Senate Bill 0994c1

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    Florida Senate - 1998                            CS for SB 994

    By the Committee on Banking and Insurance and Senator Grant





    311-2048-98

  1                      A bill to be entitled

  2         An act relating to insurance; amending s.

  3         624.316, F.S.; deleting certain rulemaking

  4         authority of the Department of Insurance

  5         relating to insurer compliance; amending s.

  6         627.7275, F.S.; modifying coverage requirements

  7         and premiums relating to motor vehicle property

  8         damage liability; amending s. 624.426, F.S.;

  9         providing that certain transferred policies are

10         exempt from the resident agent and

11         countersignature law; amending s. 627.9126,

12         F.S.; deleting the requirement that the

13         Department of Insurance conduct an annual

14         sampling of certain claims information required

15         to be maintained by liability insurers;

16         amending s. 627.913, F.S.; deleting the

17         requirement that insurers file product

18         liability insurance reports; authorizing the

19         department to require such reports upon

20         request; providing an effective date.

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22  Be It Enacted by the Legislature of the State of Florida:

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24         Section 1.  Paragraph (f) of subsection (2) of section

25  624.316, Florida Statutes, is amended to read:

26         624.316  Examination of insurers.--

27         (2)

28         (f)1.a.  An examination under this section must be

29  conducted at least once every year with respect to a domestic

30  insurer that has continuously held a certificate of authority

31  for less than 3 years. The examination must cover the

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    Florida Senate - 1998                            CS for SB 994
    311-2048-98




  1  preceding fiscal year or the period since the last examination

  2  of the insurer. The department may limit the scope of the

  3  examination if the insurer has demonstrated sufficient

  4  compliance as determined under subparagraph 3.

  5         b.  The department may not accept an independent

  6  certified public accountant's audit report in lieu of an

  7  examination required by this subparagraph.

  8         c.  An insurer may not be required to pay more than

  9  $25,000 to cover the costs of any one examination under this

10  subparagraph.

11         2.  An examination under this section must be conducted

12  not less frequently than once every 5 years with respect to an

13  insurer that has continuously held a certificate of authority,

14  without a change in ownership subject to s. 624.4245 or s.

15  628.461, for more than 15 years and has demonstrated

16  sufficient compliance as determined under subparagraph 3. The

17  examination must cover the preceding 5 fiscal years of the

18  insurer or the period since the last examination of the

19  insurer. This subparagraph does not limit the ability of the

20  department to conduct more frequent examinations.

21         3.  The department must, by rule, adopt procedures and

22  criteria for determining if an insurer has demonstrated

23  sufficient compliance with this code and cooperation with the

24  department. The rules must include consideration of such

25  factors as financial strength, timeliness, consumer service,

26  economic and community contributions and support,

27  responsiveness to department requests, and any other relevant

28  factors. The department must annually publish and disseminate

29  a listing of those insurers found to demonstrate sufficient

30  compliance under the rules, including special recognition for

31  community contributions and support.

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    Florida Senate - 1998                            CS for SB 994
    311-2048-98




  1         Section 2.  Paragraph (a) of subsection (2) of section

  2  627.7275, Florida Statutes, is amended to read:

  3         627.7275  Motor vehicle property damage liability.--

  4         (2)(a)  Insurers writing motor vehicle insurance in

  5  this state shall make available, subject to the insurers'

  6  usual underwriting restrictions, coverage under policies as

  7  described in subsection (1) of this section to any applicant

  8  for private passenger motor vehicle insurance coverage who is

  9  seeking the coverage in order to reinstate the applicant's

10  driving privileges in this state when the driving privileges

11  were revoked or suspended pursuant to s. 316.646 or s. 627.733

12  due to the failure of the applicant to maintain required

13  security.  The policy shall be issued for a period of at least

14  6 months and as to the minimum coverages required under this

15  section shall not be cancelable by the insured for any reason

16  or by the insurer after a period not to exceed 30 days during

17  which the insurer must complete underwriting of the policy.

18  After the insurer has completed underwriting the policy within

19  the 30-day period, the insurer shall notify the Department of

20  Highway Safety and Motor Vehicles that the policy is in full

21  force and effect and the policy shall not be cancelable for

22  the remainder of the policy period.  A premium shall be

23  collected and coverage shall be in effect for the 30-day

24  period during which the insurer is completing the underwriting

25  of the policy whether or not the person's driver license,

26  motor vehicle tag, and motor vehicle registration are in

27  effect.  Once the noncancelable provisions of the policy

28  become effective, the coverage or risk shall not be changed

29  during the policy period and the premium shall be

30  nonrefundable fully earned.  If, during the pendency of the

31  2-year proof of insurance period required under s. 627.733(7),

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    Florida Senate - 1998                            CS for SB 994
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  1  the insured obtains additional coverage or coverage for an

  2  additional risk or changes territories, the insured then she

  3  or he must obtain a new 6-month noncancelable policy in

  4  accordance with the provisions of this section. However, if

  5  the insured must obtain a new 6-month policy and obtains the

  6  policy from the same insurer, the policyholder shall receive

  7  credit on the new policy for any premium paid on the

  8  previously issued policy.

