Senate Bill sb2060c1
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Florida Senate - 2001 CS for SB 2060
By the Committee on Banking and Insurance; and Senator Geller
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1 A bill to be entitled
2 An act relating to the Department of Insurance;
3 amending ss. 624.3161, 626.171, F.S.; directing
4 the department to adopt rules relating to
5 market conduct examinations and license
6 applications; amending s. 626.9541, F.S.;
7 revising provisions relating to unfair
8 competition and deceptive practices; creating
9 626.9552, F.S.; providing standards for single
10 interest insurance; amending s. 627.062, F.S.;
11 providing for filing forms for rate standards;
12 amending s. 627.0625, F.S.; authorizing the
13 department to adopt rules relating to
14 third-party claimants; amending s. 627.0651,
15 F.S.; prohibiting motor vehicle insurers from
16 imposing a surcharge or a discount due to
17 certain factors; creating s. 627.385, F.S.;
18 providing rules of conduct for residual market
19 board members; creating s. 627.4065, F.S.;
20 providing for notice of right to return health
21 insurance policies; creating s. 627.41345,
22 F.S.; prohibiting an insurer or agent from
23 issuing or signing certain certificates of
24 insurance; providing that the terms of the
25 policy control in case of conflict; amending s.
26 627.7015, F.S.; defining the term "claim" for
27 purposes of alternative procedures for
28 resolving disputed property insurance claims;
29 amending s. 627.7276, F.S.; providing for
30 notice of coverage of automobile policies;
31 creating s. 627.795, F.S.; providing guidelines
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1 for title insurance policies; amending s.
2 627.918, F.S.; directing the department to
3 adopt rules relating to reporting formats;
4 amending s. 641.31, F.S.; specifying
5 reimbursement for emergency services under
6 health maintenance organization contracts;
7 amending s. 641.3108, F.S.; requiring health
8 maintenance organizations to provide certain
9 information to subscriber groups whose contract
10 is not renewed for certain reasons; providing
11 an effective date.
12
13 Be It Enacted by the Legislature of the State of Florida:
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15 Section 1. Subsection (6) is added to section
16 624.3161, Florida Statutes, to read:
17 624.3161 Market conduct examinations.--
18 (6) The department shall adopt rules as necessary to
19 effectuate the market conduct examination process, to assure
20 compliance by the person examined with the applicable
21 provisions of the Insurance Code. Such rules shall not exceed
22 the authority of the statutes involved in the market conduct
23 examination.
24 Section 2. Subsection (8) is added to section 626.171,
25 Florida Statutes, to read:
26 626.171 Application for license.--
27 (8) The department shall adopt rules to effectuate the
28 license application process, including photo identification,
29 background checks and credit reports, prelicensing courses,
30 the impact of criminal and law enforcement history, and other
31 relevant information in an effort to determine an applicant's
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1 fitness and trustworthiness to engage in the business of
2 insurance.
3 Section 3. Paragraph (o) of subsection (1) of section
4 626.9541, Florida Statutes, is amended to read:
5 626.9541 Unfair methods of competition and unfair or
6 deceptive acts or practices defined.--
7 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR
8 DECEPTIVE ACTS.--The following are defined as unfair methods
9 of competition and unfair or deceptive acts or practices:
10 (o) Illegal dealings in premiums; excess or reduced
11 charges for insurance.--
12 1. Knowingly collecting any sum as a premium or charge
13 for insurance, which is not then provided, or is not in due
14 course to be provided, subject to acceptance of the risk by
15 the insurer, by an insurance policy issued by an insurer as
16 permitted by this code.
17 2. Knowingly collecting as a premium or charge for
18 insurance any sum in excess of or less than the premium or
19 charge applicable to such insurance, in accordance with the
20 applicable classifications and rates as filed with and
21 approved by the department, and as specified in the policy;
22 or, in cases when classifications, premiums, or rates are not
23 required by this code to be so filed and approved, premiums
24 and charges in excess of or less than those specified in the
25 policy and as fixed by the insurer. This provision shall not
26 be deemed to prohibit the charging and collection, by surplus
27 lines agents licensed under part VIII of this chapter, of the
28 amount of applicable state and federal taxes, or fees as
29 authorized by s. 626.916(4), in addition to the premium
30 required by the insurer or the charging and collection, by
31 licensed agents, of the exact amount of any discount or other
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1 such fee charged by a credit card facility in connection with
2 the use of a credit card, as authorized by subparagraph (q)3.,
3 in addition to the premium required by the insurer. This
4 subparagraph shall not be construed to prohibit collection of
5 a premium for a universal life or a variable or indeterminate
6 value insurance policy made in accordance with the terms of
7 the contract.
