Senate Bill sb1822c1

    Florida Senate - 2002                           CS for SB 1822

    By the Committee on Banking and Insurance; and Senator
    Holzendorf




    311-2008B-02

  1                      A bill to be entitled

  2         An act relating to insurance guaranty

  3         associations; amending s. 631.904, F.S.;

  4         redefining the term "covered claim"; defining

  5         the term "net direct written premiums";

  6         amending s. 631.913, F.S.; revising powers and

  7         duties of the corporation with respect to

  8         payments to a claimant; amending s. 631.929,

  9         F.S.; providing certain limitations with

10         respect to the election of remedies; providing

11         an effective date.

12

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

14

15         Section 1.  Subsection (2) of section 631.904, Florida

16  Statutes, is amended, and subsection (8) is added to that

17  section, to read:

18         631.904  Definitions.--As used in this part, the term:

19         (2)  "Covered claim" means an unpaid claim, including a

20  claim for return of unearned premiums, which arises out of, is

21  within the coverage of, and is not in excess of the applicable

22  limits of, an insurance policy to which this part applies,

23  which policy was issued by an insurer and which claim is made

24  on behalf of a claimant or insured who was a resident of this

25  state at the time of the injury. The term "covered claim" does

26  not include any amount sought as a return of premium under any

27  retrospective rating plan; any amount due any reinsurer,

28  insurer, insurance pool, or underwriting association, as

29  subrogation recoveries or otherwise; or any return of premium

30  resulting from a policy that was not in force on the date of

31  the final order of liquidation. Member insurers have no right

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CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2002                           CS for SB 1822
    311-2008B-02




  1  of subrogation against the insured of any insolvent insurer.

  2  This provision shall be applied retroactively to cover claims

  3  of an insolvent self-insurance fund resulting from accidents

  4  or losses incurred prior to January 1, 1994, regardless of the

  5  date the Department of Insurance filed a petition in circuit

  6  court alleging insolvency and the date the court entered an

  7  order appointing a receiver.

  8         (8)  "Net direct written premiums" means direct gross

  9  premiums, less return premiums, written in this state on

10  insurance policies to which this part applies and dividends

11  paid or credited to policyholders on that direct business.

12  Premiums written by any insurer on policies to self-insurers

13  to which this part applies, regardless of whether designated

14  as reinsurance contracts or workers' compensation excess

15  insurance, shall be deemed net direct written premiums. Any

16  such premium must be reported as a workers' compensation

17  premium. The term "net direct written premiums" does not

18  include premiums on contracts between insurers or reinsurers.

19         Section 2.  Subsection (1) of section 631.913, Florida

20  Statutes, is amended to read:

21         631.913  Powers and duties of the corporation.--

22         (1)(a)  The corporation is obligated to the extent of

23  the full amount of the covered claims:

24         1.(a)  Existing before the adjudication of insolvency

25  and arising within 30 days after the determination of

26  insolvency;

27         2.(b)  Existing before the policy expiration date if

28  less than 30 days after the determination of insolvency; or

29         3.(c)  Existing before the insured replaces the policy

30  or causes its cancellation, if the insured does so within 30

31  days after the determination of insolvency.

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CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2002                           CS for SB 1822
    311-2008B-02




  1         (b)  The obligation shall be satisfied by paying to the

  2  claimant an amount as follows:

  3         1.  The full amount of a covered claim for benefits

  4  under a workers' compensation insurance coverage.

  5         2.  An amount not exceeding $50,000 per policy for a

  6  covered claim for the return of unearned premium.

  7

  8  The corporation is not obligated to a policyholder or claimant

  9  in an amount in excess of the obligation of the insolvent

10  insurer under the policy from which the claim arises.

11         Section 3.  Section 631.929, Florida Statutes, is

12  amended to read:

13         631.929  Election of remedies.--An injured worker who

14  has a date of accident which occurred before January 1, 1994,

15  and is not receiving benefits due under chapter 440 due to the

16  insolvency of a self-insurance fund or its successors,

17  regardless of the date declared insolvent by the court, may

18  elect to seek medical care, treatment, and attendance, and

19  compensation required under ss. 440.15 and 440.16 from the

20  corporation and forego the remedy to seek benefits from his or

21  her employer or the insolvent self-insurance fund.  An

22  employee who so elects may be required to obtain medical care,

23  treatment, and attendance through a managed care plan

24  comporting with the requirement of s. 440.134 if the plan of

25  operation so provides.  An injured worker has 60 days to seek

26  benefits from the corporation upon ratification by the

27  corporation of his or her right to elect a remedy under this

28  part.  If the injured worker elects to pursue his or her

29  remedy under the provisions of this part, the corporation may,

30  with the agreement of the injured employee, pay a lump-sum

31  payment in exchange for the corporation's and employer's

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    Florida Senate - 2002                           CS for SB 1822
    311-2008B-02




  1  release from liability for future medical and compensation

  2  expenses, as well as any other benefit provided under chapter

  3  440.  However, there shall be no entitlement to attorney's

  4  fees, penalties, interest, or costs to be paid on any claim

  5  presented to the corporation under this part. This section

  6  shall not create any cause of action against any employer who

  7  purchased workers' compensation insurance coverage pursuant to

  8  s. 440.38. An employee who elects to seek benefits from his or

  9  her employer or insolvent self-insurance fund may not then

10  seek payment from the corporation. An employer who provides

11  payment to an employee under this section has no right of

12  subrogation against the corporation.

13         Section 4.  This act shall take effect upon becoming a

14  law.

15

16          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
17                         Senate Bill 1822

18

19  The Committee Substitute deletes the provisions that excluded
    from the definition of "covered claim" for purposes of the
20  Florida Workers' Compensation Insurance Guaranty Fund, claims
    for workers that reside out-of-state at the time of the injury
21  and workers' compensation Coverage B - Employers Liability
    Insurance.
22
    The definition of net direct written premiums is clarified to
23  specifically provide that workers' compensation excess
    insurance would be subject to the guaranty fund assessment.
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