HB 1251CS

CHAMBER ACTION



1The Committee on Appropriations recommends the following:
2
3     Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to a joint underwriting plan of insurers;
7amending s. 627.311, F.S.; revising provisions requiring
8the Office of Insurance Regulation to approve a joint
9underwriting plan for workers' compensation and employer's
10liability insurers; requiring plan rates to be
11noncompetitive with the voluntary market for certain
12purposes; deleting authorization for insureds to select
13certain alternative coverages; requiring the plan of
14operation to establish three tiers for eligible employers;
15specifying criteria and rates for each tier; providing for
16an Assigned Risk Adjustment Program for certain employers;
17deleting provisions requiring establishment of certain
18subplans; providing policyholder choice under certain
19circumstances; providing requirements for premiums under
20such tiers; revising criteria, requirements, and
21limitations for a required depopulation program to reduce
22numbers of insureds under the tiers; providing an
23application fee for administration and fraud prevention;
24revising certain tier notice requirements; providing for
25funding of the plan through deficit funding; providing for
26a one-time capital contribution from the Workers'
27Compensation Administration Trust Fund to defray deficits
28prior to certain assessments; providing a mechanism for
29collecting deficit assessments; providing duties of the
30office; providing requirements, procedures, and
31limitations for collecting and enforcing deficit
32assessments; providing for transfers of funds from the
33Workers' Compensation Administration Trust Fund to the
34plan under certain circumstances; providing an exclusion
35for deficit assessments from certain taxes; specifying
36that deficit assessments are plan funds when collected;
37providing notice requirements for certain policies;
38providing for liability of certain insureds for certain
39additional deficit assessments; specifying venue for
40proceedings to enforce or collect assessments; expanding a
41prohibition against providing certain persons with
42workers' compensation and employers' liability insurance;
43providing an exclusion for the plan from certain taxes and
44assessments; providing an effective date.
45
46Be It Enacted by the Legislature of the State of Florida:
47
48     Section 1.  Paragraphs (a), (c), (d), (e), (g), and (p) of
49subsection (5) of section 627.311, Florida Statutes, are
50amended, and paragraph (q) is added to said subsection, to read:
51     627.311  Joint underwriters and joint reinsurers; public
52records and public meetings exemptions.--
53     (5)(a)  The office shall, after consultation with insurers,
54approve a joint underwriting plan of insurers which shall
55operate as a nonprofit entity. For the purposes of this
56subsection, the term "insurer" includes group self-insurance
57funds authorized by s. 624.4621, commercial self-insurance funds
58authorized by s. 624.462, assessable mutual insurers authorized
59under s. 628.6011, and insurers licensed to write workers'
60compensation and employer's liability insurance in this state.
61The purpose of the plan is to provide workers' compensation and
62employer's liability insurance to applicants who are required by
63law to maintain workers' compensation and employer's liability
64insurance and who are in good faith entitled to but who are
65unable to procure purchase such insurance through the voluntary
66market. The plan must have actuarially sound rates that ensure
67assure that the plan is self-supporting.
68     (c)  The operation of the plan shall be governed by a plan
69of operation that is prepared at the direction of the board of
70governors. The plan of operation may be changed at any time by
71the board of governors or upon request of the office. The plan
72of operation and all changes thereto are subject to the approval
73of the office. The plan of operation shall:
74     1.  Authorize the board to engage in the activities
75necessary to implement this subsection, including, but not
76limited to, borrowing money.
77     2.  Develop criteria for eligibility for coverage by the
78plan, including, but not limited to, documented rejection by at
79least two insurers which reasonably assures that insureds
80covered under the plan are unable to acquire coverage in the
81voluntary market. Any insured may voluntarily elect to accept
82coverage from an insurer for a premium equal to or greater than
83the plan premium if the insurer writing the coverage adheres to
84the provisions of s. 627.171.
85     3.  Require notice from the agent to the insured at the
86time of the application for coverage that the application is for
87coverage with the plan and that coverage may be available
88through an insurer, group self-insurers' fund, commercial self-
89insurance fund, or assessable mutual insurer through another
90agent at a lower cost.
