CODING: Words stricken are deletions; words underlined are additions.House Bill 1943
Florida House of Representatives - 1997 HB 1943
By Representatives Mackenzie and Bainter
1 A bill to be entitled
2 An act relating to insurance; requiring certain
3 insurers to file reports concerning their risk
4 based capital; requiring the Department of
5 Insurance to request such reports under certain
6 circumstances; providing for hearings;
7 providing definitions and reporting
8 requirements; requiring certain insurers to
9 file reports of material transactions
10 concerning their assets or their ceded
11 reinsurance agreements; providing definitions
12 and reporting requirements; prescribing
13 authority of the Department of Insurance with
14 respect to such reports; amending s. 624.3161,
15 F.S.; deleting a limitation on frequency of
16 certain market conduct examinations; amending
17 s. 624.424, F.S.; increasing the time
18 limitation on insurers using certain accounting
19 services for certain purposes; amending ss.
20 625.121 and 627.476, F.S.; authorizing
21 insurance companies to use alternative
22 mortality tables for certain purposes; amending
23 ss. 627.4555 and 627.5045, F.S.; revising
24 provisions requiring notice to policyowners and
25 secondary addressees of impending lapse of
26 certain insurance policies under certain
27 circumstances; providing procedures; providing
28 application; amending s. 628.801, F.S.;
29 updating a reference for certain purposes;
30 providing effective dates.
31
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1 Be It Enacted by the Legislature of the State of Florida:
2
3 Section 1. Risk based capital requirements for
4 insurers.--
5 (1) As used in this section, the term:
6 (a) "Adjusted risk based capital report" means a risk
7 based capital report that has been adjusted by the department
8 in accordance with this section.
9 (b) "Authorized control level risk based capital"
10 means the number determined under the risk based capital
11 formula in the risk based capital instructions.
12 (c) "Company action level risk based capital" means
13 the product of 2.0 and an insurer's authorized control level
14 risk based capital.
15 (d) "Corrective order" means an order issued by the
16 department specifying corrective actions that the department
17 has determined are required.
18 (e) "Department" means the Department of Insurance.
19 (f) "Domestic insurer" means any insurer domiciled in
20 this state.
21 (g) "Foreign insurer" means any insurer that is
22 authorized or eligible to do business in this state but that
23 is not domiciled in this state.
24 (h) "Life and health insurer" means any insurer
25 authorized or eligible under the Florida Insurance Code to
26 underwrite life or health insurance. The term includes a
27 property and casualty insurer that writes accident and health
28 insurance only.
29 (i) "Mandatory control level risk based capital" means
30 the product of 0.70 and the authorized control level risk
31 based capital.
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1 (j) "Negative trend" means, with respect to a life and
2 health insurer, a negative trend over a period of time, as
3 determined in accordance with the trend test calculation
4 included in the risk based capital instructions.
5 (k) "Property and casualty insurer" means any insurer
6 licensed under the Florida Insurance Code, but does not
7 include a single-line mortgage guaranty insurer, financial
8 guaranty insurer, or title insurer or a life and health
9 insurer.
10 (l) "Regulatory action level risk based capital" means
11 the product of 1.5 and an insurer's authorized control level
12 risk based capital.
13 (m) "Revised risk based capital plan" means the
14 revision of the risk based capital plan which is prepared by
15 an insurer after the department rejects the original plan.
16 (n) "Risk based capital instructions" means the
17 instructions for preparing a risk based capital report as
18 adopted by the National Association of Insurance
19 Commissioners.
20 (o) "Risk based capital level" means an insurer's
21 company action level risk based capital, regulatory action
22 level risk based capital, authorized control level risk based
23 capital, or mandatory control level risk based capital.
24 (p) "Risk based capital plan" means a comprehensive
25 financial plan specified in paragraph (4)(b).
26 (q) "Risk based capital report" means the report
27 required in subsection (2).
28 (r) "Total adjusted capital" means the sum of:
29 1. An insurer's statutory capital and surplus; and
30 2. Any other item required by the risk based capital
31 instructions.
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1 (2)(a) Each domestic insurer that is subject to this
2 section shall, on or before March 1 of each year, prepare and
3 file with the National Association of Insurance Commissioners
4 a report of its risk based capital levels as of the end of the
5 calendar year just ended, in a form and containing the
6 information required in the risk based capital instructions.
7 In addition, each domestic insurer shall file a printed copy
8 of its risk based capital report:
9 1. With the department on or before March 1 of each
10 year.
11 2. With the insurance department in any other state in
12 which the insurer is authorized to do business, if that
13 department has notified the insurer of its request in writing,
14 in which case the insurer shall file its risk based capital
15 report not later than the later of:
16 a. Fifteen days after the receipt of notice to file
17 its risk based capital report with that state; or
18 b. March 1.
19 (b) The comparison of an insurer's total adjusted
20 capital to any of its risk-based capital levels is a
21 regulatory tool which may indicate the need for possible
22 corrective action with respect to the insurer and, except as
23 otherwise required under this section, the making, publishing,
24 disseminating, circulating, or placing before the public, or
25 causing, directly or indirectly, to be made, published,
26 disseminated, circulated, or placed before the public in a
27 newspaper, magazine, or other publication, or in the form of a
28 notice, circular, pamphlet, letter, or poster or over any
29 radio or television station, or in any other way, an
30 advertisement, announcement, or statement containing an
31 assertion, representation, or statement with regard to the
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1 risk-based capital levels of any insurer, or of any component
2 derived in the calculation, by any insurer, agent, broker, or
3 other person engaged in any manner in the insurance business,
4 would be misleading and is therefore prohibited, provided, if
5 any materially false statement with respect to the comparison
6 regarding an insurer's total adjusted capital to its
7 risk-based capital levels or an inappropriate comparison of
8 any other amount to the insurer's risk-based capital levels is
9 published in any written publication and the insurer is able
10 to demonstrate to the commissioner with substantial proof the
11 falsity or inappropriateness of such statement, the insurer
12 may publish an announcement in a written publication if the
13 sole purpose of the announcement is to rebut the materially
14 false or inappropriate statement.
15 (c) The department shall use the risk based capital
16 instructions, risk based capital reports, adjusted risk based
17 capital reports, risk based capital plans, and revised risk
18 based capital plans solely for monitoring the solvency of
19 insurers and assessing the need for corrective action with
20 respect to insurers. The department may not use that
21 information for ratemaking, as evidence in any rate
22 proceeding, or for calculating or deriving any elements of an
23 appropriate premium level or rate of return for any line of
24 insurance which an insurer or an affiliate of such insurer is
25 authorized to write.
