HB 1251

1
A bill to be entitled
2An act relating to a joint underwriting plan of insurers;
3amending s. 627.311, F.S.; revising provisions requiring the
4Office of Insurance Regulation to approve a joint underwriting
5plan for workers' compensation and employer's liability
6insurers; requiring plan rates to be noncompetitive with the
7voluntary market for certain purposes; deleting authorization
8for insureds to select certain alternative coverages; requiring
9the plan of operation to establish three tiers for eligible
10employers; specifying criteria and rates for each tier; deleting
11provisions requiring establishment of certain subplans;
12providing criteria for minimum premium policies; providing
13requirements for premiums under such tiers; revising criteria,
14requirements, and limitations for a required depopulation
15program to reduce numbers of insureds under the tiers; providing
16an application fee for administration and fraud prevention;
17revising certain tier notice requirements; providing for funding
18of the plan through deficit funding; providing for transferring
19an appropriation in an amount not to exceed $10 million from the
20Workers' Compensation Administration Trust Fund to the workers'
21compensation joint underwriting plan for certain purposes;
22providing procedures and requirements; providing for
23establishing a contingency reserve for certain purposes;
24providing for transfers of funds from the contingency reserve in
25an amount not to exceed $10 million to the plan for purposes of
26funding certain deficits; providing limitations; providing for
27review of the reasonableness of the plan's administration;
28providing a sunset date for deficit funding; providing a
29mechanism for collecting deficit assessments; providing duties
30of the office; providing requirements, procedures, and
31limitations for collecting and enforcing deficit assessments;
32providing for transfers of funds from the Workers' Compensation
33Administration Trust Fund to the plan under certain
34circumstances; providing an exclusion for deficit assessments
35from certain taxes; specifying that deficit assessments are plan
36funds when collected; providing notice requirements for certain
37policies; providing for liability of certain insureds for
38certain additional deficit assessments; specifying venue for
39proceedings to enforce or collect assessments; expanding a
40prohibition against providing certain persons with workers'
41compensation and employers' liability insurance; providing an
42exclusion for the plan from certain taxes and assessments;
43requiring the Auditor General to conduct an operational audit of
44the association; providing audit requirements; requiring the
45association to comply with the Florida Single Audit Act, if
46certain conditions are met; requiring a report; providing
47appropriations; providing an exception from certain deficit
48funding assessment provisions; providing a procedure for a
49transition period; providing application; providing an effective
50date.
51
52Be It Enacted by the Legislature of the State of Florida:
53
54     Section 1.  Paragraphs (a), (c), (d), (e), (g), and (p) of
55subsection (5) of section 627.311, Florida Statutes, are
56amended, and paragraph (q) is added to said subsection, to read:
57     627.311  Joint underwriters and joint reinsurers; public
58records and public meetings exemptions.--
59     (5)(a)  The office shall, after consultation with insurers,
60approve a joint underwriting plan of insurers which shall
61operate as a nonprofit entity. For the purposes of this
62subsection, the term "insurer" includes group self-insurance
63funds authorized by s. 624.4621, commercial self-insurance funds
64authorized by s. 624.462, assessable mutual insurers authorized
65under s. 628.6011, and insurers licensed to write workers'
66compensation and employer's liability insurance in this state.
67The purpose of the plan is to provide workers' compensation and
68employer's liability insurance to applicants who are required by
69law to maintain workers' compensation and employer's liability
70insurance and who are in good faith entitled to but who are
71unable to procure purchase such insurance through the voluntary
72market. Except as provided herein, the plan must have
73actuarially sound rates that ensure assure that the plan is
74self-supporting.
75     (c)  The operation of the plan shall be governed by a plan
76of operation that is prepared at the direction of the board of
77governors. The plan of operation may be changed at any time by
78the board of governors or upon request of the office. The plan
79of operation and all changes thereto are subject to the approval
80of the office. The plan of operation shall:
81     1.  Authorize the board to engage in the activities
82necessary to implement this subsection, including, but not
83limited to, borrowing money.
