HB 1361

1
A bill to be entitled
2An act relating to insurance; amending s. 624.605, F.S.;
3including debt cancellation products within the definition
4of the term "casualty insurance"; describing debt
5cancellation products; authorizing certain entities to
6offer debt cancellation products under certain
7circumstances; specifying such products as not
8constituting insurance; amending s. 626.9541, F.S.,
9relating to unfair methods of competition and unfair or
10deceptive acts or practices; exempting, from the
11prohibition on free insurance, insurance covering property
12other than real property or motor vehicles under specified
13circumstances; amending s. 627.642, F.S.; requiring an
14identification card containing specified information to be
15given to insureds who have health and accident insurance;
16amending s. 627.553, F.S.; revising certain limitations on
17certain amounts of life insurance on a debtor; amending s.
18627.657, F.S.; requiring an identification card containing
19specified information to be given to insureds under group
20health insurance policies; amending s. 627.679, F.S.;
21revising certain limitations on certain amounts of life
22insurance on a debtor; amending s. 627.681, F.S.; revising
23a limitation on the term of credit disability insurance;
24amending s. 628.511, F.S.; revising the definitions of the
25terms "clearing corporation" and "custodian"; deleting
26definitions of the terms "book entry system" and "member
27bank"; conforming changes; amending s. 636.204, F.S.;
28revising the requirements for an application to operate as
29a discount medical plan organization; amending s. 636.206,
30F.S.; authorizing the Office of Insurance Regulation to
31examine the business affairs of a discount medical plan
32organization under certain conditions; amending s.
33636.210, F.S.; providing an exception to the prohibition
34of a discount medical plan organization having
35restrictions on free access to plan providers; amending s.
36636.216, F.S.; requiring certain charges to members be
37approved by the office before the charges can be used;
38amending s. 636.218, F.S.; deleting certain requirements
39for annual reports submitted to the office; amending s.
40636.230, F.S.; revising the minimum capital requirements
41for discount medical plan organizations; requiring a
42discount medical plan to be provided in writing under
43certain conditions; amending s. 641.31, F.S.; requiring
44that an identification card be given to persons receiving
45health care services through a health maintenance
46contract; amending s. 655.947, F.S.; providing what
47constitutes a debt cancellation product; providing a
48definition; amending s. 520.07, F.S.; requiring the
49Financial Services Commission to adopt rules regarding
50debt cancellation products provided by motor vehicle
51retail installment sellers; amending s. 624.4622, F.S.;
52authorizing local government self-insurance funds to
53insure or self-insure real or personal property against
54loss or damage; amending s. 624.4623, F.S.; prohibiting
55requiring participation of independent educational
56institution self-insurance funds in or entitlement to
57coverage under certain guaranty associations; creating s.
58624.4624, F.S.; authorizing two or more corporations not
59for profit to form a self-insurance fund for certain
60purposes; providing specific requirements; providing a
61definition; providing limitations; providing for
62application of certain provisions to certain premiums,
63contributions, and assessments; providing for payment of
64insurance premium tax at a reduced rate by corporation not
65for profit self-insurance funds; subjecting a corporation
66not for profit self-insurance fund to certain group self-
67insurance fund provisions under certain circumstances;
68creating s. 627.443, F.S.; prohibiting rejecting certain
69workers' compensation insurance policies by certain
70persons on certain grounds; providing an effective date.
71
72Be It Enacted by the Legislature of the State of Florida:
73
74     Section 1.  Paragraph (r) is added to subsection (1) of
75section 624.605, Florida Statutes, to read:
76     624.605  "Casualty insurance" defined.--
77     (1)  "Casualty insurance" includes:
78     (r)  Insurance for debt cancellation products.--Insurance
79that a creditor may purchase against the risk of financial loss
80from the use of debt cancellation products with consumer loans
81or leases or retail installment contracts.
82     1.  For purposes of this paragraph, debt cancellation
83products, including, but not limited to, debt cancellation
84contracts, debt suspension agreements, and guaranteed asset
85protection contracts, are loan or lease or retail installment
86contract terms, or modifications to loan, lease, or retail
87installment contracts, under which a creditor agrees to cancel
88or suspend all or part of a customer's obligation to make
89payments upon the occurrence of specified events.
