Florida Senate - 2006                      COMMITTEE AMENDMENT
    Bill No. SB 2118
                        Barcode 971192
                            CHAMBER ACTION
              Senate                               House
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 1           Comm: WD              .                    
       03/27/2006 01:45 PM         .                    
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11  The Committee on Banking and Insurance (Campbell) recommended
12  the following amendment to amendment (091992):
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14         Senate Amendment (with title amendment) 
15         On page 1, between lines 17 and 18,
16  
17  insert:  
18         Section 1.  Subsections (3) and (6) of section 627.041,
19  Florida Statutes, are amended to read:
20         627.041  Definitions.--As used in this part:
21         (3)  "Rating organization" means every person, other
22  than an authorized insurer, whether located within or outside
23  this state, who has as his or her object or purpose the making
24  of prospective loss costs rates, rating plans, or rating
25  systems. Two or more authorized insurers that act in concert
26  for the purpose of making rates, rating plans, or rating
27  systems, and that do not operate within the specific
28  authorizations contained in ss. 627.311, 627.314(2), (4), and
29  627.351, shall be deemed to be a rating organization.  No
30  single insurer shall be deemed to be a rating organization.
31         (6)  "Subscriber" means an insurer which is furnished
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Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 2118 Barcode 971192 1 at its request: 2 (a) With prospective loss costs rates and rating 3 manuals by a rating organization of which it is not a member; 4 or 5 (b) With advisory services by an advisory organization 6 of which it is not a member. 7 Section 2. Section 627.091, Florida Statutes, is 8 amended to read: 9 627.091 Rate filings; workers' compensation and 10 employer's liability insurances.-- 11 (1) As used in this section, the term: 12 (a) "Expenses" means that portion of a rate 13 attributable to acquisition, field supervision, collection 14 expenses, general expenses, taxes, licenses, and fees. 15 (b) "Multiplier" means the profit and expenses, other 16 than loss adjustment expenses associated with writing workers' 17 compensation and employer's liability insurance, expressed as 18 a single nonintegral number to be applied to the prospective 19 loss costs approved by the office in making rates for each 20 classification of risks used by that insurer. 21 (c) "Prospective loss costs" means that portion of a 22 rate which does not include provisions for expenses other than 23 loss adjustment expenses or profit, and is based on historical 24 aggregate losses and loss adjustment expenses adjusted through 25 development to their ultimate value and projected through 26 trending to a future point in time. 27 (2)(1) As to workers' compensation and employer's 28 liability insurances, every insurer shall file with the office 29 every manual of classifications, rules, and rates, every 30 rating plan, and every modification of any of the foregoing 31 which it proposes to use. Every insurer is authorized to 2 2:07 PM 03/17/06 s2118c-bi32-b02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 2118 Barcode 971192 1 include deductible provisions in its manual of 2 classifications, rules, and rates. Such deductibles shall in 3 all cases be in a form and manner which is consistent with the 4 underlying purpose of chapter 440. 5 (3)(2) Every such filing shall state the proposed 6 effective date thereof, and shall indicate the character and 7 extent of the coverage contemplated. When a filing is not 8 accompanied by the information upon which the insurer supports 9 the filing and the office does not have sufficient information 10 to determine whether the filing meets the applicable 11 requirements of this part, it shall within 15 days after the 12 date of filing require the insurer to furnish the information 13 upon which it supports the filing. The information furnished 14 in support of a filing may include: 15 (a) The experience or judgment of the insurer or 16 rating organization making the filing; 17 (b) Its interpretation of any statistical data it 18 relies upon; 19 (c) The experience of other insurers or rating 20 organizations; or 21 (d) Any other factors which the insurer or rating 22 organization deems relevant. 23 (4)(3) A filing and any supporting information shall 24 be open to public inspection as provided in s. 119.07(1). 25 (5)(4) An insurer may satisfy its obligation to make 26 such filings of prospective loss costs by becoming a member 27 of, or a subscriber to, a licensed rating organization which 28 makes such filings and by authorizing the office to accept 29 such filings in its behalf; but nothing contained in this 30 chapter shall be construed as requiring any insurer to become 31 a member or a subscriber to any rating organization. 