Senate Bill 0312e3
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1 A bill to be entitled
2 An act relating to insurance; amending s.
3 626.321, F.S.; providing requirements for
4 limited licenses for credit life or disability
5 insurance and credit insurance; amending s.
6 626.989, F.S.; defining the terms "insurer" and
7 "insurance policy" for purposes of determining
8 insurance fraud; creating s. 626.9892, F.S.;
9 establishing the Anti-Fraud Reward Program in
10 the department; providing for rewards under
11 certain circumstances; requiring the department
12 to adopt rules to implement the program;
13 exempting review of department decisions
14 relating to rewards; creating s. 641.3915,
15 F.S.; requiring certain health maintenance
16 organizations to comply with insurer anti-fraud
17 requirements; providing construction; amending
18 s. 775.15, F.S.; extending the statute of
19 limitations for certain insurance fraud
20 violations; amending s. 817.234, F.S.;
21 specifying a schedule of criminal penalties for
22 committing insurance fraud; providing
23 definitions; providing application to health
24 maintenance organizations and contracts;
25 amending s. 817.505, F.S.; revising a penalty
26 for patient brokering; reenacting s.
27 455.657(3), F.S., relating to kickbacks, to
28 incorporate changes; providing an
29 appropriation; creating s. 624.6085, Florida
30 Statutes; defining the term "collateral
31 protection insurance"; amending s. 626.321,
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1 F.S.; providing requirements for limited
2 licenses for credit life or disability
3 insurance and credit insurance; amending s.
4 627.6645, F.S.; revising the notice
5 requirements for cancellation or nonrenewal of
6 a group health insurance policy; specifying
7 conditions under which the insurer may
8 retroactively cancel coverage due to nonpayment
9 of premium; amending s. 627.6675, F.S.;
10 revising the time limits for an employee or
11 group member to apply for an individual
12 converted policy when termination of group
13 coverage is due to failure of the employer to
14 pay the premium; revising the requirements for
15 the premium for the converted policy; allowing
16 a group insurer to contract with another
17 insurer to issue an individual converted policy
18 under certain conditions; amending s. 641.3108,
19 F.S.; revising the notice requirements for
20 cancellation or nonrenewal of a health
21 maintenance organization contract; specifying
22 conditions under which the organization may
23 retroactively cancel coverage due to nonpayment
24 of premium; amending s. 641.3922, F.S.;
25 revising the time limits for an employee or
26 group member to apply for a converted contract
27 from a health maintenance organization when
28 termination of group coverage is due to failure
29 of the employer to pay the premium; revising
30 the requirements for the premium for the
31
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1 converted contract; providing an effective
2 date.
3
4 Be It Enacted by the Legislature of the State of Florida:
5
6 Section 1. Paragraphs (e) and (f) of subsection (1) of
7 section 626.321, Florida Statutes, 1998 Supplement, are
8 amended to read:
9 626.321 Limited licenses.--
10 (1) The department shall issue to a qualified
11 individual, or a qualified individual or entity under
12 paragraphs (c), (d), and (e), a license as agent authorized to
13 transact a limited class of business in any of the following
14 categories:
15 (e) Credit life or disability insurance.--License
16 covering only credit life or disability insurance. The
17 license may be issued only to an individual employed by a life
18 or health insurer as an officer or other salaried or
19 commissioned representative, or to an individual employed by
20 or associated with a lending or financing institution or
21 creditor, and may authorize the sale of such insurance only
22 with respect to borrowers or debtors of such lending or
23 financing institution or creditor. However, only the
24 individual or entity whose tax identification number is used
25 in receiving or is credited with receiving the commission from
26 the sale of such insurance shall be the licensed agent of the
27 insurer. No individual while so licensed shall hold a license
28 as an agent or solicitor as to any other or additional kind or
29 class of life or health insurance coverage. An entity other
30 than a lending or financial institution defined in s. 626.988
31 holding a limited license under this paragraph shall also be
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1 authorized to sell credit property insurance. An entity
2 applying for a license under this section:
3 1. Is required to submit only one application for a
4 license under s. 626.171.
5 2. Is required to obtain a license for each office,
6 branch office, or place of business making use of the entity's
7 business name by applying to the department for the license on
8 a simplified form developed by rule of the department for this
9 purpose.
10 3. Is not required to pay any additional application
11 fees for a license issued to the offices or places of business
12 referenced in subsection (2), but is required to pay the
13 license fee as prescribed in s. 624.501, be appointed under s.
14 626.112, and pay the prescribed appointment fee under s.
15 624.501. The license obtained under this paragraph shall be
16 posted at the business location for which it was issued so as
17 to be readily visible to prospective purchasers of such
18 coverage.