84     2.  Develop criteria for eligibility for coverage by the
85plan, including, but not limited to, documented rejection by at
86least two insurers which reasonably assures that insureds
87covered under the plan are unable to acquire coverage in the
88voluntary market. Any insured may voluntarily elect to accept
89coverage from an insurer for a premium equal to or greater than
90the plan premium if the insurer writing the coverage adheres to
91the provisions of s. 627.171.
92     3.  Require notice from the agent to the insured at the
93time of the application for coverage that the application is for
94coverage with the plan and that coverage may be available
95through an insurer, group self-insurers' fund, commercial self-
96insurance fund, or assessable mutual insurer through another
97agent at a lower cost.
98     4.  Establish programs to encourage insurers to provide
99coverage to applicants of the plan in the voluntary market and
100to insureds of the plan, including, but not limited to:
101     a.  Establishing procedures for an insurer to use in
102notifying the plan of the insurer's desire to provide coverage
103to applicants to the plan or existing insureds of the plan and
104in describing the types of risks in which the insurer is
105interested. The description of the desired risks must be on a
106form developed by the plan.
107     b.  Developing forms and procedures that provide an insurer
108with the information necessary to determine whether the insurer
109wants to write particular applicants to the plan or insureds of
110the plan.
111     c.  Developing procedures for notice to the plan and the
112applicant to the plan or insured of the plan that an insurer
113will insure the applicant or the insured of the plan, and notice
114of the cost of the coverage offered; and developing procedures
115for the selection of an insuring entity by the applicant or
116insured of the plan.
117     d.  Provide for a market-assistance plan to assist in the
118placement of employers. All applications for coverage in the
119plan received 45 days before the effective date for coverage
120shall be processed through the market-assistance plan. A market-
121assistance plan specifically designed to serve the needs of
122small, good policyholders as defined by the board must be
123finalized by January 1, 1994.
124     5.  Provide for policy and claims services to the insureds
125of the plan of the nature and quality provided for insureds in
126the voluntary market.
127     6.  Provide for the review of applications for coverage
128with the plan for reasonableness and accuracy, using any
129available historic information regarding the insured.
130     7.  Provide for procedures for auditing insureds of the
131plan which are based on reasonable business judgment and are
132designed to maximize the likelihood that the plan will collect
133the appropriate premiums.
134     8.  Authorize the plan to terminate the coverage of and
135refuse future coverage for any insured that submits a fraudulent
136application to the plan or provides fraudulent or grossly
137erroneous records to the plan or to any service provider of the
138plan in conjunction with the activities of the plan.
139     9.  Establish service standards for agents who submit
140business to the plan.
141     10.  Establish criteria and procedures to prohibit any
142agent who does not adhere to the established service standards
143from placing business with the plan or receiving, directly or
144indirectly, any commissions for business placed with the plan.
145     11.  Provide for the establishment of reasonable safety
146programs for all insureds in the plan. All insureds of the plan
147must participate in the safety program.
148     12.  Authorize the plan to terminate the coverage of and
149refuse future coverage to any insured who fails to pay premiums
150or surcharges when due; who, at the time of application, is
151delinquent in payments of workers' compensation or employer's
152liability insurance premiums or surcharges owed to an insurer,
153group self-insurers' fund, commercial self-insurance fund, or
154assessable mutual insurer licensed to write such coverage in
155this state; or who refuses to substantially comply with any
156safety programs recommended by the plan.
157     13.  Authorize the board of governors to provide the
158services required by the plan through staff employed by the
159plan, through reasonably compensated service providers who
160contract with the plan to provide services as specified by the
161board of governors, or through a combination of employees and
162service providers.
163     14.  Provide for service standards for service providers,
164methods of determining adherence to those service standards,
165incentives and disincentives for service, and procedures for
166terminating contracts for service providers that fail to adhere
167to service standards.
168     15.  Provide procedures for selecting service providers and
169standards for qualification as a service provider that
170reasonably assure that any service provider selected will
171continue to operate as an ongoing concern and is capable of
172providing the specified services in the manner required.
173     16.  Provide for reasonable accounting and data-reporting
174practices.
175     17.  Provide for annual review of costs associated with the
176administration and servicing of the policies issued by the plan
177to determine alternatives by which costs can be reduced.
178     18.  Authorize the acquisition of such excess insurance or
179reinsurance as is consistent with the purposes of the plan.