8 3.a. Imposing or requesting an additional premium for
9 a policy of motor vehicle liability, personal injury
10 protection, medical payment, or collision insurance or any
11 combination thereof or refusing to renew the policy solely
12 because the insured was involved in a motor vehicle accident
13 unless the insurer's file contains information from which the
14 insurer in good faith determines that the insured was
15 substantially at fault in the accident.
16 b. An insurer which imposes and collects such a
17 surcharge or which refuses to renew such policy shall, in
18 conjunction with the notice of premium due or notice of
19 nonrenewal, notify the named insured that he or she is
20 entitled to reimbursement of such amount or renewal of the
21 policy under the conditions listed below and will subsequently
22 reimburse him or her or renew the policy, if the named insured
23 demonstrates that the operator involved in the accident was:
24 (I) Lawfully parked;
25 (II) Reimbursed by, or on behalf of, a person
26 responsible for the accident or has a judgment against such
27 person;
28 (III) Struck in the rear by another vehicle headed in
29 the same direction and was not convicted of a moving traffic
30 violation in connection with the accident;
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1 (IV) Hit by a "hit-and-run" driver, if the accident
2 was reported to the proper authorities within 24 hours after
3 discovering the accident;
4 (V) Not convicted of a moving traffic violation in
5 connection with the accident, but the operator of the other
6 automobile involved in such accident was convicted of a moving
7 traffic violation;
8 (VI) Finally adjudicated not to be liable by a court
9 of competent jurisdiction;
10 (VII) In receipt of a traffic citation which was
11 dismissed or nolle prossed; or
12 (VIII) Not at fault as evidenced by a written
13 statement from the insured establishing facts demonstrating
14 lack of fault which are not rebutted by information in the
15 insurer's file from which the insurer in good faith determines
16 that the insured was substantially at fault.
17 c. In addition to the other provisions of this
18 subparagraph, an insurer may not fail to renew a policy if the
19 insured has had only one accident in which he or she was at
20 fault within the current 3-year period. However, an insurer
21 may nonrenew a policy for reasons other than accidents in
22 accordance with s. 627.728. This subparagraph does not
23 prohibit nonrenewal of a policy under which the insured has
24 had three or more accidents, regardless of fault, during the
25 most recent 3-year period.
26 4. Imposing or requesting an additional premium for,
27 or refusing to renew, a policy for motor vehicle insurance
28 solely because the insured committed a noncriminal traffic
29 infraction as described in s. 318.14 unless the infraction is:
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1 a. A second infraction committed within an 18-month
2 period, or a third or subsequent infraction committed within a
3 36-month period.
4 b. A violation of s. 316.183, when such violation is a
5 result of exceeding the lawful speed limit by more than 15
6 miles per hour.
7 5. Upon the request of the insured, the insurer and
8 licensed agent shall supply to the insured the complete proof
9 of fault or other criteria which justifies the additional
10 charge or cancellation.
11 6. No insurer shall impose or request an additional
12 premium for motor vehicle insurance, cancel or refuse to issue
13 a policy, or refuse to renew a policy because the insured or
14 the applicant is a handicapped or physically disabled person,
15 so long as such handicap or physical disability does not
16 substantially impair such person's mechanically assisted
17 driving ability.
18 7. No insurer may cancel or otherwise terminate any
19 insurance contract or coverage, or require execution of a
20 consent to rate endorsement, during the stated policy term for
21 the purpose of offering to issue, or issuing, a similar or
22 identical contract or coverage to the same insured with the
23 same exposure at a higher premium rate or continuing an
24 existing contract or coverage with the same exposure at an
25 increased premium.
26 8. No insurer may issue a nonrenewal notice on any
27 insurance contract or coverage, or require execution of a
28 consent to rate endorsement, for the purpose of offering to
29 issue, or issuing, a similar or identical contract or coverage
30 to the same insured at a higher premium rate or continuing an
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1 existing contract or coverage at an increased premium without
2 meeting any applicable notice requirements.