3 2:07 PM 03/17/06 s2118c-bi32-b02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 2118 Barcode 971192 1 (6)(a) A licensed rating organization may develop and 2 file for approval with the office reference filings containing 3 prospective loss costs and the underlying loss data and other 4 supporting statistical and actuarial information. A rating 5 organization may not develop or file final rates or 6 multipliers for expenses and profit. After a loss cost 7 reference filing has been filed with the office and approved, 8 the rating organization shall provide its member insurers with 9 a copy of the approved reference filing. 10 (b) Each insurer shall independently and individually 11 file with the office the final rates it will use and the 12 effective date of any rate changes. An insurer may 13 independently file its rates, including prospective loss 14 costs, as authorized by this section. An insurer that is a 15 member or subscriber to a rating organization may use the 16 prospective loss costs in an approved reference filing by the 17 rating organization, or the insurer may file for a deviation 18 from the loss cost reference filing under s. 627.211. 19 (c) If an insurer uses the prospective loss costs in 20 the approved reference filing, the insurer must independently 21 and individually file with the department its multiplier for 22 expenses and profit. The insurer's rates shall be the 23 combination of the prospective loss costs and the multiplier 24 for expenses and profit. Insurers shall file data in 25 accordance with the uniform statistical plan approved by the 26 department. Insurers may use variable or fixed expense loads 27 or a combination of these and may vary the expense load by 28 class, if the insurer files supporting data justifying such 29 variations. An insurer that uses the prospective loss costs in 30 an approved reference filing may use its multiplier and final 31 rates immediately upon filing with the department, subject to 4 2:07 PM 03/17/06 s2118c-bi32-b02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 2118 Barcode 971192 1 disapproval by the department. 2 (d) An insurer may request to have its multiplier for 3 expenses and profit remain on file and reference all 4 subsequent prospective loss costs reference filings. Upon the 5 effective date of approval of subsequent reference loss costs 6 filings, the insurer's rates shall be the combination of the 7 prospective loss costs and the multiplier contained in its 8 filing with the office. The insurer's filed multiplier shall 9 remain in effect until the insurer withdraws it and files a 10 revised multiplier. If the insurer elects to use the 11 prospective loss costs as filed but with a different effective 12 date, then the insurer must file notice with the office of the 13 effective date. 14 (7) A rating organization may file supplementary 15 rating information that includes policy-writing rules, rating 16 plans classification codes and descriptions, and rules that 17 include factors or relativities, such as increased limits 18 factors, classification relativities, or similar factors, but 19 excludes minimum premiums. An insurer may elect to use such 20 supplementary rating information approved by the office. 21 (8) A rating organization may file: 22 (a) Final rates and rating plans for the Florida 23 Workers' Compensation Joint Underwriting Association market; 24 (b) The uniform classification plan and rules; 25 (c) The uniform experience rating plan and rules; and 26 (d) Advisory manual workers' compensation rates to be 27 used for the sole purpose of computing the assessment 28 liability of self-insurers. 29 (9)(5) Pursuant to the provisions of s. 624.3161, the 30 office may examine the underlying statistical data used in 31 such filings. 5 2:07 PM 03/17/06 s2118c-bi32-b02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 2118 Barcode 971192 1 (10)(6) Whenever the committee of a recognized rating 2 organization with responsibility for workers' compensation and 3 employer's liability insurance rates in this state meets to 4 discuss the necessity for, or a request for, Florida rate 5 increases or decreases, the determination of Florida rates, 6 the rates to be requested, and any other matters pertaining 7 specifically and directly to such Florida rates, such meetings 8 shall be held in this state and shall be subject to s. 9 286.011. The committee of such a rating organization shall 10 provide at least 3 weeks' prior notice of such meetings to the 11 office and shall provide at least 14 days' prior notice of 12 such meetings to the public by publication in the Florida 13 Administrative Weekly. 14 Section 3. Section 627.101, Florida Statutes, is 15 amended to read: 16 627.101 When filing becomes effective; workers' 17 compensation and employer's liability insurances.-- 18 (1) The office shall review prospective loss costs 19 filings and final rate filings as to workers' compensation and 20 employer's liability insurances as soon as reasonably possible 21 after they have been made in order to determine whether they 22 meet the applicable requirements of this part. If the office 23 determines that part of a rate filing does not meet the 24 applicable requirements of this part, it may reject so much of 25 the filing as does not meet these requirements, and approve 26 the remainder of the filing. 