CS/HB 99

1	A bill to be entitled
2	An act relating to commercial insurance rates; amending s.
3	627.062, F.S.; exempting additional categories or kinds of
4	insurance and types of commercial lines risks from being
5	subject to certain otherwise applicable rate filing
6	requirements; deleting a requirement that an insurer's
7	rate change notice include total premium written for an
8	exempt class of insurance; removing a requirement that
9	specified types of records and information related to a
10	rate change be retained by an insurer; requiring actuarial
11	data regarding a rate change for an exempt class of
12	insurance be retained by an insurer for a specified time;
13	requiring the insurer to incur examination expenses;
14	removing a requirement that a rating organization maintain
15	certain statistics related to changes to loss cost for
16	exempt classes of insurance; requiring certain actuarial
17	data related to loss cost be retained by a rating
18	organization for a specified time; requiring a rating
19	organization to incur examination expenses; deleting
20	authority for the Office of Insurance Regulation to
21	require all necessary information from an insurer in order
22	to evaluate a rate change; amending s. 627.0651, F.S.;
23	expanding an exemption from certain otherwise applicable
24	rate filing requirements to include all commercial motor
25	vehicle insurance; deleting a requirement that a
26	commercial motor vehicle insurer's rate change notice
27	include total premium written; removing a requirement that
28	specified types of records and information related to a
29	commercial motor vehicle insurance rate change be retained
30	by an insurer; requiring actuarial data regarding a
31	commercial motor vehicle insurance rate change be retained
32	by an insurer for a specified time; requiring an insurer
33	for commercial motor vehicle insurance to incur
34	examination expenses; removing a requirement that a rating
35	organization maintain certain statistics related to
36	changes to loss cost for commercial motor vehicle
37	insurance; requiring actuarial data related to loss cost
38	for commercial motor vehicle insurance be retained by a
39	rating organization for a specified time; requiring a
40	rating organization for commercial motor vehicle insurance
41	to incur examination expenses; deleting authority for the
42	Office of Insurance Regulation to require all necessary
43	information from an commercial motor vehicle insurer in
44	order to evaluate a rate change; providing an effective
45	date.
46
47	Be It Enacted by the Legislature of the State of Florida:
48
49	Section 1.  Paragraph (d) of subsection (3) of section
50	627.062, Florida Statutes, is amended to read:
51	627.062  Rate standards.-
52	(3)
53	(d)1.  The following categories or kinds of insurance and
54	types of commercial lines risks are not subject to paragraph
55	(2)(a) or paragraph (2)(f):
56	a.  Excess or umbrella.
57	b.  Surety and fidelity.
58	c.  Boiler and machinery and leakage and fire extinguishing
59	equipment.
60	d.  Errors and omissions.
61	e.  Directors and officers, employment practices, fiduciary
62	liability, and management liability.
63	f.  Intellectual property and patent infringement
64	liability.
65	g.  Advertising injury and Internet liability insurance.
66	h.  Property risks rated under a highly protected risks
67	rating plan.
68	i.  General liability.
69	j.  Nonresidential property.
70	k.  Nonresidential multiperil.
71	l.  Excess property.
72	m.i.  Any other commercial lines categories or kinds of
73	insurance or types of commercial lines risks that the office
74	determines should not be subject to paragraph (2)(a) or
75	paragraph (2)(f) because of the existence of a competitive
76	market for such insurance, similarity of such insurance to other
77	categories or kinds of insurance not subject to paragraph (2)(a)
78	or paragraph (2)(f), or to improve the general operational
79	efficiency of the office.
80	2.  Insurers or rating organizations shall establish and
81	use rates, rating schedules, or rating manuals to allow the
82	insurer a reasonable rate of return on insurance and risks
83	described in subparagraph 1. which are written in this state.
84	3.  An insurer must notify the office of any changes to
85	rates for insurance and risks described in subparagraph 1. no
86	later than 30 days after the effective date of the change. The
87	notice must include the name of the insurer, the type or kind of
88	insurance subject to rate change, total premium written during
89	the immediately preceding year by the insurer for the type or
90	kind of insurance subject to the rate change, and the average
91	statewide percentage change in rates. Actuarial data
92	Underwriting files, premiums, losses, and expense statistics
93	with regard to rates for insurance and risks described in
94	subparagraph 1. written by an insurer shall be maintained by the
95	insurer for 2 years after the effective date of changes to those
96	rates and are subject to examination by the office. The office
97	may require the insurer to incur the costs associated with an
98	examination. Upon examination, the office shall, in accordance
99	with generally accepted and reasonable actuarial techniques,
100	consider the rate factors in paragraphs (2)(b), (c), and (d) and
101	the standards in paragraph (2)(e) to determine if the rate is
102	excessive, inadequate, or unfairly discriminatory.