19 (f) Credit insurance.--License covering only credit
20 insurance, as such insurance is defined in s. 624.605(1)(i),
21 and no individual or entity so licensed shall, during the same
22 period, hold a license as an agent or solicitor as to any
23 other or additional kind of life or health insurance with the
24 exception of credit life or disability insurance as defined in
25 paragraph (e). The same licensing provisions as outlined in
26 paragraph (e) apply to entities licensed as credit insurance
27 agents under this paragraph.
28 Section 2. Subsection (1) of section 626.989, Florida
29 Statutes, 1998 Supplement, is amended to read:
30 626.989 Division of Insurance Fraud; definition;
31 investigative, subpoena powers; protection from civil
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1 liability; reports to division; division investigator's power
2 to execute warrants and make arrests.--
3 (1) For the purposes of this section, a person commits
4 a "fraudulent insurance act" if the person knowingly and with
5 intent to defraud presents, causes to be presented, or
6 prepares with knowledge or belief that it will be presented,
7 to or by an insurer, self-insurer, self-insurance fund,
8 servicing corporation, purported insurer, broker, or any agent
9 thereof, any written statement as part of, or in support of,
10 an application for the issuance of, or the rating of, any
11 insurance policy, or a claim for payment or other benefit
12 pursuant to any insurance policy, which the person knows to
13 contain materially false information concerning any fact
14 material thereto or if the person conceals, for the purpose of
15 misleading another, information concerning any fact material
16 thereto. For the purposes of this section, the term "insurer"
17 also includes any health maintenance organization and the term
18 "insurance policy" also includes a health maintenance
19 organization subscriber contract.
20 Section 3. Section 626.9892, Florida Statutes, is
21 created to read:
22 626.9892 Anti-Fraud Reward Program; reporting of
23 insurance fraud.--
24 (1) The Anti-Fraud Reward Program is hereby
25 established within the department, to be funded from the
26 Insurance Commissioner's Regulatory Trust Fund.
27 (2) The department may pay rewards of up to $25,000 to
28 persons providing information leading to the arrest and
29 conviction of persons committing complex or organized crimes
30 investigated by the Division of Insurance Fraud arising from
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1 violations of s. 440.105, s. 624.15, s. 626.9541, s. 626.989,
2 or s. 817.234.
3 (3) Only a single reward amount may be paid by the
4 department for claims arising out of the same transaction or
5 occurrence, regardless of the number of persons arrested and
6 convicted and the number of persons submitting claims for the
7 reward. The reward may be disbursed among more than one
8 person in amounts determined by the department.
9 (4) The department shall adopt rules which set forth
10 the application and approval process, including the criteria
11 against which claims shall be evaluated, the basis for
12 determining specific reward amounts, and the manner in which
13 rewards shall be disbursed. Applications for rewards
14 authorized by this section must be made pursuant to rules
15 established by the department.
16 (5) Determinations by the department to grant or deny
17 a reward under this section shall not be considered agency
18 action subject to review under s. 120.569 or s. 120.57.
19 Section 4. Section 641.3915, Florida Statutes, is
20 created to read:
21 641.3915 Health maintenance organization anti-fraud
22 plans and investigative units.--Each authorized health
23 maintenance organization and applicant for a certificate of
24 authority shall comply with the provisions of ss. 626.989 and
25 626.9891 as though such organization or applicant were an
26 authorized insurer. For purposes of this section, the
27 reference to the year 1996 in s. 626.9891 means the year 2000
28 and the reference to the year 1995 means the year 1999.
29 Section 5. Paragraph (h) of subsection (2) of section
30 775.15, Florida Statutes, 1998 Supplement, is amended to read:
31 775.15 Time limitations.--
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1 (2) Except as otherwise provided in this section,
2 prosecutions for other offenses are subject to the following
3 periods of limitation:
4 (h) A prosecution for a felony violation of s. 440.105
5 and s. 817.234 must be commenced within 5 years after the
6 violation is committed.
