| 1 | A bill to be entitled |
| 2 | An act relating to Florida Hurricane Catastrophe Fund |
| 3 | emergency assessments; amending s. 215.555, F.S.; delaying |
| 4 | the repeal of an exemption from certain emergency |
| 5 | assessments provided for medical malpractice insurance |
| 6 | premiums and the subjection of such premiums to emergency |
| 7 | assessments; providing an effective date. |
| 8 |
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| 9 | Be It Enacted by the Legislature of the State of Florida: |
| 10 |
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| 11 | Section 1. Paragraph (b) of subsection (6) of section |
| 12 | 215.555, Florida Statutes, is amended to read: |
| 13 | 215.555 Florida Hurricane Catastrophe Fund.- |
| 14 | (6) REVENUE BONDS.- |
| 15 | (b) Emergency assessments.- |
| 16 | 1. If the board determines that the amount of revenue |
| 17 | produced under subsection (5) is insufficient to fund the |
| 18 | obligations, costs, and expenses of the fund and the |
| 19 | corporation, including repayment of revenue bonds and that |
| 20 | portion of the debt service coverage not met by reimbursement |
| 21 | premiums, the board shall direct the Office of Insurance |
| 22 | Regulation to levy, by order, an emergency assessment on direct |
| 23 | premiums for all property and casualty lines of business in this |
| 24 | state, including property and casualty business of surplus lines |
| 25 | insurers regulated under part VIII of chapter 626, but not |
| 26 | including any workers' compensation premiums or medical |
| 27 | malpractice premiums. As used in this subsection, the term |
| 28 | "property and casualty business" includes all lines of business |
| 29 | identified on Form 2, Exhibit of Premiums and Losses, in the |
| 30 | annual statement required of authorized insurers by s. 624.424 |
| 31 | and any rule adopted under this section, except for those lines |
| 32 | identified as accident and health insurance and except for |
| 33 | policies written under the National Flood Insurance Program. The |
| 34 | assessment shall be specified as a percentage of direct written |
| 35 | premium and is subject to annual adjustments by the board in |
| 36 | order to meet debt obligations. The same percentage shall apply |
| 37 | to all policies in lines of business subject to the assessment |
| 38 | issued or renewed during the 12-month period beginning on the |
| 39 | effective date of the assessment. |
| 40 | 2. A premium is not subject to an annual assessment under |
| 41 | this paragraph in excess of 6 percent of premium with respect to |
| 42 | obligations arising out of losses attributable to any one |
| 43 | contract year, and a premium is not subject to an aggregate |
| 44 | annual assessment under this paragraph in excess of 10 percent |
| 45 | of premium. An annual assessment under this paragraph shall |
| 46 | continue as long as the revenue bonds issued with respect to |
| 47 | which the assessment was imposed are outstanding, including any |
| 48 | bonds the proceeds of which were used to refund the revenue |
| 49 | bonds, unless adequate provision has been made for the payment |
| 50 | of the bonds under the documents authorizing issuance of the |
| 51 | bonds. |
| 52 | 3. Emergency assessments shall be collected from |
| 53 | policyholders. Emergency assessments shall be remitted by |
| 54 | insurers as a percentage of direct written premium for the |
| 55 | preceding calendar quarter as specified in the order from the |
| 56 | Office of Insurance Regulation. The office shall verify the |
| 57 | accurate and timely collection and remittance of emergency |
| 58 | assessments and shall report the information to the board in a |
| 59 | form and at a time specified by the board. Each insurer |
| 60 | collecting assessments shall provide the information with |
| 61 | respect to premiums and collections as may be required by the |
| 62 | office to enable the office to monitor and verify compliance |
| 63 | with this paragraph. |
| 64 | 4. With respect to assessments of surplus lines premiums, |
| 65 | each surplus lines agent shall collect the assessment at the |
| 66 | same time as the agent collects the surplus lines tax required |
| 67 | by s. 626.932, and the surplus lines agent shall remit the |
| 68 | assessment to the Florida Surplus Lines Service Office created |
| 69 | by s. 626.921 at the same time as the agent remits the surplus |
| 70 | lines tax to the Florida Surplus Lines Service Office. The |
| 71 | emergency assessment on each insured procuring coverage and |
