Florida Senate - 2014 CS for CS for SB 1344
By the Committees on Rules; and Banking and Insurance; and
Senator Braynon
595-03705-14 20141344c2
1 A bill to be entitled
2 An act relating to insurance; amending s. 626.8805,
3 F.S.; revising insurance administrator application
4 requirements; amending s. 626.8817, F.S.; authorizing
5 an insurer’s designee to provide certain coverage
6 information to an insurance administrator; authorizing
7 an insurer to contract a third party to conduct a
8 review of the operations of an insurance administrator
9 under certain circumstances; amending s. 626.882,
10 F.S.; prohibiting a person from acting as an insurance
11 administrator without a specific written agreement;
12 amending s. 626.883, F.S.; requiring an insurance
13 administrator to furnish fiduciary account records to
14 an insurer or its designee; requiring administrator
15 withdrawals from a fiduciary account to be made
16 according to a specific written agreement; providing
17 that an insurer’s designee may authorize payment of
18 claims; amending s. 626.884, F.S.; revising an
19 insurer’s right of access to certain administrator
20 records; amending s. 626.89, F.S.; revising the
21 deadline for filing certain financial statements;
22 amending s. 626.9541, F.S.; revising provisions for
23 unfair methods of competition and unfair or deceptive
24 acts relating to conducting certain insurance
25 transactions through credit card facilities; amending
26 s. 627.351, F.S.; revising the entities that make
27 recommendations to the Chief Financial Officer for
28 appointment to the board of governors of the Joint
29 Underwriting Association; amending s. 627.7283, F.S.;
30 allowing the electronic transfer of unearned premiums
31 under specified circumstances; amending s. 631.912,
32 F.S.; revising the appointment process for members of
33 the board of directors of the Florida Workers’
34 Compensation Insurance Guaranty Association; amending
35 s. 766.315, F.S.; revising the entities that make
36 recommendations to the Chief Financial Officer for
37 appointment to the board of directors of the Florida
38 Birth-Related Neurological Injury Compensation
39 Association; providing an effective date.
40
41 Be It Enacted by the Legislature of the State of Florida:
42
43 Section 1. Paragraph (c) of subsection (2) and subsection
44 (3) of section 626.8805, Florida Statutes, are amended to read:
45 626.8805 Certificate of authority to act as administrator.—
46 (2) The administrator shall file with the office an
47 application for a certificate of authority upon a form to be
48 adopted by the commission and furnished by the office, which
49 application shall include or have attached the following
50 information and documents:
51 (c) The names, addresses, official positions, and
52 professional qualifications of the individuals employed or
53 retained by the administrator who are responsible for the
54 conduct of the affairs of the administrator, including all
55 members of the board of directors, board of trustees, executive
56 committee, or other governing board or committee, and the
57 principal officers in the case of a corporation or, the partners
58 or members in the case of a partnership or association, and any
59 other person who exercises control or influence over the affairs
60 of the administrator.
61 (3) The applicant shall make available for inspection by
62 the office copies of all contracts relating to services provided
63 by the administrator to with insurers or other persons using
64 utilizing the services of the administrator.
65 Section 2. Subsections (1) and (3) of section 626.8817,
66 Florida Statutes, are amended to read:
67 626.8817 Responsibilities of insurance company with respect
68 to administration of coverage insured.—
69 (1) If an insurer uses the services of an administrator,
70 the insurer is responsible for determining the benefits, premium
71 rates, underwriting criteria, and claims payment procedures
72 applicable to the coverage and for securing reinsurance, if any.
73 The rules pertaining to these matters shall be provided, in
74 writing, by the insurer or its designee to the administrator.
75 The responsibilities of the administrator as to any of these
76 matters shall be set forth in a the written agreement binding
77 upon between the administrator and the insurer.
78 (3) If In cases in which an administrator administers
79 benefits for more than 100 certificateholders on behalf of an
80 insurer, the insurer shall, at least semiannually, conduct a
81 review of the operations of the administrator. At least one such
82 review must be an onsite audit of the operations of the
83 administrator. The insurer may contract with a qualified third
84 party to conduct such review.