180     19.  Provide for an annual report to the office on a date
181specified by the office and containing such information as the
182office reasonably requires.
183     20.  Establish multiple rating plans for various
184classifications of risk which reflect risk of loss, hazard
185grade, actual losses, size of premium, and compliance with loss
186control. At least one of such plans must be a preferred-rating
187plan to accommodate small-premium policyholders with good
188experience as defined in sub-subparagraph 22.a.
189     21.  Establish agent commission schedules.
190     22.  For employers otherwise eligible for coverage under
191the plan, establish three tiers of employers meeting the
192criteria and subject to the rate limitations specified in this
193subparagraph. Establish four subplans as follows:
194     a.  Tier One.--
195     (I)  Criteria; rated employers.--An employer that has an
196experience modification rating shall be included in Tier One if
197the employer meets all of the following:
198     (A)  The experience modification is below 1.00.
199     (B)  The employer had no lost-time claims subsequent to the
200applicable experience modification rating period.
201     (C)  The total of the employer's medical-only claims
202subsequent to the applicable experience modification rating
203period did not exceed 20 percent of premium.
204     (II)  Criteria; non-rated employers.--An employer that does
205not have an experience modification rating shall be included in
206Tier One if the employer meets all of the following:
207     (A)  The employer had no lost-time claims for the 3-year
208period immediately preceding the inception date or renewal date
209of the employer's coverage under the plan.
210     (B)  The total of the employer's medical-only claims for
211the 3-year period immediately preceding the inception date or
212renewal date of the employer's coverage under the plan did not
213exceed 20 percent of premium.
214     (C)  The employer has secured workers' compensation
215coverage for the entire 3-year period immediately preceding the
216inception date or renewal date of the employer's coverage under
217the plan.
218     (D)  The employer is able to provide the plan with a loss
219history generated by the employer's prior workers' compensation
220insurer, except if the employer is not able to produce a loss
221history due to the insolvency of an insurer, the receiver shall
222provide to the plan, upon the request of the employer or the
223employer's agent, a copy of the employer's loss history from the
224records of the insolvent insurer if the loss history is
225contained in records of the insurer which are in the possession
226of the receiver. If the receiver is unable to produce the loss
227history, the employer may, in lieu of the loss history, submit
228an affidavit from the employer and the employer's insurance
229agent setting forth the loss history.
230     (E)  The employer is not a new business.
231     (III)  Premiums.--The premiums for Tier One insureds shall
232be set at a premium level 25 percent above the comparable
233voluntary market premiums until the plan has sufficient
234experience as determined by the board to establish an
235actuarially sound rate for Tier One, at which point the board
236shall, subject to paragraph (e), adjust the rates, if necessary,
237to produce actuarially sound rates, provided such rate
238adjustment shall not take effect prior to January 1, 2007.
239Subplan "A" must include those insureds whose annual premium
240does not exceed $2,500 and who have neither incurred any lost-
241time claims nor incurred medical-only claims exceeding 50
242percent of their premium for the immediate 2 years.
243     b.  Tier Two.--
244     (I)  Criteria; rated employers.--An employer that has an
245experience modification rating shall be included in Tier Two if
246the employer meets all of the following:
247     (A)  The experience modification is equal to or greater
248than 1.00 but not greater than 1.10.
249     (B)  The employer had no lost-time claims subsequent to the
250applicable experience modification rating period.
251     (C)  The total of the employer's medical-only claims
252subsequent to the applicable experience modification rating
253period did not exceed 20 percent of premium.
254     (II)  Criteria; non-rated employers.--An employer that does
255not have any experience modification rating shall be included in
256Tier Two if the employer is a new business. An employer shall be
257included in Tier Two if the employer has less than 3 years of
258loss experience in the 3-year period immediately preceding the
259inception date or renewal date of the employer's coverage under
260the plan and the employer meets all of the following:
261     (A)  The employer had no lost-time claims for the 3-year
262period immediately preceding the inception date or renewal date
263of the employer's coverage under the plan.
264     (B)  The total of the employer's medical-only claims for
265the 3-year period immediately preceding the inception date or
266renewal date of the employer's coverage under the plan did not
267exceed 20 percent of premium.