90     2.  Debt cancellation products may be offered by financial
91institutions, as defined in s. 655.005(1)(h), and including
92insured depository institutions, as defined in 12 U.S.C. s.
931813(c), and subsidiaries thereof, as provided in the Financial
94Institution Codes, or Motor Vehicle Retail Installment Sellers,
95as defined in s. 520.02(15) or Retail Lessors, as defined in s.
96521.003(8), Florida Statutes, and such products shall not
97constitute insurance for purposes of the Florida Insurance Code.
98     Section 2.  Paragraph (n) of subsection (1) of section
99626.9541, Florida Statutes, is amended to read:
100     626.9541  Unfair methods of competition and unfair or
101deceptive acts or practices defined.--
102     (1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
103ACTS.--The following are defined as unfair methods of
104competition and unfair or deceptive acts or practices:
105     (n)  Free insurance prohibited.--
106     1.  Advertising, offering, or providing free insurance as
107an inducement to the purchase or sale of real or personal
108property or of services directly or indirectly connected with
109such real or personal property.
110     2.  For the purposes of this paragraph, "free" insurance
111is:
112     a.  Insurance for which no identifiable and additional
113charge is made to the purchaser of such real property, personal
114property, or services.
115     b.  Insurance for which an identifiable or additional
116charge is made in an amount less than the cost of such insurance
117as to the seller or other person, other than the insurer,
118providing the same.
119     3.  Subparagraphs 1. and 2. do not apply to:
120     a.  Insurance of, loss of, or damage to the real or
121personal property involved in any such sale or services, under a
122policy covering the interests therein of the seller or vendor.
123     b.  Blanket disability insurance as defined in s. 627.659.
124     c.  Credit life insurance or credit disability insurance.
125     d.  Any individual, isolated, nonrecurring unadvertised
126transaction not in the regular course of business.
127     e.  Title insurance.
128     f.  Any purchase agreement involving the purchase of a
129cemetery lot or lots in which, under stated conditions, any
130balance due is forgiven upon the death of the purchaser.
131     g.  Life insurance, trip cancellation insurance, or lost
132baggage insurance offered by a travel agency as part of a travel
133package offered by and booked through the agency.
134     h.  Insurance covering property, other than real property
135or motor vehicles, if the person paying for the insurance:
136     (I)  Has an ongoing contractual interest or other economic
137interest in the property; or
138     (II)  Requires the property to deliver its services.
139     4.  Using the word "free" or words which imply the
140provision of insurance without a cost to describe life or
141disability insurance, in connection with the advertising or
142offering for sale of any kind of goods, merchandise, or
143services.
144     Section 3.  Subsection (3) is added to section 627.642,
145Florida Statutes, to read:
146     627.642  Outline of coverage.--
147     (3)  In addition to the outline of coverage, a policy as
148specified in s. 627.6699(3)(k) must be accompanied by an
149identification card that contains, at a minimum:
150     (a)  The name of the organization issuing the policy or the
151name of the organization administering the policy, whichever
152applies.
153     (b)  The name of the contract holder.
154     (c)  The type of plan only if the plan is filed in the
155state, an indication that the plan is self-funded, or the name
156of the network.
157     (d)  The member identification number, contract number, and
158policy or group number, if applicable.
159     (e)  A contact phone number or electronic address for
160authorizations.
161     (f)  A phone number or electronic address whereby the
162covered person or hospital, physician, or other person rendering
163services covered by the policy may determine if the plan is
164insured and may obtain a benefits verification in order to
165estimate patient financial responsibility, in compliance with
166privacy rules under the Health Insurance Portability and
167Accountability Act.
168     (g)  The national plan identifier, in accordance with the
169compliance date set forth by the federal Department of Health
170and Human Services.
171
172The identification card must present the information in a
173readily identifiable manner or, alternatively, the information
174may be embedded on the card and available through magnetic
175stripe or smart card. The information may also be provided
176through other electronic technology.
