House Bill hb0385er

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  1                                 

  2         An act relating to insurance; amending s.

  3         624.4072, F.S.; extending the term of the

  4         exemption from taxes and assessments on

  5         minority-owned property and casualty insurers;

  6         postponing the scheduled repeal of the law;

  7         amending s. 215.555, F.S.; redefining the term

  8         "covered policy"; amending ss. 324.031,

  9         324.032, F.S.; revising the required amounts of

10         insurance required for certain for-hire

11         passenger transportation vehicles; amending s.

12         627.410, F.S.; exempting group health insurance

13         policies insuring groups of a certain size from

14         rate-filing requirements; amending s. 625.041,

15         F.S.; revising the liabilities that a workers'

16         compensation insurer must include on its

17         financial statements; amending s. 627.7283,

18         F.S.; revising criteria and procedures for

19         cancellation of a motor vehicle insurance

20         policy; providing for return of unearned

21         premium under certain circumstances; providing

22         for interest under certain circumstances;

23         providing for civil action under certain

24         circumstances; amending s. 627.9408, F.S.;

25         authorizing the department to adopt by rule

26         certain provisions of the Long-Term Care

27         Insurance Model Regulation, as adopted by the

28         National Association of Insurance

29         Commissioners; amending s. 641.35, F.S.;

30         providing for the investment of funds of a

31         health maintenance organization in excess of


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  1         certain reserves and surplus under certain

  2         circumstances; amending s. 631.904, F.S.;

  3         redefining the term "covered claim"; providing

  4         retroactivity; amending s. 627.351, F.S.;

  5         revising provisions governing financing

  6         arrangements and dissolutions; providing

  7         legislative intent; providing effective dates.

  8  

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

10  

11         Section 1.  Section 624.4072, Florida Statutes, is

12  amended to read:

13         624.4072  Minority-owned property and casualty

14  insurers; limited exemption for taxation and assessments.--

15         (1)  A minority business that is at least 51 percent

16  owned by minority persons, as defined in s. 288.703(3),

17  initially issued a certificate of authority in this state as

18  an authorized insurer after May 1, 1998, and before January 1,

19  2002, to write property and casualty insurance shall be

20  exempt, for a period not to exceed 10 5 years from the date of

21  receiving its certificate of authority, from the following

22  taxes and assessments:

23         (a)  Taxes imposed under ss. 175.101, 185.08, and

24  624.509;

25         (b)  Assessments by the Florida Residential Property

26  and Casualty Joint Underwriting Association or by the Florida

27  Windstorm Underwriting Association, as provided under s.

28  627.351, except for emergency assessments collected from

29  policyholders pursuant to s. 627.351(2)(b)2.d.(III) and

30  (6)(b)3.d. Any such insurer shall be a member insurer of the

31  Florida Windstorm Underwriting Association and the Florida


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  1  Residential Property and Casualty Joint Underwriting

  2  Association. The premiums of such insurer shall be included in

  3  determining, for the Florida Windstorm Underwriting

  4  Association, the aggregate statewide direct written premium

  5  for property insurance and in determining, for the Florida

  6  Residential Property and Casualty Joint Underwriting

  7  Association, the aggregate statewide direct written premium

  8  for the subject lines of business for all member insurers.

  9         (2)  Subsection (1) applies only to personal lines and

10  commercial lines residential property insurance policies as

11  defined in s. 627.4025, and applies only to an insurer that

12  has employees in this state and has a home office or a

13  regional office in this state.  With respect to any tax year

14  or assessment year, the exemptions provided by subsection (1)

15  apply only if during the year an average of at least 10

16  percent of the insurer's Florida residential property policies

17  in force covered properties located in enterprise zones

18  designated pursuant to s. 290.0065.

19         (3)  The provision of the definition of "minority

20  person" in s. 288.703(3) that requires residency in Florida

21  shall not apply to the term "minority person" as used in this

22  section or s. 627.3511.