3 9. No insurer shall, with respect to premiums charged
4 for motor vehicle insurance, unfairly discriminate solely on
5 the basis of age, sex, marital status, location of the risk,
6 accidents more than 3 years old, or scholastic achievement.
7 10. Imposing or requesting an additional premium for
8 motor vehicle comprehensive or uninsured motorist coverage
9 solely because the insured was involved in a motor vehicle
10 accident or was convicted of a moving traffic violation.
11 11. No insurer shall cancel or issue a nonrenewal
12 notice on any insurance policy or contract without complying
13 with any applicable cancellation or nonrenewal provision
14 required under the Florida Insurance Code.
15 12. No insurer shall impose or request an additional
16 premium, cancel a policy, or issue a nonrenewal notice on any
17 insurance policy or contract because of any traffic infraction
18 when adjudication has been withheld and no points have been
19 assessed pursuant to s. 318.14(9) and (10). However, this
20 subparagraph does not apply to traffic infractions involving
21 accidents in which the insurer has incurred a loss due to the
22 fault of the insured.
23 Section 4. Section 626.9552, Florida Statutes, is
24 created to read:
25 626.9552 Single interest insurance.--
26 (1) When single interest insurance is written at the
27 expense of the purchaser or borrower in connection with a
28 finance or loan transaction, a clear and concise statement
29 must be furnished the purchaser or borrower advising the
30 purchaser or borrower that the insurance effected is solely
31 for the interest of the financing entity, and that no
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1 protection thereunder exists for the benefit of the purchaser
2 or borrower. When single interest insurance is written, no
3 effort may be made by the insurer to recover the amount of any
4 payment from the borrower. Single interest insurance policies
5 must be clearly stamped or printed on the declarations page,
6 "Single Interest Only----No Subrogation." Single interest
7 insurance is to be placed only after it has been determined
8 that no other kind of insurance can be placed on the risk,
9 except with the consent of the purchaser or borrower. Single
10 interest may be written in cases of inland marine installment
11 sales floater policies. If insurance cannot be obtained for
12 the dual protection of the purchaser or borrower, and the
13 seller or lender or financing entity for all the coverages
14 contemplated, or if obtained, is canceled by the insurer
15 before expiration, the seller or lender or financing entity
16 may obtain insurance to protect his or her interest in the
17 motor vehicle or other personal property, and the purchaser or
18 borrower may be required to pay the cost thereof. In such
19 event the seller or lender or financing entity shall promptly
20 notify the purchaser or borrower that such insurance cannot be
21 obtained, or has been canceled, and credit to the purchaser or
22 borrower the difference between the amount charged for dual
23 protection insurance and the actual cost of such single
24 interest insurance, less, in the event of cancellation, the
25 earned premium on the dual interest insurance for the period
26 it was in force. If the purchaser or borrower procures
27 acceptable dual interest insurance within 30 days after the
28 date of such notice and provides the seller or lender, or
29 finance entity with evidence that the premium therefore has
30 been paid, there is no charge to him or her for the single
31 interest coverage. As used in this section, the term
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1 "financing entity" means a finance company, bank, or other
2 lending institution. However, those lenders licensed under the
3 Consumer Finance Act, chapter 516, must provide coverage
4 issued in the name of the borrower containing the customary
5 mortgagee or loss payee clause.
6 (2) If a certificate is issued under a master policy,
7 the same coverage as provided in an individual policy will
8 apply.
9 (3) The provisions of this section do not apply to
10 title insurance as defined in s. 624.608.