27 (2) The office shall specifically approve a 28 prospective loss costs the filing before it becomes effective, 29 unless the office has concluded it to be in the public 30 interest to hold a public hearing to determine whether the 31 filing meets the requirements of this chapter and has given 6 2:07 PM 03/17/06 s2118c-bi32-b02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 2118 Barcode 971192 1 notice of such hearing to the insurer or rating organization 2 that made the filing, and in which case the effectiveness of 3 the filing shall be subject to the further order of the office 4 made as provided in s. 627.111. An insurer that uses the 5 prospective loss costs in an approved reference filing may use 6 its multiplier and final rates immediately upon filing with 7 the office, as provided in s. 627.091, subject to disapproval 8 by the office. If the office specifically disapproves either a 9 prospective loss costs filing or a final rate the filing, the 10 provisions of subsection (4) shall apply. 11 (3) An insurer or rating organization may, at the time 12 it makes a prospective loss costs filing with the office, 13 request a public hearing thereon. In such event, the office 14 shall give notice of the hearing. 15 (4) If the office disapproves a prospective loss costs 16 filing or final rate filing, it shall promptly give notice of 17 such disapproval to the insurer or rating organization that 18 made the filing, stating the respects in which it finds that 19 the filing does not meet the requirements of this chapter. If 20 the office approves a filing, it shall give prompt notice 21 thereof to the insurer or rating organization that made the 22 filing, and in which case the filing shall become effective 23 upon such approval or upon such subsequent date as may be 24 satisfactory to the office and the insurer or rating 25 organization that made the filing. 26 Section 4. Subsection (1) of section 627.211, Florida 27 Statutes, is amended to read: 28 627.211 Deviations; workers' compensation and 29 employer's liability insurances.-- 30 (1) Every member or subscriber to a rating 31 organization shall, as to workers' compensation or employer's 7 2:07 PM 03/17/06 s2118c-bi32-b02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 2118 Barcode 971192 1 liability insurance, adhere to the filings made on its behalf 2 by such organization; except that any such insurer may make 3 written application to the office for permission to file a 4 uniform percentage decrease or increase to be applied to the 5 premiums produced by the rating system so filed for a kind of 6 insurance, for a class of insurance which is found by the 7 office to be a proper rating unit for the application of such 8 uniform percentage decrease or increase, or for a subdivision 9 of workers' compensation or employer's liability insurance: 10 (a) Comprised of a group of manual classifications 11 which is treated as a separate unit for ratemaking purposes; 12 or 13 (b) For which separate loss adjustment expense 14 provisions are included in the filings of the rating 15 organization. 16 17 Such application shall specify the basis for the modification 18 and shall be accompanied by the data upon which the applicant 19 relies. A copy of the application and data shall be sent 20 simultaneously to the rating organization. 21 22 (Redesignate subsequent sections.) 23 24 25 ================ T I T L E A M E N D M E N T =============== 26 And the title is amended as follows: 27 On page 28, lines 15 and 16, delete those lines 28 29 and insert: 30 An act relating to workers' compensation 31 insurance; amending s. 627.041, F.S.; 8 2:07 PM 03/17/06 s2118c-bi32-b02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 2118 Barcode 971192 1 redefining the terms "rating organization" and 2 "subscriber"; amending s. 627.091, F.S.; 3 defining the terms "expenses," "multiplier," 4 and "prospective loss costs" as used with 5 respect to rate filings for workers' 6 compensation insurance; allowing rating 7 organizations to make filings with the Office 8 of Insurance Regulation containing prospective 9 loss costs, but not final rates or multipliers 10 for expenses and profit; requiring each insurer 11 to independently file with the office the final 12 rates it will use and its multiplier for 13 expenses and loss costs; authorizing rating 14 organizations to file supplementary rate 15 information and final rates for the Florida 16 Workers' Compensation Joint Underwriting 17 Association and other information; amending s. 18 627.101, F.S.; prescribing procedures for 19 prospective loss costs filings and final rate 20 filings; amending s. 627.211, F.S.; revising 21 the standards for an insurer that files for a 22 deviation from the filings made by a rating 23 organization; 24 25 26 27 28 29 30 31 9 2:07 PM 03/17/06 s2118c-bi32-b02