CODING: Words stricken are deletions; words underlined are additions.
SENATE AMENDMENT
Bill No. CS for SB 268
Amendment No.
CHAMBER ACTION
Senate House
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11 Senator Holzendorf moved the following amendment:
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13 Senate Amendment (with title amendment)
14 On page 7, between lines 16 and 17,
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16 insert:
17 Section 9. Section 627.624, Florida Statutes, is
18 amended to read:
19 (Substantial rewording of section. See
20 s. 627.624, F.S., for present text.)
21 627.624 Overinsurance; valid loss of time coverage.--
22 (1) A disability income insurance policy may include
23 the following overinsurance provision:
24 "Overinsurance: After the loss-of-time benefit of this
25 policy has been payable for 90 days, the benefit will be
26 adjusted, as provided below, if the total amount of unadjusted
27 loss-of-time benefits provided in all valid loss-of-time
28 coverage upon the insured exceeds ...(percent)... of the
29 insured's earned income. If the information contained in the
30 application discloses that the total amount of loss-of-time
31 benefits under this policy and under all other valid
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SENATE AMENDMENT
Bill No. CS for SB 268
Amendment No.
1 loss-of-time coverage expected to be effective upon the
2 insured in accordance with the application for this policy
3 exceeded ...(percent)... of the insured's earned income at the
4 time of such application, the higher percentage will be used
5 in place of ...(percent).... The adjusted loss-of-time
6 benefit under this policy for any month is the proportion of
7 the loss-of-time benefit otherwise payable under this policy
8 as the product of the insured's earned income and
9 ...(percent)... bears to the total amount of loss-of-time
10 benefits payable for such month under this policy and all
11 other valid loss-of-time coverage on the insured (without
12 giving effect to the overinsurance provision in this or any
13 other coverage) less any amount of loss-of-time benefits
14 payable under other valid loss-of-time coverage that does not
15 contain an overinsurance provision. In making the
16 computation, all benefits and earnings must be converted to a
17 consistent ...(weekly or monthly)... basis. If the numerator
18 of the foregoing ratio is zero or is negative, no benefit is
19 payable under this policy. This provision may not reduce the
20 total combined amount of loss-of-time benefits payable under
21 this policy and all other valid loss-of-time coverage below an
22 amount that is the lesser of $300 or the total combined amount
23 of loss-of-time benefits determined without giving effect to
24 any overinsurance provision. This provision may not increase
25 the amount of benefits payable under this policy above the
26 amount that would have been paid in the absence of this
27 provision, or take into account or operate to reduce any
28 benefit other than the loss-of-time benefit."
29 (2) For purposes of the overinsurance provision of
30 subsection (1), the term:
31 (a) "Earned income," except where otherwise specified,
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SENATE AMENDMENT
Bill No. CS for SB 268
Amendment No.
1 means the greater of monthly earnings of the insured at the
2 time disability commences or the insured's average monthly
3 earnings for a period of 2 years immediately preceding the
4 commencement of disability. The term does not include any
5 investment income or any other income not derived from the
6 insured's vocational activities.
7 (b) "Overinsurance provision" means the contract
8 provision authorized in subsection (1) and any other provision
9 with respect to any loss-of-time coverage which may have the
10 effect of reducing an insurer's liability if the total amount
11 of loss-of-time benefits under all coverage exceeds a stated
12 relationship to the insured's earnings.
13 (c) "Department" means the Department of Insurance.
14 (3) The overinsurance provision authorized in
15 subsection (1) may be inserted only in a policy that provides
16 a loss-of-time benefit that may be payable for at least 52
17 weeks, that is issued on the basis of selective underwriting
18 of each individual application, and for which the application
19 includes a question designed to elicit information necessary
20 either to determine the ratio of the total loss-of-time
21 benefits of the insured to the insured's earned income or to
22 determine that such ratio does not exceed the percentage of
23 earnings, not less than 60 percent, selected by the insurer
24 and inserted in lieu of the blank factor in the overinsurance
25 provision. The insurer may require, as part of the proof of
26 claim, the information necessary to administer the provision.
27 If the application indicates that other loss-of-time coverage
28 is to be discontinued, the amount of such other coverage must
29 be excluded in computing the alternative percentage in the
30 overinsurance provision. The policy must define the term
31 "valid loss-of-time coverage" as approved by the department,
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SENATE AMENDMENT
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Amendment No.
1 which definition may include coverage provided by governmental
2 agencies and by organizations subject to regulation by
3 insurance law and by insurance authorities of this or any
4 other state or of any country; coverage provided for such
5 insured pursuant to any disability benefits, workers'
6 compensation benefits, or employer's liability benefits
7 provided by labor-management trustee plans or union welfare
8 plans; salary continuance or pension programs; or any other
9 coverage the inclusion of which has been approved by the
10 department.
11 (4) If by any application of the overinsurance
12 provision an insurer affects a material reduction of benefits
13 otherwise payable under the policy, the insurer must refund,
14 for the period 2 years preceding the disability for which a
15 claim is made, any premium unearned on the policy by reason of
16 such reduction of coverage, subject to the insurer's right to
17 provide in the policy that no such reduction of benefits or
18 refund will be made unless the unearned premium to be refunded
19 amounts to $5.
20 (5) The application for a policy containing the
21 overinsurance provision authorized by this section shall
22 include the following disclosure:
23 "The benefit payable under this policy may be reduced
24 if the total loss-of-time coverage in effect exceeds
25 ...(percent)... of your income."
26 (6) The department may by rule prescribe definitions,
27 forms, and procedures necessary to administer this section.
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29 (Redesignate subsequent sections.)
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SENATE AMENDMENT
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Amendment No.
1 ================ T I T L E A M E N D M E N T ===============
2 And the title is amended as follows:
3 On page 1, line 27, after the semicolon,
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5 insert:
6 amending s. 627.624, F.S.; revising
7 loss-of-time benefit requirements; providing
8 definitions of the terms "earned income" and
9 "overinsurance provisions"; requiring
10 disclosure for overinsurance provision;
11 authorizing the Department of Insurance to
12 adopt rules;
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