HB 1241

1	A bill to be entitled
2	An act relating to workers' compensation; creating s.
3	624.4315, F.S.; requiring workers' compensation insurers
4	to notify the Office of Insurance Regulation of
5	significant underwriting changes; amending s. 627.171,
6	F.S.; providing that the 10-percent limit on the
7	percentage of commercial insurance policies that an
8	insurer may write at a rate in excess of the applicable
9	filed rate excludes workers' compensation policies written
10	for an employer in lieu of coverage from the joint
11	underwriting plan established under s. 627.311(5), F.S.;
12	amending s. 627.211, F.S.; revising the standards used by
13	the Office of Insurance Regulation in approving or
14	disapproving an insurer's deviation from the approved
15	workers' compensation rate filing; requiring the Office of
16	Insurance Regulation to submit an annual report to the
17	Legislature which evaluates competition in the workers'
18	compensation insurance market; providing an effective
19	date.
20
21	Be It Enacted by the Legislature of the State of Florida:
22
23	Section 1.  Section 624.4315, Florida Statutes, is created
24	to read:
25	624.4315  Workers' compensation insurers; notice of
26	significant underwriting change.--Each workers' compensation
27	insurer shall notify the office in writing or by electronic
28	means of a significant underwriting change that materially
29	limits or restricts the number of workers' compensation policies
30	or premiums written in this state. The commission may adopt
31	rules to administer this requirement.
32	Section 2.  Section 627.171, Florida Statutes, is amended
33	to read:
34	627.171  Excess rates.--
35	(1)  With written consent of the insured signed prior to
36	the policy inception date and filed with the insurer, the
37	insurer may use a rate in excess of the otherwise applicable
38	filed rate on any specific risk.  The signed consent form must
39	include the filed rate as well as the excess rate for the risk
40	insured, and a copy of the form must be maintained by the
41	insurer for 3 years and be available for review by the office.
42	(2)  An insurer may not use excess rates pursuant to this
43	section for more than 10 percent of its commercial insurance
44	policies written or renewed in each calendar year for any line
45	of commercial insurance or for more than 5 percent of its
46	personal lines insurance policies written or renewed in each
47	calendar year for any line of personal insurance. In determining
48	the 10-percent limitation for commercial insurance policies, the
49	insurer shall exclude any workers' compensation policy that was
50	written for an employer who had coverage in the joint
51	underwriting plan created by s. 627.311(5) immediately prior to
52	the writing of the policy by the insurer and any workers'
53	compensation policy that was written for an employer who had
54	been offered coverage in the joint underwriting plan but who had
55	a policy that was written by the insurer in lieu of accepting
56	the joint underwriting plan policy. These workers' compensation
57	policies shall be excluded from the 10-percent limitation for
58	the first 3 years of coverage.
59	Section 3.  Subsection (3) of section 627.211, Florida
60	Statutes, is amended, and subsection (6) is added to that
61	section, to read:
62	627.211  Deviations; workers' compensation and employer's
63	liability insurances.--
64	(3)  In considering an application for the deviation, the
65	office shall give consideration to the applicable principles for
66	ratemaking as set forth in ss. 627.062 and 627.072 and, the
67	financial condition of the insurer, and the impact of the
68	deviation on the current market conditions including the
69	composition of the market, the stability of rates, and the level
70	of competition in the market.  In evaluating the financial
71	condition of the insurer, the office may consider: (1) the
72	insurer's audited financial statements and whether the
73	statements provide unqualified opinions or contain significant
74	qualifications or "subject to" provisions; (2) any independent
75	or other actuarial certification of loss reserves; (3) whether
76	workers' compensation and employer's liability reserves are
77	above the midpoint or best estimate of the actuary's reserve
78	range estimate; (4) the adequacy of the proposed rate; (5)
79	historical experience demonstrating the profitability of the
80	insurer; (6) the existence of excess or other reinsurance that
81	contains a sufficiently low attachment point and maximums that
82	provide adequate protection to the insurer; and (7) other
83	factors considered relevant to the financial condition of the
84	insurer by the office. The office shall approve the deviation if
85	it finds it to be justified, it would not endanger the financial
86	condition of the insurer, it would not adversely affect the
87	current market conditions including the composition of the
88	market, the stability of rates, and the level of competition in
89	the market, and it that the deviation would not constitute
90	predatory pricing. The office It shall disapprove the deviation
91	if it finds that the resulting premiums would be excessive,
92	inadequate, or unfairly discriminatory, would endanger the
93	financial condition of the insurer, or would adversely affect
94	current market conditions including the composition of the
95	marketplace, the stability of rates, and the level of
96	competition in the market, or would result in predatory pricing.
97	The insurer may not use a deviation unless the deviation is
98	specifically approved by the office.
99	(6)  The office shall submit an annual report to the
100	President of the Senate and the Speaker of the House of
101	Representatives by January 1 of each year which evaluates
102	competition in the workers' compensation insurance market in
103	this state. The report must contain an analysis of the
104	availability and affordability of workers' compensation coverage
105	and whether the current market structure, conduct, and
106	performance are conducive to competition, based upon economic
107	analysis and tests. The purpose of this report is to aid the
108	Legislature in determining whether changes to the workers'
109	compensation rating laws are warranted. The report must also
110	document that the office has complied with the provisions of s.
111	627.096 which require the office to investigate and study all
112	workers' compensation insurers in the state and to study the
113	data, statistics, schedules, or other information as it finds
114	necessary to assist in its review of workers' compensation rate
115	filings.
116	Section 4.  This act shall take effect July 1, 2004.

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