26 (d) A life and health insurer's risk based capital is
27 determined in accordance with the formula set forth in the
28 risk based capital instructions. The formula takes into
29 account and may adjust for the covariance between:
30 1. The risk with respect to the insurer's assets;
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1 2. The risk of adverse insurance experience with
2 respect to the insurer's liabilities and obligations;
3 3. The interest rate risk with respect to the
4 insurer's business; and
5 4. Any other business or other relevant risk set out
6 in the risk based capital instructions,
7
8 determined in each case by applying the factors in the manner
9 set forth in the risk based capital instructions.
10 (e) A property and casualty insurer's risk based
11 capital is determined in accordance with the formula set forth
12 in the risk based capital instructions. The formula takes
13 into account and may adjust for the covariance between:
14 1. The asset risk;
15 2. The credit risk;
16 3. The underwriting risk; and
17 4. Any other business or other relevant risk set out
18 in the risk based capital instructions,
19
20 determined in each case by applying the factors in the manner
21 set forth in the risk based capital instructions.
22 (f) The Legislature finds that an excess of capital
23 over the amount produced by the risk based capital
24 requirements and the formulas, schedules, and instructions
25 specified in this section is a desirable goal with respect to
26 the business of insurance. Accordingly, insurers should seek
27 to maintain capital above the risk based capital levels
28 required by this section. Additional capital is used and
29 useful in the insurance business and helps to secure an
30 insurer against various risks inherent in, or affecting, the
31 business of insurance and not accounted for or only partially
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1 measured by the risk based capital requirements contained in
2 this section.
3 (g) If a domestic insurer files a risk based capital
4 report that the department finds is inaccurate, the department
5 shall adjust the risk based capital report to correct the
6 inaccuracy and shall notify the insurer of the adjustment.
7 The notice must state the reason for the adjustment. A risk
8 based capital report that is so adjusted is referred to as the
9 adjusted risk based capital report. The adjusted risk based
10 capital report must also be filed by the insurer with the
11 National Association of Insurance Commissioners.
12 (3)(a) A company action level event includes:
13 1. The filing of a risk based capital report by an
14 insurer which indicates that:
15 a. The insurer's total adjusted capital is greater
16 than or equal to its regulatory action level risk based
17 capital but less than its company action level risk based
18 capital; or
19 b. If a life and health insurer, the insurer has total
20 adjusted capital that is greater than or equal to its company
21 action level risk based capital, but is less than the product
22 of its authorized control level risk based capital and 2.5,
23 and has a negative trend;
24 2. The notification by the department to the insurer
25 of an adjusted risk based capital report that indicates an
26 event in subparagraph 1., unless the insurer challenges the
27 adjusted risk based capital report under subsection (7); or
28 3. If, under subsection (7), an insurer challenges an
29 adjusted risk based capital report that indicates an event in
30 subparagraph 1., the notification by the department to the
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1 insurer that the department has, after a hearing, rejected the
2 insurer's challenge.
3 (b) If a company action level event occurs, the
4 insurer shall prepare and submit to the department a risk
5 based capital plan, which must:
6 1. Identify the conditions that contribute to the
7 company action level event;
8 2. Contain proposals of corrective actions that the
9 insurer intends to take and that are reasonably expected to
10 result in the elimination of the company action level event;
11 3. Provide projections of the insurer's financial
12 results in the current year and at least the 4 succeeding
13 years, both in the absence of proposed corrective actions and
14 giving effect to the proposed corrective actions, including
15 projections of statutory operating income, net income,
16 capital, and surplus. The projections for both new and
17 renewal business may include separate projections for each
18 major line of business and, if separate projections are
19 provided, must separately identify each significant income,
20 expense, and benefit component;
21 4. Identify the key assumptions affecting the
22 insurer's projections and the sensitivity of the projections
23 to the assumptions; and
24 5. Identify the quality of, and problems associated
25 with, the insurer's business, including, but not limited to,
26 its assets, anticipated business growth and associated surplus
27 strain, extraordinary exposure to risk, mix of business, and
28 any use of reinsurance.
29 (c) The risk based capital plan must be submitted:
30 1. Within 45 days after the company action level
31 event; or
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1 2. If the insurer challenges an adjusted risk based
2 capital report under subsection (7), within 45 days after
3 notification to the insurer that the department has, after a
4 hearing, rejected the insurer's challenge.
5 (d) Within 60 days after the submission by an insurer
6 of a risk based capital plan to the department, the department
7 shall notify the insurer whether the risk based capital plan
8 must be implemented or is, in the judgment of the department,
9 unsatisfactory. If the department determines that the risk
10 based capital plan is unsatisfactory, the notification to the
11 insurer must set forth the reasons for the determination and
12 may set forth proposed revisions. Upon notification from the
13 department, the insurer shall prepare a revised risk based
14 capital plan, which may incorporate by reference any revisions
15 proposed by the department, and shall submit the revised risk
16 based capital plan to the department:
17 1. Within 45 days after the notification from the
18 department; or
19 2. If the insurer challenges the notification from the
20 department under subsection (7), within 45 days after a
21 notification to the insurer that the department has, after a
22 hearing, rejected the insurer's challenge.
23 (e) If the department notifies an insurer that the
24 insurer's risk based capital plan or revised risk based
25 capital plan is unsatisfactory, the department may, at its
26 discretion and subject to the insurer's right to a hearing
27 under subsection (7), specify in the notification that the
28 notification is a regulatory action level event.
29 (f) Each domestic insurer that files a risk based
30 capital plan or a revised risk based capital plan with the
31 department shall file a copy of the risk based capital plan or
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1 the revised risk based capital plan with the insurance
2 department in any other state in which the insurer is
3 authorized to do business if:
4 1. That state has a risk based capital law that is
5 substantially similar to paragraph (8)(a); and
6 2. The insurance department of that state has notified
7 the insurer of its request for the filing in writing, in which
8 case the insurer shall file a copy of the risk based capital
9 plan or the revised risk based capital plan in that state no
10 later than the later of:
11 a. Fifteen days after the receipt of notice to file a
12 copy of its risk based capital plan or revised risk based
13 capital plan with the state; or
14 b. The date on which the risk based capital plan or
15 the revised risk based capital plan is filed under paragraph
16 (c) or paragraph (d).