268     (C)  The employer is able to provide the plan with a loss
269history generated by the workers' compensation insurer that
270provided coverage for the portion or portions of such period
271during which the employer had secured workers' compensation
272coverage, except if the employer is not able to produce a loss
273history due to the insolvency of an insurer, the receiver shall
274provide to the plan, upon the request of the employer or the
275employer's agent, a copy of the employer's loss history from the
276records of the insolvent insurer if the loss history is
277contained in records of the insurer which are in the possession
278of the receiver. If the receiver is unable to produce the loss
279history, the employer may, in lieu of the loss history, submit
280an affidavit from the employer and the employer's insurance
281agent setting forth the loss history.
282     (III)  Premiums.--The premiums for Tier Two insureds shall
283be set at a rate level 50 percent above the comparable voluntary
284market premiums until the plan has sufficient experience as
285determined by the board to establish an actuarially sound rate
286for Tier Two, at which point the board shall, subject to
287paragraph (e), adjust the rates, if necessary, to produce
288actuarially sound rates, provided such rate adjustment shall not
289take effect prior to January 1, 2007.  Subplan "B" must include
290insureds that are employers identified by the board of governors
291as high-risk employers due solely to the nature of the
292operations being performed by those insureds and for whom no
293market exists in the voluntary market, and whose experience
294modifications are less than 1.00.
295     c.  Tier Three.--
296     (I)  Eligibility.--An employer shall be included in Tier
297Three if the employer does not meet the criteria for Tier One or
298Tier Two.
299     (II)  Rates.--The board shall establish, subject to
300paragraph (e), and the plan shall charge, actuarially sound
301rates for Tier Three insureds. Subplan "C" must include all
302insureds within the plan that are not eligible for subplan "A,"
303subplan "B," or subplan "D."
304     d.  Subplan "D" must include any employer, regardless of
305the length of time for which it has conducted business
306operations, which has an experience modification factor of 1.10
307or less and either employs 15 or fewer employees or is an
308organization that is exempt from federal income tax pursuant to
309s. 501(c)(3) of the Internal Revenue Code and receives more than
31050 percent of its funding from gifts, grants, endowments, or
311federal or state contracts. The rate plan for subplan "D" shall
312be the same rate plan as the plan approved under ss. 627.091-
313627.151, and each participant in subplan "D" shall pay the
314premium determined under such rate plan, plus a surcharge
315determined by the board to be sufficient to ensure that the plan
316does not compete with the voluntary market rate for any
317participant, but not to exceed 25 percent. However, the
318surcharge shall not exceed 10 percent for an organization that
319is exempt from federal income tax pursuant to s. 501(c)(3) of
320the Internal Revenue Code.
321     23.  For Tier One or Tier Two employers which employ no
322nonexempt employees or which report payroll which is less than
323the minimum wage hourly rate for one full-time employee for 1
324year at 40 hours per week, the plan shall establish actuarially
325sound premiums, provided, however, that the premiums may not
326exceed $2,500.  These premiums shall be in addition to the fee
327specified in subparagraph 26.  When the plan establishes
328actuarially sound rates for all employers in Tier One and Tier
329Two, the premiums for employers referred to in this paragraph
330are no longer subject to the $2,500 cap.
331     24.23.  Provide for a depopulation program to reduce the
332number of insureds in the plan subplan "D." If an employer
333insured through the plan subplan "D" is offered coverage from a
334voluntary market carrier:
335     a.  During the first 30 days of coverage under the plan
336subplan;
337     b.  Before a policy is issued under the plan subplan;
338     c.  By issuance of a policy upon expiration or cancellation
339of the policy under the plan subplan; or
340     d.  By assumption of the plan's subplan's obligation with
341respect to an in-force policy,
342
343that employer is no longer eligible for coverage through the
344plan. The premium for risks assumed by the voluntary market
345carrier must be no greater than the same premium plus, for the
346first 2 years, the surcharge as the insured would have paid
347under the plan, and shall be adjusted upon renewal to reflect
348changes in the plan rates and the tier for which the insured
349would qualify as of the time of renewal.  The insured may be
350charged such premiums only for the first 3 years of coverage in
351the voluntary market. determined in sub-subparagraph 22.d. A
352premium under this subparagraph, including surcharge, is deemed
353approved and is not an excess premium for purposes of s.
