HOUSE AMENDMENT Bill No. HB 1837 CS
1	CHAMBER ACTION
2	Senate House
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12	Representative Ritter offered the following:
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14	Amendment (with title amendment)
15	Between line(s) 4790 and 4791, insert:
16	Section 33. Section 627.091, Florida Statutes, is amended
17	to read:
18	627.091 Rate filings; workers' compensation and employer's
19	liability insurances.--
20	(1) As used in this section, the term:
21	(a) "Expenses" means that portion of a rate attributable
22	to acquisition, field supervision, collection expenses, and
23	general expenses.
24	(b) "Multiplier" means the profit and expenses, other than
25	loss adjustment expenses associated with writing workers'
26	compensation and employer's liability insurance, expressed as a
27	single nonintegral number to be applied to the prospective loss
28	costs approved by the department in making rates for each
29	classification of risks utilized by that insurer.
30	(c) "Prospective loss costs" means that portion of a rate
31	reflecting historical aggregate losses and loss adjustment
32	expenses projected through development to their ultimate value
33	and through trending to a future point in time. The term does
34	not include provisions for profit or expenses, other than loss
35	adjustment expenses.
36	(2)(1)As to workers' compensation and employer's
37	liability insurances, every insurer shall file with the
38	department every manual of classifications, rules, and rates,
39	every rating plan, and every modification of any of the
40	foregoing which it proposes to use. Every insurer is authorized
41	to include deductible provisions in its manual of
42	classifications, rules, and rates. Such deductibles shall in all
43	cases be in a form and manner which is consistent with the
44	underlying purpose of chapter 440.
45	(3)(2)Every such filing shall state the proposed
46	effective date thereof, and shall indicate the character and
47	extent of the coverage contemplated. When a filing is not
48	accompanied by the information upon which the insurer supports
49	the filing and the department does not have sufficient
50	information to determine whether the filing meets the applicable
51	requirements of this part, it shall within 15 days after the
52	date of filing require the insurer to furnish the information
53	upon which it supports the filing. The information furnished in
54	support of a filing may include:
55	(a) The experience or judgment of the insurer or rating
56	organization making the filing;
57	(b) Its interpretation of any statistical data it relies
58	upon;
59	(c) The experience of other insurers or rating
60	organizations; or
61	(d) Any other factors which the insurer or rating
62	organization deems relevant.
63	(4)(3)A filing and any supporting information shall be
64	open to public inspection as provided in s. 119.07(1).
65	(5)(4) An insurer may satisfy its obligation to make such
66	filings of prospective loss costsby becoming a member of, or a
67	subscriber to, a licensed rating organization which makes such
68	filings and by authorizing the department to accept such filings
69	in its behalf; but nothing contained in this chapter shall be
70	construed as requiring any insurer to become a member or a
71	subscriber to any rating organization.
72	(6)(a) A licensed rating organization may develop and file
73	for approval with the department reference filings containing
74	prospective loss costs and the underlying loss data and other
75	supporting statistical and actuarial information. A rating
76	organization may not develop or file final rates or multipliers
77	for expenses and profit. After a loss cost reference filing has
78	been filed with the department and approved, the rating
79	organization shall provide its member insurers with a copy of
80	the approved reference filing.
81	(b) Each insurer shall independently and individually file
82	with the department the final rates it will use and the
83	effective date of any rate changes. An insurer may independently
84	file its rates, including prospective loss costs, as authorized
85	by this section. An insurer that is a member or subscriber to a
86	rating organization may use the prospective loss costs in an
87	approved reference filing by the rating organization or the
88	insurer may file for a deviation from the loss cost reference
89	filing under s. 627.211.
90	(c) If an insurer uses the prospective loss costs in the
91	approved reference filing, the insurer must independently and
92	individually file with the department its multiplier for
93	expenses and profit. The insurer's rates shall be the
94	combination of the prospective loss costs and the multiplier for
95	expenses and profit. Insurers shall file data in accordance with
96	the uniform statistical plan approved by the department.
97	Insurers may use variable or fixed expense loads or a
98	combination of these and may vary the expense load by class, if
99	the insurer files supporting data justifying such variations. An
100	insurer that uses the prospective loss costs in an approved
101	reference filing may use its multiplier and final rates
102	immediately upon filing with the department, subject to
103	disapproval by the department.