177     Section 4.  Subsection (3) of section 627.553, Florida
178Statutes, is amended to read:
179     627.553  Debtor groups.--The lives of a group of
180individuals may be insured under a policy issued to a creditor
181or its parent holding company, or to a trustee or trustees or
182agent designated by two or more creditors, which creditor,
183holding company, affiliate, trustee or trustees, or agent shall
184be deemed the policyholder, to insure debtors of the creditor or
185creditors, subject to the following requirements:
186     (3)  The amount of insurance on the life of any debtor
187shall at no time exceed the amount owed by her or him which is
188repayable in installments to the creditor or $50,000, whichever
189is less, except that loans not exceeding 1 year's duration shall
190not be subject to such limits. However, on such loans not
191exceeding 1 year's duration, the limit of coverage shall not
192exceed $50,000 with any one insurer.
193     Section 5.  Present subsection (2) of section 627.657,
194Florida Statutes, is renumbered as subsection (3), and a new
195subsection (2) is added to that section, to read:
196     627.657  Provisions of group health insurance policies.--
197     (2)  The medical policy as specified in s. 627.6699(3)(k)
198must be accompanied by an identification card that contains, at
199a minimum:
200     (a)  The name of the organization issuing the policy or
201name of the organization administering the policy, whichever
202applies.
203     (b)  The name of the certificateholder.
204     (c)  The type of plan only if the plan is filed in the
205state, an indication that the plan is self-funded, or the name
206of the network.
207     (d)  The member identification number, contract number, and
208policy or group number, if applicable.
209     (e)  A contact phone number or electronic address for
210authorizations.
211     (f)  A phone number or electronic address whereby the
212covered person or hospital, physician, or other person rendering
213services covered by the policy may determine if the plan is
214insured and may obtain a benefits verification in order to
215estimate patient financial responsibility, in compliance with
216privacy rules under the Health Insurance Portability and
217Accountability Act.
218     (g)  The national plan identifier, in accordance with the
219compliance date set forth by the federal Department of Health
220and Human Services.
221
222The identification card must present the information in a
223readily identifiable manner or, alternatively, the information
224may be embedded on the card and available through magnetic
225stripe or smart card. The information may also be provided
226through other electronic technology.
227     Section 6.  Paragraph (b) of subsection (1) of section
228627.679, Florida Statutes, is amended to read:
229     627.679  Amount of insurance; disclosure.--
230     (1)
231     (b)  The total amount of credit life insurance on the life
232of any debtor with respect to any loan or loans covered in one
233or more insurance policies shall at no time exceed the amount of
234the indebtedness $50,000 with any one creditor, except that
235loans not exceeding 1 year's duration shall not be subject to
236such limits, and on such loans not exceeding 1 year's duration,
237the limits of coverage shall not exceed $50,000 with any one
238insurer.
239     Section 7.  Subsection (2) of section 627.681, Florida
240Statutes, is amended to read:
241     627.681  Term and evidence of insurance.--
242     (2)  The term of credit disability insurance on any debtor
243insured under this section shall not exceed the term of
244indebtedness 10 years, and for credit transactions that exceed
24560 months, coverage shall not exceed 60 monthly indemnities.
246     Section 8.  Section 628.511, Florida Statutes, is amended
247to read:
248     628.511  Clearing corporations Book entry accounting
249system.--
250     (1)  The purpose of this section is to authorize domestic
251insurers to utilize modern systems for holding and transferring
252securities without physical delivery of securities certificates,
253subject to appropriate rules of the commission.
254     (2)  The following terms are defined for use in this
255section:
256     (a)  "Securities" means instruments as defined in s.
257678.1021.
258     (b)  "Clearing corporation" means a clearing corporation as
259defined in s. 678.1021. The term "clearing corporation" also
260includes "treasury/reserve automated debt entry securities
261system" and "treasury direct" book-entry securities systems as
262established pursuant to 31 U.S.C. ss. 3100 et seq., 12 U.S.C.
263391 and 5 U.S.C. 301.
264     (c)  "Custodian" "Direct participant" means a national
265bank, state bank or trust company, or broker or dealer that
266which maintains an account in its name in a clearing corporation
267and through which an insurance company participates in a
268clearing corporation.