  9         Section 3.  Subsection (4) is added to s. 624.426,

10  Florida Statutes, to read:

11         624.426  Exceptions to resident agent and

12  countersignature law.--Section 624.425 does not apply to:

13         (4)  Policies of insurance issued by insurers whose

14  agents represent only one company or group of companies under

15  common ownership if a company within one group is transferring

16  policies to another company within the same group and the

17  agent of record remains the same.

18         Section 4.  Subsection (1) of section 627.9126, Florida

19  Statutes, is amended to read:

20         627.9126  Annual reports of information by liability

21  insurers required.--

22         (1)  Each insurer transacting commercial multiperil,

23  products liability, commercial automobile liability, private

24  passenger automobile liability, or other line of liability

25  insurance shall maintain information as specified in this

26  section. Such information shall be maintained for each line of

27  insurance and for direct Florida business only. The department

28  may shall annually conduct a sampling of claims or actions for

29  damages for personal injury or property damage claimed to have

30  been caused by error, omission, or negligence of insureds if

31  the claim resulted in:

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    Florida Senate - 1998                            CS for SB 994
    311-2048-98




  1         (a)  A final judgment in any amount.

  2         (b)  A settlement in any amount.

  3         (c)  A final disposition not resulting in payment on

  4  behalf of the insured.

  5         Section 5.  Section 627.913, Florida Statutes, is

  6  amended to read:

  7         627.913  Reports of information by products liability

  8  insurers required.--

  9         (1)  The department may require any insurer authorized

10  to write a policy of products liability insurance in the state

11  to shall transmit the following information specified in this

12  section, based on its statewide products liability insurance

13  writings. Upon request of the department, an insurer shall,

14  within 60 days, submit to the department a report that

15  contains the following information, to the department each

16  year in the annual report of such insurer:

17         (1)(a)  Premiums written;

18         (2)(b)  Premiums earned;

19         (3)(c)  Unearned premiums;

20         (4)(d)  The dollar amount of claims paid;

21         (5)(e)  Incurred claims, not including claims incurred

22  but not reported;

23         (6)(f)  Claims closed without payment, and the amount

24  reserved for such claims;

25         (7)(g)  Loss reserves for all claims except claims

26  incurred but not reported;

27         (8)(h)  Reserves for claims incurred but not reported;

28         (9)(i)  Losses paid as a percentage of the amount

29  reserved for such losses;

30         (10)(j)  Net investment gain or loss and other income

31  gain or loss allocated to products liability lines according

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    Florida Senate - 1998                            CS for SB 994
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  1  to the allocation formula used in the annual insurance expense

  2  exhibit;

  3         (11)(k)  Underwriting income or loss;

  4         (12)(l)  Actual expenses in detail, including, but not

  5  limited to, loss adjustment expense; commissions; general

  6  expense; and advertising, home office, and defense costs;

  7         (13)(m)  Claims settled after a suit was filed;

  8         (14)(n)  Claims paid based on a judgment; and

  9         (15)(o)  Judgments appealed by the insurer, together

10  with the total results of such appeals.

11         (2)  The department shall provide a summary of

12  information provided pursuant to subsection (1) in its annual

13  report.

14         (3)  In the first year that an insurer makes a report

15  pursuant to subsection (1), the insurer shall provide only the

16  information required by paragraphs (a) through (l) of

17  subsection (1) and shall provide such information for the

18  current year and the 3 previous years.

19         Section 6.  This act shall take effect October 1, 1998.

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    Florida Senate - 1998                            CS for SB 994
    311-2048-98




  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                         Senate Bill 994

  3

  4  Removes the provision that civil remedy notices are not
    complaints for purposes of records retention by insurers.
  5
    Deletes the provision that an insurer's independent medical
  6  examination (IME) pursuant to a disputed personal injury
    protection (PIP) claim be conducted in a location reasonably
  7  accessible to the insured.

  8  Removes the repeal of PIP (personal injury protection)
    provision relating to how medical payments insurance benefits
  9  must be determined.

10  Removes the provision that an insurer place the entire amount
    of insurance coverage into a court registry when there are
11  multiple claimants.

12  Deletes the countersignature requirement by the agent of
    record when an insurance policy is transferred from one
13  company in an insurance company group to another in the same
    group.
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    Provides that the Department of Insurance may, rather than
15  shall, annually require that an insurer report certain
    information relating to product liability insurance.
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