17 (4)(a) A regulatory action level event includes:
18 1. The filing of a risk based capital report by the
19 insurer which indicates that the insurer's total adjusted
20 capital is greater than or equal to its authorized control
21 level risk based capital but is less than its regulatory
22 action level risk based capital;
23 2. The notification by the department to the insurer
24 of an adjusted risk based capital report that indicates the
25 event described in subparagraph 1., unless the insurer
26 challenges the adjusted risk based capital report under
27 subsection (7);
28 3. If, under subsection (7), the insurer challenges an
29 adjusted risk based capital report that indicates the event
30 described in subparagraph 1., the notification by the
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1 department to the insurer that the department has, after a
2 hearing, rejected the insurer's challenge;
3 4. The failure of the insurer to file a risk based
4 capital report by the filing date, unless the insurer provides
5 an explanation for such failure which is satisfactory to the
6 department and cures the failure within 10 days after the
7 filing date;
8 5. The failure of the insurer to submit a risk based
9 capital plan to the department within the time period set
10 forth in paragraph (3)(c);
11 6. Notification by the department to the insurer that:
12 a. The risk based capital plan or the revised risk
13 based capital plan submitted by the insurer is, in the
14 judgment of the department, unsatisfactory; and
15 b. This notification constitutes a regulatory action
16 level event with respect to the insurer, unless the insurer
17 challenges the determination under subsection (7);
18 7. If, under subsection (7), the insurer challenges a
19 determination by the department under subparagraph 6., the
20 notification by the department to the insurer that the
21 department has, after a hearing, rejected the challenge;
22 8. Notification by the department to the insurer that
23 the insurer has failed to adhere to its risk based capital
24 plan or revised risk based capital plan, but only if this
25 failure has a substantial adverse effect on the ability of the
26 insurer to eliminate the company action level event in
27 accordance with its risk based capital plan or revised risk
28 based capital plan and the department has so stated in the
29 notification, unless the insurer challenges the determination
30 under subsection (7); or
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1 9. If, under subsection (7), the insurer challenges a
2 determination by the department under subparagraph 8., the
3 notification by the department to the insurer that the
4 department has, after a hearing, rejected the challenge.
5 (b) If a regulatory action level event occurs, the
6 department shall:
7 1. Require the insurer to prepare and submit a risk
8 based capital plan or, if applicable, a revised risk based
9 capital plan;
10 2. Perform an examination pursuant to section 624.316,
11 Florida Statutes, or an analysis as the department considers
12 necessary of the assets, liabilities, and operations of the
13 insurer, including a review of the risk based capital plan or
14 the revised risk based capital plan; and
15 3. After the examination or analysis, issue a
16 corrective order specifying such corrective actions as the
17 department determines are required.
18 (c) In determining corrective actions, the department
19 shall consider any factor relevant to the insurer based upon
20 the department's examination or analysis of the assets,
21 liabilities, and operations of the insurer, including, but not
22 limited to, the results of any sensitivity tests undertaken as
23 provided in the risk based capital instructions. The risk
24 based capital plan or the revised risk based capital plan must
25 be submitted:
26 1. Within 45 days after the occurrence of the
27 regulatory action level event;
28 2. If the insurer challenges an adjusted risk based
29 capital report under subsection (7), within 45 days after the
30 notification to the insurer that the department has, after a
31 hearing, rejected the insurer's challenge; or
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1 3. If the insurer challenges a revised risk based
2 capital plan under subsection (7), within 45 days after the
3 notification to the insurer that the department has, after a
4 hearing, rejected the insurer's challenge.
5 (d) The department may retain actuaries, investment
6 experts, and other consultants to review an insurer's risk
7 based capital plan or revised risk based capital plan, examine
8 or analyze the assets, liabilities, and operations of an
9 insurer, and formulate the corrective order with respect to
10 the insurer. The fees, costs, and expenses relating to
11 consultants must be borne by the affected insurer or by any
12 other party as directed by the department.
13 (5)(a) An authorized control level event includes:
14 1. The filing of a risk based capital report by the
15 insurer which indicates that the insurer's total adjusted
16 capital is greater than or equal to its mandatory control
17 level risk based capital but is less than its authorized
18 control level risk based capital;
19 2. The notification by the department to the insurer
20 of an adjusted risk based capital report that indicates the
21 event in subparagraph 1., unless the insurer challenges the
22 adjusted risk based capital report under subsection (7);
23 3. If, under subsection (7), the insurer challenges an
24 adjusted risk based capital report that indicates the event in
25 subparagraph 1., notification by the department to the insurer
26 that the department has, after a hearing, rejected the
27 insurer's challenge;
28 4. The failure of the insurer to respond, in a manner
29 satisfactory to the department, to a corrective order, unless
30 the insurer challenges the corrective order under subsection
31 (7); or
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1 5. If the insurer challenges a corrective order under
2 subsection (7) and the department has, after a hearing,
3 rejected the challenge or modified the corrective order, the
4 failure of the insurer to respond, in a manner satisfactory to
5 the department, to the corrective order after rejection or
6 modification by the department.
7 (b) If an authorized control level event occurs, the
8 department shall:
9 1. Take any action required under subsection (4)
10 regarding the insurer with respect to which a regulatory
11 action level event has occurred; or
12 2. If the department considers it to be in the best
13 interests of the policyholders and creditors of the insurer
14 and of the public, take any action as necessary to cause the
15 insurer to be placed under regulatory control under chapter
16 631, Florida Statutes. An authorized control level event is
17 sufficient ground for the department to be appointed as
18 receiver as provided in chapter 631, Florida Statutes.
19 (6)(a) A mandatory control level event includes:
20 1. The filing of a risk based capital report that
21 indicates that the insurer's total adjusted capital is less
22 than its mandatory control level risk based capital;
23 2. Notification by the department to the insurer of an
24 adjusted risk based capital report that indicates the event in
25 subparagraph 1., unless the insurer challenges the adjusted
26 risk based capital report under subsection (7); or
27 3. If, under subsection (7), the insurer challenges an
28 adjusted risk based capital report that indicates the event in
29 subparagraph 1., notification by the department to the insurer
30 that the department has, after a hearing, rejected the
31 insurer's challenge.
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1 (b) If a mandatory control level event occurs:
2 1. With respect to a life and health insurer, the
3 department shall, after due consideration of s. 624.408,
4 Florida Statutes, take any action necessary to place the
5 insurer under regulatory control, including any remedy
6 available under chapter 631, Florida Statutes. A mandatory
7 control level event is sufficient ground for the department to
8 be appointed as receiver as provided in chapter 631, Florida
9 Statutes. The department may forego taking action for up to
10 90 days after the mandatory control level event if the
11 department finds there is a reasonable expectation that the
12 mandatory control level event may be eliminated within the
13 90-day period.