103	4.  A rating organization must notify the office of any
104	changes to loss cost for insurance and risks described in
105	subparagraph 1. no later than 30 days after the effective date
106	of the change. The notice must include the name of the rating
107	organization, the type or kind of insurance subject to a loss
108	cost change, loss costs during the immediately preceding year
109	for the type or kind of insurance subject to the loss cost
110	change, and the average statewide percentage change in loss
111	cost. Actuarial data Loss and exposure statistics with regard to
112	changes to loss cost for risks applicable to loss costs for a
113	rating organization not subject to paragraph (2)(a) or paragraph
114	(2)(f) shall be maintained by the rating organization for 2
115	years after the effective date of the change and are subject to
116	examination by the office. The office may require the rating
117	organization to incur the costs associated with an examination.
118	Upon examination, the office shall, in accordance with generally
119	accepted and reasonable actuarial techniques, consider the rate
120	factors in paragraphs (2)(b)-(d) and the standards in paragraph
121	(2)(e) to determine if the rate is excessive, inadequate, or
122	unfairly discriminatory.
123	5.  In reviewing a rate, the office may require the insurer
124	to provide at the insurer's expense all information necessary to
125	evaluate the condition of the company and the reasonableness of
126	the rate according to the applicable criteria described in this
127	section.
128	Section 2.  Subsection (14) of section 627.0651, Florida
129	Statutes, is amended to read:
130	627.0651  Making and use of rates for motor vehicle
131	insurance.-
132	(14)(a)  Commercial motor vehicle insurance covering a
133	fleet of 20 or more self-propelled vehicles is not subject to
134	subsection (1), subsection (2), or subsection (9) or s.
135	627.0645.
136	(b)  The rates for insurance described in this subsection
137	may not be excessive, inadequate, or unfairly discriminatory.
138	(c)  Insurers shall establish and use rates, rating
139	schedules, or rating manuals to allow the insurer a reasonable
140	rate of return on commercial motor vehicle insurance written in
141	this state covering a fleet of 20 or more self-propelled
142	vehicles.
143	(d)  An insurer must notify the office of any changes to
144	rates for type of insurance described in this subsection no
145	later than 30 days after the effective date of the change. The
146	notice shall include the name of the insurer, the type or kind
147	of insurance subject to rate change, total premium written
148	during the immediately preceding year by the insurer for the
149	type or kind of insurance subject to the rate change, and the
150	average statewide percentage change in rates. Actuarial data
151	with regard to rates for risks Underwriting files, premiums,
152	losses, and expense statistics for the type of insurance
153	described in this subsection shall be maintained by the insurer
154	for 2 years after the effective date of changes to those rates
155	and are subject to examination by the office. The office may
156	require the insurer to incur the costs associated with an
157	examination. Upon examination, the office shall, in accordance
158	with generally accepted and reasonable actuarial techniques,
159	consider the factors in paragraphs (2)(a)-(l) and apply
160	subsections (3)-(8) to determine if the rate is excessive,
161	inadequate, or unfairly discriminatory.
162	(e)  A rating organization must notify the office of any
163	changes to loss cost for the type of insurance described in this
164	subsection no later than 30 days after the effective date of the
165	change. The notice shall include the name of the rating
166	organization, the type or kind of insurance subject to a loss
167	cost change, loss costs during the immediately preceding year
168	for the type or kind of insurance subject to the loss cost
169	change, and the average statewide percentage change in loss
170	cost. Actuarial data Loss and exposure statistics with regard to
171	changes to loss cost for risks applicable to loss costs for a
172	rating organization not subject to subsection (1), subsection
173	(2), or subsection (9) shall be maintained by the rating
174	organization for 2 years after the effective date of the change
175	and are subject to examination by the office. The office may
176	require the rating organization to incur the costs associated
177	with an examination. Upon examination, the office shall, in
178	accordance with generally accepted and reasonable actuarial
179	techniques, consider the rate factors in paragraphs (2)(a)-(l)
180	and apply subsections (3)-(8) to determine if the rate is
181	excessive, inadequate, or unfairly discriminatory.
182	(f)  In reviewing the rate, the office may require the
183	insurer to provide at the insurer's expense all information
184	necessary to evaluate the condition of the company and the
185	reasonableness of the rate according to the applicable criteria
186	described herein.
187	Section 3.  This act shall take effect October 1, 2011.

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