23         (4)  This section is repealed effective December 31,

24  2010 July 1, 2003, and the tax and assessment exemptions

25  authorized by this section shall terminate on such date.

26         Section 2.  Paragraph (c) of subsection (2) of section

27  215.555, Florida Statutes, is amended to read:

28         215.555  Florida Hurricane Catastrophe Fund.--

29         (2)  DEFINITIONS.--As used in this section:

30         (c)  "Covered policy" means any insurance policy

31  covering residential property in this state, including, but


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  1  not limited to, any homeowner's, mobile home owner's, farm

  2  owner's, condominium association, condominium unit owner's,

  3  tenant's, or apartment building policy, or any other policy

  4  covering a residential structure or its contents issued by any

  5  authorized insurer, including any joint underwriting

  6  association or similar entity created pursuant to law. The

  7  term "covered policy" includes any collateral protection

  8  insurance policy covering personal residences which protects

  9  both the borrower's and the lender's financial interests, in

10  an amount at least equal to the coverage for the dwelling in

11  place under the lapsed homeowner's policy, if such policy can

12  be accurately reported as required in subsection (5).

13  Additionally, covered policies include policies covering the

14  peril of wind removed from the Florida Residential Property

15  and Casualty Joint Underwriting Association, created pursuant

16  to s. 627.351(6), or from the Florida Windstorm Underwriting

17  Association, created pursuant to s. 627.351(2), by an

18  authorized insurer under the terms and conditions of an

19  executed assumption agreement between the authorized insurer

20  and either such association. Each assumption agreement between

21  either association and such authorized insurer must be

22  approved by the Florida Department of Insurance prior to the

23  effective date of the assumption, and the Department of

24  Insurance must provide written notification to the board

25  within 15 working days after such approval. "Covered policy"

26  does not include any policy that excludes wind coverage or

27  hurricane coverage or any reinsurance agreement and does not

28  include any policy otherwise meeting this definition which is

29  issued by a surplus lines insurer or a reinsurer.

30         Section 3.  Section 324.031, Florida Statutes, is

31  amended to read:


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  1         324.031  Manner of proving financial

  2  responsibility.--The owner or operator of a taxicab,

  3  limousine, jitney, or any other for-hire passenger

  4  transportation vehicle may prove financial responsibility by

  5  providing satisfactory evidence of holding a motor vehicle

  6  liability policy as defined in s. 324.021(8) or s. 324.151,

  7  which policy is issued by an insurance carrier which is a

  8  member of the Florida Insurance Guaranty Association. The

  9  operator or owner of any other vehicle may prove his or her

10  financial responsibility by:

11         (1)  Furnishing satisfactory evidence of holding a

12  motor vehicle liability policy as defined in ss. 324.021(8)

13  and 324.151;

14         (2)  Posting with the department a satisfactory bond of

15  a surety company authorized to do business in this state,

16  conditioned for payment of the amount specified in s.

17  324.021(7);

18         (3)  Furnishing a certificate of the department showing

19  a deposit of cash or securities in accordance with s. 324.161;

20  or

21         (4)  Furnishing a certificate of self-insurance issued

22  by the department in accordance with s. 324.171.

23  

24  Any person, including any firm, partnership, association,

25  corporation, or other person, other than a natural person,

26  electing to use the method of proof specified in subsection

27  (2) or subsection (3) shall post a bond or deposit equal to

28  the number of vehicles owned times $30,000, to a maximum of

29  $120,000; in addition, any such person, other than a natural

30  person, shall maintain insurance providing coverage in excess

31  of limits of $10,000/20,000/10,000 or $30,000 combined single


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  1  limits, and such excess insurance shall provide minimum limits

  2  of $125,000/250,000/50,000 $50,000/100,000/50,000 or $300,000

  3  $150,000 combined single limits. These increased limits shall

  4  not affect the requirements for proving financial

  5  responsibility under s. 324.032(1).

