HB 159

1	A bill to be entitled
2	An act relating to the Florida Insurance Guaranty
3	Association; amending s. 631.55, F.S.; revising the
4	separate accounts of the association; amending s. 631.717,
5	F.S.; revising the aggregate liability of the association;
6	amending s. 631.735, F.S.; providing an exception to
7	certain prohibited advertisements in sales of insurance;
8	amending ss. 631.54 and 631.57, F.S.; conforming cross-
9	references; providing an effective date.
10
11	Be It Enacted by the Legislature of the State of Florida:
12
13	Section 1.  Subsection (2) of section 631.55, Florida
14	Statutes, is amended to read:
15	631.55  Creation of the association.--
16	(2)  For the purposes of administration and assessment, the
17	association shall be divided into two three separate accounts:
18	(a)  The auto liability and account;
19	(b)  The auto physical damage account.; and
20	(b)(c)  The account for all other insurance to which this
21	part applies.
22	Section 2.  Subsection (9) of section 631.717, Florida
23	Statutes, is amended to read:
24	631.717  Powers and duties of the association.--
25	(9)  The association's liability for the contractual
26	obligations of the insolvent insurer shall be as great as, but
27	no greater than, the contractual obligations of the insurer in
28	the absence of such insolvency, unless such obligations are
29	reduced as permitted by subsection (4), but the aggregate
30	liability of the association shall not exceed $300,000 $100,000
31	in cash values, or $500,000 $300,000 for all benefits including
32	cash values, with respect to any one life. In no event shall the
33	association be liable for any penalties or interest.
34	Section 3.  Section 631.735, Florida Statutes, is amended
35	to read:
36	631.735  Prohibited advertisement of Florida Life and
37	Health Insurance Guaranty Association Act in sale of
38	insurance.--A No person may not shall make, publish,
39	disseminate, circulate, or place before the public, or cause
40	directly or indirectly to be made, published, disseminated,
41	circulated, or placed before the public, in any newspaper,
42	magazine, or other publication, or in the form of a notice,
43	circular, pamphlet, letter, or poster, or over any radio station
44	or television station, or in any other way, any advertisement,
45	announcement, or statement which uses the existence of the
46	Insurance Guaranty Association of this state for the purpose of
47	sales, solicitation, or inducement to purchase any form of
48	insurance covered by the Florida Life and Health Insurance
49	Guaranty Association Act. However, this section does shall not
50	apply to the Florida Life and Health Insurance Guaranty
51	Association or any other entity which does not sell or solicit
52	insurance. This section does not prohibit a duly licensed
53	insurance agent from explaining the existence or function of the
54	association to policyholders, prospects, or applicants for
55	coverage.
56	Section 4.  Subsection (1) of section 631.54, Florida
57	Statutes, is amended to read:
58	631.54  Definitions.--As used in this part:
59	(1)  "Account" means any one of the three accounts created
60	by s. 631.55.
61	Section 5.  Paragraphs (a) and (e) of subsection (3) of
62	section 631.57, Florida Statutes, are amended to read:
63	631.57  Powers and duties of the association.--
64	(3)(a)  To the extent necessary to secure the funds for the
65	respective accounts for the payment of covered claims, to pay
66	the reasonable costs to administer the same, and to the extent
67	necessary to secure the funds for the account specified in s.
68	631.55(2)(b)(c) or to retire indebtedness, including, without
69	limitation, the principal, redemption premium, if any, and
70	interest on, and related costs of issuance of, bonds issued
71	under s. 631.695 and the funding of any reserves and other
72	payments required under the bond resolution or trust indenture
73	pursuant to which such bonds have been issued, the office, upon
74	certification of the board of directors, shall levy assessments
75	in the proportion that each insurer's net direct written
76	premiums in this state in the classes protected by the account
77	bears to the total of said net direct written premiums received
78	in this state by all such insurers for the preceding calendar
79	year for the kinds of insurance included within such account.
80	Assessments shall be remitted to and administered by the board
81	of directors in the manner specified by the approved plan. Each
82	insurer so assessed shall have at least 30 days' written notice
83	as to the date the assessment is due and payable. Every
84	assessment shall be made as a uniform percentage applicable to
85	the net direct written premiums of each insurer in the kinds of
86	insurance included within the account in which the assessment is
87	made. The assessments levied against any insurer shall not
88	exceed in any one year more than 2 percent of that insurer's net
89	direct written premiums in this state for the kinds of insurance
90	included within such account during the calendar year next
91	preceding the date of such assessments.