91     4.  Establish programs to encourage insurers to provide
92coverage to applicants of the plan in the voluntary market and
93to insureds of the plan, including, but not limited to:
94     a.  Establishing procedures for an insurer to use in
95notifying the plan of the insurer's desire to provide coverage
96to applicants to the plan or existing insureds of the plan and
97in describing the types of risks in which the insurer is
98interested. The description of the desired risks must be on a
99form developed by the plan.
100     b.  Developing forms and procedures that provide an insurer
101with the information necessary to determine whether the insurer
102wants to write particular applicants to the plan or insureds of
103the plan.
104     c.  Developing procedures for notice to the plan and the
105applicant to the plan or insured of the plan that an insurer
106will insure the applicant or the insured of the plan, and notice
107of the cost of the coverage offered; and developing procedures
108for the selection of an insuring entity by the applicant or
109insured of the plan.
110     d.  Provide for a market-assistance plan to assist in the
111placement of employers. All applications for coverage in the
112plan received 45 days before the effective date for coverage
113shall be processed through the market-assistance plan. A market-
114assistance plan specifically designed to serve the needs of
115small, good policyholders as defined by the board must be
116finalized by January 1, 1994.
117     5.  Provide for policy and claims services to the insureds
118of the plan of the nature and quality provided for insureds in
119the voluntary market.
120     6.  Provide for the review of applications for coverage
121with the plan for reasonableness and accuracy, using any
122available historic information regarding the insured.
123     7.  Provide for procedures for auditing insureds of the
124plan which are based on reasonable business judgment and are
125designed to maximize the likelihood that the plan will collect
126the appropriate premiums.
127     8.  Authorize the plan to terminate the coverage of and
128refuse future coverage for any insured that submits a fraudulent
129application to the plan or provides fraudulent or grossly
130erroneous records to the plan or to any service provider of the
131plan in conjunction with the activities of the plan.
132     9.  Establish service standards for agents who submit
133business to the plan.
134     10.  Establish criteria and procedures to prohibit any
135agent who does not adhere to the established service standards
136from placing business with the plan or receiving, directly or
137indirectly, any commissions for business placed with the plan.
138     11.  Provide for the establishment of reasonable safety
139programs for all insureds in the plan. All insureds of the plan
140must participate in the safety program.
141     12.  Authorize the plan to terminate the coverage of and
142refuse future coverage to any insured who fails to pay premiums
143or surcharges when due; who, at the time of application, is
144delinquent in payments of workers' compensation or employer's
145liability insurance premiums or surcharges owed to an insurer,
146group self-insurers' fund, commercial self-insurance fund, or
147assessable mutual insurer licensed to write such coverage in
148this state; or who refuses to substantially comply with any
149safety programs recommended by the plan.
150     13.  Authorize the board of governors to provide the
151services required by the plan through staff employed by the
152plan, through reasonably compensated service providers who
153contract with the plan to provide services as specified by the
154board of governors, or through a combination of employees and
155service providers.
156     14.  Provide for service standards for service providers,
157methods of determining adherence to those service standards,
158incentives and disincentives for service, and procedures for
159terminating contracts for service providers that fail to adhere
160to service standards.
161     15.  Provide procedures for selecting service providers and
162standards for qualification as a service provider that
163reasonably assure that any service provider selected will
164continue to operate as an ongoing concern and is capable of
165providing the specified services in the manner required.
166     16.  Provide for reasonable accounting and data-reporting
167practices.
168     17.  Provide for annual review of costs associated with the
169administration and servicing of the policies issued by the plan
170to determine alternatives by which costs can be reduced.
171     18.  Authorize the acquisition of such excess insurance or
172reinsurance as is consistent with the purposes of the plan.
173     19.  Provide for an annual report to the office on a date
174specified by the office and containing such information as the
175office reasonably requires.