  6         Section 4.  Subsection (1) of section 324.032, Florida

  7  Statutes, is amended to read:

  8         324.032  Manner of proving financial responsibility;

  9  for-hire passenger transportation vehicles.--

10         (1)  Notwithstanding the provisions of s. 324.031, a

11  person who is either the owner or a lessee required to

12  maintain insurance under s. 324.021(9)(b) and who operates at

13  least 300 taxicabs, limousines, jitneys, or any other for-hire

14  passenger transportation vehicles may prove financial

15  responsibility by satisfying the following:

16         (a)  Furnishing satisfactory evidence of holding a

17  motor vehicle liability policy as defined in s. 324.031; or

18         (b)  Complying with the provisions of s. 324.171, such

19  compliance to be demonstrated by maintaining at its principal

20  place of business an audited financial statement, prepared in

21  accordance with generally accepted accounting principles, and

22  providing to the department a certification issued by a

23  certified public accountant that the applicant's net worth is

24  at least equal to the requirements of s. 324.171 as determined

25  by the Department of Insurance, including claims liabilities

26  in an amount certified as adequate by a Fellow of the Casualty

27  Actuarial Society.

28  

29  Upon request by the department, the applicant must provide the

30  department at the applicant's principal place of business in

31  this state access to the applicant's underlying financial


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  1  information and financial statements that provide the basis of

  2  the certified public accountant's certification.  The

  3  applicant shall reimburse the requesting department for all

  4  reasonable costs incurred by it in reviewing the supporting

  5  information.  The maximum amount of self-insurance permissible

  6  under this subsection is $300,000 $100,000 and must be stated

  7  on a per-occurrence basis, and the applicant shall maintain

  8  adequate excess insurance issued by an authorized or eligible

  9  insurer licensed or approved by the Department of Insurance.

10  All risks self-insured shall remain with the owner or lessee

11  providing it, and the risks are not transferable to any other

12  person, unless a policy complying with paragraph (a) is

13  obtained.

14         Section 5.  Paragraph (a) of subsection (6) of section

15  627.410, Florida Statutes, is amended to read:

16         627.410  Filing, approval of forms.--

17         (6)(a)  An insurer shall not deliver or issue for

18  delivery or renew in this state any health insurance policy

19  form until it has filed with the department a copy of every

20  applicable rating manual, rating schedule, change in rating

21  manual, and change in rating schedule; if rating manuals and

22  rating schedules are not applicable, the insurer must file

23  with the department applicable premium rates and any change in

24  applicable premium rates. This paragraph does not apply to

25  group health insurance policies, effectuated and delivered in

26  this state, insuring groups of 51 or more persons, except for

27  Medicare supplement insurance, long-term care insurance, and

28  any coverage under which the increase in claim costs over the

29  lifetime of the contract due to advancing age or duration is

30  prefunded in the premium.

31  


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  1         Section 6.  Effective retroactively to January 1, 2002,

  2  subsection (5) is added to section 625.041, Florida Statutes,

  3  to read:

  4         625.041  Liabilities, in general.--In any determination

  5  of the financial condition of an insurer, liabilities to be

  6  charged against its assets shall include:

  7         (5)  Any insurer in this state which writes workers'

  8  compensation insurance shall accrue a liability on its

  9  financial statements for all Special Disability Trust Fund

10  assessments that are due within the current calendar year. In

11  addition, such insurers shall also disclose in the notes to

12  the financial statements required to be filed pursuant to s.

13  624.424 an estimate of future Special Disability Trust Fund

14  assessments, if such assessments are likely to occur and can

15  be estimated with reasonable certainty.

