discussed shall become public as to individual claims files after settlement of that claim.
(5)(a) The office shall, after consultation with insurers, approve a joint underwriting plan of insurers which shall operate as the Florida Workers’ Compensation Joint Underwriting Association, Inc., 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 procure such insurance through the voluntary market. Except as provided herein, the plan must have actuarially sound rates that ensure that the plan is self-supporting.
(b) The operation of the plan is subject to the supervision of a 9-member board of governors. Each member described in subparagraph 1., subparagraph 2., subparagraph 3., or subparagraph 5. shall be appointed by the Financial Services Commission and shall serve at the pleasure of the commission. The board of governors shall be comprised of:
1. Two representatives 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 who shall be appointed by the commission from a list of five nominees for each vacancy submitted by those 20 domestic insurers. The commission may reject all of the nominees recommended for a position and request that the insurers submit a new list of five different recommended nominees for the position who have not previously been recommended by the insurers;
2. Two representatives 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 who shall be appointed by the commission from a list of five nominees for each vacancy submitted by those 20 foreign insurers. The commission may reject all of the nominees recommended for a position and request that the insurers submit a new list of five different recommended nominees for the position who have not previously been recommended by the insurers;
3. One representative of the largest property and casualty insurance agents’ association in this state who shall be appointed by the commission from a list of five nominees for each vacancy submitted by the association. The commission may reject all of the nominees recommended for a position and request that the association submit a new list of five different recommended nominees for the position who have not previously been recommended by the association;
4. The consumer advocate appointed under s. 627.0613 or the consumer advocate’s designee; and
5. Three other persons appointed by the commission.
Each board member shall be appointed to a 4-year term and may be appointed to consecutive terms. A vacancy on the board shall be filled in the same manner as the original appointment for the unexpired portion of the term. The Financial Services Commission shall designate a member of the board to serve as chair. The meetings and records of the board of governors and plan are subject to chapters 119 and 286, unless otherwise exempted by law.
(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 and approved by order of the office. The plan is subject to continuous review by the office. The office may, by order, withdraw approval of all or part of a plan if the office determines that conditions have changed since approval was granted and that the purposes of the plan require changes in the plan. The plan of operation must:
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.
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 reviewed and updated periodically.
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. All insureds of the plan must participate in the safety program.
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 goods and 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.
a. Purchases that equal or exceed $2,500 but are less than or equal to $25,000, shall be made by receipt of written quotes, telephone quotes, or informal bids, if practical. The procurement of goods or services valued over $25,000 is subject to competitive solicitation, except in situations in which the goods or services are provided by a sole source or are deemed an emergency purchase, or the services are exempted from competitive-solicitation requirements under s. 287.057(3)(e). Justification for the sole-sourcing or emergency procurement must be documented. Contracts for goods or services valued at or over $100,000 are subject to board approval.
b. The board shall determine whether it is more cost-effective and in the best interests of the plan to use legal services provided by in-house attorneys employed by the plan rather than contracting with outside counsel. In making such determination, the board shall document its findings and shall consider the expertise needed; whether time commitments exceed in-house staff resources; whether local representation is needed; the travel, lodging, and other costs associated with in-house representation; and such other factors that the board determines are relevant.
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 office on a date specified by the office and containing such information as the office 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. For employers otherwise eligible for coverage under the plan, establish three tiers of employers meeting the criteria and subject to the rate limitations specified in this subparagraph.
a. Tier One.—
(I) Criteria; rated employers.—An employer that has an experience modification rating shall be included in Tier One if the employer meets all of the following:
(A) The experience modification is below 1.00.
(B) The employer had no lost-time claims subsequent to the applicable experience modification rating period.
(C) The total of the employer’s medical-only claims subsequent to the applicable experience modification rating period did not exceed 20 percent of premium.
(II) Criteria; non-rated employers.—An employer that does not have an experience modification rating shall be included in Tier One if the employer meets all of the following:
(A) The employer had no lost-time claims for the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan.
(B) The total of the employer’s medical-only claims for the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan did not exceed 20 percent of premium.
(C) The employer has secured workers’ compensation coverage for the entire 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan.
(D) The employer is able to provide the plan with a loss history generated by the employer’s prior workers’ compensation insurer, except if the employer is not able to produce a loss history due to the insolvency of an insurer, the receiver shall provide to the plan, upon the request of the employer or the employer’s agent, a copy of the employer’s loss history from the records of the insolvent insurer if the loss history is contained in records of the insurer which are in the possession of the receiver. If the receiver is unable to produce the loss history, the employer may, in lieu of the loss history, submit an affidavit from the employer and the employer’s insurance agent setting forth the loss history.
(E) The employer is not a new business.
(III) Premiums.—The premiums for Tier One insureds shall be set at a premium level 25 percent above the comparable voluntary market premiums until the plan has sufficient experience as determined by the board to establish an actuarially sound rate for Tier One, at which point the board shall, subject to paragraph (e), adjust the rates, if necessary, to produce actuarially sound rates, provided such rate adjustment shall not take effect prior to January 1, 2007.
b. Tier Two.—
(I) Criteria; rated employers.—An employer that has an experience modification rating shall be included in Tier Two if the employer meets all of the following:
(A) The experience modification is equal to or greater than 1.00 but not greater than 1.10.
(B) The employer had no lost-time claims subsequent to the applicable experience modification rating period.
(C) The total of the employer’s medical-only claims subsequent to the applicable experience modification rating period did not exceed 20 percent of premium.
(II) Criteria; non-rated employers.—An employer that does not have any experience modification rating shall be included in Tier Two if the employer is a new business. An employer shall be included in Tier Two if the employer has less than 3 years of loss experience in the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan and the employer meets all of the following:
(A) The employer had no lost-time claims for the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan.
(B) The total of the employer’s medical-only claims for the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan did not exceed 20 percent of premium.
(C) The employer is able to provide the plan with a loss history generated by the workers’ compensation insurer that provided coverage for the portion or portions of such period during which the employer had secured workers’ compensation coverage, except if the employer is not able to produce a loss history due to the insolvency of an insurer, the receiver shall provide to the plan, upon the request of the employer or the employer’s agent, a copy of the employer’s loss history from the records of the insolvent insurer if the loss history is contained in records of the insurer which are in the possession of the receiver. If the receiver is unable to produce the loss history, the employer may, in lieu of the loss history, submit an affidavit from the employer and the employer’s insurance agent setting forth the loss history.
(III) Premiums.—The premiums for Tier Two insureds shall be set at a rate level 50 percent above the comparable voluntary market premiums until the plan has sufficient experience as determined by the board to establish an actuarially sound rate for Tier Two, at which point the board shall, subject to paragraph (e), adjust the rates, if necessary, to produce actuarially sound rates, provided such rate adjustment shall not take effect prior to January 1, 2007.
c. Tier Three.—
(I) Eligibility.—An employer shall be included in Tier Three if the employer does not meet the criteria for Tier One or Tier Two.
(II) Rates.—The board shall establish, subject to paragraph (e), and the plan shall charge, actuarially sound rates for Tier Three insureds.
23. For Tier One or Tier Two employers which employ no nonexempt employees or which report payroll which is less than the minimum wage hourly rate for one full-time employee for 1 year at 40 hours per week, the plan shall establish actuarially sound premiums, provided, however, that the premiums may not exceed $2,500. These premiums shall be in addition to the fee specified in subparagraph 26. When the plan establishes actuarially sound rates for all employers in Tier One and Tier Two, the premiums for employers referred to in this paragraph are no longer subject to the $2,500 cap.
24. Provide for a depopulation program to reduce the number of insureds in the plan. If an employer insured through the plan is offered coverage from a voluntary market carrier:
a. During the first 30 days of coverage under the plan;
b. Before a policy is issued under the plan;
c. By issuance of a policy upon expiration or cancellation of the policy under the plan; or
d. By assumption of the plan’s obligation with respect to an in-force policy,
that employer is no longer eligible for coverage through the plan. The premium for risks assumed by the voluntary market carrier must be no greater than the premium the insured would have paid under the plan, and shall be adjusted upon renewal to reflect changes in the plan rates and the tier for which the insured would qualify as of the time of renewal. The insured may be charged such premiums only for the first 3 years of coverage in the voluntary market. A premium under this subparagraph is deemed approved and is not an excess premium for purposes of s. 627.171.
25. Require that policies issued and applications must include a notice that the policy could be replaced by a policy issued from a voluntary market carrier and that, if an offer of coverage is obtained from a voluntary market carrier, the policyholder is no longer eligible for coverage through the plan. The notice must also specify that acceptance of coverage under the plan creates a conclusive presumption that the applicant or policyholder is aware of this potential.
26. Require that each application for coverage and each renewal premium be accompanied by a nonrefundable fee of $475 to cover costs of administration and fraud prevention. The board may, with the prior approval of the office, increase the amount of the fee pursuant to a rate filing to reflect increased costs of administration and fraud prevention. The fee is not subject to commission and is fully earned upon commencement of coverage.
(d)1. The funding of the plan shall include premiums as provided in subparagraph (c)22. and assessments as provided in this paragraph.
2.a. If the board determines that a deficit exists in Tier One or Tier Two or that there is any deficit remaining attributable to any of the plan’s former subplans and that the deficit cannot be fully funded by using policyholder surplus attributable to former subplan C or, if the surplus in the former subplan C does not fully fund the deficit, the board shall request the office to levy, by order, a deficit assessment against premiums charged to insureds for workers’ compensation insurance by insurers as defined in s. 631.904(5). The office shall issue the order after verifying the amount of the deficit. The assessment shall be specified as a percentage of future premium collections, as recommended by the board and approved by the office. The same percentage shall apply to premiums on all workers’ compensation policies issued or renewed during the 12-month period beginning on the effective date of the assessment, as specified in the order.
b. With respect to each insurer collecting premiums that are subject to the assessment, the insurer shall collect the assessment at the same time as the insurer collects the premium payment for each policy and shall remit the assessments collected to the plan as provided in the order issued by the office. The office shall verify the accurate and timely collection and remittance of deficit assessments and shall report such information to the board. Each insurer collecting assessments shall provide such information with respect to premiums and collections as may be required by the office to enable the office to monitor and audit compliance with this paragraph.
c. Deficit assessments are not considered part of an insurer’s rate, are not premium, and are not subject to the premium tax, to the assessments under ss. 440.49 and 440.51, to the surplus lines tax, to any fees, or to any commissions. The deficit assessment imposed shall become plan funds at the moment of collection and shall not constitute income to the insurer for any purpose, including financial reporting on the insurer’s income statement. An insurer is liable for all assessments that the insurer collects and must treat the failure of an insured to pay an assessment as a failure to pay premium. An insurer is not liable for uncollectible assessments.
d. When an insurer is required to return unearned premium, the insurer shall also return any collected assessments attributable to the unearned premium.
e. Deficit assessments as described in this subparagraph shall not be levied after July 1, 2012.
3.a. All policies issued to Tier Three insureds shall be assessable. All Tier Three assessable policies must be clearly identified as assessable by containing, in contrasting color and in not less than 10-point type, the following statement:
“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.”
b. The board may from time to time assess Tier Three insureds to whom the plan has issued assessable policies for the purpose of funding plan deficits. Any such assessment shall be based upon a reasonable actuarial estimate of the amount of the deficit, taking into account the amount needed to fund medical and indemnity reserves and reserves for incurred but not reported claims, and allowing for general administrative expenses, the cost of levying and collecting the assessment, a reasonable allowance for estimated uncollectible assessments, and allocated and unallocated loss adjustment expenses.
c. Each Tier Three insured’s share of a deficit shall be computed by applying to the premium earned on the insured’s policy or policies during the period to be covered by the assessment the ratio of the total deficit to the total premiums earned during such period upon all policies subject to the assessment. If one or more Tier Three insureds fail to pay an assessment, the other Tier Three insureds shall be liable on a proportionate basis for additional assessments to fund the deficit. The plan may compromise and settle individual assessment claims without affecting the validity of or amounts due on assessments levied against other insureds. The plan may offer and accept discounted payments for assessments which are promptly paid. The plan may offset the amount of any unpaid assessment against unearned premiums which may otherwise be due to an insured. The plan shall institute legal action when necessary and appropriate to collect the assessment from any insured who fails to pay an assessment when due.
d. The venue of a proceeding to enforce or collect an assessment or to contest the validity or amount of an assessment shall be in the Circuit Court of Leon County.
e. If the board finds that a deficit in Tier Three exists for any period and that an assessment is necessary, the board shall certify to the office the need for an assessment. No sooner than 30 days after the date of such certification, the board shall notify in writing each insured who is to be assessed that an assessment is being levied against the insured, and informing the insured of the amount of the assessment, the period for which the assessment is being levied, and the date by which payment of the assessment is due. The board shall establish a date by which payment of the assessment is due, which shall be no sooner than 30 days nor later than 120 days after the date on which notice of the assessment is mailed to the insured.
f. Whenever the board makes a determination that the plan does not have a sufficient cash basis to meet 6 months of projected cash needs due to a deficit in Tier Three, the board may request the department to transfer funds from the Workers’ Compensation Administration Trust Fund to the plan in an amount sufficient to fund the difference between the amount available and the amount needed to meet a 6-month projected cash need as determined by the board and verified by the office, subject to the approval of the Legislative Budget Commission. If the Legislative Budget Commission approves a transfer of funds under this sub-subparagraph, the plan shall report to the Legislature the transfer of funds and the Legislature shall review the plan during the next legislative session or the current legislative session, if the transfer occurs during a legislative session. This sub-subparagraph shall not apply until the plan determines and the office verifies that assessments collected by the plan pursuant to sub-subparagraph b. are insufficient to fund the deficit in Tier Three and to meet 6 months of projected cash needs.
4. The plan may offer rating, dividend plans, and other plans to encourage loss prevention programs.
(e) For rates and rating plans effective on or after January 1, 2008, 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 of each year thereafter, except as provided in subparagraph (c)22., 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 office within 30 calendar days after their effective dates, and shall be considered a “use and file” filing. Any disapproval by the office 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 shall be subject to any order by the office to return to policyholders any portion of the rates disapproved by the office. The office 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 office. 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 office before it becomes final.
(g) Whenever a deficit exists, the plan shall, within 90 days, provide the office 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, including policyholder surplus in former subplan C as authorized in subparagraph (d)2., through the use of assessments as provided in subparagraph (d)2., and through assessments on assessable policies as provided in subparagraph (d)3. Any entity that was a policyholder of former subplan C is not subject to any assessments that are attributable to deficits in former subplan C.
(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. Any state funds received by the plan in excess of the amount necessary to fund deficits in subplan D or any tier shall be returned to the state.
(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) Senior managers and officers, as defined in the plan of operation, and members of the board of governors are subject to the provisions of ss. 112.313, 112.3135, 112.3143, 112.3145, 112.316, and 112.317. Senior managers, officers, and board members are also required to file such disclosures with the Commission on Ethics and the Office of Insurance Regulation. The executive director of the plan or his or her designee shall notify each newly appointed and existing appointed member of the board of governors, senior manager, and officer of his or her duty to comply with the reporting requirements of s. 112.3145. At least quarterly, the executive director of the plan or his or her designee shall submit to the Commission on Ethics a list of names of the senior managers, officers, and members of the board of governors who are subject to the public disclosure requirements under s. 112.3145. Notwithstanding s. 112.313, an employee, officer, owner, or director of an insurance agency, insurance company, or other insurance entity may be a member of the board of governors unless such employee, officer, owner, or director of an insurance agency, insurance company, other insurance entity, or an affiliate provides policy issuance, policy administration, underwriting, claims handling, or payroll audit services. Notwithstanding s. 112.3143, such board member may not participate in or vote on a matter if the insurance agency, insurance company, or other insurance entity would obtain a special or unique benefit that would not apply to other similarly situated insurance entities.
(n) On or before July 1 of each year, employees of the plan shall sign and submit a statement to the plan attesting that they do not have a conflict of interest as defined in part III of chapter 112. As a condition of employment, all prospective employees shall sign and submit a conflict-of-interest statement to the plan.
(o) Any senior manager or officer of the plan who is employed by the plan as of January 1, 2008, regardless of the date of hire, and who subsequently retires or terminates employment may not represent another person or entity before the plan for 2 years after retirement or termination of employment from the plan.
(p) No part of the income of the plan may inure to the benefit of any private person.
(q) Notwithstanding ss. 112.3148 and 112.3149 or other provision of law, an employee or board member may not knowingly accept, directly or indirectly, any expenditure or gift from a person or entity, or an employee or representative of such person or entity, which has a contractual relationship with the plan or is under consideration for a contract. An employee or board member who fails to comply with paragraph (m) or this paragraph is subject to penalties provided under s. 112.317.
(r) This section does not prohibit the plan from providing insurance coverage to any employer with whom a former employee of the plan is affiliated or employing or reemploying any former employee of the plan in a part-time, full-time, temporary, or permanent capacity, so long as such employment does not violate any provision of part III of chapter 112.
(s) 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 not 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.
(t) 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 or to any person who is an affiliated person of a person who is delinquent in the payment of premiums, assessments, penalties, or surcharges owed to the plan. For purposes of this paragraph, the term “affiliated person” of another person means:
1. The spouse of such other natural person;
2. Any person who directly or indirectly owns or controls, or holds with the power to vote, 5 percent or more of the outstanding voting securities of such other person;
3. Any person who directly or indirectly owns 5 percent or more of the outstanding voting securities that are directly or indirectly owned or controlled, or held with the power to vote, by such other person;
4. Any person or group of persons who directly or indirectly control, are controlled by, or are under common control with such other person;
5. Any officer, director, trustee, partner, owner, manager, joint venturer, or employee, or other person performing duties similar to persons in those positions, of such other persons; or
6. Any person who has an officer, director, trustee, partner, or joint venturer in common with such other person.
(u) Effective July 1, 2004, the plan is exempt from the premium tax under s. 624.509 and any assessments under ss. 440.49 and 440.51.
(v) The Office of Insurance Regulation shall perform a comprehensive market conduct examination of the plan periodically to determine compliance with its plan of operation and internal operating policies and procedures.
(w) Upon dissolution, the assets of the plan shall be applied first to pay all debts, liabilities, and obligations of the plan, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the plan shall become property of the state and shall be deposited in the Workers’ Compensation Administration Trust Fund. However, dissolution may not take effect as long as the plan has financial obligations outstanding unless adequate provision has been made for the payment of financial obligations pursuant to the documents authorizing the financial obligations.
(6) 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 created under subsection (5) is a political subdivision of the state and is exempt from the corporate income tax.
(7) 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 subsection, 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.
(8) 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.
(9)(a) The Florida Automobile Joint Underwriting Association created under this section shall be deemed to have appointed its general manager as its agent to receive service of all legal process issued against the association in any civil action or proceeding in this state. Process so served shall be valid and binding upon the insurer.
(b) Service of process upon the association’s general manager as the association’s agent pursuant to such an appointment shall be the sole method of service of process upon the association.
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; s. 35, ch. 2001-91; s. 97, ch. 2002-1; s. 1, ch. 2003-108; s. 1, ch. 2003-169; s. 1096, ch. 2003-261; s. 35, ch. 2003-412; s. 1, ch. 2004-266; s. 46, ch. 2004-335; s. 11, ch. 2004-370; s. 156, ch. 2004-390; s. 17, ch. 2006-26; s. 3, ch. 2007-39; s. 1, ch. 2007-146; s. 147, ch. 2008-4; s. 38, ch. 2010-151; s. 2, ch. 2011-11; s. 23, ch. 2013-36; s. 18, ch. 2013-154; s. 2, ch. 2016-133.
627.312 Transitional provisions.—Effective upon this act becoming a law:
(1) Notwithstanding s. 627.311(5), no policy in subplan “D” of the Florida Workers’ Compensation Joint Underwriting Association is subject to an assessment for the purpose of funding a deficit.
(2) Any policy issued by the Florida Workers’ Compensation Joint Underwriting Association with an effective date between the date on which this act becomes a law and June 30, 2004, shall be rerated and placed in the appropriate tier provided in s. 627.311(5), as amended, effective July 1, 2004, and shall be subject to the premiums and charges provided for in that section as amended.
History.—s. 6, ch. 2004-266.
627.3121 Public records and public meetings exemptions.—
(1) The following records held by the Florida Workers’ Compensation Joint Underwriting Association, Inc., 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 be provided access to his or her own underwriting files.
(b) Claims files until termination of all litigation and the settlement of all claims arising out of the same accident, except that portions of the claims files may remain confidential or exempt if otherwise provided by law.
(c) Records obtained or generated by an 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) Proprietary information licensed to the association under contract if the contract requires the association to maintain the confidentiality of such information.
(e) Medical information relating to the medical condition or medical status of an individual.
(f) All records relative to an employee’s participation in an employee assistance program upon the entrance of the employee into the program, except as otherwise provided in s. 440.102(8).
(g) Information relating to negotiations for financing, reinsurance, reinsurance commutation agreements, depopulation, or contractual services until the conclusion of the negotiations.
(h) Reports provided to or submitted by the association regarding suspected fraud or other criminal activity and producer appeals and related reporting regarding suspected misconduct until such investigation is closed or ceases to be active.
(i) Information received from the Department of Revenue regarding payroll information and client lists of employee leasing companies obtained pursuant to ss. 440.381 and 468.529.
(j) A public record prepared by an attorney retained by the association to protect or represent the interests of the association, or prepared at the attorney’s express direction, that reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association. This protection is not waived by the release of such public record to another employee or officer of the same association or any person consulted by the association attorney.
(2)(a) The association may release confidential and exempt underwriting files and claims files to:
1. A carrier that is considering underwriting a risk insured by the association;
2. A producer seeking to place such a risk with such a carrier; or
3. Another entity seeking to arrange voluntary market coverage for association risks.
(b) Prior to the release authorized in paragraph (a), the carrier, producer, or other entity must agree in writing, notarized and under oath, to maintain the confidential and exempt status of such file until that carrier, producer, or other entity agrees to underwrite the risk or provide voluntary market coverage.
(3) Records made confidential and exempt by this section may be released, upon written request, to another agency in the performance of that agency’s official duties and responsibilities.
(4)(a) That portion of a meeting of the association’s board of governors, or any subcommittee of the association’s board, at which records made confidential and exempt by this section are discussed is exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution.
(b) All exempt portions of meetings shall be recorded and transcribed. The board 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. An exempt portion of any meeting may not be off the record.
(c) Subject to this section and s. 119.021(2), the court reporter’s notes of any exempt portion of a meeting shall be retained by the association for a minimum of 5 years.
(d)1. A transcript and minutes of exempt portions of meetings are confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
2. Those portions of the transcript or the minutes pertaining to a confidential and exempt claims file are no longer confidential and exempt upon termination of all litigation with regard to that claim.
History.—s. 1, ch. 2007-202; s. 1, ch. 2012-224.
627.313 Workers’ Compensation Joint Underwriting Plan; audit requirements.—The Workers’ Compensation Joint Underwriting Association is subject to the Florida Single Audit Act, as provided in s. 215.97, if the association expends a total amount of state financial assistance equal to or in excess of $300,000 in any fiscal year. Such audit reports shall be submitted to the President of the Senate, the Speaker of the House of Representatives, and the Governor pursuant to s. 215.97.
History.—s. 4, ch. 2004-266.
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 office for public inspection whenever requested and shall be available for public announcement only by the press, office, 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; s. 1098, ch. 2003-261.
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 office 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; s. 1099, ch. 2003-261.
627.331 Recording and reporting of loss, expense, and claims experience; rating information.—
(1) The commission 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 office in determining whether the insurer’s activities comply with the applicable standards of this code.
(2) In promulgating such rules and plans, the commission 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 office 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 adopted by the commission, 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; s. 1100, ch. 2003-261.
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 office. The office 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 office in sufficient detail to make a determination of rate adequacy. Prior to the filing of such experience with the office, 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 office 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 office 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 office 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 office 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 office. 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 office 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) Effective July 1, 2002, the association shall operate subject to the supervision and approval of a board of governors who are the same individuals that have been appointed by the Treasurer to serve on the board of governors of the Citizens Property Insurance Corporation.
(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 Miami-Dade, Broward, and Palm Beach Counties or at least 30 percent of the policies so removed cover risks located in Miami-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., 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 $25 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. 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. If the risk accepts an offer of coverage through the market assistance program or through a mechanism established by the association, either before the policy is issued by the association or during the first 30 days of coverage by the association, and the producing agent who submitted the application to the association is not currently appointed by the insurer, the insurer shall:
(I) Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the association; or
(II) Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the association’s usual and customary commission for the type of policy written.
If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I). Subject to the provisions of s. 627.3517, 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. When the association enters into a contractual agreement for a take-out plan, the producing agent of record of the association policy is entitled to retain any unearned commission on the policy, and the insurer shall:
(I) Pay to the producing agent of record of the association policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the association; or
(II) 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 greater of the insurer’s or the association’s usual and customary commission for the type of policy written.
If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I).
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 subparagraph (6)(q)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.
(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.
(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)1. 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.
2. Notwithstanding the provisions of subparagraph 1., the following area is eligible for coverage under this subsection effective July 1, 2002: the area within Port Canaveral which is bordered on the south by the City of Cape Canaveral, bordered on the west by the Banana River, and bordered on the north by United States Government property.
(f) As used in this subsection, the term “department” means the former Department of Insurance.
(3) POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK APPORTIONMENT.—
(a) The office 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 office. The office 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 office, in its 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 adopted by the commission.
(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 office 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 named by The Florida Bar, a physician named by the Florida Medical Association, a dentist named by the Florida Dental Association, and a hospital representative named by the Florida Hospital Association. The Chief Financial Officer shall select the representatives of the five insurers. One insurer representative shall be selected from recommendations of the American Insurance Association. One insurer representative shall be selected from recommendations of the Property Casualty Insurers Association of America. One insurer representative shall be selected from recommendations of the Florida Insurance Council. Two insurer representatives shall be selected to represent insurers that are not affiliated with these associations. During the first meeting of the board after June 30 of each year, the board shall choose one of its members to serve as chair of the board and another member to serve as vice chair of the board. There is no liability on the part of, and no cause of action 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 office 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 office in sufficient detail to make a determination of rate adequacy. Within 60 days after a rate filing, the office 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; 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 may 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 commission 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 (5) 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 office 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 office 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 office 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 office, 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 sub-subparagraph 1.e. 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 Chief Financial Officer, 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 Chief Financial Officer. 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 office 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 office 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 office, subject to its 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 office 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 office 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 office 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 office 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 Chief Financial Officer. 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 office 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, the Chief Financial Officer, or the office 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) CITIZENS PROPERTY INSURANCE CORPORATION.—
(a) The public purpose of this subsection is to ensure that there is an orderly market for property insurance for residents and businesses of this state.
1. The Legislature finds that private insurers are unwilling or unable to provide affordable property insurance coverage in this state to the extent sought and needed. The absence of affordable property insurance threatens the public health, safety, and welfare and likewise threatens the economic health of the state. The state therefore has a compelling public interest and a public purpose to assist in assuring that property in the state is insured and that it is insured at affordable rates so as to facilitate the remediation, reconstruction, and replacement of damaged or destroyed property in order to reduce or avoid the negative effects otherwise resulting to the public health, safety, and welfare, to the economy of the state, and to the revenues of the state and local governments which are needed to provide for the public welfare. It is necessary, therefore, to provide affordable property insurance to applicants who are in good faith entitled to procure insurance through the voluntary market but are unable to do so. The Legislature intends, therefore, that affordable property insurance be provided and that it continue to be provided, as long as necessary, through Citizens Property Insurance Corporation, a government entity that is an integral part of the state, and that is not a private insurance company. To that end, the corporation shall strive to increase the availability of affordable property insurance in this state, while achieving efficiencies and economies, and while providing service to policyholders, applicants, and agents which is no less than the quality generally provided in the voluntary market, for the achievement of the foregoing public purposes. Because it is essential for this government entity to have the maximum financial resources to pay claims following a catastrophic hurricane, it is the intent of the Legislature that the corporation continue to be an integral part of the state and that the income of the corporation be exempt from federal income taxation and that interest on the debt obligations issued by the corporation be exempt from federal income taxation.
2. The Residential Property and Casualty Joint Underwriting Association originally created by this statute shall be known as the Citizens Property Insurance Corporation. The corporation shall provide insurance for residential and commercial property, for applicants who are entitled, but, in good faith, are unable to procure insurance through the voluntary market. The corporation shall operate pursuant to a plan of operation approved by order of the Financial Services Commission. The plan is subject to continuous review by the commission. The commission may, by order, withdraw approval of all or part of a plan if the commission 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, mobile home owner, dwelling, tenant, condominium unit owner, and similar policies; and commercial lines residential coverage, which consists of the type of coverage provided by condominium association, apartment building, and similar policies.
3. With respect to coverage for personal lines residential structures:
a. Effective January 1, 2014, a structure that has a dwelling replacement cost of $1 million or more, or a single condominium unit that has a combined dwelling and contents replacement cost of $1 million or more, is not eligible for coverage by the corporation. Such dwellings insured by the corporation on December 31, 2013, may continue to be covered by the corporation until the end of the policy term. The office shall approve the method used by the corporation for valuing the dwelling replacement cost for the purposes of this subparagraph. If a policyholder is insured by the corporation before being determined to be ineligible pursuant to this subparagraph and such policyholder files a lawsuit challenging the determination, the policyholder may remain insured by the corporation until the conclusion of the litigation.
b. Effective January 1, 2015, a structure that has a dwelling replacement cost of $900,000 or more, or a single condominium unit that has a combined dwelling and contents replacement cost of $900,000 or more, is not eligible for coverage by the corporation. Such dwellings insured by the corporation on December 31, 2014, may continue to be covered by the corporation only until the end of the policy term.
c. Effective January 1, 2016, a structure that has a dwelling replacement cost of $800,000 or more, or a single condominium unit that has a combined dwelling and contents replacement cost of $800,000 or more, is not eligible for coverage by the corporation. Such dwellings insured by the corporation on December 31, 2015, may continue to be covered by the corporation until the end of the policy term.
d. Effective January 1, 2017, a structure that has a dwelling replacement cost of $700,000 or more, or a single condominium unit that has a combined dwelling and contents replacement cost of $700,000 or more, is not eligible for coverage by the corporation. Such dwellings insured by the corporation on December 31, 2016, may continue to be covered by the corporation until the end of the policy term.
The requirements of sub-subparagraphs b.-d. do not apply in counties where the office determines there is not a reasonable degree of competition. In such counties a personal lines residential structure that has a dwelling replacement cost of less than $1 million, or a single condominium unit that has a combined dwelling and contents replacement cost of less than $1 million, is eligible for coverage by the corporation.
4. It is the intent of the Legislature that policyholders, applicants, and agents of the corporation receive service and treatment of the highest possible level but never less than that generally provided in the voluntary market. It is also intended that the corporation be held to service standards no less than those applied to insurers in the voluntary market by the office with respect to responsiveness, timeliness, customer courtesy, and overall dealings with policyholders, applicants, or agents of the corporation.
5.a. Effective January 1, 2009, a personal lines residential structure that is located in the “wind-borne debris region,” as defined in s. 1609.2, International Building Code (2006), and that has an insured value on the structure of $750,000 or more is not eligible for coverage by the corporation unless the structure has opening protections as required under the Florida Building Code for a newly constructed residential structure in that area. A residential structure is deemed to comply with this sub-subparagraph if it has shutters or opening protections on all openings and if such opening protections complied with the Florida Building Code at the time they were installed.
b. Any major structure, as defined in s. 161.54(6)(a), that is newly constructed, or rebuilt, repaired, restored, or remodeled to increase the total square footage of finished area by more than 25 percent, pursuant to a permit applied for after July 1, 2015, is not eligible for coverage by the corporation if the structure is seaward of the coastal construction control line established pursuant to s. 161.053 or is within the Coastal Barrier Resources System as designated by 16 U.S.C. ss. 3501-3510.
6. With respect to wind-only coverage for commercial lines residential condominiums, effective July 1, 2014, a condominium shall be deemed ineligible for coverage if 50 percent or more of the units are rented more than eight times in a calendar year for a rental agreement period of less than 30 days.
(b)1. All insurers authorized to write one or more subject lines of business in this state are subject to assessment by the corporation and, for the purposes of this subsection, are referred to collectively as “assessable insurers.” Insurers writing one or more subject lines of business in this state pursuant to part VIII of chapter 626 are not assessable insurers; however, insureds who procure one or more subject lines of business in this state pursuant to part VIII of chapter 626 are subject to assessment by the corporation and are referred to collectively as “assessable insureds.” An insurer’s assessment liability begins on the first day of the calendar year following the year in which the insurer was issued a certificate of authority to transact insurance for subject lines of business in this state and terminates 1 year after the end of the first calendar year during which the insurer no longer holds a certificate of authority to transact insurance for subject lines of business in this state.
2.a. All revenues, assets, liabilities, losses, and expenses of the corporation shall be divided into three separate accounts as follows:
(I) A personal lines account for personal residential policies issued by the corporation which provides comprehensive, multiperil coverage on risks that are not located in areas eligible for coverage by the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for policies that do not provide coverage for the peril of wind on risks that are located in such areas;
(II) A commercial lines account for commercial residential and commercial nonresidential policies issued by the corporation which provides coverage for basic property perils on risks that are not located in areas eligible for coverage by the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for policies that do not provide coverage for the peril of wind on risks that are located in such areas; and
(III) A coastal account for personal residential policies and commercial residential and commercial nonresidential property policies issued by the corporation which provides coverage for the peril of wind on risks that are located in areas eligible for coverage by the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002. The corporation may offer policies that provide multiperil coverage and shall offer policies that provide coverage only for the peril of wind for risks located in areas eligible for coverage in the coastal account. Effective July 1, 2014, the corporation shall cease offering new commercial residential policies providing multiperil coverage and shall instead continue to offer commercial residential wind-only policies, and may offer commercial residential policies excluding wind. The corporation may, however, continue to renew a commercial residential multiperil policy on a building that is insured by the corporation on June 30, 2014, under a multiperil policy. In issuing multiperil coverage, the corporation may use its approved policy forms and rates for the personal lines account. An applicant or insured who is eligible to purchase a multiperil policy from the corporation may purchase a multiperil policy from an authorized insurer without prejudice to the applicant’s or insured’s eligibility to prospectively purchase a policy that provides coverage only for the peril of wind from the corporation. An applicant or insured who is eligible for a corporation policy that provides coverage only for the peril of wind may elect to purchase or retain such policy and also purchase or retain coverage excluding wind from an authorized insurer without prejudice to the applicant’s or insured’s eligibility to prospectively purchase a policy that provides multiperil coverage from the corporation. It is the goal of the Legislature that there be an overall average savings of 10 percent or more for a policyholder who currently has a wind-only policy with the corporation, and an ex-wind policy with a voluntary insurer or the corporation, and who obtains a multiperil policy from the corporation. It is the intent of the Legislature that the offer of multiperil coverage in the coastal account be made and implemented in a manner that does not adversely affect the tax-exempt status of the corporation or creditworthiness of or security for currently outstanding financing obligations or credit facilities of the coastal account, the personal lines account, or the commercial lines account. The coastal account must also include quota share primary insurance under subparagraph (c)2. The area eligible for coverage under the coastal account also includes the area within Port Canaveral, which is bordered on the south by the City of Cape Canaveral, bordered on the west by the Banana River, and bordered on the north by Federal Government property.
b. The three separate accounts must be maintained as long as financing obligations entered into by the Florida Windstorm Underwriting Association or Residential Property and Casualty Joint Underwriting Association are outstanding, in accordance with the terms of the corresponding financing documents. If the financing obligations are no longer outstanding, the corporation may use a single account for all revenues, assets, liabilities, losses, and expenses of the corporation. Consistent with this subparagraph and prudent investment policies that minimize the cost of carrying debt, the board shall exercise its best efforts to retire existing debt or obtain the approval of necessary parties to amend the terms of existing debt, so as to structure the most efficient plan for consolidating the three separate accounts into a single account.
c. Creditors of the Residential Property and Casualty Joint Underwriting Association and the accounts specified in sub-sub-subparagraphs a.(I) and (II) may have a claim against, and recourse to, those accounts and no claim against, or recourse to, the account referred to in sub-sub-subparagraph a.(III). Creditors of the Florida Windstorm Underwriting Association have a claim against, and recourse to, the account referred to in sub-sub-subparagraph a.(III) and no claim against, or recourse to, the accounts referred to in sub-sub-subparagraphs a.(I) and (II).
d. Revenues, assets, liabilities, losses, and expenses not attributable to particular accounts shall be prorated among the accounts.
e. The Legislature finds that the revenues of the corporation are revenues that are necessary to meet the requirements set forth in documents authorizing the issuance of bonds under this subsection.
f. The income of the corporation may not inure to the benefit of any private person.
3. With respect to a deficit in an account:
a. After accounting for the Citizens policyholder surcharge imposed under sub-subparagraph i., if the remaining projected deficit incurred in the coastal account in a particular calendar year:
(I) Is not greater than 2 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year, the entire deficit shall be recovered through regular assessments of assessable insurers under paragraph (q) and assessable insureds.
(II) Exceeds 2 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year, the corporation shall levy regular assessments on assessable insurers under paragraph (q) and on assessable insureds in an amount equal to the greater of 2 percent of the projected deficit or 2 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year. Any remaining projected deficit shall be recovered through emergency assessments under sub-subparagraph d.
b. Each assessable insurer’s share of the amount being assessed under sub-subparagraph a. must be in the proportion that the assessable 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. The assessment percentage applicable to each assessable insured is the ratio of the amount being assessed under sub-subparagraph a. to the aggregate statewide direct written premium for the subject lines of business for the prior year. Assessments levied by the corporation on assessable insurers under sub-subparagraph a. must be paid as required by the corporation’s plan of operation and paragraph (q). Assessments levied by the corporation on assessable insureds under sub-subparagraph a. shall be collected by the surplus lines agent at the time the surplus lines agent collects the surplus lines tax required by s. 626.932, and paid to the Florida Surplus Lines Service Office at the time the surplus lines agent pays the surplus lines tax to that office. Upon receipt of regular assessments from surplus lines agents, the Florida Surplus Lines Service Office shall transfer the assessments directly to the corporation as determined by the corporation.
c. After accounting for the Citizens policyholder surcharge imposed under sub-subparagraph i., the remaining projected deficits in the personal lines account and in the commercial lines account in a particular calendar year shall be recovered through emergency assessments under sub-subparagraph d.
d. Upon a determination by the board of governors that a projected deficit in an account exceeds the amount that is expected to be recovered through regular assessments under sub-subparagraph a., plus the amount that is expected to be recovered through surcharges under sub-subparagraph i., the board, after verification by the office, shall levy emergency assessments for as many years as necessary to cover the deficits, to be collected by assessable insurers and the corporation and collected from assessable insureds upon issuance or renewal of policies for subject lines of business, excluding National Flood Insurance policies. The amount collected in a particular year must be a uniform percentage of that year’s direct written premium for subject lines of business and all accounts of the corporation, excluding National Flood Insurance Program policy premiums, as annually determined by the board and verified by the office. The office 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. The office shall notify assessable insurers and the Florida Surplus Lines Service Office of the date on which assessable insurers shall begin to collect and assessable insureds shall begin to pay such assessment. The date must be at least 90 days after the date the corporation levies emergency assessments pursuant to this sub-subparagraph. Notwithstanding any other provision of law, the corporation and each assessable insurer that writes subject lines of business shall collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment. Emergency assessments levied by the corporation on assessable insureds shall be collected by the surplus lines agent at the time the surplus lines agent collects the surplus lines tax required by s. 626.932 and paid to the Florida Surplus Lines Service Office at the time the surplus lines agent pays the surplus lines tax to that office. The emergency assessments collected shall be transferred directly to the corporation on a periodic basis as determined by the corporation and held by the corporation solely in the applicable account. The aggregate amount of emergency assessments levied for an account in any calendar year may be less than but may not exceed the greater of 10 percent of the amount needed to cover the deficit, plus interest, fees, commissions, required reserves, and other costs associated with financing the original deficit, or 10 percent of the aggregate statewide direct written premium for subject lines of business and all accounts of the corporation for the prior year, plus interest, fees, commissions, required reserves, and other costs associated with financing the deficit.
e. The corporation may pledge the proceeds of assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other insurance and reinsurance recoverables, policyholder surcharges and other surcharges, and other funds available to the corporation as the source of revenue for and to secure bonds issued under paragraph (q), 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 corporation in covering claims and expenses attributable to a catastrophe. As used in this subsection, the term “assessments” includes regular assessments under sub-subparagraph a. or subparagraph (q)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 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 indebtedness.
f. As used in this subsection for purposes of any deficit incurred on or after January 25, 2007, the term “subject lines of business” means insurance written by assessable insurers or procured by assessable insureds for all property and casualty lines of business in this state, but not including workers’ compensation or medical malpractice. As used in this sub-subparagraph, the term “property and casualty lines of business” includes all lines of business identified on Form 2, Exhibit of Premiums and Losses, in the annual statement required of authorized insurers under s. 624.424 and any rule adopted under this section, except for those lines identified as accident and health insurance and except for policies written under the National Flood Insurance Program or the Federal Crop Insurance Program. For purposes of this sub-subparagraph, the term “workers’ compensation” includes both workers’ compensation insurance and excess workers’ compensation insurance.
g. The Florida Surplus Lines Service Office shall determine annually the aggregate statewide written premium in subject lines of business procured by assessable insureds and report that information to the corporation in a form and at a time the corporation specifies to ensure that the corporation can meet the requirements of this subsection and the corporation’s financing obligations.
h. The Florida Surplus Lines Service Office shall verify the proper application by surplus lines agents of assessment percentages for regular assessments and emergency assessments levied under this subparagraph on assessable insureds and assist the corporation in ensuring the accurate, timely collection and payment of assessments by surplus lines agents as required by the corporation.
i. Upon determination by the board of governors that an account has a projected deficit, the board shall levy a Citizens policyholder surcharge against all policyholders of the corporation.
(I) The surcharge shall be levied as a uniform percentage of the premium for the policy of up to 15 percent of such premium, which funds shall be used to offset the deficit.
(II) The surcharge is payable upon cancellation or termination of the policy, upon renewal of the policy, or upon issuance of a new policy by the corporation within the first 12 months after the date of the levy or the period of time necessary to fully collect the surcharge amount.
(III) The corporation may not levy any regular assessments under paragraph (q) pursuant to sub-subparagraph a. or sub-subparagraph b. with respect to a particular year’s deficit until the corporation has first levied the full amount of the surcharge authorized by this sub-subparagraph.
(IV) The surcharge is not considered premium and is not subject to commissions, fees, or premium taxes. However, failure to pay the surcharge shall be treated as failure to pay premium.
j. If the amount of any assessments or surcharges collected from corporation policyholders, assessable insurers or their policyholders, or assessable insureds exceeds the amount of the deficits, such excess amounts shall be remitted to and retained by the corporation in a reserve to be used by the corporation, as determined by the board of governors and approved by the office, to pay claims or reduce any past, present, or future plan-year deficits or to reduce outstanding debt.
(c) The corporation’s plan of operation:
1. Must provide for adoption of residential property and casualty insurance policy forms and commercial residential and nonresidential property insurance forms, which must be approved by the office before use. The corporation shall adopt the following policy forms:
a. Standard personal lines policy forms that are comprehensive multiperil policies providing full coverage of a residential property equivalent to the coverage provided in the private insurance market under an HO-3, HO-4, or HO-6 policy.
b. Basic personal lines policy forms that 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 is more limited than the coverage under a standard policy.
c. Commercial lines residential and nonresidential policy forms that are generally similar to the basic perils of full coverage obtainable for commercial residential structures and commercial nonresidential structures in the admitted voluntary market.
d. Personal lines and commercial lines residential property insurance forms that cover the peril of wind only. The forms are applicable only to residential properties located in areas eligible for coverage under the coastal account referred to in sub-subparagraph (b)2.a.
e. Commercial lines nonresidential property insurance forms that cover the peril of wind only. The forms are applicable only to nonresidential properties located in areas eligible for coverage under the coastal account referred to in sub-subparagraph (b)2.a.
f. The corporation may adopt variations of the policy forms listed in sub-subparagraphs a.-e. which contain more restrictive coverage.
g. Effective January 1, 2013, the corporation shall offer a basic personal lines policy similar to an HO-8 policy with dwelling repair based on common construction materials and methods.
2. Must provide that the corporation adopt a program in which the corporation and authorized insurers enter into quota share primary insurance agreements for hurricane coverage, as defined in s. 627.4025(2)(a), for eligible risks, and adopt property insurance forms for eligible risks which cover the peril of wind only.
a. As used in this subsection, the term:
(I) “Quota share primary insurance” means an arrangement in which the primary hurricane coverage of an eligible risk is provided in specified percentages by the corporation and an authorized insurer. The corporation and authorized insurer are each solely responsible for a specified percentage of hurricane coverage of an eligible risk as set forth in a quota share primary insurance agreement between the corporation and an authorized insurer and the insurance contract. The responsibility of the corporation or authorized insurer to pay its specified percentage of hurricane losses of an eligible risk, as set forth in the agreement, may not be altered by the inability of the other party to pay its specified percentage of losses. Eligible risks that are provided hurricane coverage through a quota share primary insurance arrangement must be provided policy forms that set forth the obligations of the corporation and authorized insurer under the arrangement, clearly specify the percentages of quota share primary insurance provided by the corporation and authorized insurer, and conspicuously and clearly state that the authorized insurer and the corporation may not be held responsible beyond their specified percentage of coverage of hurricane losses.
(II) “Eligible risks” means personal lines residential and commercial lines residential risks that meet the underwriting criteria of the corporation and are located in areas that were eligible for coverage by the Florida Windstorm Underwriting Association on January 1, 2002.
b. The corporation may enter into quota share primary insurance agreements with authorized insurers at corporation coverage levels of 90 percent and 50 percent.
c. If the corporation determines that additional coverage levels are necessary to maximize participation in quota share primary insurance agreements by authorized insurers, the corporation may establish additional coverage levels. However, the corporation’s quota share primary insurance coverage level may not exceed 90 percent.
d. Any quota share primary insurance agreement entered into between an authorized insurer and the corporation must provide for a uniform specified percentage of coverage of hurricane losses, by county or territory as set forth by the corporation board, for all eligible risks of the authorized insurer covered under the agreement.
e. Any quota share primary insurance agreement entered into between an authorized insurer and the corporation is subject to review and approval by the office. However, such agreement shall be authorized only as to insurance contracts entered into between an authorized insurer and an insured who is already insured by the corporation for wind coverage.
f. For all eligible risks covered under quota share primary insurance agreements, the exposure and coverage levels for both the corporation and authorized insurers shall be reported by the corporation to the Florida Hurricane Catastrophe Fund. For all policies of eligible risks covered under such agreements, the corporation and the authorized insurer must maintain complete and accurate records for the purpose of exposure and loss reimbursement audits as required by fund rules. The corporation and the authorized insurer shall each maintain duplicate copies of policy declaration pages and supporting claims documents.
g. The corporation board shall establish in its plan of operation standards for quota share agreements which ensure that there is no discriminatory application among insurers as to the terms of the agreements, pricing of the agreements, incentive provisions if any, and consideration paid for servicing policies or adjusting claims.
h. The quota share primary insurance agreement between the corporation and an authorized insurer must set forth the specific terms under which coverage is provided, including, but not limited to, the sale and servicing of policies issued under the agreement by the insurance agent of the authorized insurer producing the business, the reporting of information concerning eligible risks, the payment of premium to the corporation, and arrangements for the adjustment and payment of hurricane claims incurred on eligible risks by the claims adjuster and personnel of the authorized insurer. Entering into a quota sharing insurance agreement between the corporation and an authorized insurer is voluntary and at the discretion of the authorized insurer.
3. May provide that the corporation 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 corporation may borrow funds by issuing bonds or by incurring other indebtedness, and shall have other powers reasonably necessary to effectuate the requirements of this subsection, including, without limitation, the power to issue bonds and incur other indebtedness in order to refinance outstanding bonds or other indebtedness. The corporation may seek judicial validation of its bonds or other indebtedness under chapter 75. The corporation may issue bonds or incur other indebtedness, or have bonds issued on its behalf by a unit of local government pursuant to subparagraph (q)2. in the absence of a hurricane or other weather-related event, upon a determination by the corporation, subject to approval by the office, that such action would enable it to efficiently meet the financial obligations of the corporation and that such financings are reasonably necessary to effectuate the requirements of this subsection. The corporation may take all actions needed to facilitate tax-free status for such bonds or indebtedness, including formation of trusts or other affiliated entities. The corporation may pledge assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other reinsurance recoverables, policyholder surcharges and other surcharges, and other funds available to the corporation 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 corporation operate subject to the supervision and approval of a board of governors consisting of nine individuals who are residents of this state and who are from different geographical areas of the state, one of whom is appointed by the Governor and serves solely to advocate on behalf of the consumer. The appointment of a consumer representative by the Governor is deemed to be within the scope of the exemption provided in s. 112.313(7)(b) and is in addition to the appointments authorized under sub-subparagraph a.
a. The Governor, the Chief Financial Officer, the President of the Senate, and the Speaker of the House of Representatives shall each appoint two members of the board. At least one of the two members appointed by each appointing officer must have demonstrated expertise in insurance and be deemed to be within the scope of the exemption provided in s. 112.313(7)(b). The Chief Financial Officer shall designate one of the appointees as chair. All board members serve at the pleasure of the appointing officer. All members of the board are subject to removal at will by the officers who appointed them. All board members, including the chair, must be appointed to serve for 3-year terms beginning annually on a date designated by the plan. However, for the first term beginning on or after July 1, 2009, each appointing officer shall appoint one member of the board for a 2-year term and one member for a 3-year term. A board vacancy shall be filled for the unexpired term by the appointing officer. The Chief Financial Officer shall appoint a technical advisory group to provide information and advice to the board in connection with the board’s duties under this subsection. The executive director and senior managers of the corporation shall be engaged by the board and serve at the pleasure of the board. Any executive director appointed on or after July 1, 2006, is subject to confirmation by the Senate. The executive director is responsible for employing other staff as the corporation may require, subject to review and concurrence by the board.
b. The board shall create a Market Accountability Advisory Committee to assist the corporation in developing awareness of its rates and its customer and agent service levels in relationship to the voluntary market insurers writing similar coverage.
(I) The members of the advisory committee consist of the following 11 persons, one of whom must be elected chair by the members of the committee: four representatives, one appointed by the Florida Association of Insurance Agents, one by the Florida Association of Insurance and Financial Advisors, one by the Professional Insurance Agents of Florida, and one by the Latin American Association of Insurance Agencies; three representatives appointed by the insurers with the three highest voluntary market share of residential property insurance business in the state; one representative from the Office of Insurance Regulation; one consumer appointed by the board who is insured by the corporation at the time of appointment to the committee; one representative appointed by the Florida Association of Realtors; and one representative appointed by the Florida Bankers Association. All members shall be appointed to 3-year terms and may serve for consecutive terms.
(II) The committee shall report to the corporation at each board meeting on insurance market issues which may include rates and rate competition with the voluntary market; service, including policy issuance, claims processing, and general responsiveness to policyholders, applicants, and agents; and matters relating to depopulation.
5. Must provide a procedure for determining the eligibility of a risk for coverage, as follows:
a. Subject to s. 627.3517, with respect to personal lines residential risks, if the risk is offered coverage from an authorized insurer at the insurer’s approved rate under a standard policy including wind coverage or, if consistent with the insurer’s underwriting rules as filed with the office, a basic policy including wind coverage, for a new application to the corporation for coverage, the risk is not eligible for any policy issued by the corporation unless the premium for coverage from the authorized insurer is more than 15 percent greater than the premium for comparable coverage from the corporation. Whenever an offer of coverage for a personal lines residential risk is received for a policyholder of the corporation at renewal from an authorized insurer, if the offer is equal to or less than the corporation’s renewal premium for comparable coverage, the risk is not eligible for coverage with the corporation. If the risk is not able to obtain such offer, the risk is eligible for a standard policy including wind coverage or a basic policy including wind coverage issued by the corporation; however, if the risk could not be insured under a standard policy including wind coverage regardless of market conditions, the risk is eligible for a basic policy including wind coverage unless rejected under subparagraph 8. However, a policyholder removed from the corporation through an assumption agreement remains eligible for coverage from the corporation until the end of the assumption period. The corporation 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.
(I) If the risk accepts an offer of coverage through the market assistance plan or through a mechanism established by the corporation other than a plan established by s. 627.3518, before a policy is issued to the risk by the corporation or during the first 30 days of coverage by the corporation, and the producing agent who submitted the application to the plan or to the corporation is not currently appointed by the insurer, the insurer shall:
(A) Pay to the producing agent of record of the policy for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(B) Offer to allow the producing agent of record of the policy to continue servicing the policy for at least 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.
If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).
(II) If the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on the policy, and the insurer shall:
(A) Pay to the producing agent of record, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(B) Offer to allow the producing agent of record to continue servicing the policy for at least 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.
If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).
b. With respect to commercial lines residential risks, for a new application to the corporation for coverage, 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 a policy issued by the corporation unless the premium for coverage from the authorized insurer is more than 15 percent greater than the premium for comparable coverage from the corporation. Whenever an offer of coverage for a commercial lines residential risk is received for a policyholder of the corporation at renewal from an authorized insurer, if the offer is equal to or less than the corporation’s renewal premium for comparable coverage, the risk is not eligible for coverage with the corporation. If the risk is not able to obtain any such offer, the risk is eligible for a policy including wind coverage issued by the corporation. However, a policyholder removed from the corporation through an assumption agreement remains eligible for coverage from the corporation until the end of the assumption period.
(I) If the risk accepts an offer of coverage through the market assistance plan or through a mechanism established by the corporation other than a plan established by s. 627.3518, before a policy is issued to the risk by the corporation or during the first 30 days of coverage by the corporation, and the producing agent who submitted the application to the plan or the corporation is not currently appointed by the insurer, the insurer shall:
(A) Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(B) Offer to allow the producing agent of record of the policy to continue servicing the policy for at least 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.
If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).
(II) If the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on the policy, and the insurer shall:
(A) Pay to the producing agent of record, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(B) Offer to allow the producing agent of record to continue servicing the policy for at least 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.
If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).
c. For purposes of determining comparable coverage under sub-subparagraphs a. and b., the comparison must be based on those forms and coverages that are reasonably comparable. The corporation may rely on a determination of comparable coverage and premium made by the producing agent who submits the application to the corporation, made in the agent’s capacity as the corporation’s agent. A comparison may be made solely of the premium with respect to the main building or structure only on the following basis: the same coverage A or other building limits; the same percentage hurricane deductible that applies on an annual basis or that applies to each hurricane for commercial residential property; the same percentage of ordinance and law coverage, if the same limit is offered by both the corporation and the authorized insurer; the same mitigation credits, to the extent the same types of credits are offered both by the corporation and the authorized insurer; the same method for loss payment, such as replacement cost or actual cash value, if the same method is offered both by the corporation and the authorized insurer in accordance with underwriting rules; and any other form or coverage that is reasonably comparable as determined by the board. If an application is submitted to the corporation for wind-only coverage in the coastal account, the premium for the corporation’s wind-only policy plus the premium for the ex-wind policy that is offered by an authorized insurer to the applicant must be compared to the premium for multiperil coverage offered by an authorized insurer, subject to the standards for comparison specified in this subparagraph. If the corporation or the applicant requests from the authorized insurer a breakdown of the premium of the offer by types of coverage so that a comparison may be made by the corporation or its agent and the authorized insurer refuses or is unable to provide such information, the corporation may treat the offer as not being an offer of coverage from an authorized insurer at the insurer’s approved rate.
6. Must include rules for classifications of risks and rates.
7. Must provide that if premium and investment income for an account attributable to a particular calendar year are in excess of projected losses and expenses for the account attributable to that year, such excess shall be held in surplus in the account. Such surplus must be available to defray deficits in that account as to future years and used for that purpose before assessing assessable insurers and assessable insureds as to any calendar year.
8. Must provide objective criteria and procedures to be uniformly applied to 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 must 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 corporation shall be construed as the private placement of insurance, and the provisions of chapter 120 do not apply.
9. Must provide that the corporation make its best efforts to procure catastrophe reinsurance at reasonable rates, to cover its projected 100-year probable maximum loss as determined by the board of governors.
10. The policies issued by the corporation must provide that if the corporation or the market assistance plan obtains an offer from an authorized insurer to cover the risk at its approved rates, the risk is no longer eligible for renewal through the corporation, except as otherwise provided in this subsection.
11. Corporation policies and applications must include a notice that the corporation policy could, under this section, be replaced with a policy issued by an authorized insurer which does not provide coverage identical to the coverage provided by the corporation. The notice must also specify that acceptance of corporation coverage creates a conclusive presumption that the applicant or policyholder is aware of this potential.
12. May establish, subject to approval by the office, 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 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 continue to have access to coverage from the corporation. If coverage is sought in connection with a real property transfer, the requirements and procedures may not provide 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.
