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A bill to be entitled

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An act relating to insurance; amending s. 627.062, F.S.;

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deleting the requirement for the Office of Insurance

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Regulation to approve a rating factor that provides an

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insurer a reasonable rate of return for covering

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catastrophic losses not covered by reinsurance; providing

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an effective date.

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Be It Enacted by the Legislature of the State of Florida:

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     Section 1.  Paragraph (b) of subsection (2) of section

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627.062, Florida Statutes, is amended to read:

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     627.062  Rate standards.--

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     (2)  As to all such classes of insurance:

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     (b)  Upon receiving a rate filing, the office shall review

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the rate filing to determine if a rate is excessive, inadequate,

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or unfairly discriminatory. In making that determination, the

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office shall, in accordance with generally accepted and

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reasonable actuarial techniques, consider the following factors:

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     1.  Past and prospective loss experience within and without

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this state.

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     2.  Past and prospective expenses.

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     3.  The degree of competition among insurers for the risk

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insured.

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     4.  Investment income reasonably expected by the insurer,

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consistent with the insurer's investment practices, from

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investable premiums anticipated in the filing, plus any other

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expected income from currently invested assets representing the

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amount expected on unearned premium reserves and loss reserves.

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The commission may adopt rules using utilizing reasonable

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techniques of actuarial science and economics to specify the

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manner in which insurers shall calculate investment income

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attributable to such classes of insurance written in this state

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and the manner in which such investment income shall be used to

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calculate in the calculation of insurance rates. Such manner

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shall contemplate allowances for an underwriting profit factor

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and full consideration of investment income which produce a

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reasonable rate of return; however, investment income from

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invested surplus may shall not be considered.

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     5.  The reasonableness of the judgment reflected in the

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filing.

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     6.  Dividends, savings, or unabsorbed premium deposits

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allowed or returned to Florida policyholders, members, or

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subscribers.

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     7.  The adequacy of loss reserves.

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     8.  The cost of reinsurance.

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     9.  Trend factors, including trends in actual losses per

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insured unit for the insurer making the filing.

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     10.  Conflagration and catastrophe hazards, if applicable.

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     11.  A reasonable margin for underwriting profit and

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contingencies. For that portion of the rate covering the risk of

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hurricanes and other catastrophic losses for which the insurer

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has not purchased reinsurance and has exposed its capital and

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surplus to such risk, the office must approve a rating factor

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that provides the insurer a reasonable rate of return that is

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commensurate with such risk.

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     12.  The cost of medical services, if applicable.

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     13.  Other relevant factors which impact upon the frequency

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or severity of claims or upon expenses.

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The provisions of this subsection shall not apply to workers'

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compensation and employer's liability insurance and to motor

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vehicle insurance.

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     Section 2.  This act shall take effect July 1, 2008.