354627.171.
355     25.24.  Require that policies issued under subplan "D" and
356applications for such policies must include a notice that the
357policy issued under subplan "D" could be replaced by a policy
358issued from a voluntary market carrier and that, if an offer of
359coverage is obtained from a voluntary market carrier, the
360policyholder is no longer eligible for coverage through the plan
361subplan "D." The notice must also specify that acceptance of
362coverage under the plan subplan "D" creates a conclusive
363presumption that the applicant or policyholder is aware of this
364potential.
365     26.  Require that each application for coverage and each
366renewal premium be accompanied by a nonrefundable fee of $475 to
367cover costs of administration and fraud prevention. The board
368may, with the approval of the office, increase the amount of the
369fee pursuant to a rate filing to reflect increased costs of
370administration and fraud prevention. The fee is not subject to
371commission and is fully earned upon commencement of coverage.
372     (d)1.  The funding of the plan shall include premiums as
373provided in subparagraph (c)22. and assessments as provided in
374this paragraph. The plan must be funded through actuarially
375sound premiums charged to insureds of the plan.
376     2.a.  If the board determines that a deficit exists in Tier
377One or Tier Two or that there is any deficit remaining
378attributable to any of the plan's former subplans and that the
379deficit cannot be funded without the use of deficit assessments,
380the board shall request the office to levy, by order, a deficit
381assessment against premiums charged to insureds for workers'
382compensation insurance by insurers as defined in s. 631.904(5).
383The office shall issue the order after verifying the amount of
384the deficit. The assessment shall be specified as a percentage
385of future premium collections, as recommended by the board and
386approved by the office. The same percentage shall apply to
387premiums on all workers' compensation policies issued or renewed
388during the 12-month period beginning on the effective date of
389the assessment, as specified in the order.
390     b.  With respect to each insurer collecting premiums that
391are subject to the assessment, the insurer shall collect the
392assessment at the same time as the insurer collects the premium
393payment for each policy and shall remit the assessments
394collected to the plan as provided in the order issued by the
395office. The office shall verify the accurate and timely
396collection and remittance of deficit assessments and shall
397report such information to the board. Each insurer collecting
398assessments shall provide such information with respect to
399premiums and collections as may be required by the office to
400enable the office to monitor and audit compliance with this
401paragraph.
402     c.  Deficit assessments are not considered part of an
403insurer's rate, are not premium, and are not subject to the
404premium tax, to the assessments under ss. 440.49 and 440.51, to
405the surplus lines tax, to any fees, or to any commissions. The
406deficit assessment imposed shall become plan funds at the moment
407of collection and shall not constitute income to the insurer for
408any purpose, including financial reporting on the insurer's
409income statement. An insurer is liable for all assessments that
410the insurer collects and must treat the failure of an insured to
411pay an assessment as a failure to pay premium. An insurer is not
412liable for uncollectible assessments.
413     d.  When an insurer is required to return unearned premium,
414the insurer shall also return any collected assessments
415attributable to the unearned premium.
416     e.  Deficit assessments as described in this subparagraph
417shall not be levied after July 1, 2007. The plan may issue
418assessable policies only to those insureds in subplans "C" and
419"D." Subject to verification by the department, the board may
420levy assessments against insureds in subplan "C" or subplan "D,"
421on a pro rata earned premium basis, to fund any deficits that
422exist in those subplans. Assessments levied against subplan "C"
423participants shall cover only the deficits attributable to
424subplan "C," and assessments levied against subplan "D"
425participants shall cover only the deficits attributable to
426subplan "D." In no event may the plan levy assessments against
427any person or entity, except as authorized by this paragraph.
428Those assessable policies must be clearly identified as
429assessable by containing, in contrasting color and in not less
430than 10-point type, the following statements: "This is an
431assessable policy. If the plan is unable to pay its obligations,
432policyholders will be required to contribute on a pro rata
433earned premium basis the money necessary to meet any assessment
434levied."
435     3.a.  All policies issued to Tier Three insureds shall be
436assessable. All Tier Three assessable policies must be clearly
437identified as assessable by containing, in contrasting color and
438in not less than 10-point type, the following statement:
439
440"This is an assessable policy. If the plan is unable to
441pay its obligations, policyholders will be required to
442contribute on a pro rata earned premium basis the money
443necessary to meet any assessment levied."