7 Section 6. Subsections (1), (2), (3), (4), and (10) of
8 section 817.234, Florida Statutes, 1998 Supplement, are
9 amended, and subsections (11) and (12) are added to said
10 section, to read:
11 817.234 False and fraudulent insurance claims.--
12 (1)(a) A person commits insurance fraud punishable as
13 provided in subsection (11) if that Any person who, with the
14 intent to injure, defraud, or deceive any insurer:
15 1. Presents or causes to be presented any written or
16 oral statement as part of, or in support of, a claim for
17 payment or other benefit pursuant to an insurance policy or a
18 health maintenance organization subscriber or provider
19 contract, knowing that such statement contains any false,
20 incomplete, or misleading information concerning any fact or
21 thing material to such claim;
22 2. Prepares or makes any written or oral statement
23 that is intended to be presented to any insurer in connection
24 with, or in support of, any claim for payment or other benefit
25 pursuant to an insurance policy or a health maintenance
26 organization subscriber or provider contract, knowing that
27 such statement contains any false, incomplete, or misleading
28 information concerning any fact or thing material to such
29 claim; or
30 3.a. Knowingly presents, causes to be presented, or
31 prepares or makes with knowledge or belief that it will be
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1 presented to any insurer, purported insurer, servicing
2 corporation, insurance broker, or insurance agent, or any
3 employee or agent thereof, any false, incomplete, or
4 misleading information or written or oral statement as part
5 of, or in support of, an application for the issuance of, or
6 the rating of, any insurance policy, or a health maintenance
7 organization subscriber or provider contract; or
8 b. Who knowingly conceals information concerning any
9 fact material to such application,
10
11 commits a felony of the third degree, punishable as provided
12 in s. 775.082, s. 775.083, or s. 775.084.
13 (b) All claims and application forms shall contain a
14 statement that is approved by the Department of Insurance that
15 clearly states in substance the following: "Any person who
16 knowingly and with intent to injure, defraud, or deceive any
17 insurer files a statement of claim or an application
18 containing any false, incomplete, or misleading information is
19 guilty of a felony of the third degree." This paragraph shall
20 not apply to reinsurance contracts, reinsurance agreements, or
21 reinsurance claims transactions. The changes in this paragraph
22 relating to applications shall take effect on March 1, 1996.
23 (2) Any physician licensed under chapter 458,
24 osteopathic physician licensed under chapter 459, chiropractic
25 physician licensed under chapter 460, or other practitioner
26 licensed under the laws of this state who knowingly and
27 willfully assists, conspires with, or urges any insured party
28 to fraudulently violate any of the provisions of this section
29 or part XI of chapter 627, or any person who, due to such
30 assistance, conspiracy, or urging by said physician,
31 osteopathic physician, chiropractic physician, or
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1 practitioner, knowingly and willfully benefits from the
2 proceeds derived from the use of such fraud, commits insurance
3 fraud is guilty of a felony of the third degree, punishable as
4 provided in subsection (11) s. 775.082, s. 775.083, or s.
5 775.084. In the event that a physician, osteopathic physician,
6 chiropractic physician, or practitioner is adjudicated guilty
7 of a violation of this section, the Board of Medicine as set
8 forth in chapter 458, the Board of Osteopathic Medicine as set
9 forth in chapter 459, the Board of Chiropractic Medicine as
10 set forth in chapter 460, or other appropriate licensing
11 authority shall hold an administrative hearing to consider the
12 imposition of administrative sanctions as provided by law
13 against said physician, osteopathic physician, chiropractic
14 physician, or practitioner.
15 (3) Any attorney who knowingly and willfully assists,
16 conspires with, or urges any claimant to fraudulently violate
17 any of the provisions of this section or part XI of chapter
18 627, or any person who, due to such assistance, conspiracy, or
19 urging on such attorney's part, knowingly and willfully
20 benefits from the proceeds derived from the use of such fraud,
21 commits insurance fraud a felony of the third degree,
22 punishable as provided in subsection (11) s. 775.082, s.
23 775.083, or s. 775.084.
24 (4) Any No person or governmental unit licensed under
25 chapter 395 to maintain or operate a hospital, and any no
26 administrator or employee of any such hospital, who shall
27 knowingly and willfully allows allow the use of the facilities
28 of said hospital by an insured party in a scheme or conspiracy
29 to fraudulently violate any of the provisions of this section
30 or part XI of chapter 627. Any hospital administrator or
31 employee who violates this subsection commits insurance fraud
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1 a felony of the third degree, punishable as provided in
2 subsection (11) s. 775.082, s. 775.083, or s. 775.084. Any
3 adjudication of guilt for a violation of this subsection, or
4 the use of business practices demonstrating a pattern
5 indicating that the spirit of the law set forth in this
6 section or part XI of chapter 627 is not being followed, shall
7 be grounds for suspension or revocation of the license to
8 operate the hospital or the imposition of an administrative
9 penalty of up to $5,000 by the licensing agency, as set forth
10 in chapter 395.
11 (10) As used in this section, the term "insurer" means
12 any insurer, health maintenance organization, self-insurer,
13 self-insurance fund, or other similar entity or person
14 regulated under chapter 440 or chapter 641 or by the
15 Department of Insurance under the Florida Insurance Code.
16 (11) If the value of any property involved in a
17 violation of this section:
18 (a) Is less than $20,000, the offender commits a
19 felony of the third degree, punishable as provided in s.