13. Must provide that, with respect to the coastal account, any assessable insurer with a surplus as to policyholders of $25 million or less writing 25 percent or more of its total countrywide property insurance premiums in this state may petition the office, within the first 90 days of each calendar year, to qualify as a limited apportionment company. A regular assessment levied by the corporation on a limited apportionment company for a deficit incurred by the corporation for the coastal account may be paid to the corporation on a monthly basis as the assessments are collected by the limited apportionment company from its insureds, but a limited apportionment company must begin collecting the regular assessments not later than 90 days after the regular assessments are levied by the corporation, and the regular assessments must be paid in full within 15 months after being levied by the corporation. A limited apportionment company shall collect from its policyholders any emergency assessment imposed under sub-subparagraph (b)3.d. The plan must provide that, if the office determines that any regular assessment will result in an impairment of the surplus of a limited apportionment company, the office may direct that all or part of such assessment be deferred as provided in subparagraph (q)4. However, an emergency assessment to be collected from policyholders under sub-subparagraph (b)3.d. may not be limited or deferred.
14. Must provide that the corporation appoint as its licensed agents only those agents who throughout such appointments also hold an appointment as defined in s. 626.015 by an insurer who is authorized to write and is actually writing or renewing personal lines residential property coverage, commercial residential property coverage, or commercial nonresidential property coverage within the state.
15. Must provide a premium payment plan option to its policyholders which, at a minimum, allows for quarterly and semiannual payment of premiums. A monthly payment plan may, but is not required to, be offered.
16. Must limit coverage on mobile homes or manufactured homes built before 1994 to actual cash value of the dwelling rather than replacement costs of the dwelling.
17. Must provide coverage for manufactured or mobile home dwellings. Such coverage must also include the following attached structures:
a. Screened enclosures that are aluminum framed or screened enclosures that are not covered by the same or substantially the same materials as those of the primary dwelling;
b. Carports that are aluminum or carports that are not covered by the same or substantially the same materials as those of the primary dwelling; and
c. Patios that have a roof covering that is constructed of materials that are not the same or substantially the same materials as those of the primary dwelling.
The corporation shall make available a policy for mobile homes or manufactured homes for a minimum insured value of at least $3,000.
18. May provide such limits of coverage as the board determines, consistent with the requirements of this subsection.
19. May require commercial property to meet specified hurricane mitigation construction features as a condition of eligibility for coverage.
20. Must provide that new or renewal policies issued by the corporation on or after January 1, 2012, which cover sinkhole loss do not include coverage for any loss to appurtenant structures, driveways, sidewalks, decks, or patios that are directly or indirectly caused by sinkhole activity. The corporation shall exclude such coverage using a notice of coverage change, which may be included with the policy renewal, and not by issuance of a notice of nonrenewal of the excluded coverage upon renewal of the current policy.
21. As of January 1, 2012, must require that the agent obtain from an applicant for coverage from the corporation an acknowledgment signed by the applicant, which includes, at a minimum, the following statement:
ACKNOWLEDGMENT OF POTENTIAL SURCHARGE
AND ASSESSMENT LIABILITY:
1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA LEGISLATURE.
2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM, BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES ARE REGULATED AND APPROVED BY THE STATE.
3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA LEGISLATURE.
4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE STATE OF FLORIDA.
a. The corporation shall maintain, in electronic format or otherwise, a copy of the applicant’s signed acknowledgment and provide a copy of the statement to the policyholder as part of the first renewal after the effective date of this subparagraph.
b. The signed acknowledgment form creates a conclusive presumption that the policyholder understood and accepted his or her potential surcharge and assessment liability as a policyholder of the corporation.
(d)1. All prospective employees for senior management positions, as defined by the plan of operation, are subject to background checks as a prerequisite for employment. The office shall conduct the background checks pursuant to ss. 624.34, 624.404(3), and 628.261.
2. On or before July 1 of each year, employees of the corporation must sign and submit a statement attesting that they do not have a conflict of interest, as defined in part III of chapter 112. As a condition of employment, all prospective employees must sign and submit to the corporation a conflict-of-interest statement.
3. The executive director, senior managers, and members of the board of governors are subject to part III of chapter 112, including, but not limited to, the code of ethics and public disclosure and reporting of financial interests, pursuant to s. 112.3145. For purposes of applying part III of chapter 112 to activities of the executive director, senior managers, and members of the board of governors, those persons shall be considered public officers or employees and the corporation shall be considered their agency. Notwithstanding s. 112.3143(2), a board member may not vote on any measure that would inure to his or her special private gain or loss; that he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312; or that he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Before the vote is taken, such member shall publicly state to the assembly the nature of his or her interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes. Senior managers and board members are also required to file such disclosures with the Commission on Ethics and the Office of Insurance Regulation. The executive director of the corporation or his or her designee shall notify each existing and newly appointed member of the board of governors and senior managers of their duty to comply with the reporting requirements of part III of chapter 112. At least quarterly, the executive director or his or her designee shall submit to the Commission on Ethics a list of names of the senior managers and members of the board of governors who are subject to the public disclosure requirements under s. 112.3145.
4. Notwithstanding s. 112.3148, s. 112.3149, or any other provision of law, an employee or board member may not knowingly accept, directly or indirectly, any gift or expenditure from a person or entity, or an employee or representative of such person or entity, which has a contractual relationship with the corporation or who is under consideration for a contract. An employee or board member who fails to comply with subparagraph 3. or this subparagraph is subject to penalties provided under ss. 112.317 and 112.3173.
5. Any senior manager of the corporation who is employed on or after January 1, 2007, regardless of the date of hire, who subsequently retires or terminates employment is prohibited from representing another person or entity before the corporation for 2 years after retirement or termination of employment from the corporation.
6. The executive director, members of the board of governors, and senior managers of the corporation are prohibited from having any employment or contractual relationship for 2 years after retirement from or termination of service to the corporation with an insurer that has entered into a take-out bonus agreement with the corporation.
(e) The corporation is subject to s. 287.057 for the purchase of commodities and contractual services except as otherwise provided in this paragraph. Services provided by tradepersons or technical experts to assist a licensed adjuster in the evaluation of individual claims are not subject to the procurement requirements of this section. Additionally, the procurement of financial services providers and underwriters must be made pursuant to s. 627.3513. Contracts for goods or services valued at or more than $100,000 are subject to approval by the board.
1. The corporation is an agency for purposes of s. 287.057, except that, for purposes of s. 287.057(22), the corporation is an eligible user.
a. The authority of the Department of Management Services and the Chief Financial Officer under s. 287.057 extends to the corporation as if the corporation were an agency.
b. The executive director of the corporation is the agency head under s. 287.057, except for resolution of bid protests for which the board would serve as the agency head.
2. The corporation must provide notice of a decision or intended decision concerning a solicitation, contract award, or exceptional purchase by electronic posting. Such notice must contain the following statement: “Failure to file a protest within the time prescribed in this section constitutes a waiver of proceedings.”
a. A person adversely affected by the corporation’s decision or intended decision to award a contract pursuant to s. 287.057(1) or (3)(c) who elects to challenge the decision must file a written notice of protest with the executive director of the corporation within 72 hours after the corporation posts a notice of its decision or intended decision. For a protest of the terms, conditions, and specifications contained in a solicitation, including provisions governing the methods for ranking bids, proposals, replies, awarding contracts, reserving rights of further negotiation, or modifying or amending any contract, the notice of protest must be filed in writing within 72 hours after posting the solicitation. Saturdays, Sundays, and state holidays are excluded in the computation of the 72-hour time period.
b. A formal written protest must be filed within 10 days after the date the notice of protest is filed. The formal written protest must state with particularity the facts and law upon which the protest is based. Upon receipt of a formal written protest that has been timely filed, the corporation must stop the solicitation or contract award process until the subject of the protest is resolved by final board action unless the executive director sets forth in writing particular facts and circumstances that require the continuance of the solicitation or contract award process without delay in order to avoid an immediate and serious danger to the public health, safety, or welfare.
(I) The corporation must provide an opportunity to resolve the protest by mutual agreement between the parties within 7 business days after receipt of the formal written protest.
(II) If the subject of a protest is not resolved by mutual agreement within 7 business days, the corporation’s board must transmit the protest to the Division of Administrative Hearings and contract with the division to conduct a hearing to determine the merits of the protest and to issue a recommended order. The contract must provide for the corporation to reimburse the division for any costs incurred by the division for court reporters, transcript preparation, travel, facility rental, and other customary hearing costs in the manner set forth in s. 120.65(9). The division has jurisdiction to determine the facts and law concerning the protest and to issue a recommended order. The division’s rules and procedures apply to these proceedings; the division’s applicable bond requirements do not apply. The protest must be heard by the division at a publicly noticed meeting in accordance with procedures established by the division.
c. In a protest of an invitation-to-bid or request-for-proposals procurement, submissions made after the bid or proposal opening which amend or supplement the bid or proposal may not be considered. In protesting an invitation-to-negotiate procurement, submissions made after the corporation announces its intent to award a contract, reject all replies, or withdraw the solicitation that amends or supplements the reply may not be considered. Unless otherwise provided by law, the burden of proof rests with the party protesting the corporation’s action. In a competitive-procurement protest, other than a rejection of all bids, proposals, or replies, the administrative law judge must conduct a de novo proceeding to determine whether the corporation’s proposed action is contrary to the corporation’s governing statutes, the corporation’s rules or policies, or the solicitation specifications. The standard of proof for the proceeding is whether the corporation’s action was clearly erroneous, contrary to competition, arbitrary, or capricious. In any bid-protest proceeding contesting an intended corporation action to reject all bids, proposals, or replies, the standard of review by the board is whether the corporation’s intended action is illegal, arbitrary, dishonest, or fraudulent.
d. Failure to file a notice of protest or failure to file a formal written protest constitutes a waiver of proceedings.
3. The board, acting as agency head, shall consider the recommended order of an administrative law judge in a public meeting and take final action on the protest. Any further legal remedy lies with the First District Court of Appeal.
(f) The corporation is subject to the provisions of chapter 255.
(g) The board shall determine whether it is more cost-effective and in the best interests of the corporation to use legal services provided by in-house attorneys employed by the corporation rather than contracting with outside counsel. In making such determination, the board shall document its findings and shall consider: the expertise needed; whether time commitments exceed in-house staff resources; whether local representation is needed; the travel, lodging and other costs associated with in-house representation; and such other factors that the board determines are relevant.
(h) The corporation may not retain a lobbyist to represent it before the legislative branch or executive branch. However, full-time employees of the corporation may register as lobbyists and represent the corporation before the legislative branch or executive branch.
(i)1. The Office of the Internal Auditor is established within the corporation to provide a central point for coordination of and responsibility for activities that promote accountability, integrity, and efficiency to the policyholders and to the taxpayers of this state. The internal auditor shall be appointed by the board of governors, shall report to and be under the general supervision of the board of governors, and is not subject to supervision by an employee of the corporation. Administrative staff and support shall be provided by the corporation. The internal auditor shall be appointed without regard to political affiliation. It is the duty and responsibility of the internal auditor to:
a. Provide direction for, supervise, conduct, and coordinate audits, investigations, and management reviews relating to the programs and operations of the corporation.
b. Conduct, supervise, or coordinate other activities carried out or financed by the corporation for the purpose of promoting efficiency in the administration of, or preventing and detecting fraud, abuse, and mismanagement in, its programs and operations.
c. Submit final audit reports, reviews, or investigative reports to the board of governors, the executive director, the members of the Financial Services Commission, and the President of the Senate and the Speaker of the House of Representatives.
d. Keep the board of governors informed concerning fraud, abuses, and internal control deficiencies relating to programs and operations administered or financed by the corporation, recommend corrective action, and report on the progress made in implementing corrective action.
e. Cooperate and coordinate activities with the corporation’s inspector general.
2. On or before February 15, the internal auditor shall prepare an annual report evaluating the effectiveness of the internal controls of the corporation and providing recommendations for corrective action, if necessary, and summarizing the audits, reviews, and investigations conducted by the office during the preceding fiscal year. The final report shall be furnished to the board of governors and the executive director, the President of the Senate, the Speaker of the House of Representatives, and the Financial Services Commission.
(j) All records of the corporation, except as otherwise provided by law, are subject to the record retention requirements of s. 119.021.
(k)1. The corporation shall establish and maintain a unit or division to investigate possible fraudulent claims by insureds or by persons making claims for services or repairs against policies held by insureds; or it may contract with others to investigate possible fraudulent claims for services or repairs against policies held by the corporation pursuant to s. 626.9891. The corporation must comply with reporting requirements of s. 626.9891. An employee of the corporation shall notify the corporation’s Office of the Inspector General and the Division of Investigative and Forensic Services within 48 hours after having information that would lead a reasonable person to suspect that fraud may have been committed by any employee of the corporation.
2. The corporation shall establish a unit or division responsible for receiving and responding to consumer complaints, which unit or division is the sole responsibility of a senior manager of the corporation.
(l) The office shall conduct a comprehensive market conduct examination of the corporation every 2 years to determine compliance with its plan of operation and internal operations procedures. The first market conduct examination report shall be submitted to the President of the Senate and the Speaker of the House of Representatives no later than February 1, 2009. Subsequent reports shall be submitted on or before February 1 every 2 years thereafter.
(m) The Auditor General shall conduct an operational audit of the corporation every 3 years to evaluate management’s performance in administering laws, policies, and procedures governing the operations of the corporation in an efficient and effective manner. The scope of the review shall include, but is not limited to, evaluating claims handling, customer service, take-out programs and bonuses, financing arrangements, procurement of goods and services, internal controls, and the internal audit function. The initial audit must be completed by February 1, 2009.
(n)1. Rates for coverage provided by the corporation must be actuarially sound and subject to s. 627.062, except as otherwise provided in this paragraph. The corporation shall file its recommended rates with the office at least annually. The corporation shall provide any additional information regarding the rates which the office requires. The office shall consider the recommendations of the board and issue a final order establishing the rates for the corporation within 45 days after the recommended rates are filed. The corporation may not pursue an administrative challenge or judicial review of the final order of the office.
2. In addition to the rates otherwise determined pursuant to this paragraph, the corporation shall impose and collect an amount equal to the premium tax provided in s. 624.509 to augment the financial resources of the corporation.
3. After the public hurricane loss-projection model under s. 627.06281 has been found to be accurate and reliable by the Florida Commission on Hurricane Loss Projection Methodology, the model shall be considered when establishing the windstorm portion of the corporation’s rates. The corporation may use the public model results in combination with the results of private models to calculate rates for the windstorm portion of the corporation’s rates. This subparagraph does not require or allow the corporation to adopt rates lower than the rates otherwise required or allowed by this paragraph.
4. The rate filings for the corporation which were approved by the office and took effect January 1, 2007, are rescinded, except for those rates that were lowered. As soon as possible, the corporation shall begin using the lower rates that were in effect on December 31, 2006, and provide refunds to policyholders who paid higher rates as a result of that rate filing. The rates in effect on December 31, 2006, remain in effect for the 2007 and 2008 calendar years except for any rate change that results in a lower rate. The next rate change that may increase rates shall take effect pursuant to a new rate filing recommended by the corporation and established by the office, subject to this paragraph.
5. Beginning on July 15, 2009, and annually thereafter, the corporation must make a recommended actuarially sound rate filing for each personal and commercial line of business it writes, to be effective no earlier than January 1, 2010.
6. Beginning on or after January 1, 2010, and notwithstanding the board’s recommended rates and the office’s final order regarding the corporation’s filed rates under subparagraph 1., the corporation shall annually implement a rate increase which, except for sinkhole coverage, does not exceed 10 percent for any single policy issued by the corporation, excluding coverage changes and surcharges.
7. The corporation may also implement an increase to reflect the effect on the corporation of the cash buildup factor pursuant to s. 215.555(5)(b).
8. The corporation’s implementation of rates as prescribed in subparagraph 6. shall cease for any line of business written by the corporation upon the corporation’s implementation of actuarially sound rates. Thereafter, the corporation shall annually make a recommended actuarially sound rate filing for each commercial and personal line of business the corporation writes.
(o) If coverage in an account is deactivated pursuant to paragraph (p), coverage through the corporation shall be reactivated by order of the office 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 office that the conditions of this subparagraph have been met for eligibility for coverage in the corporation, 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 office may activate coverage by order for the period of the emergency upon a finding by the office that the emergency significantly affects the availability of residential property insurance.
(p)1. The corporation shall file with the office quarterly statements of financial condition, an annual statement of financial condition, and audited financial statements in the manner prescribed by law. In addition, the corporation shall report to the office monthly on the types, premium, exposure, and distribution by county of its policies in force, and shall submit other reports as the office requires to carry out its oversight of the corporation.
2. The activities of the corporation shall be reviewed at least annually by the office to determine whether coverage shall be deactivated in an account on the basis that the conditions giving rise to its activation no longer exist.
(q)1. The corporation shall certify to the office its needs for annual assessments as to a particular calendar year, and for any 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 office shall approve such certification, and the corporation shall levy such annual or interim assessments. Such assessments shall be prorated as provided in paragraph (b). The corporation shall take all reasonable and prudent steps necessary to collect the amount of assessments due from each assessable insurer, including, if prudent, filing suit to collect the assessments, and the office may provide such assistance to the corporation it deems appropriate. If the corporation is unable to collect an assessment from any assessable insurer, the uncollected assessments shall be levied as an additional assessment against the assessable insurers and any assessable insurer required to pay an additional assessment as a result of such failure to pay shall have a cause of action against such nonpaying assessable insurer. Assessments shall be included as an appropriate factor in the making of rates. The failure of a surplus lines agent to collect and remit any regular or emergency assessment levied by the corporation is considered to be a violation of s. 626.936 and subjects the surplus lines agent to the penalties provided in that section.
2. The governing body of any unit of local government, any residents of which are insured by the corporation, 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 corporation, for the purpose of defraying deficits of the corporation. 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 corporation, 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 under this subparagraph 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 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 corporation. Any such unit of local government may enter into such contracts with the corporation 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 corporation 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.
3.a. The corporation shall adopt one or more programs subject to approval by the office for the reduction of both new and renewal writings in the corporation. Beginning January 1, 2008, any program the corporation adopts for the payment of bonuses to an insurer for each risk the insurer removes from the corporation shall comply with s. 627.3511(2) and may not exceed the amount referenced in s. 627.3511(2) for each risk removed. The corporation may consider any prudent and not unfairly discriminatory approach to reducing corporation writings, and may adopt a credit against assessment liability or other liability that provides an incentive for insurers to take risks out of the corporation and to keep risks out of the corporation by maintaining or increasing voluntary writings in counties or areas in which corporation risks are highly concentrated and a program to provide a formula under which an insurer voluntarily taking risks out of the corporation by maintaining or increasing voluntary writings will be relieved wholly or partially from assessments under sub-subparagraph (b)3.a. However, any “take-out bonus” or payment to an insurer must be conditioned on the property being insured for at least 5 years by the insurer, unless canceled or nonrenewed by the policyholder. If the policy is canceled or nonrenewed by the policyholder before the end of the 5-year period, the amount of the take-out bonus must be prorated for the time period the policy was insured. When the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on such policy, and the insurer shall either:
(I) Pay to the producing agent of record of the policy, for the first year, an amount which is the greater of the insurer’s usual and customary commission for the type of policy written or a policy fee equal to the usual and customary commission of the corporation; or
(II) Offer to allow the producing agent of record of the 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. If the producing agent is unwilling or unable to accept appointment by the new insurer, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I).
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 corporation. With the approval of the office, 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 corporation, 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 an assessable insurer, other than an emergency assessment collected from policyholders pursuant to sub-subparagraph (b)3.d., if the office finds that payment of the assessment would endanger or impair the solvency of the insurer. In the event an assessment against an assessable insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other assessable insurers in a manner consistent with the basis for assessments set forth in paragraph (b).
5. Effective July 1, 2007, in order to evaluate the costs and benefits of approved take-out plans, if the corporation pays a bonus or other payment to an insurer for an approved take-out plan, it shall maintain a record of the address or such other identifying information on the property or risk removed in order to track if and when the property or risk is later insured by the corporation.
6. Any policy taken out, assumed, or removed from the corporation is, as of the effective date of the take-out, assumption, or removal, direct insurance issued by the insurer and not by the corporation, even if the corporation continues to service the policies. This subparagraph applies to policies of the corporation and not policies taken out, assumed, or removed from any other entity.
7. For a policy taken out, assumed, or removed from the corporation, the insurer may, for a period of no more than 3 years, continue to use any of the corporation’s policy forms or endorsements that apply to the policy taken out, removed, or assumed without obtaining approval from the office for use of such policy form or endorsement.
(r) Nothing in this subsection shall be construed to preclude the issuance of residential property insurance coverage pursuant to part VIII of chapter 626.
(s)1. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any assessable insurer or its agents or employees, the corporation or its agents or employees, members of the board of governors or their respective designees at a board meeting, corporation committee members, or the office 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:
a. Any of the foregoing persons or entities for any willful tort;
b. The corporation or its producing agents for breach of any contract or agreement pertaining to insurance coverage;
c. The corporation with respect to issuance or payment of debt;
d. Any assessable insurer with respect to any action to enforce an assessable insurer’s obligations to the corporation under this subsection; or
e. The corporation in any pending or future action for breach of contract or for benefits under a policy issued by the corporation; in any such action, the corporation shall be liable to the policyholders and beneficiaries for attorney’s fees under s. 627.428.
2. The corporation shall manage its claim employees, independent adjusters, and others who handle claims to ensure they carry out the corporation’s duty to its policyholders to handle claims carefully, timely, diligently, and in good faith, balanced against the corporation’s duty to the state to manage its assets responsibly to minimize its assessment potential.
(t) For the purposes of s. 199.183(1), the corporation shall be considered a political subdivision of the state and shall be exempt from the corporate income tax. The premiums, assessments, investment income, and other revenue of the corporation are funds received for providing property insurance coverage as required by this subsection, paying claims for Florida citizens insured by the corporation, securing and repaying debt obligations issued by the corporation, and conducting all other activities of the corporation, and shall not be considered taxes, fees, licenses, or charges for services imposed by the Legislature on individuals, businesses, or agencies outside state government. Bonds and other debt obligations issued by or on behalf of the corporation are not to be considered “state bonds” within the meaning of s. 215.58(8). The corporation is subject to the procurement provisions of chapter 287 as provided in paragraph (e), and policies and decisions of the corporation relating to incurring debt, levying of assessments and the sale, issuance, continuation, terms and claims under corporation policies, and all services relating thereto, are not subject to the provisions of chapter 120. The corporation is not required to obtain or to hold a certificate of authority issued by the office, nor is it required to participate as a member insurer of the Florida Insurance Guaranty Association. However, the corporation is required to pay, in the same manner as an authorized insurer, assessments levied by the Florida Insurance Guaranty Association. It is the intent of the Legislature that the tax exemptions provided in this paragraph will augment the financial resources of the corporation to better enable the corporation to fulfill its public purposes. Any debt obligations issued by the corporation, their transfer, and the income therefrom, including any profit made on the sale thereof, shall at all times be free from taxation of every kind by the state and any political subdivision or local unit or other instrumentality thereof; however, this exemption does not apply to any tax imposed by chapter 220 on interest, income, or profits on debt obligations owned by corporations other than the corporation.
(u) Upon a determination by the office that the conditions giving rise to the establishment and activation of the corporation no longer exist, the corporation is dissolved. Upon dissolution, the assets of the corporation shall be applied first to pay all debts, liabilities, and obligations of the corporation, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the corporation shall become property of the state and shall be deposited in the Florida Hurricane Catastrophe Fund. However, no dissolution shall take effect as long as the corporation has bonds or other financial obligations outstanding unless adequate provision has been made for the payment of the bonds or other financial obligations pursuant to the documents authorizing the issuance of the bonds or other financial obligations.
(v)1. Effective July 1, 2002, policies of the Residential Property and Casualty Joint Underwriting Association become policies of the corporation. All obligations, rights, assets and liabilities of the association, including bonds, note and debt obligations, and the financing documents pertaining to them become those of the corporation as of July 1, 2002. The corporation is not required to issue endorsements or certificates of assumption to insureds during the remaining term of in-force transferred policies.
2. Effective July 1, 2002, policies of the Florida Windstorm Underwriting Association are transferred to the corporation and become policies of the corporation. All obligations, rights, assets, and liabilities of the association, including bonds, note and debt obligations, and the financing documents pertaining to them are transferred to and assumed by the corporation on July 1, 2002. The corporation is not required to issue endorsements or certificates of assumption to insureds during the remaining term of in-force transferred policies.
3. The Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association shall take all actions necessary to further evidence the transfers and provide the documents and instruments of further assurance as may reasonably be requested by the corporation for that purpose. The corporation shall execute assumptions and instruments as the trustees or other parties to the financing documents of the Florida Windstorm Underwriting Association or the Residential Property and Casualty Joint Underwriting Association may reasonably request to further evidence the transfers and assumptions, which transfers and assumptions, however, are effective on the date provided under this paragraph whether or not, and regardless of the date on which, the assumptions or instruments are executed by the corporation. Subject to the relevant financing documents pertaining to their outstanding bonds, notes, indebtedness, or other financing obligations, the moneys, investments, receivables, choses in action, and other intangibles of the Florida Windstorm Underwriting Association shall be credited to the coastal account of the corporation, and those of the personal lines residential coverage account and the commercial lines residential coverage account of the Residential Property and Casualty Joint Underwriting Association shall be credited to the personal lines account and the commercial lines account, respectively, of the corporation.
4. Effective July 1, 2002, a new applicant for property insurance coverage who would otherwise have been eligible for coverage in the Florida Windstorm Underwriting Association is eligible for coverage from the corporation as provided in this subsection.
5. The transfer of all policies, obligations, rights, assets, and liabilities from the Florida Windstorm Underwriting Association to the corporation and the renaming of the Residential Property and Casualty Joint Underwriting Association as the corporation does not affect the coverage with respect to covered policies as defined in s. 215.555(2)(c) provided to these entities by the Florida Hurricane Catastrophe Fund. The coverage provided by the fund to the Florida Windstorm Underwriting Association based on its exposures as of June 30, 2002, and each June 30 thereafter shall be redesignated as coverage for the coastal account of the corporation. Notwithstanding any other provision of law, the coverage provided by the fund to the Residential Property and Casualty Joint Underwriting Association based on its exposures as of June 30, 2002, and each June 30 thereafter shall be transferred to the personal lines account and the commercial lines account of the corporation. Notwithstanding any other provision of law, the coastal account shall be treated, for all Florida Hurricane Catastrophe Fund purposes, as if it were a separate participating insurer with its own exposures, reimbursement premium, and loss reimbursement. Likewise, the personal lines and commercial lines accounts shall be viewed together, for all fund purposes, as if the two accounts were one and represent a single, separate participating insurer with its own exposures, reimbursement premium, and loss reimbursement. The coverage provided by the fund to the corporation shall constitute and operate as a full transfer of coverage from the Florida Windstorm Underwriting Association and Residential Property and Casualty Joint Underwriting Association to the corporation.
(w) 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 corporation created or purported to be created pursuant to any financing documents to secure any bonds or other indebtedness of the corporation 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 corporation under the laws of this state.
2. The proceeding does not relieve the corporation of its obligation, or otherwise affect its ability to perform its obligation, to continue to collect, or levy and collect, assessments, policyholder surcharges or other surcharges under sub-subparagraph (b)3.i., or any other rights, revenues, or other assets of the corporation 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, policyholder surcharges 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 corporation 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 corporation 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 or financial product, as defined in the plan of operation of the corporation related to such bonds or indebtedness.
4. Any such pledge or sale of assessments, revenues, contract rights, or other rights or assets of the corporation 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 corporation 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.
5. As long as the corporation has any bonds outstanding, the corporation may not file a voluntary petition under chapter 9 of the federal Bankruptcy Code or such corresponding chapter or sections as may be in effect, from time to time, and a public officer or any organization, entity, or other person may not authorize the corporation to be or become a debtor under chapter 9 of the federal Bankruptcy Code or such corresponding chapter or sections as may be in effect, from time to time, during any such period.
6. If ordered by a court of competent jurisdiction, the corporation may assume policies or otherwise provide coverage for policyholders of an insurer placed in liquidation under chapter 631, under such forms, rates, terms, and conditions as the corporation deems appropriate, subject to approval by the office.
(x)1. The following records of the corporation 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. Confidential and exempt underwriting file records may also 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 herein.
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 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 corporation 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 a corporation employee which is not relevant to the employee’s capacity to perform his or her duties, except as otherwise provided in this paragraph. Information that 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 that 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 shall be redacted.
2. If an authorized insurer is considering underwriting a risk insured by the corporation, 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. If 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 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 corporation 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 an entity that has obtained a permit to become an authorized insurer, a reinsurer that may provide reinsurance under s. 624.610, a licensed reinsurance broker, a licensed rating organization, a modeling company, or a licensed general lines insurance agent: 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 person must retain the confidentiality of the information received and may use the information only for the purposes of developing a take-out plan or a rating plan to be submitted to the office for approval or otherwise analyzing the underwriting of a risk or risks insured by the corporation on behalf of the private insurance market. A licensed general lines insurance agent may not use such information for the direct solicitation of policyholders.
3. A policyholder who has filed suit against the corporation has the right to discover the contents of his or her own claims file to the same extent that discovery of such contents would be available from a private insurer in litigation as provided by the Florida Rules of Civil Procedure, the Florida Evidence Code, and other applicable law. Pursuant to subpoena, a third party has the right to discover the contents of an insured’s or applicant’s underwriting or claims file to the same extent that discovery of such contents would be available from a private insurer by subpoena as provided by the Florida Rules of Civil Procedure, the Florida Evidence Code, and other applicable law, and subject to any confidentiality protections requested by the corporation and agreed to by the seeking party or ordered by the court. The corporation may release confidential underwriting and claims file contents and information as it deems necessary and appropriate to underwrite or service insurance policies and claims, subject to any confidentiality protections deemed necessary and appropriate by the corporation.
4. Portions of meetings of the corporation 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 corporation 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(1)(d)-(f), the court reporter’s notes of any closed meeting shall be retained by the corporation 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.
(y) It is the intent of the Legislature that the amendments to this subsection enacted in 2002 should, over time, reduce the probable maximum windstorm losses in the residual markets and the potential assessments to be levied on property insurers and policyholders statewide.
(z) In enacting the provisions of this section, the Legislature recognizes that both the Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association have entered into financing arrangements that obligate each entity to service its debts and maintain the capacity to repay funds secured under these financing arrangements. It is the intent of the Legislature that nothing in this section be construed to compromise, diminish, or interfere with the rights of creditors under such financing arrangements. It is further the intent of the Legislature to preserve the obligations of the Florida Windstorm Underwriting Association and Residential Property and Casualty Joint Underwriting Association with regard to outstanding financing arrangements, with such obligations passing entirely and unchanged to the corporation and, specifically, to the applicable account of the corporation. So long as any bonds, notes, indebtedness, or other financing obligations of the Florida Windstorm Underwriting Association or the Residential Property and Casualty Joint Underwriting Association are outstanding, under the terms of the financing documents pertaining to them, the governing board of the corporation shall have and shall exercise the authority to levy, charge, collect, and receive all premiums, assessments, surcharges, charges, revenues, and receipts that the associations had authority to levy, charge, collect, or receive under the provisions of subsection (2) and this subsection, respectively, as they existed on January 1, 2002, to provide moneys, without exercise of the authority provided by this subsection, in at least the amounts, and by the times, as would be provided under those former provisions of subsection (2) or this subsection, respectively, so that the value, amount, and collectability of any assets, revenues, or revenue source pledged or committed to, or any lien thereon securing such outstanding bonds, notes, indebtedness, or other financing obligations will not be diminished, impaired, or adversely affected by the amendments made by this act and to permit compliance with all provisions of financing documents pertaining to such bonds, notes, indebtedness, or other financing obligations, or the security or credit enhancement for them, and any reference in this subsection to bonds, notes, indebtedness, financing obligations, or similar obligations, of the corporation shall include like instruments or contracts of the Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association to the extent not inconsistent with the provisions of the financing documents pertaining to them.
(aa) The corporation shall not require the securing of flood insurance as a condition of coverage if the insured or applicant executes a form approved by the office affirming that flood insurance is not provided by the corporation and that if flood insurance is not secured by the applicant or insured in addition to coverage by the corporation, the risk will not be covered for flood damage. A corporation policyholder electing not to secure flood insurance and executing a form as provided herein making a claim for water damage against the corporation shall have the burden of proving the damage was not caused by flooding. Notwithstanding other provisions of this subsection, the corporation may deny coverage to an applicant or insured who refuses to execute the form described herein.
(bb) A salaried employee of the corporation who performs policy administration services subsequent to the effectuation of a corporation policy is not required to be licensed as an agent under the provisions of s. 626.112.
(cc) There shall be no liability on the part of, and no cause of action of any nature shall arise against, producing agents of record of the corporation or employees of such agents for insolvency of any take-out insurer.
(dd) The assets of the corporation may be invested and managed by the State Board of Administration.
(ee) The office may establish a pilot program to offer optional sinkhole coverage in one or more counties or other territories of the corporation for the purpose of implementing s. 627.706, as amended by s. 30, chapter 2007-1, Laws of Florida. Under the pilot program, the corporation is not required to issue a notice of nonrenewal to exclude sinkhole coverage upon the renewal of existing policies, but may exclude such coverage using a notice of coverage change.
(ff) In establishing replacement costs for coverage on a dwelling insured by the corporation, the corporation must accept a valuation from any of the following sources and must use the lowest valuation as the insured value of the dwelling, excluding land value, provided the valuation was completed within the 12 months before the application or renewal date of coverage:
1. A replacement cost valuation software that is specifically designed for use in establishing insurance replacement costs and that includes an itemized calculation of the cost of reconstruction;
2. A replacement cost valuation prepared by a certified or licensed real estate appraiser under part II of chapter 475 that is specifically formulated to establish insurance replacement cost, rather than market value, and which includes an itemized calculation of the cost of reconstruction; or
3. A replacement cost valuation prepared by a general, building, or residential contractor licensed under s. 489.113, or a professional engineer licensed under s. 471.015, which includes an itemized calculation of the total price of reconstruction.
(gg) The Office of Inspector General is established within the corporation to provide a central point for coordination of and responsibility for activities that promote accountability, integrity, and efficiency. The office shall be headed by an inspector general, which is a senior management position that involves planning, coordinating, and performing activities assigned to and assumed by the inspector general for the corporation.
1. The inspector general shall be appointed by the Financial Services Commission and may only be removed from office by the commission. The inspector general shall be appointed without regard to political affiliation.
a. At a minimum, the inspector general must possess a bachelor’s degree from an accredited college or university and 8 years of professional experience related to the duties of an inspector general as described in this paragraph, of which 5 years must have been at a supervisory level.
b. The inspector general shall report to, and be under the supervision of, the chair of the board of governors. The executive director or corporation staff may not prevent or prohibit the inspector general from initiating, carrying out, or completing any audit, review, evaluation, study, or investigation.
2. The inspector general shall initiate, direct, coordinate, participate in, and perform audits, reviews, evaluations, studies, and investigations designed to assess management practices; compliance with laws, rules, and policies; and program effectiveness and efficiency. This includes:
a. Conducting internal examinations; investigating allegations of fraud, waste, abuse, malfeasance, mismanagement, employee misconduct, or violations of corporation policies; and conducting any other investigations as directed by the Financial Services Commission or as independently determined.
b. Evaluating and recommending actions regarding security, the ethical behavior of personnel and vendors, and compliance with rules, laws, policies, and personnel matters; and rendering ethics opinions.
c. Evaluating personnel and administrative policy compliance, management and operational matters, and human resources-related matters.
d. Evaluating the application of a corporation code of ethics, providing reviews and recommendations on the design and content of ethics-related policy training courses, educating employees on the code and on appropriate conduct, and checking for compliance.
e. Evaluating the activities of the senior management team and management’s compliance with recommended solutions.
f. Cooperating and coordinating activities with the chief of internal audit.
g. Maintaining records of investigations and discipline in accordance with established policies, or as otherwise required.
h. Supervising and directing the tasks and assignments of the staff assigned to assist with the inspector general’s projects, including regular review and feedback regarding work in progress and providing recommendations regarding relevant training and staff development activities.
i. Directing, planning, preparing, and presenting interim and final reports and oral briefings which communicate the results of studies, reviews, and investigations.
j. Providing the executive director with independent and objective assessments of programs and activities.
k. Completing special projects, assignments, and other duties as requested by the Financial Services Commission.
l. Reporting expeditiously to the Department of Law Enforcement or other law enforcement agencies, as appropriate, whenever the inspector general has reasonable grounds to believe there has been a violation of criminal law.
(hh) The corporation shall prepare a report for each calendar year outlining both the statewide average and county-specific details of the loss ratio attributable to losses that are not catastrophic losses for residential coverage provided by the corporation, which information must be presented to the office and available for public inspection on the Internet website of the corporation by March 1 of the following calendar year.
(ii) The corporation shall revise the programs adopted pursuant to sub-subparagraph (q)3.a. for personal lines residential policies to maximize policyholder options and encourage increased participation by insurers and agents. After January 1, 2017, a policy may not be taken out of the corporation unless the provisions of this paragraph are met.
1. The corporation must publish a periodic schedule of cycles during which an insurer may identify, and notify the corporation of, policies that the insurer is requesting to take out. A request must include a description of the coverage offered and an estimated premium and must be submitted to the corporation in a form and manner prescribed by the corporation.
2. The corporation must maintain and make available to the agent of record a consolidated list of all insurers requesting to take out a policy. The list must include a description of the coverage offered and the estimated premium for each take-out request.
3. The corporation must provide written notice to the policyholder and the agent of record regarding all insurers requesting to take out the policy and regarding the policyholder’s option to accept a take-out offer or to reject all take-out offers and to remain with the corporation. The notice must be in a format prescribed by the corporation and include, for each take-out offer:
a. The amount of the estimated premium;
b. A description of the coverage; and
c. A comparison of the estimated premium and coverage offered by the insurer to the estimated premium and coverage provided by the corporation.
1(7) COLLATERAL PROTECTION INSURANCE.—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; s. 35, ch. 2001-186; s. 4, ch. 2001-372; s. 2, ch. 2002-221; s. 2, ch. 2002-240; s. 11, ch. 2002-282; s. 90, ch. 2003-1; s. 1101, ch. 2003-261; s. 73, ch. 2003-281; s. 122, ch. 2004-5; s. 47, ch. 2004-335; s. 24, ch. 2004-374; s. 7, ch. 2005-111; s. 87, ch. 2006-1; s. 15, ch. 2006-12; s. 21, ch. 2007-1; s. 141, ch. 2007-5; s. 4, ch. 2007-39; s. 11, ch. 2007-90; s. 6, ch. 2007-126; s. 148, ch. 2008-4; s. 13, ch. 2008-66; s. 24, ch. 2008-191; s. 3, ch. 2008-220; s. 84, ch. 2009-21; s. 4, ch. 2009-77; s. 10, ch. 2009-87; s. 121, ch. 2010-5; s. 39, ch. 2010-151; s. 15, ch. 2011-39; s. 77, ch. 2012-5; s. 1, ch. 2012-80; s. 11, ch. 2012-151; s. 24, ch. 2013-36; ss. 7, 8, ch. 2013-60; s. 19, ch. 2013-154; s. 1, ch. 2013-158; s. 149, ch. 2014-17; s. 8, ch. 2014-103; s. 3, ch. 2014-104; s. 1, ch. 2014-140; s. 12, ch. 2014-183; s. 1, ch. 2015-94; s. 21, ch. 2016-165; s. 1, ch. 2016-229; s. 36, ch. 2017-175; s. 104, ch. 2018-24.
627.3511 Depopulation of Citizens Property Insurance Corporation.—
(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 Citizens Property Insurance Corporation policies with policies written by admitted insurers at approved rates.
(2) TAKE-OUT BONUS.—The Citizens Property Insurance Corporation shall pay the sum of up to $100 to an insurer for each risk that the insurer removes from the corporation, either by issuance of a policy upon expiration or cancellation of the corporation policy or by assumption of the corporation’s obligations with respect to an in-force policy. Such payment is subject to approval of the corporation 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 office 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 corporation 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 corporation 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. shall, for an insurer that in any calendar year removes 50,000 or more risks from the Citizens Property Insurance Corporation, either by issuance of a policy upon expiration or cancellation of the corporation policy or by assumption of the corporation’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 corporation shall pay to the assuming insurer all unearned premium with respect to such policies less any policy acquisition costs agreed to by the corporation and assuming insurer. The term “policy acquisition costs” is defined as costs of issuance of the policy by the corporation 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 corporation are located in Miami-Dade, Broward, and Palm Beach Counties, or at least 30 percent of the risks removed from the corporation are located in such counties and an additional 50 percent of the risks removed from the corporation 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., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., of the Citizens Property Insurance Corporation 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., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., of the Citizens Property Insurance Corporation 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 corporation. With the approval of the office, 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 corporation, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies so removed.
(4) AGENT BONUS.—When the corporation enters into a contractual agreement for a take-out plan that provides a bonus to the insurer, the producing agent of record of the corporation 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, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(b) Offer to allow the producing agent of record of the corporation policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.
If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with paragraph (a). 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 1s. 627.351(6)(c)10. 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 corporation policy is replaced by a standard policy including wind coverage or, if consistent with the insurer’s underwriting rules filed with the office, a basic policy including wind coverage; however, for risks located in areas where coverage through the coastal account of the corporation 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 four additional 1-year terms, unless canceled or not renewed by the policyholder. If an insurer assumes the corporation’s obligations for a policy, it must issue a replacement policy for a 1-year term upon expiration of the corporation policy and must renew the replacement policy at approved rates on substantially similar terms for four additional 1-year terms, unless canceled or not renewed by the policyholder. For each replacement policy canceled or nonrenewed by the insurer for any reason during the 5-year coverage period, the insurer must remove from the corporation one additional policy covering a risk similar to the risk covered by the canceled or nonrenewed policy. In addition, the corporation must place the bonus moneys in escrow for 5 years; such moneys may be released from escrow only to pay claims. If the policy is canceled or nonrenewed before the end of the 5-year period, the amount of the take-out bonus must be prorated for the time period the policy was insured. A take-out bonus provided by subsection (2) or subsection (6) is not premium income for purposes of taxes and assessments under the Florida Insurance Code and remains the property of the corporation, subject to the prior security interest of the insurer under the escrow agreement until it is released from escrow; after it is released from escrow it is 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 corporation.
(6) COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.—
(a) The corporation shall pay a bonus to an insurer for each commercial residential policy that the insurer removes from the corporation pursuant to an approved take-out plan, either by issuance of a new policy upon expiration of the corporation policy or by assumption of the corporation’s obligations with respect to an in-force policy. The corporation 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 corporation, 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 corporation’s 1-year premium for the policy. Such payment is subject to approval of the corporation 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 corporation under the plan must be located in Miami-Dade, Broward, and Palm Beach Counties, or at least 30 percent of the policies removed from the corporation under the plan must be located in such counties and an additional 50 percent of the policies removed from the corporation 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 corporation’s obligations for a policy, it must issue a replacement policy for a 1-year term upon expiration of the corporation 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 corporation 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 office, 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 corporation 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 corporation 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(6)(b)3.a., 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 corporation 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., 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. 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., 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, 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, with the corporation.
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; s. 3, ch. 2002-221; s. 3, ch. 2002-240; s. 1102, ch. 2003-261; s. 88, ch. 2006-1; s. 17, ch. 2006-12; s. 12, ch. 2007-90; s. 149, ch. 2008-4; s. 16, ch. 2011-39; s. 433, ch. 2011-142; s. 78, ch. 2012-5; s. 107, ch. 2013-15.
1Note.—Material in the cited provision relating to written notice of cancellation was deleted by s. 2, ch. 2002-240.
627.3512 Recoupment of residual market deficit assessments.—
(1) The Legislature finds and declares that all assessments paid by an insurer or insurer group as a result of a levy by any residual market entity, including regular assessments levied on insurers by Citizens Property Insurance Corporation and any other assessments levied on insurers by an insurance risk apportionment plan or assigned risk plan under s. 627.311 or s. 627.351 constitute advances of funds from the insurer to the residual market entity, and that the insurer is entitled to fully recoup such advances. 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. A limited apportionment company as defined in s. 627.351(6)(c) may recoup any regular assessment that has been levied by, or paid to, Citizens Property Insurance Corporation.
(2) The recoupment shall be made by applying a separate recoupment 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.
(3) The recoupment factor may 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 does not collect the full amount of the deficit assessment during one 12-month period, the insurer or insurer group may apply recalculated recoupment factors to policies issued or renewed during one or more succeeding 12-month periods.
(4) The insurer or insurer group shall file with the office a statement for informational purposes only setting forth the amount of the recoupment 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 informational statement shall include documentation of the assessment paid by the insurer or insurer group and the arithmetic calculations supporting the recoupment factor. The insurer or insurer group may use the recoupment factor at any time after the expiration of the 15-day period. The recoupment factor shall apply to all policies described in subsection (3) that are issued or renewed by the insurer or insurer group during a 12-month period. If full recoupment requires the insurer or insurer group to apply a recoupment factor over a subsequent 12-month period, the insurer or insurer group must file a supplemental informational statement pursuant to this subsection.
(5) No later than 90 days after the insurer or insurer group has completed the recoupment process, it shall file with the office a final accounting report documenting the recoupment. The report shall provide the amounts of assessments paid by the insurer or insurer group, the amounts and percentages recouped by year from each affected line of business, and the direct written premium subject to recoupment by year.
(6) The commission may adopt rules to implement this section.
History.—s. 11, ch. 95-276; s. 7, ch. 97-55; s. 1103, ch. 2003-261; s. 18, ch. 2006-12; s. 11, ch. 2009-87.
627.3513 Standards for sale of bonds by Citizens Property Insurance Corporation.—
(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) The term “corporation,” as used in this section, means the Citizens Property Insurance Corporation.
(2) The plan of operation of the corporation 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 corporation 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 corporation shall make all selections of financial service providers and managing underwriters at a noticed public meeting.
(3) The plan of operation of the corporation shall provide for any managing underwriter or financial adviser to provide to the corporation 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 corporation 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 corporation unless full disclosure is made in writing to the corporation 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(6) or the issuance of bonds by the corporation.
(6) The failure of the corporation to comply with one or more provisions of this section shall not affect the validity of the bond issue; however, the failure of the corporation 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; s. 1104, ch. 2003-261.
627.3515 Market assistance plan; property and casualty risks.—
(1) The office 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 Citizens Property Insurance Corporation 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 Citizens Property Insurance Corporation 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 Citizens Property Insurance Corporation 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.
(3)(a) The plan and the corporation shall develop a business plan and present it to the Financial Services Commission for approval by September 1, 2007, to provide for the implementation of an electronic database for the purpose of confirming eligibility pursuant to s. 627.351(6). The business plan may provide that authorized insurers or agents of authorized insurers may submit to the plan or the corporation in electronic form, as determined by the plan or the corporation, information determined necessary by the plan or the corporation to deny coverage to risks ineligible for coverage by the corporation. Any authorized insurer submitting such information that results in a risk being denied coverage by the corporation is required to offer coverage to the risk at its approved rates, for the coverage and premium quoted, for at least 1 year.
(b) There shall be no liability on the part of, and no cause of action of any nature shall arise against, any authorized insurer acting within the scope of its authority under this subsection or its agents or employees for any action taken by them in the performance of their duties or responsibilities under this subsection.
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; s. 1105, ch. 2003-261; s. 23, ch. 2007-1; s. 13, ch. 2007-90.
627.3517 Consumer choice.—No provision of s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to impair the right of any insurance risk apportionment plan policyholder, upon receipt of any keepout or take-out offer, to retain his or her current agent, so long as that agent is duly licensed and appointed by the insurance risk apportionment plan or otherwise authorized to place business with the insurance risk apportionment plan. This right shall not be canceled, suspended, impeded, abridged, or otherwise compromised by any rule, plan of operation, or depopulation plan, whether through keepout, take-out, midterm assumption, or any other means, of any insurance risk apportionment plan or depopulation plan, including, but not limited to, those described in s. 627.351, s. 627.3511, or s. 627.3515. The commission shall adopt any rules necessary to cause any insurance risk apportionment plan or market assistance plan under such sections to demonstrate that the operations of the plan do not interfere with, promote, or allow interference with the rights created under this section. If the policyholder’s current agent is unable or unwilling to be appointed with the insurer making the take-out or keepout offer, the policyholder shall not be disqualified from participation in the appropriate insurance risk apportionment plan because of an offer of coverage in the voluntary market. An offer of full property insurance coverage by the insurer currently insuring either the ex-wind or wind-only coverage on the policy to which the offer applies shall not be considered a take-out or keepout offer. Any rule, plan of operation, or plan of depopulation, through keepout, take-out, midterm assumption, or any other means, of any property insurance risk apportionment plan under s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c) and 627.3511(4).
History.—s. 4, ch. 2002-221; s. 4, ch. 2002-240; s. 1106, ch. 2003-261; s. 19, ch. 2006-12; s. 14, ch. 2007-90.
627.3518 Citizens Property Insurance Corporation policyholder eligibility clearinghouse program.—The purpose of this section is to provide a framework for the corporation to implement a clearinghouse program by January 1, 2014.
(1) As used in this section, the term:
(a) “Corporation” means Citizens Property Insurance Corporation.
(b) “Exclusive agent” means any licensed insurance agent that has, by contract, agreed to act exclusively for one company or group of affiliated insurance companies and is disallowed by the provisions of that contract to directly write for any other unaffiliated insurer absent express consent from the company or group of affiliated insurance companies.
(c) “Independent agent” means any licensed insurance agent not described in paragraph (b).
(d) “Program” means the clearinghouse created under this section.
(2) In order to confirm eligibility with the corporation and to enhance access of new applicants for coverage and existing policyholders of the corporation to offers of coverage from authorized insurers, the corporation shall establish a program for personal residential risks in order to facilitate the diversion of ineligible applicants and existing policyholders from the corporation into the voluntary insurance market. The corporation shall also develop appropriate procedures for facilitating the diversion of ineligible applicants and existing policyholders for commercial residential coverage into the private insurance market and shall report such procedures to the President of the Senate and the Speaker of the House of Representatives by January 1, 2014.
(3) The corporation board shall establish the clearinghouse program as an organizational unit within the corporation. The program shall have all the rights and responsibilities in carrying out its duties as a licensed general lines agent, but may not be required to employ or engage a licensed general lines agent or to maintain an insurance agency license to carry out its activities in the solicitation and placement of insurance coverage. In establishing the program, the corporation may:
(a) Require all new applications, and all policies due for renewal, to be submitted for coverage to the program in order to facilitate obtaining an offer of coverage from an authorized insurer before binding or renewing coverage by the corporation.
(b) Employ or otherwise contract with individuals or other entities for appropriate administrative or professional services to effectuate the plan within the corporation in accordance with the applicable purchasing requirements under s. 627.351.
(c) Enter into contracts with any authorized insurer to participate in the program and accept an appointment by such insurer.
(d) Provide funds to operate the program. Insurers and agents participating in the program are not required to pay a fee to offset or partially offset the cost of the program or use the program for renewal of policies initially written through the clearinghouse.
(e) Develop an enhanced application that includes information to assist private insurers in determining whether to make an offer of coverage through the program.
(f) For personal lines residential risks, require, before approving all new applications for coverage by the corporation, that every application be subject to a period of 2 business days when any insurer participating in the program may select the application for coverage. The insurer may issue a binder on any policy selected for coverage for a period of at least 30 days but not more than 60 days.
(4) Any authorized insurer may participate in the program; however, participation is not mandatory for any insurer. Insurers making offers of coverage to new applicants or renewal policyholders through the program:
(a) May not be required to individually appoint any agent whose customer is underwritten and bound through the program. Notwithstanding s. 626.112, insurers are not required to appoint any agent on a policy underwritten through the program for as long as that policy remains with the insurer. Insurers may, at their election, appoint any agent whose customer is initially underwritten and bound through the program. In the event an insurer accepts a policy from an agent who is not appointed pursuant to this paragraph, and thereafter elects to accept a policy from such agent, the provisions of s. 626.112 requiring appointment apply to the agent.
(b) Must enter into a limited agency agreement with each agent that is not appointed in accordance with paragraph (a) and whose customer is underwritten and bound through the program.
(c) Must enter into its standard agency agreement with each agent whose customer is underwritten and bound through the program when that agent has been appointed by the insurer pursuant to s. 626.112.
(d) Must comply with s. 627.4133(2).
(e) May participate through their single-designated managing general agent or broker; however, the provisions of paragraph (6)(a) regarding ownership, control, and use of the expirations continue to apply.
(f) Must pay to the producing agent a commission equal to that paid by the corporation or the usual and customary commission paid by the insurer for that line of business, whichever is greater.
(5) Notwithstanding s. 627.3517, any applicant for new coverage from the corporation is not eligible for coverage from the corporation if provided an offer of coverage from an authorized insurer through the program at a premium that is at or below the eligibility threshold established in s. 627.351(6)(c)5.a. Whenever an offer of coverage for a personal lines risk is received for a policyholder of the corporation at renewal from an authorized insurer through the program, if the offer is equal to or less than the corporation’s renewal premium for comparable coverage, the risk is not eligible for coverage with the corporation. In the event an offer of coverage for a new applicant is received from an authorized insurer through the program, and the premium offered exceeds the eligibility threshold contained in s. 627.351(6)(c)5.a., the applicant or insured may elect to accept such coverage, or may elect to accept or continue coverage with the corporation. In the event an offer of coverage for a personal lines risk is received from an authorized insurer at renewal through the program, and the premium offered is more than the corporation’s renewal premium for comparable coverage, the insured may elect to accept such coverage, or may elect to accept or continue coverage with the corporation. Section 627.351(6)(c)5.a.(I) does not apply to an offer of coverage from an authorized insurer obtained through the program. An applicant for coverage from the corporation who was declared ineligible for coverage at renewal by the corporation in the previous 36 months due to an offer of coverage pursuant to this subsection shall be considered a renewal under this section if the corporation determines that the authorized insurer making the offer of coverage pursuant to this subsection continues to insure the applicant and increased the rate on the policy in excess of the increase allowed for the corporation under s. 627.351(6)(n)6.
(6) Independent insurance agents submitting new applications for coverage or that are the agent of record on a renewal policy submitted to the program:
(a) Are granted and must maintain ownership and the exclusive use of expirations, records, or other written or electronic information directly related to such applications or renewals written through the corporation or through an insurer participating in the program, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and (II)(B). Such ownership is granted for as long as the insured remains with the agency or until sold or surrendered in writing by the agent. Contracts with the corporation or required by the corporation must not amend, modify, interfere with, or limit such rights of ownership. Such expirations, records, or other written or electronic information may be used to review an application, issue a policy, or for any other purpose necessary for placing such business through the program.
(b) May not be required to be appointed by any insurer participating in the program for policies written solely through the program, notwithstanding the provisions of s. 626.112.
(c) May accept an appointment from any insurer participating in the program.
(d) May enter into either a standard or limited agency agreement with the insurer, at the insurer’s option.
Applicants ineligible for coverage in accordance with subsection (5) remain ineligible if their independent agent is unwilling or unable to enter into a standard or limited agency agreement with an insurer participating in the program.
(7) Exclusive agents submitting new applications for coverage or that are the agent of record on a renewal policy submitted to the program:
(a) Must maintain ownership and the exclusive use of expirations, records, or other written or electronic information directly related to such applications or renewals written through the corporation or through an insurer participating in the program, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and (II)(B). Contracts with the corporation or required by the corporation must not amend, modify, interfere with, or limit such rights of ownership. Such expirations, records, or other written or electronic information may be used to review an application, issue a policy, or for any other purpose necessary for placing such business through the program.
(b) May not be required to be appointed by any insurer participating in the program for policies written solely through the program, notwithstanding the provisions of s. 626.112.
(c) Must only facilitate the placement of an offer of coverage from an insurer whose limited servicing agreement is approved by that exclusive agent’s exclusive insurer.
(d) May enter into a limited servicing agreement with the insurer making an offer of coverage, and only after the exclusive agent’s insurer has approved the limited servicing agreement terms. The exclusive agent’s insurer must approve a limited service agreement for the program for any insurer for which it has approved a service agreement for other purposes.
Applicants ineligible for coverage in accordance with subsection (5) remain ineligible if their exclusive agent is unwilling or unable to enter into a standard or limited agency agreement with an insurer making an offer of coverage to that applicant.
(8) Submission of an application for coverage by the corporation to the program does not constitute the binding of coverage by the corporation, and failure of the program to obtain an offer of coverage by an insurer may not be considered acceptance of coverage of the risk by the corporation.
(9) The 45-day notice of nonrenewal requirement set forth in s. 627.4133(2)(b)5. applies when a policy is nonrenewed by the corporation because the risk has received an offer of coverage pursuant to this section which renders the risk ineligible for coverage by the corporation.
(10) The program may not include commercial nonresidential policies.