444
445     b.  The board may from time to time assess Tier Three
446insureds to whom the plan has issued assessable policies for the
447purpose of funding plan deficits. Any such assessment shall be
448based upon a reasonable actuarial estimate of the amount of the
449deficit, taking into account the amount needed to fund medical
450and indemnity reserves and reserves for incurred but not
451reported claims, and allowing for general administrative
452expenses, the cost of levying and collecting the assessment, a
453reasonable allowance for estimated uncollectible assessments,
454and allocated and unallocated loss adjustment expenses.
455     c.  Each Tier Three insured's share of a deficit shall be
456computed by applying to the premium earned on the insured's
457policy or policies during the period to be covered by the
458assessment the ratio of the total deficit to the total premiums
459earned during such period upon all policies subject to the
460assessment. If one or more Tier Three insureds fail to pay an
461assessment, the other Tier Three insureds shall be liable on a
462proportionate basis for additional assessments to fund the
463deficit. The plan may compromise and settle individual
464assessment claims without affecting the validity of or amounts
465due on assessments levied against other insureds. The plan may
466offer and accept discounted payments for assessments which are
467promptly paid. The plan may offset the amount of any unpaid
468assessment against unearned premiums which may otherwise be due
469to an insured. The plan shall institute legal action when
470necessary and appropriate to collect the assessment from any
471insured who fails to pay an assessment when due.
472     d.  The venue of a proceeding to enforce or collect an
473assessment or to contest the validity or amount of an assessment
474shall be in the Circuit Court of Leon County.
475     e.  If the board finds that a deficit in Tier Three exists
476for any period and that an assessment is necessary, the board
477shall certify to the office the need for an assessment. No
478sooner than 30 days after the date of such certification, the
479board shall notify in writing each insured who is to be assessed
480that an assessment is being levied against the insured, and
481informing the insured of the amount of the assessment, the
482period for which the assessment is being levied, and the date by
483which payment of the assessment is due. The board shall
484establish a date by which payment of the assessment is due,
485which shall be no sooner than 30 days nor later than 120 days
486after the date on which notice of the assessment is mailed to
487the insured.
488     f.  Whenever the board makes a determination that the plan
489does not have a sufficient cash basis to meet 3 months of
490projected cash needs due to a deficit in Tier Three, the board
491may request the department to transfer funds from the Workers'
492Compensation Administration Trust Fund to the plan in an amount
493sufficient to fund the difference between the amount available
494and the amount needed to meet a 3-month projected cash need as
495determined by the board and verified by the office, subject to
496the approval of the Legislative Budget Commission. If the
497Legislative Budget Commission approves a transfer of funds under
498this sub-subparagraph, the plan shall report to the Legislature
499the transfer of funds and the Legislature shall review the plan
500during the next legislative session or the current legislative
501session, if the transfer occurs during a legislative session.
502This sub-subparagraph shall not apply until the plan determines
503and the office verifies that assessments collected by the plan
504pursuant to sub-subparagraph b. are insufficient to fund the
505deficit in Tier Three and to meet 3 months of projected cash
506needs. The plan may issue assessable policies with differing
507terms and conditions to different groups within subplans "C" and
508"D" when a reasonable basis exists for the differentiation.
509     4.  The plan may offer rating, dividend plans, and other
510plans to encourage loss prevention programs.
511     (e)  The plan shall establish and use its rates and rating
512plans, and the plan may establish and use changes in rating
513plans at any time, but no more frequently than two times per any
514rating class for any calendar year. By December 1, 1993, and
515December 1 of each year thereafter, except as provided in
516subparagraph (c)22., the board shall establish and use
517actuarially sound rates for use by the plan to assure that the
518plan is self-funding while those rates are in effect. Such rates
519and rating plans must be filed with the office within 30
520calendar days after their effective dates, and shall be
521considered a "use and file" filing. Any disapproval by the
522office must have an effective date that is at least 60 days from
523the date of disapproval of the rates and rating plan and must
524have prospective effect only. The plan may not be subject to any
525order by the office to return to policyholders any portion of
526the rates disapproved by the office. The office may not
527disapprove any rates or rating plans unless it demonstrates that
528such rates and rating plans are excessive, inadequate, or
529unfairly discriminatory.