16         Section 7.  Section 627.7283, Florida Statutes, is

17  amended to read:

18         627.7283  Cancellation; return of premium.--

19         (1)  If the insured or insurer cancels a policy of

20  motor vehicle insurance, the insurer must mail return the

21  unearned portion of any premium paid within 30 days after the

22  effective date of the policy cancellation or receipt of notice

23  or request for cancellation, whichever is later. This

24  requirement applies to a cancellation initiated by an insured

25  for any reason. issuance or receipt by the insurer of notice

26  of cancellation.  If the unearned premium is not returned

27  within the 30-day period, the insurer must pay 8 percent

28  interest on the amount due.  If the unearned premium is not

29  returned within 45 days after receipt of the notice, the

30  insured may bring an action against the insurer pursuant to s.

31  624.155.


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  1         (2)  If an insurer cancels a policy of motor vehicle

  2  insurance, the insurer must mail the unearned premium portion

  3  of any premium within 15 days after the effective date of the

  4  policy cancellation.

  5         (3)  If the unearned premium is not mailed within the

  6  applicable period, the insurer must pay to the insured 8

  7  percent interest on the amount due. If the unearned premium is

  8  not mailed within 45 days after the applicable period, the

  9  insured may bring an action against the insurer pursuant to s.

10  624.155.

11         (4)(2)  If the insured cancels, the insurer may retain

12  up to 10 percent of the unearned premium and must refund at

13  least 90 percent of the unearned premium.  If the insurer

14  cancels, the insurer must refund 100 percent of the unearned

15  premium. Cancellation is without prejudice to any claim

16  originating prior to the effective date of the cancellation.

17  For purposes of this section, unearned premiums must be

18  computed on a pro rata basis.

19         Section 8.  Section 627.9408, Florida Statutes, is

20  amended to read:

21         627.9408  Rules.--

22         (1)  The department may has authority to adopt rules

23  pursuant to ss. 120.536(1) and 120.54 to administer implement

24  the provisions of this part.

25         (2)  The department may adopt by rule the provisions of

26  the Long-Term Care Insurance Model Regulation adopted by the

27  National Association of Insurance Commissioners in the second

28  quarter of the year 2000 which are not in conflict with the

29  Florida Insurance Code.

30         Section 9.  Subsection (15) of section 641.35, Florida

31  Statutes, is amended to read:


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  1         641.35  Assets, liabilities, and investments.--

  2         (15)  SPECIAL CONSENT INVESTMENT OF EXCESS FUNDS.--

  3         (a)  After satisfying the requirements of this part,

  4  any funds of a health maintenance organization in excess of

  5  its statutorily required reserves and surplus may be invested:

  6         1.  Without limitation in any investments otherwise

  7  authorized by this part; or

  8         2.  In such other investments not specifically

  9  authorized by this part provided such investments do not

10  exceed the lesser 5 percent of the health maintenance

11  organization's admitted assets or 25 percent of the amount by

12  which a health maintenance organization's surplus exceeds its

13  statutorily required minimum surplus. A health maintenance

14  organization may exceed the limitations of this subparagraph

15  only with the prior written approval of the department.

16         (b)  Nothing in this section authorizes a health

17  maintenance organization to:

18         1.  Invest any funds in excess of the amount by which

19  its actual surplus exceeds its statutorily required minimum

20  surplus; or

21         2.  Make any investment prohibited by this code Any

22  investment of the health maintenance organization's funds not

23  enumerated in this part requires the prior approval of the

24  department.

25         Section 10.  Subsection (2) of section 631.904, Florida

26  Statutes, is amended to read:

27         631.904  Definitions.--As used in this part, the term:

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

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

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

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


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

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

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

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

  5  retrospective rating plan; any amount due any reinsurer,

  6  insurer, insurance pool, or underwriting association, as

  7  subrogation recoveries or otherwise; or any return of premium

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

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

10  of subrogation  against the insured of any insolvent insurer.

11  This provision shall be applied retroactively to cover claims

12  of an insolvent self-insurance fund resulting from accidents

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

14  date the Department of Insurance filed a petition in circuit

15  court alleging insolvency and the date the court entered an

16  order appointing a receiver.