104	(d) Insurers may file with the department premium
105	discounts, credits, and surcharges, that bear a reasonable
106	relationship to the expected loss and expense experience of an
107	individual policyholder, subject to a maximum surcharge of 40
108	percent above the approved rate and a maximum discount or credit
109	of 50 percent below the approved rate. An insurer that uses the
110	prospective loss costs in an approved reference filing may use
111	premium discounts, credits, and surcharges immediately upon
112	filing with the department, subject to disapproval by the
113	department.
114	(e) An insurer may request to have its multiplier for
115	expenses and profit remain on file and reference all subsequent
116	prospective loss costs reference filings. Upon the effective
117	date of approval of subsequent reference loss cost filings, the
118	insurer's rates shall be the combination of the prospective loss
119	costs and the multiplier contained in its filing with the
120	department. The insurer's filed multiplier shall remain in
121	effect until the insurer withdraws it and files a revised
122	multiplier. If the insurer elects to use the prospective loss
123	costs as filed but with a different effective date, then the
124	insurer must file notice with the department of the effective
125	date.
126	(f)1. A rate may be disapproved at any time subsequent to
127	the effective date. A rate subject to prefiling may also be
128	disapproved before the effective date.
129	2. The director may disapprove a rate if the director
130	finds that the rate is inadequate or unfairly discriminatory.
131	The director shall disapprove a rate if he or she finds that the
132	rate is excessive, inadequate, or unfairly discriminatory.
133	3. If the director finds that a reasonable degree of
134	competition does not exist, the director may require that the
135	insurers in that market file information in support of existing
136	rates. If the director believes that such rates may violate any
137	of the requirements of these sections a hearing shall be called
138	prior to any disapproval.
139	4. If the director believes that rates violate the
140	inadequacy or unfair discrimination standard in or any other
141	applicable requirement of this act, the director may require
142	that the insurers in that market file information in support of
143	existing rates. If, after reviewing the supporting rate
144	information, the director continues to believe that the rates
145	may violate these requirements, a hearing shall be called prior
146	to any disapproval.
147	5. The director may disapprove, without hearing, rates
148	prefiled that have not become effective; however, the insurer
149	whose rates have been disapproved shall be given a hearing upon
150	a written request made within 30 days after the disapproval
151	order.
152	6. If the director disapproves a rate, the director shall
153	issue an order specifying in what respects it fails to meet the
154	requirements of these sections and stating when, within a
155	reasonable period thereafter, such rate shall be discontinued
156	for any policy issued or renewed after a date specified in the
157	order. Such order may include a provision for premium adjustment
158	for the period after the effective date of the order for
159	policies in effect on such date.
160	7. Whenever an insurer has no legally effective rates as a
161	result of the director's disapproval of rates or other act, the
162	director shall on request of the insurer specify interim rates
163	for the insurer that are high enough to protect the interests of
164	all parties and may order that a specified portion of the
165	premiums be placed in an escrow account approved by him or her.
166	When new rates become legally effective, the director shall
167	order the escrowed funds or any overcharge in the interim rates
168	to be distributed appropriately, except that refunds of less
169	than $10 per policyholder shall not be required.
170	(7) A rating organization may file supplementary rating
171	information that includes policy-writing rules, rating plans
172	classification codes and descriptions, and rules that include
173	factors or relativities such as increased limits factors,
174	classification relativities, or similar factors, but excludes
175	minimum premiums. An insurer may elect to use such supplementary
176	rating information approved by the department.
177	(8) A rating organization may file:
178	(a) Final rates and rating plans for the residual market.
179	(b) The uniform classification plan and rules.
180	(c) The uniform experience rating plan and rules.
181	(d) Advisory manual workers' compensation rates to be used
182	for the sole purpose of computing the assessment liability of
183	self-insurers.
184	(9)(5)Pursuant to the provisions of s. 624.3161, the
185	department may examine the underlying statistical data used in
186	such filings.
187	(10)(6)Whenever the committee of a recognized rating
188	organization with responsibility for workers' compensation and
189	employer's liability insurance rates in this state meets to
190	discuss the necessity for, or a request for, Florida rate
191	increases or decreases, the determination of Florida rates, the
192	rates to be requested, and any other matters pertaining
193	specifically and directly to such Florida rates, such meetings
194	shall be held in this state and shall be subject to s. 286.011.
195	The committee of such a rating organization shall provide at
196	least 3 weeks' prior notice of such meetings to the department
197	and shall provide at least 14 days' prior notice of such
198	meetings to the public by publication in the Florida
199	Administrative Weekly.
200	Section 34. Subsection (1) of section 627.096, Florida
201	Statutes, is amended to read:
202	627.096 Workers' Compensation Rating Bureau.--
203	(1) There is created within the department a Workers'
204	Compensation Rating Bureau, which shall make an investigation
205	and study of all insurers authorized to issue workers'
206	compensation and employer's liability coverage in this state.