(11) Proprietary business information provided to the corporation’s clearinghouse by insurers with respect to identifying and selecting risks for an offer of coverage is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
(a) As used in this subsection, the term “proprietary business information” means information, regardless of form or characteristics, which is owned or controlled by an insurer and:
1. Is identified by the insurer as proprietary business information and is intended to be and is treated by the insurer as private in that the disclosure of the information would cause harm to the insurer, an individual, or the company’s business operations and has not been disclosed unless disclosed pursuant to a statutory requirement, an order of a court or administrative body, or a private agreement that provides that the information will not be released to the public;
2. Is not otherwise readily ascertainable or publicly available by proper means by other persons from another source in the same configuration as provided to the clearinghouse; and
3. Includes:
a. Trade secrets, as defined in s. 688.002.
b. Information relating to competitive interests, the disclosure of which would impair the competitive business of the provider of the information.
Proprietary business information may be found in underwriting criteria or instructions which are used to identify and select risks through the program for an offer of coverage and are shared with the clearinghouse to facilitate the shopping of risks with the insurer.
(b) The clearinghouse may disclose confidential and exempt proprietary business information:
1. If the insurer to which it pertains gives prior written consent;
2. Pursuant to a court order; or
3. To another state agency in this or another state or to a federal agency if the recipient agrees in writing to maintain the confidential and exempt status of the document, material, or other information and has verified in writing its legal authority to maintain such confidentiality.
History.—s. 10, ch. 2013-60; s. 1, ch. 2013-61; s. 150, ch. 2014-17; s. 1, ch. 2014-86; s. 4, ch. 2015-135; s. 1, ch. 2018-121.
627.35191 Required reports.—
(1) By February 1 of each year, the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation shall each submit a report to the Legislature and the Financial Services Commission identifying their respective aggregate net probable maximum losses, financing options, and potential assessments. The report issued by the fund and the corporation must include their respective 50-year, 100-year, and 250-year probable maximum losses; analysis of all reasonable financing strategies for each such probable maximum loss, including the amount and term of debt instruments; specification of the percentage assessments that would be needed to support each of the financing strategies; and calculations of the aggregate assessment burden on Florida property and casualty policyholders for each of the probable maximum losses.
(2) In May of each year, Citizens Property Insurance Corporation shall also provide to the Legislature and the Financial Services Commission a statement of the estimated borrowing capacity of the corporation for the next 12-month period, the estimated claims-paying capacity of the corporation, and the corporation’s estimated balance as of December 31 of the current calendar year. Such estimates must take into account that the corporation, the Florida Hurricane Catastrophe Fund, and the Florida Insurance Guaranty Association may all be concurrently issuing debt instruments following a catastrophic event.
History.—s. 11, ch. 2013-60; s. 5, ch. 2014-104.
627.35193 Consumer reporting agency request for claims data from Citizens Property Insurance Corporation.—Upon the request of a consumer reporting agency, as defined by the federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681 et seq., which consumer reporting agency is in compliance with the confidentiality requirements of such act, the Citizens Property Insurance Corporation shall electronically report claims data and histories to such consumer reporting agency which maintains a database of similar data for use in connection with the underwriting of insurance involving a consumer.
History.—s. 28, ch. 2008-220; s. 85, ch. 2009-21.
627.352 Security of data and information technology in Citizens Property Insurance Corporation.—
(1) The following data and information from technology systems owned by, under contract with, or maintained by Citizens Property Insurance Corporation are confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution:
(a) Records held by the corporation which identify detection, investigation, or response practices for suspected or confirmed information technology security incidents, including suspected or confirmed breaches, if the disclosure of such records would facilitate unauthorized access to or unauthorized modification, disclosure, or destruction of:
1. Data or information, whether physical or virtual; or
2. Information technology resources, including:
a. Information relating to the security of the corporation’s technologies, processes, and practices designed to protect networks, computers, data processing software, and data from attack, damage, or unauthorized access; or
b. Security information, whether physical or virtual, which relates to the corporation’s existing or proposed information technology systems.
(b) Those portions of risk assessments, evaluations, audits, and other reports of the corporation’s information technology security program for its data, information, and information technology resources which are held by the corporation, if the disclosure of such records would facilitate unauthorized access to or the unauthorized modification, disclosure, or destruction of:
1. Data or information, whether physical or virtual; or
2. Information technology resources, which include:
a. Information relating to the security of the corporation’s technologies, processes, and practices designed to protect networks, computers, data processing software, and data from attack, damage, or unauthorized access; or
b. Security information, whether physical or virtual, which relates to the corporation’s existing or proposed information technology systems.
(2) Those portions of a public meeting as specified in s. 286.011 which would reveal data and information described in subsection (1) are exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution. No exempt portion of an exempt meeting may be off the record. All exempt portions of such a meeting must be recorded and transcribed. The recording and transcript of the meeting must remain confidential and exempt from disclosure under s. 119.07(1) and s. 24(a), Art. 1 of the State Constitution unless a court of competent jurisdiction, following an in camera review, determines that the meeting was not restricted to the discussion of data and information made confidential and exempt by this section. In the event of such a judicial determination, only that portion of the transcript which reveals nonexempt data and information may be disclosed to a third party.
(3) The records and portions of public meeting recordings and transcripts described in subsection (2) must be available to the Auditor General, the Cybercrime Office of the Department of Law Enforcement, and the Office of Insurance Regulation. Such records and portions of meetings, recordings, and transcripts may be made available to a state or federal agency for security purposes or in furtherance of the agency’s official duties.
(4) The exemptions provided by this section apply to records held by the corporation before, on, or after the effective date of this act.
(5) This section is subject to the Open Government Sunset Review Act in accordance with s. 119.15 and shall stand repealed on October 2, 2023, unless reviewed and saved from repeal through reenactment by the Legislature.
History.—s. 1, ch. 2018-65.
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 practice registered nurse 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 office 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 office. The fund is subject to rules of the commission and to part IX 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 commission shall adopt rules to implement this section, including rules that ensure that a trust fund remains solvent and 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 office 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 office 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 office at least 30 days prior to use and may not be used until approved by the office. The office 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.
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; s. 57, ch. 2001-63; s. 1107, ch. 2003-261; s. 42, ch. 2003-416; s. 72, ch. 2018-106.
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 office, any statistical agency designated by the office, 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; s. 1108, ch. 2003-261.
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 office, specifying the grounds relied upon. If the office 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 office 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 office has good cause to believe that such noncompliance is willful or if, within the period prescribed by the office 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 office or establish to the satisfaction of the office that such specified noncompliance does not exist, then the office 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; s. 1109, ch. 2003-261.
627.381 Penalty for violation.—
(1) The office 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 office may suspend the license or authority of any rating organization or insurer which fails to comply with an order of the office within the time limited by such order, or any extension thereof which the office may grant. The office 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 office 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; s. 1110, ch. 2003-261.
PART II
THE INSURANCE CONTRACT627.401 Scope of this part.
627.402 Definitions.
627.4025 Residential coverage and hurricane coverage defined.
627.403 “Premium” defined.
627.4035 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.
627.40951 Standard personal lines residential insurance policy.
627.410 Filing, approval of forms.
627.4101 Credit insurance enrollment forms.
627.4102 Informational filing of forms.
627.4105 Life and health insurance; reduced premiums upon rigorous physical examination.
627.4107 Government employees exposed to toxic drug chemicals; cancellation of life or health policy or certificate prohibited.
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.
627.4138 Wrap-up insurance policies for nonpublic construction projects.
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.
627.41495 Public notice of medical malpractice rate filings.
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.
627.42391 Insurance policies; cancer treatment parity; orally administered cancer treatment medications.
627.42392 Prior authorization.
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.
627.4302 Identification cards for processing prescription drug claims.
627.43141 Notice of change in policy terms.
627.441 Commercial general liability policies; coverage to contractors for completed operations.
627.442 Insurance contracts.
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.—As used in this part, the term:
(1) “Grandfathered health plan” has the same meaning as provided in 42 U.S.C. s. 18011, subject to the conditions for maintaining status as a grandfathered health plan specified in regulations adopted by the federal Department of Health and Human Services in 45 C.F.R. s. 147.140.
(2) “Nongrandfathered health plan” is a health insurance policy or health maintenance organization contract that is not a grandfathered health plan and does not provide the benefits or coverages specified under s. 627.6513(1)-(14).
(3) “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 that are a part thereof. The term “certificate” as used in this subsection does not include certificates as to group life or health insurance or as to group annuities issued to individual insureds.
(4) “PPACA” means the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, and regulations adopted pursuant to those acts.
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; s. 14, ch. 2013-101; s. 6, ch. 2016-194.
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, mobile home owner, dwelling, tenant, condominium unit owner, cooperative unit owner, 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 Payment of premiums; claims.—
(1)(a) The premiums for insurance contracts issued in this state or covering risk located in this state must be paid in cash consisting of coins, currency, checks, electronic checks, drafts, or money orders or by using a debit card, credit card, automatic electronic funds transfer, or payroll deduction plan. Insurers issuing personal lines residential and commercial property policies shall provide a premium payment plan option to their policyholders which allows for a minimum of quarterly and semiannual payment of premiums. Insurers may, but are not required to, offer monthly payment plans. Insurers issuing such policies must submit their premium payment plan option to the office for approval before use.
(b) If, due to insufficient funds, a payment of premium under this subsection by debit card, credit card, electronic funds transfer, or electronic check is returned, is declined, or cannot be processed, the insurer may impose an insufficient funds fee of up to $15 per occurrence pursuant to the policy terms. However, the insurer may not charge the policyholder an insufficient funds fee if the failure in payment resulted from fraud or misuse on the policyholder’s account from which the payment was made and such fraud or misuse was not attributed to the policyholder.
(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 commission 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. However, the written authorization requirement may be waived by the recipient or the recipient’s representative if the insurer verifies the identity of the insured or the insured’s recipient and does not charge a fee for the transaction. If the funds are misdirected, the insurer remains liable for the payment of the claim.
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; s. 1111, ch. 2003-261; s. 1, ch. 2003-267; s. 1, ch. 2003-281; s. 21, ch. 2006-12; s. 24, ch. 2007-1; s. 15, ch. 2007-90; s. 11, ch. 2017-132.
627.404 Insurable interest; personal insurance.—
(1) Any individual of legal capacity may procure or effect an insurance contract on his or her own life or body for the benefit of any person, but no person shall procure or cause to be procured or effected an insurance contract on the life or body of another individual unless the benefits under such contract are payable to the individual insured or his or her personal representatives, or to any person having, at the time such contract was made, an insurable interest in the individual insured. The insurable interest need not exist after the inception date of coverage under the contract.
(2) For purposes of this section, the term:
(a) “Business entity” includes, but is not limited to, a joint venture, partnership, corporation, limited liability company, and business trust.
(b) “Insurable interest” as to life, health, or disability insurance includes only the following interests:
1. An individual has an insurable interest in his or her own life, body, and health.
2. An individual has an insurable interest in the life, body, and health of another person to whom the individual is closely related by blood or by law and in whom the individual has a substantial interest engendered by love and affection.
3. An individual has an insurable interest in the life, body, and health of another person if such individual has an expectation of a substantial pecuniary advantage through the continued life, health, and safety of that other person and consequent substantial pecuniary loss by reason of the death, injury, or disability of that other person.
4. An individual party to a contract for the purchase or sale of an interest in any business entity has an insurable interest in the life of each other party to such contract for the purpose of such contract only.
5. A trust, or the trustee of a trust, has an insurable interest in the life of an individual insured under a life insurance policy owned by the trust, or the trustee of the trust acting in a fiduciary capacity, if the insured is the grantor of the trust; an individual closely related by blood or law to the grantor; or an individual in whom the grantor otherwise has an insurable interest if, in each of the situations described in subsection (5), the life insurance proceeds are primarily for the benefit of trust beneficiaries having an insurable interest in the life of the insured.
6. A guardian, trustee, or other fiduciary, acting in a fiduciary capacity, has an insurable interest in the life of any person for whose benefit the fiduciary holds property, and in the life of any other individual in whose life the person has an insurable interest so long as the life insurance proceeds are primarily for the benefit of persons having an insurable interest in the life of the insured.
7. A charitable organization meeting the requirements of s. 501(c)(3) of the United States Internal Revenue Code, as amended, has an insurable interest in the life of any person who consents in writing to the organization’s ownership or purchase of that insurance.
8. A trustee, sponsor, or custodian of assets held in any plan governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. ss. 1001 et seq., or in any other retirement or employee benefit plan, has an insurable interest in the life of any participant in the plan with the written consent of the prospective insured. An employer, trustee, sponsor, or custodian may not retaliate or take adverse action against any participant who does not consent to the issuance of insurance on the participant’s life.
9. A business entity has an insurable interest in the life, body, and health of any of the owners, directors, officers, partners, and managers of the business entity or any affiliate or subsidiary of the business entity, or key employees or key persons of the business entity or affiliate or subsidiary, if consent is obtained in writing from the key employees or persons before the insurance is purchased. The business entity or affiliate or subsidiary may not retaliate or take adverse action against any key employee or person who does not consent to the issuance of insurance on the key employee or key person’s life. For purposes of this subsection, a “key employee” or “key person” means an individual whose position or compensation is described in s. 101(j)(2)(A)(ii) of the Internal Revenue Code of 1986.
(3) 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.
(4) If the beneficiary, assignee, or other payee under any insurance contract procured by a person not having an insurable interest in the insured at the time such contract was made receives from the insurer any benefits thereunder by reason of the death, injury, or disability of the insured, the insured or his or her personal representative or other lawfully acting agent may maintain an action to recover such benefits from the person receiving them.
(5) A contract of insurance upon a person, other than a policy of group life insurance or group or blanket accident, health, or disability insurance, may not be effectuated unless, on or before the time of entering into such contract, the person insured, having legal capacity to contract, applies for or consents in writing to the contract and its terms, except that any person having an insurable interest in the life of a minor younger than 15 years of age or any person upon whom a minor younger than 15 years of age is dependent for support and maintenance may effectuate a policy of insurance on the minor.
(6) For purposes of this section, the signature of the proposed insured, having capacity to contract, on the application for insurance shall constitute his or her written consent.
(7) This section does not apply to any policy of life insurance to which s. 624.402(8) applies.
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; s. 1, ch. 2008-36.
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 not a warranty. Except as provided in subsection (3), 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 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 a warranty, condition, or provision of a wet marine or transportation insurance policy, contract of insurance, endorsement, or application 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.
(3) For residential property insurance, if a policy or contract has been in effect for more than 90 days, a claim filed by the insured cannot be denied based on credit information available in public records.
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; s. 2, ch. 2014-86.
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.
(5) When an insurer refuses to provide private passenger automobile insurance or personal lines residential property insurance, including, but not limited to, homeowner’s, mobile home owner’s, condominium unit owner’s, or other insurance covering a personal residential structure, to an applicant due to adverse underwriting information, the insurer shall:
(a) Provide to the applicant specific information regarding the reasons for the refusal to insure.
(b) If the reason for the refusal to insure is based on a loss underwriting history or report from a consumer reporting agency, to the extent applicable identify the loss underwriting history and notify the applicant of his or her right under the federal Fair and Accurate Credit Transactions Act to obtain a copy of the report from the consumer reporting agency.
History.—s. 31, ch. 92-318; s. 12, ch. 2004-370; s. 157, ch. 2004-390.
627.40951 Standard personal lines residential insurance policy.—
(1) The Legislature finds that many consumers who filed property loss claims as a result of the hurricanes that struck this state in 2004 were inadequately insured due to the difficulty consumers encounter in trying to understand the complex nature of property insurance policies. The purpose and intent of this section is to have property and casualty insurers offer standard personal lines residential property insurance policies and standard checklists of policy contents, in accordance with s. 627.4143, to consumers and to ensure that these policies and checklists are written in a simple format with easily readable language that will enable most consumers to understand the principal benefits and coverage provided in the policy; the principal exclusions and limitations or reductions contained in the policy, including, but not limited to, deductibles, coinsurance, and any other limitations or reductions; and any additional coverage provided through any rider or endorsement that accompanies the policy and renewal or cancellation provisions.
(2) The Chief Financial Officer shall appoint an advisory committee composed of two representatives of insurers currently selling personal lines residential property insurance coverage, two representatives of property and casualty agents, two representatives of consumers, two representatives of the Commissioner of Insurance Regulation, and the Insurance Consumer Advocate or her or his designee. The Chief Financial Officer or her or his designee shall serve as chair of the committee. The committee shall develop policy language for coverage that represents general industry standards in the market for comprehensive coverage under personal lines residential insurance policies and shall develop a checklist to be used with each type of personal lines residential property insurance policy. The committee shall review policies and related forms written by Insurance Services Office, Inc. The committee shall file a report containing its recommendations to the President of the Senate and the Speaker of the House of Representatives by January 15, 2006. No insurer shall be required to offer the standard policy unless required by further act of the Legislature.
History.—s. 8, ch. 2005-111.
1627.410 Filing, approval of forms.—
(1) A 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, group certificates issued under a master contract delivered in this state, or printed rider or endorsement form or form of renewal certificate, may not be delivered or issued for delivery in this state unless the form has been filed with the office by or on behalf of the insurer that proposes to use such form and has been approved by the office or filed pursuant to s. 627.4102. This provision does not apply to surety bonds or to policies, riders, endorsements, or forms of unique character that are designed for and used with insurance on a particular subject, other than as to health insurance, or that relate to the manner of distributing 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. For 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 office for information purposes only.
(2) Every such filing must be made at least 30 days in advance of any such use or delivery. At the expiration of the 30 days, the form filed will be deemed approved unless prior thereto it has been affirmatively approved or disapproved by order of the office. The approval of such form by the office constitutes a waiver of any unexpired portion of such waiting period. The office may extend the period within which it may affirmatively approve or disapprove such form by up to 15 days by giving notice of such extension before expiration of the initial 30-day period. At the expiration of such extended period, and in the absence of prior affirmative approval or disapproval, such form shall be deemed approved.
(3) The office may, for cause, withdraw a previous approval. No insurer shall issue or use any form disapproved by the office, or as to which the office has withdrawn approval, after the effective date of the order of the office.
(4) The office 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 office that such form is not subject to approval or disapproval by such official, and upon the order of the office 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 may not deliver, issue for delivery, or renew in this state any health insurance policy form until it has filed with the office 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 office applicable premium rates and any change in applicable premium rates. This paragraph does not apply to group health insurance policies, effectuated and delivered in this state, insuring groups of 51 or more persons, except for Medicare supplement insurance, long-term care insurance, and any coverage under which the increase in claim costs over the lifetime of the contract due to advancing age or duration is prefunded in the premium.
(b) The commission 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 are for informational purposes.
(c) Every filing made pursuant to this subsection shall be made within the same time period, and shall be deemed to be approved under the same conditions, as provided in subsection (2).
(d) Every filing made pursuant to this subsection, except disability income policies and accidental death policies, is prohibited from applying the following rating practices:
1. Select and ultimate premium schedules.
2. Premium class definitions that 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 is not considered to be available for purchase unless the insurer has actively offered it for sale during the previous 12 months.
1. An insurer may discontinue the availability of a policy form if the insurer provides its decision to the office in writing at least 30 days before discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the office, the insurer may no longer offer the policy form or certificate form for sale in this state.
2. An insurer that discontinues the availability of a policy form pursuant to subparagraph 1. may not file for approval a new policy form providing benefits similar to the discontinued form for 5 years after the insurer provides notice to the office of the discontinuance. The period of discontinuance may be reduced if the office determines that a shorter period is appropriate. The requirements of this subparagraph do not apply to the discontinuance of a policy form because it does not comply with PPACA.
3. The experience of all policy forms providing similar benefits shall be combined for all rating purposes, except that the experience of grandfathered health plans and nongrandfathered health plans shall be separated.
(7) Each insurer subject to subsection (6) shall make an annual filing with the office within 12 months after its previous filing, demonstrating the reasonableness of benefits in relation to premium rates. After receiving a request to be exempted from the provisions of this section, the office 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.
(a) The filing 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 adopted by the commission.
2. If no rate change is proposed, a filing that 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 commission.
(b) As used in this section, the term “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 who have 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.
(c) If at the time a filing is required an insurer is in the process of completing a rate review, the insurer may apply to the office 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 office by the date the filing is due.
(d) If an insurer fails to meet the filing requirements of this subsection and does not submit the filing within 60 days after the date the filing is due, the office 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 office 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 commission, 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 office, 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 office 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 office 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 office 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 office no later than the end of such quarter. The commission 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 office 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 office, 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; s. 5, ch. 2002-282; s. 1112, ch. 2003-261; s. 20, ch. 2004-297; s. 3, ch. 2013-66; s. 15, ch. 2013-101; s. 11, ch. 2016-11.
1Note.—Section 3, ch. 2013-174, provides that “[t]he rules adopted by the Financial Services Commission to establish the format for the notice of the estimated premium impact of the federal Patient Protection and Affordable Care Act pursuant to s. 627.410, Florida Statutes, as amended by Senate Bill 1842, House Bill 7155, or similar legislation adopted in the same legislative session or an extension thereof, are not subject to s. 120.541(3), Florida Statutes.” Senate Bill 1842 became chapter 2013-101.
627.4101 Credit insurance enrollment forms.—All credit insurance enrollment forms must be approved by the office pursuant to the provisions of s. 627.410 or s. 627.682.
History.—s. 11, ch. 2002-57; s. 1113, ch. 2003-261.
627.4102 Informational filing of forms.—
(1) Property and casualty forms, except workers’ compensation and personal lines forms, are exempt from the approval process required under s. 627.410 if:
(a) The form has been electronically submitted to the office in an informational filing made through I-File 30 days before the delivery or issuance for delivery of the form within this state; and
(b) At the time the informational filing is made, a notarized certification is attached to the filing that certifies that each form within the filing is in compliance with all applicable state laws and rules. The certification must be on the insurer’s letterhead and signed and dated by the insurer’s president, chief executive officer, general counsel, or an employee of the insurer responsible for the filing on behalf of the insurer. The certification must contain the following statement, and no other language: “I, (name) , as (title) of (insurer name) , do hereby certify that this form filing has been thoroughly and diligently reviewed by me and by all appropriate company personnel, as well as company consultants, if applicable, and certify that each form contained within the filing is in compliance with all applicable Florida laws and rules. Should a form be found not to be in compliance with Florida laws and rules, I acknowledge that the Office of Insurance Regulation shall disapprove the form.”
(2) If the filing contains a form that is not in compliance with state laws and rules, the form filing, at the discretion of the office, is subject to prior review and approval pursuant to s. 627.410, and the period for review and approval established under s. 627.410(2) begins to run on the date the office notifies the insurer of the discovery of the noncompliant form.
(3) A Notice of Change in Policy Terms form required under s. 627.43141(2) shall be filed as a part of the informational filing for a renewal policy that contains a change. If a renewal policy that was certified requires such form, the insurer must provide a sample copy of the form to the named insured’s agent before or upon providing the form to the named insured.
(4) This section does not preclude an insurer from electing to file any form for approval under s. 627.410 that would otherwise be exempt under this section.
(5) The provisions of this section supersede and replace the existing order issued by the office exempting specified property and casualty forms from the requirements of s. 627.410.
History.—s. 4, ch. 2013-66.
627.4105 Life and health insurance; reduced premiums upon rigorous physical examination.—Upon request, the office 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; s. 1114, ch. 2003-261.
627.4107 Government employees exposed to toxic drug chemicals; cancellation of life or health policy or certificate prohibited.—No life or health insurer may cancel or nonrenew a life or health insurance policy or certificate of insurance providing coverage to a state or local law enforcement officer as defined in s. 943.10, firefighter as defined in s. 633.102, emergency medical technician as defined in s. 401.23, or paramedic as defined in s. 401.23, a volunteer firefighter as defined in s. 633.102 engaged by state or local government, a law enforcement officer employed by the Federal Government, or any other local, state, or Federal Government employee solely based on the fact that the individual has been exposed to toxic chemicals or suffered injury or disease as a result of the individual’s lawful duties arising out of the commission of a violation of chapter 893 by another person. This section does not apply to a person who commits an offense under chapter 893. This section does not prohibit an insurer from canceling or nonrenewing an insurance policy or certificate, as permitted under the applicable state insurance code, based on an act or practice of the policyholder or certificateholder that constitutes fraud or intentional misrepresentation of material fact by the policyholder or certificateholder.
History.—s. 3, ch. 2006-306; s. 152, ch. 2013-183.
627.411 Grounds for disapproval.—
(1) The office 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 residential property insurance and contains provisions that are unfair or inequitable or encourage misrepresentation.
(f) Is for health insurance, and:
1. Provides benefits that are unreasonable in relation to the premium charged.
2. Contains provisions that are unfair or inequitable or contrary to the public policy of this state or that encourage misrepresentation.
3. Contains provisions that apply rating practices that result in unfair discrimination pursuant to s. 626.9541(1)(g)2.
(g) 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 office, 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; s. 1, ch. 2003-139; s. 1115, ch. 2003-261; s. 9, ch. 2005-111; s. 16, ch. 2013-101; s. 12, ch. 2016-11; s. 7, ch. 2016-194.
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 office 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 office 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 office.
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; s. 1116, ch. 2003-261.
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 office, 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 office, 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 office, shall have typed, printed, stamped, or legibly handwritten on the certificate the words “minimum premium policy” or equivalent language. The office may impose an administrative fine pursuant to s. 624.4211 if the office finds any violation of this subsection.
(6) Notwithstanding any other provision of the Florida Insurance Code that is in conflict with federal requirements for a health savings account qualified high-deductible health plan, an insurer, or a health maintenance organization subject to part I of chapter 641, which is authorized to issue health insurance in this state may offer for sale an individual or group policy or contract that provides for a high-deductible plan that meets the federal requirements of a health savings account plan and which is offered in conjunction with a health savings account.
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; s. 1117, ch. 2003-261; s. 3, ch. 2005-231.
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 first-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 first-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. As used in this subparagraph and s. 440.42(3), the term “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. If a dishonored check represents the initial premium payment, the contract and all contractual obligations 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; 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. This subsection does 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, mobile home owner, farmowner, condominium association, condominium unit owner, apartment building, or other policy covering a residential structure or its contents:
(a) The insurer shall give the first-named insured at least 45 days’ advance written notice of the renewal premium.
(b) The insurer shall give the first-named insured written notice of nonrenewal, cancellation, or termination at least 120 days before the effective date of the nonrenewal, cancellation, or termination. The notice must include the reason for the nonrenewal, cancellation, or termination, except that:
1. If cancellation is for nonpayment of premium, at least 10 days’ written notice of cancellation accompanied by the reason therefor must be given. As used in this subparagraph, the term “nonpayment of premium” means failure of the named insured to discharge when due her or his obligations for paying the premium on a policy or an installment of such premium, whether the premium is payable directly to the insurer or its agent or indirectly under a 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. The term 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. If a dishonored check represents the initial premium payment, the contract and all contractual obligations are 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. If the contract is void, any premium received by the insurer from a third party must be refunded to that party in full.
2. If cancellation or termination occurs during the first 90 days 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 must be given unless there has been a material misstatement or misrepresentation or a failure to comply with the underwriting requirements established by the insurer.
3. After the policy has been in effect for 90 days, the policy may not be canceled by the insurer unless there has been a material misstatement; a nonpayment of premium; a failure to comply, within 90 days after the date of effectuation of coverage, with underwriting requirements established by the insurer before the date of effectuation of coverage; or a substantial change in the risk covered by the policy or unless the cancellation is for all insureds under such policies for a given class of insureds. This subparagraph does not apply to individually rated risks that have a policy term of less than 90 days.
4. After a policy or contract has been in effect for more than 90 days, the insurer may not cancel or terminate the policy or contract based on credit information available in public records.
5. A policy that is nonrenewed by Citizens Property Insurance Corporation, pursuant to s. 627.351(6), for a policy that has been assumed by an authorized insurer offering replacement coverage to the policyholder is exempt from the notice requirements of paragraph (a) and this paragraph. In such cases, the corporation must give the named insured written notice of nonrenewal at least 45 days before the effective date of the nonrenewal.
6. Notwithstanding any other provision of law, an insurer may cancel or nonrenew a property insurance policy after at least 45 days’ notice if the office finds that the early cancellation of some or all of the insurer’s policies is necessary to protect the best interests of the public or policyholders and the office approves the insurer’s plan for early cancellation or nonrenewal of some or all of its policies. The office may base such finding upon the financial condition of the insurer, lack of adequate reinsurance coverage for hurricane risk, or other relevant factors. The office may condition its finding on the consent of the insurer to be placed under administrative supervision pursuant to s. 624.81 or to the appointment of a receiver under chapter 631.
7. A policy covering both a home and a motor vehicle may be nonrenewed for any reason applicable to the property or motor vehicle insurance after providing 90 days’ notice.
(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.
(d)1. Upon a declaration of an emergency pursuant to s. 252.36 and the filing of an order by the Commissioner of Insurance Regulation, an insurer may not cancel or nonrenew a personal residential or commercial residential property insurance policy covering a dwelling or residential property located in this state which has been damaged as a result of a hurricane or wind loss that is the subject of the declaration of emergency for a period of 90 days after the dwelling or residential property has been repaired. A structure is deemed to be repaired when substantially completed and restored to the extent that it is insurable by another authorized insurer that is writing policies in this state.
2. However, an insurer or agent may cancel or nonrenew such a policy prior to the repair of the dwelling or residential property:
a. Upon 10 days’ notice for nonpayment of premium; or
b. Upon 45 days’ notice:
(I) For a material misstatement or fraud related to the claim;
(II) If the insurer determines that the insured has unreasonably caused a delay in the repair of the dwelling; or
(III) If the insurer has paid policy limits.
3. If the insurer elects to nonrenew a policy covering a property that has been damaged, the insurer shall provide at least 90 days’ notice to the insured that the insurer intends to nonrenew the policy 90 days after the dwelling or residential property has been repaired. Nothing in this paragraph shall prevent the insurer from canceling or nonrenewing the policy 90 days after the repairs are complete for the same reasons the insurer would otherwise have canceled or nonrenewed the policy but for the limitations of subparagraph 1. The Financial Services Commission may adopt rules, and the Commissioner of Insurance Regulation may issue orders, necessary to implement this paragraph.
4. This paragraph shall also apply to personal residential and commercial residential policies covering property that was damaged as the result of Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances, Hurricane Ivan, or Hurricane Jeanne.
(e) If any cancellation or nonrenewal of a policy subject to this subsection is to take effect during the duration of a hurricane as defined in s. 627.4025(2)(c), the effective date of such cancellation or nonrenewal is extended until the end of the duration of such hurricane. The insurer may collect premium at the prior rates or the rates then in effect for the period of time for which coverage is extended. This paragraph does not apply to any property with respect to which replacement coverage has been obtained and which is in effect for a claim occurring during the duration of the hurricane.
(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.
(4) Notwithstanding s. 440.42(3), if cancellation of a policy providing coverage for workers’ compensation and employer’s liability insurance is requested in writing by the insured, such cancellation shall be effective on the date requested by the insured or, if no date is specified by the insured, cancellation shall be effective on the date of the written request. The carrier is not required to send notice of cancellation to the insured if the cancellation is requested in writing by the insured. Any retroactive assumption of coverage and liabilities under a policy providing workers’ compensation and employer’s liability insurance may not exceed 21 days.
(5) An insurer that cancels a property insurance policy on property secured by a mortgage due to the failure of the lender to timely pay the premium when due shall reinstate the policy as required by s. 501.137.
(6) A single claim on a property insurance policy which is the result of water damage may not be used as the sole cause for cancellation or nonrenewal unless the insurer can demonstrate that the insured has failed to take action reasonably requested by the insurer to prevent a future similar occurrence of damage to the insured property.
(7)(a) Effective August 1, 2007, with respect to any residential property insurance policy, every notice of renewal premium must specify:
1. The dollar amounts recouped for assessments by the Florida Hurricane Catastrophe Fund, the Citizens Property Insurance Corporation, and the Florida Insurance Guaranty Association. The actual names of the entities must appear next to the dollar amounts.
2. The dollar amount of any premium increase that is due to an approved rate increase and the total dollar amount that is due to coverage changes.
(b) The Financial Services Commission may adopt rules pursuant to ss. 120.536(1) and 120.54 to implement this subsection.
(8) Upon expiration of the policy term, an insurer may transfer a personal lines residential, commercial residential, or commercial lines policy to another authorized insurer that is a member of the same group or owned by the same holding company as the transferring insurer. The transfer constitutes a renewal of the policy and may not be treated as a cancellation or a nonrenewal of the policy. The insurer must provide notice of its intent to transfer the policy at least 45 days before the effective date of the transfer along with the financial rating of the authorized insurer to which the policy is being transferred. Such notice may be provided in the notice of renewal premium. This subsection does not apply to a policy providing personal lines residential or commercial residential property insurance coverage, except for farmowners insurance, unless:
(a) The authorized insurer to which the policy is being transferred is admitted in this state and other states and writing residential property insurance in multiple states, is not converting the policy to a surplus lines policy, and has been determined by the office to have the same or better financial strength than the transferring insurer;
(b) The transfer results in substantially similar coverage;
(c) The authorized insurer to which the policy is being transferred provides a notice of change in policy terms to the policyholder in compliance with s. 627.43141, which must also include notice of the policy transfer and the authorized insurer’s financial rating. Such notice must be provided with the notice of renewal premium. The notice and information provided under this paragraph must be provided to the insured at least 60 days before the effective date of the transfer and may replace any other notice required by this subsection;
(d) The policyholder of the policy being transferred has been selected on a nondiscriminatory basis; and
(e) The office has approved the transfer.
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; s. 13, ch. 2004-370; s. 43, ch. 2004-374; ss. 109, 158, ch. 2004-390; s. 10, ch. 2005-111; s. 47, ch. 2006-12; s. 12, ch. 2006-305; s. 25, ch. 2007-1; s. 16, ch. 2007-90; s. 150, ch. 2008-4; s. 14, ch. 2008-66; s. 17, ch. 2011-39; s. 9, ch. 2011-174; s. 8, ch. 2012-213; s. 3, ch. 2014-86; s. 5, ch. 2015-135; s. 1, ch. 2017-19.
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.
(3) Any request made to a self-insured corporation pursuant to this section shall be sent by certified mail to the registered agent of the disclosing entity.
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; s. 10, ch. 2011-174.
Note.—Former s. 627.7264.
627.4138 Wrap-up insurance policies for nonpublic construction projects.—
(1) As used in this section, the term:
(a) “Specified contracted worksite” means construction being performed during one or more policy years at one site or multiple sites of the same construction project.
(b) “Wrap-up insurance policy” means a consolidated insurance program or series of insurance policies issued to the nonpublic owner, the general contractor, or combination thereof which may provide one or more of the following types of insurance coverage for a contractor or subcontractor working at a specified contracted worksite of a construction project: general liability, property damage liability, workers’ compensation, employers’ liability, or pollution liability.
(2) A wrap-up insurance policy may include a deductible of $100,000 or more for workers’ compensation claims if:
(a) The workers’ compensation minimum standard premium calculated on the combined payrolls for all entities covered by the policy exceeds $500,000;
(b) The estimated cost of the construction to be performed at each specified contracted worksite of a construction project is $25 million or more;
(c) The insurer is obligated to pay the first dollar of a claim like any other workers’ compensation policy without a deductible;
(d) The reimbursement of the deductible by the insured does not affect the insurer’s obligation to pay claims;
(e) The insurer complies with all the filing requirements of the Department of Financial Services under chapter 440 for all losses, including those below the deductible limit;
(f) The insurer files unit statistical reports with the National Council on Compensation Insurance which show all losses, including those below the deductible limit;
(g) The unit statistical reports necessary for the calculation of an experience modification factor for the insured are filed with National Council on Compensation Insurance;
(h) The insurer complies with National Council on Compensation Insurance aggregate financial calls, detail claim information calls, unit statistical reporting, and other required calls; and
(i) The insurer has an established program for having the first-named insured, whether the owner, the general contractor, or a combination thereof, reimburse the insurer for losses paid within the deductible.
History.—s. 1, ch. 2013-175.
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 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 for a private passenger motor vehicle insurance policy 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) 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) A basic homeowner, mobile home owner, dwelling, or condominium unit owner policy may not be delivered or issued for delivery in this state unless a comprehensive checklist of coverage on a form adopted by the commission and an appropriate outline of coverage have been delivered prior to issuance of the policy or accompanies the policy when issued. The commission shall, by rule, adopt a form for the checklist for each type of policy to which this subsection applies. Each form shall indicate that it was adopted by the commission.
(a) The checklist must contain a list of the standard provisions and elements that may typically be included in these policies, whether or not they are included in the particular policy being issued, in a format that allows the insurer to place a check mark next to the provisions elements that are included so that the consumer can see both what is included and what is not included in the policy. As an alternative to checking the boxes on the checklist, an insurer may delete the check boxes from the form and replace them with text indicating whether the provision’s elements are included or not. Limits of liability shall be listed for each item. The checklist must include, but is not limited to, the following:
1. Property coverage for the principal premises shown in the declarations.
2. Property coverage for other structures on the residence premises.
3. Whether the principal premises and other structures are insured against the following perils:
a. Fire.
b. Lightning.
c. Explosion.
d. Hurricane loss.
e. Nonhurricane wind loss.
f. Collapse.
g. Mold.
h. Sinkhole loss.
i. Vandalism.
4. Personal property coverage.
5. Whether personal property is insured against the following perils:
a. Fire.
b. Lightning.
c. Hurricane loss.
d. Nonhurricane wind loss.
e. Collapse.
f. Mold.
g. Sinkhole loss.
h. Theft.
6. The following additional coverages:
a. Debris removal.
b. Loss assessment.
c. Additional living expenses.
7. Personal liability coverage.
8. Medical payments coverage.
9. Discounts applied to the premium.
10. Deductibles for loss due to hurricane and loss to other perils.
11. Building ordinance or law coverage.
12. Replacement cost coverage.
13. Actual cash value coverage.
(b) The forms shall allow insurers to place other coverages on the checklists which may or may not be included in the insurer’s policies.
(c) The outline of coverage must contain:
1. 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.
2. 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.
3. A summary statement of any renewal or cancellation provisions.
4. 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.
5. A summary of any additional coverage provided through any rider or endorsement that accompanies the policy.
(4) The outline of coverage for a private passenger motor vehicle policy is required only on the initial policy issued by an insurer. The outline of coverage and the checklist for a basic homeowner, mobile home owner, dwelling, or condominium unit owner policy is required on the initial policy and each renewal thereof issued by an insurer.
(5) An insurer must insert the following language on the outline of coverage:
“The following outline of coverage or checklist is for informational purposes only. Florida law prohibits this outline or checklist 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.”
(6) Neither this section nor the outline of coverage or checklist 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; s. 11, ch. 2005-111.
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 office;
(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 office 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 office 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 office, 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; s. 1118, ch. 2003-261.
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 s. 624.462 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. 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.
2. 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 90 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 90 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.
(d) A clause requiring the insurer or self-insurer to notify the insured no less than 60 days prior to the effective date of a rate increase. The provisions of s. 627.4133 shall apply to such notice and to the failure of the insurer to provide such notice to the extent not in conflict with this section.
(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, 2003.
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; s. 43, ch. 2003-416; s. 9, ch. 2011-233.
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.
627.41495 Public notice of medical malpractice rate filings.—
(1) Upon the filing of a proposed rate change by a medical malpractice insurer or self-insurance fund, which filing would result in an average statewide increase of 25 percent or more, pursuant to standards determined by the office, the insurer or self-insurance fund shall mail notice of such filing to each of its policyholders or members.
(2) The rate filing shall be available for public inspection.
History.—s. 44, ch. 2003-416.
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) Except as set forth in subsection (4), an 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.
(4) An insurer may elect to issue an insurance policy that is not executed by an officer, attorney in fact, employee, or representative, provided that such policy may not be rendered invalid by reason of the lack of execution thereof.
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; s. 6, ch. 2018-131.
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 office, 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; s. 1119, ch. 2003-261.
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 office 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; s. 1120, ch. 2003-261.
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.
(9) With respect to any group or individual insurer covering dental services, each claimant, or dentist acting for a claimant, who has had a claim denied as not medically or dentally necessary or who has had a claim payment based on an alternate dental service in accordance with accepted dental standards for adequate and appropriate care must be provided an opportunity for an appeal to the insurer’s licensed dentist 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 dentist must respond within a reasonable time, not to exceed 15 business days.
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; s. 3, ch. 2001-176; s. 107, ch. 2001-277.
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, delivered, or electronically transmitted to the insured or to the person entitled thereto not later than 60 days after the effectuation of coverage. Notwithstanding any other provision of law, an insurer may allow a policyholder of personal lines insurance to affirmatively elect delivery of the policy documents, including, but not limited to, policies, endorsements, notices, or documents, by electronic means in lieu of delivery by mail. Electronic transmission of a policy for commercial risks, including, but not limited to, workers’ compensation and employers’ liability, commercial automobile liability, commercial automobile physical damage, commercial lines residential property, commercial nonresidential property, farmowners insurance, and the types of commercial lines risks set forth in s. 627.062(3)(d), constitutes delivery to the insured or to the person entitled to delivery, unless the insured or the person entitled to delivery communicates to the insurer in writing or electronically that he or she does not agree to delivery by electronic means. Electronic transmission shall include a notice to the insured or to the person entitled to delivery of a policy of his or her right to receive the policy via United States mail rather than via electronic transmission. A paper copy of the policy shall be provided to the insured or to the person entitled to delivery at his or her request.
(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.
(4) Notwithstanding subsections (1) and (2), property and casualty insurance policies and endorsements that do not contain personally identifiable information may be posted on the insurer’s Internet website. If the insurer elects to post insurance policies and endorsements on its Internet website in lieu of mailing or delivery to insureds, the insurer must comply with the following:
(a) Each policy and endorsement must be easily accessible on the insurer’s Internet website for as long as the policy and endorsement remain in force.
(b) The insurer must archive all of its expired policies and endorsements on its Internet website and make any expired policy and endorsement available upon an insured’s request for at least 5 years after expiration of the policy and endorsement.
(c) Each policy and endorsement must be posted in a manner that enables the insured to print and save the policy and endorsement using a program or application that is widely available on the Internet without charge.
(d) When the insurer issues an initial policy or any renewal, the insurer must notify the insured, in the manner the insurer customarily uses to communicate with the insured, that the insured has the right to request and obtain without charge a paper or electronic copy of the insured’s policy and endorsements.
(e) On each declarations page issued to the insured, the insurer must clearly identify the exact policy form and endorsement form purchased by the insured.
(f) If the insurer changes any policy form or endorsement, the insurer must notify the insured, in the manner the insurer customarily uses to communicate with the insured, that the insured has the right to request and obtain without charge a paper or electronic copy of such form or endorsement.
(5) An electronically delivered document satisfies any font, size, color, spacing, or other formatting requirement for printed documents if the format in the electronically delivered document has reasonably similar proportions or emphasis of the characters relative to the rest of the electronic document or is otherwise displayed in a reasonably conspicuous manner.
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; s. 1, ch. 2013-190; s. 1, ch. 2013-191; s. 1, ch. 2015-170; s. 12, ch. 2017-132.
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 office 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; s. 1121, ch. 2003-261.
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 or nonablative therapy with curative or life-prolonging 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 Chief Financial Officer;
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; s. 1122, ch. 2003-261; s. 1, ch. 2008-119.
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.
627.4238 Health insurer examinations.—The office 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 office 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 office, except in a case in which the office 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; s. 1123, ch. 2003-261.
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.
1(b) “Standard reference compendium” means authoritative compendia identified by the Secretary of the United States Department of Health and Human Services and recognized by the federal Centers for Medicare and Medicaid Services.
(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; s. 1, ch. 2009-202; s. 72, ch. 2009-223.
1Note.—As amended by s. 72, ch. 2009-223. For a description of multiple acts in the same session affecting a statutory provision, see preface to the Florida Statutes, “Statutory Construction.” Paragraph (1)(b) was also amended by s. 1, ch. 2009-202, and that version reads:
(b) “Standard reference compendium” means an authoritative compendium identified by the Secretary of the United States Department of Health and Human Services and recognized by the federal Centers for Medicare and Medicaid Services.
627.42391 Insurance policies; cancer treatment parity; orally administered cancer treatment medications.—
(1) As used in this section, the term:
(a) “Cancer treatment medication” means medication prescribed by a treating physician who determines that the medication is medically necessary to kill or slow the growth of cancerous cells in a manner consistent with nationally accepted standards of practice.
(b) “Cost sharing” includes copayments, coinsurance, dollar limits, and deductibles imposed on the covered person.
(c) “Grandfathered health plan” has the same meaning as provided in 42 U.S.C. s. 18011 and is subject to the conditions for maintaining status as a grandfathered health plan as specified in 45 C.F.R. s. 147.140.
(2) An individual or group insurance policy delivered, issued for delivery, renewed, amended, or continued in this state that provides medical, major medical, or similar comprehensive coverage and includes coverage for cancer treatment medications must also cover prescribed, orally administered cancer treatment medications and may not apply cost-sharing requirements for orally administered cancer treatment medications that are less favorable to the covered person than cost-sharing requirements for intravenous or injected cancer treatment medications covered under the policy or contract.
(3) An insurer providing a policy or contract described in subsection (2) and any participating entity through which the insurer offers health services may not:
(a) Vary the terms of the policy in effect on July 1, 2014, to avoid compliance with this section.
(b) Provide any incentive, including, but not limited to, a monetary incentive, or impose treatment limitations to encourage a covered person to accept less than the minimum protections available under this section.
(c) Penalize a health care practitioner or reduce or limit the compensation of a health care practitioner for recommending or providing services or care to a covered person as required under this section.
(d) Provide any incentive, including, but not limited to, a monetary incentive, to induce a health care practitioner to provide care or services that do not comply with this section.
(e) Change the classification of any intravenous or injected cancer treatment medication or increase the amount of cost sharing applicable to any intravenous or injected cancer treatment medication in effect on the effective date of this section in order to achieve compliance with this section.
(4) This section does not apply to grandfathered health plans or to Medicare supplement, dental, vision, long-term care, disability, accident only, specified disease policies, or other supplemental limited-benefit plans.
Notwithstanding this section, if the cost-sharing requirements for intravenous or injected cancer treatment medications under the policy or contract are less than $50 per month, then the cost-sharing requirements for orally administered cancer treatment medications may be up to $50 per month.
History.—s. 8, ch. 2013-153.
627.42392 Prior authorization.—
(1) As used in this section, the term “health insurer” means an authorized insurer offering health insurance as defined in s. 624.603, a managed care plan as defined in s. 409.962(10), or a health maintenance organization as defined in s. 641.19(12).
(2) Notwithstanding any other provision of law, effective January 1, 2017, or six (6) months after the effective date of the rule adopting the prior authorization form, whichever is later, a health insurer, or a pharmacy benefits manager on behalf of the health insurer, which does not provide an electronic prior authorization process for use by its contracted providers, shall only use the prior authorization form that has been approved by the Financial Services Commission for granting a prior authorization for a medical procedure, course of treatment, or prescription drug benefit. Such form may not exceed two pages in length, excluding any instructions or guiding documentation, and must include all clinical documentation necessary for the health insurer to make a decision. At a minimum, the form must include: (1) sufficient patient information to identify the member, date of birth, full name, and Health Plan ID number; (2) provider name, address and phone number; (3) the medical procedure, course of treatment, or prescription drug benefit being requested, including the medical reason therefor, and all services tried and failed; (4) any laboratory documentation required; and (5) an attestation that all information provided is true and accurate.
(3) The Financial Services Commission in consultation with the Agency for Health Care Administration shall adopt by rule guidelines for all prior authorization forms which ensure the general uniformity of such forms.
(4) Electronic prior authorization approvals do not preclude benefit verification or medical review by the insurer under either the medical or pharmacy benefits.
History.—ss. 3, 4, ch. 2016-222; s. 16, ch. 2016-224; s. 40, ch. 2017-3.
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 office 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 office shall forthwith revoke the insurer’s certificate of authority. The office 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 office 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; s. 1124, ch. 2003-261.
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 office 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; s. 1125, ch. 2003-261.
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.
627.4302 Identification cards for processing prescription drug claims.—
(1) The purpose of this section is to improve patient care by minimizing confusion, eliminating unnecessary work, decreasing patient wait time, and improving business efficiencies.
(2) Any health insurer or health maintenance organization and all state and local government entities entering into an agreement to provide coverage for prescription drugs on an outpatient basis shall provide a benefits-identification card containing the following information:
(a) The name of the claim processor.
(b) The electronic-claims payor identification number or the issuer identification number, also referred to as the Banking Identification Number or “BIN,” assigned by the American National Standards Institute.
(c) The insured’s prescription group number.
(d) The insured’s identification number.
(e) The insured’s name.
(f) The claims submission name and address.
(g) The help desk telephone number.
(h) Any other information that the entity finds will assist in the processing of the claim.
The information required in paragraphs (a), (b), (g), and (h) must be provided on the card, unless instruction is provided on the card for ready access to such information by electronic means.
(3) The benefits-identification card must present the information in a manner readily identifiable or, alternatively, the information may be embedded in the card and available through magnetic stripe or smart card. The information may also be provided through other electronic technology.
(4) Any entity providing a health-benefits-identification card containing all of the information required by this section shall not be required to provide a separate identification card for prescription drug benefits.
(5) A benefits-identification card required under subsection (2) shall be issued no later than 60 days after any change in the information contained on the card becomes effective. An entity may issue a temporary sticker containing the new information in lieu of issuing a new card prior to the annual renewal date. Such sticker must be designed so that it can be attached to the existing card.
History.—s. 1, ch. 2002-245.
627.43141 Notice of change in policy terms.—
(1) As used in this section, the term:
(a) “Change in policy terms” means the modification, addition, or deletion of any term, coverage, duty, or condition from the previous policy. The correction of typographical or scrivener’s errors or the application of mandated legislative changes is not a change in policy terms.
(b) “Optional coverage” means the addition of new insurance coverage that has not previously been requested or approved by the policyholder but that does not include any change to the base policy or a deductible or an insurance limit.
(c) “Policy” means a written contract of property and casualty insurance or written agreement for such insurance, by whatever name called, and includes all clauses, riders, endorsements, and papers that are a part of such policy. The term does not include a binder as defined in s. 627.420 unless the duration of the binder period exceeds 60 days.
(d) “Renewal” 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 that has a policy period or term of less than 6 months or that does not have a fixed expiration date shall, for purposes of this section, be considered as written for successive policy periods or terms of 6 months.
(2) A renewal policy may contain a change in policy terms. If such change occurs, the insurer shall give the named insured advance written notice summarizing the change, which may be enclosed along with the written notice of renewal premium required under ss. 627.4133 and 627.728 or sent separately within the timeframe required under the Florida Insurance Code for the provision of a notice of nonrenewal to the named insured for that line of insurance. The insurer must also provide a sample copy of the notice to the named insured’s insurance agent before or at the same time that notice is provided to the named insured. Such notice shall be entitled “Notice of Change in Policy Terms.”
(3) A renewal policy, which includes the addition of optional coverage that increases the premium to a policyholder, may not use the Notice of Change in Policy Terms to add the optional coverage to the policy unless the policyholder affirmatively indicates to the insurer or agent that the policyholder approves the addition of the optional coverage.
(4) Although not required, proof of mailing or registered mailing through the United States Postal Service of the Notice of Change in Policy Terms to the named insured at the address shown in the policy is sufficient proof of notice.
(5) Receipt of the premium payment for the renewal policy by the insurer is deemed to be acceptance of the new policy terms by the named insured.
(6) If an insurer fails to provide the notice required in subsection (2), the original policy terms remain in effect until the next renewal and the proper service of the notice, or until the effective date of replacement coverage obtained by the named insured, whichever occurs first.
(7) The intent of this section is to:
(a) Allow an insurer to make a change in policy terms without nonrenewing those policyholders that the insurer wishes to continue insuring.
(b) Alleviate concern and confusion to the policyholder caused by the required policy nonrenewal for the limited issue if an insurer intends to renew the insurance policy, but the new policy contains a change in policy terms.
(c) Encourage policyholders to discuss their coverages with their insurance agents.
History.—s. 18, ch. 2011-39; s. 2, ch. 2015-170; s. 7, ch. 2018-131.
627.441 Commercial general liability policies; coverage to contractors for completed operations.—
(1) As used in this section, the term:
(a) “Contractor” means a contractor or subcontractor performing work on a public construction project under contract with a public agency, as described in s. 255.0517(2).
(b) “Liability insurer” means an insurer issuing a commercial general liability insurance policy in this state to a contractor that provides coverage for liability arising out of completed operations performed by the contractor or on the contractor’s behalf.
(2) A liability insurer must offer coverage at an appropriate additional premium for liability arising out of current or completed operations under an owner-controlled insurance program for any period beyond the period for which the program provides liability coverage, as specified in s. 255.0517(2)(b). The period of such coverage must be sufficient to protect against liability arising out of an action brought within the time limits provided in s. 95.11(3)(c).
History.—s. 2, ch. 2004-377; s. 3, ch. 2017-101.
627.442 Insurance contracts.—
(1) A person who requires a workers’ compensation insurance policy pursuant to a construction contract may not reject a workers’ compensation insurance policy issued by a self-insurance fund that is subject to part V of chapter 631 based upon the self-insurance fund not being rated by a nationally recognized insurance rating service.
(2) Notwithstanding s. 440.381(3), an insurer having at least $200 million in surplus, or an insurer within an insurer group that has at least $400 million in surplus, as reflected in the combined annual statement filed by the insurer group with the office, is not required to perform physical onsite premium audits for workers’ compensation coverage, other than an audit required by an order of the office, or if requested by the insured.
History.—s. 1, ch. 2007-178; s. 15, ch. 2011-174; s. 9, ch. 2012-213.
PART III
LIFE INSURANCE AND ANNUITY CONTRACTS627.451 Scope of this part.
627.452 Standard provisions required.
627.453 Grace period.
627.454 Entire contract; statements in application.
627.455 Incontestability.
627.4553 Recommendations to surrender.
627.4554 Annuity investments.
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.
627.4605 Replacement notice.
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 office 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; s. 1126, ch. 2003-261.
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.
627.4553 Recommendations to surrender.—
(1) If an insurance agent recommends the surrender of an annuity or life insurance policy containing a cash value and does not recommend that the proceeds from the surrender be used to fund or purchase another annuity or life insurance policy, before execution of the surrender, the insurance agent shall provide written information relating to the annuity or policy to be surrendered. Such information shall include, but is not limited to, the amount of any estimated surrender charge, the loss of any minimum interest rate guarantees, the possibility of tax consequences, the amount of any forfeited death benefit, and a description of any other investment performance guarantees being forfeited as a result of the transaction. The agent shall maintain a copy of the information and the date that the information was provided to the owner. This section also applies to a person performing insurance agent activities pursuant to an exemption from licensure under this part.
(2) For purposes of this section, the term “surrender” means the voluntary surrender, by the owner’s request, of the annuity or life insurance policy before its maturity date, in exchange for the policy’s current cash surrender value which results in a surrender or termination of the policy or contract. The term excludes any involuntary termination that is otherwise required by the terms of the policy contract and excludes all transactions other than a surrender, such as maturity, policy loan, lapse for nonpayment of premium, or withdrawal of policy or contract values, annuitization, or exercise of reduced-paid-up or extended-term nonforfeiture options.
History.—s. 27, ch. 2014-123; s. 15, ch. 2015-180.
627.4554 Annuity investments.—
(1) PURPOSE.—The purpose of this section is to require insurers to set forth standards and procedures for making recommendations to consumers which result in transactions involving annuity products, and to establish a system for supervising such recommendations in order to ensure that the insurance needs and financial objectives of consumers are appropriately addressed at the time of the transaction.
(2) SCOPE.—This section applies to any recommendation made to a consumer to purchase, exchange, or replace an annuity by an insurer or its agent, and which results in the purchase, exchange, or replacement recommended.
(3) DEFINITIONS.—As used in this section, the term:
(a) “Agent” has the same meaning as provided in s. 626.015.
(b) “Annuity” means an insurance product under state law which is individually solicited, whether classified as an individual or group annuity.
(c) “FINRA” means the Financial Industry Regulatory Authority or a succeeding agency.
(d) “Insurer” has the same meaning as provided in s. 624.03.
(e) “Recommendation” means advice provided by an insurer or its agent to a consumer which would result in the purchase, exchange, or replacement of an annuity in accordance with that advice.