269     (d)  "Federal Reserve book-entry system" means the
270computerized systems sponsored by the United States Department
271of the Treasury and agencies and instrumentalities of the United
272States for holding and transferring securities of the United
273States Government and such agencies and instrumentalities,
274respectively, in Federal Reserve banks through banks which are
275members of the Federal Reserve System or which otherwise have
276access to such computerized systems.
277     (e)  "Member bank" means a national bank, state bank or
278trust company which is a member of the Federal Reserve System
279and through which an insurer participates in the Federal Reserve
280book-entry system.
281     (3)  Notwithstanding any other provision of law, a domestic
282insurer may deposit or arrange for the deposit of securities
283held in or purchased for its general account and its separate
284accounts in a clearing corporation or in the Federal Reserve
285book-entry system. When securities are deposited with a clearing
286corporation, certificates representing securities of the same
287class of the same issuer may be merged and held in bulk in the
288name of the nominee of such clearing corporation with any other
289securities deposited with such clearing corporation by any
290person, regardless of the ownership of such securities, and
291certificates representing securities of small denominations may
292be merged into one or more certificates of larger denominations.
293The records of any custodian bank through which an insurer holds
294securities in the Federal Reserve book-entry system, and the
295records of any custodian banks through which an insurer holds
296securities in a clearing corporation , shall at all times show
297that such securities are held for such insurer and for which
298accounts thereof. Ownership of, and other interests in, such
299securities may be transferred by bookkeeping entry on the books
300of such clearing corporation or in the Federal Reserve book-
301entry system without, in either case, physical delivery of
302certificates representing such securities.
303     (4)  The commission may adopt rules governing the deposit
304by insurers of securities with clearing corporations and in the
305Federal Reserve book-entry system.
306     Section 9.  Paragraph (i) of subsection (2) of section
307636.204, Florida Statutes, is amended to read:
308     636.204  License required.--
309     (2)  An application for a license to operate as a discount
310medical plan organization must be filed with the office on a
311form prescribed by the commission. Such application must be
312sworn to by an officer or authorized representative of the
313applicant and be accompanied by the following, if applicable:
314     (i)  A copy of the applicant's most recent financial
315statements audited by an independent certified public
316accountant. An applicant that is a subsidiary of a parent entity
317that is publicly traded and that prepares audited financial
318statements reflecting the consolidated operations of the parent
319entity and the subsidiary may submit petition the office to
320accept, in lieu of the audited financial statement of the
321applicant, the audited financial statement of the parent entity
322and a written guaranty by the parent entity that the minimum
323capital requirements of the applicant required by this part will
324be met by the parent entity.
325     Section 10.  Subsection (1) of section 636.206, Florida
326Statutes, is amended to read:
327     636.206  Examinations and investigations.--
328     (1)  The office may examine or investigate the business and
329affairs of any discount medical plan organization if the
330commissioner has reason to believe that the discount medical
331plan organization is not complying with requirements of this
332chapter. The office may order any discount medical plan
333organization or applicant to produce any records, books, files,
334advertising and solicitation materials, or other information and
335may take statements under oath to determine whether the discount
336medical plan organization or applicant is in violation of the
337law or is acting contrary to the public interest. The expenses
338incurred in conducting any examination or investigation must be
339paid by the discount medical plan organization or applicant.
340Examinations and investigations must be conducted as provided in
341chapter 624.
342     Section 11.  Subsection (1) of section 636.210, Florida
343Statutes, is amended to read:
344     636.210  Prohibited activities of a discount medical plan
345organization.--
346     (1)  A discount medical plan organization may not:
347     (a)  Use in its advertisements, marketing material,
348brochures, and discount cards the term "insurance" except as
349otherwise provided in this part or as a disclaimer of any
350relationship between discount medical plan organization benefits
351and insurance;
352     (b)  Use in its advertisements, marketing material,
353brochures, and discount cards the terms "health plan,"
354"coverage," "copay," "copayments," "preexisting conditions,"
355"guaranteed issue," "premium," "PPO," "preferred provider
356organization," or other terms in a manner that could reasonably
357mislead a person into believing the discount medical plan was
358health insurance;
359     (c)  Have restrictions on free access to plan providers,
360except for hospital services, including, but not limited to,
361waiting periods and notification periods; or
362     (d)  Pay providers any fees for medical services.
