Senate Bill sb2338
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Florida Senate - 2005 SB 2338
By Senator Alexander
17-196A-05
1 A bill to be entitled
2 An act relating to motor vehicle insurance;
3 amending s. 627.311, F.S.; providing standards
4 for administration of the motor vehicle
5 insurance risk apportionment program;
6 prescribing duties of the program's board of
7 governors and the Office of Insurance
8 Regulation; providing circumstances in which
9 new carriers will be added to the program and
10 in which the board of governors will be
11 replaced; providing composition of the board;
12 requiring actuarial certification of loss
13 reserves; providing for certain costs to be
14 included in rate filings; providing an
15 effective date.
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17 Be It Enacted by the Legislature of the State of Florida:
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19 Section 1. Subsection (8) is added to section 627.311,
20 Florida Statutes, to read:
21 627.311 Joint underwriters and joint reinsurers;
22 public records and public meetings exemptions.--
23 (8)(a) The motor vehicle insurance risk apportionment
24 program established by this section shall be administered in a
25 manner so as to produce a combined loss ratio that does not
26 exceed 100 percent, thereby avoiding assessments to the extent
27 reasonably achievable, which shall be a priority that
28 supersedes any other provision set forth in this section.
29 (b) The motor vehicle insurance risk apportionment
30 program shall establish a special investigation and litigation
31 department that may be an adjunct to, or separate and distinct
1
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Florida Senate - 2005 SB 2338
17-196A-05
1 from, the servicing carrier's claims administration and that
2 will be funded to the extent considered necessary and
3 appropriate to prevent the payment of fraudulent claims as
4 determined solely by the program's board of governors subject
5 only to the approval of the Office of Insurance Regulation.
6 (c) After any fiscal year in which the motor vehicle
7 insurance risk apportionment program exceeds a combined loss
8 ratio of 100 percent, the board of governors shall appoint one
9 or more new servicing carriers, which shall be selected on a
10 first-priority basis from the insurance company applicants
11 that have the lowest combined loss ratios arising from their
12 voluntary business.
13 (d) If the motor vehicle insurance risk apportionment
14 program exceeds a combined loss ratio of 100 percent in any 2
15 successive years, the Office of Insurance Regulation shall
16 replace a majority of the board of governors with appointees
17 that are among the insurers maintaining the lowest combined
18 loss ratios in their voluntary business who are willing to
19 serve as members of the board of governors.
20 (e) The combined loss ratio provisions set forth in
21 paragraphs (c) and (d) are applicable if any actuarially
22 certified adverse loss development establishes a combined loss
23 ratio that exceeds 100 percent.
24 (f) The motor vehicle insurance risk apportionment
25 program shall obtain an actuarial certification of its loss
26 reserves no less frequently than every 6 months and shall
27 issue policies that are effective for a period of 6 months
28 only.
29 (g) If the motor vehicle insurance risk apportionment
30 program's actuarial certification of its loss reserves
31 establishes that the program is operating at a deficit or has
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Florida Senate - 2005 SB 2338
17-196A-05
1 inadequate rates, a rate filing shall be submitted to the
2 Office of Insurance Regulation for approval.
3 (h) The motor vehicle insurance risk apportionment
4 program's board of governors shall be comprised of
5 representatives that include, but are not limited to, the
6 Office of Insurance Regulation, the Florida Property and
7 Casualty Association, the Florida Insurance Council, the
8 Florida Association of Insurance Agents, the Specialty Agents,
9 the Latin American Association of Insurance Agents, and three
10 at-large appointees of the Chief Financial Officer.
11 (i) If an assessment results from an operating deficit
12 of the motor vehicle insurance risk apportionment program,
13 insurance companies shall be authorized to recoup these
14 assessments by incorporating such assessments as a factor in
15 their rate filings.
16 Section 2. This act shall take effect July 1, 2005.
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19 SENATE SUMMARY
20 Requires the motor vehicle insurance risk apportionment
program to be operated in such a manner that its combined
21 loss ratio does not exceed 100 percent; if it does for 1
year, additional carriers may be added, and if it does
22 for 2 years, the Office of Insurance Regulation may
replace the program's board of governors. Provides
23 eligibility standards for membership on the board.
Requires an actuarial certification of loss reserves at
24 least every 6 months and requires policies to be issued
for 6-month periods. Authorizes a rate filing when the
25 program is operating at a deficit or has inadequate rates
and when an assessment results from a deficit.
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