92	(e)1.a.  In addition to assessments otherwise authorized in
93	paragraph (a) and to the extent necessary to secure the funds
94	for the account specified in s. 631.55(2)(b)(c) for the direct
95	payment of covered claims of insurers rendered insolvent by the
96	effects of a hurricane and to pay the reasonable costs to
97	administer such claims, or to retire indebtedness, including,
98	without limitation, the principal, redemption premium, if any,
99	and interest on, and related costs of issuance of, bonds issued
100	under s. 631.695 and the funding of any reserves and other
101	payments required under the bond resolution or trust indenture
102	pursuant to which such bonds have been issued, the office, upon
103	certification of the board of directors, shall levy emergency
104	assessments upon insurers holding a certificate of authority.
105	The emergency assessments payable under this paragraph by any
106	insurer shall not exceed in any single year more than 2 percent
107	of that insurer's direct written premiums, net of refunds, in
108	this state during the preceding calendar year for the kinds of
109	insurance within the account specified in s. 631.55(2)(b)(c).
110	b.  Any emergency assessments authorized under this
111	paragraph shall be levied by the office upon insurers referred
112	to in sub-subparagraph a., upon certification as to the need for
113	such assessments by the board of directors. In the event the
114	board of directors participates in the issuance of bonds in
115	accordance with s. 631.695, emergency assessments shall be
116	levied in each year that bonds issued under s. 631.695 and
117	secured by such emergency assessments are outstanding, in such
118	amounts up to such 2-percent limit as required in order to
119	provide for the full and timely payment of the principal of,
120	redemption premium, if any, and interest on, and related costs
121	of issuance of, such bonds. The emergency assessments provided
122	for in this paragraph are assigned and pledged to the
123	municipality, county, or legal entity issuing bonds under s.
124	631.695 for the benefit of the holders of such bonds, in order
125	to enable such municipality, county, or legal entity to provide
126	for the payment of the principal of, redemption premium, if any,
127	and interest on such bonds, the cost of issuance of such bonds,
128	and the funding of any reserves and other payments required
129	under the bond resolution or trust indenture pursuant to which
130	such bonds have been issued, without the necessity of any
131	further action by the association, the office, or any other
132	party. To the extent bonds are issued under s. 631.695 and the
133	association determines to secure such bonds by a pledge of
134	revenues received from the emergency assessments, such bonds,
135	upon such pledge of revenues, shall be secured by and payable
136	from the proceeds of such emergency assessments, and the
137	proceeds of emergency assessments levied under this paragraph
138	shall be remitted directly to and administered by the trustee or
139	custodian appointed for such bonds.
140	c.  Emergency assessments under this paragraph may be
141	payable in a single payment or, at the option of the
142	association, may be payable in 12 monthly installments with the
143	first installment being due and payable at the end of the month
144	after an emergency assessment is levied and subsequent
145	installments being due not later than the end of each succeeding
146	month.
147	d.  If emergency assessments are imposed, the report
148	required by s. 631.695(7) shall include an analysis of the
149	revenues generated from the emergency assessments imposed under
150	this paragraph.
151	e.  If emergency assessments are imposed, the references in
152	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
153	assessments levied under paragraph (a) shall include emergency
154	assessments imposed under this paragraph.
155	2.  In order to ensure that insurers paying emergency
156	assessments levied under this paragraph continue to charge rates
157	that are neither inadequate nor excessive, within 90 days after
158	being notified of such assessments, each insurer that is to be
159	assessed pursuant to this paragraph shall submit a rate filing
160	for coverage included within the account specified in s.
161	631.55(2)(b)(c) and for which rates are required to be filed
162	under s. 627.062. If the filing reflects a rate change that, as
163	a percentage, is equal to the difference between the rate of
164	such assessment and the rate of the previous year's assessment
165	under this paragraph, the filing shall consist of a
166	certification so stating and shall be deemed approved when made.
167	Any rate change of a different percentage shall be subject to
168	the standards and procedures of s. 627.062.
169	3.  In the event the board of directors participates in the
170	issuance of bonds in accordance with s. 631.695, an annual
171	assessment under this paragraph shall continue while the bonds
172	issued with respect to which the assessment was imposed are
173	outstanding, including any bonds the proceeds of which were used
174	to refund bonds issued pursuant to s. 631.695, unless adequate
175	provision has been made for the payment of the bonds in the
176	documents authorizing the issuance of such bonds.
177	4.  Emergency assessments under this paragraph are not
178	premium and are not subject to the premium tax, to any fees, or
179	to any commissions. An insurer is liable for all emergency
180	assessments that the insurer collects and shall treat the
181	failure of an insured to pay an emergency assessment as a
182	failure to pay the premium. An insurer is not liable for
183	uncollectible emergency assessments.
184	Section 6.  This act shall take effect upon becoming a law.

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