| 1 | The Insurance Committee recommends the following: |
| 2 |
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| 3 | Council/Committee Substitute |
| 4 | Remove the entire bill and insert: |
| 5 | A bill to be entitled |
| 6 | An act relating to corporation not for profit self- |
| 7 | insurance funds; creating s. 624.4624, F.S.; authorizing |
| 8 | two or more corporations not for profit to form a self- |
| 9 | insurance fund for certain purposes; providing specific |
| 10 | requirements; providing an exception; providing an |
| 11 | effective date. |
| 12 |
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| 13 | Be It Enacted by the Legislature of the State of Florida: |
| 14 |
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| 15 | Section 1. Section 624.4624, Florida Statutes, is created |
| 16 | to read: |
| 17 | 624.4624 Corporation not for profit self-insurance |
| 18 | funds.-- |
| 19 | (1) Notwithstanding any other provision of law, any two or |
| 20 | more corporations not for profit located in and organized under |
| 21 | the laws of this state may form a self-insurance fund for the |
| 22 | purpose of pooling and spreading liabilities of its group |
| 23 | members in any property or casualty risk or surety insurance or |
| 24 | securing the payment of benefits under chapter 440, provided the |
| 25 | corporation not for profit self-insurance fund that is created: |
| 26 | (a) Has annual normal premiums in excess of $5 million. |
| 27 | (b) Requires for qualification that each participating |
| 28 | member receive at least 75 percent of its revenues from local, |
| 29 | state, or federal governmental sources. |
| 30 | (c) Uses an actuary credentialed by the Casualty Actuarial |
| 31 | Society or American Academy of Actuaries to determine rates. |
| 32 | Rates and rating factors must be established using accepted |
| 33 | actuarial principles to develop rates that are not excessive, |
| 34 | inadequate, or discriminatory. |
| 35 | (d) Maintains a continuing program of excess insurance |
| 36 | coverage and reserve evaluation to protect the financial |
| 37 | stability of the fund in an amount and manner determined by a |
| 38 | qualified, independent actuary. At a minimum, this program must: |
| 39 | 1. Purchase excess insurance from authorized insurance |
| 40 | carriers. |
| 41 | 2. Retain a maximum per-loss occurrence of 2 percent of |
| 42 | normal premiums or $350,000, whichever is less. |
| 43 | (e) Submits to the office annually an audited fiscal year- |
| 44 | end financial statement by an independent certified public |
| 45 | accountant within 6 months after the end of the fiscal year. |
| 46 | (f) Has a governing body that is comprised entirely of |
| 47 | corporation not for profit officials. |
| 48 | (g) Uses knowledgeable persons to administer or service |
| 49 | the fund in claims administration, claims adjusting, |
| 50 | underwriting, risk management, loss control, policy |
| 51 | administration, financial audit, and legal areas. Such persons |
| 52 | must have at least 5 years' experience with commercial self- |
| 53 | insurance funds formed under s. 624.462, self-insurance funds |
| 54 | formed under s. 624.4622, or with domestic insurers. |
| 55 | (2) A corporation not for profit self-insurance fund that |
| 56 | meets the requirements of this section is not subject to s. |
| 57 | 624.4621 and is not required to file any report with the |
| 58 | department under s. 440.38(2)(b) which is uniquely required of |
| 59 | group self-insurer funds qualified under s. 624.4621. If any of |
| 60 | the requirements of this section are not met, the corporation |
| 61 | not for profit self-insurance fund is subject to the |
| 62 | requirements of s. 624.4621. |
| 63 | Section 2. This act shall take effect July 1, 2006. |