Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. SB 1408
Barcode 214592
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
04/09/2013 .
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The Committee on Banking and Insurance (Richter) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Subsections (8), (9), and (13) of section
6 628.901, Florida Statutes, are amended to read:
7 628.901 Definitions.—As used in this part, the term:
8 (8) “Industrial insured” means an insured that:
9 (a) Has gross assets in excess of $50 million;
10 (b) Procures insurance through the use of a full-time
11 employee of the insured who acts as an insurance manager or
12 buyer or through the services of a person licensed as a property
13 and casualty insurance agent, broker, or consultant in such
14 person’s state of domicile;
15 (c) Has at least 100 full-time employees; and
16 (d) Pays annual premiums of at least $200,000 for each line
17 of insurance purchased from the industrial insured captive
18 insurance company insurer or at least $75,000 for any line of
19 coverage in excess of at least $25 million in the annual
20 aggregate. The purchase of umbrella or general liability
21 coverage in excess of $25 million in the annual aggregate shall
22 be deemed to be the purchase of a single line of insurance.
23 (9) “Industrial insured captive insurance company” means a
24 captive insurance company that provides insurance only to the
25 industrial insureds that are its stockholders or members, and
26 affiliates thereof, or to the stockholders, and affiliates
27 thereof, of its parent corporation. An industrial insured
28 captive insurance company may can also provide reinsurance to
29 insurers only on risks written by such insurers for the
30 industrial insureds that are the stockholders or members, and
31 affiliates thereof, of the industrial insured captive insurance
32 company insurer, or the stockholders, and affiliates thereof, of
33 the parent corporation of the industrial insured captive
34 insurance company insurer.
35 (13) “Qualifying reinsurer parent company” means a
36 reinsurer that which currently holds a certificate of authority,
37 letter of eligibility or is an accredited or trusteed a
38 satisfactory non-approved reinsurer under s. 624.610(3)(c) in
39 this state possessing a consolidated GAAP net worth of at least
40 $500 million and a consolidated debt to total capital ratio of
41 not greater than 0.50.
42 Section 2. Subsections (1) and (2), paragraph (b) of
43 subsection (4), and subsection (5) of section 628.905, Florida
44 Statutes, are amended to read:
45 628.905 Licensing; authority.—
46 (1) A captive insurance company insurer, if permitted by
47 its charter or articles of incorporation, may apply to the
48 office for a license to do any and all insurance authorized
49 under the insurance code, other than workers’ compensation and
50 employer’s liability, life, health, personal motor vehicle, and
51 personal residential property insurance, except that:
52 (a) A pure captive insurance company may not insure any
53 risks other than those of its parent, affiliated companies,
54 controlled unaffiliated businesses, or a combination thereof.
55 (b) An industrial insured captive insurance company may not
56 insure any risks other than those of the industrial insureds
57 that comprise the industrial insured group and their affiliated
58 companies, or its stockholders or members and affiliates thereof
59 of the industrial insured captive, or the stockholders or
60 affiliates of the parent corporation of the industrial insured
61 captive insurance company.
62 (c) A special purpose captive insurance company may insure
63 only the risks of its parent.
64 (d) A captive insurance company may not accept or cede
65 reinsurance except as provided under in this part.
66 (e) An industrial insured captive insurance company that
67 has unencumbered capital and surplus of at least $20 million may
68 be licensed to provide workers’ compensation and employer’s
69 liability insurance in excess of $25 million in the annual
70 aggregate. An industrial insured captive insurance company must
71 maintain unencumbered capital and surplus of at least $20
72 million in order to continue to write excess workers’
73 compensation insurance in this state.
74 (2) To conduct insurance business in this state, a captive
75 insurance company insurer must:
76 (a) Obtain from the office a license authorizing it to
77 conduct insurance business in this state;
78 (b) Hold at least one board of directors’ meeting each year
79 in this state;
80 (c) Maintain its principal place of business in this state;
81 and
82 (d) Appoint a resident registered agent to accept service
83 of process and to otherwise act on its behalf in this state. In
84 the case of a captive insurance company formed as a corporation
85 or a nonprofit corporation, if the registered agent cannot with
86 reasonable diligence be found at the registered office of the
87 captive insurance company, the Chief Financial Officer is of
88 this state must be an agent of the captive insurance company
89 upon whom any process, notice, or demand may be served.
90 (4) A captive insurance company or captive reinsurance
91 company must pay to the office a nonrefundable fee of $1,500 for
92 processing its application for license.
93 (b) The office may charge a fee of $5 for any document
94 requiring certification of authenticity or the signature of the
95 office commissioner or his or her designee.
96 (5) If the office commissioner is satisfied that the
97 documents and statements filed by the captive insurance company
98 comply with this chapter, the office commissioner may grant a
99 license authorizing the company to conduct insurance business in
100 this state until the next succeeding March 1, at which time the
101 license may be renewed.
102 Section 3. Subsection (1) of section 628.907, Florida
103 Statutes, is amended to read:
104 628.907 Minimum capital and net assets requirements;
105 restriction on payment of dividends.—
106 (1) A captive insurance company insurer may not be issued a
107 license unless it possesses and thereafter maintains unimpaired
108 paid-in capital of:
109 (a) In the case of a pure captive insurance company, at
110 least $100,000.