363     Section 12.  Subsection (1) of section 636.216, Florida
364Statutes, is amended to read:
365     636.216  Charge or form filings.--
366     (1)  All charges to members must be filed with the office
367and any charge to members greater than $30 per month or $360 per
368year for access to health care services other than those
369provided by physicians licensed under chapter 458 or chapter 459
370or by hospitals licensed under chapter 395 must be approved by
371the office before the charges can be used. Any charge to members
372greater than $60 per month or $720 per year for health care
373services that include services provided by physicians licensed
374under chapter 458 or chapter 459 or by hospitals licensed under
375chapter 395 must be approved by the office before the charges
376can be used. The discount medical plan organization has the
377burden of proof that the charges bear a reasonable relation to
378the benefits received by the member.
379     Section 13.  Subsection (2) of section 636.218, Florida
380Statutes, is amended to read:
381     636.218  Annual reports.--
382     (2)  Such reports must be on forms prescribed by the
383commission and must include:
384     (a)  Audited financial statements prepared in accordance
385with generally accepted accounting principles certified by an
386independent certified public accountant, including the
387organization's balance sheet, income statement, and statement of
388changes in cash flow for the preceding year. An organization
389that is a subsidiary of a parent entity that is publicly traded
390and that prepares audited financial statements reflecting the
391consolidated operations of the parent entity and the
392organization may petition the office to accept, in lieu of the
393audited financial statement of the organization, the audited
394financial statement of the parent entity and a written guaranty
395by the parent entity that the minimum capital requirements of
396the organization required by this part will be met by the parent
397entity.
398     (a)(b)  If different from the initial application or the
399last annual report, a list of the names and residence addresses
400of all persons responsible for the conduct of the organization's
401affairs, together with a disclosure of the extent and nature of
402any contracts or arrangements between such persons and the
403discount medical plan organization, including any possible
404conflicts of interest.
405     (b)(c)  The number of discount medical plan members in the
406state.
407     (c)(d)  Such other information relating to the performance
408of the discount medical plan organization as is reasonably
409required by the commission or office.
410     Section 14.  Subsection (1) of section 636.220, Florida
411Statutes, is amended to read:
412     636.220  Minimum capital requirements.--
413     (1)  Each discount medical plan organization must at all
414times maintain a net worth of at least $150,000.
415     (2)  The office may not issue a license unless the discount
416medical plan organization has a net worth of at least $150,000,
417and each discount medical plan organization shall certify in
418writing under oath at the time of licensure and annually
419thereafter that the minimum capitalization requirements of this
420part are satisfied.
421     Section 15.  Section 636.230, Florida Statutes, is amended
422to read:
423     636.230  Bundling discount medical plans with insurance
424other products.--When a marketer or discount medical plan
425organization sells a discount medical plan together with any
426insurance other product, the fees for the discount medical plan
427must be provided in writing to the member if the fees exceed $30
428per month for access to health care services other than those
429provided by physicians licensed under chapter 458 or chapter
430459, or by hospitals licensed under chapter 395, or $60 per
431month for health care services that include services provided by
432physicians licensed under chapter 458 or chapter 459 or by
433hospitals licensed under chapter 395.
434     Section 16.  Present subsections (5) through (40) of
435section 641.31, Florida Statutes, are renumbered as subsections
436(6) through (41), respectively, and a new subsection (5) is
437added to that section, to read:
438     641.31  Health maintenance contracts.--
439     (5)  The contract, certificate, or member handbook must be
440accompanied by an identification card that contains, at a
441minimum:
442     (a)  The name of the organization offering the contract or
443name of the organization administering the contract, whichever
444applies.
445     (b)  The name of the subscriber.
446     (c)  A statement that the health plan is a health
447maintenance organization. Only a health plan with a certificate
448of authority issued under this chapter may be identified as a
449health maintenance organization.
450     (d)  The member identification number, contract number, and
451group number, if applicable.
452     (e)  A contact phone number or electronic address for
453authorizations.
454     (f)  A phone number or electronic address whereby the
455covered person or hospital, physician, or other person rendering
456services covered by the contract may determine if the plan is
457insured and may obtain a benefits verification in order to
458estimate patient financial responsibility, in compliance with
459privacy rules under the Health Insurance Portability and
460Accountability Act.