14 2. With respect to a property and casualty insurer,
15 the department shall, after due consideration of s. 624.408,
16 Florida Statutes, take any action necessary to place the
17 insurer under regulatory control, including any remedy
18 available under chapter 631, Florida Statutes, or, in the case
19 of an insurer that is not writing new business, may allow the
20 insurer to continue to operate under the supervision of the
21 department. In either case, the mandatory control level event
22 is sufficient ground for the department to be appointed as
23 receiver as provided in chapter 631, Florida Statutes. The
24 department may forego taking action for up to 90 days after
25 the mandatory control level event if the department finds
26 there is a reasonable expectation that the mandatory control
27 level event will be eliminated within the 90-day period.
28 (7)(a) An insurer has a right to a hearing before the
29 department upon:
30 1. Notification to an insurer by the department of an
31 adjusted risk based capital report;
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1 2. Notification to an insurer by the department that
2 the insurer's risk based capital plan or revised risk based
3 capital plan is unsatisfactory, and that the notification
4 constitutes a regulatory action level event with respect to
5 such insurer;
6 3. Notification to any insurer by the department that
7 the insurer has failed to adhere to its risk based capital
8 plan or revised risk based capital plan and that the failure
9 has a substantial adverse effect on the ability of the insurer
10 to eliminate the company action level event in accordance with
11 its risk based capital plan or its revised risk based capital
12 plan; or
13 4. Notification to an insurer by the department of a
14 corrective order with respect to the insurer.
15 (b) At such hearing the insurer may challenge any
16 determination or action by the department. The insurer shall
17 notify the department of its request for a hearing within 5
18 days after receipt of the notification by the department under
19 this subsection. Upon receipt of the request for a hearing,
20 the department shall set a date for the hearing, which date
21 must be no less than 10 nor more than 30 days after the date
22 the department receives the insurer's request. The hearing
23 must be conducted as provided in section 624.324, Florida
24 Statutes, with the right to appellate review under section
25 120.68, Florida Statutes.
26 (8)(a) Any foreign insurer shall, upon the written
27 request of the department, submit to the department a risk
28 based capital report, as of the end of the calendar year just
29 ended, no later than the later of:
30 1. The date a risk based capital report is required to
31 be filed by a domestic insurer under this section; or
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1 2. Fifteen days after the request is received by the
2 foreign insurer.
3 (b) Any foreign insurer shall, upon the written
4 request of the department, promptly submit to the department a
5 copy of any risk based capital plan that is filed with the
6 insurance department of another state.
7 (c) The department may require a foreign insurer to
8 file a risk based capital plan if:
9 1. A company action level event, regulatory action
10 level event, or authorized control level event occurs with
11 respect to any foreign insurer as determined under the risk
12 based capital law of the state of domicile of the insurer, or,
13 if there is no risk based capital law in that state, under
14 this section.
15 2. The insurance department of the state of domicile
16 of the foreign insurer fails to require the foreign insurer to
17 file a risk based capital plan in the manner specified under
18 the risk based capital law of that state, or, if there is no
19 risk based capital law in that state, under subsection (3).
20
21 The failure of the foreign insurer to file a risk based
22 capital plan with the department when required under this
23 paragraph is a ground for the department to take any action
24 under section 624.418, Florida Statutes, which it determines
25 is necessary.
26 (d) If a mandatory control level event occurs with
27 respect to any foreign insurer and a domiciliary receiver has
28 not been appointed with respect to the foreign insurer under
29 the rehabilitation and liquidation law of the state of
30 domicile of the foreign insurer, the department may apply to
31 the Circuit Court of Leon County and such event constitutes
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1 grounds for the department to be appointed as receiver as
2 provided in chapter 631, Florida Statutes, with respect to the
3 liquidation of property of foreign insurers found in this
4 state. The occurrence of a mandatory control level event is a
5 ground for such application.
6 (9) There shall be no liability on the part of, and no
7 cause of action shall arise against, the commissioner, the
8 department, or its employees or agents for any action taken by
9 them in the performance of their powers and duties under this
10 section.
11 (10) The department shall transmit any notice that may
12 result in regulatory action by registered mail, certified
13 mail, or any other method of transmission. Notice is
14 effective when the insurer receives it.
15 (11) For the purposes of the risk based capital
16 reports required to be filed by life and health insurers with
17 respect to their 1997 annual statement data and the risk based
18 capital reports required to be filed by property and casualty
19 insurers with respect to their 1997 annual statement data, the
20 following requirements apply in lieu of the provisions of
21 subsections (3), (4), (5), and (6):
22 (a) If a company action level event occurs with
23 respect to a domestic insurer, the department may not take any
24 regulatory action.
25 (b) If a regulatory action level event occurs under
26 subparagraph 1., subparagraph 2., or subparagraph 3. of
27 paragraph (4)(a), the department shall take the actions
28 required under subsection (3).
29 (c) If a regulatory action level event occurs under
30 subparagraph 4., subparagraph 5., subparagraph 6.,
31 subparagraph 7., subparagraph 8., or subparagraph 9. of
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1 paragraph (4)(a), or an authorized control level event occurs,
2 the department shall take the actions required under
3 subsection (4).
4 (d) If a mandatory control level event occurs with
5 respect to an insurer, the department shall take the actions
6 required under subsection (5).
7 (12) This section is supplemental to the other laws of
8 this state and does not preclude or limit any power or duty of
9 the department under those laws or under the rules adopted
10 under those laws.
11 (13) This section does not apply to a domestic
12 property and casualty insurer that meets all of the following
13 conditions:
14 (a) Writes direct business only in this state;
15 (b) Writes direct annual premiums of $2 million or
16 less; and
17 (c) Assumes no reinsurance in excess of 5 percent of
18 direct premium written.
19 (14) The department may adopt rules to administer this
20 section, including, but not limited to, those regarding risk
21 based capital reports, adjusted risk based capital reports,
22 risk based capital plans, corrective orders and procedures to
23 be followed in the event of a triggering of a company action
24 level event, a regulatory action level event, an authorized
25 control level event, or a mandatory control level event.
26 Section 2. Assets of insurers; reporting
27 requirements.--
28 (1) As used in this section, the term:
29 (a) "Material acquisition of assets" or "material
30 disposition of assets" means one or more transactions
31 occurring during any 30-day period which are nonrecurring and
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1 not in the ordinary course of business and involve more than 5
2 percent of the reporting insurer's total admitted assets as
3 reported in its more recent statutory statement filed with the
4 insurance department of the insurer's state of domicile.