20 775.082, s. 775.083, or s. 775.084.
21 (b) Is $20,000 or more, but less than $100,000, the
22 offender commits a felony of the second degree, punishable as
23 provided in s. 775.082, s. 775.083, or s. 775.084.
24 (c) Is $100,000 or more, the offender commits a felony
25 of the first degree, punishable as provided in s. 775.082, s.
26 775.083, or s. 775.084.
27 (12) As used in this section:
28 (a) "Property" means property as defined in s.
29 812.012.
30 (b) "Value" means value as defined in s. 812.012.
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1 Section 7. Subsection (4) of section 817.505, Florida
2 Statutes, 1998 Supplement, is amended to read:
3 817.505 Patient brokering prohibited; exceptions;
4 penalties.--
5 (4) Any person, including an officer, partner, agent,
6 attorney, or other representative of a firm, joint venture,
7 partnership, business trust, syndicate, corporation, or other
8 business entity, who violates any provision of this section
9 commits:
10 (a) A misdemeanor of the first degree for a first
11 violation, punishable as provided in s. 775.082 or by a fine
12 not to exceed $5,000, or both.
13 (b) a felony of the third degree for a second or
14 subsequent violation, punishable as provided in s. 775.082, s.
15 775.083, or s. 775.084 or by a fine not to exceed $10,000, or
16 both.
17 Section 8. For the purpose of incorporating the
18 amendment to subsection (4) of section 817.505, Florida
19 Statutes, 1998 Supplement, in a reference thereto, subsection
20 (3) of section 455.657, Florida Statutes, is reenacted to
21 read:
22 455.657 Kickbacks prohibited.--
23 (3) Violations of this section shall be considered
24 patient brokering and shall be punishable as provided in s.
25 817.505.
26 Section 9. The sum of $250,000 is hereby appropriated
27 from the Insurance Commissioner's Regulatory Trust Fund in a
28 nonoperating category for state fiscal year 1999-2000 for the
29 purpose of implementing the reward program under s. 626.9892,
30 Florida Statutes, as created by this act.
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1 Section 10. Section 624.6085, Florida Statutes, is
2 created to read:
3 624.6085 "Collateral protection insurance"
4 defined.--For purposes of ss. 215.555, 627.311, and 627.351,
5 "collateral protection insurance" means commercial property
6 insurance under which a creditor is the primary beneficiary
7 and policyholder and which protects or covers an interest of
8 the creditor arising out of a credit transaction secured by
9 real or personal property. Initiation of such coverage is
10 triggered by the mortgagor's failure to maintain insurance
11 coverage as required by the mortgage or other lending
12 document. Collateral protection insurance is not residential
13 coverage.
14 Section 11. Paragraphs (e) and (f) of subsection (1)
15 of section 626.321, Florida Statutes, 1998 Supplement are
16 amended to read:
17 626.321 Limited licenses.--
18 (1) The department shall issue to a qualified
19 individual, or a qualified individual or entity under
20 paragraphs (c), (d), and (e), a license as agent authorized to
21 transact a limited class of business in any of the following
22 categories:
23 (e) Credit life or disability insurance.--License
24 covering only credit life or disability insurance. The
25 license may be issued only to an individual employed by a life
26 or health insurer as an officer or other salaried or
27 commissioned representative, or to an individual employed by
28 or associated with a lending or financing institution or
29 creditor, and may authorize the sale of such insurance only
30 with respect to borrowers or debtors of such lending or
31 financing institution or creditor. However, only the
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1 individual or entity whose tax identification number is used
2 in receiving or is credited with receiving the commission from
3 the sale of such insurance shall be the licensed agent of the
4 insurer. No individual while so licensed shall hold a license
5 as an agent or solicitor as to any other or additional kind or
6 class of life or health insurance coverage. An entity other
7 than a lending or financial institution defined in s. 626.988
8 holding a limited license under this paragraph shall also be
9 authorized to sell credit property insurance. An entity
10 applying for a license under this section:
11 1. Is required to submit only one application for a
12 license under s. 626.171.
13 2. Is required to obtain a license for each office,
14 branch office, or place of business making use of the entity's
15 business name by applying to the department for the license on
16 a simplified form developed by rule of the department for this
17 purpose.
18 3. Is not required to pay any additional application
19 fees for a license issued to the offices or places of business
20 referenced in subsection (2), but is required to pay the
21 license fee as prescribed in s. 624.501, be appointed under s.
22 626.112, and pay the prescribed appointment fee under s.