461     (g)  The national plan identifier, in accordance with the
462compliance date set forth by the federal Department of Health
463and Human Services.
464
465The identification card must present the information in a
466readily identifiable manner or, alternatively, the information
467may be embedded on the card and available through magnetic
468stripe or smart card. The information may also be provided
469through other electronic technology.
470     Section 17.  Section 655.947, Florida Statutes, is created
471to read:
472     655.947  Debt cancellation products.--
473     (1)  Debt cancellation products, including, but not limited
474to, debt cancellation contracts, debt suspension agreements, and
475guaranteed asset protection contracts, are loan or lease
476contract terms, or modifications to loan or lease contracts,
477under which a creditor agrees to cancel or suspend all or part
478of a customer's obligation to make payments upon the occurrence
479of specified events. Debt cancellation products may be offered,
480and a fee charged, by financial institutions and their
481subsidiaries subject to the provisions of this section. As used
482in this section, the term "financial institutions" includes
483those as defined in s. 655.005(1)(h) and insured depository
484institutions as defined in 12 U.S.C. s. 1813.
485     (2)  The commission shall adopt rules to administer this
486section, which rules must be consistent with 12 C.F.R. part 37,
487as amended.
488     Section 18.  Section 655.947, Florida Statutes, is created
489to read:
490     655.947  Debt cancellation products.--
491     (1)  Debt cancellation products, including, but not limited
492to, debt cancellation contracts, debt suspension agreements, and
493guaranteed asset protection contracts, are loan or lease
494contract terms, or modifications to loan or lease contracts,
495under which a creditor agrees to cancel or suspend all or part
496of a customer's obligation to make payments upon the occurrence
497of specified events. Debt cancellation products may be offered,
498and a fee charged, by financial institutions and their
499subsidiaries subject to the provisions of this section. As used
500in this section, the term "financial institutions" includes
501those as defined in s. 655.005(1)(h) and insured depository
502institutions as defined in 12 U.S.C. s. 1813.
503     (2)  The commission shall adopt rules to administer this
504section, such rules shall be consistent with 12 CFR Part 37, as
505amended.
506     Section 19.  Subsection (11) is added to section 520.07,
507Florida Statutes, to read:
508     520.07  Requirements and prohibitions as to retail
509installment contracts.--
510     (11)  The commission shall adopt rules to administer the
511sale of debt cancellation products as defined in s.
512624.605(1)(r) by motor vehicle retail installment sellers.
513     Section 20.  Subsection (1) of section 624.4622, Florida
514Statutes, is amended to read:
515     624.4622  Local government self-insurance funds.--
516     (1)  Any two or more local governmental entities may enter
517into interlocal agreements for the purpose of securing the
518payment of benefits under chapter 440, or insuring or self-
519insuring real or personal property of every kind and every
520interest in such property against loss or damage from any hazard
521or cause and against any loss consequential to such loss or
522damage, provided the local government self-insurance fund that
523is created must:
524     (a)  Have annual normal premiums in excess of $5 million;
525     (b)  Maintain a continuing program of excess insurance
526coverage and reserve evaluation to protect the financial
527stability of the fund in an amount and manner determined by a
528qualified and independent actuary;
529     (c)  Submit annually an audited fiscal year-end financial
530statement by an independent certified public accountant within 6
531months after the end of the fiscal year to the office; and
532     (d)  Have a governing body which is comprised entirely of
533local elected officials.
534     Section 21.  Subsection (3) is added to section 624.4623,
535Florida Statutes, to read:
536     624.4623  Independent Educational Institution Self-
537Insurance Funds.--
538     (3)  An independent educational institution self-insurance
539fund may not be required to participate in, or be entitled to
540coverage under, any guaranty association created pursuant to
541part II or part V of chapter 631.
542     Section 22.  Section 624.4624, Florida Statutes, is created
543to read:
544     624.4624  Corporation not for profit self-insurance funds.