5 (b) "Material nonrenewal, cancellation, or revision of
6 a ceded reinsurance agreement" is one that affects:
7 1. With respect to property and casualty business,
8 including accident and health business written by a property
9 and casualty insurer:
10 a. More than 50 percent of the insurer's total ceded
11 written premium; or
12 b. More than 50 percent of the insurer's total ceded
13 indemnity and loss-adjustment reserves.
14 2. With respect to life, annuity, and accident and
15 health business, more than 50 percent of the total reserve
16 credit taken for business ceded, on an annualized basis, as
17 indicated in the insurer's most recent annual statement.
18 3. With respect to property and casualty business or
19 life, annuity, and accident and health business, a material
20 revision includes:
21 a. The replacement of an authorized reinsurer
22 representing more than 10 percent of a total cession by one or
23 more unauthorized reinsurers; or
24 b. The reduction or waiver, with respect to one or
25 more unauthorized insurers, of previously established
26 collateral requirements representing more than 10 percent of a
27 total cession.
28 (2) Each domestic insurer shall file a report with the
29 Department of Insurance disclosing a material acquisition of
30 assets, a material disposition of assets, or a material
31 nonrenewal, cancellation, or revision of a ceded reinsurance
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1 agreement, unless the material acquisition or disposition of
2 assets or the material nonrenewal, cancellation, or revision
3 of a ceded reinsurance agreement has been submitted to the
4 department for review, approval, or informational purposes
5 under another section of the Florida Insurance Code or a rule
6 adopted thereunder. A copy of the report and each exhibit or
7 other attachment must be filed by the insurer with the
8 National Association of Insurance Commissioners. The report
9 required in this section is due within 15 days after the end
10 of the calendar month in which the transaction occurs.
11 (3) An immaterial acquisition or disposition of assets
12 need not be reported under this section.
13 (4)(a) Acquisitions of assets which are subject to
14 this section include each purchase, lease, exchange, merger,
15 consolidation, succession, or other acquisition of assets.
16 Asset acquisitions for the construction or development of real
17 property by or for the reporting insurer and the acquisition
18 of construction materials for this purpose are not subject to
19 this section.
20 (b) Dispositions of assets which are subject to this
21 section include each sale, lease, exchange, merger,
22 consolidation, mortgage, hypothecation, assignment for the
23 benefit of a creditor or otherwise, abandonment, destruction,
24 or other disposition of assets.
25 (5)(a) The following information must be disclosed in
26 any report of a material acquisition or disposition of assets:
27 1. The date of the transaction;
28 2. The manner of acquisition or disposition;
29 3. The description of the assets involved;
30 4. The nature and amount of the consideration given or
31 received;
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1 5. The purpose of, or reason for, the transaction;
2 6. The manner by which the amount of consideration was
3 determined;
4 7. The gain or loss recognized or realized as a result
5 of the transaction; and
6 8. The name of the person from whom the assets were
7 acquired or to whom they were disposed.
8 (b) Insurers must report material acquisitions or
9 dispositions on a nonconsolidated basis unless the insurer is
10 part of a consolidated group of insurers which uses a pooling
11 arrangement or a 100-percent reinsurance agreement that
12 affects the solvency and integrity of the insurer's reserves
13 and the insurer has ceded substantially all of its direct and
14 assumed business to the pool. An insurer is deemed to have
15 ceded substantially all of its direct and assumed business to
16 a pool if the insurer has less than $1 million in total direct
17 and assumed written premiums during a calendar year which are
18 not subject to a pooling arrangement and if the net income of
19 the business which is not subject to the pooling arrangement
20 represents less than 5 percent of the insurer's capital and
21 surplus.
22 (6) The nonrenewal, cancellation, or revision of a
23 ceded reinsurance agreement need not be reported if the
24 renewal or the revision is not material or if:
25 (a) With respect to property and casualty business,
26 including accident and health business written by a property
27 and casualty insurer, the insurer's total ceded written
28 premium represents, on an annualized basis, less than 10
29 percent of its total written premium for direct and assumed
30 business; or
31
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1 (b) With respect to life, annuity, and accident and
2 health business, the total reserve credit taken for business
3 ceded represents, on an annualized basis, less than 10 percent
4 of the statutory reserve requirement before the cession.
5 (7)(a) The following information must be disclosed in
6 any report of a material nonrenewal, cancellation, or revision
7 of a ceded reinsurance agreement:
8 1. The effective date of the nonrenewal, cancellation,
9 or revision;
10 2. The description of the transaction and the
11 identification of the initiator of the transaction;
12 3. The purpose of, or reason for, the transaction; and
13 4. If applicable, the identity of each replacement
14 reinsurer.
15 (b) Insurers shall report the material nonrenewal,
16 cancellation, or revision of a ceded reinsurance agreement on
17 a nonconsolidated basis unless the insurer is part of a
18 consolidated group of insurers which uses a pooling
19 arrangement or a 100-percent reinsurance agreement that
20 affects the solvency and integrity of the insurer's reserves
21 and the insurer has ceded substantially all of its direct and
22 assumed business to the pool. An insurer is deemed to have
23 ceded substantially all of its direct and assumed business to
24 a pool if the insurer has less than $1 million in total direct
25 and assumed written premiums during a calendar year which are
26 not subject to a pooling arrangement and if the net income of
27 the business not subject to the pooling arrangement represents
28 less than 5 percent of the insurer's capital and surplus.
29 Section 3. Subsection (1) of section 624.3161, Florida
30 Statutes, is amended to read:
31 624.3161 Market conduct examinations.--
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1 (1) As often as it deems necessary, and not less
2 frequently than each 5 years, the department shall examine
3 each licensed rating organization, each advisory organization,
4 each group, association, or other organization of insurers
5 which engages in joint underwriting or joint reinsurance, and
6 each authorized insurer transacting in this state any class of
7 insurance to which the provisions of part I of chapter 627 are
8 applicable. The examination shall be for the purpose of
9 ascertaining compliance by the person examined with the
10 applicable provisions of chapters 624, 626, 627, and 635.
11 Section 4. Paragraph (d) of subsection (8) of section
12 624.424, Florida Statutes, is amended to read:
13 624.424 Annual statement and other information.--
14 (8)
15 (d) An insurer may not use the same accountant or
16 partner of an accounting firm responsible for preparing the
17 report required by this subsection for more than 7 5
18 consecutive years. Following this period, the insurer may not
19 use such accountant or partner for a period of 2 years, but
20 may use another accountant or partner of the same firm. An
21 insurer may request the department to waive this prohibition
22 based upon an unusual hardship to the insurer and a
23 determination that the accountant is exercising independent
24 judgment that is not unduly influenced by the insurer
25 considering such factors as the number of partners, expertise
26 of the partners or the number of insurance clients of the
27 accounting firm; the premium volume of the insurer; and the
28 number of jurisdictions in which the insurer transacts
29 business.
