| 1 | The State Administration Appropriations Committee recommends the |
| 2 | following: |
| 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 for |
| 11 | payment of insurance premium tax at a reduced rate by |
| 12 | corporation not for profit self-insurance funds; providing |
| 13 | an effective date. |
| 14 |
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| 15 | Be It Enacted by the Legislature of the State of Florida: |
| 16 |
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| 17 | Section 1. Section 624.4624, Florida Statutes, is created |
| 18 | to read: |
| 19 | 624.4624 Corporation not for profit self-insurance |
| 20 | funds.-- |
| 21 | (1) Notwithstanding any other provision of law, any two or |
| 22 | more corporations not for profit located in and organized under |
| 23 | the laws of this state may form a self-insurance fund for the |
| 24 | purpose of pooling and spreading liabilities of its group |
| 25 | members in any property or casualty risk or surety insurance or |
| 26 | securing the payment of benefits under chapter 440, provided the |
| 27 | corporation not for profit self-insurance fund that is created: |
| 28 | (a) Has annual normal premiums in excess of $5 million. |
| 29 | (b) Requires for qualification that each participating |
| 30 | member receive at least 75 percent of its revenues from local, |
| 31 | state, or federal governmental sources. |
| 32 | (c) Uses an actuary credentialed by the Casualty Actuarial |
| 33 | Society or American Academy of Actuaries to determine rates. |
| 34 | Rates and rating factors must be established using accepted |
| 35 | actuarial principles to develop rates that are not excessive, |
| 36 | inadequate, or discriminatory. |
| 37 | (d) Maintains a continuing program of excess insurance |
| 38 | coverage and reserve evaluation to protect the financial |
| 39 | stability of the fund in an amount and manner determined by a |
| 40 | qualified, independent actuary. At a minimum, this program must: |
| 41 | 1. Purchase excess insurance from authorized insurance |
| 42 | carriers. |
| 43 | 2. Retain a maximum per-loss occurrence of 2 percent of |
| 44 | normal premiums or $350,000, whichever is less. |
| 45 | (e) Submits to the office annually an audited fiscal year- |
| 46 | end financial statement by an independent certified public |
| 47 | accountant within 6 months after the end of the fiscal year. |
| 48 | (f) Has a governing body that is comprised entirely of |
| 49 | corporation not for profit officials. |
| 50 | (g) Uses knowledgeable persons to administer or service |
| 51 | the fund in claims administration, claims adjusting, |
| 52 | underwriting, risk management, loss control, policy |
| 53 | administration, financial audit, and legal areas. Such persons |
| 54 | must have at least 5 years' experience with commercial self- |
| 55 | insurance funds formed under s. 624.462, self-insurance funds |
| 56 | formed under s. 624.4622, or with domestic insurers. |
| 57 | (2) A corporation not for profit self-insurance fund that |
| 58 | meets the requirements of this section is not subject to s. |
| 59 | 624.4621 and is not required to file any report with the |
| 60 | department under s. 440.38(2)(b) which is uniquely required of |
| 61 | group self-insurer funds qualified under s. 624.4621. If any of |
| 62 | the requirements of this section are not met, the corporation |
| 63 | not for profit self-insurance fund is subject to the |
| 64 | requirements of s. 624.4621. |
| 65 | (3) Premiums, contributions, and assessments received by a |
| 66 | corporation not for profit self-insurance fund are subject to |
| 67 | ss. 624.509(1) and (2) and 624.5092, except the tax rate shall |
| 68 | be 1.6 percent of the gross amount of such premiums, |
| 69 | contributions, and assessments. |
| 70 | Section 2. This act shall take effect July 1, 2006. |