(f) “Replacement” means a transaction in which a new policy or contract is to be purchased and it is known or should be known to the proposing insurer or its agent that by reason of such transaction an existing policy or contract will be:
1. Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated;
2. Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value due to the use of nonforfeiture benefits or other policy values;
3. Amended so as to effect a reduction in benefits or the term for which coverage would otherwise remain in force or for which benefits would be paid;
4. Reissued with a reduction in cash value; or
5. Used in a financed purchase.
(g) “Suitability information” means information related to the consumer which is reasonably appropriate to determine the suitability of a recommendation made to the consumer, including the following:
1. Age;
2. Annual income;
3. Financial situation and needs, including the financial resources used for funding the annuity;
4. Financial experience;
5. Financial objectives;
6. Intended use of the annuity;
7. Financial time horizon;
8. Existing assets, including investment and life insurance holdings;
9. Liquidity needs;
10. Liquid net worth;
11. Risk tolerance; and
12. Tax status.
(4) EXEMPTIONS.—This section does not apply to transactions involving:
(a) Direct-response solicitations where there is no recommendation based on information collected from the consumer pursuant to this section;
(b) Contracts used to fund:
1. An employee pension or welfare benefit plan that is covered by the federal Employee Retirement and Income Security Act;
2. A plan described by s. 401(a), s. 401(k), s. 403(b), s. 408(k), or s. 408(p) of the Internal Revenue Code, if established or maintained by an employer;
3. A government or church plan defined in s. 414 of the Internal Revenue Code, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax-exempt organization under s. 457 of the Internal Revenue Code;
4. A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;
5. Settlements or assumptions of liabilities associated with personal injury litigation or a dispute or claim-resolution process; or
6. Formal prepaid funeral contracts.
(5) DUTIES OF INSURERS AND AGENTS.—
(a) When recommending the purchase or exchange of an annuity to a consumer which results in an insurance transaction or series of insurance transactions, the agent, or the insurer where no agent is involved, must have reasonable grounds for believing that the recommendation is suitable for the consumer, based on the consumer’s suitability information, and that there is a reasonable basis to believe all of the following:
1. The consumer has been reasonably informed of various features of the annuity, such as the potential surrender period and surrender charge; potential tax penalty if the consumer sells, exchanges, surrenders, or annuitizes the annuity; mortality and expense fees; investment advisory fees; potential charges for and features of riders; limitations on interest returns; insurance and investment components; and market risk.
2. The consumer would benefit from certain features of the annuity, such as tax-deferred growth, annuitization, or the death or living benefit.
3. The particular annuity as a whole, the underlying subaccounts to which funds are allocated at the time of purchase or exchange of the annuity, and riders and similar product enhancements, if any, are suitable; and, in the case of an exchange or replacement, the transaction as a whole is suitable for the particular consumer based on his or her suitability information.
4. In the case of an exchange or replacement of an annuity, the exchange or replacement is suitable after considering whether the consumer:
a. Will incur a surrender charge; be subject to the commencement of a new surrender period; lose existing benefits, such as death, living, or other contractual benefits; or be subject to increased fees, investment advisory fees, or charges for riders and similar product enhancements;
b. Would benefit from product enhancements and improvements; and
c. Has had another annuity exchange or replacement, including an exchange or replacement within the preceding 36 months.
(b) Before executing a purchase, exchange, or replacement of an annuity resulting from a recommendation, an insurer or its agent must make reasonable efforts to obtain the consumer’s suitability information. The information shall be collected on form DFS-H1-1980, which is hereby incorporated by reference, and completed and signed by the applicant and agent. Questions requesting this information must be presented in at least 12-point type and be sufficiently clear so as to be readily understandable by both the agent and the consumer. A true and correct executed copy of the form must be provided by the agent to the insurer, or to the person or entity that has contracted with the insurer to perform this function as authorized by this section, within 10 days after execution of the form, and shall be provided to the consumer no later than the date of delivery of the contract or contracts.
(c) Except as provided under paragraph (d), an insurer may not issue an annuity recommended to a consumer unless there is a reasonable basis to believe the annuity is suitable based on the consumer’s suitability information.
(d) An insurer’s issuance of an annuity must be reasonable based on all the circumstances actually known to the insurer at the time the annuity is issued. However, an insurer or its agent does not have an obligation to a consumer related to an annuity transaction under paragraph (a) or paragraph (c) if:
1. A recommendation has not been made;
2. A recommendation was made and is later found to have been based on materially inaccurate information provided by the consumer;
3. A consumer refuses to provide relevant suitability information and the annuity transaction is not recommended; or
4. A consumer decides to enter into an annuity transaction that is not based on a recommendation of an insurer or its agent.
(e) At the time of sale, the agent or the agent’s representative must:
1. Make a record of any recommendation made to the consumer pursuant to paragraph (a);
2. Obtain the consumer’s signed statement documenting his or her refusal to provide suitability information, if applicable; and
3. Obtain the consumer’s signed statement acknowledging that an annuity transaction is not recommended if he or she decides to enter into an annuity transaction that is not based on the insurer’s or its agent’s recommendation, if applicable.
(f) Before executing a replacement or exchange of an annuity contract resulting from a recommendation, the agent must provide on form DFS-H1-1981, which is hereby incorporated by reference, information that compares the differences between the existing annuity contract and the annuity contract being recommended in order to determine the suitability of the recommendation and its benefit to the consumer. A true and correct executed copy of this form must be provided by the agent to the insurer, or to the person or entity that has contracted with the insurer to perform this function as authorized by this section, within 10 days after execution of the form, and must be provided to the consumer no later than the date of delivery of the contract or contracts.
(g) An insurer shall establish a supervision system that is reasonably designed to achieve the insurer’s and its agent’s compliance with this section.
1. Such system must include, but is not limited to:
a. Maintaining reasonable procedures to inform its agents of the requirements of this section and incorporating those requirements into relevant agent training manuals;
b. Establishing standards for agent product training;
c. Providing product-specific training and training materials that explain all material features of its annuity products to its agents;
d. Maintaining procedures for the review of each recommendation before issuance of an annuity which are designed to ensure that there is a reasonable basis for determining that a recommendation is suitable. Such review procedures may use a screening system for identifying selected transactions for additional review and may be accomplished electronically or through other means, including physical review. Such electronic or other system may be designed to require additional review only of those transactions identified for additional review using established selection criteria;
e. Maintaining reasonable procedures to detect recommendations that are not suitable, such as confirmation of consumer suitability information, systematic customer surveys, consumer interviews, confirmation letters, and internal monitoring programs. This sub-subparagraph does not prevent an insurer from using sampling procedures or from confirming suitability information after the issuance or delivery of the annuity; and
f. Annually providing a report to senior managers, including the senior manager who is responsible for audit functions, which details a review, along with appropriate testing, which is reasonably designed to determine the effectiveness of the supervision system, the exceptions found, and corrective action taken or recommended, if any.
2. An insurer is not required to include in its supervision system agent recommendations to consumers of products other than the annuities offered by the insurer.
3. An insurer may contract for performance of a function required under subparagraph 1.
a. If an insurer contracts for the performance of a function, the insurer must include the supervision of contractual performance as part of those procedures listed in subparagraph 1. These include, but are not limited to:
(I) Monitoring and, as appropriate, conducting audits to ensure that the contracted function is properly performed; and
(II) Annually obtaining a certification from a senior manager who has responsibility for the contracted function that the manager has a reasonable basis for representing that the function is being properly performed.
b. An insurer is responsible for taking appropriate corrective action and may be subject to sanctions and penalties pursuant to subsection (7) regardless of whether the insurer contracts for performance of a function and regardless of the insurer’s compliance with sub-subparagraph a.
(h) An agent may not dissuade, or attempt to dissuade, a consumer from:
1. Truthfully responding to an insurer’s request for confirmation of suitability information;
2. Filing a complaint; or
3. Cooperating with the investigation of a complaint.
(i) Sales made in compliance with FINRA requirements pertaining to the suitability and supervision of annuity transactions satisfy the requirements of this section. This applies to FINRA broker-dealer sales of variable annuities and fixed annuities if the suitability and supervision is similar to those applied to variable annuity sales. However, this paragraph does not limit the ability of the office or the department to enforce, including investigate, the provisions of this section. For this paragraph to apply, an insurer must:
1. Monitor the FINRA member broker-dealer using information collected in the normal course of an insurer’s business; and
2. Provide to the FINRA member broker-dealer information and reports that are reasonably appropriate to assist the FINRA member broker-dealer in maintaining its supervision system.
(6) RECORDKEEPING.—
(a) Insurers and agents must maintain or be able to make available to the office or department records of the information collected from the consumer and other information used in making the recommendations that were the basis for insurance transactions for 5 years after the insurance transaction is completed by the insurer. An insurer may maintain the documentation on behalf of its agent.
(b) Records required to be maintained under this subsection may be maintained in paper, photographic, microprocess, magnetic, mechanical, or electronic media, or by any process that accurately reproduces the actual document.
(7) COMPLIANCE MITIGATION; PENALTIES.—
(a) An insurer is responsible for compliance with this section. If a violation occurs because of the action or inaction of the insurer or its agent which results in harm to a consumer, the office may order the insurer to take reasonably appropriate corrective action for the consumer and may impose appropriate penalties and sanctions.
(b) The department may order:
1. An insurance agent to take reasonably appropriate corrective action for a consumer harmed by a violation of this section by the insurance agent, including monetary restitution of penalties or fees incurred by the consumer, and impose appropriate penalties and sanctions.
2. A managing general agency or insurance agency that employs or contracts with an insurance agent to sell or solicit the sale of annuities to consumers to take reasonably appropriate corrective action for a consumer harmed by a violation of this section by the insurance agent.
(c) In addition to any other penalty authorized under chapter 626, the department shall order an insurance agent to pay restitution to a consumer who has been deprived of money by the agent’s misappropriation, conversion, or unlawful withholding of moneys belonging to the consumer in the course of a transaction involving annuities. The amount of restitution required to be paid may not exceed the amount misappropriated, converted, or unlawfully withheld. This paragraph does not limit or restrict a person’s right to seek other remedies as provided by law.
(d) Any applicable penalty under the Florida Insurance Code for a violation of this section shall be reduced or eliminated according to a schedule adopted by the office or the department, as appropriate, if corrective action for the consumer was taken promptly after a violation was discovered.
(e) A violation of this section does not create or imply a private cause of action.
(8) PROHIBITED CHARGES.—An annuity contract issued to a senior consumer age 65 or older may not contain a surrender or deferred sales charge for a withdrawal of money from an annuity exceeding 10 percent of the amount withdrawn. The charge shall be reduced so that no surrender or deferred sales charge exists after the end of the 10th policy year or 10 years after the date of each premium payment if multiple premiums are paid, whichever is later. This subsection does not apply to annuities purchased by an accredited investor, as defined in Regulation D as adopted by the United States Securities and Exchange Commission, or to those annuities specified in paragraph (4)(b).
(9) RULES.—The department and the commission may adopt rules to administer this section.
History.—s. 146, ch. 2004-390; s. 9, ch. 2008-237; s. 52, ch. 2010-175; s. 1, ch. 2013-163.
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 office shall require the insurer to furnish such assurances as the office 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; s. 1127, ch. 2003-261.
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.
627.4605 Replacement notice.—A notice to a current insurer of a replacement of a current life insurance policy is not required in a transaction involving:
(1) An application to the current insurer that issued the current policy or contract when a contractual change or conversion privilege is being exercised;
(2) A current policy or contract that is being replaced by the same insurer pursuant to a program filed with and approved by the office; or
(3) A term conversion privilege that is being exercised among corporate affiliates.
History.—s. 2, ch. 2010-61; s. 45, ch. 2011-4.
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 office 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; s. 1128, ch. 2003-261.
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 office 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) An annuity purchased, dedicated, or otherwise allocated as part of a settlement to satisfy the requirements of 42 U.S.C. s. 1395y(b)(2) may not be sold to, or commuted by or for, a third party unconnected to the settlement.
(3) 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; s. 1129, ch. 2003-261; s. 3, ch. 2010-61.
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 office 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 office.
(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 1980 Standard Ordinary Mortality Table adopted by the NAIC or, at the election of the insurer for any one or more specified plans of life insurance, the 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors adopted by the NAIC; for all policies of industrial insurance be calculated on the basis of the 1961 Standard Industrial Mortality Table adopted by the NAIC; and 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 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 1980 Extended Term Insurance Table adopted by the NAIC for policies of ordinary insurance and not more than the 1961 Industrial Extended Term Insurance Table adopted by the NAIC 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 commission, 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 policies issued:
a. Before the operative date of the valuation manual, ordinary mortality tables, adopted after 1980 by the NAIC, adopted by rule by the commission for use in determining the minimum nonforfeiture standard may be substituted for the 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or the 1980 Extended Term Insurance Table adopted by the NAIC.
b. On or after the operative date of the valuation manual, the valuation manual shall provide the Standard Mortality Table for use in determining the minimum nonforfeiture standard that may be substituted for:
(I) The 1980 Standard Ordinary Mortality Table with or without 10-Year Select Mortality Factors or the 1980 Extended Term Insurance Table adopted by the NAIC. If the commission approves by rule a Standard Ordinary Mortality Table adopted by the NAIC for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, the minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.
(II) The 1961 Standard Industrial Mortality Table or 1961 Industrial Extended Term Insurance Table adopted by the NAIC. If the commission approves by rule any Standard Industrial Mortality Table adopted by the NAIC for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, the minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.
7. 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 a policy issued in a particular calendar year for policies issued:
1. Before the operative date of the valuation manual, 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; however, the nonforfeiture interest rate may not be less than 4 percent.
2. On or after the operative date of the valuation manual, shall be as provided by the valuation manual.
(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 office 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 office 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 office 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 commission.
(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.—
(a) After the effective date of this code, an insurer may file with the office a written notice or notices of its election to comply with 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 office written notice of its election to have the 1961 Standard Industrial Mortality Table and 1961 Industrial Extended Term Insurance Table adopted by the NAIC applicable with respect to subsection (8) for policies issued on and after the date specified in such election.
(b) As used in subsection (9), the term “operative date of the valuation manual” has the same meaning as provided in s. 625.1212(2).
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; s. 1130, ch. 2003-261; s. 14, ch. 2004-370; s. 159, ch. 2004-390; s. 9, ch. 2014-101.
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 commission shall, by rule, define such prohibited policies.
(3) The office 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; s. 1131, ch. 2003-261.
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 commission.
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; s. 1132, ch. 2003-261.
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)(a) 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, and a surplus of 10 percent of such reserves, calculated using:
1.a. The present value of future guaranteed benefits for individual annuities that have either commenced paying benefits or have fixed a future date of the first benefit payment.
b. The commissioner’s annuity reserve method, as set forth in s. 625.121(7)(c), for individual deferred annuities that have not fixed a date for the first benefit payment.
2. The mortality tables used to value individual annuities, as defined in s. 625.121(5).
a. For annuities issued prior to July 1, 1998:
(I) The mortality tables described in s. 625.121(5)(h), for individual annuities;
(II) At the option of the corporation or trust, the 1983 Individual Annuity Mortality Table; or
(III) At the option of the corporation or trust, the 2000 Individual Annuity Mortality Table for annuities issued between January 1, 1998, and June 30, 1998, inclusive.
b. For annuities issued on or after July 1, 1998:
(I) The mortality tables set forth in s. 625.121(5)(i)3.;
(II) Any other mortality tables required to be used by insurers in accordance with s. 625.121; or
(III) At the option of the corporation or trust, any other mortality tables authorized to be used by insurers in accordance with s. 625.121.
3. An interest rate not greater than the maximum interest rate permitted for the valuation of individual annuities issued during the same calendar year as the charitable gift annuity for individual annuities as set forth in s. 625.121(6)(b)-(f).
a. The maximum statutory valuation interest rates for single-premium immediate annuities for 1992 may be used for annuities issued in 1992 or any prior year. The maximum statutory valuation interest rates for single-premium immediate annuities issued in 1992 through 2001 are as follows:
| Year of Issue | Single Premium Immediate Annuity Interest Rate |
| 1992 | 7.75 percent |
| 1993 | 7.00 percent |
| 1994 | 6.50 percent |
| 1995 | 7.25 percent |
| 1996 | 6.75 percent |
| 1997 | 6.75 percent |
| 1998 | 6.25 percent |
| 1999 | 6.25 percent |
| 2000 | 7.00 percent |
| 2001 | 6.75 percent |
b. For 2002 and subsequent years, until an interest rate for a specified year can be determined in accordance with s. 625.121(6), the prior year’s rate shall be used unless the office requires use of a lower rate.
(b) 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.
(c)1. 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 mutual funds or investments permitted under part II of chapter 625 for the investment of the reserves of authorized life insurance companies.
2. For purposes of this section, the provisions of s. 625.305(2)(a) shall not apply. In lieu thereof, the fair market value of investments made by such corporation or trust in stock authorized by s. 625.324 may not exceed 50 percent of such corporation’s or trust’s required reserves and surplus. The fair market value in stock of any one corporation or mutual fund may not exceed 10 percent of such corporation’s or trust’s required reserves and surplus. All other provisions of s. 625.305 shall apply. 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 office 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 office 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 office 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 office 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 part IX of chapter 626 apply to issuers of annuity agreements under this section.
(11) The commission 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; s. 58, ch. 2001-63; s. 6, ch. 2002-247; s. 1133, ch. 2003-261.
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 office, it is determined by the office 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; s. 1134, ch. 2003-261.
PART IV
INDUSTRIAL LIFE INSURANCEPOLICIES
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 office 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; s. 1135, ch. 2003-261.
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 office 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; s. 1136, ch. 2003-261.
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 commission. The commission 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; s. 1137, ch. 2003-261.
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 POLICIES627.551 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.
1(d) Insuring or providing benefits pursuant to s. 627.404(2)(b)8. or 9.
(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; s. 10, ch. 2008-237.
1Note.—Section 12, ch. 2008-237, provides in part that “[e]ffective [June 30, 2008,] the Department of Financial Services may adopt rules to implement this act.”
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 office for informational purposes.
(5) Prior to solicitation in this state, an officer of the insurer shall truthfully certify to the office 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; s. 1138, ch. 2003-261.
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; however, a class of employees may not be created or permitted that consists solely of employees covered under the employer’s group health plan. This section does not prohibit an employer from requiring participation in its group health plan as a condition of 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; s. 4, ch. 2010-61.
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 the debtor which is repayable in installments to the creditor.
(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; s. 4, ch. 2008-75.
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 office 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; s. 1139, ch. 2003-261.
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 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; s. 5, ch. 2010-61.
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 office 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 office 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; s. 1140, ch. 2003-261.
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 POLICIES627.601 Scope of this part.
627.6011 Mandated coverages.
627.602 Scope, format of policy.
627.603 Death benefits.
627.604 Nonresident insured.
627.6041 Children with disabilities; 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.
627.6131 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.
627.6385 Disclosures to policyholders; calculations of cost sharing.
627.639 Application signed by agent.
627.640 Filing of classifications and rates.
627.6401 Refunds for persons age 64.
627.6402 Insurance rebates for healthy lifestyles.
627.6403 Payment of acupuncture benefits to certified acupuncturists.
627.6405 Decreasing inappropriate utilization of emergency care.
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.
627.64194 Coverage requirements for services provided by nonparticipating providers; payment collection limitations.
627.64195 Requirements for opioid coverage.
627.64196 Medication synchronization.
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.
627.64731 Leasing, renting, or granting access to a participating provider.
627.6474 Provider contracts.
627.64741 Pharmacy benefit manager contracts.
627.6475 Individual reinsurance pool.
627.6487 Guaranteed availability of individual health insurance coverage to eligible individuals.
627.64995 Restrictions on use of state and federal funds for state exchanges.
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.
(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; s. 19, ch. 2016-11.
627.6011 Mandated coverages.—Mandatory health benefits regulated under this chapter are not intended to apply to the types of health benefit plans listed in s. 627.6513(1)-(14), issued in any market, unless specifically designated otherwise. For purposes of this section, the term “mandatory health benefits” means those benefits set forth in ss. 627.6401-627.64193, and any other mandatory treatment or health coverages or benefits enacted on or after July 1, 2012.
History.—s. 12, ch. 2012-151; s. 8, ch. 2016-194.
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. If an insurer offers coverage for dependent children of the policyholder, such policy must comply with the provisions of s. 627.6562.
(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 office.
(h) Section 641.312 and the provisions of the Employee Retirement Income Security Act of 1974, as implemented by 29 C.F.R. s. 2560.503-1, relating to internal grievances. This paragraph does not apply to the types of benefits or coverages provided under s. 627.6513(1)-(14) issued in any market.
(2) The office 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 office. 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; s. 1141, ch. 2003-261; s. 8, ch. 2008-32; s. 11, ch. 2012-44; s. 9, ch. 2016-194; s. 105, ch. 2018-24.
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 office that any such policy is not subject to approval or disapproval by such official, the commission 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; s. 1142, ch. 2003-261.
627.6041 Children with disabilities; continuation of coverage.—
(1) 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 terminates upon attainment of the limiting age for dependent children specified in the policy or contract must 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:
(a) Incapable of self-sustaining employment by reason of an intellectual or physical disability.
(b) Chiefly dependent upon the policyholder or subscriber for support and maintenance.
(2) 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 subsection (1).
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; s. 19, ch. 2013-162.
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 office 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 office 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 office, 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; s. 1143, ch. 2003-261.
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.
627.6131 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) As used in this section, the term “claim” for a noninstitutional provider means a paper or electronic billing instrument submitted to the insurer’s designated location that consists of the HCFA 1500 data set, or its successor, that has all mandatory entries for a physician licensed under chapter 458, chapter 459, chapter 460, chapter 461, or chapter 463, or psychologists licensed under chapter 490 or any appropriate billing instrument that has all mandatory entries for any other noninstitutional provider. For institutional providers, “claim” means a paper or electronic billing instrument submitted to the insurer’s designated location that consists of the UB-92 data set or its successor with entries stated as mandatory by the National Uniform Billing Committee.
(3) All claims for payment or overpayment, whether electronic or nonelectronic:
(a) Are considered received on the date the claim is received by the insurer at its designated claims-receipt location or the date the claim for overpayment is received by the provider at its designated location.
(b) Must be mailed or electronically transferred to the primary insurer within 6 months after the following have occurred:
1. Discharge for inpatient services or the date of service for outpatient services; and
2. The provider has been furnished with the correct name and address of the patient’s health insurer.
All claims for payment, whether electronic or nonelectronic, must be mailed or electronically transferred to the secondary insurer within 90 days after final determination by the primary insurer. A provider’s claim is considered submitted on the date it is electronically transferred or mailed.
(c) Must not duplicate a claim previously submitted unless it is determined that the original claim was not received or is otherwise lost.
(4) For all electronically submitted claims, a health insurer shall:
(a) Within 24 hours after the beginning of the next business day after receipt of the claim, provide electronic acknowledgment of the receipt of the claim to the electronic source submitting the claim.
(b) Within 20 days after receipt of the claim, pay the claim or notify a provider or designee if a claim is denied or contested. Notice of the insurer’s action on the claim and payment of the claim is considered to be made on the date the notice or payment was mailed or electronically transferred.
(c)1. Notification of the health insurer’s determination of a contested claim must be accompanied by an itemized list of additional information or documents the insurer can reasonably determine are necessary to process the claim.
2. A provider must submit the additional information or documentation, as specified on the itemized list, within 35 days after receipt of the notification. Additional information is considered submitted on the date it is electronically transferred or mailed. The health insurer may not request duplicate documents.
(d) For purposes of this subsection, electronic means of transmission of claims, notices, documents, forms, and payments shall be used to the greatest extent possible by the health insurer and the provider.
(e) A claim must be paid or denied within 90 days after receipt of the claim. Failure to pay or deny a claim within 120 days after receipt of the claim creates an uncontestable obligation to pay the claim.
(5) For all nonelectronically submitted claims, a health insurer shall:
(a) Effective November 1, 2003, provide acknowledgment of receipt of the claim within 15 days after receipt of the claim to the provider or provide a provider within 15 days after receipt with electronic access to the status of a submitted claim.
(b) Within 40 days after receipt of the claim, pay the claim or notify a provider or designee if a claim is denied or contested. Notice of the insurer’s action on the claim and payment of the claim is considered to be made on the date the notice or payment was mailed or electronically transferred.
(c)1. Notification of the health insurer’s determination of a contested claim must be accompanied by an itemized list of additional information or documents the insurer can reasonably determine are necessary to process the claim.
2. A provider must submit the additional information or documentation, as specified on the itemized list, within 35 days after receipt of the notification. Additional information is considered submitted on the date it is electronically transferred or mailed. The health insurer may not request duplicate documents.
(d) For purposes of this subsection, electronic means of transmission of claims, notices, documents, forms, and payments shall be used to the greatest extent possible by the health insurer and the provider.
(e) A claim must be paid or denied within 120 days after receipt of the claim. Failure to pay or deny a claim within 140 days after receipt of the claim creates an uncontestable obligation to pay the claim.
(6) If a health insurer determines that it has made an overpayment to a provider for services rendered to an insured, the health insurer must make a claim for such overpayment to the provider’s designated location. A health insurer that makes a claim for overpayment to a provider under this section shall give the provider a written or electronic statement specifying the basis for the retroactive denial or payment adjustment. The insurer must identify the claim or claims, or overpayment claim portion thereof, for which a claim for overpayment is submitted.
(a) If an overpayment determination is the result of retroactive review or audit of coverage decisions or payment levels not related to fraud, a health insurer shall adhere to the following procedures:
1. All claims for overpayment must be submitted to a provider within 30 months after the health insurer’s payment of the claim. A provider must pay, deny, or contest the health insurer’s claim for overpayment within 40 days after the receipt of the claim. All contested claims for overpayment must be paid or denied within 120 days after receipt of the claim. Failure to pay or deny overpayment and claim within 140 days after receipt creates an uncontestable obligation to pay the claim.
2. A provider that denies or contests a health insurer’s claim for overpayment or any portion of a claim shall notify the health insurer, in writing, within 35 days after the provider receives the claim that the claim for overpayment is contested or denied. The notice that the claim for overpayment is denied or contested must identify the contested portion of the claim and the specific reason for contesting or denying the claim and, if contested, must include a request for additional information. If the health insurer submits additional information, the health insurer must, within 35 days after receipt of the request, mail or electronically transfer the information to the provider. The provider shall pay or deny the claim for overpayment within 45 days after receipt of the information. The notice is considered made on the date the notice is mailed or electronically transferred by the provider.
3. The health insurer may not reduce payment to the provider for other services unless the provider agrees to the reduction in writing or fails to respond to the health insurer’s overpayment claim as required by this paragraph.
4. Payment of an overpayment claim is considered made on the date the payment was mailed or electronically transferred. An overdue payment of a claim bears simple interest at the rate of 12 percent per year. Interest on an overdue payment for a claim for an overpayment begins to accrue when the claim should have been paid, denied, or contested.
(b) A claim for overpayment shall not be permitted beyond 30 months after the health insurer’s payment of a claim, except that claims for overpayment may be sought beyond that time from providers convicted of fraud pursuant to s. 817.234.
(7) Payment of a claim is considered made on the date the payment was mailed or electronically transferred. An overdue payment of a claim bears simple interest of 12 percent per year. Interest on an overdue payment for a claim or for any portion of a claim begins to accrue when the claim should have been paid, denied, or contested. The interest is payable with the payment of the claim.
(8) For all contracts entered into or renewed on or after October 1, 2002, a health insurer’s internal dispute resolution process related to a denied claim not under active review by a mediator, arbitrator, or third-party dispute entity must be finalized within 60 days after the receipt of the provider’s request for review or appeal.
(9) A provider or any representative of a provider, regardless of whether the provider is under contract with the health insurer, may not collect or attempt to collect money from, maintain any action at law against, or report to a credit agency an insured for payment of covered services for which the health insurer contested or denied the provider’s claim. This prohibition applies during the pendency of any claim for payment made by the provider to the health insurer for payment of the services or internal dispute resolution process to determine whether the health insurer is liable for the services. For a claim, this pendency applies from the date the claim or a portion of the claim is denied to the date of the completion of the health insurer’s internal dispute resolution process, not to exceed 60 days. This subsection does not prohibit the collection by the provider of copayments, coinsurance, or deductible amounts due the provider.
(10) The provisions of this section may not be waived, voided, or nullified by contract.
(11) A health insurer may not retroactively deny a claim because of insured ineligibility more than 1 year after the date of payment of the claim.
(12) A health insurer shall pay a contracted primary care or admitting physician, pursuant to such physician’s contract, for providing inpatient services in a contracted hospital to an insured if such services are determined by the health insurer to be medically necessary and covered services under the health insurer’s contract with the contract holder.
(13) 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.
(14) A permissible error ratio of 5 percent is established for insurer’s claims payment violations of paragraphs (4)(a), (b), (c), and (e) and (5)(a), (b), (c), and (e). If the error ratio of a particular insurer does not exceed the permissible error ratio of 5 percent for an audit period, no fine shall be assessed for the noted claims violations for the audit period. The error ratio shall be determined by dividing the number of claims with violations found on a statistically valid sample of claims for the audit period by the total number of claims in the sample. If the error ratio exceeds the permissible error ratio of 5 percent, a fine may be assessed according to s. 624.4211 for those claims payment violations which exceed the error ratio. Notwithstanding the provisions of this section, the office may fine a health insurer for claims payment violations of paragraphs (4)(e) and (5)(e) which create an uncontestable obligation to pay the claim. The office shall not fine insurers for violations which the office determines were due to circumstances beyond the insurer’s control.
(15) This section is applicable only to a major medical expense health insurance policy as defined in s. 627.643(2)(e) offered by a group or an individual health insurer licensed pursuant to chapter 624, including a preferred provider policy under s. 627.6471 and an exclusive provider organization under s. 627.6472 or a group or individual insurance contract that only provides direct payments to dentists for enumerated dental services.
(16) Notwithstanding paragraph (4)(b), where an electronic pharmacy claim is submitted to a pharmacy benefits manager acting on behalf of a health insurer, the pharmacy benefits manager shall, within 30 days of receipt of the claim, pay the claim or notify a provider or designee if a claim is denied or contested. Notice of the insurer’s action on the claim and payment of the claim is considered to be made on the date the notice or payment was mailed or electronically transferred.
(17) Notwithstanding paragraph (5)(a), effective November 1, 2003, where a nonelectronic pharmacy claim is submitted to a pharmacy benefits manager acting on behalf of a health insurer, the pharmacy benefits manager shall provide acknowledgment of receipt of the claim within 30 days after receipt of the claim to the provider or provide a provider within 30 days after receipt with electronic access to the status of a submitted claim.
(18) Notwithstanding the 30-month period provided in subsection (6), all claims for overpayment submitted to a provider licensed under chapter 458, chapter 459, chapter 460, chapter 461, or chapter 466 must be submitted to the provider within 12 months after the health insurer’s payment of the claim. A claim for overpayment may not be permitted beyond 12 months after the health insurer’s payment of a claim, except that claims for overpayment may be sought beyond that time from providers convicted of fraud pursuant to s. 817.234.
(19) Notwithstanding any other provision of this section, all claims for underpayment from a provider licensed under chapter 458, chapter 459, chapter 460, chapter 461, or chapter 466 must be submitted to the insurer within 12 months after the health insurer’s payment of the claim. A claim for underpayment may not be permitted beyond 12 months after the health insurer’s payment of a claim.
History.—s. 5, ch. 2002-389; s. 1144, ch. 2003-261; s. 3, ch. 2008-212.
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 office 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 office 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; s. 1145, ch. 2003-261.
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 office, 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; s. 1146, ch. 2003-261.
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 office, 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; s. 1147, ch. 2003-261.
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 office, 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; s. 1148, ch. 2003-261.
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 office.
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; s. 1149, ch. 2003-261.
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, licensed ambulance provider, 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, licensed ambulance provider, 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, licensed ambulance provider, physician, dentist, or other person who provided the services in accordance with the provisions of the policy, the insurer shall make such payment to the designated provider of such services. The insurance contract may not prohibit, and claims forms must provide an option for, the payment of benefits directly to a licensed hospital, licensed ambulance provider, physician, dentist, or other person who provided the services in accordance with the provisions of the policy for care provided. The insurer may require written attestation of assignment of benefits. Payment to the provider from the insurer may not be more than the amount that the insurer would otherwise have paid without the assignment.
(3) Any insurer who has contracted with a preferred provider, as defined in s. 627.6471(1)(b), for the delivery of health care services to its insureds shall make payments directly to the preferred provider for such services.
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; s. 4, ch. 2005-231; s. 2, ch. 2008-212; ss. 1, 2, ch. 2009-124.
627.6385 Disclosures to policyholders; calculations of cost sharing.—
(1) Each health insurer shall make available on its website:
(a) A method for policyholders to estimate their copayments, deductibles, and other cost-sharing responsibilities for health care services and procedures. Such method of making an estimate shall be based on service bundles established pursuant to s. 408.05(3)(c). Estimates do not preclude the actual copayment, coinsurance percentage, or deductible, whichever is applicable, from exceeding the estimate.
1. Estimates shall be calculated according to the policy and known plan usage during the coverage period.
2. Estimates shall be made available based on providers that are in-network and out-of-network.
3. A policyholder must be able to create estimates by any combination of the service bundles established pursuant to s. 408.05(3)(c), a specified provider, or a comparison of providers.
(b) A method for policyholders to estimate their copayments, deductibles, and other cost-sharing responsibilities based on a personalized estimate of charges received from a facility pursuant to s. 395.301 or a practitioner pursuant to s. 456.0575.
(c) A hyperlink to the health information, including, but not limited to, service bundles and quality of care information, which is disseminated by the Agency for Health Care Administration pursuant to s. 408.05(3).
(2) Each health insurer shall include in every policy delivered or issued for delivery to any person in the state or in materials provided as required by s. 627.64725 notice that the information required by this section is available electronically and the address of the website where the information can be accessed.
(3) Each health insurer that participates in the state group health insurance plan created under s. 110.123 or Medicaid managed care pursuant to part IV of chapter 409 shall contribute all claims data from Florida policyholders held by the insurer and its affiliates to the contracted vendor selected by the Agency for Health Care Administration under s. 408.05(3)(c). Health insurers shall submit Medicaid managed care claims data to the vendor beginning July 1, 2017, and may submit data before that date. However, each insurer and its affiliates may not contribute claims data to the contracted vendor which reflect the following types of coverage:
(a) Coverage only for accident, or disability income insurance, or any combination thereof.
(b) Coverage issued as a supplement to liability insurance.
(c) Liability insurance, including general liability insurance and automobile liability insurance.
(d) Workers’ compensation or similar insurance.
(e) Automobile medical payment insurance.
(f) Credit-only insurance.
(g) Coverage for onsite medical clinics, including prepaid health clinics under part II of chapter 641.
(h) Limited scope dental or vision benefits.
(i) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof.
(j) Coverage only for a specified disease or illness.
(k) Hospital indemnity or other fixed indemnity insurance.
(l) 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, U.S.C., and similar supplemental coverage provided to supplement coverage under a group health plan.
History.—s. 6, ch. 2016-234.
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 office 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; s. 1150, ch. 2003-261.
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.
627.6402 Insurance rebates for healthy lifestyles.—
(1) Any rate, rating schedule, or rating manual for an individual health insurance policy filed with the office may provide for an appropriate rebate of premiums paid in the last year when the individual covered by such plan is enrolled in and maintains participation in any health wellness, maintenance, or improvement program approved by the health plan. The rebate may be based on premiums paid in the last calendar year or the last policy year. The individual must provide evidence of demonstrative maintenance or improvement of the individual’s health status as determined by assessments of agreed-upon health status indicators between the individual and the health insurer, including, but not limited to, reduction in weight, body mass index, and smoking cessation. Any rebate provided by the health insurer is presumed to be appropriate unless credible data demonstrates otherwise, or unless such rebate program requires the insured to incur costs to qualify for the rebate which equal or exceed the value of the rebate, but in no event shall the rebate exceed 10 percent of paid premiums.
(2) The premium rebate authorized by this section shall be effective for an insured on an annual basis, unless the individual fails to maintain or improve his or her health status while participating in an approved wellness program, or credible evidence demonstrates that the individual is not participating in the approved wellness program.
History.—s. 33, ch. 2004-297; s. 5, ch. 2005-231.
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.
627.6405 Decreasing inappropriate utilization of emergency care.—
(1) The Legislature finds and declares it to be of vital importance that emergency services and care be provided by hospitals and physicians to every person in need of such care, but with the double-digit increases in health insurance premiums, health care providers and insurers should encourage patients and the insured to assume responsibility for their treatment, including emergency care. The Legislature finds that inappropriate utilization of emergency department services increases the overall cost of providing health care and these costs are ultimately borne by the hospital, the insured patients, and, many times, by the taxpayers of this state. Finally, the Legislature declares that the providers and insurers must share the responsibility of providing alternative treatment options to urgent care patients outside of the emergency department. Therefore, it is the intent of the Legislature to place the obligation for educating consumers and creating mechanisms for delivery of care that will decrease the overutilization of emergency service on health insurers and providers.
(2) Health insurers shall provide on their websites information regarding appropriate utilization of emergency care services which shall include, but not be limited to, a list of alternative urgent care contracted providers, the types of services offered by these providers, and what to do in the event of a true emergency.
(3) Health insurers shall develop community emergency department diversion programs. Such programs may include, at the discretion of the insurer, but not be limited to, enlisting providers to be on call to insurers after hours, coordinating care through local community resources, and providing incentives to providers for case management.
(4) As a disincentive for insureds to inappropriately use emergency department services for nonemergency care, health insurers may require higher copayments for urgent care or primary care provided in an emergency department and higher copayments for use of out-of-network emergency departments. Higher copayments may not be charged for the utilization of the emergency department for emergency care. For the purposes of this section, the term “emergency care” has the same meaning as provided in s. 395.002 and shall include services provided to rule out an emergency medical condition.
History.—s. 25, ch. 2004-297.
627.6406 Maternity care.—
(1) Any policy of health insurance which 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. 383.30-383.332.
(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; s. 106, ch. 2018-24.
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.
(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; s. 89, ch. 2006-1.
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.
627.64194 Coverage requirements for services provided by nonparticipating providers; payment collection limitations.—
(1) As used in this section, the term:
(a) “Emergency services” means emergency services and care, as defined in s. 641.47(8), which are provided in a facility.
(b) “Facility” means a licensed facility as defined in s. 395.002(16) and an urgent care center as defined in s. 395.002.
(c) “Insured” means a person who is covered under an individual or group health insurance policy delivered or issued for delivery in this state by an insurer authorized to transact business in this state.
(d) “Nonemergency services” means the services and care that are not emergency services.
(e) “Nonparticipating provider” means a provider who is not a preferred provider as defined in s. 627.6471 or a provider who is not an exclusive provider as defined in s. 627.6472. For purposes of covered emergency services under this section, a facility licensed under chapter 395 or an urgent care center defined in s. 395.002 is a nonparticipating provider if the facility has not contracted with an insurer to provide emergency services to its insureds at a specified rate.
(f) “Participating provider” means, for purposes of this section, a preferred provider as defined in s. 627.6471 or an exclusive provider as defined in s. 627.6472.
(2) An insurer is solely liable for payment of fees to a nonparticipating provider of covered emergency services provided to an insured in accordance with the coverage terms of the health insurance policy, and such insured is not liable for payment of fees for covered services to a nonparticipating provider of emergency services, other than applicable copayments, coinsurance, and deductibles. An insurer must provide coverage for emergency services that:
(a) May not require prior authorization.
(b) Must be provided regardless of whether the services are furnished by a participating provider or a nonparticipating provider.
(c) May impose a coinsurance amount, copayment, or limitation of benefits requirement for a nonparticipating provider only if the same requirement applies to a participating provider.
The provisions of s. 627.638 apply to this subsection.
(3) An insurer is solely liable for payment of fees to a nonparticipating provider of covered nonemergency services provided to an insured in accordance with the coverage terms of the health insurance policy, and such insured is not liable for payment of fees to a nonparticipating provider, other than applicable copayments, coinsurance, and deductibles, for covered nonemergency services that are:
(a) Provided in a facility that has a contract for the nonemergency services with the insurer which the facility would be otherwise obligated to provide under contract with the insurer; and
(b) Provided when the insured does not have the ability and opportunity to choose a participating provider at the facility who is available to treat the insured.
The provisions of s. 627.638 apply to this subsection.
(4) An insurer must reimburse a nonparticipating provider of services under subsections (2) and (3) as specified in s. 641.513(5), reduced only by insured cost share responsibilities as specified in the health insurance policy, within the applicable timeframe provided in s. 627.6131.
(5) A nonparticipating provider of emergency services as provided in subsection (2) or a nonparticipating provider of nonemergency services as provided in subsection (3) may not be reimbursed an amount greater than the amount provided in subsection (4) and may not collect or attempt to collect from the insured, directly or indirectly, any excess amount, other than copayments, coinsurance, and deductibles. This section does not prohibit a nonparticipating provider from collecting or attempting to collect from the insured an amount due for the provision of noncovered services.
(6) Any dispute with regard to the reimbursement to the nonparticipating provider of emergency or nonemergency services as provided in subsection (4) shall be resolved in a court of competent jurisdiction or through the voluntary dispute resolution process in s. 408.7057.
History.—s. 12, ch. 2016-222; s. 107, ch. 2018-24.
627.64195 Requirements for opioid coverage.—
(1) DEFINITIONS.—As used in this section, the term:
(a) “Abuse-deterrent opioid analgesic drug product” means a brand or generic opioid analgesic drug product approved by the United States Food and Drug Administration with an abuse-deterrence labeling claim that indicates the drug product is expected to deter abuse.
(b) “Opioid analgesic drug product” means a drug product in the opioid analgesic drug class prescribed to treat moderate to severe pain or other conditions in immediate-release, extended-release, or long-acting form regardless of whether or not combined with other drug substances to form a single drug product or dosage form.
(2) COVERAGE REQUIREMENTS.—A health insurance policy that provides coverage for abuse-deterrent opioid analgesic drug products:
(a) May impose a prior authorization requirement for an abuse-deterrent opioid analgesic drug product only if the policy imposes the same prior authorization requirement for each opioid analgesic drug product without an abuse-deterrence labeling claim.
(b) May not require use of an opioid analgesic drug product without an abuse-deterrence labeling claim before authorizing the use of an abuse-deterrent opioid analgesic drug product.
History.—s. 1, ch. 2016-112.
627.64196 Medication synchronization.—
(1) A health insurer issuing or delivering in this state an individual or a group health insurance policy that provides prescription drug coverage shall offer medication synchronization to allow an insured to align at least once in a plan year the refill dates for prescription drugs covered by the policy. The insurer shall implement a process for dispensing prescription drugs to an insured for the purpose of aligning the refill dates of such drugs, and such medication synchronization may be available only through a network pharmacy. A controlled substance, a prescription drug dispensed in an unbreakable package, or a multidose unit of a prescription drug may not be partially filled for the purpose of aligning refill dates. The insurer shall pay a full dispensing fee to the network pharmacy for each partial refill of a covered prescription drug dispensed to align refill dates, unless otherwise agreed to by the plan and the network pharmacy at the time an insured requests medication synchronization. The insurer shall prorate the cost-sharing obligations of the insured for each partial refill of a covered prescription drug dispensed to align refill dates. This section applies to policies renewed or entered into on or after January 1, 2018.
(2) Notwithstanding subsection (1), an alternate process used by an insurer which includes early refill dates, refill overrides, and access on the insurer’s public website to the terms and conditions of such a process is deemed to comply with the requirements of this section.
History.—s. 1, ch. 2017-94.
627.642 Outline of coverage.—
(1) A policy offering benefits defined in s. 627.6513(1)-(14) may not 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.
(3) In addition to the outline of coverage, a policy as specified in s. 627.6699(3)(k) must be accompanied by an identification card that contains, at a minimum:
(a) The name of the organization issuing the policy or the name of the organization administering the policy, whichever applies.
(b) The name of the contract holder.
(c) The type of plan only if the plan is filed in the state, an indication that the plan is self-funded, or the name of the network.
(d) The member identification number, contract number, and policy or group number, if applicable.
(e) A contact phone number or electronic address for authorizations and admission certifications.
(f) A phone number or electronic address whereby the covered person or hospital, physician, or other person rendering services covered by the policy may obtain benefits verification and information in order to estimate patient financial responsibility, in compliance with privacy rules under the Health Insurance Portability and Accountability Act.
(g) The national plan identifier, in accordance with the compliance date set forth by the federal Department of Health and Human Services.
The identification card must present the information in a readily identifiable manner or, alternatively, the information may be embedded on the card and available through magnetic stripe or smart card. The information may also be provided through other electronic technology.
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; s. 2, ch. 2008-119; s. 151, ch. 2014-17; s. 3, ch. 2015-121; s. 10, ch. 2016-194.
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. 624.603, 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 s. 627.6513(1)-(14).
(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, contributions, or a required copayment payable to the insurer in accordance with the terms of the health insurance coverage or the insurer has not received timely premium payments. When the copayment is payable to the insurer and exceeds $300, the insurer shall allow the insured up to 90 days after the date of the procedure to pay the required copayment. The insurer shall print in 10-point type on the Declaration of Benefits page notification that the insured could be terminated for failure to make any required copayment to the insurer.
(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) If 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 before 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 a 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. If a policy form covers both grandfathered and nongrandfathered health plans, an insurer may nonrenew coverage only for the nongrandfathered health plans, in which case the requirements of subparagraphs 1. and 2. apply only to the nongrandfathered health plans. As used in this subparagraph, the terms “grandfathered health plan” and “nongrandfathered health plan” have the same meaning as provided in s. 627.402.
(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 office 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) 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; s. 33, ch. 2002-400; s. 1151, ch. 2003-261; s. 17, ch. 2013-101; s. 11, ch. 2016-194.
627.643 Uniform minimum standards.—
(1) The commission 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 commission 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 office 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 office must be identified as to category only as prescribed by the office.
(3) The office 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 office 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; s. 1152, ch. 2003-261.
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) A claim for payment under a health insurance policy or self-insured program of health benefits for treatment, care, or services in a licensed hospital that is accredited by an accrediting organization whose standards incorporate comparable regulations required by this state may not 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; s. 11, ch. 2013-93.
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 commission 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; s. 1153, ch. 2003-261.
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 on its website. The list must include, when applicable and reported, a listing by specialty of the names, addresses, and telephone numbers of all participating providers, including facilities, and, in the case of physicians, must also include board certifications, languages spoken, and any affiliations with participating hospitals. Information posted on the insurer’s website must be updated on at least a calendar-month basis with additions or terminations of providers from the insurer’s network or reported changes in physicians’ hospital affiliations.
(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 licensed as an advanced practice registered nurse 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.
(7) Any policy issued under this section after January 1, 2017, must include the following disclosure: “WARNING: LIMITED BENEFITS WILL BE PAID WHEN NONPARTICIPATING PROVIDERS ARE USED. You should be aware that when you elect to utilize the services of a nonparticipating provider for a covered nonemergency service, benefit payments to the provider are not based upon the amount the provider charges. The basis of the payment will be determined according to your policy’s out-of-network reimbursement benefit. Nonparticipating providers may bill insureds for any difference in the amount. YOU MAY BE REQUIRED TO PAY MORE THAN THE COINSURANCE OR COPAYMENT AMOUNT. Participating providers have agreed to accept discounted payments for services with no additional billing to you other than coinsurance, copayment, and deductible amounts. You may obtain further information about the providers who have contracted with your insurance plan by consulting your insurer’s website or contacting your insurer or agent directly.”
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; ss. 13, 14, ch. 2016-222; s. 73, ch. 2018-106.
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 office.
(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 licensed as an advanced practice registered nurse 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 practice registered nurse licensed pursuant to s. 464.012, who is acting within the scope of such license, solely on the basis of such license. 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; s. 1154, ch. 2003-261; s. 74, ch. 2018-106.
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.
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.
627.64731 Leasing, renting, or granting access to a participating provider.—
(1) As used in this section, the term:
(a) “Contracting entity” means any person or entity that is engaged in the act of contracting with participating providers and has a direct contract with a participating provider for the delivery of health care services or the selling or assigning of physicians or physician panels to other health care entities.
(b) “Participating provider” means a physician licensed under chapter 458, chapter 459, chapter 460, chapter 461, or chapter 466, or a physician group practice that has a health care contract with a contracting entity and is entitled to reimbursement for health care services rendered to an enrollee under the health care contract and includes both preferred providers as defined in s. 627.6471 and exclusive providers as defined in s. 627.6472.
(2) A contracting entity may not sell, lease, rent, or otherwise grant access to the health care services of a participating provider under a health care contract unless expressly authorized by the health care contract. The health care contract must specifically provide that it applies to network rental arrangements and state that one purpose of the contract is selling, renting, or giving the contracting entity rights to the services of the participating provider, including other preferred provider organizations. At the time a health care contract is entered into with a participating provider, the contracting entity shall, to the extent possible, identify any third party to which the contracting entity has granted access to the health care services of the participating provider. The contracting entity may sell, lease, rent, or otherwise grant access to the participating provider’s services only to a third party that is:
(a) A payor or a third-party administrator or other entity responsible for administering claims on behalf of the payor;
(b) A preferred provider organization or preferred provider network that receives access to the participating provider’s services pursuant to an arrangement with the preferred provider organization or preferred provider network in a contract with the participating provider and that is required to comply with all of the terms, conditions, and affirmative obligations to which the originally contracted primary participating provider network is bound under its contract with the participating provider, including, but not limited to, obligations concerning patient steerage and the timeliness and manner of reimbursement; or
(c) An entity that is engaged in the business of providing electronic claims transport between the contracting entity and the payor or third-party administrator and that complies with all of the applicable terms, conditions, and affirmative obligations of the contracting entity’s contract with the participating provider including, but not limited to, obligations concerning patient steerage and the timeliness and manner of reimbursement.
(3) Upon a request by a participating provider, a contracting entity must provide the identity of any third party that has been granted access to the health care services of the participating provider.
(4) A contracting entity that leases, rents, or otherwise grants access to the health care services of a participating provider must maintain an Internet website or a toll-free telephone number through which the provider may obtain a listing, updated at least every 90 days, of the third parties that have been granted access to the provider’s health care services.
(5) A contracting entity that leases, rents, or otherwise grants access to a participating provider’s health care services must ensure that an explanation of benefits or remittance advice furnished to the participating provider that delivers health care services under the health care contract identifies the contractual source of any applicable discount.
(6) Subject to applicable continuity-of-care laws, the right of a third party to exercise the rights and responsibilities of a contracting entity under a health care contract terminates on the day following the termination of the participating provider’s contract with the contracting entity.
(7) The provisions of this section do not apply if the third party that is granted access to a participating provider’s health care services under a health care contract is:
(a) An employer or other entity providing coverage for health care services to the employer’s employees or the entity’s members and the employer or entity has a contract with the contracting entity or the contracting entity’s affiliate for the administration or processing of claims for payment or services provided under the health care contract;
(b) An entity providing administrative services to, or receiving administrative services from, the contracting entity or the contracting entity’s affiliate or subsidiary; or
(c) An affiliate or a subsidiary of a contracting entity, or other entity if operating under the same brand licensee program as the contracting entity.
(8) A health care contract may provide for arbitration of disputes arising under this section.
(9) A contracting entity shall ensure that all third parties to which the contracting entity has sold, rented, assigned, or otherwise given access to the participating provider’s discounted rate comply with the physician contract, including all requirements to encourage access to the participating provider, and pay the provider pursuant to the rates of payment and methodology set forth in that contract, unless otherwise agreed to by a participating provider.
(10) A contracting entity is deemed in compliance with this section when the insured’s identification card provides information, written or electronically, which identifies the preferred provider network or networks to be used to reimburse the provider for covered services.
(11) This section does not apply to a contract between a contracting entity and a discount plan organization licensed or exempt under part II of chapter 636.
History.—s. 4, ch. 2008-212; s. 15, ch. 2017-112.
627.6474 Provider contracts.—
(1) A health insurer may not require a contracted health care practitioner as defined in s. 456.001(4) to accept the terms of other health care practitioner contracts with the insurer or any other insurer, or health maintenance organization, under common management and control with the insurer, including Medicare and Medicaid practitioner contracts and those authorized by s. 627.6471, s. 627.6472, s. 636.035, or s. 641.315, except for a practitioner in a group practice as defined in s. 456.053 who must accept the terms of a contract negotiated for the practitioner by the group, as a condition of continuation or renewal of the contract. Any contract provision that violates this section is void. A violation of this subsection is not subject to the criminal penalty specified in s. 624.15.
(2) A contract between a health insurer and a dentist licensed under chapter 466 for the provision of services to an insured may not contain a provision that requires the dentist to provide services to the insured under such contract at a fee set by the health insurer unless such services are covered services under the applicable contract. As used in this subsection, the term “covered services” means dental care services for which a reimbursement is available under the insured’s contract, or for which a reimbursement would be available but for the application of contractual limitations such as deductibles, coinsurance, waiting periods, annual or lifetime maximums, frequency limitations, alternative benefit payments, or any other limitation.
(3)(a) A health insurer may not require an ophthalmologist licensed pursuant to chapter 458 or chapter 459 or an optometrist licensed pursuant to chapter 463 to join a network solely for the purpose of credentialing the licensee for another insurer’s vision network. This paragraph does not prevent a health insurer from entering into a contract with another insurer’s vision care plan to use the vision network.
(b) A health insurer may not restrict an ophthalmologist licensed pursuant to chapter 458 or chapter 459, an optometrist licensed pursuant to chapter 463, or an optician licensed pursuant to part I of chapter 484 to specific suppliers of materials or optical laboratories. This paragraph does not restrict a health insurer in determining specific amounts of coverage or reimbursement for the use of network or out-of-network suppliers or laboratories.
(c) A health insurer’s online vision care network provider directory must be updated monthly to reflect the vision care providers currently participating in the health insurer’s network.
(d) A knowing violation of paragraph (a) or paragraph (b) constitutes an unfair insurance trade practice under s. 626.9541(1)(d).
History.—s. 1, ch. 2001-107; s. 1, ch. 2014-64; s. 1, ch. 2016-69.
627.64741 Pharmacy benefit manager contracts.—
(1) As used in this section, the term:
(a) “Maximum allowable cost” means the per-unit amount that a pharmacy benefit manager reimburses a pharmacist for a prescription drug, excluding dispensing fees, prior to the application of copayments, coinsurance, and other cost-sharing charges, if any.
(b) “Pharmacy benefit manager” means a person or entity doing business in this state which contracts to administer or manage prescription drug benefits on behalf of a health insurer to residents of this state.
(2) A contract between a health insurer and a pharmacy benefit manager must require that the pharmacy benefit manager:
(a) Update maximum allowable cost pricing information at least every 7 calendar days.
(b) Maintain a process that will, in a timely manner, eliminate drugs from maximum allowable cost lists or modify drug prices to remain consistent with changes in pricing data used in formulating maximum allowable cost prices and product availability.
(3) A contract between a health insurer and a pharmacy benefit manager must prohibit the pharmacy benefit manager from limiting a pharmacist’s ability to disclose whether the cost-sharing obligation exceeds the retail price for a covered prescription drug, and the availability of a more affordable alternative drug, pursuant to s. 465.0244.
(4) A contract between a health insurer and a pharmacy benefit manager must prohibit the pharmacy benefit manager from requiring an insured to make a payment for a prescription drug at the point of sale in an amount that exceeds the lesser of:
(a) The applicable cost-sharing amount; or
(b) The retail price of the drug in the absence of prescription drug coverage.
(5) This section applies to contracts entered into or renewed on or after July 1, 2018.
History.—s. 4, ch. 2018-91.
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 office may permit an issuer to modify its election at any time for good cause shown, after a hearing.
(b) The office 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 office a designation of election under this subsection in a format and manner prescribed by the commission. The office shall approve the election of a health insurance issuer to become a risk-assuming carrier if the office finds that the issuer is capable of assuming that status pursuant to the criteria set forth in paragraph (b).
2. The office 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 office 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 office 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 office shall hold a hearing on the election at the request of the issuer.
(d) The office may rescind the approval granted to a risk-assuming carrier under this subsection if the office 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 office 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 office, 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 office.
(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 office 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 office, 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 office 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 office 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 office 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 office 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 office 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(12)(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(12) 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 commission may adopt rules to administer this section, including rules governing compliance by carriers.
History.—s. 3, ch. 97-179; s. 1155, ch. 2003-261; s. 4, ch. 2015-121.
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. 624.603, 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 s. 627.6513(1)-(14).
(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. 627.6562(3), 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 commission, 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 office 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 office 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 office 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; s. 59, ch. 2001-63; s. 1158, ch. 2003-261; s. 12, ch. 2016-194.
627.64995 Restrictions on use of state and federal funds for state exchanges.—
(1) A health insurance policy under which coverage is purchased in whole or in part with any state or federal funds through an exchange created pursuant to the federal Patient Protection and Affordable Care Act, Pub. L. No. 111-148, may not provide coverage for an abortion as defined in s. 390.011(1), except if the pregnancy is the result of an act of rape or incest, or in the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, which would, as certified by a physician, place the woman in danger of death unless an abortion is performed. Coverage is deemed to be purchased with state or federal funds if any tax credit or cost-sharing credit is applied toward the health insurance policy.
(2) This section does not prohibit a health insurance policy from offering separate coverage for an abortion if such coverage is not purchased in whole or in part with state or federal funds.
(3) As used in this section, the term “state” means this state or any political subdivision of the state.
History.—s. 1, ch. 2011-111.
PART VII
GROUP, BLANKET, AND FRANCHISEHEALTH INSURANCE POLICIES
627.651 Group contracts and plans of self-insurance must meet group requirements.
627.6512 Exemption of certain group health insurance policies.
627.6513 Scope.
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.
627.65626 Insurance rebates for healthy lifestyles.
627.6563 Full-time employment defined.
627.657 Provisions of group health insurance policies.
627.6571 Guaranteed renewability of coverage.
627.6572 Pharmacy benefit manager contracts.
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 Children with disabilities; 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.
627.6686 Coverage for individuals with autism spectrum disorder required; exception.
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.
627.66996 Restrictions on use of state and federal funds for state exchanges.
627.66997 Stop-loss insurance.
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(7). 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; s. 6, ch. 2002-389.