176     20.  Establish multiple rating plans for various
177classifications of risk which reflect risk of loss, hazard
178grade, actual losses, size of premium, and compliance with loss
179control. At least one of such plans must be a preferred-rating
180plan to accommodate small-premium policyholders with good
181experience as defined in sub-subparagraph 22.a.
182     21.  Establish agent commission schedules.
183     22.  For employers otherwise eligible for coverage under
184the plan, establish three tiers of employers meeting the
185criteria and subject to the rate limitations specified in this
186subparagraph. Establish four subplans as follows:
187     a.  Tier One.--
188     (I)  Criteria; rated employers.--An employer that has an
189experience modification rating shall be included in Tier One if
190the employer meets all of the following:
191     (A)  The experience modification is below 1.00.
192     (B)  The employer had no lost-time claims subsequent to the
193applicable experience modification rating period.
194     (C)  The total of the employer's medical-only claims
195subsequent to the applicable experience modification rating
196period did not exceed 20 percent of premium.
197     (II)  Criteria; non-rated employers.--An employer that does
198not have an experience modification rating shall be included in
199Tier One if the employer meets all of the following:
200     (A)  The employer had no lost-time claims for the 3-year
201period immediately preceding the inception date or renewal date
202of the employer's coverage under the plan.
203     (B)  The total of the employer's medical-only claims for
204the 3-year period immediately preceding the inception date or
205renewal date of the employer's coverage under the plan did not
206exceed 20 percent of premium.
207     (C)  The employer has secured workers' compensation
208coverage for the entire 3-year period immediately preceding the
209inception date or renewal date of the employer's coverage under
210the plan.
211     (D)  The employer is able to provide the plan with a loss
212history generated by the employer's prior workers' compensation
213insurer, except if the employer is not able to produce a loss
214history due to the insolvency of an insurer, the receiver shall
215provide to the plan, upon the request of the employer or the
216employer's agent, a copy of the employer's loss history from the
217records of the insolvent insurer if the loss history is
218contained in records of the insurer which are in the possession
219of the receiver. If the receiver is unable to produce the loss
220history, the employer may, in lieu of the loss history, submit
221an affidavit from the employer and the employer's insurance
222agent setting forth the loss history.
223     (E)  The employer is not a new business.
224     (III)  Premiums.--The premiums for Tier One insureds shall
225be set at a premium level 25 percent above the comparable
226voluntary market premiums until the plan has sufficient
227experience as determined by the board to establish an
228actuarially sound rate for Tier One, at which point the board
229shall, subject to paragraph (e), adjust the rates, if necessary,
230to produce actuarially sound rates, provided such rate
231adjustment shall not take effect prior to January 1, 2007.
232Subplan "A" must include those insureds whose annual premium
233does not exceed $2,500 and who have neither incurred any lost-
234time claims nor incurred medical-only claims exceeding 50
235percent of their premium for the immediate 2 years.
236     b.  Tier Two.--
237     (I)  Criteria; rated employers.--An employer that has an
238experience modification rating shall be included in Tier Two if
239the employer meets all of the following:
240     (A)  The experience modification is equal to or greater
241than 1.00 but not greater than 1.10.
242     (B)  The employer had no lost-time claims subsequent to the
243applicable experience modification rating period.
244     (C)  The total of the employer's medical-only claims
245subsequent to the applicable experience modification rating
246period did not exceed 20 percent of premium.
247     (II)  Criteria; non-rated employers.--An employer that does
248not have any experience modification rating shall be included in
249Tier Two if the employer is a new business. An employer shall be
250included in Tier Two if the employer has less than 3 years of
251loss experience in the 3-year period immediately preceding the
252inception date or renewal date of the employer's coverage under
253the plan and the employer meets all of the following:
254     (A)  The employer had no lost-time claims for the 3-year
255period immediately preceding the inception date or renewal date
256of the employer's coverage under the plan.
257     (B)  The total of the employer's medical-only claims for
258the 3-year period immediately preceding the inception date or
259renewal date of the employer's coverage under the plan did not
260exceed 20 percent of premium.