23 624.501. The license obtained under this paragraph shall be
24 posted at the business location for which it was issued so as
25 to be readily visible to prospective purchasers of such
26 coverage.
27 (f) Credit insurance.--License covering only credit
28 insurance, as such insurance is defined in s. 624.605(1)(i),
29 and no individual or entity so licensed shall, during the same
30 period, hold a license as an agent or solicitor as to any
31 other or additional kind of life or health insurance with the
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1 exception of credit life or disability insurance as defined in
2 paragraph (e). The same licensing provisions as outlined in
3 paragraph (e) apply to entities licensed as credit insurance
4 agents under this paragraph.
5 Section 12. Subsection (1) of section 627.6645,
6 Florida Statutes, is amended and subsection (5) is added to
7 that section to read:
8 627.6645 Notification of cancellation, expiration,
9 nonrenewal, or change in rates.--
10 (1) Every insurer delivering or issuing for delivery a
11 group health insurance policy under the provisions of this
12 part shall give the policyholder at least 45 days' advance
13 notice of cancellation, expiration, nonrenewal, or a change in
14 rates. Such notice shall be mailed to the policyholder's last
15 address as shown by the records of the insurer. However, if
16 cancellation is for nonpayment of premium, only the
17 requirements of subsection (5) this section shall not apply.
18 Upon receipt of such notice, the policyholder shall forward,
19 as soon as practicable, the notice of expiration,
20 cancellation, or nonrenewal to each certificateholder covered
21 under the policy.
22 (5) If cancellation is due to nonpayment of premium,
23 the insurer may not retroactively cancel the policy to a date
24 prior to the date that notice of cancellation was provided to
25 the policyholder unless the insurer mails notice of
26 cancellation to the policyholder prior to 45 days after the
27 date the premium was due. Such notice must be mailed to the
28 policyholder's last address as shown by the records of the
29 insurer and may provide for a retroactive date of cancellation
30 no earlier than midnight of the date that the premium was due.
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1 Section 13. Section 627.6675, Florida Statutes, 1998
2 Supplement, is amended to read:
3 627.6675 Conversion on termination of
4 eligibility.--Subject to all of the provisions of this
5 section, a group policy delivered or issued for delivery in
6 this state by an insurer or nonprofit health care services
7 plan that provides, on an expense-incurred basis, hospital,
8 surgical, or major medical expense insurance, or any
9 combination of these coverages, shall provide that an employee
10 or member whose insurance under the group policy has been
11 terminated for any reason, including discontinuance of the
12 group policy in its entirety or with respect to an insured
13 class, and who has been continuously insured under the group
14 policy, and under any group policy providing similar benefits
15 that the terminated group policy replaced, for at least 3
16 months immediately prior to termination, shall be entitled to
17 have issued to him or her by the insurer a policy or
18 certificate of health insurance, referred to in this section
19 as a "converted policy." A group insurer may meet the
20 requirements of this section by contracting with another
21 insurer, authorized in this state, to issue an individual
22 converted policy, which policy has been approved by the
23 department under s. 627.410. An employee or member shall not
24 be entitled to a converted policy if termination of his or her
25 insurance under the group policy occurred because he or she
26 failed to pay any required contribution, or because any
27 discontinued group coverage was replaced by similar group
28 coverage within 31 days after discontinuance.
29 (1) TIME LIMIT.--Written application for the converted
30 policy shall be made and the first premium must be paid to the
31 insurer, not later than 63 days after termination of the group
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1 policy. However, if termination was the result of failure to
2 pay any required premium or contribution and such nonpayment
3 of premium was due to acts of an employer or policyholder
4 other than the employee or certificateholder, written
5 application for the converted policy must be made and the
6 first premium must be paid to the insurer not later than 63
7 days after notice of termination is mailed by the insurer or
8 the employer, whichever is earlier, to the employee's or
9 certificateholder's last address as shown by the record of the
10 insurer or the employer, whichever is applicable. In such case
11 of termination due to nonpayment of premium by the employer or
12 policyholder, the premium for the converted policy may not
13 exceed the rate for the prior group coverage for the period of
14 coverage under the converted policy prior to the date notice
15 of termination is mailed to the employee or certificateholder.
16 For the period of coverage after such date, the premium for
17 the converted policy is subject to the requirements of
18 subsection (3).
19 (2) EVIDENCE OF INSURABILITY.--The converted policy
20 shall be issued without evidence of insurability.
21 (3) CONVERSION PREMIUM; EFFECT ON PREMIUM RATES FOR
22 GROUP COVERAGE.--
23 (a) The premium for the converted policy shall be
24 determined in accordance with premium rates applicable to the
25 age and class of risk of each person to be covered under the
26 converted policy and to the type and amount of insurance
27 provided. However, the premium for the converted policy may
28 not exceed 200 percent of the standard risk rate as
29 established by the department, pursuant to this subsection.