11 Section 5. Paragraph (a) of subsection (2) of section
12 627.062, Florida Statutes, is amended to read:
13 627.062 Rate standards.--
14 (2) As to all such classes of insurance:
15 (a) Insurers or rating organizations shall establish
16 and use rates, rating schedules, or rating manuals to allow
17 the insurer a reasonable rate of return on such classes of
18 insurance written in this state. Copies A copy of rates,
19 rating schedules, rating manuals, premium credits or discount
20 schedules, and surcharge schedules, and changes thereto, shall
21 be filed with the department under one of the following
22 procedures:
23 1. If the filing is made at least 90 days before the
24 proposed effective date and the filing is not implemented
25 during the department's review of the filing and any
26 proceeding and judicial review, then such filing shall be
27 considered a "file and use" filing. In such case, the
28 department shall finalize its review by issuance of a notice
29 of intent to approve or a notice of intent to disapprove
30 within 90 days after receipt of the filing. The notice of
31 intent to approve and the notice of intent to disapprove
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1 constitute agency action for purposes of the Administrative
2 Procedure Act. Requests for supporting information, requests
3 for mathematical or mechanical corrections, or notification to
4 the insurer by the department of its preliminary findings
5 shall not toll the 90-day period during any such proceedings
6 and subsequent judicial review. The rate shall be deemed
7 approved if the department does not issue a notice of intent
8 to approve or a notice of intent to disapprove within 90 days
9 after receipt of the filing.
10 2. If the filing is not made in accordance with the
11 provisions of subparagraph 1., such filing shall be made as
12 soon as practicable, but no later than 30 days after the
13 effective date, and shall be considered a "use and file"
14 filing. An insurer making a "use and file" filing is
15 potentially subject to an order by the department to return to
16 policyholders portions of rates found to be excessive, as
17 provided in paragraph (h).
18 Section 6. Subsection (4) is added to section
19 627.0625, Florida Statutes, to read:
20 627.0625 Commercial property and casualty risk
21 management plans.--
22 (4) Commercial motor vehicle policies that are issued
23 to satisfy mandatory financial responsibility requirements of
24 a state or local government must provide first dollar coverage
25 to third-party claimants without a deductible. With respect to
26 such practices, the department may adopt rules necessary to
27 assure that claims are administered fairly as required by law.
28 Section 7. Subsection (8) of section 627.0651, Florida
29 Statutes, is amended to read:
30 627.0651 Making and use of rates for motor vehicle
31 insurance.--
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1 (8) Rates are not unfairly discriminatory if averaged
2 broadly among members of a group; nor are rates unfairly
3 discriminatory even though they are lower than rates for
4 nonmembers of the group. However, such rates are unfairly
5 discriminatory if they are not actuarially measurable and
6 credible and sufficiently related to actual or expected loss
7 and expense experience of the group so as to assure that
8 nonmembers of the group are not unfairly discriminated
9 against. Use of a single United States Postal Service zip code
10 as a rating territory shall be deemed unfairly discriminatory.
11 An insurer may not impose a surcharge or discount for
12 liability coverages based on the type of vehicle without
13 providing acceptable actuarial justification.
14 Section 8. Section 627.385, Florida Statutes, is
15 created to read:
16 627.385 Conduct of residual market board members.--
17 (1)(a) For various insurance coverages, a residual
18 market has been created by legislation to provide a market of
19 last resort for individuals unable to secure coverage in the
20 voluntary market.
21 (b) Each residual market's enabling legislation calls
22 for the establishment of a board of governors or directors
23 that operates subject to a plan of operation. The board, in
24 carrying out its obligations, must engage in business
25 transactions in order to provide and administer the required
26 coverage and maintain adequate funds to support the plan. In
27 order for the board to fully execute its responsibilities
28 required by law, conflict of interest or inappropriate
29 activity by board members, or the appearance thereof, with
30 regard to member insurers or policyholders of the residual
31 market mechanism must be avoided. The Legislature has
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1 determined that the provisions set forth in subsection (2) are
2 necessary to protect the public interest by ensuring fair,
3 reasonable, and beneficial board practice and activity.
4 (c) This section applies to the Florida Medical
5 Malpractice Joint Underwriting Association, the Florida
6 Automobile Joint Underwriting Association, the Florida
7 Workers' Compensation Joint Underwriting Association, the
8 Florida Comprehensive Health Association, the Florida
9 Windstorm Underwriting Association, the Florida Property and
10 Casualty Joint Underwriting Association, the Florida
11 Residential Property and Casualty Joint Underwriting
12 Association, and the board members thereof.
13 (2) To ensure that the board is free from potential
14 conflict or inappropriate behavior the following are adopted
15 in the plan of operation of the subject residual market in
16 this state.