261     (C)  The employer is able to provide the plan with a loss
262history generated by the workers' compensation insurer that
263provided coverage for the portion or portions of such period
264during which the employer had secured workers' compensation
265coverage, except if the employer is not able to produce a loss
266history due to the insolvency of an insurer, the receiver shall
267provide to the plan, upon the request of the employer or the
268employer's agent, a copy of the employer's loss history from the
269records of the insolvent insurer if the loss history is
270contained in records of the insurer which are in the possession
271of the receiver. If the receiver is unable to produce the loss
272history, the employer may, in lieu of the loss history, submit
273an affidavit from the employer and the employer's insurance
274agent setting forth the loss history.
275     (III)  Premiums.--The premiums for Tier Two insureds shall
276be set at a rate level 50 percent above the comparable voluntary
277market premiums until the plan has sufficient experience as
278determined by the board to establish an actuarially sound rate
279for Tier Two, at which point the board shall, subject to
280paragraph (e), adjust the rates, if necessary, to produce
281actuarially sound rates, provided such rate adjustment shall not
282take effect prior to January 1, 2007.
283     (IV)  Assigned Risk Adjustment Program.--Employers assigned
284to Tier Two shall be subject to the Assigned Risk Adjustment
285Program, as applicable. Subplan "B" must include insureds that
286are employers identified by the board of governors as high-risk
287employers due solely to the nature of the operations being
288performed by those insureds and for whom no market exists in the
289voluntary market, and whose experience modifications are less
290than 1.00.
291     c.  Tier Three.--
292     (I)  Eligibility.--An employer shall be included in Tier
293Three if the employer does not meet the criteria for Tier One or
294Tier Two.
295     (II)  Rates.--The board shall establish, subject to
296paragraph (e), and the plan shall charge, actuarially sound
297rates for Tier Three insureds.
298     (III)  Assigned Risk Adjustment Program.--Employers
299assigned to Tier Three shall be subject to the Assigned Risk
300Adjustment Program, as applicable. Subplan "C" must include all
301insureds within the plan that are not eligible for subplan "A,"
302subplan "B," or subplan "D."
303     d.  Subplan "D" must include any employer, regardless of
304the length of time for which it has conducted business
305operations, which has an experience modification factor of 1.10
306or less and either employs 15 or fewer employees or is an
307organization that is exempt from federal income tax pursuant to
308s. 501(c)(3) of the Internal Revenue Code and receives more than
30950 percent of its funding from gifts, grants, endowments, or
310federal or state contracts. The rate plan for subplan "D" shall
311be the same rate plan as the plan approved under ss. 627.091-
312627.151, and each participant in subplan "D" shall pay the
313premium determined under such rate plan, plus a surcharge
314determined by the board to be sufficient to ensure that the plan
315does not compete with the voluntary market rate for any
316participant, but not to exceed 25 percent. However, the
317surcharge shall not exceed 10 percent for an organization that
318is exempt from federal income tax pursuant to s. 501(c)(3) of
319the Internal Revenue Code.
320     23.  For Tier One or Tier Two employers in construction
321class codes which employ no nonexempt employees or which report
322payroll that is insufficient to develop premiums in excess of
323$2,500, establish premiums of $2,500, which shall be in addition
324to the fee specified in subparagraph 26. When the board
325establishes actuarially sound rates for Tier One and Tier Two,
326the board shall also establish actuarially sound rates for
327minimum premium policies in those tiers.
328     24.23.  Provide for a depopulation program to reduce the
329number of insureds in the plan subplan "D." If an employer
330insured through the plan subplan "D" is offered coverage from a
331voluntary market carrier:
332     a.  During the first 30 days of coverage under the plan
333subplan;
334     b.  Before a policy is issued under the plan subplan;
335     c.  By issuance of a policy upon expiration or cancellation
336of the policy under the plan subplan; or
337     d.  By assumption of the plan's subplan's obligation with
338respect to an in-force policy,
339
340that employer is no longer eligible for coverage through the
341plan. The premium for risks assumed by the voluntary market
342carrier must be the same premium plus, for the first 2 years,
343the surcharge as the insured would have paid under the plan, and
344shall be adjusted upon renewal to reflect changes in the plan
345rates and the tier for which the insured would qualify as of the
346time of renewal. Such premium change shall occur upon renewal,
347but in no event more than once annually determined in sub-
348subparagraph 22.d. A premium under this subparagraph, including
349surcharge, is deemed approved and is not an excess premium for
350purposes of s. 627.171.