627.6512 Exemption of certain group health insurance policies.—Sections 627.6561, 627.65615, 627.65625, and 627.6571 do not apply to any group insurance policy in relation to its provision of benefits described in s. 627.6513(1)-(14).
History.—s. 7, ch. 97-179; s. 14, ch. 2016-194.
627.6513 Scope.—Section 641.312 and the provisions of the Employee Retirement Income Security Act of 1974, as implemented by 29 C.F.R. s. 2560.503-1, relating to internal grievances, apply to all group health insurance policies issued under this part. This section does not apply to:
(1) Coverage only for accident insurance, 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 onsite medical clinics, including prepaid health clinics under part II of chapter 641.
(8) Other similar insurance coverage, specified in rules adopted by the commission, 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.
(9) Limited scope dental or vision benefits, if offered separately.
(10) Benefits for long-term care, nursing home care, home health care, or community-based care, or any combination thereof, if offered separately.
(11) Other similar, limited benefits, if offered separately, as specified in rules adopted by the commission.
(12) Coverage only for a specified disease or illness, if offered as independent, noncoordinated benefits.
(13) Hospital indemnity or other fixed indemnity insurance, if offered as independent, noncoordinated benefits.
(14) Benefits provided through a Medicare supplemental health insurance policy, as defined under s. 1882(g)(1) of the Social Security Act, coverage supplemental to the coverage provided under 10 U.S.C. chapter 55, and similar supplemental coverage provided to coverage under a group health plan, which are offered as a separate insurance policy and as independent, noncoordinated benefits.
History.—s. 12, ch. 2012-44; s. 15, ch. 2016-194; s. 108, ch. 2018-24.
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) Except as otherwise provided in this part, 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, and complies with the requirements of s. 627.66996.
(d) Applications for certificates of coverage offered to residents of this state must contain, in contrasting color and not less than 12-point type, the following statement on the same page as the applicant’s signature:
“This policy is primarily governed by the laws of insert state where the master policy is filed . As a result, all of the rating laws applicable to policies filed in this state do not apply to this coverage, which may result in increases in your premium at renewal that would not be permissible under a Florida-approved policy. Any purchase of individual health insurance should be considered carefully, as future medical conditions may make it impossible to qualify for another individual health policy. For information concerning individual health coverage under a Florida-approved policy, consult your agent or the Florida Department of Financial Services.”
This paragraph applies only to group certificates providing health insurance coverage which require individualized underwriting to determine coverage eligibility for an individual or premium rates to be charged to an individual except for the following:
1. Policies issued to provide coverage to groups of persons all of whom are in the same or functionally related licensed professions, and providing coverage only to such licensed professionals, their employees, or their dependents;
2. Policies providing coverage to small employers as defined by s. 627.6699. Such policies shall be subject to, and governed by, the provisions of s. 627.6699;
3. Policies issued to a bona fide association, as defined by s. 627.6571(5), provided that there is a person or board acting as a fiduciary for the benefit of the members, and such association is not owned, controlled by, or otherwise associated with the insurance company; or
4. Any accidental death, accidental death and dismemberment, accident-only, vision-only, dental-only, hospital indemnity-only, hospital accident-only, cancer, specified disease, Medicare supplement, products that supplement Medicare, long-term care, or disability income insurance, or similar supplemental plans provided under a separate policy, certificate, or contract of insurance, which cannot duplicate coverage under an underlying health plan, coinsurance, or deductibles or coverage issued as a supplement to workers’ compensation or similar insurance, or automobile medical-payment insurance.
(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 office for informational purposes.
(5) Prior to solicitation in this state, an officer of the insurer shall truthfully certify to the office 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.
(9) Any insured shall be able to terminate membership or affiliation with the group to whom the master policy is issued. An insured that elects to terminate his or her membership or affiliation with the group shall provide written notice to the insurer. Upon providing the written notice, the member shall be entitled to the rights and options provided by s. 627.6675.
(10) Any pricing structure that results, or is reasonably expected to result, in rate escalations resulting in a death spiral, which is a rate escalation caused by segmenting healthy and unhealthy lives resulting in an ultimate pool of primarily less healthy insureds, is considered a predatory pricing structure and constitutes unfair discrimination as provided in s. 626.9541(1)(g). The Financial Services Commission may adopt rules to define other unfairly discriminatory or predatory health insurance rating practices.
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; s. 3, ch. 2003-139; s. 1164, ch. 2003-261; s. 1, ch. 2004-7; s. 4, ch. 2011-111; s. 152, ch. 2014-17.
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.
627.6561 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 s. 627.6562(3), 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) 1Subparagraphs 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.
History.—s. 130, ch. 92-33; s. 2, ch. 95-364; s. 8, ch. 97-179; s. 1165, ch. 2003-261; s. 16, ch. 2016-194.
1Note.—Paragraph (b) is not divided into subparagraphs. The reference may be to subparagraphs (a)1. and (a)2.
627.65615 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.
627.6562 Dependent coverage.—
(1) If an insurer offers coverage under a group, blanket, or franchise health insurance policy 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) A policy that is subject to the requirements of subsection (1) must also offer the policyholder or certificateholder the option to insure a child of the policyholder or certificateholder at least until the end of the calendar year in which the child reaches the age of 30, if the child:
(a) Is unmarried and does not have a dependent of his or her own;
(b) Is a resident of this state or a full-time or part-time student; and
(c) Is not provided coverage as a named subscriber, insured, enrollee, or covered person under any other group, blanket, or franchise health insurance policy or individual health benefits plan, or is not entitled to benefits under Title XVIII of the Social Security Act.
(3) If, pursuant to subsection (2), a child is provided coverage under the parent’s policy after the end of the calendar year in which the child reaches age 25 and coverage for the child is subsequently terminated, the child is not eligible to be covered under the parent’s policy unless the child was continuously covered by other creditable coverage without a gap in coverage of more than 63 days.
(a) For the purposes of this subsection, 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. Title 10 U.S.C. chapter 55.
6. A medical care program of the Indian Health Service or of a tribal organization.
7. A state health benefit risk pool.
8. A health plan offered under 5 U.S.C. chapter 89.
9. A public health plan as defined by rules adopted by the commission. 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 of one or more, or any combination thereof, of the following excepted benefits:
1. Coverage only for accident insurance, 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 onsite medical clinics, including prepaid health clinics under part II of chapter 641.
8. Other similar insurance coverage specified in rules adopted by the commission 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. Other similar, limited benefits specified in rules adopted by the commission.
(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 policy, as defined under s. 1882(g)(1) of the Social Security Act, coverage supplemental to the coverage provided under 10 U.S.C. chapter 55, and similar supplemental coverage provided to coverage under a group health plan are not considered creditable coverage if offered as a separate insurance policy.
(4) This section does not:
(a) Affect or preempt an insurer’s right to medically underwrite or charge the appropriate premium;
(b) Require coverage for services provided to a dependent before October 1, 2008;
(c) Require an employer to pay all or part of the cost of coverage provided for a dependent under this section; or
(d) Prohibit an insurer or health maintenance organization from increasing the limiting age for dependent coverage to age 30 in policies or contracts issued or renewed prior to the effective date of this act.
(5) This section does not apply to accident only, specified disease, disability income, Medicare supplement, or long-term care insurance policies.
History.—s. 131, ch. 92-33; s. 9, ch. 2008-32; s. 153, ch. 2014-17; s. 17, ch. 2016-194; s. 41, ch. 2017-3.
627.65625 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.
627.65626 Insurance rebates for healthy lifestyles.—
(1) Any rate, rating schedule, or rating manual for a health insurance policy that provides creditable coverage as defined in s. 627.6562(3) filed with the office shall provide for an appropriate rebate of premiums paid in the last policy year, contract year, or calendar year when the majority of members of a health plan have enrolled and maintained participation in any health wellness, maintenance, or improvement program offered by the group policyholder and health plan. The rebate may be based upon premiums paid in the last calendar year or policy year. The group must provide evidence of demonstrative maintenance or improvement of the enrollees’ health status as determined by assessments of agreed-upon health status indicators between the policyholder and the health insurer, including, but not limited to, reduction in weight, body mass index, and smoking cessation. The group or health insurer may contract with a third-party administrator to assemble and report the health status required in this subsection between the policyholder and the health insurer. Any rebate provided by the health insurer is presumed to be appropriate unless credible data demonstrates otherwise, or unless the rebate program requires the insured to incur costs to qualify for the rebate which equal or exceed the value of the rebate, but the rebate may not exceed 10 percent of paid premiums.
(2) The premium rebate authorized by this section shall be effective for an insured on an annual basis unless the number of participating members on the policy renewal anniversary becomes less than the majority of the members eligible for participation in the wellness program.
History.—s. 32, ch. 2004-297; s. 6, ch. 2005-231; s. 18, ch. 2016-194.
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) The medical policy as specified in s. 627.6699(3)(k) must be accompanied by an identification card that contains, at a minimum:
(a) The name of the organization issuing the policy or name of the organization administering the policy, whichever applies.
(b) The name of the certificateholder.
(c) The type of plan only if the plan is filed in the state, an indication that the plan is self-funded, or the name of the network.
(d) The member identification number, contract number, and policy or group number, if applicable.
(e) A contact phone number or electronic address for authorizations and admission certifications.
(f) A phone number or electronic address whereby the covered person or hospital, physician, or other person rendering services covered by the policy may obtain benefits verification and information in order to estimate patient financial responsibility, in compliance with privacy rules under the Health Insurance Portability and Accountability Act.
(g) The national plan identifier, in accordance with the compliance date set forth by the federal Department of Health and Human Services.
The identification card must present the information in a readily identifiable manner or, alternatively, the information may be embedded on the card and available through magnetic stripe or smart card. The information may also be provided through other electronic technology.
(3) 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; s. 3, ch. 2008-119; s. 154, ch. 2014-17; s. 5, ch. 2015-121.
627.6571 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.
(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 under this policy form, and to participants and beneficiaries covered under such coverage, of such discontinuation at least 90 days before the date of the nonrenewal of such coverage;
2. The insurer offers to each policyholder provided coverage under this policy form 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. If a policy form covers both grandfathered and nongrandfathered health plans, an insurer may nonrenew coverage only for nongrandfathered health plans, in which case the requirements of subparagraphs 1. and 2. apply only to the nongrandfathered health plans. As used in this subparagraph, the terms “grandfathered health plan” and “nongrandfathered health plan” have the same meanings as provided in s. 627.402.
(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 office 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; s. 1166, ch. 2003-261; s. 21, ch. 2013-101; s. 6, ch. 2015-121.
627.6572 Pharmacy benefit manager contracts.—
(1) As used in this section, the term:
(a) “Maximum allowable cost” means the per-unit amount that a pharmacy benefit manager reimburses a pharmacist for a prescription drug, excluding dispensing fees, prior to the application of copayments, coinsurance, and other cost-sharing charges, if any.
(b) “Pharmacy benefit manager” means a person or entity doing business in this state which contracts to administer or manage prescription drug benefits on behalf of a health insurer to residents of this state.
(2) A contract between a health insurer and a pharmacy benefit manager must require that the pharmacy benefit manager:
(a) Update maximum allowable cost pricing information at least every 7 calendar days.
(b) Maintain a process that will, in a timely manner, eliminate drugs from maximum allowable cost lists or modify drug prices to remain consistent with changes in pricing data used in formulating maximum allowable cost prices and product availability.
(3) A contract between a health insurer and a pharmacy benefit manager must prohibit the pharmacy benefit manager from limiting a pharmacist’s ability to disclose whether the cost-sharing obligation exceeds the retail price for a covered prescription drug, and the availability of a more affordable alternative drug, pursuant to s. 465.0244.
(4) A contract between a health insurer and a pharmacy benefit manager must prohibit the pharmacy benefit manager from requiring an insured to make a payment for a prescription drug at the point of sale in an amount that exceeds the lesser of:
(a) The applicable cost-sharing amount; or
(b) The retail price of the drug in the absence of prescription drug coverage.
(5) This section applies to contracts entered into or renewed on or after July 1, 2018.
History.—s. 5, ch. 2018-91.
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 which 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. 383.30-383.332.
(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; s. 109, ch. 2018-24.
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 or to any operator, owner, or lessee of a means of transportation, which is deemed the policyholder, covering a group defined as all persons who may become passengers on such common carrier or such means of transportation.
(2) Under a policy or contract issued to an employer, who is deemed the policyholder, covering any group of employees or the employees’ dependents or guests defined by reference to activities or operations of the policyholder, 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 all or any class of its students, teachers, and employees. Any such policy issued may insure the spouse or dependent children of the insured student, teacher, or employee.
(4) Under a policy or contract issued in the name of a volunteer fire department, first aid group, local emergency management agency as defined in s. 252.34(6), or other group of first responders as defined in s. 112.1815, which is deemed the policyholder, covering all or any grouping of the members or employees of the policyholder or covering all or any participants in an activity or operation sponsored or supervised by the policyholder.
(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, any religious, instructive, educational, charitable, recreational, or civic body, or similar organization, or to an individual, firm, or corporation, holding or operating meetings such as summer camps or other meetings for religious, instructive, educational, charitable, recreational, or civic purposes, which is deemed the policyholder, covering any or all participants in the activities or operations sponsored or supervised by the policyholder, including 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 or other publisher, which is deemed the policyholder, covering independent contractor newspaper or publication delivery persons for health insurance that may contain the following benefits:
(a) Coverage only for accident or disability income insurance or any combination thereof;
(b) Limited-scope dental or vision benefits;
(c) Coverage only for a specified disease or illness; or
(d) Hospital indemnity or other fixed indemnity insurance.
(7) Under a policy or contract issued in the name of a health care provider, which is deemed the policyholder, covering patients, or issued to an arranger of fertility medicine relationships, such as a surrogacy agency, which is deemed the policyholder, covering donors, recipients, or surrogates. This coverage may be offered to patients of a health care provider or to donors, recipients, or surrogates of such arranged health services 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 part I of chapter 641, which is 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.
(9) Under a policy or contract issued to a sports team, camp, or sponsor thereof, which is deemed the policyholder, covering members, campers, participants, employees, officials, or supervisors.
(10) Under a policy or contract issued to a travel agency or other organization that provides travel-related services, which is deemed the policyholder, to cover any or all persons for whom travel and travel-related services are provided.
(11) Under a policy or contract issued to an association, which is deemed the policyholder, if the association has a constitution and bylaws, has at least 25 individual members, and has been organized and maintained in good faith for at least 1 year for purposes other than obtaining insurance, covering all or any class of members of such association.
(12) Under a policy or contract issued to a financial institution or parent holding company, or issued to the trustees or agents designated by one or more banks or financial institutions as defined in s. 655.005, which is deemed the policyholder, covering accountholders, cardholders, debtors, or guarantors for health insurance that may contain the following benefits:
(a) Coverage only for accident or disability income insurance or any combination thereof;
(b) Limited-scope dental or vision benefits;
(c) Coverage only for a specified disease or illness; or
(d) Hospital indemnity or other fixed indemnity insurance.
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; s. 1, ch. 2015-124; s. 5, ch. 2016-198.
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.
(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; s. 90, ch. 2006-1.
627.6615 Children with disabilities; continuation of coverage under group policy.—
(1) 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 terminates upon attainment of the limiting age for dependent children specified in the policy or contract must 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:
(a) Incapable of self-sustaining employment by reason of an intellectual or physical disability.
(b) Chiefly dependent upon the employee or member for support and maintenance.
(2) 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 subsection (1).
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; s. 20, ch. 2013-162.
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 III 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; s. 142, ch. 2007-5.
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 627.613, relating to timely payment of claims, or s. 627.6131, relating to payment of claims, whichever is applicable.
(7) Section 627.645(1), relating to denial 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.
(11) Section 627.64731, relating to leasing, renting, or granting access to a participating provider.
(12) Section 627.6474, relating to provider contracts.
(13) Section 627.6044, relating to the use of specific methodology for payment of claims.
(14) Section 627.6405, relating to the inappropriate utilization of emergency care.
(15) Section 627.64194, relating to coverage requirements for services provided by nonparticipating providers and payment collection limitations.
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; s. 2, ch. 2001-107; s. 7, ch. 2002-389; s. 23, ch. 2004-297; s. 5, ch. 2008-212; s. 15, ch. 2016-222.
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 office 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 office, 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 office shall annually determine standard risk rates, using reasonable actuarial techniques and standards adopted by the commission 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 office 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 is not required to issue a converted policy covering any person who is or could be covered by Medicare. The insurer is not required to issue or renew 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 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 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 office before 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. 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 office. The reason for nonrenewal authorized by this subparagraph is not required to be contained in the converted policy but must be provided in writing to the policyholder at least 90 days before the policy renewal date.
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 office.
(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 coverage 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 may, at its option, 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 office, 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) CONSTRUCTION.—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 office.
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; s. 1167, ch. 2003-261; s. 22, ch. 2013-101; s. 7, ch. 2015-121.
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 that is accredited by an accrediting organization whose standards incorporate comparable regulations required by this state. Alcohol rehabilitation programs accredited by an accrediting organization whose standards incorporate comparable regulations required by this state or approved by the state and licensed drug abuse rehabilitation programs shall also be qualified providers under this section. In a given benefit year, if partial hospitalization services or a combination of inpatient and partial hospitalization are used, the total benefits paid for all such services may not exceed the cost of 30 days after 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; s. 12, ch. 2013-93.
627.6686 Coverage for individuals with autism spectrum disorder required; exception.—
(1) This section and s. 641.31098 may be cited as the “Steven A. Geller Autism Coverage Act.”
(2) As used in this section, the term:
(a) “Applied behavior analysis” means the design, implementation, and evaluation of environmental modifications, using behavioral stimuli and consequences, to produce socially significant improvement in human behavior, including, but not limited to, the use of direct observation, measurement, and functional analysis of the relations between environment and behavior.
(b) “Autism spectrum disorder” means any of the following disorders as defined in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association:
1. Autistic disorder.
2. Asperger’s syndrome.
3. Pervasive developmental disorder not otherwise specified.
(c) “Eligible individual” means an individual under 18 years of age or an individual 18 years of age or older who is in high school who has been diagnosed as having a developmental disability at 8 years of age or younger.
(d) “Health insurance plan” means a group health insurance policy or group health benefit plan offered by an insurer which includes the state group insurance program provided under s. 110.123. The term does not include any health insurance plan offered in the individual market, any health insurance plan that is individually underwritten, or any health insurance plan provided to a small employer.
(e) “Insurer” means an insurer providing health insurance coverage, which is licensed to engage in the business of insurance in this state and is subject to insurance regulation.
(3) A health insurance plan issued or renewed on or after April 1, 2009, shall provide coverage to an eligible individual for:
(a) Well-baby and well-child screening for diagnosing the presence of autism spectrum disorder.
(b) Treatment of autism spectrum disorder and Down syndrome through speech therapy, occupational therapy, physical therapy, and applied behavior analysis. Applied behavior analysis services shall be provided by an individual certified pursuant to s. 393.17 or an individual licensed under chapter 490 or chapter 491.
(4) The coverage required pursuant to subsection (3) is subject to the following requirements:
(a) Coverage shall be limited to treatment that is prescribed by the insured’s treating physician in accordance with a treatment plan.
(b) Coverage for the services described in subsection (3) shall be limited to $36,000 annually and may not exceed $200,000 in total lifetime benefits.
(c) Coverage may not be denied on the basis that provided services are habilitative in nature.
(d) Coverage may be subject to other general exclusions and limitations of the insurer’s policy or plan, including, but not limited to, coordination of benefits, participating provider requirements, restrictions on services provided by family or household members, and utilization review of health care services, including the review of medical necessity, case management, and other managed care provisions.
(5) The coverage required pursuant to subsection (3) may not be subject to dollar limits, deductibles, or coinsurance provisions that are less favorable to an insured than the dollar limits, deductibles, or coinsurance provisions that apply to physical illnesses that are generally covered under the health insurance plan, except as otherwise provided in subsection (4).
(6) An insurer may not deny or refuse to issue coverage for medically necessary services, refuse to contract with, or refuse to renew or reissue or otherwise terminate or restrict coverage for an individual because the individual is diagnosed as having a developmental disability.
(7) The treatment plan required pursuant to subsection (4) shall include all elements necessary for the health insurance plan to appropriately pay claims. These elements include, but are not limited to, a diagnosis, the proposed treatment by type, the frequency and duration of treatment, the anticipated outcomes stated as goals, the frequency with which the treatment plan will be updated, and the signature of the treating physician.
(8) The maximum benefit under paragraph (4)(b) shall be adjusted annually on January 1 of each calendar year to reflect any change from the previous year in the medical component of the then current Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics of the United States Department of Labor.
(9) This section may not be construed as limiting benefits and coverage otherwise available to an insured under a health insurance plan.
History.—s. 3, ch. 2008-30; s. 13, ch. 2012-27; s. 155, ch. 2014-17; s. 1, ch. 2016-222.
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 are 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 that is accredited by an accrediting organization whose standards incorporate comparable regulations required by this state or that is approved by this 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; s. 13, ch. 2013-93.
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 63 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 commission 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 office, 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.
(h) If a covered employee is in the military reserve or National Guard and is called to active duty and the employee’s employment is terminated either after or during the active duty period, the termination is a separate qualifying event, distinct from the qualifying event that may have occurred when the employee was called to active duty, and the employee and other qualified beneficiaries are eligible for a new 18-month benefit period beginning on the later of the date active duty ends or the date of termination of employment.
(i) If a covered employee is in the military reserve or National Guard and is called to active duty and:
1. The employee dies during the period of active duty,
2. There is a divorce or legal separation of the covered employee from the covered employee’s spouse, or
3. A dependent child ceases to be a dependent child under the requirements of the employer’s group health plan,
such events are qualifying events distinct from the qualifying event that may have occurred when the employee was called to active duty.
(j) Notwithstanding paragraph (b), if a qualified beneficiary in the military reserve or National Guard has elected to continue coverage and is thereafter called to active duty and the coverage under the group plan is terminated by the beneficiary or the carrier due to the qualified beneficiary becoming eligible for TRICARE (the health care program provided by the United States Defense Department), the 18-month period or such other applicable maximum time period for which the qualified beneficiary would otherwise be entitled to continue coverage is tolled during the time that he or she is covered under the TRICARE program. Within 63 days after the federal TRICARE coverage terminates, the qualified beneficiary may elect to continue coverage under the group health plan, retroactively to the date coverage terminated under TRICARE, for the remainder of the 18-month period or such other applicable time period, subject to termination of coverage at the earliest of the conditions specified in paragraph (b).
(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 commission 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; s. 1, ch. 2001-353; s. 1169, ch. 2003-261; s. 7, ch. 2005-231.
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.
627.6699 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 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 office, 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) “Board” means the board of directors of the program.
(c) “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 or voluntary employees’ beneficiary association, as defined under 26 U.S.C. s. 501(c)(9), which multiple-employer welfare arrangement or voluntary employees’ beneficiary association operates solely for the benefit of the members or the members and the employees of such members, is located in this state, and was in existence on January 1, 1992. The term also does not include any authorized insurer or health maintenance organization to the extent that it insures the members or the members and the employees of such members of such multiple-employer welfare arrangement or voluntary employees’ beneficiary association in existence on January 1, 1992.
(d) “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.
(e) “Creditable coverage” has the same meaning as provided in s. 627.6562(3).
(f) “Dependent” means the spouse or child of an eligible employee, subject to the applicable terms of the health benefit plan covering that employee.
(g) “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.
(h) “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.
(i) “Grandfathered health plan” and “nongrandfathered health plan” have the same meaning as provided in s. 627.402.
(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 who, with respect to coverage under a group health policy, is 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.
(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)(f); and allows adjustments for: claims experience, health status, or duration of coverage as permitted under subparagraph (6)(b)5.; and administrative and acquisition expenses as permitted 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:
1. For a grandfathered health plan, 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, the majority of whom were employed in this state, employs at least 1 employee on the first day of the plan year, and is not formed primarily for purposes of purchasing insurance. In determining the number of employees, companies that are an affiliated group as defined in s. 1504(a) of the Internal Revenue Code of 1986, as amended, are considered a single employer. 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.
2. For a nongrandfathered health plan, any employer that has its principal place of business in this state, employed an average of at least 1 but not more than 50 employees on business days during the preceding calendar year, and employs at least 1 employee on the first day of the plan year. As used in this subparagraph, the terms “employee” and “employer” have the same meaning as provided in s. 3 of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. s. 1002.
(w) “Small employer carrier” means a carrier that offers health benefit plans covering employees of one or more small employers.
(4) APPLICABILITY AND SCOPE.—
(a)1. This section applies to a health benefit plan that provides coverage to employees of a small employer in this state, unless the coverage is marketed directly to the individual employee, and the employer does not contribute directly or indirectly to the premiums or facilitate the administration of the coverage in any manner. For the purposes of this subparagraph, an employer is not deemed to be contributing to the premiums or facilitating the administration of coverage if the employer does not contribute to the premium and merely collects the premiums for coverage from an employee’s wages or salary through payroll deduction and submits payment for the premiums of one or more employees in a lump sum to a carrier.
2. A carrier authorized to issue group or individual health benefit plans under this chapter or chapter 641 may offer coverage as described in this paragraph to individual employees without being subject to this section if the employer has not had a group health benefit plan in place in the prior 6 months. A carrier authorized to issue group or individual health benefit plans under this chapter or chapter 641 may offer coverage as described in this subparagraph to employees that are not eligible employees as defined in this section, whether or not the small employer has a group health benefit plan in place. A carrier that offers coverage as described in this subparagraph must provide a cancellation notice to the primary insured at least 10 days prior to canceling the coverage for nonpayment of premium.
(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) A small employer carrier that does not offer coverage but renews or continues coverage in force must provide coverage to newly eligible employees and dependents on the same basis as small employer carriers that offer coverage.
(b) Every small employer carrier must, as a condition of transacting business in this state, 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.
(c) Except as provided in paragraph (d), 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.
(d) 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. Additional or increased benefits may only be offered by riders.
2. 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.
(e) 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.
(f) 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 commission 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 issued by small employer carriers on or after January 1, 1994, premium rates for health benefit plans are subject to the following:
1. Small employer carriers must use a modified community rating methodology in which the premium for each small employer is 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)(f) and in which the premium may be adjusted as permitted by this paragraph. A small employer carrier is not required to use gender as a rating factor for a nongrandfathered health plan.
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 office 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 within the 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 office 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 office. 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. This subparagraph does not exempt an alliance or group association from licensure for 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, up to 10 percent annually, due to the claims experience, health status, or duration of coverage of the employees or dependents of the small employer. 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 4 percent for the current policy term, the carrier shall limit the application of such adjustments only to minus adjustments. For any subsequent policy term, 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 4 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 office 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, the term “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.
8. A carrier may separate the experience of small employer groups with fewer than 2 eligible employees from the experience of small employer groups with 2-50 eligible employees for purposes of determining an alternative modified community rating.
a. If a carrier separates the experience of small employer groups, the rate to be charged to small employer groups of fewer than 2 eligible employees may not exceed 150 percent of the rate determined for small employer groups of 2-50 eligible employees. However, the carrier may charge excess losses of the experience pool consisting of small employer groups with less than 2 eligible employees to the experience pool consisting of small employer groups with 2-50 eligible employees so that all losses are allocated and the 150-percent rate limit on the experience pool consisting of small employer groups with less than 2 eligible employees is maintained.
b. Notwithstanding s. 627.411(1), the rate to be charged to a small employer group of fewer than 2 eligible employees, insured as of July 1, 2002, may be up to 125 percent of the rate determined for small employer groups of 2-50 eligible employees for the first annual renewal and 150 percent for subsequent annual renewals.
9. A carrier shall separate the experience of grandfathered health plans from nongrandfathered health plans for determining rates.
(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 1organization, 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 office 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 commission. 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 office upon request. The information constitutes proprietary and trade secret information and may not be disclosed by the office to persons outside the office, 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 office quarterly an enrollment report as directed by the office. 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. 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 and intends to become a small employer carrier 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 office may permit a carrier to modify its election at any time for good cause shown, after a hearing.
(b) The commission 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 office a designation of election under subsection (9) in a format and manner prescribed by the commission. The office shall approve the election of a small employer carrier to become a risk-assuming carrier if the office finds that the carrier is capable of assuming that status pursuant to the criteria set forth in paragraph (b).
2. The office 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 office 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 office 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 office shall hold a hearing on the election at the request of the carrier.
(e) The office may rescind the approval granted to a risk-assuming carrier under this subsection if the office 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 director of the office 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 director of the office and serve as follows:
a. Five members shall be representatives of health insurers licensed under chapter 624 or chapter 641. Two members shall be agents who are actively engaged in the sale of health insurance. Four members shall be employers or representatives of employers. One member shall be a person covered under an individual health insurance policy issued by a licensed insurer in this state. One member shall represent the Agency for Health Care Administration and shall be recommended by the Secretary of Health Care Administration.
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 director of the office 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 director of the office 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.
(c)1. The board shall submit to the office a plan of operation to assure the fair, reasonable, and equitable administration of the program. The board may at any time submit to the office any amendments to the plan that the board finds to be necessary or suitable.
2. The office 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 office.
(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 office.
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 office market conduct requirements and other requirements for carriers and agents, including requirements relating to:
1. Registration by each carrier with the office of its intention to be a small employer carrier under this section;
2. Publication by the office 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. 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.
2. A small employer carrier may reinsure an entire employer group within 60 days after the commencement of the group’s coverage under the plan.
3. 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.
4. 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 office approves a lower adjustment factor.
5. A small employer carrier may terminate reinsurance for all reinsured employees or dependents on any plan anniversary.
6. 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 3., shall be reduced by an amount equal to that portion of the risk, if any, which exceeds the amount set forth in subparagraph 3. which may not be ceded to the program.
7. 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.
8. 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 office. 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 office.
(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 this section.
(j)1. Before July 1 of each calendar year, the board shall determine and report to the office 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 (m), 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 office, 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 July 1 of each year, the board shall determine and file with the office 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 office within 180 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 office within 180 days following the end of the applicable calendar year, the office may evaluate the operations of the program and implement such amendments to the plan of operation the office 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 office, a deferment, in whole or in part, from any assessment made by the board. The office may defer, in whole or in part, the assessment of a carrier if, in the opinion of the office, 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 shall monitor compliance with this section, including the market conduct of small employer carriers, and shall report to the office 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 office 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 office.
(m) 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.
(n) The board shall advise the office, the Agency for Health Care Administration, the department, other executive departments, and the Legislature on health insurance issues. Specifically, the board shall:
1. Provide a forum for stakeholders, consisting of insurers, employers, agents, consumers, and regulators, in the private health insurance market in this state.
2. Review and recommend strategies to improve the functioning of the health insurance markets in this state with a specific focus on market stability, access, and pricing.
3. Make recommendations to the office for legislation addressing health insurance market issues and provide comments on health insurance legislation proposed by the office.
4. Meet at least three times each year. One meeting shall be held to hear reports and to secure public comment on the health insurance market, to develop any legislation needed to address health insurance market issues, and to provide comments on health insurance legislation proposed by the office.
5. Issue a report to the office on the state of the health insurance market by September 1 each year. The report shall include recommendations for changes in the health insurance market, results from implementation of previous recommendations, and information on health insurance markets.
(12) STANDARDS TO ASSURE FAIR MARKETING.—
(a) Each small employer carrier shall actively market health benefit plan coverage, including any subsequent modifications or additions to those plans, to eligible small employers in the state. Small employer carriers must offer and issue all plans on a guaranteed-issue basis.
(b) A small employer carrier or agent shall not, 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) Paragraph (a) does 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) A small employer carrier shall not, 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 not 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.
(f) A small employer carrier or agent shall not 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.
(g) 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.
(h) The commission 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.
(i) A violation of this section by a small employer carrier or an agent is an unfair trade practice under s. 626.9541 or ss. 641.3903 and 641.3907.
(j) 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.
(13) 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.
(14) SMALL EMPLOYERS ACCESS PROGRAM.—
(a) Popular name.—This subsection may be referred to by the popular name “The Small Employers Access Program.”
(b) Intent.—The Legislature finds that increased access to health care coverage for small employers with up to 25 employees could improve employees’ health and reduce the incidence and costs of illness and disabilities among residents in this state. Many employers do not offer health care benefits to their employees citing the increased cost of this benefit. It is the intent of the Legislature to create the Small Business Health Plan to provide small employers the option and ability to provide health care benefits to their employees at an affordable cost through the creation of purchasing pools for employers with up to 25 employees, and rural hospital employers and nursing home employers regardless of the number of employees.
(c) Definitions.—For purposes of this subsection:
1. “Fair commission” means a commission structure determined by the insurers and reflected in the insurers’ rate filings made pursuant to this subsection.
2. “Insurer” means any entity that provides health insurance in this state. For purposes of this subsection, insurer includes an insurance company holding a certificate of authority pursuant to chapter 624 or a health maintenance organization holding a certificate of authority pursuant to chapter 641, which qualifies to provide coverage to small employer groups pursuant to this section.
3. “Mutually supported benefit plan” means an optional alternative coverage plan developed within a defined geographic region which may include, but is not limited to, a minimum level of primary care coverage in which the percentage of the premium is distributed among the employer, the employee, and community-generated revenue either alone or in conjunction with federal matching funds.
4. “Office” means the Office of Insurance Regulation of the Department of Financial Services.
5. “Participating insurer” means any insurer providing health insurance to small employers that has been selected by the office in accordance with this subsection for its designated region.
6. “Program” means the Small Employer Access Program as created by this subsection.
(d) Eligibility.—
1. Any small employer that is actively engaged in business, has its principal place of business in this state, employs up to 25 eligible employees on business days during the preceding calendar year, employs at least 2 employees on the first day of the plan year, and has had no prior coverage for the last 6 months may participate.
2. Any municipality, county, school district, or hospital employer located in a rural community as defined in s. 288.0656(2) may participate.
3. Nursing home employers may participate.
4. Each dependent of a person eligible for coverage is also eligible to participate.
Any employer participating in the program must do so until the end of the term for which the carrier providing the coverage is obligated to provide such coverage to the program. Coverage for a small employer group that ceases to meet the eligibility requirements of this section may be terminated at the end of the policy period for which the necessary premiums have been paid.
(e) Administration.—
1. The office shall by competitive bid, in accordance with current state law, select an insurer to provide coverage through the program to eligible small employers within an established geographical area of this state. The office may develop exclusive regions for the program similar to those used by the Healthy Kids Corporation. However, the office is not precluded from developing, in conjunction with insurers, regions different from those used by the Healthy Kids Corporation if the office deems that such a region will carry out the intentions of this subsection.
2. The office shall evaluate bids submitted based upon criteria established by the office, which shall include, but not be limited to:
a. The insurer’s proven ability to handle health insurance coverage to small employer groups.
b. The efficiency and timeliness of the insurer’s claim processing procedures.
c. The insurer’s ability to apply effective cost-containment programs and procedures and to administer the program in a cost-efficient manner.
d. The financial condition and stability of the insurer.
e. The insurer’s ability to develop an optional mutually supported benefit plan.
The office may use any financial information available to it through its regulatory duties to make this evaluation.
(f) Insurer qualifications.—The insurer shall be a duly authorized insurer or health maintenance organization.
(g) Duties of the insurer.—The insurer shall:
1. Develop and implement a program to publicize the existence of the program, program eligibility requirements, and procedures for enrollment and maintain public awareness of the program.
2. Maintain employer awareness of the program.
3. Demonstrate the ability to use delivery of cost-effective health care services.
4. Encourage, educate, advise, and administer the effective use of health savings accounts by covered employees and dependents.
5. Serve for a period specified in the contract between the office and the insurer, subject to removal for cause and subject to any terms, conditions, and limitations of the contract between the office and the insurer as may be specified in the request for proposal.
(h) Contract term.—The contract term shall not exceed 3 years. At least 6 months prior to the expiration of each contract period, the office shall invite eligible entities, including the current insurer, to submit bids to serve as the insurer for a designated geographic area. Selection of the insurer for the succeeding period shall be made at least 3 months prior to the end of the current period. If a protest is filed and not resolved by the end of the contract period, the contract with the existing administrator may be extended for a period not to exceed 6 months. During the contract extension period, the administrator shall be paid at a rate to be negotiated by the office.
(i) Insurer reporting requirements.—On March 1 following the close of each calendar year, the insurer shall determine net written and earned premiums, the expense of administration, and the paid and incurred losses for the year and report this information to the office on a form prescribed by the office.
(j) Application requirements.—The insurer shall permit or allow any licensed and duly appointed health insurance agent residing in the designated region to submit applications for coverage, and such agent shall be paid a fair commission if coverage is written. The agent must be appointed to at least one insurer.
(k) Benefits.—Upon the approval of the office, the insurer may establish an optional mutually supported benefit plan that is an alternative plan developed within a defined geographic region of this state or any other such alternative plan that will carry out the intent of this subsection. Any small employer carrier issuing new health benefit plans may offer a benefit plan with coverages similar to, but not less than, any alternative coverage plan developed pursuant to this subsection.
(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 limited benefit policy or contract offered or delivered to a small employer unless that law is made expressly applicable to such policies or contracts. A law restricting or limiting deductibles, coinsurance, copayments, or annual or lifetime maximum payments does not apply to any health plan policy offered or delivered to a small employer unless such law is made expressly applicable to such policy or contract.
(b) Notwithstanding chapter 641, a health maintenance organization may issue contracts providing benefits equal to the limited benefit policy authorized by this section.
(16) RESTRICTIONS ON COVERAGE.—
(a) A plan under which coverage is purchased in whole or in part with any state or federal funds through an exchange created pursuant to the federal Patient Protection and Affordable Care Act, Pub. L. No. 111-148, may not provide coverage for an abortion, as defined in s. 390.011(1), except if the pregnancy is the result of an act of rape or incest, or in the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, which would, as certified by a physician, place the woman in danger of death unless an abortion is performed. Coverage is deemed to be purchased with state or federal funds if any tax credit or cost-sharing credit is applied toward the plan.
(b) This subsection does not prohibit a plan from providing any person or entity with separate coverage for an abortion if such coverage is not purchased in whole or in part with state or federal funds.
(c) As used in this section, the term “state” means this state or any political subdivision of the state.
(17) RULEMAKING AUTHORITY.—The commission 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; s. 60, ch. 2001-63; s. 15, ch. 2002-389; s. 1170, ch. 2003-261; s. 24, ch. 2004-297; s. 80, ch. 2004-390; s. 120, ch. 2005-2; s. 8, ch. 2005-231; s. 6, ch. 2008-212; s. 23, ch. 2009-51; s. 5, ch. 2011-111; s. 2, ch. 2012-93; s. 13, ch. 2012-151; s. 23, ch. 2013-101; s. 1, ch. 2013-174; s. 1, ch. 2015-121; s. 20, ch. 2016-11; s. 19, ch. 2016-194.
1Note.—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.
627.66996 Restrictions on use of state and federal funds for state exchanges.—
(1) A group, franchise, or blanket health insurance policy under which coverage is purchased in whole or in part with any state or federal funds through an exchange created pursuant to the federal Patient Protection and Affordable Care Act, Pub. L. No. 111-148, may not provide coverage for an abortion as defined in s. 390.011(1), except if the pregnancy is the result of an act of rape or incest, or in the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, which would, as certified by a physician, place the woman in danger of death unless an abortion is performed. Coverage is deemed to be purchased with state or federal funds if any tax credit or cost-sharing credit is applied toward the group, franchise, or blanket health insurance policy.
(2) This section does not prohibit a group, franchise, or blanket health insurance policy from offering separate coverage for an abortion if such coverage is not purchased in whole or in part with state or federal funds.
(3) As used in this section, the term “state” means this state or any political subdivision of the state.
History.—s. 2, ch. 2011-111.
627.66997 Stop-loss insurance.—
(1) A self-insured health benefit plan established or maintained by a small employer, as defined in s. 627.6699(3)(v), is exempt from s. 627.6699 and may use a stop-loss insurance policy issued to the employer. For purposes of this subsection, the term “stop-loss insurance policy” means an insurance policy issued to a small employer which covers the small employer’s obligation for the excess cost of medical care on an equivalent basis per employee provided under a self-insured health benefit plan.
(a) A small employer stop-loss insurance policy is considered a health insurance policy and is subject to s. 627.6699 if the policy has an aggregate attachment point that is lower than the greatest of:
1. Two thousand dollars multiplied by the number of employees;
2. One hundred twenty percent of expected claims, as determined by the stop-loss insurer in accordance with actuarial standards of practice; or
3. Twenty thousand dollars.
(b) Once claims under the small employer health benefit plan reach the aggregate attachment point set forth in paragraph (a), the stop-loss insurance policy authorized under this section must cover 100 percent of all claims that exceed the aggregate attachment point.
(2) A self-insured health benefit plan established or maintained by an employer with 51 or more covered employees is considered health insurance if the plan’s stop-loss coverage, as defined in former s. 627.6482(14), has an aggregate attachment point that is lower than the greater of:
(a) One hundred ten percent of expected claims, as determined by the stop-loss insurer in accordance with actuarial standards of practice; or
(b) Twenty thousand dollars.
(3) Stop-loss insurance carriers shall use a consistent basis for determining the number of an employer’s covered employees. Such basis may include, but is not limited to, the average number of employees employed annually or at a uniform time.
History.—s. 2, ch. 2015-121; s. 21, ch. 2016-11.
PART VIII
MEDICARE SUPPLEMENT POLICIES627.671 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 “Alonzo Mourning Access to Care 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; s. 1, ch. 2009-141.
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 office 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 office 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; s. 1171, ch. 2003-261.
627.6735 Order to discontinue certain advertising.—An insurer must file with the office all advertisements for Medicare supplement policies pursuant to rules adopted by the commission. If, in the opinion of the office, any advertisement by a Medicare supplement policy insurer violates any of the provisions of part IX of chapter 626 or any rule of the commission, the office may enter an immediate order requiring that the use of the advertisement be discontinued. If requested by the insurer, the office 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 part IX of chapter 626 or of any rule of the commission, the office 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; s. 61, ch. 2001-63; s. 1172, ch. 2003-261.
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 commission 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 commission may adopt rules that specify prohibited policies or policy provisions, not otherwise specifically authorized by statute, which in the opinion of the office 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 commission 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 office 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 office 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 office.
(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; s. 1173, ch. 2003-261.
627.6741 Issuance, cancellation, nonrenewal, and replacement.—
(1)(a) 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:
1. To any individual who is 65 years of age or older, or under 65 years of age and eligible for Medicare by reason of disability or end-stage renal disease, 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 is eligible for Medicare by reason of a disability or end-stage renal disease, and is enrolled in Medicare Part B; or
2. To any individual who is 65 years of age or older, or under 65 years of age and eligible for Medicare by reason of a disability or end-stage renal disease, who is enrolled in Medicare Part B, and 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.
(b) The 6-month period to enroll in a Medicare supplement policy for an individual who is under 65 years of age and is eligible for Medicare by reason of disability or end-stage renal disease and otherwise eligible under subparagraph (a)1. or subparagraph (a)2. and first enrolled in Medicare Part B before October 1, 2009, begins on October 1, 2009.
(c) A company that has offered Medicare supplement policies to individuals under 65 years of age who are eligible for Medicare by reason of disability or end-stage renal disease before October 1, 2009, may, for one time only, effect a rate schedule change that redefines the age bands of the premium classes without activating the period of discontinuance required by s. 627.410(6)(e)2.
(d) As a part of an insurer’s rate filings, before and including the insurer’s first rate filing for a block of policy forms in 2015, notwithstanding the provisions of s. 627.410(6)(e)3., an insurer shall consider the experience of the policies or certificates for the premium classes including individuals under 65 years of age and eligible for Medicare by reason of disability or end-stage renal disease separately from the balance of the block so as not to affect the other premium classes. For filings in such time period only, credibility of that experience shall be as follows: if a block of policy forms has 1,250 or more policies or certificates in force in the age band including ages under 65 years of age, full or 100-percent credibility shall be given to the experience; and if fewer than 250 policies or certificates are in force, no or zero-percent credibility shall be given. Linear interpolation shall be used for in-force amounts between the low and high values. Florida-only experience shall be used if it is 100-percent credible. If Florida-only experience is not 100-percent credible, a combination of Florida-only and nationwide experience shall be used. If Florida-only experience is zero-percent credible, nationwide experience shall be used. The insurer may file its initial rates and any rate adjustment based upon the experience of these policies or certificates or based upon expected claim experience using experience data of the same company, other companies in the same or other states, or using data publicly available from the Centers for Medicaid and Medicare Services if the insurer’s combined Florida and nationwide experience is not 100-percent credible, separate from the balance of all other Medicare supplement policies.
A Medicare supplement policy issued to an individual under subparagraph (a)1. or subparagraph (a)2. may not exclude benefits based on a preexisting condition if the individual has a continuous period of creditable coverage, as defined in s. 627.6562(3), 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. 627.6562(3), 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.
(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 commission 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).
(6) An insurer offering a Medicare supplement policy under this part is not prohibited from entering into an agreement through a network with inpatient facilities that agree to waive the Medicare Part A deductible in whole or in part. An insurer is not required to file a copy of the network agreement with, and such network agreements are not subject to approval of, the office.
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; s. 1174, ch. 2003-261; s. 2, ch. 2009-141; s. 7, ch. 2010-175; s. 20, ch. 2016-194.
627.6742 Permitted compensation arrangements.—
(1) The commission 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; s. 1175, ch. 2003-261.
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 commission 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; s. 1176, ch. 2003-261.
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 office 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 commission shall adopt a written policy statement regarding the holding of public hearings prior to approval of any premium increases for Medicare supplement insurance policies.
(8) For an insurer that enters into a network agreement pursuant to s. 627.6741(6), the waiver of the Medicare Part A deductible and premium credit shall be factored into the insurer’s loss-ratio calculation and policy premium.
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; s. 1177, ch. 2003-261; s. 8, ch. 2010-175.
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 DISABILITYINSURANCES
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 commission shall have full power and authority to adopt, and the office shall 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, commission, or office 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; s. 1178, ch. 2003-261.
627.6785 Filing of rates with department.—
(1) Credit disability and credit life insurers shall file with the office 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 commission.
(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; s. 1179, ch. 2003-261.
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 the amount of the indebtedness.
(c) Before any credit life insurance may be sold in connection with a specific installment loan or home equity line of credit, 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.
This paragraph does not apply to credit life insurance relating to open-end or revolving credit arrangements. In lieu of the required written acknowledgments set forth in this paragraph and s. 626.9551(2)(a), if the sale of credit life insurance is solicited or consummated telephonically, the creditor agent or agent shall provide written disclosures of such options to the borrower within 30 days from the date the coverage takes effect. The borrower must be notified that he or she has 30 days from the date the disclosures are received to rescind the credit life insurance coverage.
(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; s. 2, ch. 2001-111; s. 67, ch. 2003-267; s. 5, ch. 2008-75.
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 the term of indebtedness.
(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; s. 6, ch. 2008-75.
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 office before use as provided in ss. 627.410 and 627.411. In addition to grounds as specified in s. 627.411, the office, 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; s. 1180, ch. 2003-261.
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 commission 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; s. 1181, ch. 2003-261.
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 office pursuant to s. 627.682.
History.—s. 77, ch. 92-318; s. 1182, ch. 2003-261.
PART X
PROPERTY INSURANCE CONTRACTS627.701 Liability of insureds; coinsurance; deductibles.
627.7011 Homeowners’ policies; offer of replacement cost coverage and law and ordinance coverage.
627.70121 Payment of claims for dual interest property.
627.70131 Insurer’s duty to acknowledge communications regarding claims; investigation.
627.70132 Notice of windstorm or hurricane claim.
627.7015 Alternative procedure for resolution of disputed property insurance claims.
627.70151 Appraisal; conflicts of interest.
627.7016 Insurer contracts with building contractors.
627.70161 Family day care insurance.
627.7017 Hurricane loss mitigation projects.
627.7018 Standards for determining risk of coverage.
627.7019 Standardization of requirements applicable to insurers after natural disasters.
627.702 Valued policy law.
627.705 Return of unearned premium on overinsured personal property.
627.706 Sinkhole insurance; catastrophic ground cover collapse; definitions.
627.7061 Coverage inquiries.
627.7063 Building code effectiveness grading schedule.
627.707 Investigation of sinkhole claims; insurer payment; nonrenewals.
627.7072 Testing standards for sinkholes.
627.7073 Sinkhole reports.
627.7074 Alternative procedure for resolution of disputed sinkhole insurance claims.
627.711 Notice of premium discounts for hurricane loss mitigation; uniform mitigation verification inspection form.
627.712 Residential windstorm coverage required; availability of exclusions for windstorm or contents.
627.713 Report of hurricane loss data.
627.714 Residential condominium unit owner coverage; loss assessment coverage required.
627.7142 Homeowner Claims Bill of Rights.
627.715 Flood insurance.
627.7151 Limited sinkhole coverage insurance.
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 office 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) Except as otherwise provided in this subsection, prior to issuing a personal lines residential property insurance policy, the insurer must offer alternative deductible amounts applicable to hurricane losses equal to $500, 2 percent, 5 percent, and 10 percent of the policy dwelling limits, unless the specific percentage deductible is less than $500. The written notice of the offer shall specify the hurricane 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 subsection in a form approved by the office 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.
(b) This subsection 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.
(c) 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 deductible as required by paragraph (a), 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 deductible as required by paragraph (a).
(d) With respect to a policy covering a risk with dwelling limits of $250,000 or more, the insurer need not offer the $500 hurricane deductible as required by paragraph (a), but must, except as otherwise provided in this subsection, offer the other hurricane deductibles as required by paragraph (a).
(4)(a) 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.”
(b) For any personal lines residential property insurance policy containing a separate hurricane deductible, the insurer shall compute and prominently display the actual dollar value of the hurricane deductible on the declarations page of the policy at issuance and, for renewal, on the renewal declarations page of the policy or on the premium renewal notice.
(c) For any personal lines residential property insurance policy containing an inflation guard rider, the insurer shall compute and prominently display the actual dollar value of the hurricane deductible on the declarations page of the policy at issuance and, for renewal, on the renewal declarations page of the policy or on the premium renewal notice. In addition, for any personal lines residential property insurance policy containing an inflation guard rider, the insurer shall notify the policyholder of the possibility that the hurricane deductible may be higher than indicated when loss occurs due to application of the inflation guard rider. Such notification shall be made on the declarations page of the policy at issuance and, for renewal, on the renewal declarations page of the policy or on the premium renewal notice.
(d)1. A personal lines residential property insurance policy covering a risk valued at less than $500,000 may not have a hurricane deductible in excess of 10 percent of the policy dwelling limits, unless the following conditions are met:
a. The policyholder must personally write and provide to the insurer the following statement in his or her own handwriting and sign his or her name, which must also be signed by every other named insured on the policy, and dated: “I do not want the insurance on my home to pay for the first (specify dollar value) of damage from hurricanes. I will pay those costs. My insurance will not.”
b. If the structure insured by the policy is subject to a mortgage or lien, the policyholder must provide the insurer with a written statement from the mortgageholder or lienholder indicating that the mortgageholder or lienholder approves the policyholder electing to have the specified deductible.
2. A deductible subject to the requirements of this paragraph applies for the term of the policy and for each renewal thereafter. Changes to the deductible percentage may be implemented only as of the date of renewal.
3. An insurer shall keep the original copy of the signed statement required by this paragraph, electronically or otherwise, and provide a copy to the policyholder providing the signed statement. A signed statement meeting the requirements of this paragraph creates a presumption that there was an informed, knowing election of coverage.
4. The commission shall adopt rules providing appropriate alternative methods for providing the statements required by this section for policyholders who have a handicapping or disabling condition that prevents them from providing a handwritten statement.
(5)(a) The hurricane deductible of any personal lines residential property insurance policy issued or renewed on or after May 1, 2005, shall be applied as follows:
1. The hurricane deductible shall apply on an annual basis to all covered hurricane losses that occur during the calendar year for losses that are covered under one or more policies issued by the same insurer or an insurer in the same insurer group.
2. If a hurricane deductible applies separately to each of one or more structures insured under a single policy, the requirements of this paragraph apply with respect to the deductible for each structure.
3. If there was a hurricane loss for a prior hurricane or hurricanes during the calendar year, the insurer may apply a deductible to a subsequent hurricane which is the greater of the remaining amount of the hurricane deductible or the amount of the deductible that applies to perils other than a hurricane. Insurers may require policyholders to report hurricane losses that are below the hurricane deductible or to maintain receipts or other records of such hurricane losses in order to apply such losses to subsequent hurricane claims.
4. If there are hurricane losses in a calendar year on more than one policy issued by the same insurer or an insurer in the same insurer group, the hurricane deductible shall be the highest amount stated in any one of the policies. If a policyholder who had a hurricane loss under the prior policy is provided or offered a lower hurricane deductible under the new or renewal policy, the insurer must notify the policyholder, in writing, at the time the lower hurricane deductible is provided or offered, that the lower hurricane deductible will not apply until January 1 of the following calendar year.
(b) For commercial residential property insurance policies issued or renewed on or after January 1, 2006, the insurer must offer the policyholder the following alternative hurricane deductibles:
1. A hurricane deductible that applies on an annual basis as provided in paragraph (a); and
2. A hurricane deductible that applies to each hurricane.
(6)(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 former 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 office shall draft and formally propose as a rule the form for the certificate of security. 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 office 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.
(7) 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 approved by the office 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.
(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 10 percent of the insured value 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 commission or office.
(9) With respect to hurricane coverage provided in a policy of residential coverage, when the policyholder has taken appropriate hurricane mitigation measures regarding the residence covered under the policy, the insurer shall provide the insured the option of selecting an appropriate reduction in the policy’s hurricane deductible or selecting the appropriate discount credit or other rate differential as provided in s. 627.0629. The insurer must provide the policyholder with notice of the options available under this subsection on a form approved by the office.
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; s. 1183, ch. 2003-261; s. 4, ch. 2004-480; ss. 12, 13, ch. 2005-111; s. 45, ch. 2006-12; s. 28, ch. 2007-1; s. 17, ch. 2007-90; s. 151, ch. 2008-4.
627.7011 Homeowners’ policies; offer of replacement cost coverage and law and ordinance coverage.—
(1) Prior to issuing a homeowner’s insurance policy, the insurer must offer each of the following:
(a) A policy or endorsement providing that any loss that is repaired or replaced will be adjusted on the basis of replacement costs to the dwelling not exceeding policy limits, rather than actual cash value, but not including costs necessary to meet applicable laws and ordinances 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 that is repaired or replaced at any location will be adjusted on the basis of replacement costs to the dwelling not exceeding policy limits, rather than actual cash value, and also including costs necessary to meet applicable laws and ordinances regulating the construction, use, or repair of any property or requiring the tearing down of any property, including the costs of removing debris. However, additional costs necessary to meet applicable laws and ordinances may be limited to 25 percent or 50 percent of the dwelling limit, as selected by the policyholder, and such coverage applies 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) for law and ordinance coverage limited to 25 percent of the dwelling limit, except that the insurer must offer the law and ordinance coverage limited to 50 percent of the dwelling limit. 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 law and ordinance coverage limited to 25 percent of the dwelling limit. The rejection or selection of alternative coverage shall be made on a form approved by the office. The form must fully advise the applicant of the nature of the coverage being rejected. If this form is signed by a named insured, it is 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 if the policyholder has rejected the coverage specified in this section or has selected alternative coverage. The insurer must provide the policyholder with notice of the availability of such coverage in a form approved by the office 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) In the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs:
(a) For a dwelling, the insurer must initially pay at least the actual cash value of the insured loss, less any applicable deductible. The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred. If a total loss of a dwelling occurs, the insurer shall pay the replacement cost coverage without reservation or holdback of any depreciation in value, pursuant to s. 627.702.
(b) For personal property:
1. The insurer must offer coverage under which the insurer is obligated to pay the replacement cost without reservation or holdback for any depreciation in value, whether or not the insured replaces the property.
2. The insurer may also offer coverage under which the insurer may limit the initial payment to the actual cash value of the personal property to be replaced, require the insured to provide receipts for the purchase of the property financed by the initial payment, use such receipts to make the next payment requested by the insured for the replacement of insured property, and continue this process until the insured remits all receipts up to the policy limits for replacement costs. The insurer must provide clear notice of this process before the policy is bound. A policyholder must be provided an actuarially reasonable premium credit or discount for this coverage. The insurer may not require the policyholder to advance payment for the replaced property.
(4) An insurer that issues a homeowner’s insurance policy must include with the policy documents at initial issuance and every renewal in bold type no smaller than 18 points the following statement:
“LAW AND ORDINANCE: LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE THAT YOU MAY WISH TO PURCHASE. PLEASE DISCUSS WITH YOUR INSURANCE AGENT.”
“FLOOD INSURANCE: YOU MAY ALSO NEED TO CONSIDER THE PURCHASE OF FLOOD INSURANCE. YOUR HOMEOWNER’S INSURANCE POLICY DOES NOT INCLUDE COVERAGE FOR DAMAGE RESULTING FROM FLOOD EVEN IF HURRICANE WINDS AND RAIN CAUSED THE FLOOD TO OCCUR. WITHOUT SEPARATE FLOOD INSURANCE COVERAGE, YOU MAY HAVE UNCOVERED LOSSES CAUSED BY FLOOD. PLEASE DISCUSS THE NEED TO PURCHASE SEPARATE FLOOD INSURANCE COVERAGE WITH YOUR INSURANCE AGENT.”