30 (b) Actual or expected experience under converted
31 policies may be combined with such experience under group
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1 policies for the purposes of determining premium and loss
2 experience and establishing premium rate levels for group
3 coverage.
4 (c) The department shall annually determine standard
5 risk rates, using reasonable actuarial techniques and
6 standards adopted by the department by rule. The standard risk
7 rates must be determined as follows:
8 1. Standard risk rates for individual coverage must be
9 determined separately for indemnity policies, preferred
10 provider/exclusive provider policies, and health maintenance
11 organization contracts.
12 2. The department shall survey insurers and health
13 maintenance organizations representing at least an 80 percent
14 market share, based on premiums earned in the state for the
15 most recent calendar year, for each of the categories
16 specified in subparagraph 1.
17 3. Standard risk rate schedules must be determined,
18 computed as the average rates charged by the carriers
19 surveyed, giving appropriate weight to each carrier's
20 statewide market share of earned premiums.
21 4. The rate schedule shall be determined from analysis
22 of the one county with the largest market share in the state
23 of all such carriers.
24 5. The rate for other counties must be determined by
25 using the weighted average of each carrier's county factor
26 relationship to the county determined in subparagraph 4.
27 6. The rate schedule must be determined for different
28 age brackets and family size brackets.
29 (4) EFFECTIVE DATE OF COVERAGE.--The effective date of
30 the converted policy shall be the day following the
31 termination of insurance under the group policy.
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1 (5) SCOPE OF COVERAGE.--The converted policy shall
2 cover the employee or member and his or her dependents who
3 were covered by the group policy on the date of termination of
4 insurance. At the option of the insurer, a separate converted
5 policy may be issued to cover any dependent.
6 (6) OPTIONAL COVERAGE.--The insurer shall not be
7 required to issue a converted policy covering any person who
8 is or could be covered by Medicare. The insurer shall not be
9 required to issue a converted policy covering a person if
10 paragraphs (a) and (b) apply to the person:
11 (a) If any of the following apply to the person:
12 1. The person is covered for similar benefits by
13 another hospital, surgical, medical, or major medical expense
14 insurance policy or hospital or medical service subscriber
15 contract or medical practice or other prepayment plan, or by
16 any other plan or program.
17 2. The person is eligible for similar benefits,
18 whether or not actually provided coverage, under any
19 arrangement of coverage for individuals in a group, whether on
20 an insured or uninsured basis.
21 3. Similar benefits are provided for or are available
22 to the person under any state or federal law.
23 (b) If the benefits provided under the sources
24 referred to in subparagraph (a)1. or the benefits provided or
25 available under the sources referred to in subparagraphs (a)2.
26 and 3., together with the benefits provided by the converted
27 policy, would result in overinsurance according to the
28 insurer's standards. The insurer's standards must bear some
29 reasonable relationship to actual health care costs in the
30 area in which the insured lives at the time of conversion and
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1 must be filed with the department prior to their use in
2 denying coverage.
3 (7) INFORMATION REQUESTED BY INSURER.--
4 (a) A converted policy may include a provision under
5 which the insurer may request information, in advance of any
6 premium due date, of any person covered thereunder as to
7 whether:
8 1. The person is covered for similar benefits by
9 another hospital, surgical, medical, or major medical expense
10 insurance policy or hospital or medical service subscriber
11 contract or medical practice or other prepayment plan or by
12 any other plan or program.
13 2. The person is covered for similar benefits under
14 any arrangement of coverage for individuals in a group,
15 whether on an insured or uninsured basis.
16 3. Similar benefits are provided for or are available
17 to the person under any state or federal law.
18 (b) The converted policy may provide that the insurer
19 may refuse to renew the policy or the coverage of any person
20 only for one or more of the following reasons:
21 1. Either the benefits provided under the sources
22 referred to in subparagraphs (a)1. and 2. for the person or
23 the benefits provided or available under the sources referred
24 to in subparagraph (a)3. for the person, together with the
25 benefits provided by the converted policy, would result in
26 overinsurance according to the insurer's standards on file
27 with the department.
28 2. The converted policyholder fails to provide the
29 information requested pursuant to paragraph (a).
30 3. Fraud or intentional misrepresentation in applying
31 for any benefits under the converted policy.
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1 4. Other reasons approved by the department.
2 (8) BENEFITS OFFERED.--
3 (a) An insurer shall not be required to issue a
4 converted policy that provides benefits in excess of those
5 provided under the group policy from which conversion is made.