30 Section 5. Subsection (5) of section 625.121, Florida
31 Statutes, is amended to read:
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1 625.121 Standard Valuation Law; life insurance.--
2 (5) MINIMUM STANDARD FOR VALUATION OF POLICIES AND
3 CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD
4 NONFORFEITURE LAW.--
5 (a) Except as otherwise provided in subparagraph 8.
6 paragraph (h) and subsections (6), (11), and (14), the minimum
7 standard for the valuation of all such policies and contracts
8 issued on or after the operative date of s. 627.476 (Standard
9 Nonforfeiture Law for Life Insurance) shall be the
10 commissioners' reserve valuation method defined in subsections
11 (7), (11), and (14); 5 percent interest for group annuity and
12 pure endowment contracts and 3.5 percent interest for all
13 other such policies and contracts, or in the case of life
14 insurance policies and contracts, other than annuity and pure
15 endowment contracts, issued on or after July 1, 1973, 4
16 percent interest for such policies issued prior to October 1,
17 1979, and 4.5 percent interest for such policies issued on or
18 after October 1, 1979; and the following tables:
19 1.(a) For all ordinary policies of life insurance
20 issued on the standard basis, excluding any disability and
21 accidental death benefits in such policies:
22 a.1. For policies issued prior to the operative date
23 of s. 627.476(9), the commissioners' 1958 Standard Ordinary
24 Mortality Table; except that, for any category of such
25 policies issued on female risks, modified net premiums and
26 present values, referred to in subsection (7), may be
27 calculated according to an age not more than 6 years younger
28 than the actual age of the insured; and
29 b.2. For policies issued on or after the operative
30 date of s. 627.476(9), the commissioners' 1980 Standard
31 Ordinary Mortality Table or, at the election of the insurer
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1 for any one or more specified plans of life insurance, the
2 commissioners' 1980 Standard Ordinary Mortality Table with
3 Ten-Year Select Mortality Factors.
4 2.(b) For all industrial life insurance policies
5 issued on the standard basis, excluding any disability and
6 accidental death benefits in such policies:
7 a.1. For policies issued prior to the first date to
8 which the commissioners' 1961 Standard Industrial Mortality
9 Table is applicable according to s. 627.476, the 1941 Standard
10 Industrial Mortality Table; and
11 b.2. For such policies issued on or after that date,
12 the commissioners' 1961 Standard Industrial Mortality Table.
13 3.(c) For individual annuity and pure endowment
14 contracts, excluding any disability and accidental death
15 benefits in such policies, the 1937 Standard Annuity Mortality
16 Table or, at the option of the insurer, the Annuity Mortality
17 Table for 1949, Ultimate, or any modification of either of
18 these tables approved by the department.
19 4.(d) For group annuity and pure endowment contracts,
20 excluding any disability and accidental death benefits in such
21 policies, the Group Annuity Mortality Table for 1951; any
22 modification of such table approved by the department; or, at
23 the option of the insurer, any of the tables or modifications
24 of tables specified for individual annuity and pure endowment
25 contracts.
26 5.(e) For total and permanent disability benefits in
27 or supplementary to ordinary policies or contracts:
28 a.1. For policies or contracts issued on or after
29 January 1, 1966, the tables of period 2 disablement rates and
30 the 1930 to 1950 termination rates of the 1952 disability
31
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1 study of the Society of Actuaries, with due regard to the type
2 of benefit;
3 b.2. For policies or contracts issued on or after
4 January 1, 1961, and prior to January 1, 1966, either those
5 tables or, at the option of the insurer, the class three
6 disability table (1926); and
7 c.3. For policies issued prior to January 1, 1961, the
8 class three disability table (1926).
9
10 Any such table for active lives shall be combined with a
11 mortality table permitted for calculating the reserves for
12 life insurance policies.
13 6.(f) For accidental death benefits in or
14 supplementary to policies:
15 a.1. For policies issued on or after January 1, 1966,
16 the 1959 Accidental Death Benefits Table;
17 b.2. For policies issued on or after January 1, 1961,
18 and prior to January 1, 1966, either that table or, at the
19 option of the insurer, the Intercompany Double Indemnity
20 Mortality Table; and
21 c.3. For policies issued prior to January 1, 1961, the
22 Intercompany Double Indemnity Mortality Table.
23
24 Either table shall be combined with a mortality table
25 permitted for calculating the reserves for life insurance
26 policies.
27 7.(g) For group life insurance, life insurance issued
28 on the substandard basis, and other special benefits, such
29 tables as may be approved by the department as being
30 sufficient with relation to the benefits provided by such
31 policies.
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1 8.(h) Except as provided in subsection (6), the
2 minimum standard for the valuation of all individual annuity
3 and pure endowment contracts issued on or after the operative
4 date of this paragraph and for all annuities and pure
5 endowments purchased on or after such operative date under
6 group annuity and pure endowment contracts shall be the
7 commissioners' reserve valuation method defined in subsection
8 (7) and the following tables and interest rates:
9 a.1. For individual annuity and pure endowment
10 contracts issued prior to October 1, 1979, excluding any
11 disability and accidental death benefits in such contracts,
12 the 1971 Individual Annuity Mortality Table, or any
13 modification of this table approved by the department, and 6
14 percent interest for single-premium immediate annuity
15 contracts and 4 percent interest for all other individual
16 annuity and pure endowment contracts.
17 b.2. For individual single-premium immediate annuity
18 contracts issued on or after October 1, 1979, and prior to
19 October 1, 1986, excluding any disability and accidental death
20 benefits in such contracts, the 1971 Individual Annuity
21 Mortality Table, or any modification of this table approved by
22 the department, and 7.5 percent interest. For such contracts
23 issued on or after October 1, 1986, the 1983 Individual Annual
24 Mortality Table, or any modification of such table approved by
25 the department, and the applicable calendar year statutory
26 valuation interest rate as described in subsection (6).
27 c.3. For individual annuity and pure endowment
28 contracts issued on or after October 1, 1979, and prior to
29 October 1, 1986, other than single-premium immediate annuity
30 contracts, excluding any disability and accidental death
31 benefits in such contracts, the 1971 Individual Annuity
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1 Mortality Table, or any modification of this table approved by
2 the department, and 5.5 percent interest for single-premium
3 deferred annuity and pure endowment contracts and 4.5 percent
4 interest for all other such individual annuity and pure
5 endowment contracts. For such contracts issued on or after
6 October 1, 1986, the 1983 Individual Annual Mortality Table,
7 or any modification of such table approved by the department,
8 and the applicable calendar year statutory valuation interest
9 rate as described in subsection (6).