The intent of this subsection is to encourage policyholders to purchase sufficient coverage to protect them in case events excluded from the standard homeowners policy, such as law and ordinance enforcement and flood, combine with covered events to produce damage or loss to the insured property. The intent is also to encourage policyholders to discuss these issues with their insurance agent.
(5) This section does not:
(a) Apply to policies not considered to be “homeowners’ policies,” as that term is commonly understood in the insurance industry.
(b) Apply to mobile home policies.
(c) Limit the ability of an 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.
(d) Prohibit an insurer from limiting its liability under a policy or endorsement providing that loss will be adjusted on the basis of replacement costs to the lesser of:
1. The limit of liability shown on the policy declarations page;
2. The reasonable and necessary cost to repair the damaged, destroyed, or stolen covered property; or
3. The reasonable and necessary cost to replace the damaged, destroyed, or stolen covered property.
(e) Prohibit an insurer from exercising its right to repair damaged property in compliance with its policy and s. 627.702(7).
History.—s. 17, ch. 93-410; s. 1184, ch. 2003-261; s. 14, ch. 2005-111; s. 23, ch. 2006-12; s. 4, ch. 2009-87; s. 19, ch. 2011-39; s. 1, ch. 2018-63.
627.70121 Payment of claims for dual interest property.—For policies issued or renewed on or after October 1, 2006, a property insurer shall transmit claims payments directly to the primary policyholder by check or other allowable payment method, payable to the primary policyholder only, without requiring a dual endorsement from any mortgageholder or lienholder, for amounts payable under the policy for personal property and contents, additional living expenses, and other covered items that are not subject to a recorded security interest that is noted in the dual interest provision of the policy.
History.—s. 22, ch. 2006-12.
627.70131 Insurer’s duty to acknowledge communications regarding claims; investigation.—
(1)(a) Upon an insurer’s receiving a communication with respect to a claim, the insurer shall, within 14 calendar days, review and acknowledge receipt of such communication unless payment is made within that period of time or unless the failure to acknowledge is caused by factors beyond the control of the insurer which reasonably prevent such acknowledgment. If the acknowledgment is not in writing, a notification indicating acknowledgment shall be made in the insurer’s claim file and dated. A communication made to or by an agent of an insurer with respect to a claim shall constitute communication to or by the insurer.
(b) As used in this subsection, the term “agent” means any person to whom an insurer has granted authority or responsibility to receive or make such communications with respect to claims on behalf of the insurer.
(c) This subsection shall not apply to claimants represented by counsel beyond those communications necessary to provide forms and instructions.
(2) Such acknowledgment shall be responsive to the communication. If the communication constitutes a notification of a claim, unless the acknowledgment reasonably advises the claimant that the claim appears not to be covered by the insurer, the acknowledgment shall provide necessary claim forms, and instructions, including an appropriate telephone number.
(3) Unless otherwise provided by the policy of insurance or by law, within 10 working days after an insurer receives proof of loss statements, the insurer shall begin such investigation as is reasonably necessary unless the failure to begin such investigation is caused by factors beyond the control of the insurer which reasonably prevent the commencement of such investigation.
(4) For purposes of this section, the term “insurer” means any residential property insurer.
(5)(a) Within 90 days after an insurer receives notice of an initial, reopened, or supplemental property insurance claim from a policyholder, the insurer shall pay or deny such claim or a portion of the claim unless the failure to pay is caused by factors beyond the control of the insurer which reasonably prevent such payment. Any payment of an initial or supplemental claim or portion of such claim made 90 days after the insurer receives notice of the claim, or made more than 15 days after there are no longer factors beyond the control of the insurer which reasonably prevented such payment, whichever is later, bears interest at the rate set forth in s. 55.03. Interest begins to accrue from the date the insurer receives notice of the claim. The provisions of this subsection may not be waived, voided, or nullified by the terms of the insurance policy. If there is a right to prejudgment interest, the insured shall select whether to receive prejudgment interest or interest under this subsection. Interest is payable when the claim or portion of the claim is paid. Failure to comply with this subsection constitutes a violation of this code. However, failure to comply with this subsection does not form the sole basis for a private cause of action.
(b) Notwithstanding subsection (4), for purposes of this subsection, the term “claim” means any of the following:
1. A claim under an insurance policy providing residential coverage as defined in s. 627.4025(1);
2. A claim for structural or contents coverage under a commercial property insurance policy if the insured structure is 10,000 square feet or less; or
3. A claim for contents coverage under a commercial tenant policy if the insured premises is 10,000 square feet or less.
(c) This subsection shall not apply to claims under an insurance policy covering nonresidential commercial structures or contents in more than one state.
History.—s. 23, ch. 2005-111; s. 27, ch. 2007-1; s. 18, ch. 2007-90; s. 20, ch. 2011-39.
Note.—Former s. 627.4261.
627.70132 Notice of windstorm or hurricane claim.—A claim, supplemental claim, or reopened claim under an insurance policy that provides property insurance, as defined in s. 624.604, for loss or damage caused by the peril of windstorm or hurricane is barred unless notice of the claim, supplemental claim, or reopened claim was given to the insurer in accordance with the terms of the policy within 3 years after the hurricane first made landfall or the windstorm caused the covered damage. For purposes of this section, the term “supplemental claim” or “reopened claim” means any additional claim for recovery from the insurer for losses from the same hurricane or windstorm which the insurer has previously adjusted pursuant to the initial claim. This section does not affect any applicable limitation on civil actions provided in s. 95.11 for claims, supplemental claims, or reopened claims timely filed under this section.
History.—s. 10, ch. 2011-39.
627.7015 Alternative procedure for resolution of disputed property insurance claims.—
(1) 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 and commercial residential insurance policies obligate policyholders to participate in a potentially expensive and time-consuming adversarial appraisal process before 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, policyholders and insurers are encouraged to resolve claims as quickly and fairly as possible. This section is available with respect to claims under personal lines and commercial residential policies before commencing the appraisal process, or before commencing litigation. Mediation may be requested only by the policyholder, as a first-party claimant, a third-party, as an assignee of the policy benefits, or the insurer. However, an insurer is not required to participate in any mediation requested by a third-party assignee of the policy benefits. If requested by the policyholder, participation by legal counsel is 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 by the policyholder, the insurer shall notify the policyholder of its 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.
(3) The costs of mediation must be reasonable, and the insurer must bear all of the cost of conducting mediation conferences, except as otherwise provided in this section. If a policyholder fails to appear at the conference, the conference must be rescheduled upon the policyholder’s payment of the costs of a rescheduled conference. If the insurer fails to appear at the conference, the insurer must pay the policyholder’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 must include a charge necessary to defray the expenses of the department related to its duties under this section and must be deposited in the Insurance 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, denial of application, suspension, revocation of approval, and other penalties for mediators as provided in s. 627.745 and the Florida Rules for Certified and Court-Appointed Mediators.
(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 policyholder has 3 business days within which the policyholder may rescind the settlement unless the policyholder has cashed or deposited any check or draft disbursed to the policyholder for the disputed matters as a result of the conference. If a settlement agreement is reached and is not rescinded, it is binding and acts as a release of all specific claims that were presented in that mediation conference.
(7) If the insurer fails to comply with subsection (2) by failing to notify a policyholder of its right to participate in the mediation program under this section or if the insurer requests the mediation, and the mediation results are rejected by either party, the policyholder is not 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.
(9) For purposes of this section, the term “claim” refers to any dispute between an insurer and a policyholder relating to a material issue of fact other than a dispute:
(a) With respect to which the insurer has a reasonable basis to suspect fraud;
(b) When, based on agreed-upon facts as to the cause of loss, there is no coverage under the policy;
(c) With respect to which the insurer has a reasonable basis to believe that the policyholder has intentionally made a material misrepresentation of fact which is relevant to the claim, and the entire request for payment of a loss has been denied on the basis of the material misrepresentation;
(d) With respect to which the amount in controversy is less than $500, unless the parties agree to mediate a dispute involving a lesser amount; or
(e) With respect to a windstorm or hurricane loss that does not comply with s. 627.70132.
History.—s. 20, ch. 93-410; s. 1186, ch. 2003-261; s. 2, ch. 2003-267; s. 2, ch. 2003-281; s. 15, ch. 2005-111; s. 14, ch. 2012-151; s. 4, ch. 2014-86; s. 28, ch. 2014-123; s. 8, ch. 2018-131.
627.70151 Appraisal; conflicts of interest.—An insurer that offers residential coverage as defined in s. 627.4025, or a policyholder that uses an appraisal clause in a property insurance contract to establish a process for estimating or evaluating the amount of loss through the use of an impartial umpire, may challenge an umpire’s impartiality and disqualify the proposed umpire only if:
(1) A familial relationship within the third degree exists between the umpire and a party or a representative of a party;
(2) The umpire has previously represented a party in a professional capacity in the same claim or matter involving the same property;
(3) The umpire has represented another person in a professional capacity on the same or a substantially related matter that includes the claim, the same property or an adjacent property, and the other person’s interests are materially adverse to the interests of a party; or
(4) The umpire has worked as an employer or employee of a party within the preceding 5 years.
History.—s. 5, ch. 2014-86.
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 office may contract with public or private entities for hurricane loss mitigation projects.
History.—s. 16, ch. 96-194; s. 1187, ch. 2003-261.
627.7018 Standards for determining risk of coverage.—In determining the risk of providing property insurance coverage, an insurer may not deny coverage solely on the basis of the age of the structure and shall consider the wind resistance of the structure and measures undertaken by the owner to protect the structure against hurricane loss.
History.—s. 29, ch. 2007-1.
627.7019 Standardization of requirements applicable to insurers after natural disasters.—
(1) The commission shall adopt by rule, pursuant to s. 120.54(1)-(3), standardized requirements that may be applied to insurers as a consequence of a hurricane or other natural disaster. The rules shall address the following areas:
(a) Claims reporting requirements.
(b) Grace periods for payment of premiums and performance of other duties by insureds.
(c) Temporary postponement of cancellations and nonrenewals.
(2) The rules adopted under this section shall require the office to issue an order within 72 hours after the occurrence of a hurricane or other natural disaster specifying, by line of insurance, which of the standardized requirements apply, the geographic areas in which they apply, the time at which applicability commences, and the time at which applicability terminates.
(3) Any emergency rule adopted under s. 120.54(4) which is in conflict with any provision of the rules adopted under this section must be by unanimous vote of the commission.
History.—s. 24, ch. 2006-12.
627.702 Valued policy law.—
(1)(a) 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(13), 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 under the policy for such total loss, if caused by a covered peril, 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.
(b) The intent of this subsection is not to deprive an insurer of any proper defense under the policy, to create new or additional coverage under the policy, or to require an insurer to pay for a loss caused by a peril other than the covered peril. In furtherance of such legislative intent, when a loss was caused in part by a covered peril and in part by a noncovered peril, paragraph (a) does not apply. In such circumstances, the insurer’s liability under this section shall be limited to the amount of the loss caused by the covered peril. However, if the covered perils alone would have caused the total loss, paragraph (a) shall apply. The insurer is never liable for more than the amount necessary to repair, rebuild, or replace the structure following the total loss, after considering all other benefits actually paid for the total loss.
(c) It is the intent of the Legislature that the amendment to this section shall not be applied retroactively and shall apply only to claims filed after the effective date of such amendment.
(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(13). 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 office. 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; s. 98, ch. 2002-1; s. 1188, ch. 2003-261; s. 16, ch. 2005-111; s. 14, ch. 2007-55.
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; catastrophic ground cover collapse; definitions.—
(1)(a) Every insurer authorized to transact property insurance in this state must provide coverage for a catastrophic ground cover collapse.
(b) The insurer shall make available, for an appropriate additional premium, coverage for sinkhole losses on any structure, including the contents of personal property contained therein, to the extent provided in the form to which the coverage attaches. The insurer may require an inspection of the property before issuance of sinkhole loss coverage. A policy for residential property insurance may include a deductible amount applicable to sinkhole losses equal to 1 percent, 2 percent, 5 percent, or 10 percent of the policy dwelling limits, with appropriate premium discounts offered with each deductible amount.
(c) The insurer may restrict catastrophic ground cover collapse and sinkhole loss coverage to the principal building, as defined in the applicable policy.
(2) As used in ss. 627.706-627.7074, and as used in connection with any policy providing coverage for a catastrophic ground cover collapse or for sinkhole losses, the term:
(a) “Catastrophic ground cover collapse” means geological activity that results in all the following:
1. The abrupt collapse of the ground cover;
2. A depression in the ground cover clearly visible to the naked eye;
3. Structural damage to the covered building, including the foundation; and
4. The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.
Contents coverage applies if there is a loss resulting from a catastrophic ground cover collapse. Damage consisting merely of the settling or cracking of a foundation, structure, or building does not constitute a loss resulting from a catastrophic ground cover collapse.
(b) “Neutral evaluation” means the alternative dispute resolution provided in s. 627.7074.
(c) “Neutral evaluator” means an engineer licensed under chapter 471 who has experience and expertise in the identification of sinkhole activity as well as other potential causes of structural damage or a professional geologist. The licensed engineer or professional geologist must have completed a course of study in alternative dispute resolution designed or approved by the department for use in the neutral evaluation process, must be determined by the department to be fair and impartial, and 1may not otherwise be ineligible for certification as provided under s. 627.7074.
(d) “Primary structural member” means a structural element designed to provide support and stability for the vertical or lateral loads of the overall structure.
(e) “Primary structural system” means an assemblage of primary structural members.
(f) “Professional engineer” means a person, as defined in s. 471.005, who has a bachelor’s degree or higher in engineering. A professional engineer must also have experience and expertise in the identification of sinkhole activity or other potential causes of structural damage.
(g) “Professional geologist” means a person, as defined in s. 492.102, who has a bachelor’s degree or higher in geology or related earth science and experience and expertise in the identification of sinkhole activity as well as other potential geologic causes of structural damage.
(h) “Sinkhole” means a landform created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater. A sinkhole forms by collapse into subterranean voids created by dissolution of limestone or dolostone or by subsidence as these strata are dissolved.
(i) “Sinkhole activity” means settlement or systematic weakening of the earth supporting the covered building only if the settlement or systematic weakening results from contemporaneous movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on a limestone or similar rock formation.
(j) “Sinkhole loss” means structural damage to the covered building, including the foundation, caused by sinkhole activity. Contents coverage and additional living expenses apply only if there is structural damage to the covered building caused by sinkhole activity.
(k) “Structural damage” means a covered building, regardless of the date of its construction, has experienced the following:
1. Interior floor displacement or deflection in excess of acceptable variances as defined in ACI 117-90 or the Florida Building Code, which results in settlement-related damage to the interior such that the interior building structure or members become unfit for service or represents a safety hazard as defined within the Florida Building Code;
2. Foundation displacement or deflection in excess of acceptable variances as defined in ACI 318-95 or the Florida Building Code, which results in settlement-related damage to the primary structural members or primary structural systems that prevents those members or systems from supporting the loads and forces they were designed to support to the extent that stresses in those primary structural members or primary structural systems exceeds one and one-third the nominal strength allowed under the Florida Building Code for new buildings of similar structure, purpose, or location;
3. Damage that results in listing, leaning, or buckling of the exterior load-bearing walls or other vertical primary structural members to such an extent that a plumb line passing through the center of gravity does not fall inside the middle one-third of the base as defined within the Florida Building Code;
4. Damage that results in the building, or any portion of the building containing primary structural members or primary structural systems, being significantly likely to imminently collapse because of the movement or instability of the ground within the influence zone of the supporting ground within the sheer plane necessary for the purpose of supporting such building as defined within the Florida Building Code; or
5. Damage occurring on or after October 15, 2005, that qualifies as “substantial structural damage” as defined in the Florida Building Code.
(3) Insurers offering policies that exclude coverage for sinkhole losses must inform policyholders in bold type of not less than 14 points as follows: “YOUR POLICY PROVIDES COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE, YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN ADDITIONAL PREMIUM.”
(4) An insurer offering sinkhole coverage to policyholders before or after the adoption of s. 30, chapter 2007-1, Laws of Florida, may nonrenew the policies of policyholders maintaining sinkhole coverage at the option of the insurer, and provide an offer of coverage that includes catastrophic ground cover collapse and excludes sinkhole coverage. Insurers acting in accordance with this subsection are subject to the following requirements:
(a) Policyholders must be notified that a nonrenewal is for purposes of removing sinkhole coverage, and that the policyholder is being offered a policy that provides coverage for catastrophic ground cover collapse.
(b) Policyholders must be provided an actuarially reasonable premium credit or discount for the removal of sinkhole coverage and provision of only catastrophic ground cover collapse.
(c) Subject to the provisions of this subsection and the insurer’s approved underwriting or insurability guidelines, the insurer shall provide each policyholder with the opportunity to purchase an endorsement to his or her policy providing sinkhole coverage and may require an inspection of the property before issuance of a sinkhole coverage endorsement.
(d) Section 624.4305 does not apply to nonrenewal notices issued pursuant to this subsection.
(5) Any claim, including, but not limited to, initial, supplemental, and reopened claims under an insurance policy that provides sinkhole coverage is barred unless notice of the claim was given to the insurer in accordance with the terms of the policy within 2 years after the policyholder knew or reasonably should have known about the sinkhole loss.
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; s. 1189, ch. 2003-261; s. 17, ch. 2005-111; s. 25, ch. 2006-12; s. 30, ch. 2007-1; s. 1, ch. 2009-178; s. 3, ch. 2011-11; s. 22, ch. 2011-39; s. 6, ch. 2014-86; s. 29, ch. 2014-123.
1Note.—As amended by s. 6, ch. 2014-86. The amendment by s. 29, ch. 2014-123, uses the word “must” instead of the word “may.”
627.7061 Coverage inquiries.—Inquiries about coverage on a property insurance contract are not claim activity, unless an actual claim is filed by the policyholder which results in a company investigation of the claim.
History.—s. 78, ch. 92-318; s. 23, ch. 2011-39.
627.7063 Building code effectiveness grading schedule.—
(1) As used in this section, the term “sinkhole loss prevention ordinance” means a county ordinance that amends the Florida Building Code and that is intended to reduce the number of sinkhole claims and the severity of sinkhole losses.
(2) The commission shall adopt a building code effectiveness grading schedule by rule. The grading schedule shall evaluate the effectiveness of each sinkhole loss prevention ordinance in reducing the number of sinkhole claims and severity of sinkhole losses. Each ordinance shall be evaluated 4 years after the ordinance takes effect. The grading schedule shall be based on the effectiveness of code enforcement in each county and scientific, modeling, and engineering methodologies. The rules shall further mandate insurance premium discounts or surcharges on personal residential property insurance based on a property’s compliance with an ordinance and the grade assigned to the applicable sinkhole loss prevention ordinance.
History.—s. 2, ch. 2009-178.
627.707 Investigation of sinkhole claims; insurer payment; nonrenewals.—Upon receipt of a claim for a sinkhole loss to a covered building, an insurer must meet the following standards in investigating a claim:
(1) The insurer must inspect the policyholder’s premises to determine if there is structural damage that may be the result of sinkhole activity.
(2) If the insurer confirms that structural damage exists but is unable to identify a valid cause of such damage or discovers that such damage is consistent with sinkhole loss, the insurer shall engage a professional engineer or a professional geologist to conduct testing as provided in s. 627.7072 to determine the cause of the loss within a reasonable professional probability and issue a report as provided in s. 627.7073, only if sinkhole loss is covered under the policy. Except as provided in subsections (4) and (6), the fees and costs of the professional engineer or professional geologist shall be paid by the insurer.
(3) Following the initial inspection of the policyholder’s premises, the insurer shall provide written notice to the policyholder disclosing the following information:
(a) What the insurer has determined to be the cause of damage, if the insurer has made such a determination.
(b) A statement of the circumstances under which the insurer is required to engage a professional engineer or a professional geologist to verify or eliminate sinkhole loss and to engage a professional engineer to make recommendations regarding land and building stabilization and foundation repair.
(c) A statement regarding the right of the policyholder to request testing by a professional engineer or a professional geologist, the circumstances under which the policyholder may demand certain testing, and the circumstances under which the policyholder may incur costs associated with testing.
(4)(a) If the insurer determines that there is no sinkhole loss, the insurer may deny the claim.
(b) If coverage for sinkhole loss is available and the insurer denies the claim without performing testing under s. 627.7072, the policyholder may demand testing by the insurer under s. 627.7072.
1. The policyholder’s demand for testing must be communicated to the insurer in writing within 60 days after the policyholder’s receipt of the insurer’s denial of the claim.
2. The policyholder shall pay 50 percent of the actual costs of the analyses and services provided under ss. 627.7072 and 627.7073 or $2,500, whichever is less.
3. The insurer shall reimburse the policyholder for the costs if the insurer’s engineer or geologist provides written certification pursuant to s. 627.7073 that there is sinkhole loss.
(5) If a sinkhole loss is verified, the insurer shall pay to stabilize the land and building and repair the foundation in accordance with the recommendations of the professional engineer retained pursuant to subsection (2), with notice to the policyholder, subject to the coverage and terms of the policy. The insurer shall pay for other repairs to the structure and contents in accordance with the terms of the policy. If a covered building suffers a sinkhole loss or a catastrophic ground cover collapse, the insured must repair such damage or loss in accordance with the insurer’s professional engineer’s recommended repairs. However, if the insurer’s professional engineer determines that the repair cannot be completed within policy limits, the insurer must pay to complete the repairs recommended by the insurer’s professional engineer or tender the policy limits to the policyholder.
(a) The insurer may limit its total claims payment to the actual cash value of the sinkhole loss, which does not include underpinning or grouting or any other repair technique performed below the existing foundation of the building, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs in accordance with the recommendations set forth in the insurer’s report issued pursuant to s. 627.7073.
(b) In order to prevent additional damage to the building or structure, the policyholder must enter into a contract for the performance of building stabilization and foundation repairs within 90 days after the insurance company confirms coverage for the sinkhole loss and notifies the policyholder of such confirmation. This time period is tolled if either party invokes the neutral evaluation process, and begins again 10 days after the conclusion of the neutral evaluation process.
(c) After the policyholder enters into the contract for the performance of building stabilization and foundation repairs, the insurer shall pay the amounts necessary to begin and perform such repairs as the work is performed and the expenses are incurred. The insurer may not require the policyholder to advance payment for such repairs. If repair covered by a personal lines residential property insurance policy has begun and the professional engineer selected or approved by the insurer determines that the repair cannot be completed within the policy limits, the insurer must complete the professional engineer’s recommended repair or tender the policy limits to the policyholder without a reduction for the repair expenses incurred.
(d) The stabilization and all other repairs to the structure and contents must be completed within 12 months after entering into the contract for repairs described in paragraph (b) unless:
1. There is a mutual agreement between the insurer and the policyholder;
2. The claim is involved with the neutral evaluation process;
3. The claim is in litigation; or
4. The claim is under appraisal or mediation.
(e) Upon the insurer’s obtaining the written approval of any lienholder, the insurer may make payment directly to the persons selected by the policyholder to perform the land and building stabilization and foundation repairs. The decision by the insurer to make payment to such persons does not hold the insurer liable for the work performed.
(f) The policyholder may not accept a rebate from any person performing the repairs specified in this section. If a policyholder receives a rebate, coverage is void and the policyholder must refund the amount of the rebate to the insurer. Any person performing the repairs specified in this section who offers a rebate commits insurance fraud punishable as a third degree felony as provided in s. 775.082, s. 775.083, or s. 775.084. As used in this paragraph, the term “rebate” means a remuneration, payment, gift, discount, or transfer of any item of value to the policyholder by or on behalf of a person performing the repairs specified in this section as an incentive or inducement to obtain repairs performed by that person.
(6) If the insurer obtains, pursuant to s. 627.7073, written certification that there is no sinkhole loss or that the cause of the damage 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 actual costs of the analyses and services provided under ss. 627.7072 and 627.7073; 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 subsection only if the policyholder requested the analysis and services provided under ss. 627.7072 and 627.7073 and the insurer, before ordering the analysis under s. 627.7072, informs the policyholder in writing of the policyholder’s potential liability for reimbursement and gives the policyholder the opportunity to withdraw the claim.
(7) An insurer may not nonrenew any policy of property insurance on the basis of filing of claims for sinkhole loss if the total of such payments does not equal or exceed the policy limits of coverage for the policy in effect on the date of loss, for property damage to the covered building, as set forth on the declarations page, or if the policyholder repaired the structure in accordance with the engineering recommendations made pursuant to subsection (2) upon which any payment or policy proceeds were based. If the insurer pays such limits, it may nonrenew the policy.
(8) The insurer may engage a professional structural engineer to make recommendations as to the repair of the structure.
History.—s. 1, ch. 92-146; s. 4, ch. 93-401; s. 19, ch. 2005-111; s. 26, ch. 2006-12; s. 25, ch. 2011-39; s. 15, ch. 2012-151.
627.7072 Testing standards for sinkholes.—The professional engineer and professional geologist shall perform such tests as sufficient, in their professional opinion, to determine the presence or absence of sinkhole loss or other cause of damage within reasonable professional probability and for the professional engineer to make recommendations regarding necessary building stabilization and foundation repair.
History.—s. 20, ch. 2005-111; s. 27, ch. 2006-12.
627.7073 Sinkhole reports.—
(1) Upon completion of testing as provided in s. 627.7072, the professional engineer or professional geologist shall issue a report and certification to the insurer and the policyholder as provided in this section.
(a) Sinkhole loss is verified if, based upon tests performed in accordance with s. 627.7072, a professional engineer or a professional geologist issues a written report and certification stating:
1. That structural damage to the covered building has been identified within a reasonable professional probability.
2. That the cause of the structural damage is sinkhole activity within a reasonable professional probability.
3. That the analyses conducted were of sufficient scope to identify sinkhole activity as the cause of damage within a reasonable professional probability.
4. A description of the tests performed.
5. A recommendation by the professional engineer of methods for stabilizing the land and building and for making repairs to the foundation.
(b) If there is no structural damage or if sinkhole activity is eliminated as the cause of such damage to the covered building, the professional engineer or professional geologist shall issue a written report and certification to the policyholder and the insurer stating:
1. That there is no structural damage or the cause of such damage is not sinkhole activity within a reasonable professional probability.
2. That the analyses and tests conducted were of sufficient scope to eliminate sinkhole activity as the cause of the structural damage within a reasonable professional probability.
3. A statement of the cause of the structural damage within a reasonable professional probability.
4. A description of the tests performed.
(c) The respective findings, opinions, and recommendations of the insurer’s professional engineer or professional geologist as to the cause of distress to the property and the findings, opinions, and recommendations of the insurer’s professional engineer as to land and building stabilization and foundation repair set forth by s. 627.7072 shall be presumed correct.
(2) An insurer that has paid a claim for a sinkhole loss shall file a copy of the report and certification, prepared pursuant to subsection (1), including the legal description of the real property and the name of the property owner, the neutral evaluator’s report, if any, which indicates that sinkhole activity caused the damage claimed, a copy of the certification indicating that stabilization has been completed, if applicable, and the amount of the payment, with the county clerk of court, who shall record the report and certification. The insurer shall bear the cost of filing and recording one or more reports and certifications. There shall be no cause of action or liability against an insurer for compliance with this section.
(a) The recording of the report and certification does not:
1. Constitute a lien, encumbrance, or restriction on the title to the real property or constitute a defect in the title to the real property;
2. Create any cause of action or liability against any grantor of the real property for breach of any warranty of good title or warranty against encumbrances; or
3. Create any cause of action or liability against any title insurer that insures the title to the real property.
(b) As a precondition to accepting payment for a sinkhole loss, the policyholder must file a copy of any sinkhole report regarding the insured property which was prepared on behalf or at the request of the policyholder. The policyholder shall bear the cost of filing and recording the sinkhole report. The recording of the report does not:
1. Constitute a lien, encumbrance, or restriction on the title to the real property or constitute a defect in the title to the real property;
2. Create any cause of action or liability against any grantor of the real property for breach of any warranty of good title or warranty against encumbrances; or
3. Create any cause of action or liability against a title insurer that insures the title to the real property.
(c) The seller of real property upon which a sinkhole claim has been made by the seller and paid by the insurer must disclose to the buyer of such property, before the closing, that a claim has been paid and whether or not the full amount of the proceeds was used to repair the sinkhole damage.
(3) Upon completion of any building stabilization or foundation repairs for a verified sinkhole loss, the professional engineer responsible for monitoring the repairs shall issue a report to the property owner which specifies what repairs have been performed and certifies within a reasonable degree of professional probability that such repairs have been properly performed. The professional engineer issuing the report shall file a copy of the report and certification, which includes a legal description of the real property and the name of the property owner, with the county clerk of the court, who shall record the report and certification. This subsection does not create liability for an insurer based on any representation or certification by a professional engineer related to the stabilization or foundation repairs for the verified sinkhole loss.
History.—s. 21, ch. 2005-111; s. 28, ch. 2006-12; s. 26, ch. 2011-39.
627.7074 Alternative procedure for resolution of disputed sinkhole insurance claims.—
(1) The department shall:
(a) Certify and maintain a list of persons who are neutral evaluators.
(b) Prepare a consumer information pamphlet for distribution by insurers to policyholders which clearly describes the neutral evaluation process and includes information necessary for the policyholder to request a neutral evaluation.
(2) Neutral evaluation is available to either party if a sinkhole report has been issued pursuant to s. 627.7073. At a minimum, neutral evaluation must determine:
(a) Causation;
(b) All methods of stabilization and repair both above and below ground;
(c) The costs for stabilization and all repairs; and
(d) Information necessary to carry out subsection (12).
(3) If there is coverage available under the policy and the claim was submitted within the timeframe provided in s. 627.706(5), following the receipt of the report provided under s. 627.7073 or the denial of a claim for a sinkhole loss, the insurer shall notify the policyholder of his or her right to participate in the neutral evaluation program under this section. Neutral evaluation supersedes the alternative dispute resolution process under s. 627.7015 but does not invalidate the appraisal clause of the insurance policy. The insurer shall provide to the policyholder the consumer information pamphlet prepared by the department pursuant to subsection (1) electronically or by United States mail.
(4) Neutral evaluation is nonbinding, but mandatory if requested by either party. A request for neutral evaluation may be filed with the department by the policyholder or the insurer on a form approved by the department. The request for neutral evaluation must state the reason for the request and must include an explanation of all the issues in dispute at the time of the request. Filing a request for neutral evaluation tolls the applicable time requirements for filing suit for 60 days following the conclusion of the neutral evaluation process or the time prescribed in s. 95.11, whichever is later.
(5) Neutral evaluation shall be conducted as an informal process in which formal rules of evidence and procedure need not be observed. A party to neutral evaluation is not required to attend neutral evaluation if a representative of the party attends and has the authority to make a binding decision on behalf of the party. All parties shall participate in the evaluation in good faith. The neutral evaluator must be allowed reasonable access to the interior and exterior of insured structures to be evaluated or for which a claim has been made. Any reports initiated by the policyholder, or an agent of the policyholder, confirming a sinkhole loss or disputing another sinkhole report regarding insured structures must be provided to the neutral evaluator before the evaluator’s physical inspection of the insured property.
(6) The insurer shall pay reasonable costs associated with the neutral evaluation. However, if a party chooses to hire a court reporter or stenographer to contemporaneously record and document the neutral evaluation, that party must bear such costs.
(7) Upon receipt of a request for neutral evaluation, the department shall provide the parties a list of certified neutral evaluators. The department shall allow the parties to submit requests to disqualify evaluators on the list for cause.
(a) The department shall disqualify neutral evaluators for cause based only on any of the following grounds:
1. A familial relationship within the third degree exists between the neutral evaluator and either party or a representative of either party.
2. The proposed neutral evaluator has, in a professional capacity, previously represented either party or a representative of either party in the same or a substantially related matter.
3. The proposed neutral evaluator has, in a professional capacity, represented another person in the same or a substantially related matter and that person’s interests are materially adverse to the interests of the parties. The term “substantially related matter” means participation by the neutral evaluator on the same claim, property, or adjacent property.
4. The proposed neutral evaluator has, within the preceding 5 years, worked as an employer or employee of any party to the case.
5. The proposed neutral evaluator has, within the preceding 5 years, worked for any entity that performed any sinkhole loss testing, review, or analysis for the property.
(b) The department shall deny an application for, or suspend or revoke its certification of, a neutral evaluator to serve in such capacity if the department finds that 1any of the following grounds exist:
1. Lack of one or more of the qualifications specified in this section for approval or certification.
2. Material misstatement, misrepresentation, or fraud in obtaining or attempting to obtain the approval or certification.
3. Demonstrated lack of fitness or trustworthiness to act as a neutral evaluator.
4. Fraudulent or dishonest practices in the conduct of an evaluation or in the conduct of financial services business.
5. Violation of any provision of this code or of a lawful order or rule of the department, or aiding, instructing, or encouraging another party in committing such a violation.
(c) The parties shall appoint a neutral evaluator from the department list and promptly inform the department. If the parties cannot agree to a neutral evaluator within 14 business days, the department shall appoint a neutral evaluator from the list of certified neutral evaluators. The department shall allow each party to disqualify two neutral evaluators without cause. Upon selection or appointment, the department shall promptly refer the request to the neutral evaluator.
(d) Within 14 business days after referral, the neutral evaluator shall notify the policyholder and the insurer of the date, time, and place of the neutral evaluation conference. The conference may be held by telephone, if feasible and desirable. The neutral evaluator shall make reasonable efforts to hold the conference within 90 days after the receipt of the request by the department. Failure of the neutral evaluator to hold the conference within 90 days does not invalidate either party’s right to neutral evaluation or to a neutral evaluation conference held outside this timeframe.
(8) For policyholders not represented by an attorney, a consumer affairs specialist of the department or an employee designated as the primary contact for consumers on issues relating to sinkholes under s. 624.307(10)(a)5. shall be available for consultation to the extent that he or she may lawfully do so.
(9) Evidence of an offer to settle a claim during the neutral evaluation process, as well as any relevant conduct or statements made in negotiations concerning the offer to settle a claim, is inadmissible to prove liability or absence of liability for the claim or its value, except as provided in subsection (14).
(10) Regardless of when noticed, any court proceeding related to the subject matter of the neutral evaluation shall be stayed pending completion of the neutral evaluation and for 5 days after the filing of the neutral evaluator’s report with the court.
(11) If, based upon his or her professional training and credentials, a neutral evaluator is qualified to determine only disputes relating to causation or method of repair, the department shall allow the neutral evaluator to enlist the assistance of another professional from the neutral evaluators list not previously stricken, who, based upon his or her professional training and credentials, is able to provide an opinion as to other disputed issues. A professional who would be disqualified for any reason listed in subsection (7) must be disqualified. The neutral evaluator may also use the services of professional engineers and professional geologists who are not certified as neutral evaluators, as well as licensed building contractors, in order to ensure that all items in dispute are addressed and the neutral evaluation can be completed. Any professional engineer, professional geologist, or licensed building contractor retained may be disqualified for any of the reasons listed in subsection (7). The neutral evaluator may request the entity that performed the investigation pursuant to s. 627.7072 perform such additional and reasonable testing as deemed necessary in the professional opinion of the neutral evaluator.
(12) At the conclusion of the neutral evaluation, the neutral evaluator shall prepare a report describing all matters that are the subject of the neutral evaluation, including whether, in his or her opinion, the sinkhole loss has been verified or eliminated within a reasonable degree of professional probability and, if verified, whether the sinkhole activity caused structural damage to the covered building, and, if so, the need for and estimated costs of stabilizing the land and any covered buildings and other appropriate remediation or necessary building repairs due to the sinkhole loss. The evaluator’s report shall be sent to all parties and to the department, within 14 days after completing the neutral evaluation conference.
(13) The recommendation of the neutral evaluator is not binding on any party, and the parties retain access to the court. The neutral evaluator’s written recommendation, oral testimony, and full report shall be admitted in any action, litigation, or proceeding relating to the claim or to the cause of action giving rise to the claim.
(14) If the neutral evaluator verifies the existence of a sinkhole that caused structural damage and recommends the need for and estimates costs of stabilizing the land and any covered buildings and other appropriate remediation or building repairs which exceed the amount that the insurer has offered to pay the policyholder, the insurer is liable to the policyholder for up to $2,500 in attorney’s fees for the attorney’s participation in the neutral evaluation process. For purposes of this subsection, the term “offer to pay” means a written offer signed by the insurer or its legal representative and delivered to the policyholder within 10 days after the insurer receives notice that a request for neutral evaluation has been made under this section.
(15) If the insurer timely agrees in writing to comply and timely complies with the recommendation of the neutral evaluator, but the policyholder declines to resolve the matter in accordance with the recommendation of the neutral evaluator pursuant to this section:
(a) The insurer is not liable for extracontractual damages related to a claim for a sinkhole loss but only as related to the issues determined by the neutral evaluation process. This section does not affect or impair claims for extracontractual damages unrelated to the issues determined by the neutral evaluation process contained in this section; and
(b) The actions of the insurer are not a confession of judgment or admission of liability, and the insurer is not liable for attorney’s fees under s. 627.428 or other provisions of the insurance code unless the policyholder obtains a judgment that is more favorable than the recommendation of the neutral evaluator.
(16) If the insurer agrees to comply with the neutral evaluator’s report, payments shall be made in accordance with the terms and conditions of the applicable insurance policy pursuant to s. 627.707(5).
(17) Neutral evaluators are deemed to be agents of the department and have immunity from suit as provided in s. 44.107.
(18) The department shall adopt rules of procedure for the neutral evaluation process and adopt rules for certifying, denying certification of, suspending certification of, and revoking the certification as a neutral evaluator.
History.—s. 29, ch. 2006-12; s. 27, ch. 2011-39; s. 7, ch. 2014-86; s. 30, ch. 2014-123; s. 6, ch. 2015-135; s. 18, ch. 2016-132; s. 42, ch. 2017-3.
1Note.—As amended by s. 7, ch. 2014-86. The amendment by s. 30, ch. 2014-123, uses the words “one or more” instead of the word “any.”
627.711 Notice of premium discounts for hurricane loss mitigation; uniform mitigation verification inspection form.—
(1) Using a form prescribed by the Office of Insurance Regulation, the insurer shall clearly notify the applicant or policyholder of any personal lines residential property insurance policy, at the time of the issuance of the policy and at each renewal, of the availability and the range of each premium discount, credit, other rate differential, or reduction in deductibles, and combinations of discounts, credits, rate differentials, or reductions in deductibles, for properties on which fixtures or construction techniques demonstrated to reduce the amount of loss in a windstorm can be or have been installed or implemented. The prescribed form shall describe generally what actions the policyholders may be able to take to reduce their windstorm premium. The prescribed form and a list of such ranges approved by the office for each insurer licensed in the state and providing such discounts, credits, other rate differentials, or reductions in deductibles for properties described in this subsection shall be available for electronic viewing and download from the Department of Financial Services’ or the Office of Insurance Regulation’s Internet website. The Financial Services Commission may adopt rules to implement this subsection.
(2)(a) The Financial Services Commission shall develop by rule a uniform mitigation verification inspection form that shall be used by all insurers when submitted by policyholders for the purpose of factoring discounts for wind insurance. In developing the form, the commission shall seek input from insurance, construction, and building code representatives. Further, the commission shall provide guidance as to the length of time the inspection results are valid. An insurer shall accept as valid a uniform mitigation verification form signed by the following authorized mitigation inspectors:
1. A home inspector licensed under s. 468.8314 who has completed at least 3 hours of hurricane mitigation training approved by the Construction Industry Licensing Board which includes hurricane mitigation techniques and compliance with the uniform mitigation verification form and completion of a proficiency exam;
2. A building code inspector certified under s. 468.607;
3. A general, building, or residential contractor licensed under s. 489.111;
4. A professional engineer licensed under s. 471.015;
5. A professional architect licensed under s. 481.213; or
6. Any other individual or entity recognized by the insurer as possessing the necessary qualifications to properly complete a uniform mitigation verification form.
(b) An insurer may, but is not required to, accept a form from any other person possessing qualifications and experience acceptable to the insurer.
(3) A person who is authorized to sign a mitigation verification form must inspect the structures referenced by the form personally, not through employees or other persons, and must certify or attest to personal inspection of the structures referenced by the form. However, licensees under s. 471.015 or s. 489.111 may authorize a direct employee, who is not an independent contractor, and who possesses the requisite skill, knowledge and experience, to conduct a mitigation verification inspection. Insurers shall have the right to request and obtain information from the authorized mitigation inspector under s. 471.015 or s. 489.111, regarding any authorized employee’s qualifications prior to accepting a mitigation verification form performed by an employee that is not licensed under s. 471.015 or s. 489.111.
(4) An authorized mitigation inspector that signs a uniform mitigation form, and a direct employee authorized to conduct mitigation verification inspections under subsection (3), may not commit misconduct in performing hurricane mitigation inspections or in completing a uniform mitigation form that causes financial harm to a customer or their insurer; or that jeopardizes a customer’s health and safety. Misconduct occurs when an authorized mitigation inspector signs a uniform mitigation verification form that:
(a) Falsely indicates that he or she personally inspected the structures referenced by the form;
(b) Falsely indicates the existence of a feature which entitles an insured to a mitigation discount which the inspector knows does not exist or did not personally inspect;
(c) Contains erroneous information due to the gross negligence of the inspector; or
(d) Contains a pattern of demonstrably false information regarding the existence of mitigation features that could give an insured a false evaluation of the ability of the structure to withstand major damage from a hurricane endangering the safety of the insured’s life and property.
(5) The licensing board of an authorized mitigation inspector that violates subsection (4) may commence disciplinary proceedings and impose administrative fines and other sanctions authorized under the authorized mitigation inspector’s licensing act. Authorized mitigation inspectors licensed under s. 471.015 or s. 489.111 shall be directly liable for the acts of employees that violate subsection (4) as if the authorized mitigation inspector personally performed the inspection.
(6)(a) An authorized mitigation inspector may not directly or indirectly offer or deliver any compensation, inducement, or reward to an insurance agency, insurance agent, customer representative, or an employee of an insurance agency for the referral of the owner of the inspected property to the inspector or the inspection company. Section 455.227(1)(k) applies to applicable licensees in violation of this paragraph.
(b) An insurance agency, insurance agent, customer representative, or an employee of an insurance agency may not directly or indirectly receive or accept any compensation, inducement, or reward from an authorized mitigation inspector for the referral of the owner of the inspected property to the inspector or the inspection company. Sections 626.621(2) and 626.6215(5)(d) apply to a violation of this paragraph.
(7) An insurer, person, or other entity that obtains evidence of fraud or evidence that an authorized mitigation inspector or an employee authorized to conduct mitigation verification inspections under subsection (3) has made false statements in the completion of a mitigation inspection form shall file a report with the Division of Investigative and Forensic Services, along with all of the evidence in its possession that supports the allegation of fraud or falsity. An insurer, person, or other entity making the report shall be immune from liability, in accordance with s. 626.989(4), for any statements made in the report, during the investigation, or in connection with the report. The Division of Investigative and Forensic Services shall issue an investigative report if it finds that probable cause exists to believe that the authorized mitigation inspector, or an employee authorized to conduct mitigation verification inspections under subsection (3), made intentionally false or fraudulent statements in the inspection form. Upon conclusion of the investigation and a finding of probable cause that a violation has occurred, the Division of Investigative and Forensic Services shall send a copy of the investigative report to the office and a copy to the agency responsible for the professional licensure of the authorized mitigation inspector, whether or not a prosecutor takes action based upon the report.
(8) An individual or entity who knowingly provides or utters a false or fraudulent mitigation verification form with the intent to obtain or receive a discount on an insurance premium to which the individual or entity is not entitled commits a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.
(9) At its expense, the insurer may require that a uniform mitigation verification form provided by a policyholder, a policyholder’s agent, or an authorized mitigation inspector or inspection company be independently verified by an inspector, an inspection company, or an independent third-party quality assurance provider that possesses a quality assurance program before accepting the uniform mitigation verification form as valid. At its option, the insurer may exempt from independent verification a uniform mitigation verification form completed by an authorized mitigation inspector or inspection company that possesses a quality assurance program approved by the insurer. A uniform mitigation verification form provided by a policyholder, a policyholder’s agent, or an authorized mitigation inspector or inspection company to Citizens Property Insurance Corporation is not subject to independent verification and the property is not subject to reinspection by the corporation, absent material changes to the structure during the term stated on the form, if the form was signed by an authorized mitigation inspector and submitted to, reviewed by, and verified by a quality assurance program approved by the corporation before submission of the form to the corporation.
History.—s. 22, ch. 2005-111; s. 91, ch. 2006-1; s. 31, ch. 2007-1; s. 2, ch. 2008-248; s. 12, ch. 2009-87; s. 45, ch. 2010-176; s. 46, ch. 2011-4; s. 28, ch. 2011-39; s. 35, ch. 2011-222; s. 6, ch. 2014-104; s. 22, ch. 2016-165.
627.712 Residential windstorm coverage required; availability of exclusions for windstorm or contents.—
(1) An insurer issuing a residential property insurance policy must provide windstorm coverage. Except as provided in paragraph (2)(c), this section does not apply to risks that are eligible for wind-only coverage from Citizens Property Insurance Corporation under s. 627.351(6), and risks that are not eligible for coverage from Citizens Property Insurance Corporation under s. 627.351(6)(a)3. or 5. A risk ineligible for coverage by the corporation under s. 627.351(6)(a)3. or 5. is exempt from this section only if the risk is located within the boundaries of the coastal account of the corporation.
(2) A property insurer must make available, at the option of the policyholder, an exclusion of windstorm coverage.
(a) The coverage may be excluded only if:
1. When the policyholder is a natural person, the policyholder personally writes and provides to the insurer the following statement in his or her own handwriting and signs his or her name, which must also be signed by every other named insured on the policy, and dated: “I do not want the insurance on my (home/mobile home/condominium unit) to pay for damage from windstorms. I will pay those costs. My insurance will not.”
2. When the policyholder is other than a natural person, the policyholder provides to the insurer on the policyholder’s letterhead the following statement that must be signed by the policyholder’s authorized representative and dated: “ (Name of entity) does not want the insurance on its (type of structure) to pay for damage from windstorms. (Name of entity) will be responsible for these costs. (Name of entity’s) insurance will not.”
(b) If the structure insured by the policy is subject to a mortgage or lien, the policyholder must provide the insurer with a written statement from the mortgageholder or lienholder indicating that the mortgageholder or lienholder approves the policyholder electing to exclude windstorm coverage or hurricane coverage from his or her or its property insurance policy.
(c) An insurer nonrenewing a policy and issuing a replacement policy, or issuing a new policy, that does not provide wind coverage shall provide a notice to the mortgageholder or lienholder indicating the policyholder has elected coverage that does not cover wind.
(3) An insurer issuing a residential property insurance policy, except for a condominium unit owner policy or a tenant policy, must make available, at the option of the policyholder, an exclusion of coverage for the contents. The coverage may be excluded only if the policyholder personally writes and provides to the insurer the following statement in his or her own handwriting and signs his or her signature, which must also be signed by every other named insured on the policy, and dated: “I do not want the insurance on my (home/mobile home) to pay for the costs to repair or replace any contents that are damaged. I will pay those costs. My insurance will not.”
(4) An insurer shall keep the original copy of a signed statement required by this section, electronically or otherwise, and provide a copy to the policyholder providing the signed statement. A signed statement meeting the requirements of this section creates a presumption that there was an informed, knowing rejection of coverage.
(5) The exclusions authorized by this section apply for the term of the policy and for each renewal thereafter. Changes to the exclusions authorized by this section may be implemented only as of the date of renewal.
(6) The commission shall adopt rules providing appropriate alternative methods for providing the statements required by this section for policyholders who have a handicapping or disabling condition that prevents them from providing a handwritten statement.
History.—s. 32, ch. 2007-1; s. 19, ch. 2007-90; s. 25, ch. 2008-66; s. 13, ch. 2009-87; s. 6, ch. 2011-11; s. 29, ch. 2011-39; s. 2, ch. 2015-94.
627.713 Report of hurricane loss data.—The office may require property insurers to report data regarding hurricane claims and underwriting costs, including, but not limited to:
(1) Number of claims.
(2) Amount of claim payments made.
(3) Number and amount of total-loss claims.
(4) Amount and percentage of losses covered by reinsurance or other loss-transfer agreements.
(5) Amount of losses covered under specified deductibles.
(6) Claims and payments for specified insured values.
(7) Claims and payments for specified dollar values.
(8) Claims and payments for specified types of construction or mitigation features.
(9) Claims and payments for policies under specified underwriting criteria.
(10) Claims and payments for contents, additional living expense, and other specified coverages.
(11) Claims and payments by county for the information specified in this section.
(12) Any other data that the office requires.
History.—s. 33, ch. 2007-1.
627.714 Residential condominium unit owner coverage; loss assessment coverage required.—
(1) For policies issued or renewed on or after July 1, 2010, coverage under a unit owner’s residential property policy must include at least $2,000 in property loss assessment coverage for all assessments made as a result of the same direct loss to the property, regardless of the number of assessments, owned by all members of the association collectively if such loss is of the type of loss covered by the unit owner’s residential property insurance policy, to which a deductible of no more than $250 per direct property loss applies. If a deductible was or will be applied to other property loss sustained by the unit owner resulting from the same direct loss to the property, no deductible applies to the loss assessment coverage.
(2) The maximum amount of any unit owner’s loss assessment coverage that can be assessed for any loss shall be an amount equal to that unit owner’s loss assessment coverage limit in effect 1 day before the date of the occurrence. Any changes to the limits of a unit owner’s coverage for loss assessments made on or after the day before the date of the occurrence are not applicable to such loss.
(3) Regardless of the number of assessments, an insurer providing loss assessment coverage to a unit owner is not required to pay more than an amount equal to that unit owner’s loss assessment coverage limit as a result of the same direct loss to property.
(4) Every individual unit owner’s residential property policy must contain a provision stating that the coverage afforded by such policy is excess coverage over the amount recoverable under any other policy covering the same property.
History.—s. 5, ch. 2010-174.
627.7142 Homeowner Claims Bill of Rights.—An insurer issuing a personal lines residential property insurance policy in this state must provide a Homeowner Claims Bill of Rights to a policyholder within 14 days after receiving an initial communication with respect to a claim, unless the claim follows an event that is the subject of a declaration of a state of emergency by the Governor. The purpose of the bill of rights is to summarize, in simple, nontechnical terms, existing Florida law regarding the rights of a personal lines residential property insurance policyholder who files a claim of loss. The Homeowner Claims Bill of Rights is specific to the claims process and does not represent all of a policyholder’s rights under Florida law regarding the insurance policy. The Homeowner Claims Bill of Rights does not create a civil cause of action by any individual policyholder or class of policyholders against an insurer or insurers. The failure of an insurer to properly deliver the Homeowner Claims Bill of Rights is subject to administrative enforcement by the office but is not admissible as evidence in a civil action against an insurer. The Homeowner Claims Bill of Rights does not enlarge, modify, or contravene statutory requirements, including, but not limited to, ss. 626.854, 626.9541, 627.70131, 627.7015, and 627.7074, and does not prohibit an insurer from exercising its right to repair damaged property in compliance with the terms of an applicable policy or ss. 627.7011(5)(e) and 627.702(7). The Homeowner Claims Bill of Rights must state:
HOMEOWNER CLAIMS
BILL OF RIGHTS
This Bill of Rights is specific to the claims process and does not represent all of your rights under Florida law regarding your policy. There are also exceptions to the stated timelines when conditions are beyond your insurance company’s control. This document does not create a civil cause of action by an individual policyholder, or a class of policyholders, against an insurer or insurers and does not prohibit an insurer from exercising its right to repair damaged property in compliance with the terms of an applicable policy.
YOU HAVE THE RIGHT TO:
1. Receive from your insurance company an acknowledgment of your reported claim within 14 days after the time you communicated the claim.
2. Upon written request, receive from your insurance company within 30 days after you have submitted a complete proof-of-loss statement to your insurance company, confirmation that your claim is covered in full, partially covered, or denied, or receive a written statement that your claim is being investigated.
3. Within 90 days, subject to any dual interest noted in the policy, receive full settlement payment for your claim or payment of the undisputed portion of your claim, or your insurance company’s denial of your claim.
4. Free mediation of your disputed claim by the Florida Department of Financial Services, Division of Consumer Services, under most circumstances and subject to certain restrictions.
5. Neutral evaluation of your disputed claim, if your claim is for damage caused by a sinkhole and is covered by your policy.
6. Contact the Florida Department of Financial Services, Division of Consumer Services’ toll-free helpline for assistance with any insurance claim or questions pertaining to the handling of your claim. You can reach the Helpline by phone at (toll-free phone number) , or you can seek assistance online at the Florida Department of Financial Services, Division of Consumer Services’ website at (website address) .
YOU ARE ADVISED TO:
1. Contact your insurance company before entering into any contract for repairs to confirm any managed repair policy provisions or optional preferred vendors.
2. Make and document emergency repairs that are necessary to prevent further damage. Keep the damaged property, if feasible, keep all receipts, and take photographs of damage before and after any repairs.
3. Carefully read any contract that requires you to pay out-of-pocket expenses or a fee that is based on a percentage of the insurance proceeds that you will receive for repairing or replacing your property.
4. Confirm that the contractor you choose is licensed to do business in Florida. You can verify a contractor’s license and check to see if there are any complaints against him or her by calling the Florida Department of Business and Professional Regulation. You should also ask the contractor for references from previous work.
5. Require all contractors to provide proof of insurance before beginning repairs.
6. Take precautions if the damage requires you to leave your home, including securing your property and turning off your gas, water, and electricity, and contacting your insurance company and provide a phone number where you can be reached.
History.—s. 8, ch. 2014-86.
627.715 Flood insurance.—An authorized insurer may issue an insurance policy, contract, or endorsement providing personal lines residential coverage for the peril of flood or excess coverage for the peril of flood on any structure or the contents of personal property contained therein, subject to this section. This section does not apply to commercial lines residential or commercial lines nonresidential coverage for the peril of flood. An insurer may issue flood insurance policies, contracts, endorsements, or excess coverage on a standard, preferred, customized, flexible, or supplemental basis.
(1)(a) Except for excess flood insurance policies, policies issued under this section include:
1. Standard flood insurance, which must cover only losses from the peril of flood, as defined in paragraph (b), equivalent to that provided under a standard flood insurance policy under the National Flood Insurance Program. Standard flood insurance issued under this section must provide the same coverage, including deductibles and adjustment of losses, as that provided under a standard flood insurance policy under the National Flood Insurance Program.
2. Preferred flood insurance, which must include the same coverage as standard flood insurance but:
a. Include, within the definition of “flood,” losses from water intrusion originating from outside the structure that are not otherwise covered under the definition of “flood” provided in paragraph (b).
b. Include coverage for additional living expenses.
c. Require that any loss under personal property or contents coverage that is repaired or replaced be adjusted only on the basis of replacement costs up to the policy limits.
3. Customized flood insurance, which must include coverage that is broader than the coverage provided under standard flood insurance.
4. Flexible flood insurance, which must cover losses from the peril of flood, as defined in paragraph (b), and may also include coverage for losses from water intrusion originating from outside the structure which is not otherwise covered by the definition of flood. Flexible flood insurance must include one or more of the following provisions:
a. An agreement between the insurer and the insured that the flood coverage is in a specified amount, such as coverage that is limited to the total amount of each outstanding mortgage applicable to the covered property.
b. A requirement for a deductible in an amount authorized under s. 627.701, including a deductible in an amount authorized for hurricanes.
c. A requirement that flood loss to a dwelling be adjusted in accordance with s. 627.7011(3) or adjusted only on the basis of the actual cash value of the property.
d. A restriction limiting flood coverage to the principal building defined in the policy.
e. A provision including or excluding coverage for additional living expenses.
f. A provision excluding coverage for personal property or contents as to the peril of flood.
5. Supplemental flood insurance, which may provide coverage designed to supplement a flood policy obtained from the National Flood Insurance Program or from an insurer issuing standard or preferred flood insurance pursuant to this section. Supplemental flood insurance may provide, but need not be limited to, coverage for jewelry, art, deductibles, and additional living expenses.
(b) “Flood” means a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties, at least one of which is the policyholder’s property, from:
1. Overflow of inland or tidal waters;
2. Unusual and rapid accumulation or runoff of surface waters from any source;
3. Mudflow; or
4. Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined in this paragraph.
(2) Flood coverage deductibles and policy limits pursuant to this section must be prominently noted on the policy declarations page or face page.
(3)(a) An insurer may establish and use flood coverage rates in accordance with the rate standards provided in s. 627.062.