17         Section 11.  Effective July 1, 2002, and contingent

18  upon SB 1418 becoming a law, paragraph (k) of subsection (6)

19  of section 627.351, Florida Statutes, is amended and paragraph

20  (p) is added to that subsection, to read:

21         (6)  CITIZENS RESIDENTIAL PROPERTY INSURANCE

22  CORPORATION AND CASUALTY JOINT UNDERWRITING ASSOCIATION.--

23         (k)  Upon a determination by the department board of

24  governors that the conditions giving rise to the establishment

25  and activation of the corporation association no longer exist,

26  and upon the consent thereto by order of the department, the

27  corporation association is dissolved. Upon dissolution, the

28  assets of the association shall be applied first to pay all

29  debts, liabilities, and obligations of the corporation

30  association, including the establishment of reasonable

31  reserves for any contingent liabilities or obligations, and


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  1  all remaining assets of the corporation association shall

  2  become property of the state and deposited in the Florida

  3  Hurricane Catastrophe Fund. However, no dissolution shall take

  4  effect as long as the corporation has bonds or other financial

  5  obligations outstanding unless adequate provision has been

  6  made for the payment of the bonds or other financial

  7  obligations pursuant to the documents authorizing the issuance

  8  of the bonds or other financial obligations.

  9         (p)  In enacting the provisions of this section, the

10  Legislature recognizes that both the Florida Windstorm

11  Underwriting Association and the Residential Property and

12  Casualty Joint Underwriting Association have entered into

13  financing arrangements that obligate each entity to service

14  its debts and maintain the capacity to repay funds secured

15  under these financing arrangements. It is the intent of the

16  Legislature that nothing in this section be construed to

17  compromise, diminish, or interfere with the rights of

18  creditors under such financing arrangements. It is further the

19  intent of the Legislature to preserve the obligations of the

20  Florida Windstorm Underwriting Association and Residential

21  Property and Casualty Joint Underwriting Association with

22  regard to outstanding financing arrangements, with such

23  obligations passing entirely and unchanged to the corporation

24  and, specifically, to the applicable account of the

25  corporation. So long as any bonds, notes, indebtedness, or

26  other financing obligations of the Florida Windstorm

27  Underwriting Association or the Residential Property and

28  Casualty Joint Underwriting Association are outstanding, under

29  the terms of the financing documents pertaining to them, the

30  governing board of the corporation shall have and shall

31  exercise the authority to levy, charge, collect, and receive


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  1  all premiums, assessments, surcharges, charges, revenues and

  2  receipts that the associations had authority to levy, charge,

  3  collect, or receive under the provisions of subsection (2) and

  4  subsection (6), respectively, as they existed on January 1,

  5  2002, to provide moneys, without exercise of the authority

  6  provided by this subsection, in at least the amounts, and by

  7  the times, as would be provided under those former provisions

  8  of subsection (2) or subsection (6), respectively, so that the

  9  value, amount, and collectability of any assets, revenues, or

10  revenue source pledged or committed to, or any lien thereon

11  securing such outstanding bonds, notes, indebtedness, or other

12  financing obligations will not be diminished, impaired, or

13  adversely affected by the amendments made by this act and to

14  permit compliance with all provisions of financing documents

15  pertaining to such bonds, notes, indebtedness, or other

16  financing obligations, or the security or credit enhancement

17  for them, and any reference in this subsection to bonds,

18  notes, indebtedness, financing obligations, or similar

19  obligations, of the corporation shall include like instruments

20  or contracts of the Florida Windstorm Underwriting Association

21  and the Residential Property and Casualty Joint Underwriting

22  Association to the extent not inconsistent with the provisions

23  of the financing documents pertaining to them.

24         Section 12.  The amendments to section 627.351, Florida

25  Statutes, in this act prevail over any conflicting amendments

26  to that section contained in SB 1418.

27         Section 13.  Except as otherwise expressly provided in

28  this act, this act shall take effect July 1, 2002.

29  

30  

31  


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