17 (a) A board member may not act as a servicing carrier
18 or administering entity for the subject plan, other than a
19 claim adjustment contract open to all members of the plan.
20 (b) A board member or board member representative may
21 not use his or her position to foster or facilitate any
22 special pecuniary gain for himself or herself, his or her
23 member company, or any other entity in which the board member
24 or board member representative or the member company has a
25 substantial financial interest, except as otherwise provided
26 in paragraph (a).
27 (c) A board member or board member representative may
28 not use his or her position on the board to secure or promote
29 any business relationship from which he or she may derive a
30 financial gain.
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1 (d) A board member or designee may not receive any
2 gift or gratuity, except as provided in s. 112.3248, other
3 than meals, while acting in his or her capacity as a board
4 member.
5 (3) Board members and board member representatives
6 shall maintain reasonable board expenses based on state travel
7 policy as set forth in s. 112.061. The board shall develop a
8 detailed policy regarding board member travel, which policy
9 must be based on s. 112.061 and is subject to the approval of
10 the department.
11 Section 9. Section 627.4065, Florida Statutes, is
12 created to read:
13 627.4065 Insured's right to return policy; notice.--A
14 health insurance policy issued or issued for delivery in this
15 state must have printed or stamped thereon or attached thereto
16 a notice in a prominent place stating in substance that the
17 policyholder may return the policy to the insurer within 10
18 days after its delivery and may have the premium paid refunded
19 if, after examination of the policy or contract, the
20 policyholder is not satisfied with it for any reason. The
21 notice must provide that if the policyholder, pursuant to such
22 notice, returns the policy or contract to the insurer at its
23 home office or branch office or to the agent through whom it
24 was purchased, it is considered void from the beginning and
25 the parties are in the same position as if no policy or
26 contract had been issued. This section does not apply to group
27 policies, single premium nonrenewable policies or travel
28 accident policies.
29 Section 10. Section 627.41345, Florida Statutes, is
30 created to read:
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1 627.41345 Certificate of insurance.--An insurer or
2 agent may not issue or sign a certificate of insurance that
3 contains terms or conditions that differ from those in the
4 policy under which the certificate of insurance is issued. In
5 the event of a conflict, the terms of the policy under which
6 the certificate of insurance is issued shall control.
7 Section 11. Subsection (9) is added to section
8 627.7015, Florida Statutes, to read:
9 627.7015 Alternative procedure for resolution of
10 disputed property insurance claims.--
11 (9) For purposes of this section, the term "claim"
12 refers to any dispute between an insurer and an insured
13 relating to a material issue of fact other than a dispute:
14 (a) With respect to which the insurer has a reasonable
15 basis to suspect fraud;
16 (b) Where, based on agreed-upon facts as to the cause
17 of loss, there is no coverage under the policy;
18 (c) With respect to which the insurer has a reasonable
19 basis to believe that the claimant has intentionally made a
20 material misrepresentation of fact which is relevant to the
21 claim, and the entire request for payment of a loss has been
22 denied on the basis of the material misrepresentation; or
23 (d) Where the amount in controversy is less than $500,
24 unless the parties agree to mediate a dispute involving a
25 lesser amount.
26 Section 12. Section 627.7276, Florida Statutes, is
27 amended to read:
28 627.7276 Notice of limited coverage.--
29 (1) The following notice of limited coverage shall An
30 automobile policy that does not contain coverage for bodily
31 injury and property damage must be clearly stamped or printed
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1 on any automobile insurance policy that provides coverage only
2 for first-party damage to the insured vehicle, but does not
3 provide coverage for bodily injury liability, property damage
4 liability, or personal injury protection to the effect that
5 such coverage is not included in the policy in the following
6 manner:
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8 "THIS POLICY DOES NOT PROVIDE BODILY INJURY
9 LIABILITY, AND PROPERTY DAMAGE LIABILITY, OR
10 PERSONAL INJURY PROTECTION INSURANCE OR ANY
11 OTHER COVERAGE FOR WHICH A SPECIFIC PREMIUM
12 CHARGE IS NOT MADE, AND DOES NOT COMPLY WITH
13 ANY FINANCIAL RESPONSIBILITY LAW OR WITH THE
14 FLORIDA MOTOR VEHICLE NO-FAULT LAW."
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16 (2) This legend must appear on the policy declaration
17 page and on the filing back of the policy and be printed in a
18 contrasting color from that used on the policy and in type
19 larger than the largest type used in the text thereof, as an
20 overprint or by a rubber stamp impression.