(b) For flood coverage rates filed with the office before October 1, 2025, the insurer may also establish and use such rates in accordance with the rates, rating schedules, or rating manuals filed by the insurer with the office which allow the insurer a reasonable rate of return on flood coverage written in this state. Flood coverage rates established pursuant to this paragraph are not subject to s. 627.062(2)(a) and (f). An insurer shall notify the office of any change to such rates within 30 days after the effective date of the change. The notice must include the name of the insurer and the average statewide percentage change in rates. Actuarial data with regard to such rates for flood coverage must be maintained by the insurer for 2 years after the effective date of such rate change and is subject to examination by the office. The office may require the insurer to incur the costs associated with an examination. Upon examination, the office, in accordance with generally accepted and reasonable actuarial techniques, shall consider the rate factors in s. 627.062(2)(b), (c), and (d), and the standards in s. 627.062(2)(e), to determine if the rate is excessive, inadequate, or unfairly discriminatory. If the office determines that a rate is excessive or unfairly discriminatory, the office shall require the insurer to provide appropriate credit to affected insureds or an appropriate refund to affected insureds who no longer receive coverage from the insurer.
(4) A surplus lines agent may export a contract or endorsement providing flood coverage to an eligible surplus lines insurer without making a diligent effort to seek such coverage from three or more authorized insurers under s. 626.916(1)(a). This subsection expires July 1, 2019, or on the date on which the Commissioner of Insurance Regulation determines in writing that there is an adequate admitted market to provide coverage for the peril of flood consistent with this section, whichever date occurs first. If there are fewer than three admitted insurers on the date this subsection expires, the number of declinations necessary to meet the diligent-effort requirement shall be no fewer than the number of authorized insurers providing flood coverage.
(5) In addition to any other applicable requirements, an insurer providing flood coverage that is not excess coverage in this state must:
(a) Notify the office at least 30 days before writing flood insurance in this state; and
(b) File a plan of operation and financial projections or revisions to such plan, as applicable, with the office.
(6) Citizens Property Insurance Corporation may not provide insurance for the peril of flood.
(7) The Florida Hurricane Catastrophe Fund may not provide reimbursement for losses proximately caused by the peril of flood, including losses that occur during a covered event as defined in s. 215.555(2)(b).
(8) An agent must provide a written notice to be signed by the applicant before the agent places flood insurance coverage with an admitted or surplus lines insurer for a property receiving flood insurance under the National Flood Insurance Program. The notice must notify the applicant that, if the applicant discontinues coverage under the National Flood Insurance Program which is provided at a subsidized rate, the full risk rate for flood insurance may apply to the property if the applicant later seeks to reinstate coverage under the program.
(9) With respect to the regulation of flood coverage written in this state by authorized insurers, this section supersedes any other provision in the Florida Insurance Code in the event of a conflict.
(10) If federal law or rule requires a certification by a state insurance regulatory official as a condition of qualifying for private flood insurance or disaster assistance, the Commissioner of Insurance Regulation may provide the certification, and such certification is not subject to review under chapter 120.
(11)(a) An authorized insurer offering flood insurance may request the office to certify that a policy, contract, or endorsement provides coverage for the peril of flood which equals or exceeds the flood coverage offered by the National Flood Insurance Program. To be eligible for certification, such policy, contract, or endorsement must contain a provision stating that it meets the private flood insurance requirements specified in 42 U.S.C. s. 4012a(b) and may not contain any provision that is not in compliance with 42 U.S.C. s. 4012a(b).
(b) The authorized insurer or its agent may reference or include a certification under paragraph (a) in advertising or communications with an agent, a lending institution, an insured, or a potential insured only for a policy, contract, or endorsement that is certified under this subsection. The authorized insurer may include a statement that notifies an insured of the certification on the declarations page or other policy documentation related to flood coverage certified under this subsection.
(c) An insurer or agent who knowingly misrepresents that a flood policy, contract, or endorsement is certified under this subsection commits an unfair or deceptive act under s. 626.9541.
History.—ss. 3, 4, ch. 2014-80; s. 3, ch. 2015-69; s. 2, ch. 2017-142.
627.7151 Limited sinkhole coverage insurance.—
(1) An authorized insurer may issue, but is not required to make available, a limited sinkhole coverage insurance policy providing personal lines residential coverage, subject to underwriting, for the peril of sinkhole loss on any structure or the contents of personal property contained therein, subject to this section and ss. 627.706-627.7074. This section does not apply to commercial lines residential or commercial lines nonresidential coverage for the peril of sinkhole loss. This section also does not apply to coverage for the peril of sinkhole loss that is excess coverage over any other insurance covering the peril of sinkhole loss.
(2) Limited sinkhole coverage insurance must cover only losses from the peril of sinkhole loss, as defined in s. 627.706(2)(j); however, such coverage is not required to provide for contents and additional living expenses.
(3) Citizens Property Insurance Corporation may not issue limited sinkhole coverage insurance.
(4) Limited sinkhole coverage insurance may:
(a) Notwithstanding s. 627.707(5), limit coverage to repairs to stabilize the building and repair the foundation in accordance with the recommendations of the professional engineer retained pursuant to s. 627.707(2).
(b) In addition to the deductibles authorized under s. 627.706(1)(b), offer deductibles agreed to by the insured and insurer.
(c) Offer policy limits agreed to by the insured and insurer. However, policy limits below $50,000 are prohibited unless that amount exceeds full replacement cost of the property.
(5) Before issuing a limited sinkhole coverage insurance policy under this section, the insurance agent must obtain a signed acknowledgment from an applicant that includes the following statement in at least 12-point bold, uppercase type: “BY ACCEPTING THIS LIMITED SINKHOLE COVERAGE INSURANCE POLICY, I HAVE READ AND UNDERSTAND THE LIMITATIONS THAT MAY APPLY TO MY POLICY AND I UNDERSTAND THAT MY POLICY IS A “REPAIR-ONLY” POLICY WHICH MEANS ONLY REPAIR AND/OR STABILIZATION OF THE SPECIFIED BUILDING AND ITS FOUNDATION IS COVERED, NOT TO EXCEED THE POLICY LIMITS AFTER APPLICATION OF MY DEDUCTIBLE. I ALSO UNDERSTAND THAT IT IS RECOMMENDED THAT I CONSULT WITH A QUALIFIED PROFESSIONAL TO IDENTIFY THE APPROXIMATE COST OF REPAIRING OR STABILIZING THE SPECIFIED BUILDING AND ITS FOUNDATION SO THAT I CAN MAKE AN INFORMED DECISION WHEN SELECTING MY POLICY LIMITS AND DEDUCTIBLE.” The signed acknowledgment must also include, in at least 12-point bold, uppercase type:
(a) For a policy that provides limited sinkhole coverage insurance in an amount less than the full replacement cost of the property, the following statement: “THIS POLICY LIMITS SINKHOLE COVERAGE TO LESS THAN THE FULL COST OF REPLACEMENT FOR THE PROPERTY, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU AND MAY PUT YOUR EQUITY IN THIS PROPERTY AT RISK.”
(b) For a policy that provides for a deductible that exceeds the deductibles authorized under s. 627.706(1)(b), the following statement: “THIS POLICY EXCEEDS THE DEDUCTIBLE AMOUNT PERMITTED FOR OTHER AUTHORIZED SINKHOLE LOSS INSURANCE POLICIES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU.”
(6) If the sinkhole loss cannot be repaired within policy limits, the insurer must:
(a) Pay the cost, without regard to policy limits, to complete the repairs recommended by the insurer’s professional engineer; or
(b) Pay the cost, not to exceed the policy limits, to complete the repairs upon the insured’s entering into a contract to repair the sinkhole loss in accordance with the repairs recommended by the insurer’s professional engineer.
However, if the insured obtains a lower-cost alternative repair recommendation from a professional engineer for stabilizing the land or the building and repairing the foundation, the insurer must pay the cost, not to exceed the policy limits, to complete the lower-cost alternative repair upon the insured’s entering into a contract to repair the sinkhole loss in accordance with the lower-cost alternative repair recommendation by the insured’s professional engineer. Such lower-cost alternative repair shall be subject to reasonable cost adjustment by the insurer; however, the insurer may not depart from the engineering requirements of the insured’s professional engineer’s lower-cost alternative repair recommendation. Except when payment for sinkhole loss is made under paragraph (a), the insured is responsible for the amount of the repair costs in excess of policy limits, if any.
(7) The insurer shall make payment for sinkhole losses to the insured and the contractor performing the repairs jointly. The insurer may make payment for contents and additional living expenses, if covered, directly to the insured.
(8) Notwithstanding s. 627.410, an insurer may establish and use a limited sinkhole coverage insurance form without filing the form with the office and requesting approval of the form from the office.
(9)(a) An insurer may establish and use limited sinkhole coverage insurance rates in accordance with the rate standards provided in s. 627.062.
(b) For limited sinkhole coverage insurance rates filed with the office before October 1, 2019, the insurer may also establish and use rates in accordance with the rates, rating schedules, or rating manuals filed by the insurer with the office which allow the insurer a reasonable rate of return on limited sinkhole coverage insurance written in this state. Limited sinkhole coverage insurance rates established pursuant to this paragraph are not subject to s. 627.062(2)(a) or (f). An insurer shall notify the office of any change to such rates within 30 days after the effective date of the change. The notice must include the name of the insurer and the average statewide percentage change in rates. Actuarial data with regard to such rates for limited sinkhole coverage insurance must be maintained by the insurer for 2 years after the effective date of such rate change and is subject to examination by the office. The office may require the insurer to incur the costs associated with an examination. Upon examination, the office, in accordance with generally accepted and reasonable actuarial techniques, shall consider the rate factors in s. 627.062(2)(b) and (d) and the standards in s. 627.062(2)(e) to determine whether the rate is excessive, inadequate, or unfairly discriminatory.
(10) In addition to any other applicable requirements, an insurer providing limited sinkhole coverage insurance in this state must:
(a) Notify the office at least 30 days before writing limited sinkhole coverage insurance in this state.
(b) File a plan of operation and financial projections or revisions to such plan, as applicable, with the office.
History.—s. 3, ch. 2016-197.
PART XI
MOTOR VEHICLE AND CASUALTYINSURANCE 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 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 unearned 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.
627.7311 Effect of law on personal injury protection policies.
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.
627.7407 Application of the Florida Motor Vehicle No-Fault Law.
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 Preinsurance inspection of private passenger motor vehicles.
627.745 Mediation of claims.
627.746 Coverage for minors who have a learner’s driver license; additional premium prohibited.
627.748 Transportation network companies.
627.7261 Refusal to issue policy.—
(1) An insurer may not 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.
(2)(a) An insurer may not deny an application for automobile liability insurance or impose a surcharge or otherwise increase the premium rate for an automobile liability policy solely on the basis that the applicant, a named insured, a member of the insured’s household, or a person who customarily operates the insured’s vehicle is a volunteer driver.
(b) As used in this section, the term “volunteer driver” means a person who provides services, including transporting individuals or goods, without compensation in excess of expenses to a private nonprofit agency as defined in s. 273.01(3) or a charitable organization as defined in s. 736.1201(1).
(c) This section does not prohibit an insurer from refusing to renew, imposing a surcharge on, or otherwise increasing the premium rate for an automobile liability insurance policy based upon factors other than the volunteer status of the persons named in this subsection.
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; s. 5, ch. 2007-150; s. 152, ch. 2008-4; s. 19, ch. 2008-5.
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 office. 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 office. 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 under this section shall present such claim for payment to the Florida Insurance Guaranty Association only. In the event of a payment to a person in settlement of a claim arising under this section, the association is not subrogated or entitled to 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 office, 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 office, 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 on behalf of all insureds. 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 office 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; s. 1190, ch. 2003-261; s. 30, ch. 2006-12; s. 1, ch. 2013-195; s. 4, ch. 2015-65.
627.7275 Motor vehicle liability.—
(1) A motor vehicle insurance policy providing personal injury protection as set forth in s. 627.736 may not 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 as required by s. 324.022.
(2)(a) Insurers writing motor vehicle insurance in this state shall make available, subject to the insurers’ usual underwriting restrictions:
1. Coverage under policies as described in subsection (1) to an 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 if the driving privileges were revoked or suspended pursuant to s. 316.646 or s. 324.0221 due to the failure of the applicant to maintain required security.
2. Coverage under policies as described in subsection (1), which also provides liability coverage for bodily injury, death, and property damage arising out of the ownership, maintenance, or use of the motor vehicle in an amount not less than the limits described in s. 324.021(7) and conforms to the requirements of s. 324.151, to an 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 after such privileges were revoked or suspended under s. 316.193 or s. 322.26(2) for driving under the influence.
(b) The policies described in paragraph (a) shall be issued for at least 6 months and, as to the minimum coverages required under this section, may not be canceled by the insured for any reason or by the insurer after 60 days, during which period the insurer is completing the underwriting of the policy. After the insurer has completed underwriting the policy, the insurer shall notify the Department of Highway Safety and Motor Vehicles that the policy is in full force and effect and is not cancelable for the remainder of the policy period. A premium shall be collected and the coverage is in effect for the 60-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 coverages for bodily injury, property damage, and personal injury protection may not be reduced below the minimum limits required under s. 324.021 or s. 324.023 during the policy period.
(c) This subsection controls to the extent of any conflict with any other section.
(d) An insurer issuing a policy subject to this section may cancel the policy if, during the policy term, the named insured, or any other operator who resides in the same household or customarily operates an automobile insured under the policy, has his or her driver license suspended or revoked.
(e) This subsection does not require an insurer to offer a policy of insurance to an applicant if such offer would be inconsistent with the insurer’s underwriting guidelines and procedures.
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; s. 1191, ch. 2003-261; s. 3, ch. 2005-72; s. 6, ch. 2007-324; s. 1, ch. 2014-76.
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 the first-named insured 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; s. 34, ch. 2007-1; s. 20, ch. 2007-90; s. 11, ch. 2011-174.
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 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 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 first-named insured and to the first-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 first-named insured, at the address shown in the policy, and to the first-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 first-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, certified or registered mailing, or other mailing using the Intelligent Mail barcode or other similar tracking method used or approved by the United States Postal Service 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 first-named insured at the address shown in the policy, are 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 first-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 office. The office 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 office shall initiate a proceeding. If informal procedures fail to resolve the appeal, the office 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 office. 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 office the name and address of the person authorized to receive notices pursuant to this section on behalf of the insurer.
(c) The office 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 office 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 office 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 office shall deposit all fees provided for in this section into the Insurance 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; s. 1192, ch. 2003-261; s. 12, ch. 2011-174; s. 2, ch. 2015-158; s. 9, ch. 2018-131.
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 first-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; s. 13, ch. 2011-174.
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 commission 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; s. 1193, ch. 2003-261.
627.7283 Cancellation; return of unearned premium.—
(1) If the insured cancels a policy of motor vehicle insurance, the insurer must mail or electronically transfer the unearned portion of any premium paid within 30 days after the effective date of the policy cancellation or receipt of notice or request for cancellation, whichever is later. This requirement applies to a cancellation initiated by an insured for any reason. However, the insured may elect to apply the unearned portion of any premium paid to unpaid balances of other policies with the same insurer or insurer group.
(2) If an insurer cancels a policy of motor vehicle insurance, the insurer must mail or electronically transfer the unearned premium portion of any premium within 15 days after the effective date of the policy cancellation. However, the insured may elect to apply the unearned portion of any premium paid to unpaid balances of other policies with the same insurer or insurer group.
(3) If the unearned premium is not mailed, electronically transferred, or applied to the unpaid balance of other policies within the applicable period, the insurer must pay to the insured 8 percent interest on the amount due. If the unearned premium is not mailed or electronically transferred within 45 days after the applicable period, the insured may bring an action against the insurer pursuant to s. 624.155.
(4) 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.
(5) The insurer must refund 100 percent of the unearned premium if the insured is a servicemember, as defined in s. 250.01, who cancels because he or she is called to active duty or transferred by the United States Armed Forces to a location where the insurance is not required. The insurer may require a servicemember to submit either a copy of the official military orders or a written verification signed by the servicemember’s commanding officer to support the refund authorized under this subsection. 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; s. 7, ch. 2002-282; s. 18, ch. 2003-72; s. 9, ch. 2014-103; s. 3, ch. 2016-133.
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 coverage, property damage liability coverage, or both.
(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 or any other type of premium payment that was subsequently determined to be rejected or invalid.
(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 fee is not considered part of the premium.
(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 online 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, before the effective date of such binder or policy, 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, an automatic electronic funds transfer payment plan from the policyholder, or a recurring credit card or debit card agreement with the insurer. 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, a managing general agent, or a premium finance company 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; s. 1194, ch. 2003-261; s. 68, ch. 2003-267; s. 21, ch. 2003-411; s. 3, ch. 2005-195; s. 92, ch. 2006-1; s. 7, ch. 2007-324; s. 13, ch. 2010-198; s. 16, ch. 2011-174; s. 16, ch. 2012-151; s. 4, ch. 2016-133; s. 13, ch. 2017-132.
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; s. 19, ch. 2003-411; s. 8, ch. 2007-324.
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; s. 19, ch. 2003-411; s. 9, ch. 2007-324.
627.7311 Effect of law on personal injury protection policies.—The provisions and procedures authorized in ss. 627.730-627.7405 shall be implemented by insurers offering policies pursuant to the Florida Motor Vehicle No-Fault Law. The Legislature intends that these provisions and procedures have full force and effect regardless of their express inclusion in an insurance policy form, and a specific provision or procedure authorized in ss. 627.730-627.7405 shall control over general provisions in an insurance policy form. An insurer is not required to amend its policy form or to expressly notify providers, claimants, or insureds in order to implement and apply such provisions or procedures.
History.—s. 8, ch. 2012-197.
627.732 Definitions.—As used in ss. 627.730-627.7405, the term:
(1) “Broker” means any person not possessing a license under chapter 395, chapter 400, chapter 429, chapter 458, chapter 459, chapter 460, chapter 461, or chapter 641 who charges or receives compensation for any use of medical equipment and is not the 100-percent owner or the 100-percent lessee of such equipment. For purposes of this section, such owner or lessee may be an individual, a corporation, a partnership, or any other entity and any of its 100-percent-owned affiliates and subsidiaries. For purposes of this subsection, the term “lessee” means a long-term lessee under a capital or operating lease, but does not include a part-time lessee. The term “broker” does not include a hospital or physician management company whose medical equipment is ancillary to the practices managed, a debt collection agency, or an entity that has contracted with the insurer to obtain a discounted rate for such services; nor does the term include a management company that has contracted to provide general management services for a licensed physician or health care facility and whose compensation is not materially affected by the usage or frequency of usage of medical equipment or an entity that is 100-percent owned by one or more hospitals or physicians. The term “broker” does not include a person or entity that certifies, upon request of an insurer, that:
(a) It is a clinic licensed under ss. 400.990-400.995;
(b) It is a 100-percent owner of medical equipment; and
(c) The owner’s only part-time lease of medical equipment for personal injury protection patients is on a temporary basis not to exceed 30 days in a 12-month period, and such lease is solely for the purposes of necessary repair or maintenance of the 100-percent-owned medical equipment or pending the arrival and installation of the newly purchased or a replacement for the 100-percent-owned medical equipment, or for patients for whom, because of physical size or claustrophobia, it is determined by the medical director or clinical director to be medically necessary that the test be performed in medical equipment that is open-style. The leased medical equipment cannot be used by patients who are not patients of the registered clinic for medical treatment of services. Any person or entity making a false certification under this subsection commits insurance fraud as defined in s. 817.234. However, the 30-day period provided in this paragraph may be extended for an additional 60 days as applicable to magnetic resonance imaging equipment if the owner certifies that the extension otherwise complies with this paragraph.
(2) “Medically necessary” refers to a medical service or supply that a prudent physician would provide for the purpose of preventing, diagnosing, or treating an illness, injury, disease, or symptom in a manner that is:
(a) In accordance with generally accepted standards of medical practice;
(b) Clinically appropriate in terms of type, frequency, extent, site, and duration; and
(c) Not primarily for the convenience of the patient, physician, or other health care provider.
(3) “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.
(4) “Named insured” means a person, usually the owner of a vehicle, identified in a policy by name as the insured under the policy.
(5) “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.
(6) “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.
(7) “Certify” means to swear or attest to being true or represented in writing.
(8) “Immediate personal supervision,” as it relates to the performance of medical services by nonphysicians not in a hospital, means that an individual licensed to perform the medical service or provide the medical supplies must be present within the confines of the physical structure where the medical services are performed or where the medical supplies are provided such that the licensed individual can respond immediately to any emergencies if needed.
(9) “Incident,” with respect to services considered as incident to a physician’s professional service, for a physician licensed under chapter 458, chapter 459, chapter 460, or chapter 461, if not furnished in a hospital, means such services must be an integral, even if incidental, part of a covered physician’s service.
(10) “Knowingly” means that a person, with respect to information, has actual knowledge of the information; acts in deliberate ignorance of the truth or falsity of the information; or acts in reckless disregard of the information, and proof of specific intent to defraud is not required.
(11) “Lawful” or “lawfully” means in substantial compliance with all relevant applicable criminal, civil, and administrative requirements of state and federal law related to the provision of medical services or treatment.
(12) “Hospital” means a facility that, at the time services or treatment were rendered, was licensed under chapter 395.
(13) “Properly completed” means providing truthful, substantially complete, and substantially accurate responses as to all material elements to each applicable request for information or statement by a means that may lawfully be provided and that complies with this section, or as agreed by the parties.
(14) “Upcoding” means an action that submits a billing code that would result in payment greater in amount than would be paid using a billing code that accurately describes the services performed. The term does not include an otherwise lawful bill by a magnetic resonance imaging facility, which globally combines both technical and professional components, if the amount of the global bill is not more than the components if billed separately; however, payment of such a bill constitutes payment in full for all components of such service.
(15) “Unbundling” means an action that submits a billing code that is properly billed under one billing code, but that has been separated into two or more billing codes, and would result in payment greater in amount than would be paid using one billing code.
(16) “Emergency medical condition” means a medical condition manifesting itself by acute symptoms of sufficient severity, which may include severe pain, such that the absence of immediate medical attention could reasonably be expected to result in any of the following:
(a) Serious jeopardy to patient health.
(b) Serious impairment to bodily functions.
(c) Serious dysfunction of any bodily organ or part.
(17) “Entity wholly owned” means a proprietorship, group practice, partnership, or corporation that provides health care services rendered by licensed health care practitioners and in which licensed health care practitioners are the business owners of all aspects of the business entity, including, but not limited to, being reflected as the business owners on the title or lease of the physical facility, filing taxes as the business owners, being account holders on the entity’s bank account, being listed as the principals on all incorporation documents required by this state, and having ultimate authority over all personnel and compensation decisions relating to the entity. However, this definition does not apply to an entity that is wholly owned, directly or indirectly, by a hospital licensed under chapter 395.
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; s. 5, ch. 2001-271; s. 18, ch. 2003-2; ss. 7, 19, ch. 2003-411; s. 30, ch. 2005-3; s. 98, ch. 2006-197; s. 10, ch. 2007-324; s. 9, ch. 2012-197.
627.733 Required security.—
(1)(a) Every owner or registrant of a motor vehicle, other than a motor vehicle used as a school bus as defined in s. 1006.25 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.
(b) Every owner or registrant of a motor vehicle used as a taxicab shall not be governed by paragraph (1)(a) but shall maintain security as required under s. 324.032(1), and s. 627.737 shall not apply to any motor vehicle used as a taxicab.
(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) or (3) 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(16). 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 s. 324.0221(2), 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.
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; s. 1031, ch. 2002-387; s. 19, ch. 2003-2; s. 19, ch. 2003-411; s. 123, ch. 2004-5; s. 47, ch. 2006-290; s. 4, ch. 2007-150; s. 11, ch. 2007-324; s. 90, ch. 2013-160.
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; s. 19, ch. 2003-411; s. 12, ch. 2007-324.
627.736 Required personal injury protection benefits; exclusions; priority; claims.—
(1) REQUIRED BENEFITS.—An insurance policy complying with the security requirements of s. 627.733 must provide personal injury protection to the named insured, relatives residing in the same household, persons operating the insured motor vehicle, passengers in the motor vehicle, and other persons struck by the motor vehicle and suffering bodily injury while not an occupant of a self-propelled vehicle, subject to subsection (2) and paragraph (4)(e), to a limit of $10,000 in medical and disability benefits and $5,000 in death benefits resulting from 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 medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services if the individual receives initial services and care pursuant to subparagraph 1. within 14 days after the motor vehicle accident. The medical benefits provide reimbursement only for:
1. Initial services and care that are lawfully provided, supervised, ordered, or prescribed by a physician licensed under chapter 458 or chapter 459, a dentist licensed under chapter 466, or a chiropractic physician licensed under chapter 460 or that are provided in a hospital or in a facility that owns, or is wholly owned by, a hospital. Initial services and care may also be provided by a person or entity licensed under part III of chapter 401 which provides emergency transportation and treatment.
2. Upon referral by a provider described in subparagraph 1., followup services and care consistent with the underlying medical diagnosis rendered pursuant to subparagraph 1. which may be provided, supervised, ordered, or prescribed only by a physician licensed under chapter 458 or chapter 459, a chiropractic physician licensed under chapter 460, a dentist licensed under chapter 466, or, to the extent permitted by applicable law and under the supervision of such physician, osteopathic physician, chiropractic physician, or dentist, by a physician assistant licensed under chapter 458 or chapter 459 or an advanced practice registered nurse licensed under chapter 464. Followup services and care may also be provided by the following persons or entities:
a. A hospital or ambulatory surgical center licensed under chapter 395.
b. An entity wholly owned by one or more physicians licensed under chapter 458 or chapter 459, chiropractic physicians licensed under chapter 460, or dentists licensed under chapter 466 or by such practitioners and the spouse, parent, child, or sibling of such practitioners.
c. An entity that owns or is wholly owned, directly or indirectly, by a hospital or hospitals.
d. A physical therapist licensed under chapter 486, based upon a referral by a provider described in this subparagraph.
e. A health care clinic licensed under part X of chapter 400 which is accredited by an accrediting organization whose standards incorporate comparable regulations required by this state, or
(I) Has a medical director licensed under chapter 458, chapter 459, or chapter 460;
(II) Has been continuously licensed for more than 3 years or is a publicly traded corporation that issues securities traded on an exchange registered with the United States Securities and Exchange Commission as a national securities exchange; and
(III) Provides at least four of the following medical specialties:
(A) General medicine.
(B) Radiography.
(C) Orthopedic medicine.
(D) Physical medicine.
(E) Physical therapy.
(F) Physical rehabilitation.
(G) Prescribing or dispensing outpatient prescription medication.
(H) Laboratory services.
3. Reimbursement for services and care provided in subparagraph 1. or subparagraph 2. up to $10,000 if a physician licensed under chapter 458 or chapter 459, a dentist licensed under chapter 466, a physician assistant licensed under chapter 458 or chapter 459, or an advanced practice registered nurse licensed under chapter 464 has determined that the injured person had an emergency medical condition.
4. Reimbursement for services and care provided in subparagraph 1. or subparagraph 2. is limited to $2,500 if a provider listed in subparagraph 1. or subparagraph 2. determines that the injured person did not have an emergency medical condition.
5. Medical benefits do not include massage as defined in s. 480.033 or acupuncture as defined in s. 457.102, regardless of the person, entity, or licensee providing massage or acupuncture, and a licensed massage therapist or licensed acupuncturist may not be reimbursed for medical benefits under this section.
6. The Financial Services Commission shall adopt by rule the form that must be used by an insurer and a health care provider specified in sub-subparagraph 2.b., sub-subparagraph 2.c., or sub-subparagraph 2.e. to document that the health care provider meets the criteria of this paragraph. Such rule must include a requirement for a sworn statement or affidavit.
(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 must be paid at least every 2 weeks.
(c) Death benefits.—Death benefits of $5,000 per individual. Death benefits are in addition to the medical and disability benefits provided under the insurance policy. The insurer may pay death benefits to the executor or administrator of the deceased, to any of the deceased’s relatives by blood, legal adoption, or marriage, or to any person appearing to the insurer to be equitably entitled to such benefits.
Only insurers writing motor vehicle liability insurance in this state may provide the required benefits of this section, and such insurer may not 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 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. An insurer writing motor vehicle liability insurance in this state who fails to comply with such availability requirement as a general business practice violates part IX of chapter 626, and such violation constitutes an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance. An insurer committing such violation is subject to the penalties provided under that part, as well as those provided 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) PAYMENT OF BENEFITS.—Benefits due from an insurer under ss. 627.730-627.7405 are primary, except that benefits received under any workers’ compensation law must be credited against the benefits provided by subsection (1) and are 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. If 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, the benefits under ss. 627.730-627.7405 are subject to the Medicaid program. However, within 30 days after receiving notice that the Medicaid program paid such benefits, the insurer shall repay the full amount of the benefits to 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 are 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. However:
1. If written notice of the entire claim is not furnished to the insurer, any partial amount supported by written notice is overdue if not paid within 30 days after 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 written notice is furnished to the insurer.
2. If an insurer pays only a portion of a claim or rejects a claim, the insurer shall provide at the time of the partial payment or rejection an itemized specification of each item that the insurer had reduced, omitted, or declined to pay and any information that the insurer desires the claimant to consider related to the medical necessity of the denied treatment or to explain the reasonableness of the reduced charge if this does not limit the introduction of evidence at trial. The insurer must also include the name and address of the person to whom the claimant should respond and a claim number to be referenced in future correspondence.
3. If an insurer pays only a portion of a claim or rejects a claim due to an alleged error in the claim, the insurer, at the time of the partial payment or rejection, shall provide an itemized specification or explanation of benefits due to the specified error. Upon receiving the specification or explanation, the person making the claim, at the person’s option and without waiving any other legal remedy for payment, has 15 days to submit a revised claim, which shall be considered a timely submission of written notice of a claim.
4. Notwithstanding the fact that written notice has been furnished to the insurer, payment is not overdue if the insurer has reasonable proof that the insurer is not responsible for the payment.
5. For the purpose of calculating the extent to which benefits are overdue, payment shall be treated as being made on the date a draft or other valid instrument that 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. This paragraph does not preclude or limit the ability of the insurer to assert that the claim was unrelated, was not medically necessary, or was unreasonable or that the amount of the charge was in excess of that permitted under, or in violation of, subsection (5). Such assertion may be made at any time, including after payment of the claim or after the 30-day period for payment set forth in this paragraph.
(c) Upon receiving notice of an accident that is potentially covered by personal injury protection benefits, the insurer must reserve $5,000 of personal injury protection benefits for payment to physicians licensed under chapter 458 or chapter 459 or dentists licensed under chapter 466 who provide emergency services and care, as defined in s. 395.002, or who provide hospital inpatient care. The amount required to be held in reserve may be used only to pay claims from such physicians or dentists until 30 days after the date the insurer receives notice of the accident. After the 30-day period, any amount of the reserve for which the insurer has not received notice of such claims may be used by the insurer to pay other claims. The time periods specified in paragraph (b) for payment of personal injury protection benefits are tolled for the period of time that an insurer is required to hold payment of a claim that is not from such physician or dentist to the extent that the personal injury protection benefits not held in reserve are insufficient to pay the claim. This paragraph does not require an insurer to establish a claim reserve for insurance accounting purposes.
(d) All overdue payments bear simple interest at the rate established under s. 55.03 or the rate established in the insurance contract, whichever is greater, for the quarter in which the payment became overdue, calculated from the date the insurer was furnished with written notice of the amount of covered loss. Interest is due at the time payment of the overdue claim is made.
(e) 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., if the relative at the time of the accident is domiciled in the owner’s household and is not 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, if the injured person is not:
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 of such a motor vehicle.
(f) If two or more insurers are liable for paying personal injury protection benefits for the same injury to any one person, the maximum payable is as specified in subsection (1), and the insurer paying the benefits is 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.
(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.
(h) Benefits are not due or payable to or on the behalf of an insured person if that person has committed, by a material act or omission, insurance fraud relating to personal injury protection coverage under his or her policy, if the fraud is admitted to in a sworn statement by the insured or established in a court of competent jurisdiction. Any insurance fraud voids all coverage arising from the claim related to such fraud under the personal injury protection coverage of the insured person who committed the fraud, irrespective of whether a portion of the insured person’s claim may be legitimate, and any benefits paid before the discovery of the fraud is recoverable by the insurer in its entirety from the person who committed insurance fraud. The prevailing party is entitled to its costs and attorney fees in any action in which it prevails in an insurer’s action to enforce its right of recovery under this paragraph.
(i) If an insurer has a reasonable belief that a fraudulent insurance act, for the purposes of s. 626.989 or s. 817.234, has been committed, the insurer shall notify the claimant, in writing, within 30 days after submission of the claim that the claim is being investigated for suspected fraud. Beginning at the end of the initial 30-day period, the insurer has an additional 60 days to conduct its fraud investigation. Notwithstanding subsection (10), no later than 90 days after the submission of the claim, the insurer must deny the claim or pay the claim with simple interest as provided in paragraph (d). Interest shall be assessed from the day the claim was submitted until the day the claim is paid. All claims denied for suspected fraudulent insurance acts shall be reported to the Division of Investigative and Forensic Services.
(j) An insurer shall create and maintain for each insured a log of personal injury protection benefits paid by the insurer on behalf of the insured. If litigation is commenced, the insurer shall provide to the insured a copy of the log within 30 days after receiving a request for the log from the insured.
(5) CHARGES FOR TREATMENT OF INJURED PERSONS.—
(a) A 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 the insurer and injured party only a reasonable amount pursuant to this section for the services and supplies 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 properly completed invoice, bill, or claim form approved by the office 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. However, such a charge may not exceed the amount the person or institution customarily charges for like services or supplies. In determining whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, reimbursement levels in the community and various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.
1. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:
a. For emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare.
b. For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital’s usual and customary charges.
c. For emergency services and care as defined by s. 395.002 provided in a facility licensed under chapter 395 rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community.
d. For hospital inpatient services, other than emergency services and care, 200 percent of the Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services.
e. For hospital outpatient services, other than emergency services and care, 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services.
f. For all other medical services, supplies, and care, 200 percent of the allowable amount under:
(I) The participating physicians fee schedule of Medicare Part B, except as provided in sub-sub-subparagraphs (II) and (III).
(II) Medicare Part B, in the case of services, supplies, and care provided by ambulatory surgical centers and clinical laboratories.
(III) The Durable Medical Equipment Prosthetics/Orthotics and Supplies fee schedule of Medicare Part B, in the case of durable medical equipment.
However, if such services, supplies, or care is not reimbursable under Medicare Part B, as provided in this sub-subparagraph, the insurer may limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13 and rules adopted thereunder which are in effect at the time such services, supplies, or care is provided. Services, supplies, or care that is not reimbursable under Medicare or workers’ compensation is not required to be reimbursed by the insurer.
2. For purposes of subparagraph 1., the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect on March 1 of the service year in which the services, supplies, or care is rendered and for the area in which such services, supplies, or care is rendered, and the applicable fee schedule or payment limitation applies to services, supplies, or care rendered during that service year, notwithstanding any subsequent change made to the fee schedule or payment limitation, except that it may not be less than the allowable amount under the applicable schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B. For purposes of this subparagraph, the term “service year” means the period from March 1 through the end of February of the following year.
3. Subparagraph 1. does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation. An insurer that applies the allowable payment limitations of subparagraph 1. must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider is entitled to reimbursement under Medicare due to restrictions or limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes. However, subparagraph 1. does not prohibit an insurer from using the Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers, to determine the appropriate amount of reimbursement for medical services, supplies, or care if the coding policy or payment methodology does not constitute a utilization limit.
4. If an insurer limits payment as authorized by subparagraph 1., the person providing such services, supplies, or care may not bill or attempt to collect from the insured any amount in excess of such limits, except for amounts that are not covered by the insured’s personal injury protection coverage due to the coinsurance amount or maximum policy limits.
5. An insurer may limit payment as authorized by this paragraph only if the insurance policy includes a notice at the time of issuance or renewal that the insurer may limit payment pursuant to the schedule of charges specified in this paragraph. A policy form approved by the office satisfies this requirement. If a provider submits a charge for an amount less than the amount allowed under subparagraph 1., the insurer may pay the amount of the charge submitted.
(b)1. An insurer or insured is not required to pay a claim or charges:
a. Made by a broker or by a person making a claim on behalf of a broker;
b. For any service or treatment that was not lawful at the time rendered;
c. To any person who knowingly submits a false or misleading statement relating to the claim or charges;
d. With respect to a bill or statement that does not substantially meet the applicable requirements of paragraph (d);
e. For any treatment or service that is upcoded, or that is unbundled when such treatment or services should be bundled, in accordance with paragraph (d). To facilitate prompt payment of lawful services, an insurer may change codes that it determines have been improperly or incorrectly upcoded or unbundled and may make payment based on the changed codes, without affecting the right of the provider to dispute the change by the insurer, if, before doing so, the insurer contacts the health care provider and discusses the reasons for the insurer’s change and the health care provider’s reason for the coding, or makes a reasonable good faith effort to do so, as documented in the insurer’s file; and
f. For medical services or treatment billed by a physician and not provided in a hospital unless such services are rendered by the physician or are incident to his or her professional services and are included on the physician’s bill, including documentation verifying that the physician is responsible for the medical services that were rendered and billed.
2. The Department of Health, in consultation with the appropriate professional licensing boards, shall adopt, by rule, a list of diagnostic tests deemed not to be medically necessary for use in the treatment of persons sustaining bodily injury covered by personal injury protection benefits under this section. The list shall be revised from time to time as determined by the Department of Health, in consultation with the respective professional licensing boards. Inclusion of a test on the list shall be based on lack of demonstrated medical value and a level of general acceptance by the relevant provider community and may not be dependent for results entirely upon subjective patient response. Notwithstanding its inclusion on a fee schedule in this subsection, an insurer or insured is not required to pay any charges or reimburse claims for an invalid diagnostic test as determined by the Department of Health.
(c) With respect to any treatment or service, other than medical services billed by a hospital or other provider for emergency services and care as defined in s. 395.002 or inpatient 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 35 days before the postmark date or electronic transmission 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, 75 days before the postmark date of the statement. The injured party is not liable for, and the provider may 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.
1. If the insured fails to furnish the provider with the correct name and address of the insured’s personal injury protection insurer, the provider has 35 days from the date the provider obtains the correct information to furnish the insurer with a statement of the charges. The insurer is not required to pay for such charges unless the provider includes with the statement documentary evidence that was provided by the insured during the 35-day period demonstrating that the provider reasonably relied on erroneous information from the insured and either:
a. A denial letter from the incorrect insurer; or
b. Proof of mailing, which may include an affidavit under penalty of perjury, reflecting timely mailing to the incorrect address or insurer.
2. For emergency services and care 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 is not 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 (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 federal Centers for Medicare and Medicaid Services.
3. Each notice of the insured’s rights under s. 627.7401 must include the following statement in at least 12-point type:
BILLING REQUIREMENTS.—Florida law provides 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 35 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, 75 days before the postmark date of the statement.
(d) All statements and bills for medical services rendered by a physician, hospital, clinic, or other person or institution shall be submitted to the insurer on a properly completed Centers for Medicare and Medicaid Services (CMS) 1500 form, UB 92 forms, or any other standard form approved by the office and adopted by the commission for purposes of this paragraph. All billings for such services rendered by providers must, to the extent applicable, comply with the CMS 1500 form instructions, the American Medical Association CPT Editorial Panel, and the Healthcare Common Procedure Coding System (HCPCS); and must follow the Physicians’ Current Procedural Terminology (CPT), the HCPCS in effect for the year in which services are rendered, and the International Classification of Diseases (ICD) adopted by the United States Department of Health and Human Services in effect for the year in which services are rendered. All providers, other than hospitals, must include on the applicable claim form the professional license number of the provider in the line or space provided for “Signature of Physician or Supplier, Including Degrees or Credentials.” In determining compliance with applicable CPT and HCPCS coding, guidance shall be provided by the CPT or the HCPCS in effect for the year in which services were rendered, the Office of the Inspector General, Physicians Compliance Guidelines, and other authoritative treatises designated by rule by the Agency for Health Care Administration. A statement of medical services may not 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 is not 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 and are properly completed in their entirety as to all material provisions, with all relevant information being provided therein.
(e)1. At the initial treatment or service provided, each physician, other licensed professional, clinic, or other medical institution providing medical services upon which a claim for personal injury protection benefits is based shall require an insured person, or his or her guardian, to execute a disclosure and acknowledgment form, which reflects at a minimum that:
a. The insured, or his or her guardian, must countersign the form attesting to the fact that the services set forth therein were actually rendered;
b. The insured, or his or her guardian, has both the right and affirmative duty to confirm that the services were actually rendered;
c. The insured, or his or her guardian, was not solicited by any person to seek any services from the medical provider;
d. The physician, other licensed professional, clinic, or other medical institution rendering services for which payment is being claimed explained the services to the insured or his or her guardian; and
e. If the insured notifies the insurer in writing of a billing error, the insured may be entitled to a certain percentage of a reduction in the amounts paid by the insured’s motor vehicle insurer.
2. The physician, other licensed professional, clinic, or other medical institution rendering services for which payment is being claimed has the affirmative duty to explain the services rendered to the insured, or his or her guardian, so that the insured, or his or her guardian, countersigns the form with informed consent.
3. Countersignature by the insured, or his or her guardian, is not required for the reading of diagnostic tests or other services that are of such a nature that they are not required to be performed in the presence of the insured.
4. The licensed medical professional rendering treatment for which payment is being claimed must sign, by his or her own hand, the form complying with this paragraph.
5. The original completed disclosure and acknowledgment form shall be furnished to the insurer pursuant to paragraph (4)(b) and may not be electronically furnished.
6. The disclosure and acknowledgment form is not required for services billed by a provider 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.
7. The Financial Services Commission shall adopt, by rule, a standard disclosure and acknowledgment form to be used to fulfill the requirements of this paragraph.
8. As used in this paragraph, the term “countersign” or “countersignature” means a second or verifying signature, as on a previously signed document, and is not satisfied by the statement “signature on file” or any similar statement.
9. The requirements of this paragraph apply only with respect to the initial treatment or service of the insured by a provider. For subsequent treatments or service, the provider must maintain a patient log signed by the patient, in chronological order by date of service, which is consistent with the services being rendered to the patient as claimed. The requirement to maintain a patient log signed by the patient may be met by a hospital that maintains medical records as required by s. 395.3025 and applicable rules and makes such records available to the insurer upon request.
(f) Upon written notification by any person, an insurer shall investigate any claim of improper billing by a physician or other medical provider. The insurer shall determine if the insured was properly billed for only those services and treatments that the insured actually received. If the insurer determines that the insured has been improperly billed, the insurer shall notify the insured, the person making the written notification, and the provider of its findings and reduce the amount of payment to the provider by the amount determined to be improperly billed. If a reduction is made due to a written notification by any person, the insurer shall pay to the person 20 percent of the amount of the reduction, up to $500. If the provider is arrested due to the improper billing, the insurer shall pay to the person 40 percent of the amount of the reduction, up to $500.
(g) An insurer may not systematically downcode with the intent to deny reimbursement otherwise due. Such action constitutes a material misrepresentation under s. 626.9541(1)(i)2.
(h) As provided in s. 400.9905, an entity excluded from the definition of a clinic shall be deemed a clinic and must be licensed under part X of chapter 400 in order to receive reimbursement under ss. 627.730-627.7405. However, this licensing requirement does not apply to:
1. An entity wholly owned by a physician licensed under chapter 458 or chapter 459, or by the physician and the spouse, parent, child, or sibling of the physician;
2. An entity wholly owned by a dentist licensed under chapter 466, or by the dentist and the spouse, parent, child, or sibling of the dentist;
3. An entity wholly owned by a chiropractic physician licensed under chapter 460, or by the chiropractic physician and the spouse, parent, child, or sibling of the chiropractic physician;
4. A hospital or ambulatory surgical center licensed under chapter 395;
5. An entity that wholly owns or is wholly owned, directly or indirectly, by a hospital or hospitals licensed under chapter 395;
6. An entity that is a clinical facility affiliated with an accredited medical school at which training is provided for medical students, residents, or fellows;
7. An entity that is certified under 42 C.F.R. part 485, subpart H; or
8. An entity that is owned by a publicly traded corporation, either directly or indirectly through its subsidiaries, that has $250 million or more in total annual sales of health care services provided by licensed health care practitioners if one or more of the persons responsible for the operations of the entity are health care practitioners who are licensed in this state and who are responsible for supervising the business activities of the entity and the entity’s compliance with state law for purposes of this section.
(6) DISCOVERY OF FACTS ABOUT AN INJURED PERSON; DISPUTES.—
(a) 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, an employer must furnish, in a form approved by the office, 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 by the insurer against whom the claim has been made, furnish a written report of the history, condition, treatment, dates, and costs of such treatment of the injured person and why the items identified by the insurer were reasonable in amount and medically necessary, 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, and allow the inspection and copying of, his or her or its records regarding such history, condition, treatment, dates, and costs of treatment if this does not limit the introduction of evidence at trial. Such sworn statement must 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.” A cause of action for violation of the physician-patient privilege or invasion of the right of privacy may not be brought against any physician, hospital, clinic, or other medical institution complying with 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 or information under this paragraph within 30 days after having received notice of the amount of a covered loss under paragraph (4)(a), the amount or the partial amount that is the subject of the insurer’s inquiry is overdue if the insurer does not pay in accordance with paragraph (4)(b) or within 10 days after the insurer’s receipt of the requested documentation or information, whichever occurs later. As used in this paragraph, the term “receipt” includes, but is not limited to, inspection and copying pursuant to this paragraph. An insurer that requests documentation or information pertaining to reasonableness of charges or medical necessity under this paragraph without a reasonable basis for such requests as a general business practice is engaging in an unfair trade practice under the insurance code.
(c) In the event of a dispute regarding an insurer’s right to discovery of facts under this section, 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 must specify the time, place, manner, conditions, and scope of the discovery. In order to protect against annoyance, embarrassment, or oppression, as justice requires, the court may 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 this section, and pay a reasonable charge, if required by the insurer.
(e) Notice to an insurer of the existence of a claim may not be unreasonably withheld by an insured.
(f) In a dispute between the insured and the insurer, or between an assignee of the insured’s rights and the insurer, upon request, the insurer must notify the insured or the assignee that the policy limits under this section have been reached within 15 days after the limits have been reached.
(g) An insured seeking benefits under ss. 627.730–627.7405, including an omnibus insured, must comply with the terms of the policy, which include, but are not limited to, submitting to an examination under oath. The scope of questioning during the examination under oath is limited to relevant information or information that could reasonably be expected to lead to relevant information. Compliance with this paragraph is a condition precedent to receiving benefits. An insurer that, as a general business practice as determined by the office, requests an examination under oath of an insured or an omnibus insured without a reasonable basis is subject to s. 626.9541.
(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, 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 valid report by a Florida 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. A valid report is one that is prepared and signed by the physician examining the injured person or reviewing the treatment records of the injured person and is factually supported by the examination and treatment records if reviewed and that has not been modified by anyone other than the physician. The physician preparing the report must be in active practice, unless the physician is physically disabled. Active practice means that during the 3 years immediately preceding the date of the physical examination or review of the treatment records the physician must have devoted professional time to the active clinical practice of evaluation, diagnosis, or treatment of medical conditions or to the instruction of students in an accredited health professional school or accredited residency program or a clinical research program that is affiliated with an accredited health professional school or teaching hospital or accredited residency program. The physician preparing a report at the request of an insurer and physicians rendering expert opinions on behalf of persons claiming medical benefits for personal injury protection, or on behalf of an insured through an attorney or another entity, shall maintain, for at least 3 years, copies of all examination reports as medical records and shall maintain, for at least 3 years, records of all payments for the examinations and reports. Neither an insurer nor any person acting at the direction of or on behalf of an insurer may materially change an opinion in a report prepared under this paragraph or direct the physician preparing the report to change such opinion. The denial of a payment as the result of such a changed opinion constitutes a material misrepresentation under s. 626.9541(1)(i)2.; however, this provision does not preclude the insurer from calling to the attention of the physician errors of fact in the report based upon information in the claim file.
(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 or fails to appear at an examination, the personal injury protection carrier is no longer liable for subsequent personal injury protection benefits. An insured’s refusal to submit to or failure to appear at two examinations raises a rebuttable presumption that the insured’s refusal or failure was unreasonable.
(8) APPLICABILITY OF PROVISION REGULATING ATTORNEY FEES.—With respect to any dispute under the provisions of ss. 627.730-627.7405 between the insured and the insurer, or between an assignee of an insured’s rights and the insurer, the provisions of ss. 627.428 and 768.79 apply, except as provided in subsections (10) and (15), and except that any attorney fees recovered must:
(a) Comply with prevailing professional standards;
(b) Not overstate or inflate the number of hours reasonably necessary for a case of comparable skill or complexity; and
(c) Represent legal services that are reasonable and necessary to achieve the result obtained.
Upon request by either party, a judge must make written findings, substantiated by evidence presented at trial or any hearings associated therewith, that any award of attorney fees complies with this subsection. Notwithstanding s. 627.428, attorney fees recovered under ss. 627.730-627.7405 must be calculated without regard to a contingency risk multiplier.
(9) PREFERRED PROVIDERS.—An insurer may negotiate and contract with preferred providers for the benefits described in this section, which include health care providers licensed under chapter 458, chapter 459, chapter 460, chapter 461, or chapter 463. The insurer may provide an option to an insured to use a preferred provider at the time of purchasing 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 insured 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 insurer’s principal office within the state.
(10) DEMAND LETTER.—
(a) As a condition precedent to filing any action for benefits under this section, written notice of an intent to initiate litigation must be provided to the insurer. Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
(b) The notice must state that it is a “demand letter under s. 627.736” and state with specificity:
1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.
2. The claim number or policy number upon which such claim was originally submitted to the insurer.
3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due. A completed form satisfying the requirements of paragraph (5)(d) or the lost-wage statement previously submitted may be used as the itemized statement. To the extent that the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, the claimant shall attach a copy of the insurer’s notice withdrawing such payment and an itemized statement of the type, frequency, and duration of future treatment claimed to be reasonable and medically necessary.
(c) Each notice required by this subsection must be delivered to the insurer by United States certified or registered mail, return receipt requested. Such postal costs shall be reimbursed by the insurer if requested by the claimant in the notice, when the insurer pays the claim. Such notice must be sent to the person and address specified by the insurer for the purposes of receiving notices under this subsection. Each licensed insurer, whether domestic, foreign, or alien, shall file with the office the name and address of the designated person to whom notices must be sent which the office shall make available on its Internet website. The name and address on file with the office pursuant to s. 624.422 is deemed the authorized representative to accept notice pursuant to this subsection if no other designation has been made.
(d) If, within 30 days after receipt of notice by the insurer, the overdue claim specified in the notice is paid by the insurer together with applicable interest and a penalty of 10 percent of the overdue amount paid by the insurer, subject to a maximum penalty of $250, no action may be brought against the insurer. If the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, no action may be brought against the insurer if, within 30 days after its receipt of the notice, the insurer mails to the person filing the notice a written statement of the insurer’s agreement to pay for such treatment in accordance with the notice and to pay a penalty of 10 percent, subject to a maximum penalty of $250, when it pays for such future treatment in accordance with the requirements of this section. To the extent the insurer determines not to pay any amount demanded, the penalty is not payable in any subsequent action. For purposes of this subsection, payment or the insurer’s agreement shall be treated as being made on the date a draft or other valid instrument that is equivalent to payment, or the insurer’s written statement of agreement, is placed in the United States mail in a properly addressed, postpaid envelope, or if not so posted, on the date of delivery. The insurer is not obligated to pay any attorney fees if the insurer pays the claim or mails its agreement to pay for future treatment within the time prescribed by this subsection.
(e) The applicable statute of limitation for an action under this section shall be tolled for 30 business days by the mailing of the notice required by this subsection.
(11) FAILURE TO PAY VALID CLAIMS; UNFAIR OR DECEPTIVE PRACTICE.—
(a) An insurer is engaging in a prohibited unfair or deceptive practice that is subject to the penalties provided in s. 626.9521 and the office has the powers and duties specified in ss. 626.9561-626.9601 if the insurer, with such frequency so as to indicate a general business practice:
1. Fails to pay valid claims for personal injury protection; or
2. Fails to pay valid claims until receipt of the notice required by subsection (10).
(b) Notwithstanding s. 501.212, the Department of Legal Affairs may investigate and initiate actions for a violation of this subsection, including, but not limited to, the powers and duties specified in part II of chapter 501.
(12) CIVIL ACTION FOR INSURANCE FRAUD.—An insurer shall have a cause of action against any person convicted of, or who, regardless of adjudication of guilt, pleads guilty or nolo contendere to insurance fraud under s. 817.234, patient brokering under s. 817.505, or kickbacks under s. 456.054, associated with a claim for personal injury protection benefits in accordance with this section. An insurer prevailing in an action brought under this subsection may recover compensatory, consequential, and punitive damages subject to the requirements and limitations of part II of chapter 768, and attorney’s fees and costs incurred in litigating a cause of action against any person convicted of, or who, regardless of adjudication of guilt, pleads guilty or nolo contendere to insurance fraud under s. 817.234, patient brokering under s. 817.505, or kickbacks under s. 456.054, associated with a claim for personal injury protection benefits in accordance with this section.
(13) MINIMUM BENEFIT COVERAGE.—If the Financial Services Commission determines that the cost savings under personal injury protection insurance benefits paid by insurers have been realized due to the provisions of this act, prior legislative reforms, or other factors, the commission may increase the minimum $10,000 benefit coverage requirement. In establishing the amount of such increase, the commission must determine that the additional premium for such coverage is approximately equal to the premium cost savings that have been realized for the personal injury protection coverage with limits of $10,000.
(14) FRAUD ADVISORY NOTICE.—Upon receiving notice of a claim under this section, an insurer shall provide a notice to the insured or to a person for whom a claim for reimbursement for diagnosis or treatment of injuries has been filed, advising that:
(a) Pursuant to s. 626.9892, the Department of Financial Services may pay rewards of up to $25,000 to persons providing information leading to the arrest and conviction of persons committing crimes investigated by the Division of Investigative and Forensic Services arising from violations of s. 440.105, s. 624.15, s. 626.9541, s. 626.989, or s. 817.234.
(b) Solicitation of a person injured in a motor vehicle crash for purposes of filing personal injury protection or tort claims could be a violation of s. 817.234, s. 817.505, or the rules regulating The Florida Bar and should be immediately reported to the Division of Investigative and Forensic Services if such conduct has taken place.
(15) ALL CLAIMS BROUGHT IN A SINGLE ACTION.—In any civil action to recover personal injury protection benefits brought by a claimant pursuant to this section against an insurer, all claims related to the same health care provider for the same injured person shall be brought in one action, unless good cause is shown why such claims should be brought separately. If the court determines that a civil action is filed for a claim that should have been brought in a prior civil action, the court may not award attorney’s fees to the claimant.
(16) SECURE ELECTRONIC DATA TRANSFER.—A notice, documentation, transmission, or communication of any kind required or authorized under ss. 627.730-627.7405 may be transmitted electronically if it is transmitted by secure electronic data transfer that is consistent with state and federal privacy and security laws.
(17) NONREIMBURSABLE CLAIMS.—Claims generated as a result of activities that are unlawful pursuant to s. 817.505 are not reimbursable under the Florida Motor Vehicle No-Fault Law.
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; s. 62, ch. 2001-63; s. 6, ch. 2001-271; s. 1195, ch. 2003-261; ss. 8, 19, ch. 2003-411; s. 124, ch. 2004-5; s. 121, ch. 2005-2; s. 13, ch. 2006-305; ss. 13, 20, ch. 2007-324; s. 153, ch. 2008-4; s. 22, ch. 2008-220; s. 86, ch. 2009-21; s. 17, ch. 2012-151; ss. 10, 11, ch. 2012-197; s. 14, ch. 2013-93; s. 7, ch. 2015-135; s. 6, ch. 2016-133; s. 23, ch. 2016-165; s. 75, ch. 2018-106.
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; s. 19, ch. 2003-411; s. 14, ch. 2007-324.
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.
(2) Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, and $1,000. The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1). 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 office, 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; s. 1196, ch. 2003-261; ss. 9, 19, ch. 2003-411; s. 15, ch. 2007-324.
627.7401 Notification of insured’s rights.—
(1) The commission, 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) 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.
(b) An advisory informing insureds that:
1. Pursuant to s. 626.9892, the Department of Financial Services may pay rewards of up to $25,000 to persons providing information leading to the arrest and conviction of persons committing crimes investigated by the Division of Investigative and Forensic Services arising from violations of s. 440.105, s. 624.15, s. 626.9541, s. 626.989, or s. 817.234.
2. Pursuant to s. 627.736(5)(e)1., if the insured notifies the insurer of a billing error, the insured may be entitled to a certain percentage of a reduction in the amount paid by the insured’s motor vehicle insurer.
(c) A notice that solicitation of a person injured in a motor vehicle crash for purposes of filing personal injury protection or tort claims could be a violation of s. 817.234, s 817.505, or the rules regulating The Florida Bar and should be immediately reported to the Division of Investigative and Forensic Services if such conduct has taken place.
(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 office 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; s. 1197, ch. 2003-261; s. 19, ch. 2003-411; s. 14, ch. 2006-305; s. 16, ch. 2007-324; s. 24, ch. 2016-165.
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; s. 19, ch. 2003-411; s. 17, ch. 2007-324.