351     25.24.  Require that policies issued under subplan "D" and
352applications for such policies must include a notice that the
353policy issued under subplan "D" could be replaced by a policy
354issued from a voluntary market carrier and that, if an offer of
355coverage is obtained from a voluntary market carrier, the
356policyholder is no longer eligible for coverage through the plan
357subplan "D." The notice must also specify that acceptance of
358coverage under the plan subplan "D" creates a conclusive
359presumption that the applicant or policyholder is aware of this
360potential.
361     26.  Require that each application for coverage and each
362renewal premium be accompanied by a nonrefundable fee of $475 to
363cover costs of administration and fraud prevention. The board
364may, with the approval of the office, increase the amount of the
365fee pursuant to a rate filing to reflect increased costs of
366administration and fraud prevention. The fee is not subject to
367commission and is fully earned upon commencement of coverage.
368     (d)1.  The funding of the plan shall include premiums as
369provided in subparagraph (c)22. and assessments as provided in
370this paragraph. The plan must be funded through actuarially
371sound premiums charged to insureds of the plan.
372     2.a.  If the board determines that a deficit exists in Tier
373One or Tier Two or that there is any deficit remaining
374attributable to any of the plan's former subplans and that the
375deficit cannot be funded without the use of deficit assessments,
376the board shall request the office to levy, by order, a deficit
377assessment against premiums charged to insureds for workers'
378compensation insurance by insurers as defined in s. 631.904(5).
379The office shall issue the order after verifying the amount of
380the deficit. The assessment shall be specified as a percentage
381of future premium collections, as recommended by the board and
382approved by the office. The same percentage shall apply to
383premiums on all workers' compensation policies issued or renewed
384during the 12-month period beginning on the effective date of
385the assessment, as specified in the order.
386     b.  With respect to each insurer collecting premiums that
387are subject to the assessment, the insurer shall collect the
388assessment at the same time as the insurer collects the premium
389payment for each policy and shall remit the assessments
390collected to the plan as provided in the order issued by the
391office. The office shall verify the accurate and timely
392collection and remittance of deficit assessments and shall
393report such information to the board. Each insurer collecting
394assessments shall provide such information with respect to
395premiums and collections as may be required by the office to
396enable the office to monitor and audit compliance with this
397paragraph.
398     c.  Deficit assessments are not considered part of an
399insurer's rate, are not premium, and are not subject to the
400premium tax, to the assessments under ss. 440.49 and 440.51, to
401the surplus lines tax, to any fees, or to any commissions. The
402deficit assessment imposed shall become plan funds at the moment
403of collection and shall not constitute income to the insurer for
404any purpose, including financial reporting on the insurer's
405income statement. An insurer is liable for all assessments that
406the insurer collects and must treat the failure of an insured to
407pay an assessment as a failure to pay premium. An insurer is not
408liable for uncollectible assessments.
409     d.  When an insurer is required to return unearned premium,
410the insurer shall also return any collected assessments
411attributable to the unearned premium. The plan may issue
412assessable policies only to those insureds in subplans "C" and
413"D." Subject to verification by the department, the board may
414levy assessments against insureds in subplan "C" or subplan "D,"
415on a pro rata earned premium basis, to fund any deficits that
416exist in those subplans. Assessments levied against subplan "C"
417participants shall cover only the deficits attributable to
418subplan "C," and assessments levied against subplan "D"
419participants shall cover only the deficits attributable to
420subplan "D." In no event may the plan levy assessments against
421any person or entity, except as authorized by this paragraph.