545--
546     (1)  Notwithstanding any other provision of law, any two or
547more corporations not for profit located in and organized under
548the laws of this state may form a self-insurance fund for the
549purpose of pooling and spreading liabilities of its group
550members in any one or combination of property or casualty risk
551or surety insurance or securing the payment of benefits under
552chapter 440, provided the corporation not for profit self-
553insurance fund that is created:
554     (a)  Has annual normal premiums in excess of $5 million.
555     (b)  Requires for qualification that each participating
556member receive at least 75 percent of its revenues from local,
557state, or federal governmental sources or a combination of such
558sources.
559     (c)  Uses a qualified actuary to determine rates using
560accepted actuarial principles and annually submits to the office
561a certification by the actuary that the rates are actuarially
562sound and are not inadequate, as defined in s. 627.062.
563     (d)  Uses a qualified actuary to establish reserves for
564loss and loss adjustment expenses and annually submits to the
565office a certification by the actuary that the loss and loss
566adjustment expense reserves are adequate. If the actuary
567determines that reserves are not adequate, the fund shall file
568with the office a remedial plan for increasing the reserves or
569otherwise addressing the financial condition of the fund,
570subject to a determination by the office that the fund will
571operate on an actuarially sound basis and the fund does not pose
572a significant risk of insolvency.
573     (e)  Maintains a continuing program of excess insurance
574coverage and reserve evaluation to protect the financial
575stability of the fund in an amount and manner determined by a
576qualified actuary. At a minimum, this program must:
577     1.  Purchase excess insurance from authorized insurance
578carriers.
579     2.  Retain a per-loss occurrence that does not exceed
580$350,000.
581     (f)  Submits to the office annually an audited fiscal year-
582end financial statement by an independent certified public
583accountant within 6 months after the end of the fiscal year.
584     (g)  Has a governing body that is comprised entirely of
585officials from corporations not for profit that are members of
586the corporation not for profit self-insurance fund.
587     (h)  Uses knowledgeable persons or business entities to
588administer or service the fund in the areas of claims
589administration, claims adjusting, underwriting, risk management,
590loss control, policy administration, financial audit, and legal
591areas. Such persons must meet all applicable requirements of law
592for state licensure and must have at least 5 years' experience
593with commercial self-insurance funds formed under s. 624.462,
594self-insurance funds formed under s. 624.4622, or domestic
595insurers.
596     (i)  Submits to the office copies of contracts used for its
597members which clearly establish the liability of each member for
598the obligations of the fund.
599     (j)  Annually submits to the office a certification by the
600governing body of the fund that, to the best of its knowledge,
601the requirements of this section are met.
602     (2)  As used in this section, the term "qualified actuary"
603means an actuary that is a member of the Casualty Actuarial
604Society or the American Academy of Actuaries.
605     (3)  A corporation not for profit self-insurance fund that
606meets the requirements of this section is not:
607     (a)  An insurer for purposes of participation in or
608coverage by any insurance guaranty association established by
609chapter 631; or
610     (b)  Subject to s. 624.4621 and is not required to file any
611report with the department under s. 440.38(2)(b) which is
612uniquely required of group self-insurer funds qualified under s.
613624.4621.
614     (4)  Premiums, contributions, and assessments received by a
615corporation not for profit self-insurance fund are subject to
616ss. 624.509(1) and (2) and 624.5092, except that the tax rate
617shall be 1.6 percent of the gross amount of such premiums,
618contributions, and assessments.
619     (5)  If any of the requirements of subsection (1) are not
620met, a corporation not for profit self-insurance fund is subject
621to the requirements of s. 624.4621 if the fund provides only
622workers' compensation coverage or is subject to the requirements
623of ss. 624.460-624.488 if the fund provides coverage for other
624property, casualty, or surety risks.
625     Section 23.  Section 627.443, Florida Statutes, is created
626to read:
627     627.443  Workers' compensation insurance policy
628limitation.--Notwithstanding any other provision in this
629chapter, a workers' compensation insurance policy issued by a
630self-insurance fund that is subject to part V of chapter 631 may
631not be rejected by any person requiring a workers' compensation
632insurance policy pursuant to a construction contract, if such
633rejection is because the self-insurance fund is not rated by a
634nationally-recognized insurance rating service.
635     Section 24.  This act shall take effect upon becoming a
636law.


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