10 d.4. For all annuities and pure endowments purchased
11 prior to October 1, 1979, under group annuity and pure
12 endowment contracts, excluding any disability and accidental
13 death benefits purchased under such contracts, the 1971 Group
14 Annuity Mortality Table, or any modification of this table
15 approved by the department, and 6 percent interest.
16 e.5. For all annuities and pure endowments purchased
17 on or after October 1, 1979, and prior to October 1, 1986,
18 under group annuity and pure endowment contracts, excluding
19 any disability and accidental death benefits purchased under
20 such contracts, the 1971 Group Annuity Mortality Table, or any
21 modification of this table approved by the department, and 7.5
22 percent interest. For such contracts purchased on or after
23 October 1, 1986, the 1983 Group Annuity Mortality Table, or
24 any modification of such table approved by the department, and
25 the applicable calendar year statutory valuation interest rate
26 as described in subsection (6).
27
28 After July 1, 1973, any insurer may file with the department a
29 written notice of its election to comply with the provisions
30 of this paragraph after a specified date before January 1,
31 1979, which shall be the operative date of this paragraph for
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1 such insurer. However, an insurer may elect a different
2 operative date for individual annuity and pure endowment
3 contracts from that elected for group annuity and pure
4 endowment contracts. If an insurer makes no such election,
5 the operative date of this paragraph for such insurer shall be
6 January 1, 1979.
7 (b) In lieu of the mortality tables specified in this
8 subsection, and subject to rules adopted by the department, an
9 insurance company:
10 1. May substitute the commissioner's 1958 Standard
11 Ordinary Smoker and Nonsmoker Mortality Table or the
12 commissioner's 1958 Extended Term Insurance Smoker and
13 Nonsmoker Mortality Table, whichever is applicable, in lieu of
14 the commissioner's 1980 Standard Ordinary Mortality Table
15 standards or the commissioner's 1980 Extended Term Insurance
16 Mortality Table standards, for policies issued on or after the
17 effective date of s. 627.476(9)(h)2. and before January 1,
18 1989.
19 2. May substitute the commissioner's 1980 Standard
20 Ordinary Smoker and Nonsmoker Mortality Table or the
21 commissioner's 1980 Extended Term Insurance Smoker and
22 Nonsmoker Mortality Table, whichever is applicable, in lieu of
23 the commissioner's 1980 Standard Ordinary Mortality Table
24 standards or the commissioner's 1980 Extended Term Insurance
25 Mortality Table standards.
26 3. May use the Annuity 2000 Mortality Table on an
27 optional basis for determining the minimum standard of
28 valuation for individual annuity and pure endowment contracts
29 issued on or after the effective date of this section until
30 the department, on a date certain on or after January 1, 1998,
31
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1 adopts by rule such table for determining the minimum standard
2 for valuation purposes.
3 4. May use the 1994 Group Annuity Reserves Table on an
4 optional basis for determining the minimum standard of
5 valuation for annuities and pure endowments purchased on or
6 after the effective date of this section under group annuity
7 and pure endowment contracts until the department, on a date
8 certain after January 1, 1998, adopts by rule such table for
9 determining the minimum standard for valuation purposes.
10 Section 6. Paragraph (h) of subsection (9) of section
11 627.476, Florida Statutes, is amended to read:
12 627.476 Standard Nonforfeiture Law for Life
13 Insurance.--
14 (9) CALCULATION OF ADJUSTED PREMIUMS AND PRESENT
15 VALUES FOR POLICIES ISSUED AFTER OPERATIVE DATE OF THIS
16 SUBSECTION.--
17 (h)1. All adjusted premiums and present values
18 referred to in this section shall for all policies of ordinary
19 insurance be calculated on the basis of the Commissioners'
20 1980 Standard Ordinary Mortality Table or, at the election of
21 the insurer for any one or more specified plans of life
22 insurance, the Commissioners' 1980 Standard Ordinary Mortality
23 Table with Ten-Year Select Mortality Factors; shall for all
24 policies of industrial insurance be calculated on the basis of
25 the Commissioners' 1961 Standard Industrial Mortality Table;
26 and shall for all policies issued in a particular calendar
27 year be calculated on the basis of a rate of interest not
28 exceeding the nonforfeiture interest rate as defined in this
29 subsection for policies issued in that calendar year. However:
30 a.1. At the option of the insurer, calculations for
31 all policies issued in a particular calendar year may be made
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1 on the basis of a rate of interest not exceeding the
2 nonforfeiture interest rate, as defined in this subsection,
3 for policies issued in the immediately preceding calendar
4 year.
5 b.2. Under any paid-up nonforfeiture benefit,
6 including any paid-up dividend additions, any cash surrender
7 value available, whether or not required by subsection (2),
8 shall be calculated on the basis of the mortality table and
9 rate of interest used in determining the amount of such
10 paid-up nonforfeiture benefit and paid-up dividend additions,
11 if any.
12 c.3. An insurer may calculate the amount of any
13 guaranteed paid-up nonforfeiture benefit, including any
14 paid-up additions under the policy, on the basis of an
15 interest rate no lower than that specified in the policy for
16 calculating cash surrender values.
17 d.4. In calculating the present value of any paid-up
18 term insurance with accompanying pure endowment, if any,
19 offered as a nonforfeiture benefit, the rates of mortality
20 assumed may be not more than those shown in the Commissioners'
21 1980 Extended Term Insurance Table for policies of ordinary
22 insurance and not more than the Commissioners' 1961 Industrial
23 Extended Term Insurance Table for policies of industrial
24 insurance.
25 e.5. For insurance issued on a substandard basis, the
26 calculation of any such adjusted premiums and present values
27 may be based on appropriate modifications of the
28 aforementioned tables.
29 2. In lieu of the mortality tables specified in this
30 section, an insurance company may substitute, subject to rules
31 adopted by the department:
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1 a. The commissioner's 1958 Standard Ordinary Smoker
2 and Nonsmoker Mortality Table or the commissioner's 1958
3 Extended Term Insurance Smoker and Nonsmoker Mortality Table,
4 whichever is applicable, for policies issued on or after the
5 effective date of this subparagraph and before January 1,
6 1989.