530     (g)  Whenever a deficit exists, the plan shall, within 90
531days, provide the office with a program to eliminate the deficit
532within a reasonable time. The deficit may be funded through
533increased premiums charged to insureds of the plan for
534subsequent years, through the use of policyholder surplus
535attributable to any year, through the use of assessments as
536provided in subparagraph (d)2., and through assessments on
537insureds in the plan if the plan uses assessable policies as
538provided in subparagraph (d)3.
539     (p)  No insurer shall provide workers' compensation and
540employer's liability insurance to any person who is delinquent
541in the payment of premiums, assessments, penalties, or
542surcharges owed to the plan or to any person who is an
543affiliated person of a person who is delinquent in the payment
544of premiums, assessments, penalties, or surcharges owed to the
545plan. For purposes of this paragraph, the term "affiliated
546person" of another person means:
547     1.  The spouse of such other natural person;
548     2.  Any person who directly or indirectly owns or controls,
549or holds with the power to vote, 5 percent or more of the
550outstanding voting securities of such other person;
551     3.  Any person who directly or indirectly owns 5 percent or
552more of the outstanding voting securities that are directly or
553indirectly owned or controlled, or held with the power to vote,
554by such other person;
555     4.  Any person or group of persons who directly or
556indirectly control, are controlled by, or are under common
557control with such other person;
558     5.  Any officer, director, trustee, partner, owner,
559manager, joint venturer, or employee, or other person performing
560duties similar to persons in those positions, of such other
561persons; or
562     6.  Any person who has an officer, director, trustee,
563partner, or joint venturer in common with such other person.
564     (q)  Effective July 1, 2004, the plan is exempt from the
565premium tax under s. 624.509 and any assessments under ss.
566440.49 and 440.51.
567     Section 2.  Notwithstanding the provisions of sections
568440.50 and 440.51, Florida Statutes, for the 2004-2005 fiscal
569year the sum of $10 million is appropriated from the Workers'
570Workers' Compensation Administration Trust Fund in the
571Department of Financial Services for transfer to the workers'
572workers' compensation joint underwriting plan provided in
573section 627.311(5), Florida Statutes, as a capital contribution
574to fund any deficit in the plan.  The Chief Financial Officer
575shall transfer such funds to the plan no later than July 31,
5762004.  
577     Notwithstanding the provisions of ss. 440.50 and 440.51,
578Florida Statutes, subject to the following procedures and
579approval, the Department of Financial Services may request
580transfer funds from the Workers' Compensation Administration
581Trust Fund within the Department of Financial Services to the
582workers' compensation joint underwriting plan provided in s.
583627.311(5), Florida Statutes.
584     (1) The department shall establish a contingency reserve
585within the Workers' Compensation Administration Trust Fund, from
586which the department is authorized to expend funds as provided
587in the subsection, in an amount not to exceed $15 million to be
588released only upon the approval of a budget amendment presented
589to the Legislative Budget Commission.  For actuarial deficits
590projected for policyholders, based on actuarial best estimates,
591covered in subplan "D" prior to July 1, 2004, and upon
592verification by the Office of Insurance Regulation, the plan is
593authorized to request and the department is authorized to submit
594a budget amendment in an amount not to exceed $15 million for
595the purpose of funding deficits in subplan "D".  
596     (2)  After the contingency reserve is established, whenever
597the board determines subplan "D" does not have a sufficient cash
598basis to meet 3 months of projected cash needs due to any
599deficit in subplan "D," the board is authorized to request the
600department to transfer funds from the contingency reserve fund
601within the Workers' Compensation Administration Trust Fund to
602the plan in an amount sufficient to fund the difference between
603the amount available and the amount needed to meet subplan "D"'s
604&
605projected cash need for the subsequent 3-month period. The board
606and the office must first certify to the Department of Financial
607Services that there is not sufficient cash within subplan
608"D" to meet the projected cash needs in subplan "D" within
609subsequent 3 months. The amount requested for transfer to
610subplan "D" may not exceed the difference between the


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