422Those assessable policies must be clearly identified as
423assessable by containing, in contrasting color and in not less
424than 10-point type, the following statements: "This is an
425assessable policy. If the plan is unable to pay its obligations,
426policyholders will be required to contribute on a pro rata
427earned premium basis the money necessary to meet any assessment
428levied."
429     3.a.  All policies issued to Tier Three insureds shall be
430assessable. All Tier Three assessable policies must be clearly
431identified as assessable by containing, in contrasting color and
432in not less than 10-point type, the following statement:
433
434"This is an assessable policy. If the plan is unable to
435pay its obligations, policyholders will be required to
436contribute on a pro rata earned premium basis the money
437necessary to meet any assessment levied."
438
439     b.  The board may from time to time assess Tier Three
440insureds to whom the plan has issued assessable policies for the
441purpose of funding plan deficits. Any such assessment shall be
442based upon a reasonable actuarial estimate of the amount of the
443deficit, taking into account the amount needed to fund medical
444and indemnity reserves and reserves for incurred but not
445reported claims, and allowing for general administrative
446expenses, the cost of levying and collecting the assessment, a
447reasonable allowance for estimated uncollectible assessments,
448and allocated and unallocated loss adjustment expenses.
449     c.  Each Tier Three insured's share of a deficit shall be
450computed by applying to the premium earned on the insured's
451policy or policies during the period to be covered by the
452assessment the ratio of the total deficit to the total premiums
453earned during such period upon all policies subject to the
454assessment. If one or more Tier Three insureds fail to pay an
455assessment, the other Tier Three insureds shall be liable on a
456proportionate basis for additional assessments to fund the
457deficit. The plan may compromise and settle individual
458assessment claims without affecting the validity of or amounts
459due on assessments levied against other insureds. The plan may
460offer and accept discounted payments for assessments which are
461promptly paid. The plan may offset the amount of any unpaid
462assessment against unearned premiums which may otherwise be due
463to an insured. The plan shall institute legal action when
464necessary and appropriate to collect the assessment from any
465insured who fails to pay an assessment when due.
466     d.  The venue of a proceeding to enforce or collect an
467assessment or to contest the validity or amount of an assessment
468shall be in the Circuit Court of Leon County.
469     e.  If the board finds that a deficit in Tier Three exists
470for any period and that an assessment is necessary, the board
471shall certify to the office the need for an assessment. No
472sooner than 30 days after the date of such certification, the
473board shall notify in writing each insured who is to be assessed
474that an assessment is being levied against the insured, and
475informing the insured of the amount of the assessment, the
476period for which the assessment is being levied, and the date by
477which payment of the assessment is due. The board shall
478establish a date by which payment of the assessment is due,
479which shall be no sooner than 30 days nor later than 120 days
480after the date on which notice of the assessment is mailed to
481the insured.
482     f.  Whenever the board makes a determination that the plan
483does not have a sufficient cash basis to meet 3 months of
484projected cash needs due to a deficit in Tier Three, the board
485may request the department to transfer funds from the Workers'
486Compensation Administration Trust Fund to the plan in an amount
487sufficient to fund the difference between the amount available
488and the amount needed to meet a 3-month projected cash need as
489determined by the board and verified by the office, subject to
490the approval of the Legislative Budget Commission. If the
491Legislative Budget Commission approves a transfer of funds under
492this sub-subparagraph, the plan shall report to the Legislature
493the transfer of funds and the Legislature shall review the plan
494during the next legislative session or the current legislative
495session, if the transfer occurs during a legislative session.
496This sub-subparagraph shall not apply until the plan determines
497and the office verifies that assessments collected by the plan
498pursuant to sub-subparagraph b. are insufficient to fund the
499deficit in Tier Three and to meet 3 months of projected cash
500needs. The plan may issue assessable policies with differing
501terms and conditions to different groups within subplans "C" and
502"D" when a reasonable basis exists for the differentiation.