7 b. The commissioner's 1980 Standard Ordinary Smoker
8 and Nonsmoker Mortality Table or the commissioner's 1980
9 Extended Term Insurance Smoker and Nonsmoker Mortality Table,
10 whichever is applicable, for policies issued on or after the
11 effective date of this subparagraph.
12 c. A mortality table which is a blend of the
13 commissioner's sex-distinct 1980 Standard Ordinary Mortality
14 Table standards or the commissioner's sex-distinct 1980
15 Extended Term Insurance Mortality Table standards, whichever
16 is applicable, or a mortality table which is a blend of the
17 commissioner's sex-distinct 1980 Standard Ordinary Smoker and
18 Nonsmoker Mortality Table standards or the commissioner's
19 sex-distinct 1980 Extended Term Insurance Smoker and Nonsmoker
20 Mortality Table standards, whichever is applicable, for
21 policies subject to the United States Supreme Court decision
22 in Arizona Governing Committee v. Norris to prevent unfair
23 discrimination in employment situations.
24 Section 7. Effective October 1, 1997, section
25 627.4555, Florida Statutes, is amended to read:
26 627.4555 Secondary notice.--Except as provided in this
27 section, no contract for life insurance issued or issued for
28 delivery in this state on or after October 1, 1997, covering a
29 natural person 64 years of age or older or owned by a natural
30 person 64 years of age or older, which has been in force for
31 at least 1 year, shall be lapsed canceled for nonpayment of
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1 premium unless, after expiration of the grace period, and at
2 least 21 days prior to the effective date of any such lapse
3 cancellation, the insurer has mailed a notification of such
4 impending possible lapse in coverage to the policyowner owner
5 of the policy and to a specified secondary addressee if such
6 addressee has been designated in writing by name and address
7 by the policyowner. An insurer issuing a life insurance
8 contract on or after October 1, 1997 1995, shall notify the
9 applicant of the right to designate a secondary addressee at
10 the time of application for the policy, on a form provided by
11 the insurer, and at any time the policy is in force, by
12 submitting a written notice to the insurer containing the name
13 and address of the secondary addressee. For purposes of any
14 life insurance policy which provides a grace period of more
15 than 51 days for nonpayment of premiums, the notice of
16 impending lapse in coverage required by this section shall be
17 mailed to the policyowner and the secondary addressee at least
18 21 days prior to the expiration of the grace period provided
19 in such policy. This section does not apply to any life
20 insurance contract under which premiums are payable monthly or
21 more frequently and are regularly collected by a licensed
22 agent or are paid by credit card or any preauthorized check
23 processing or automatic debit service of a financial
24 institution. For policies of life insurance issued or renewed
25 on or after October 1, 1995, the insurer shall notify the
26 owner, at least annually, of the right to designate a
27 secondary addressee.
28 Section 8. Effective October 1, 1997, section
29 627.5045, Florida Statutes, is amended to read:
30 627.5045 Secondary notice.--Except as provided in this
31 section, no contract for an industrial life insurance policy
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1 issued or issued for delivery in this state on or after
2 October 1, 1997, for which premiums are paid monthly, covering
3 a natural person 64 years of age or older or owned by a
4 natural person 64 years of age or older, which has been in
5 force for at least 1 year, shall be lapsed canceled for
6 nonpayment of premium unless, after expiration of the grace
7 period, and at least 21 days prior to the effective date of
8 such lapse cancellation, the insurer has mailed a notification
9 of such impending possible lapse in coverage to the
10 policyowner owner of the policy and to a specified secondary
11 addressee if such addressee has been designated in writing by
12 name and address by the policyowner. An insurer issuing an
13 industrial life insurance contract on or after October 1, 1997
14 1995, shall notify the applicant of the right to designate a
15 secondary addressee at the time of application for the policy
16 on a form provided by the insurer and at any time the policy
17 is in force by submitting a written notice to the insurer
18 containing the name and address of the secondary addressee.
19 This section does not apply to any life insurance contract
20 under which premiums are payable monthly or more frequently
21 and are regularly collected by a licensed agent. For policies
22 of industrial life insurance issued or renewed on or after
23 October 1, 1995, the insurer shall notify the owner, at least
24 annually, of the right to designate a secondary addressee.
25 Section 9. Effective October 1, 1997, section 628.801,
26 Florida Statutes, is amended to read:
27 628.801 Insurance holding companies; registration;
28 regulation.--Every insurer which is authorized to do business
29 in this state and which is a member of an insurance holding
30 company shall register with the department and be subject to
31 regulation with respect to its relationship to such holding
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1 company as provided by rule or statute. The department shall
2 adopt rules establishing the information and form required for
3 registration and the manner in which registered insurers and
4 their affiliates shall be regulated. The rules shall apply to
5 domestic insurers, foreign insurers, and commercially
6 domiciled insurers, except a foreign insurer domiciled in
7 states that are accredited by the National Association of
8 Insurance Commissioners by December 31, 1995. Except to the
9 extent of any conflict with this code, the rules must include
10 all requirements and standards of ss. 4 and 5 of the Insurance
11 Holding Company System Regulatory Act and the Insurance
12 Holding Company System Model Regulation of the National
13 Association of Insurance Commissioners, as the Regulatory Act
14 and the Model Regulation existed on January 1, 1997 1993, and
15 may include a prohibition on oral contracts between affiliated
16 entities. Upon request, the department may waive filing
17 requirements under this section for a domestic insurer that is
18 the subsidiary of an insurer that is in full compliance with
19 the insurance holding company registration laws of its state
20 of domicile, which state is accredited by the National
21 Association of Insurance Commissioners.
22 Section 10. Except as otherwise provided herein, this
23 act shall take effect upon becoming a law.
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27
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29
30
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1 *****************************************
2 HOUSE SUMMARY
3
Requires domestic insurers, including property and
4 casualty insurers and life and health insurers, and
foreign insurers to submit to the Department of
5 Insurance, upon request, a report relating to their risk
based capital. Requires domestic insurers to file with
6 the department a report of their assets or their ceded
reinsurance agreements. Provides exceptions. Provides
7 definitions and reporting requirements. Prescribes
authority of the department and authorizes the department
8 to adopt rules. Deletes a limitation on the frequency of
specified market conduct examinations. Increases time
9 limitations on insurers for preparing annual reports and
other information. Specifies application of dividends or
10 premium refunds for purposes of calculating annual
assessments for the Special Disability Trust Fund and
11 expenses of administration. Authorizes insurance
companies to use substitute mortality tables for purposes
12 of valuation of insurance policies. Revises provisions
requiring notice to policyowners and secondary addressees
13 of impending lapse of life insurance policies. See bill
for details.
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