21 Section 13. Section 627.795, Florida Statutes, is
22 created to read:
23 627.795 Policy exceptions.--
24 (1) A title insurance commitment must be issued on all
25 real estate closing transactions when a title insurance policy
26 is to be issued, except for multiple conveyances on the same
27 property such as timesharing.
28 (2) A gap exception may not be deleted on a commitment
29 until the time of closing.
30 Section 14. Subsection (1) of section 627.918, Florida
31 Statutes, is amended to read:
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1 627.918 Reporting formats.--
2 (1) The department shall require that the reporting
3 provided for in this part be made on forms adopted established
4 by the department or in a format compatible with the
5 department's its electronic data processing equipment. The
6 department shall adopt by rule standards for such approval.
7 Section 15. Subsection (12) of section 641.31, Florida
8 Statutes, is amended to read:
9 641.31 Health maintenance contracts.--
10 (12) Each health maintenance contract, certificate, or
11 member handbook shall state that emergency services and care
12 shall be provided to subscribers in emergency situations not
13 permitting treatment through the health maintenance
14 organization's providers, without prior notification to and
15 approval of the organization. Reimbursement for covered
16 services and supplies under this section shall be governed by
17 the provisions of s. 641.513(5), up to the subscriber contract
18 benefit limits. Not less than 75 percent of the reasonable
19 charges for covered services and supplies shall be paid by the
20 organization, up to the subscriber contract benefit limits.
21 Payment also may be subject to additional applicable copayment
22 provisions, not to exceed $100 per claim. The health
23 maintenance contract, certificate, or member handbook shall
24 contain the definitions of "emergency services and care" and
25 "emergency medical condition" as specified in s. 641.19(7) and
26 (8), shall describe procedures for determination by the health
27 maintenance organization of whether the services qualify for
28 reimbursement as emergency services and care, and shall
29 contain specific examples of what does constitute an
30 emergency. In providing for emergency services and care as a
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1 covered service, a health maintenance organization shall be
2 governed by s. 641.513.
3 Section 16. Subsection (3) of section 641.3108,
4 Florida Statutes, is amended to read:
5 641.3108 Notice of cancellation of contract.--
6 (3) In the case of a health maintenance contract
7 issued to an employer or person holding the contract on behalf
8 of the subscriber group, the health maintenance organization
9 may make the notification through the employer or group
10 contract holder, and, if the health maintenance organization
11 elects to take this action through the employer or group
12 contract holder, the organization shall be deemed to have
13 complied with the provisions of this section upon notifying
14 the employer or group contract holder of the requirements of
15 this section and requesting the employer or group contract
16 holder to forward to all subscribers the notice required
17 herein. If a subscriber group contract is not renewed due to
18 claim experience, the subscriber group is entitled to receive
19 information concerning its loss ratio. If requested by a
20 subscriber group, a detailed claim experience record may be
21 provided at a reasonable expense. The record shall maintain
22 subscriber confidentiality.
23 Section 17. This act shall take effect upon becoming a
24 law.
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 SB 2060
3
4 Prohibits an insurer or agent from issuing a certificate of
insurance that contains terms that differ from those in the
5 policy.
6 Clarifies that reimbursement for emergency services by a
health maintenance organization are governed by s. 641.513(5),
7 F.S.
8 Requires health maintenance organizations to provide detailed
claim experience to a subscriber group, upon request, if the
9 group contract is not renewed due to claim experience.
10 Exempts certain property insurance claims from the mandatory
mediation provisions.
11
Adds the Workers' Compensation Joint Underwriting Association
12 to the JUA's subject to the provisions that prohibit board
members from engaging in specified activities considered a
13 conflict of interest and limit expenses for travel and per
diem.
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Deletes provisions related to the fees charged to participants
15 in the Deferred Compensation program.
16 Deletes provisions authorizing the department to adopt by rule
the provisions of the Long-Term Care Insurance Model
17 Regulation adopted by the National Association of Insurance
Commissioners.
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Deletes provisions requiring insurers and agents to maintain
19 certain records.
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