207	Such bureau shall study the data, statistics, schedules, or
208	other information as it may deem necessary to assist and advise
209	the department in its review of filings made by or on behalf of
210	workers' compensation and employer's liability insurers. The
211	department shall have the authority to promulgate rules
212	requiring all workers' compensation and employer's liability
213	insurers to submit to the rating bureau any data, statistics,
214	schedules, and other information deemed necessary to the rating
215	bureau's study and advisement. All data, statistics, schedules,
216	and other information submitted to, or considered by, the
217	Workers’ Compensation Rating Bureau shall be considered public
218	record for purposes of s. 119.07(1) and s. 24(a), Art. 1 of the
219	State Constitution.
220	Section 35. Section 627.101, Florida Statutes, is amended
221	to read:
222	627.101 When filing becomes effective; workers'
223	compensation and employer's liability insurances.--
224	(1) The department shall review prospective loss cost
225	filings and final ratefilings as to workers' compensation and
226	employer's liability insurances as soon as reasonably possible
227	after they have been made in order to determine whether they
228	meet the applicable requirements of this part. If the department
229	determines that part of a rate filing does not meet the
230	applicable requirements of this part, it may reject so much of
231	the filing as does not meet these requirements, and approve the
232	remainder of the filing.
233	(2) The department shall specifically approve a
234	prospective loss costthefiling before it becomes effective,
235	unless the department has concluded it to be in the public
236	interest to hold a public hearing to determine whether the
237	filing meets the requirements of this chapter and has given
238	notice of such hearing to the insurer or rating organization
239	that made the filing, and in which case the effectiveness of the
240	filing shall be subject to the further order of the department
241	made as provided in s. 627.111. An insurer that uses the
242	prospective loss costs in an approved reference filing may use
243	its multiplier and final rates immediately upon filing with the
244	department, as provided in s. 627.091, subject to disapproval by
245	the department. If the department specifically disapproves
246	either a prospective loss cost filing or a final ratethe
247	filing, the provisions of subsection (4) shall apply.
248	(3) An insurer or rating organization may, at the time it
249	makes a prospective loss costfiling with the department,
250	request a public hearing thereon. In such event, the department
251	shall give notice of the hearing.
252	(4) If the department disapproves a prospective loss cost
253	or final ratefiling, it shall promptly give notice of such
254	disapproval to the insurer or rating organization that made the
255	filing, stating the respects in which it finds that the filing
256	does not meet the requirements of this chapter. If the
257	department approves a filing, it shall give prompt notice
258	thereof to the insurer or rating organization that made the
259	filing, and in which case the filing shall become effective upon
260	such approval or upon such subsequent date as may be
261	satisfactory to the department and the insurer or rating
262	organization that made the filing.
263	Section 36. Paragraph (b) of subsection (1) of section
264	627.211, Florida Statutes, is amended to read:
265	627.211 Deviations; workers' compensation and employer's
266	liability insurances.--
267	(1) Every member or subscriber to a rating organization
268	shall, as to workers' compensation or employer's liability
269	insurance, adhere to the filings made on its behalf by such
270	organization; except that any such insurer may make written
271	application to the department for permission to file a uniform
272	percentage decrease or increase to be applied to the premiums
273	produced by the rating system so filed for a kind of insurance,
274	for a class of insurance which is found by the department to be
275	a proper rating unit for the application of such uniform
276	percentage decrease or increase, or for a subdivision of
277	workers' compensation or employer's liability insurance:
278	(b) For which separate loss adjustmentexpense provisions
279	are included in the filings of the rating organization.
280
281	Such application shall specify the basis for the modification
282	and shall be accompanied by the data upon which the applicant
283	relies. A copy of the application and data shall be sent
284	simultaneously to the rating organization.
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286	================= T I T L E A M E N D M E N T =================
287	Between line(s) 92 and 93, insert:
288	amending s. 627.091, F.S.; revising provisions for rate
289	filings and factors for consideration in such filings;
290	providing procedures for disapproval of rates; amending s.
291	627.096, F.S.; providing for information obtained by the
292	Workers’ Compensation Rating Bureau; amending s. 627.101,
293	F.S.; revising rate filing, review, and approval
294	procedures; amending s. 627.211, F.S.; revising provisions
295	for filings by rating organizations;