503     4.  The plan may offer rating, dividend plans, and other
504plans to encourage loss prevention programs.
505     (e)  The plan shall establish and use its rates and rating
506plans, and the plan may establish and use changes in rating
507plans at any time, but no more frequently than two times per any
508rating class for any calendar year. By December 1, 1993, and
509December 1 of each year thereafter, except as provided in
510subparagraph (c)22., the board shall establish and use
511actuarially sound rates for use by the plan to assure that the
512plan is self-funding while those rates are in effect. Such rates
513and rating plans must be filed with the office within 30
514calendar days after their effective dates, and shall be
515considered a "use and file" filing. Any disapproval by the
516office must have an effective date that is at least 60 days from
517the date of disapproval of the rates and rating plan and must
518have prospective effect only. The plan may not be subject to any
519order by the office to return to policyholders any portion of
520the rates disapproved by the office. The office may not
521disapprove any rates or rating plans unless it demonstrates that
522such rates and rating plans are excessive, inadequate, or
523unfairly discriminatory.
524     (g)  Whenever a deficit exists, the plan shall, within 90
525days, provide the office with a program to eliminate the deficit
526within a reasonable time. The deficit may be funded through
527increased premiums charged to insureds of the plan for
528subsequent years, through the use of policyholder surplus
529attributable to any year, through the use of assessments as
530provided in subparagraph (d)2., and through assessments on
531insureds in the plan if the plan uses assessable policies as
532provided in subparagraph (d)3.
533     (p)  No insurer shall provide workers' compensation and
534employer's liability insurance to any person who is delinquent
535in the payment of premiums, assessments, penalties, or
536surcharges owed to the plan or to any person who is an
537affiliated person of a person who is delinquent in the payment
538of premiums, assessments, penalties, or surcharges owed to the
539plan. For purposes of this paragraph, the term "affiliated
540person" of another person means:
541     1.  The spouse of such other natural person;
542     2.  Any person who directly or indirectly owns or controls,
543or holds with the power to vote, 5 percent or more of the
544outstanding voting securities of such other person;
545     3.  Any person who directly or indirectly owns 5 percent or
546more of the outstanding voting securities that are directly or
547indirectly owned or controlled, or held with the power to vote,
548by such other person;
549     4.  Any person or group of persons who directly or
550indirectly control, are controlled by, or are under common
551control with such other person;
552     5.  Any officer, director, trustee, partner, owner,
553manager, joint venturer, or employee, or other person performing
554duties similar to persons in those positions, of such other
555persons; or
556     6.  Any person who has an officer, director, trustee,
557partner, or joint venturer in common with such other person.
558     (q)  Effective July 1, 2004, the plan is exempt from the
559premium tax under s. 624.509 and any assessments under ss.
560440.49 and 440.51.
561     Section 2.  Notwithstanding the provisions of ss. 440.50
562and 440.51, Florida Statutes, for the 2004-2005 fiscal year the
563sum of $25 million is appropriated from the Workers'
564Compensation Administration Trust Fund in the Department of
565Financial Services for transfer to the workers' compensation
566joint underwriting plan provided in s. 627.311(5), Florida
567Statutes, as a capital contribution to fund any deficit in the
568plan. The Chief Financial Officer shall transfer such funds to
569the plan no later than July 31, 2004. An additional amount not
570to exceed $10 million is appropriated from the Workers'
571Compensation Administration Trust Fund for transfer to the
572workers' compensation joint underwriting plan provided in s.
573627.311(5), Florida Statutes, subject to the approval of the
574Legislative Budget Commission, if the Board of Governors and the
575Office of Insurance Regulation determine that a deficit exists
576in Tier One or Tier Two or that there is any deficit remaining
577attributable to the former Subplan "D" under former s.
578627.311(5)(c)22., Florida Statutes, and that the deficit cannot
579be funded without the use of deficit assessments as authorized
580by s. 627.351(5)(d), Florida Statutes.
581     Section 3.  Except as otherwise provided herein, this act
582shall take effect July 1, 2004.


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