HB 1643

1	A bill to be entitled
2	An act relating to automobile insurance joint underwriting
3	plan administration; creating s. 627.3115, F.S.; providing
4	requirements for administration of an automobile insurance
5	joint underwriting plan; requiring the plan to establish
6	an investigation and litigation unit for certain purposes;
7	providing for funding of the unit; requiring appointment
8	of new servicing carriers for the plan under certain
9	circumstances; requiring the plan to obtain actuarial
10	certification under certain circumstances; requiring the
11	plan to submit a rate filing to the Office of Insurance
12	Regulation under certain circumstances; specifying
13	criteria for members of the plan's board of governors;
14	authorizing insurance companies to recoup assessments in
15	rate filings under certain circumstances; providing an
16	effective date.
17
18	Be It Enacted by the Legislature of the State of Florida:
19
20	Section 1.  Section 627.3115, Florida Statutes, is created
21	to read:
22	627.3115  Administration of joint underwriting plan.--
23	(1)  The joint underwriting plan established by s. 627.311
24	shall be administered in a manner to produce a combined loss
25	ratio that does not exceed 100 percent to avoid assessments to
26	the extent reasonably achievable, which shall be a priority that
27	supersedes any provision set forth in s. 627.311.
28	(2)  The joint underwriting plan shall establish a special
29	investigation and litigation unit that may be an adjunct to the
30	servicing carrier's claims administration or which may be
31	separate and distinct from such administration and funded to the
32	extent considered necessary and appropriate to prevent the
33	payment of fraudulent claims as determined solely by the plan's
34	board of governors subject only to the approval of the Office of
35	Insurance Regulation.
36	(3)  After any fiscal year that the joint underwriting plan
37	exceeds a combined loss ratio of 100 percent, the board of
38	governors shall appoint one or more new servicing carriers that
39	shall be selected on a first priority basis from the insurance
40	company applicants that have the lowest combined loss ratios
41	arising from their voluntary business.
42	(4)  If the joint underwriting plan exceeds a combined loss
43	ratio in any two successive years, a majority of the board of
44	governors shall be replaced by the Office of Insurance
45	Regulation with appointees that are among the insurers
46	maintaining the lowest combined loss ratios in their voluntary
47	business who are willing to serve as members of the board of
48	governors.
49	(5)  The combined loss ratio provisions set forth in
50	subsections (3) and (4) shall apply if any actuarially certified
51	adverse loss development establishes a combined loss ratio that
52	exceeds 100 percent.
53	(6)  The joint underwriting plan shall obtain an actuarial
54	certification of its loss reserves no less than every 6 months
55	and shall issue policies that are effective for a period of only
56	6 months.
57	(7)  If the joint underwriting plan's actuarial
58	certification of its loss reserves establishes that the plan is
59	operating at a deficit or has inadequate rates, a rate filing
60	shall be submitted to the Office of Insurance Regulation for
61	approval.
62	(8)  The joint underwriting plan's board of governors shall
63	be comprised of representatives that shall include, but not be
64	limited to, the Office of Insurance Regulation, the Florida
65	Property and Casualty Association, the Florida Insurance
66	Council, the Florida Association of Insurance Agents, the
67	Specialty Agents' Association, the Latin American Association of
68	Insurance Agents, and three at-large appointees of the Chief
69	Financial Officer.
70	(9)  If an assessment results from an operating deficit of
71	the joint underwriting plan, insurance companies may recoup such
72	assessments by incorporating such assessments as a factor in
73	company rate filings.
74	Section 2.  This act shall take effect July 1, 2005.

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