6 (b) An insurer shall offer the benefits specified in
7 s. 627.668 and the benefits specified in s. 627.669 if those
8 benefits were provided in the group plan.
9 (c) An insurer shall offer maternity benefits and
10 dental benefits if those benefits were provided in the group
11 plan.
12 (9) PREEXISTING CONDITION PROVISION.--The converted
13 policy shall not exclude a preexisting condition not excluded
14 by the group policy. However, the converted policy may provide
15 that any hospital, surgical, or medical benefits payable under
16 the converted policy may be reduced by the amount of any such
17 benefits payable under the group policy after the termination
18 of covered under the group policy. The converted policy may
19 also provide that during the first policy year the benefits
20 payable under the converted policy, together with the benefits
21 payable under the group policy, shall not exceed those that
22 would have been payable had the individual's insurance under
23 the group policy remained in force.
24 (10) REQUIRED OPTION FOR MAJOR MEDICAL
25 COVERAGE.--Subject to the provisions and conditions of this
26 part, the employee or member shall be entitled to obtain a
27 converted policy providing major medical coverage under a plan
28 meeting the following requirements:
29 (a) A maximum benefit equal to the lesser of the
30 policy limit of the group policy from which the individual
31 converted or $500,000 per covered person for all covered
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1 medical expenses incurred during the covered person's
2 lifetime.
3 (b) Payment of benefits at the rate of 80 percent of
4 covered medical expenses which are in excess of the
5 deductible, until 20 percent of such expenses in a benefit
6 period reaches $2,000, after which benefits will be paid at
7 the rate of 90 percent during the remainder of the contract
8 year unless the insured is in the insurer's case management
9 program, in which case benefits shall be paid at the rate of
10 100 percent during the remainder of the contract year. For
11 the purposes of this paragraph, "case management program"
12 means the specific supervision and management of the medical
13 care provided or prescribed for a specific individual, which
14 may include the use of health care providers designated by the
15 insurer. Payment of benefits for outpatient treatment of
16 mental illness, if provided in the converted policy, may be at
17 a lesser rate but not less than 50 percent.
18 (c) A deductible for each calendar year that must be
19 $500, $1,000, or $2,000, at the option of the policyholder.
20 (d) The term "covered medical expenses," as used in
21 this subsection, shall be consistent with those customarily
22 offered by the insurer under group or individual health
23 insurance policies but is not required to be identical to the
24 covered medical expenses provided in the group policy from
25 which the individual converted.
26 (11) ALTERNATIVE PLANS.--The insurer shall, in
27 addition to the option required by subsection (10), offer the
28 standard health benefit plan, as established pursuant to s.
29 627.6699(12). The insurer may, at its option, also offer
30 alternative plans for group health conversion in addition to
31 the plans required by this section.
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1 (12) RETIREMENT COVERAGE.--If coverage would be
2 continued under the group policy on an employee following the
3 employee's retirement prior to the time he or she is or could
4 be covered by Medicare, the employee may elect, instead of
5 such continuation of group insurance, to have the same
6 conversion rights as would apply had his or her insurance
7 terminated at retirement by reason or termination of
8 employment or membership.
9 (13) REDUCTION OF COVERAGE DUE TO MEDICARE.--The
10 converted policy may provide for reduction of coverage on any
11 person upon his or her eligibility for coverage under Medicare
12 or under any other state or federal law providing for benefits
13 similar to those provided by the converted policy.
14 (14) CONVERSION PRIVILEGE ALLOWED.--The conversion
15 privilege shall also be available to any of the following:
16 (a) The surviving spouse, if any, at the death of the
17 employee or member, with respect to the spouse and the
18 children whose coverages under the group policy terminate by
19 reason of the death, otherwise to each surviving child whose
20 coverage under the group policy terminates by reason of such
21 death, or, if the group policy provides for continuation of
22 dependents' coverages following the employee's or member's
23 death, at the end of such continuation.
24 (b) The former spouse whose coverage would otherwise
25 terminate because of annulment or dissolution of marriage, if
26 the former spouse is dependent for financial support.
27 (c) The spouse of the employee or member upon
28 termination of coverage of the spouse, while the employee or
29 member remains insured under the group policy, by reason of
30 ceasing to be a qualified family member under the group
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1 policy, with respect to the spouse and the children whose
2 coverages under the group policy terminate at the same time.
3 (d) A child solely with respect to himself or herself
4 upon termination of his or her coverage by reason of ceasing
5 to be a qualified family member under the group policy, if a
6 conversion privilege is not otherwise provided in this
7 subsection with respect to such termination.