627.7405 Insurers’ right of reimbursement.—
(1) Notwithstanding ss. 627.730-627.7405, an 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.
1(2) The insurer’s right of reimbursement under this section does not apply to an owner or registrant as identified in s. 627.733(1)(b).
History.—s. 7, ch. 78-374; s. 2, ch. 81-318; ss. 558, 563, ch. 82-243; s. 19, ch. 2003-411; s. 18, ch. 2007-324; s. 18, ch. 2012-151; s. 12, ch. 2012-197.
1Note.—As created by s. 12, ch. 2012-197. For a description of multiple acts in the same session affecting a statutory provision, see preface to the Florida Statutes, “Statutory Construction.” Subsection (2) was also created by s. 18, ch. 2012-151, and that version reads:
(2) For purposes of this section, no owner or registrant identified in s. 627.733(1)(b) shall be liable for right of reimbursement.
627.7407 Application of the Florida Motor Vehicle No-Fault Law.—
(1) Any person subject to the requirements of ss. 627.730-627.7405, the Florida Motor Vehicle No-Fault Law, as revived and amended by this act, must maintain security for personal injury protection as required by the Florida Motor Vehicle No-Fault Law, as revived and amended by this act, beginning on January 1, 2008.
(2) Any personal injury protection policy in effect on or after January 1, 2008, shall be deemed to incorporate the provisions of the Florida Motor Vehicle No-Fault Law, as revived and amended by this act.
(3) An insurer shall continue to use the personal injury protection forms and rates that were in effect on September 30, 2007, until new forms or rates are used as authorized by law.
(4) Each motor vehicle insurer shall provide personal injury protection coverage to each of its motor vehicle insureds who is subject to subsection (1) beginning on January 1, 2008. With respect to a person who does not have a personal injury protection policy in effect on such date, the initial endorsement shall not be considered a new policy and shall be issued for a period that terminates on the same date as the person’s other motor vehicle insurance coverage. Except as modified by the insured, the deductibles and exclusions that applied to the insured’s previous personal injury protection coverage with that insurer shall apply to the new personal injury protection coverage. The insurer is not required to provide the coverage if the insured does not pay the required premium by January 1, 2008, or such later date that the insurer may allow.
(5) No later than November 15, 2007, each motor vehicle insurer shall provide notice of the provisions of this section to each motor vehicle insured who is subject to subsection (1). The notice is not subject to approval by the Office of Insurance Regulation. The notice must clearly inform the policyholder:
(a) That beginning on January 1, 2008, Florida law requires the policyholder to maintain personal injury protection (“PIP”) insurance coverage and that this insurance pays covered medical expenses for injuries sustained in a motor vehicle crash by the policyholder, passengers, and relatives residing in the policyholder’s household.
(b) That if the policyholder does not maintain personal injury protection coverage, the State of Florida may suspend the policyholder’s driver license and vehicle registration.
(c) That if the policyholder already has personal injury protection coverage, that coverage will be amended effective January 1, 2008, to incorporate legally required changes without any additional premium and that the policyholder is not required to take any further action.
(d) That, if the policyholder does not currently have personal injury protection coverage, the current motor vehicle policy will be amended to incorporate the required personal injury protection coverage effective January 1, 2008.
(e) The additional premium that is due, if any, and the date that it is due, which may be no earlier than January 1, 2008.
(f) That if the policyholder has any questions, the name and phone number of whom they should contact.
(6) This section does not apply the Florida Motor Vehicle No-Fault Law, as revived and amended by this act, prior to January 1, 2008. However, for lawsuits for injuries arising out of an auto accident that occurs between the effective date of this act and December 31, 2007, inclusive, the limitation on lawsuits and tort immunity provided in s. 627.737 shall apply if, and only if, the plaintiff and the defendant are insured for personal injury protection coverage that meets the requirements of Florida Motor Vehicle No-Fault Law that was in effect on September 30, 2007.
(7) The Legislature finds that in order to protect the public health, safety, and welfare, it is necessary to revise or endorse policies in effect on January 1, 2008, to add personal injury protection coverage as required by this section, and to provide a uniform date for motor vehicle owners to obtain or continue such coverage and for insurance policies to provide such coverage. In order to avoid revising in-force policies, enforcement would depend on policyholders electing to add such coverage, or providing a nonuniform date for coverage to be mandatory as policies renew which results in unequal treatment under the law, or delaying the effective date for at least 1 year to provide a uniform date after all policies have renewed, any of which options would result in a much greater number of uninsured vehicles, an inability of accident victims to obtain medical care, a greater level of uncompensated medical care, higher costs to other public and private health care systems, and greater numbers of persons being subject to penalties for noncompliance.
(8) The Legislature recognizes that the Florida Motor Vehicle No-Fault Law was repealed on October 1, 2007, and that vehicle owners are not required to maintain personal injury protection coverage on or after that date until January 1, 2008. Notwithstanding any other law, an insurer is not required to report the issuance, cancellation, or nonrenewal of personal injury protection coverage occurring between October 1, 2007, and December 31, 2007, inclusive, to the Department of Highway Safety and Motor Vehicles. Any law requiring personal injury protection coverage or providing sanctions for failure to maintain or demonstrate proof of such coverage does not apply during this time period. However, this subsection does not relieve a motor vehicle owner from responsibility for maintaining property damage liability coverage as required by law and does not relieve an insurer from reporting the issuance, cancellation, or nonrenewal of property damage liability coverage as required by law.
History.—s. 21, ch. 2007-324.
627.7415 Commercial motor vehicles; additional liability insurance coverage.—Commercial motor vehicles, as defined in s. 207.002 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, 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; s. 91, ch. 2013-160.
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 1006 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; s. 1032, ch. 2002-387.
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 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 that provides physical damage coverage for any vehicle if the agent of the insurer verifies the previous coverage.
(b) To a new, unused motor vehicle purchased or leased from a licensed motor vehicle dealer or leasing company. The insurer may require:
1. A bill of sale, buyer’s order, or lease agreement that contains a full description of the motor vehicle; or
2. A copy of the title or registration that establishes transfer of ownership from the dealer or leasing company to the customer and a copy of the window sticker.
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 or the insurer’s option not to require the documents. However, if the insurer requires a document under this paragraph at the time the policy is issued, payment of a claim may be conditioned upon the receipt by the insurer of the required documents, and no physical damage loss occurring after the effective date of the coverage may be 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 commission. The commission 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) 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 commission, 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.
(4) 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 commission.
(b) Recording the presence of accessories required by the commission to be recorded.
(c) Recording the locations of and a description of existing damage to the vehicle.
(5) 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.
(6) The commission may, by rule, establish such procedures and notice requirements that it finds necessary to implement this section.
(7) Notwithstanding any other provision of this section, an insurer may opt out of the inspection requirements of this section. An insurer opting out of the inspection must file a manual rule with the office indicating that the insurer will not participate in the inspection program under this section. An insurer that files such a manual rule with the office may establish its own preinsurance inspection requirements as a condition to issuing a private passenger motor vehicle insurance policy. The insurer’s preinsurance inspection requirements must be included in the manual rule filed with the office. An insurer opting out of the inspection requirements of this section may not require an applicant to pay for the cost of an inspection.
History.—ss. 41, 52, ch. 90-119; ss. 85, 114, ch. 92-318; s. 28, ch. 95-146; s. 1198, ch. 2003-261; s. 8, ch. 2015-135; s. 5, ch. 2016-133; s. 13, ch. 2017-178.
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, an individual must meet one of the following qualifications:
1. Possess an active certification as a Florida Supreme Court certified circuit court mediator. A Florida Supreme Court certified circuit court mediator in a lapsed, suspended, sanctioned, or decertified status is not eligible to participate in the mediation program.
2. Be an approved department mediator as of July 1, 2014, and have conducted at least one mediation on behalf of the department within 4 years immediately preceding that date.
(4) The department shall deny an application, or suspend or revoke its approval, of a mediator to serve in such capacity if the department finds that one or more of the following grounds exist:
(a) Lack of one or more of the qualifications specified in this section for approval.
(b) Material misstatement, misrepresentation, or fraud in obtaining or attempting to obtain the approval.
(c) Demonstrated lack of fitness or trustworthiness to act as a mediator.
(d) Fraudulent or dishonest practices in the conduct of mediation or in the conduct of business in the financial services industry.
(e) Violation of any provision of this code or of a lawful order or rule of the department, violation of the Florida Rules for Certified and Court-Appointed Mediators, or aiding, instructing, or encouraging another party in committing such a violation.
The department may adopt rules to administer this subsection.
(5) 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.
(6) 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; s. 31, ch. 2014-123; s. 79, ch. 2015-2.
627.746 Coverage for minors who have a learner’s driver license; additional premium prohibited.—An insurer that issues an insurance policy on a private passenger motor vehicle to a named insured who is a caregiver of a minor who is under the age of 18 years and is in out-of-home care as defined in 1s. 39.01(49) may not charge an additional premium for coverage of the minor while the minor is operating the insured vehicle, for the period of time that the minor has a learner’s driver license, until such time as the minor obtains a driver license.
History.—s. 2, ch. 2001-83; s. 27, ch. 2018-103.
627.748 Transportation network companies.—
(1) DEFINITIONS.—As used in this section, the term:
(a) “Digital network” means any online-enabled technology application service, website, or system offered or used by a transportation network company which enables the prearrangement of rides with transportation network company drivers.
(b) “Prearranged ride” means the provision of transportation by a TNC driver to a rider, beginning when a TNC driver accepts a ride requested by a rider through a digital network controlled by a transportation network company, continuing while the TNC driver transports the rider, and ending when the last rider exits from and is no longer occupying the TNC vehicle. The term does not include a taxicab, for-hire vehicle, or street hail service and does not include ridesharing as defined in s. 341.031, carpool as defined in s. 450.28, or any other type of service in which the driver receives a fee that does not exceed the driver’s cost to provide the ride.
(c) “Rider” means an individual who uses a digital network to connect with a TNC driver in order to obtain a prearranged ride in the TNC driver’s TNC vehicle between points chosen by the rider. A person may use a digital network to request a prearranged ride on behalf of a rider.
(d) “Street hail” means an immediate arrangement on a street with a driver by a person using any method other than a digital network to seek immediate transportation.
(e) “Transportation network company” or “TNC” means an entity operating in this state pursuant to this section using a digital network to connect a rider to a TNC driver, who provides prearranged rides. A TNC is not deemed to own, control, operate, direct, or manage the TNC vehicles or TNC drivers that connect to its digital network, except where agreed to by written contract, and is not a taxicab association or for-hire vehicle owner. An individual, corporation, partnership, sole proprietorship, or other entity that arranges medical transportation for individuals qualifying for Medicaid or Medicare pursuant to a contract with the state or a managed care organization is not a TNC. This section does not prohibit a TNC from providing prearranged rides to individuals who qualify for Medicaid or Medicare if it meets the requirements of this section.
(f) “Transportation network company driver” or “TNC driver” means an individual who:
1. Receives connections to potential riders and related services from a transportation network company; and
2. In return for compensation, uses a TNC vehicle to offer or provide a prearranged ride to a rider upon connection through a digital network.
(g) “Transportation network company vehicle” or “TNC vehicle” means a vehicle that is not a taxicab, jitney, limousine, or for-hire vehicle as defined in s. 320.01(15) and that is:
1. Used by a TNC driver to offer or provide a prearranged ride; and
2. Owned, leased, or otherwise authorized to be used by the TNC driver.
Notwithstanding any other provision of law, a vehicle that is let or rented to another for consideration may be used as a TNC vehicle.
(2) NOT OTHER CARRIERS.—A TNC or TNC driver is not a common carrier, contract carrier, or motor carrier and does not provide taxicab or for-hire vehicle service. In addition, a TNC driver is not required to register the vehicle that the TNC driver uses to provide prearranged rides as a commercial motor vehicle or a for-hire vehicle.
(3) AGENT.—A TNC must designate and maintain an agent for service of process in this state.
(4) FARE TRANSPARENCY.—If a fare is collected from a rider, the TNC must disclose to the rider the fare or fare calculation method on its website or within the online-enabled technology application service before the beginning of the prearranged ride. If the fare is not disclosed to the rider before the beginning of the prearranged ride, the rider must have the option to receive an estimated fare before the beginning of the prearranged ride.
(5) IDENTIFICATION OF TNC VEHICLES AND DRIVERS.—The TNC’s digital network must display a photograph of the TNC driver and the license plate number of the TNC vehicle used for providing the prearranged ride before the rider enters the TNC driver’s vehicle.
(6) ELECTRONIC RECEIPT.—Within a reasonable period after the completion of a ride, a TNC shall transmit an electronic receipt to the rider on behalf of the TNC driver which lists:
(a) The origin and destination of the ride;
(b) The total time and distance of the ride; and
(c) The total fare paid.
(7) TRANSPORTATION NETWORK COMPANY AND TNC DRIVER INSURANCE REQUIREMENTS.—
(a) Beginning July 1, 2017, a TNC driver or a TNC on behalf of the TNC driver shall maintain primary automobile insurance that:
1. Recognizes that the TNC driver is a TNC driver or otherwise uses a vehicle to transport riders for compensation; and
2. Covers the TNC driver while the TNC driver is logged on to the digital network of the TNC or while the TNC driver is engaged in a prearranged ride.
(b) The following automobile insurance requirements apply while a participating TNC driver is logged on to the digital network but is not engaged in a prearranged ride:
1. Automobile insurance that provides:
a. A primary automobile liability coverage of at least $50,000 for death and bodily injury per person, $100,000 for death and bodily injury per incident, and $25,000 for property damage;
b. Personal injury protection benefits that meet the minimum coverage amounts required under ss. 627.730-627.7405; and
c. Uninsured and underinsured vehicle coverage as required by s. 627.727.
2. The coverage requirements of this paragraph may be satisfied by any of the following:
a. Automobile insurance maintained by the TNC driver;
b. Automobile insurance maintained by the TNC; or
c. A combination of sub-subparagraphs a. and b.
(c) The following automobile insurance requirements apply while a TNC driver is engaged in a prearranged ride:
1. Automobile insurance that provides:
a. A primary automobile liability coverage of at least $1 million for death, bodily injury, and property damage;
b. Personal injury protection benefits that meet the minimum coverage amounts required of a limousine under ss. 627.730-627.7405; and
c. Uninsured and underinsured vehicle coverage as required by s. 627.727.
2. The coverage requirements of this paragraph may be satisfied by any of the following:
a. Automobile insurance maintained by the TNC driver;
b. Automobile insurance maintained by the TNC; or
c. A combination of sub-subparagraphs a. and b.
(d) If the TNC driver’s insurance under paragraph (b) or paragraph (c) has lapsed or does not provide the required coverage, the insurance maintained by the TNC must provide the coverage required under this subsection, beginning with the first dollar of a claim, and have the duty to defend such claim.
(e) Coverage under an automobile insurance policy maintained by the TNC must not be dependent on a personal automobile insurer first denying a claim, and a personal automobile insurance policy is not required to first deny a claim.
(f) Insurance required under this subsection must be provided by an insurer authorized to do business in this state which is a member of the Florida Insurance Guaranty Association or an eligible surplus lines insurer that has a superior, excellent, exceptional, or equivalent financial strength rating by a rating agency acceptable to the Office of Insurance Regulation of the Financial Services Commission.
(g) Insurance satisfying the requirements under this subsection is deemed to satisfy the financial responsibility requirement for a motor vehicle under chapter 324 and the security required under s. 627.733 for any period when the TNC driver is logged onto the digital network or engaged in a prearranged ride.
(h) A TNC driver shall carry proof of coverage satisfying paragraphs (b) and (c) with him or her at all times during his or her use of a TNC vehicle in connection with a digital network. In the event of an accident, a TNC driver shall provide this insurance coverage information to any party directly involved in the accident or the party’s designated representative, automobile insurers, and investigating police officers. Proof of financial responsibility may be presented through an electronic device, such as a digital phone application, under s. 316.646. Upon request, a TNC driver shall also disclose to any party directly involved in the accident or the party’s designated representative, automobile insurers, and investigating police officers whether he or she was logged on to a digital network or was engaged in a prearranged ride at the time of the accident.
(i) If a TNC’s insurer makes a payment for a claim covered under comprehensive coverage or collision coverage, the TNC shall cause its insurer to issue the payment directly to the business repairing the vehicle or jointly to the owner of the vehicle and the primary lienholder on the covered vehicle.
(8) TRANSPORTATION NETWORK COMPANY AND INSURER; DISCLOSURE; EXCLUSIONS.—
(a) Before a TNC driver is allowed to accept a request for a prearranged ride on the digital network, the TNC must disclose in writing to the TNC driver:
1. The insurance coverage, including the types of coverage and the limits for each coverage, which the TNC provides while the TNC driver uses a TNC vehicle in connection with the TNC’s digital network.
2. That the TNC driver’s own automobile insurance policy might not provide any coverage while the TNC driver is logged on to the digital network or is engaged in a prearranged ride, depending on the terms of the TNC driver’s own automobile insurance policy.
3. That the provision of rides for compensation which are not prearranged rides subjects the driver to the coverage requirements imposed under s. 324.032(1) and that failure to meet such coverage requirements subjects the TNC driver to penalties provided in s. 324.221, up to and including a misdemeanor of the second degree.
(b)1. An insurer that provides an automobile liability insurance policy under this part may exclude any and all coverage afforded under the policy issued to an owner or operator of a TNC vehicle while driving that vehicle for any loss or injury that occurs while a TNC driver is logged on to a digital network or while a TNC driver provides a prearranged ride. Exclusions imposed under this subsection are limited to coverage while a TNC driver is logged on to a digital network or while a TNC driver provides a prearranged ride. This right to exclude all coverage may apply to any coverage included in an automobile insurance policy, including, but not limited to:
a. Liability coverage for bodily injury and property damage;
b. Uninsured and underinsured motorist coverage;
c. Medical payments coverage;
d. Comprehensive physical damage coverage;
e. Collision physical damage coverage; and
f. Personal injury protection.
2. The exclusions described in subparagraph 1. apply notwithstanding any requirement under chapter 324. These exclusions do not affect or diminish coverage otherwise available for permissive drivers or resident relatives under the personal automobile insurance policy of the TNC driver or owner of the TNC vehicle who are not occupying the TNC vehicle at the time of loss. This section does not require that a personal automobile insurance policy provide coverage while the TNC driver is logged on to a digital network, while the TNC driver is engaged in a prearranged ride, or while the TNC driver otherwise uses a vehicle to transport riders for compensation.
3. This section must not be construed to require an insurer to use any particular policy language or reference to this section in order to exclude any and all coverage for any loss or injury that occurs while a TNC driver is logged on to a digital network or while a TNC driver provides a prearranged ride.
4. This section does not preclude an insurer from providing primary or excess coverage for the TNC driver’s vehicle by contract or endorsement.
(c)1. An automobile insurer that excludes the coverage described in subparagraph (b)1. does not have a duty to defend or indemnify any claim expressly excluded thereunder. This section does not invalidate or limit an exclusion contained in a policy, including a policy in use or approved for use in this state before July 1, 2017, which excludes coverage for vehicles used to carry persons or property for a charge or available for hire by the public.
2. An automobile insurer that defends or indemnifies a claim against a TNC driver which is excluded under the terms of its policy has a right of contribution against other insurers that provide automobile insurance to the same TNC driver in satisfaction of the coverage requirements of subsection (7) at the time of loss.
(d) In a claims coverage investigation, a TNC shall immediately provide, upon request by a directly involved party or any insurer of the TNC driver, if applicable, the precise times that the TNC driver logged on and off the digital network in the 12-hour period immediately preceding and in the 12-hour period immediately following the accident. An insurer providing coverage under subsection (7) shall disclose, upon request by any other insurer involved in the particular claim, the applicable coverages, exclusions, and limits provided under any automobile insurance maintained in order to satisfy the requirements of subsection (7).
(9) LIMITATION ON TRANSPORTATION NETWORK COMPANIES.—A TNC driver is an independent contractor and not an employee of the TNC if all of the following conditions are met:
(a) The TNC does not unilaterally prescribe specific hours during which the TNC driver must be logged on to the TNC’s digital network.
(b) The TNC does not prohibit the TNC driver from using digital networks from other TNCs.
(c) The TNC does not restrict the TNC driver from engaging in any other occupation or business.
(d) The TNC and TNC driver agree in writing that the TNC driver is an independent contractor with respect to the TNC.
(10) ZERO TOLERANCE FOR DRUG OR ALCOHOL USE.—
(a) The TNC shall implement a zero-tolerance policy regarding a TNC driver’s activities while accessing the TNC’s digital network. The zero-tolerance policy must address the use of drugs or alcohol while a TNC driver is providing a prearranged ride or is logged on to the digital network.
(b) The TNC shall provide notice of this policy on its website, as well as procedures to report a complaint about a TNC driver who a rider reasonably suspects was under the influence of drugs or alcohol during the course of the ride.
(c) Upon receipt of a rider’s complaint alleging a violation of the zero-tolerance policy, the TNC shall suspend a TNC driver’s ability to accept any ride request through the TNC’s digital network as soon as possible and shall conduct an investigation into the reported incident. The suspension must last the duration of the investigation.
(11) TRANSPORTATION NETWORK COMPANY DRIVER REQUIREMENTS.—
(a) Before an individual is authorized to accept a ride request through a digital network:
1. The individual must submit an application to the TNC which includes information regarding his or her address, age, driver license, motor vehicle registration, and other information required by the TNC;
2. The TNC must conduct, or have a third party conduct, a local and national criminal background check that includes:
a. A search of the Multi-State/Multi-Jurisdiction Criminal Records Locator or other similar commercial nationwide database with validation of any records through primary source search; and
b. A search of the National Sex Offender Public Website maintained by the United States Department of Justice; and
3. The TNC must obtain and review, or have a third party obtain and review, a driving history research report for the applicant.
(b) The TNC shall conduct the background check required under paragraph (a) for a TNC driver every 3 years.
(c) The TNC may not authorize an individual to act as a TNC driver on its digital network if the driving history research report conducted when the individual first seeks access to the digital network reveals that the individual has had more than three moving violations in the prior 3-year period.
(d) The TNC may not authorize an individual to act as a TNC driver on its digital network if the background check conducted when the individual first seeks access to the digital network or any subsequent background check required under paragraph (b) reveals that the individual:
1. Has been convicted, within the past 5 years, of:
a. A felony;
b. A misdemeanor for driving under the influence of drugs or alcohol, for reckless driving, for hit and run, or for fleeing or attempting to elude a law enforcement officer; or
c. A misdemeanor for a violent offense or sexual battery, or a crime of lewdness or indecent exposure under chapter 800;
2. Has been convicted, within the past 3 years, of driving with a suspended or revoked license;
3. Is a match in the National Sex Offender Public Website maintained by the United States Department of Justice;
4. Does not possess a valid driver license; or
5. Does not possess proof of registration for the motor vehicle used to provide prearranged rides.
(e) No later than January 1 of every other year beginning in 2019, a TNC shall submit to the Department of Financial Services an examination report prepared by an independent certified public accountant for the sole purpose of verifying that the TNC has maintained compliance with subsection (8) and this subsection on a continual basis for either the preceding 2 years or for the timeframe that the TNC has been operating in this state if that timeframe is less than 2 years. The report shall expressly state whether the TNC was compliant or noncompliant. The report must be prepared in accordance with applicable attestation standards established by the American Institute of Certified Public Accountants. The TNC shall bear all costs associated with the preparation and submission of the report.
(f) The Department of Financial Services, within 30 days after receipt of the report required under paragraph (e), shall impose a fine of $10,000 if the report includes a finding that the TNC has been noncompliant with subsection (8), this subsection, or both. A TNC that has been found to be noncompliant shall submit another examination report prepared by an independent certified public accountant to the department no later than January 1 of the following year. This subsequent report shall evaluate the records of the TNC for the timeframe since the independent certified public accountant last reviewed the records of the TNC to determine whether the TNC has been compliant with subsection (8), this subsection, or both on a continual basis. The department, within 30 days after receipt of the subsequent report required by this paragraph, shall impose a fine of $20,000 if the subsequent report includes a finding that the TNC has been noncompliant with subsection (8), this subsection, or both. Failure to timely submit any report required under this paragraph shall result in the imposition of an additional fine of $10,000 for noncompliance. Any fine imposed by the department shall be payable within 21 days after receipt of notice from the department. The moneys so received may be deposited by the department for use in defraying the expenses of the department in the discharge of its administrative and regulatory duties under this subsection. The payment of the fine shall be stayed by the filing of a petition for an administrative proceeding pursuant to chapter 120 with the department’s agency clerk. Failure to timely petition will waive any rights to an administrative hearing. The department may, pursuant to the Florida Rules of Civil Procedure, seek injunctive relief against a TNC that fails to comply with the requirements of paragraph (e) and this paragraph. The department may adopt rules to implement paragraph (e) and this paragraph.
(g) Unless otherwise explicitly provided, this subsection does not extinguish any claim otherwise available under common law or any other statute.
(12) PROHIBITED CONDUCT.—
(a) A TNC driver may not accept a ride for compensation other than by a rider arranged through a digital network.
(b) A TNC driver may not solicit or accept street hails.
(c) A TNC may not alter the presentation of information on its digital network to an enforcement official for the purpose of thwarting or interfering with the official’s enforcement or oversight of the TNC.
(13) NONDISCRIMINATION; ACCESSIBILITY.—
(a) A TNC shall adopt a policy of nondiscrimination with respect to riders and potential riders and shall notify TNC drivers of such policy.
(b) A TNC driver shall comply with the TNC’s nondiscrimination policy.
(c) A TNC driver shall comply with all applicable laws regarding nondiscrimination against riders and potential riders.
(d) A TNC driver shall comply with all applicable laws relating to accommodation of service animals.
(e) A TNC may not impose additional charges for providing services to a person who has a physical disability because of the person’s disability.
(f) A TNC that contracts with a governmental entity to provide paratransit services must comply with all applicable state and federal laws related to individuals with disabilities.
(g) A TNC shall reevaluate any decision to remove a TNC driver’s authorization to access its digital network due to a low quality rating by riders if the TNC driver alleges that the low quality rating was because of a characteristic identified in the company’s nondiscrimination policy and there is a plausible basis for such allegation.
(14) RECORDS.—A TNC shall maintain the following records:
(a) Individual ride records for at least 1 year after the date on which each ride is provided; and
(b) Individual records of TNC drivers for at least 1 year after the date on which the TNC driver’s relationship with the TNC ends.
(15) PREEMPTION.—
(a) It is the intent of the Legislature to provide for uniformity of laws governing TNCs, TNC drivers, and TNC vehicles throughout the state. TNCs, TNC drivers, and TNC vehicles are governed exclusively by state law, including in any locality or other jurisdiction that enacted a law or created rules governing TNCs, TNC drivers, or TNC vehicles before July 1, 2017. A county, municipality, special district, airport authority, port authority, or other local governmental entity or subdivision may not:
1. Impose a tax on, or require a license for, a TNC, a TNC driver, or a TNC vehicle if such tax or license relates to providing prearranged rides;
2. Subject a TNC, a TNC driver, or a TNC vehicle to any rate, entry, operation, or other requirement of the county, municipality, special district, airport authority, port authority, or other local governmental entity or subdivision; or
3. Require a TNC or a TNC driver to obtain a business license or any other type of similar authorization to operate within the local governmental entity’s jurisdiction.
(b) This subsection does not prohibit an airport or seaport from charging reasonable pickup fees consistent with any pickup fees charged to taxicab companies at that airport or seaport for their use of the airport’s or seaport’s facilities or prohibit the airport or seaport from designating locations for staging, pickup, and other similar operations at the airport or seaport.
History.—s. 1, ch. 2017-12; s. 86, ch. 2018-110.
PART XII
SURETY INSURANCE CONTRACTS627.751 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 office an undertaking to become surety.
(2) The undertaking shall be in the form prescribed by the commission 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; s. 1199, ch. 2003-261.
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 CONTRACTS627.7711 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 premium.
627.782 Adoption of rates.
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 Property information 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.
627.796 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) “Closing services” means services performed by a licensed title insurer, title insurance agent or agency, or attorney agent in the agent’s or agency’s capacity as such, including, but not limited to, 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.
(b) “Primary title services” means determining insurability in accordance with sound underwriting practices based upon evaluation of a reasonable title search or a search of the records of a Uniform Commercial Code filing office and such other information as may be necessary, 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. Such services do not include closing services or title searches, for which a separate charge or separate charges may be made.
(2) “Premium” means the charge, as specified by rule of the commission, which 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. 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.
(4) “Title search” means the compiling of title information from official or public records.
History.—ss. 575, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 88, 114, ch. 92-318; s. 6, ch. 99-286; s. 1200, ch. 2003-261; s. 2, ch. 2005-153; s. 3, ch. 2007-44; s. 20, ch. 2014-38; s. 6, ch. 2014-132.
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; 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; s. 66, ch. 2002-206.
627.777 Approval of forms.—
(1) 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 office. The office 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.
(2) The office shall approve or disapprove a form filed for approval within 180 days after receipt.
(3) When the office approves any form, it shall determine if the current rate in effect applies or if the coverages require the adoption of a rule pursuant to s. 627.782.
(4) The office may revoke approval of any form after providing 180 days’ notice to the title insurer.
(5) An insurer may not achieve a competitive advantage over any other insurer, agency, or agent as to rates or forms. If a form or rate is approved for an insurer, the office shall expeditiously approve the forms of other insurers who apply for approval if those forms contain identical coverages, rates, and deviations which have been approved under s. 627.783.
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; s. 1201, ch. 2003-261; s. 4, ch. 2012-206.
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 office 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 office 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 office, and shall report the results of the special audit to the office 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; s. 1202, ch. 2003-261.
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 its surplus as to policyholders, unless the excess is simultaneously reinsured in one or more authorized insurers or one or more reinsurers that meet the requirements of s. 624.610.
(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 or reinsurers that meet the requirements of s. 624.610. 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.
(3) Only contractual remedies are available for a breach of a duty which arises solely from the terms of a contract of title insurance or an instrument issued pursuant to s. 627.786(3).
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; s. 11, ch. 2014-112; s. 1, ch. 2016-82.
627.780 Illegal dealings in 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 commission, except as provided in s. 626.9541(1)(h)3.b.
(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; s. 1203, ch. 2003-261; s. 4, ch. 2007-44.
627.782 Adoption of rates.—
(1) Subject to the rating provisions of this code, the commission 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.
(2) In adopting premium rates, the commission 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 commission 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) Each title insurance agency and insurer licensed to do business in this state and each insurer’s direct or retail business in this state shall maintain and submit information, including revenue, loss, and expense data, as the office determines necessary to assist in the analysis of title insurance premium rates, title search costs, and the condition of the title insurance industry in this state. Such information shall be transmitted to the office annually by May 31 of the year after the reporting year. The commission shall adopt rules relating to the collection and analysis of the data from 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; s. 1204, ch. 2003-261; s. 5, ch. 2007-44; s. 5, ch. 2012-206; s. 12, ch. 2014-112.
627.783 Rate deviation.—
(1) A title insurer may petition the office for an order authorizing a specific deviation from the adopted premium. 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 office shall rule on all such petitions simultaneously.
(2) If, in the judgment of the office, the requested deviation is not justified, the office 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; s. 1205, ch. 2003-261; s. 6, ch. 2007-44.
Note.—Section 23, ch. 2008-220, provides that “[t]he Legislature finds that the Uniform Commercial Code insurance product authorized by section 1 of Chapter 2005-153, Laws of Florida, will open new markets in this state and will result in generation of new revenue for the state. Accordingly, title insurers may petition for a rate deviation as provided by s. 627.783, Florida Statutes, for the uniform commercial code insurance product. In determining whether to approve such petition for a rate deviation for the uniform commercial code insurance product, the office shall be guided by standards for national rates for the product currently being offered in other states.”
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 standards of practice for surveying required by the Department of Agriculture and Consumer Services 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; s. 23, ch. 2014-147.
627.7843 Property information reports.—
(1) As used in this section, the term “property information report” means any report that contains the limitations of this section and discloses documents or information appearing in the Official Records as described in s. 28.222, in the records of a county tax collector pertaining to ad valorem real property taxes and special assessments imposed by a governmental authority against real property, in the Secretary of State filing office, or in another governmental filing office pertaining to real or personal property. A property information report may be issued by any person, including a Florida-licensed title insurer, title agent, or title agency.
(2) A property information report may not directly or indirectly set forth or imply any opinion, warranty, guarantee, insurance, or other similar assurance and does not constitute title insurance as defined in s. 624.608.
(3) The contractual liability of the issuer of a property information report is limited to the person or persons expressly identified by name in the property information report as the recipient or recipients of the property information report and may not exceed the amount paid for the property information report. Only contractual remedies are available for an error or omission that arises from a property information report. A property information report must contain the following language:
“This report is not title insurance. Pursuant to s. 627.7843, Florida Statutes, the maximum liability of the issuer of this property information report for errors or omissions in this property information report is limited to the amount paid for this property information report, and is further limited to the person(s) expressly identified by name in the property information report as the recipient(s) of the property information report.”
(4) This section is not applicable to an opinion of title issued by an attorney.
History.—s. 101, ch. 92-318; s. 1206, ch. 2003-261; s. 14, ch. 2017-132.
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 made a determination of insurability based upon the evaluation of a reasonable title search or a search of the records of a Uniform Commercial Code filing office, as applicable, has examined such other information as may be necessary, and has caused to be made a determination of insurability of title or the existence, attachments, perfection, and priority of a Uniform Commercial Code security interest, including endorsement coverages, in accordance with sound underwriting practices.
(2) The title insurer shall cause the evidence of the determination of insurability and the reasonable title search or search of the records of a Uniform Commercial Code filing office to be preserved and retained in its files or in the files of its title insurance agent or agency for at least 7 years after the title insurance commitment or title insurance policy was issued. The title insurer or its agent or agency must produce the evidence required to be maintained under this subsection at its offices upon the demand of the office. Instead of retaining the original evidence, the title insurer or its 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 that 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 premium charged 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 office.
(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; s. 1207, ch. 2003-261; s. 3, ch. 2005-153; s. 7, ch. 2007-44; s. 13, ch. 2014-112.
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 office, 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; s. 1208, ch. 2003-261.
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 office 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; s. 1209, ch. 2003-261.
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 office or commission, 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; s. 1210, ch. 2003-261.
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.
627.796 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 (5) 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; s. 80, ch. 2015-2.
627.798 Rulemaking authority.—The commission 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; s. 1212, ch. 2003-261.
PART XIV
VARIABLE OR INDETERMINATEVALUE 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 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.
1627.805 Regulation of variable and indeterminate value contracts; rules.—The Department of Financial Services and the Office of Insurance Regulation shall regulate the issuance and sale of variable and indeterminate value contracts pursuant to their respective authority as conferred by state law. The Office of Financial Regulation shall regulate the sale of variable and indeterminate value contracts pursuant to its authority under chapter 517. The Department of Financial Services and, when applicable, the Financial Services Commission, may adopt rules pursuant to ss. 120.536(1) and 120.54 to implement 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; s. 1213, ch. 2003-261; s. 11, ch. 2008-237.
1Note.—Section 12, ch. 2008-237, provides in part that “[e]ffective [June 30, 2008], the Department of Financial Services may adopt rules to implement this act.”
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 office 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; s. 1214, ch. 2003-261.
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 COMPANIESAND 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) The following entities are exempt from the provisions of this part:
(a) 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.
(b) Any person who purchases or otherwise acquires premium finance agreements from a licensee if the licensee retains the possession of and the legal obligation to service the agreements and collect payments due under the agreements and remains responsible for the premium finance agreements being administered in compliance with 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; s. 1, ch. 2003-152.
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 office. 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 with the office or other acceptable collateral with the department as approved by the office or department 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 commission. 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 commission.
(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 office to be renewed annually.
3. If the office 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 office 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 commission 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 office 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 office 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; s. 1215, ch. 2003-261.
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 office 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 office 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 office before October 1 of any year, the license sought to be renewed shall be continued in force either until the issuance by the office of the renewal license applied for or until 5 days after the office 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; s. 1216, ch. 2003-261.
627.832 Grounds for refusal, suspension, or revocation of license.—
(1) The office 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 office.
(b) That the licensee has violated any provision of this part or any rule of the commission.
(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 office 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 office may reinstate a suspended license or issue a new license to a licensee whose license has been revoked, if no fact or condition then exists which clearly would have warranted office 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; s. 1217, ch. 2003-261; s. 125, ch. 2004-5.
627.833 Administrative fine and probation in lieu of suspension, revocation, or refusal to renew license.—The office 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; s. 1218, ch. 2003-261.
627.834 Examinations.—
(1) The office 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 office 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; s. 1219, ch. 2003-261.
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 office 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 office giving such information as the office may require. The report shall be made under oath and in the form prescribed by the commission and shall be accompanied by the annual report filing fee specified in s. 627.849. The office may make and publish annually an analysis and recapitulation of such reports. In addition, the office may require such additional regular or special reports as it deems necessary. The commission may by rule require all or part of the statements or filings required under this section to be submitted by electronic means in a computer-readable form compatible with the electronic data format specified by the commission.
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; s. 1220, ch. 2003-261; s. 3, ch. 2006-64.
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 office. Every filing shall be made within 30 days of issuance or use.
(2) Each premium finance company shall file with the office 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.
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; s. 1221, ch. 2003-261; s. 16, ch. 2004-370; s. 161, ch. 2004-390.
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 office, 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; s. 1222, ch. 2003-261.
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 commission 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; s. 1223, ch. 2003-261.
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 a financed insurance contract is canceled, the insurer shall, within 30 days of the cancellation date, 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, within 30 days of the cancellation date, 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 shall, within 15 days after the account has been overpaid, either refund to the insured for the insured’s benefit any refund due on his or her account or, if the refund is sent or credited to the agent, return or credit to the agent the amount of the overpayment and notify the insured of the refunded amount. 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 office. The commission 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 commission shall adopt a standard cancellation notice for use by premium finance companies in canceling insurance policies. The commission 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; s. 1224, ch. 2003-261; s. 17, ch. 2004-370; s. 162, ch. 2004-390.
627.849 Fees.—
(1) The office 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
(2) The fees received under this section shall be credited to the Insurance 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; s. 1225, ch. 2003-261; s. 18, ch. 2004-370; s. 163, ch. 2004-390.
PART XVI
PREMIUM FINANCING627.901 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 $3 per installment. The maximum service charge shall not exceed $36 per year. In lieu of such service charges, an insurance agent or agency, at the sole discretion of such agent or agency, may charge a rate of interest not to exceed 18 percent simple interest per year on:
(a) The unpaid balance; or
(b) The average unpaid balance as billed over the term of the policy and subject to endorsement changes. The interest authorized by this paragraph may be billed in equal installments.
(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; s. 1, ch. 2002-252; s. 3, ch. 2003-267; s. 3, ch. 2003-281.
627.902 Premium financing by an insurer or subsidiary.—
(1) 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 that charges a total service charge per year or rate of interest which is substantially more than that provided in s. 627.901 shall be subject to part XV of this chapter. Notwithstanding any other provision of law, 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 charge one-half of the additional charge provided in s. 627.840, and the charges provided in s. 627.841.
(2) Nothing in this part or in part XV disallows or otherwise applies to a discount for any insured who pays the entire premium for the entire policy term at the inception of the term if the discount is found to be actuarially justified by the office and approved by the office pursuant to the provisions of part I. Such actuarially justified and approved discount shall not be deemed a component of or related to premium financing.
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; s. 2, ch. 2002-252; s. 1, ch. 2009-84.
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 REPORTING627.911 Scope of this part.
627.912 Professional liability claims and actions; reports by insurers and health care providers; annual report by office.
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 and accident 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 and health care providers; annual report by office.—
(1)(a) Each self-insurer authorized under s. 627.357 and each commercial self-insurance fund authorized under s. 624.462, authorized insurer, surplus lines insurer, risk retention group, and 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, or to an ambulatory surgical center as defined in s. 395.002, and each insurer providing professional liability insurance to a member of The Florida Bar shall report to the office as set forth in paragraph (c) any written 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.
(b) For purposes of this section, the term “claim” means the receipt of a notice of intent to initiate litigation, a summons and complaint, or a written demand from a person or his or her legal representative stating an intention to pursue an action for damages against a person described in paragraph (a).
(c) The duty to report specified in paragraph (a) arises upon the occurrence of the first of:
1. The entry of any judgment against any provider identified in paragraph (a) for which all appeals as a matter of right have been exhausted or for which the time period for filing such an appeal has expired;
2. The execution of an agreement between a provider identified in paragraph (a) or an entity required to report under that paragraph and a claimant to settle damages purported to arise from the provision of professional services, which agreement includes the indemnity payment of at least $1; however, if any applicable law requires any such agreement to be approved by the court, the duty arises when the agreement is approved;
3. The final payment of any indemnity money by any of the entities required to report under paragraph (a) on behalf of any provider identified in that paragraph for damages purported to arise from professional services rendered; or
4. The final disposition of a claim for which no indemnity payment was made on behalf of the insured but for which loss adjustment expenses were paid in excess of $5,000. As used in this subparagraph, the term “final disposition” means the insurer has brought down all reserves and closed its file.
(d) After any calendar year in which no claim or action for damages was closed, the entity shall file a no claim submission report. Such report shall be filed with the office no later than April 1 of each calendar year for the immediately preceding calendar year. If a reporting entity submits such a report for a particular calendar year and subsequently discovers that its report was submitted in error, the reporting entity shall promptly notify the office of the error and take steps as directed by the office to make the needed corrections.
(e) If a claim is initially opened and then closed, and is subsequently reopened, the reopened claim shall be treated as a new claim and reported after the occurrence of the first of any event listed in paragraph (c).
(f) Each health care practitioner and health care facility listed in paragraph (a) must report any claim or action for damages as described in paragraph (a), if the claim is not otherwise required to be reported by an insurer or other insuring entity.
(g) Reports under this subsection shall be filed with the office no later than 30 days following the occurrence of the first of any event listed in paragraph (c). An insurer is not required to file a new or amended report on a claim more than 1 year after submitting an initial report.
(2) The reports required by subsection (1) shall contain:
(a) The name, address, health care provider professional license number, 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 office without the injured person’s consent, except for disclosure by the office to the Department of Health. This information may be used by the office 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, names, and health care provider professional license numbers of all defendants involved in the claim.
(i) The date and amount of judgment or settlement, if any, including the itemization of the verdict.
(j) In the case of a settlement, such information as the office 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 commission, by rule, to assist the office in its analysis and evaluation of the nature, causes, location, cost, and damages involved in professional liability cases.
(3) The office shall provide the Department of Health with electronic access to all information received under this section related to persons licensed under chapter 458, chapter 459, chapter 461, or chapter 466. 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.
(4) There shall be no liability on the part of, and no cause of action of any nature shall arise against, any person or entity reporting hereunder or its agents or employees or the office or its employees for any action taken by them under this section. The office may impose a fine of up to $250 per day per case, but not to exceed a total of $10,000 per case, against an insurer, commercial self-insurance fund, medical malpractice self-insurance fund, or risk retention group that violates the requirements of this section, except that the office may impose a fine of $250 per day per case, not to exceed a total of $1,000 per case, against an insurer providing professional liability insurance to a member of The Florida Bar, which insurer violates the provisions of this section. If a health care practitioner or health care facility violates the requirements of this section, it shall be considered a violation of the chapter or act under which the practitioner or facility is licensed and shall be grounds for a fine or disciplinary action as such other violations of the chapter or act. The office may adjust a fine imposed under this subsection by considering the financial condition of the licensee, premium volume written, ratio of violations to compliancy, and other mitigating factors as determined by the office.
(5) Any self-insurance program established under s. 1004.24 shall report to the office 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 state university board of trustees through an employee or agent of the state university board of trustees, 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 state university board of trustees whose performance or professional services is alleged in the claim or action to have caused personal injury.
(6)(a) The office shall prepare statistical summaries of the closed claims reports for medical malpractice filed pursuant to this section, for each year that such reports have been filed, and make such summaries and closed claim reports available on the Internet by July 1, 2005.
(b) The office shall prepare an annual report by October 1 of each year, beginning in 2004, which shall be available on the Internet, which summarizes and analyzes the closed claim reports for medical malpractice filed pursuant to this section and the annual financial reports filed by insurers writing medical malpractice insurance in this state. The report must include an analysis of closed claim reports of prior years, in order to show trends in the frequency and amount of claims payments, the itemization of economic and noneconomic damages, the nature of the errant conduct, and such other information as the office determines is illustrative of the trends in closed claims. The report must also analyze the state of the medical malpractice insurance market in Florida, including an analysis of the financial reports of those insurers with a combined market share of at least 80 percent of the net written premium in the state for medical malpractice for the prior calendar year, including a loss ratio analysis for medical malpractice written in Florida and a profitability analysis of each such insurer. The report shall compare the ratios for medical malpractice in Florida compared to other states, based on financial reports filed with the National Association of Insurance Commissioners and such other information as the office deems relevant.
(c) The annual report shall also include a summary of the rate filings for medical malpractice which have been approved by the office for the prior calendar year, including an analysis of the trend of direct and incurred losses as compared to prior years.
(7) The commission may adopt rules requiring persons and entities required to report pursuant to this section to also report data related to the frequency and severity of open claims for the reporting period, amounts reserved for incurred claims, changes in reserves from the previous reporting period, and other information considered relevant to the ability of the office to monitor losses and claims development in the Florida medical malpractice insurance market.
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; s. 1033, ch. 2002-387; s. 1226, ch. 2003-261; s. 45, ch. 2003-416; s. 15, ch. 2006-305; s. 2, ch. 2009-189.
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 office 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 office 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 office without the consent of the injured person. This information may be used by the office 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 office 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 office to analyze and evaluate the nature, causes, costs, and damages involved in officers’ and directors’ liability cases.
(3) The office 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; s. 1227, ch. 2003-261.
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 office 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 office, an insurer shall, within 60 days, submit to the office 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 office 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 office 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 office 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; s. 1228, ch. 2003-261.
627.913 Reports by products liability insurers.—The office 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 office, an insurer shall, within 60 days, submit to the office 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; s. 1229, ch. 2003-261.
Note.—Former s. 624.433.
627.914 Reports of information by workers’ compensation insurers required.—
(1) The commission shall adopt rules and statistical plans that must thereafter be used by each insurer and self-insurance fund as defined in s. 624.461 in the recording and reporting of loss, expense, and claims experience, in order that the experience of all insurers and self-insurance funds may be made available at least annually in such form and detail as may be necessary to aid the office in determining whether Florida experience for workers’ compensation insurance is sufficient for establishing rates.
(2) Each insurer and self-insurance fund authorized to write a policy of workers’ compensation insurance shall transmit the following information 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 July 1 of each year. All reports shall be filed in accordance with standard reporting procedures for insurers, which procedures have received approval by the office, and shall contain data for the most recent policy period available. A statistical or rating organization may be used by insurers and self-insurance funds to report the data required by this section. The statistical or rating organization shall report each data element in the aggregate only for insurers and self-insurance funds required to report under this section who elect to have the organization report on their behalf. Such insurers and self-insurance funds shall be named in the report.
(3) Individual self-insurers as defined in s. 440.02 shall report only Florida data as prescribed in paragraphs (2)(a)-(e) to the office.
(a) The office shall publish the dates and forms necessary to enable individual self-insurers to comply with this section.
(b) A statistical or rating organization may be used by individual self-insurers for the purposes of reporting the data required by this section and calculating experience ratings.
(4) The office shall provide a summary of information provided pursuant to subsection (2) 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; s. 36, ch. 2001-91; s. 68, ch. 2002-194; s. 1230, ch. 2003-261.
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 office. 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 office. 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 office 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 office 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; s. 1231, ch. 2003-261.
627.917 Uniform risk classification reporting system for motor vehicle insurance.—
(1) The commission 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 commission 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 office 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 commission and shall cover a 1-year period.
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; s. 1232, ch. 2003-261; s. 97, ch. 2013-18.
Note.—Former s. 627.343.
627.9175 Reports of information on health and accident insurance.—
(1) Each health insurer, prepaid limited health services organization, and health maintenance organization shall submit, no later than April 1 of each year, to the office information concerning health and accident insurance coverage and medical plans being marketed and currently in force in this state. The required information shall be described by market segment, to include, but not be limited to:
(a) Issuing, servicing company, and entity contact information.
(b) Information on all health and accident insurance policies and prepaid limited health service organizations and health maintenance organization contracts in force and issued in the previous year. Such information shall include, but not be limited to, direct premiums earned, direct losses incurred, number of policies, number of certificates, number of covered lives, and the average number of days taken to pay claims.
The commission may establish rules governing the submission of information described in this section, including the use of uniform formats and electronic data transmission.
(2)(a) Every insurer transacting health insurance in this state shall report annually to the office, 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 commission 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 office shall analyze the data reported under this subsection and shall annually make available to the department which shall provide 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; s. 1233, ch. 2003-261; s. 27, ch. 2004-297.
627.918 Reporting formats.—
(1) The office shall require that the reporting provided for in this part be made on forms established by the commission or in a format compatible with the office’s electronic data processing equipment.
(2) The reporting forms and formats established by the commission 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; s. 1234, ch. 2003-261.
627.919 Maintenance of insurance data.—The office 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 office and Legislature. The acquisition by the office of data processing software, hardware, and services necessary to carry out the provisions of this section 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; s. 1235, ch. 2003-261.
PART XVIII
LONG-TERM CARE INSURANCE POLICIES627.9401 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.
627.94075 A qualified state Long-Term Care Insurance Partnership Program in Florida.
627.94076 Time limit on certain defenses.
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 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 commission rule is a type of long-term care insurance policy that 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).
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; s. 63, ch. 2001-63; s. 1236, ch. 2003-261; s. 7, ch. 2006-254.
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 health insurance coverage not otherwise defined as long-term care insurance.
(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 commission.
(7) “Limited benefit policy” means any long-term care insurance 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 commission 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; s. 1237, ch. 2003-261; s. 8, ch. 2006-254.
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 office 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 office 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; s. 1238, ch. 2003-261.
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 office pursuant to the procedures specified in s. 627.410.
History.—ss. 1, 2, ch. 88-57; s. 114, ch. 92-318; s. 1239, ch. 2003-261.
627.9407 Disclosure, advertising, and performance standards for long-term care insurance.—
(1) STANDARDS.—The commission 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 commission shall adopt rules establishing standards for the advertising, marketing, and sale of long-term care insurance policies in order to protect applicants from unfair or deceptive sales or enrollment practices. An insurer shall file with the office any long-term care insurance advertising material intended for use in this state and may immediately begin using such material upon filing, subject to subsequent disapproval by the office. Following receipt of a notice of disapproval or a withdrawal of approval, the insurer must immediately cease use of the disapproved material. The office may also 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 this part, part IX of chapter 626, or any rule of the commission.
(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 office may authorize nonrenewal for an insurer on a statewide basis on terms and conditions determined to be necessary by the office 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 or any affiliated 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 commission 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) 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 office 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 commission 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) 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.
(b) Any long-term care insurance policy or certificate issued or renewed, at the option of the policyholder or certificateholder, shall make available to the insured the contingent benefit upon lapse as provided in the Long-Term Care Insurance Model Regulation adopted by the National Association of Insurance Commissioners in the second quarter of the year 2000.
(c) Any premium increase for existing insureds shall not result in a premium charged to the insureds that would exceed the premium charged on a newly issued insurance policy, except to reflect benefit differences. If the insurer is not currently issuing new coverage, the new business rate shall be as published by the office at the rate representing the new business rate of insurers representing 80 percent of the carriers currently issuing policies with similar coverage as determined by the prior calendar year earned premium.
(d) Compliance with the pooling provisions of s. 627.410(6)(e)3. shall be determined by pooling the experience of all affiliated insurers.
(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; s. 64, ch. 2001-63; s. 1240, ch. 2003-261; s. 9, ch. 2006-254; s. 2, ch. 2013-174.
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 office if all or part of a premium is not paid. A nonforfeiture protection provision may be offered in the form of a return of premium upon the death of the insured or upon the complete surrender or cancellation of the policy or contract. Nonforfeiture benefits and any additional premium for such benefits must be computed in an actuarially sound manner, using a methodology that is filed with and approved by the office.
(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 s. 627.9407(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; s. 65, ch. 2001-63; s. 1241, ch. 2003-261; s. 1, ch. 2015-21.
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 annually, 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 form must also inform the policyholder to update any change made to the address of the secondary addressee. 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 of possible lapse in coverage due to nonpayment of premium shall be given by United States Postal Service proof of mailing or certified or registered mail to the policyholder and secondary designee at the address shown in the policy or the last known address provided to the insurer. 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 is 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 policyholder’s cognitive impairment, loss of functional capacity, or continuous confinement in a hospital, skilled nursing facility, or assisted living facility for a period in excess of 60 days. 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; s. 20, ch. 2008-220.
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 commission, 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; s. 1242, ch. 2003-261.
627.94075 A qualified state Long-Term Care Insurance Partnership Program in Florida.—The commission may adopt rules pursuant to ss. 120.536(1) and 120.54 to implement applicable provisions of a qualified state Long-Term Care Insurance Partnership Program in Florida in accordance with the requirements of s. 1917(b) of the Social Security Act, as amended, any applicable federal guidelines, and any rules necessary to ensure program compliance by insurers as provided in s. 409.9102.
History.—s. 2, ch. 2006-254.
627.94076 Time limit on certain defenses.—Notwithstanding the provisions of s. 627.607, each long-term care insurance 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 after its date of issue except for nonpayment of premiums.
History.—s. 6, ch. 2006-254.
627.9408 Rules.—
(1) The commission may adopt rules pursuant to ss. 120.536(1) and 120.54 to administer this part.
(2) The commission may adopt by rule the provisions of the Long-Term Care Insurance Model Regulation adopted by the National Association of Insurance Commissioners in the second quarter of the year 2000 which are not in conflict with the Florida Insurance Code.
History.—ss. 1, 2, ch. 88-57; s. 114, ch. 92-318; s. 205, ch. 98-200; s. 32, ch. 2002-223; s. 8, ch. 2002-282; s. 1243, ch. 2003-261.
PART XIX
PURCHASING GROUPS ANDRISK 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 are requested by the office.
(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; s. 1244, ch. 2003-261.
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 office 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 office.
(3) A proposed risk retention group shall provide to the office 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 office 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; s. 1245, ch. 2003-261.
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 CHIEF FINANCIAL OFFICER AS AGENT.—Before offering insurance in this state, a risk retention group shall submit to the office:
(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 office 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 Chief Financial Officer 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 office:
(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 commission 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 office, 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 part IX of chapter 626. If the office 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 office 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 office. 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 office 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; s. 66, ch. 2001-63; s. 1246, ch. 2003-261.
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 office 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 office 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 Chief Financial Officer 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; s. 1247, ch. 2003-261.
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 office 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 office’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 office may rely on the procedural law and regulations of the state. The injunctive authority of the office 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; s. 1248, ch. 2003-261.
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 office 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 office 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 office 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; s. 1249, ch. 2003-261.
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 under this subsection, in order to place business through Florida eligible surplus lines carriers, must, if a resident of this state, be licensed and appointed as a surplus lines agent. If not a resident of this state, such person must be licensed and appointed as a surplus lines agent in her or his state of residence and be licensed and appointed as a nonresident surplus lines agent in this state.
(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 office 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; s. 1250, ch. 2003-261; s. 52, ch. 2012-209; s. 32, ch. 2014-123.
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 commission 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; s. 1251, ch. 2003-261.
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 INSURANCE627.971 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 office 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;
13. Guarantees of higher education loans, unless written by a financial guaranty insurance corporation; or
14. Any other form of insurance covering risks which the office 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 office, for the benefit of the corporation; or held in trust, pursuant to the bond indenture, by a trustee acceptable to the office, 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 or mutual 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 office;
(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 office; 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 office; 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; s. 1252, ch. 2003-261; s. 1, ch. 2013-125; s. 6, ch. 2015-42.
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 or mutual property and casualty insurers except that:
(a) A corporation organized to transact financial guaranty insurance may, subject to 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 if the provisions of chapter 635 are met.
(b)1. Prior to the issuance of a license, a corporation must submit to the office 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 office.
2. An insurer that 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 this paragraph.
(c) An insurer transacting financial guaranty insurance is subject to all provisions of this code which 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 office 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 office 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 office prescribes or approves.
History.—ss. 1, 6, ch. 88-87; s. 114, ch. 92-318; s. 1253, ch. 2003-261; s. 2, ch. 2013-125.
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 office 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 office pursuant to limitations and restrictions promulgated by rule that the commission 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 office 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 office 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 office, 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 office 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; s. 1254, ch. 2003-261.
627.974 Filing of policy forms and rates.—
(1) Policy forms and any amendments thereto must be filed with the office 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 commission may prescribe additional minimum policy provisions which are determined by the commission 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 office for information prior to their use by the insurer.
(4) All such filings must be available for public inspection at the office.
(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; s. 1255, ch. 2003-261.
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 CONSOLIDATIONS627.981 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 commission 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; s. 1256, ch. 2003-261.
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 office.
History.—ss. 1, 2, ch. 90-149; s. 114, ch. 92-318; s. 1257, ch. 2003-261.