| 72 | filing under s. 626.938 shall be remitted by the insured to the |
| 73 | Florida Surplus Lines Service Office at the time the insured |
| 74 | pays the surplus lines tax to the Florida Surplus Lines Service |
| 75 | Office. The Florida Surplus Lines Service Office shall remit the |
| 76 | collected assessments to the fund or corporation as provided in |
| 77 | the order levied by the Office of Insurance Regulation. The |
| 78 | Florida Surplus Lines Service Office shall verify the proper |
| 79 | application of such emergency assessments and shall assist the |
| 80 | board in ensuring the accurate and timely collection and |
| 81 | remittance of assessments as required by the board. The Florida |
| 82 | Surplus Lines Service Office shall annually calculate the |
| 83 | aggregate written premium on property and casualty business, |
| 84 | other than workers' compensation and medical malpractice, |
| 85 | procured through surplus lines agents and insureds procuring |
| 86 | coverage and filing under s. 626.938 and shall report the |
| 87 | information to the board in a form and at a time specified by |
| 88 | the board. |
| 89 | 5. Any assessment authority not used for a particular |
| 90 | contract year may be used for a subsequent contract year. If, |
| 91 | for a subsequent contract year, the board determines that the |
| 92 | amount of revenue produced under subsection (5) is insufficient |
| 93 | to fund the obligations, costs, and expenses of the fund and the |
| 94 | corporation, including repayment of revenue bonds and that |
| 95 | portion of the debt service coverage not met by reimbursement |
| 96 | premiums, the board shall direct the Office of Insurance |
| 97 | Regulation to levy an emergency assessment up to an amount not |
| 98 | exceeding the amount of unused assessment authority from a |
| 99 | previous contract year or years, plus an additional 4 percent |
| 100 | provided that the assessments in the aggregate do not exceed the |
| 101 | limits specified in subparagraph 2. |
| 102 | 6. The assessments otherwise payable to the corporation |
| 103 | under this paragraph shall be paid to the fund unless and until |
| 104 | the Office of Insurance Regulation and the Florida Surplus Lines |
| 105 | Service Office have received from the corporation and the fund a |
| 106 | notice, which shall be conclusive and upon which they may rely |
| 107 | without further inquiry, that the corporation has issued bonds |
| 108 | and the fund has no agreements in effect with local governments |
| 109 | under paragraph (c). On or after the date of the notice and |
| 110 | until the date the corporation has no bonds outstanding, the |
| 111 | fund shall have no right, title, or interest in or to the |
| 112 | assessments, except as provided in the fund's agreement with the |
| 113 | corporation. |
| 114 | 7. Emergency assessments are not premium and are not |
| 115 | subject to the premium tax, to the surplus lines tax, to any |
| 116 | fees, or to any commissions. An insurer is liable for all |
| 117 | assessments that it collects and must treat the failure of an |
| 118 | insured to pay an assessment as a failure to pay the premium. An |
| 119 | insurer is not liable for uncollectible assessments. |
| 120 | 8. When an insurer is required to return an unearned |
| 121 | premium, it shall also return any collected assessment |
| 122 | attributable to the unearned premium. A credit adjustment to the |
| 123 | collected assessment may be made by the insurer with regard to |
| 124 | future remittances that are payable to the fund or corporation, |
| 125 | but the insurer is not entitled to a refund. |
| 126 | 9. When a surplus lines insured or an insured who has |
| 127 | procured coverage and filed under s. 626.938 is entitled to the |
| 128 | return of an unearned premium, the Florida Surplus Lines Service |
| 129 | Office shall provide a credit or refund to the agent or such |
| 130 | insured for the collected assessment attributable to the |
| 131 | unearned premium prior to remitting the emergency assessment |
| 132 | collected to the fund or corporation. |
| 133 | 10. The exemption of medical malpractice insurance |
| 134 | premiums from emergency assessments under this paragraph is |
| 135 | repealed May 31, 2013 2010, and medical malpractice insurance |
| 136 | premiums shall be subject to emergency assessments attributable |
| 137 | to loss events occurring in the contract years commencing on |
| 138 | June 1, 2013 2010. |
| 139 | Section 2. This act shall take effect upon becoming a law. |