8 (15) BENEFIT LEVELS.--If the benefit levels required
9 in subsection (10) exceed the benefit levels provided under
10 the group policy, the conversion policy may offer benefits
11 which are substantially similar to those provided under the
12 group policy in lieu of those required in subsection (10).
13 (16) GROUP COVERAGE INSTEAD OF INDIVIDUAL
14 COVERAGE.--The insurer may elect to provide group insurance
15 coverage instead of issuing a converted individual policy.
16 (17) NOTIFICATION.--A notification of the conversion
17 privilege shall be included in each certificate of coverage.
18 The insurer shall mail an election and premium notice form,
19 including an outline of coverage, on a form approved by the
20 department, within 14 days after an individual who is eligible
21 for a converted policy gives notice to the insurer that the
22 individual is considering applying for the converted policy or
23 otherwise requests such information. The outline of coverage
24 must contain a description of the principal benefits and
25 coverage provided by the policy and its principal exclusions
26 and limitations, including, but not limited to, deductibles
27 and coinsurance.
28 (18) OUTSIDE CONVERSIONS.--A converted policy that is
29 delivered outside of this state must be on a form that could
30 be delivered in the other jurisdiction as a converted policy
31 had the group policy been issued in that jurisdiction.
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1 (19) APPLICABILITY.--This section does not require
2 conversion on termination of eligibility for a policy or
3 contract that provides benefits for specified diseases, or for
4 accidental injuries only, disability income, Medicare
5 supplement, hospital indemnity, limited benefit,
6 nonconventional, or excess policies.
7 (20) Nothing in this section or in the incorporation
8 of it into insurance policies shall be construed to require
9 insurers to provide benefits equal to those provided in the
10 group policy from which the individual converted, provided,
11 however, that comprehensive benefits are offered which shall
12 be subject to approval by the Insurance Commissioner.
13 Section 14. Section 641.3108, Florida Statutes, is
14 amended to read:
15 641.3108 Notice of cancellation of contract.--
16 (1) Except for nonpayment of premium or termination of
17 eligibility, no health maintenance organization may cancel or
18 otherwise terminate or fail to renew a health maintenance
19 contract without giving the subscriber at least 45 days'
20 notice in writing of the cancellation, termination, or
21 nonrenewal of the contract. The written notice shall state the
22 reason or reasons for the cancellation, termination, or
23 nonrenewal. All health maintenance contracts shall contain a
24 clause which requires that this notice be given.
25 (2) If cancellation is due to nonpayment of premium,
26 the health maintenance organization may not retroactively
27 cancel the contract to a date prior to the date that notice of
28 cancellation was provided to the subscriber unless the
29 organization mails notice of cancellation to the subscriber
30 prior to 45 days after the date the premium was due. Such
31 notice must be mailed to the subscriber's last address as
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1 shown by the records of the organization and may provide for a
2 retroactive date of cancellation no earlier than midnight of
3 the date that the premium was due.
4 (3) In the case of a health maintenance contract
5 issued to an employer or person holding the contract on behalf
6 of the subscriber group, the health maintenance organization
7 may make the notification through the employer or group
8 contract holder, and, if the health maintenance organization
9 elects to take this action through the employer or group
10 contract holder, the organization shall be deemed to have
11 complied with the provisions of this section upon notifying
12 the employer or group contract holder of the requirements of
13 this section and requesting the employer or group contract
14 holder to forward to all subscribers the notice required
15 herein.
16 Section 15. Subsection (1) of section 641.3922,
17 Florida Statutes, 1998 Supplement, is amended to read:
18 641.3922 Conversion contracts; conditions.--Issuance
19 of a converted contract shall be subject to the following
20 conditions:
21 (1) TIME LIMIT.--Written application for the converted
22 contract shall be made and the first premium paid to the
23 health maintenance organization not later than 63 days after
24 such termination. However, if termination was the result of
25 failure to pay any required premium or contribution and such
26 nonpayment of premium was due to acts of an employer or group
27 contract holder other than the employee or individual
28 subscriber, written application for the contract must be made
29 and the first premium must be paid not later than 63 days
30 after notice of termination is mailed by the organization or
31 the employer, whichever is earlier, to the employee's or
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1 individual's last address as shown by the record of the
2 organization or the employer, whichever is applicable. In such
3 case of termination due to non-payment of premium by the
4 employer or group contract holder, the premium for the
5 converted contract may not exceed the rate for the prior group
6 coverage for the period of coverage under the converted
7 contract prior to the date notice of termination is mailed to
8 the employee or individual subscriber. For the period of
9 coverage after such date, the premium for the converted
10 contract is subject to the requirements of subsection (3).
11 Section 16. This act shall take effect October 1,
12 1999, and shall apply to policies and contracts issued or
13 renewed on or after that date.
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