111 (b) In the case of an industrial insured captive insurance
112 company incorporated as a stock insurer, at least $200,000.
113 (c) In the case of a special purpose captive insurance
114 company, an amount determined by the office after giving due
115 consideration to the company’s business plan, feasibility study,
116 and pro forma financial statements and projections, including
117 the nature of the risks to be insured.
118 Section 4. Section 628.909, Florida Statutes, is amended to
119 read:
120 628.909 Applicability of other laws.—
121 (1) The Florida Insurance Code does not apply to captive
122 insurance companies insurers or industrial insured captive
123 insurance companies insurers except as provided under in this
124 part and subsections (2) and (3).
125 (2) The following provisions of the Florida Insurance Code
126 apply to captive insurance companies that insurers who are not
127 industrial insured captive insurance companies insurers to the
128 extent that such provisions are not inconsistent with this part:
129 (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
130 624.40851, 624.4095, 624.411, 624.425, and 624.426.
131 (b) Chapter 625, part II.
132 (c) Chapter 626, part IX.
133 (d) Sections 627.730-627.7405, if when no-fault coverage is
134 provided.
135 (e) Chapter 628.
136 (3) The following provisions of the Florida Insurance Code
137 apply to industrial insured captive insurance companies insurers
138 to the extent that such provisions are not inconsistent with
139 this part:
140 (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
141 624.40851, 624.4095, 624.411, 624.425, 624.426, and 624.609(1).
142 (b) Chapter 625, part II, if the industrial insured captive
143 insurance company insurer is incorporated in this state.
144 (c) Chapter 626, part IX.
145 (d) Sections 627.730-627.7405 if when no-fault coverage is
146 provided.
147 (e) Chapter 628, except for ss. 628.341, 628.351, and
148 628.6018.
149 Section 5. Subsection (2) of section 628.9142, Florida
150 Statutes, is amended to read:
151 628.9142 Reinsurance; effect on reserves.—
152 (2) A captive insurance company may take credit for
153 reserves on risks or portions of risks ceded to authorized
154 insurers or reinsurers and unauthorized insurers or reinsurers
155 complying with s. 624.610. A captive insurance company insurer
156 may not take credit for reserves on risks or portions of risks
157 ceded to an unauthorized insurer or reinsurer if the insurer or
158 reinsurer is not in compliance with s. 624.610.
159 Section 6. Section 628.915, Florida Statutes, is amended to
160 read:
161 628.915 Exemption from compulsory association.—
162 (1) A No captive insurance company may not insurer shall be
163 permitted to join or contribute financially to a any joint
164 underwriting association or guaranty fund in this state; nor may
165 a shall any captive insurance company insurer, its insured, or
166 its parent or any affiliated company receive any benefit from
167 any such joint underwriting association or guaranty fund for
168 claims arising out of the operations of such captive insurance
169 company insurer.
170 (2) An No industrial insured captive insurance company may
171 not insurer shall be permitted to join or contribute financially
172 to a any joint underwriting association or guaranty fund in this
173 state; nor may an shall any industrial insured captive insurance
174 company insurer, its industrial insured, or its parent or any
175 affiliated company receive any benefit from any such joint
176 underwriting association or guaranty fund for claims arising out
177 of the operations of such industrial insured captive insurance
178 company insurer.
179 Section 7. Section 628.917, Florida Statutes, is amended to
180 read:
181 628.917 Insolvency and liquidation.—If In the event that a
182 captive insurance company insurer is insolvent as defined in
183 chapter 631, the office shall liquidate the captive insurance
184 company insurer pursuant to the provisions of part I of chapter
185 631,; except that the office may shall make no attempt to
186 rehabilitate such company insurer.
187 Section 8. Section 628.919, Florida Statutes, is amended to
188 read:
189 628.919 Standards to ensure risk management control by
190 parent company.—A pure captive insurance company must submit The
191 Financial Services Commission shall adopt rules establishing
192 standards to the office which ensure that a parent or affiliated
193 company is able to exercise control of the risk management
194 function of a any controlled unaffiliated business to be insured
195 by the pure captive insurance company.
196 Section 9. This act shall take effect July 1, 2013.
197
198 ================= T I T L E A M E N D M E N T ================
199 And the title is amended as follows:
200 Delete everything before the enacting clause
201 and insert:
202 A bill to be entitled
203 An act relating to captive insurance; replacing the
204 term “captive insurer” with “captive insurance
205 company” in part V of ch. 628, F.S.; amending s.
206 628.901, F.S.; revising definitions; amending s.
207 628.905, F.S.; expanding the risks that an industrial
208 insured capital insurance company may insure;
209 providing that an industrial insured captive insurance
210 company may provide certain insurance if the company
211 has and maintains unencumbered capital and surplus of
212 a certain amount; amending s. 628.907, F.S.;
213 conforming terms; amending s. 628.909, F.S.;
214 conforming terms and requiring captive insurance
215 companies to deposit and maintain securities for the
216 protection of policyholders; amending ss. 628.9142,
217 628.915, 628.917, and 628.919, F.S.; conforming terms;
218 providing an effective date.