Senate Bill sb1114
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Florida Senate - 2001 SB 1114
By the Committee on Banking and Insurance
311-619B-01
1 A bill to be entitled
2 An act relating to property insurance; amending
3 s. 627.062, F.S.; requiring insurers to
4 maintain certain documentation relating to
5 policy numbers and annual statement lines;
6 exempting homeowner's insurance as to
7 individual risk rating; defining terms;
8 specifying conditions of large commercial risks
9 which are sufficient to be eligible for
10 individual risk rating; requiring documentation
11 for individual rated risks that are not large
12 commercial risks; requiring documentation for
13 large commercial risks; providing for the
14 adoption of rules by the Department of
15 Insurance; providing an effective date.
16
17 Be It Enacted by the Legislature of the State of Florida:
18
19 Section 1. Subsection (3) of section 627.062, Florida
20 Statutes, is amended to read:
21 627.062 Rate standards.--
22 (3)(a) For individual risks that are not rated in
23 accordance with the insurer's rates, rating schedules, rating
24 manuals, and underwriting rules filed with the department and
25 which have been submitted to the insurer for individual
26 rating, the insurer must maintain documentation on each risk
27 subject to individual risk rating. The documentation must
28 identify the named insured, the policy number, and the annual
29 statement line and must specify the characteristics and
30 classification of the risk supporting the reason for the risk
31 being individually risk rated, including any modifications to
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Florida Senate - 2001 SB 1114
311-619B-01
1 existing approved forms to be used on the risk. The insurer
2 must maintain these records for a period of at least 5 years
3 after the effective date of the policy.
4 (b) Individual risk rates and modifications to
5 existing approved forms are not subject to this part or part
6 II, except for paragraph (a) and ss. 627.402, 627.403,
7 627.4035, 627.404, 627.405, 627.406, 627.407, 627.4085,
8 627.409, 627.4132, 627.4133, 627.415, 627.416, 627.417,
9 627.419, 627.425, 627.426, 627.4265, 627.427, and 627.428, but
10 are subject to all other applicable provisions of this code
11 and rules adopted thereunder.
12 (c) This subsection does not apply to private
13 passenger motor vehicle insurance or homeowner's insurance.
14 (d) As used in this subsection, the term:
15 1. "Individual risk" means the insurable interests of
16 a single entity, that is, a natural person, partnership,
17 corporation, or unincorporated association.
18 2. "Individually rated risk" means an individual risk
19 for which an insurer provides coverage and which has not been
20 rated in accordance with the insurer's rates, rating
21 schedules, rating manuals, underwriting rules, and rating
22 plans filed with the department.
23 3. "Large commercial risk" means a risk that meets any
24 two or more of the following conditions:
25 a. Employs at least 500 full-time employees or their
26 equivalent.
27 b. Generates annual net revenue of at least $100
28 million in the latest fiscal year, as reported in audited
29 financial statements.
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Florida Senate - 2001 SB 1114
311-619B-01
1 c. Possesses a net worth of at least $50 million in
2 the latest fiscal year, as reported in audited financial
3 statements.
4 d. Pays annual property and casualty insurance
5 premiums of at least $500,000 in total for the following types
6 of insurance:
7 (I) Commercial property, including allied lines;
8 (II) Commercial auto; and
9 (III) Commercial general liability.
10 e. Procures insurance through a credentialed certified
11 risk manager, or has at least 7 years' experience in risk
12 financing, claims administration, loss prevention, or risk and
13 insurance coverage analysis.
14 f. Is a public entity having population in excess of
15 50,000.
16 g. Is a nonprofit organization or a public entity
17 having a minimum annual budget of at least $45 million.
18 (e) For individually rated risks that are not large
19 commercial risks as defined in subparagraph (d)3., an insurer
20 shall:
21 1. Maintain documentation that identifies the named
22 insured, the policy number, the annual statement line, the
23 classification of the risk, any special characteristics of the
24 risk, the reasons why the risk is being individually rated,
25 and the justification for the individual rate, including any
26 modifications to existing approved policy forms used on the
27 risk. The insurer shall maintain such records for at least 5
28 years after the effective date of the policy; and
29 2. Complete quarterly reports in accordance with
30 department rules.
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Florida Senate - 2001 SB 1114
311-619B-01
1 (f) The characteristics of a large commercial risk are
2 sufficient for it to be eligible for individual risk rating.
3 For large commercial risks that are individually rated, the
4 insurer must:
5 1. Maintain documentation to show that the risk is a
6 large commercial risk as defined in paragraph (d). This
7 documentation must be maintained for a period of 5 years after
8 the effective date of this act and is in lieu of the other
9 documentation required by this subsection; and
10 2. Complete quarterly reports in accordance with
11 department rules.
12 (g) The number of employees, net revenue, net worth,
13 annual property and casualty premiums, population, or budget
14 of a group of individual risks may not be combined to meet the
15 conditions of a large commercial risk.
16 (h) The department may adopt rules to administer this
17 subsection.
18 Section 2. This act shall take effect upon becoming a
19 law.
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22 SENATE SUMMARY
23 Revises provisions relating to property insurance.
Requires insurers to maintain certain documentation.
24 Exempts certain insurers from specified rate filing
requirements. Specifies conditions that large commercial
25 risks are eligible for individual risk ratings and
requires documentation for certain individual rated
26 risks. Specifies conditions under which such exemptions
apply.
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