85 Section 3. Subsections (1) and (4) of section 626.882,
86 Florida Statutes, are amended to read:
87 626.882 Agreement between administrator and insurer;
88 required provisions; maintenance of records.—
89 (1) A No person may not act as an administrator without a
90 written agreement, as required under s. 626.8817, which
91 specifies the rights, duties, and obligations of the between
92 such person as administrator and an insurer.
93 (4) If a policy is issued to a trustee or trustees, a copy
94 of the trust agreement and any amendments to that agreement
95 shall be furnished to the insurer or its designee by the
96 administrator and shall be retained as part of the official
97 records of both the administrator and the insurer for the
98 duration of the policy and for 5 years thereafter.
99 Section 4. Subsections (3), (4), and (5) of section
100 626.883, Florida Statutes, are amended to read:
101 626.883 Administrator as intermediary; collections held in
102 fiduciary capacity; establishment of account; disbursement;
103 payments on behalf of insurer.—
104 (3) If charges or premiums deposited in a fiduciary account
105 have been collected on behalf of or for more than one insurer,
106 the administrator shall keep records clearly recording the
107 deposits in and withdrawals from such account on behalf of or
108 for each insurer. The administrator shall, upon request of an
109 insurer or its designee, furnish such insurer or designee with
110 copies of records pertaining to deposits and withdrawals on
111 behalf of or for such insurer.
112 (4) The administrator may not pay any claim by withdrawals
113 from a fiduciary account. Withdrawals from such account shall be
114 made as provided in the written agreement required under ss.
115 626.8817 and 626.882 between the administrator and the insurer
116 for any of the following:
117 (a) Remittance to an insurer entitled to such remittance.
118 (b) Deposit in an account maintained in the name of such
119 insurer.
120 (c) Transfer to and deposit in a claims-paying account,
121 with claims to be paid as provided by such insurer.
122 (d) Payment to a group policyholder for remittance to the
123 insurer entitled to such remittance.
124 (e) Payment to the administrator of the commission, fees,
125 or charges of the administrator.
126 (f) Remittance of return premium to the person or persons
127 entitled to such return premium.
128 (5) All claims paid by the administrator from funds
129 collected on behalf of the insurer shall be paid only on drafts
130 of, and as authorized by, such insurer or its designee.
131 Section 5. Subsection (3) of section 626.884, Florida
132 Statutes, is amended to read:
133 626.884 Maintenance of records by administrator; access;
134 confidentiality.—
135 (3) The insurer shall retain the right of continuing access
136 to books and records maintained by the administrator sufficient
137 to permit the insurer to fulfill all of its contractual
138 obligations to insured persons, subject to any restrictions in
139 the written agreement pertaining to between the insurer and the
140 administrator on the proprietary rights of the parties in such
141 books and records.
142 Section 6. Subsections (1) and (2) of section 626.89,
143 Florida Statutes, are amended to read:
144 626.89 Annual financial statement and filing fee; notice of
145 change of ownership.—
146 (1) Each authorized administrator shall annually file with
147 the office a full and true statement of its financial condition,
148 transactions, and affairs within 3 months after the end of the
149 administrator’s fiscal year. The statement shall be filed
150 annually on or before March 1 or within such extension of time
151 therefor as the office for good cause may have granted. The
152 statement must and shall be for the preceding fiscal calendar
153 year and must. The statement shall be in such form and contain
154 such matters as the commission prescribes and must shall be
155 verified by at least two officers of the such administrator. An
156 administrator whose sole stockholder is an association
157 representing health care providers which is not an affiliate of
158 an insurer, an administrator of a pooled governmental self
159 insurance program, or an administrator that is a university may
160 submit the preceding fiscal year’s statement within 2 months
161 after its fiscal year end.
162 (2) Each authorized administrator shall also file an
163 audited financial statement performed by an independent
164 certified public accountant. The audited financial statement
165 shall be filed with the office within 5 months after the end of
166 the administrator’s fiscal year and be on or before June 1 for
167 the preceding fiscal calendar year ending December 31. An
168 administrator whose sole stockholder is an association
169 representing health care providers which is not an affiliate of
170 an insurer, an administrator of a pooled governmental self
171 insurance program, or an administrator that is a university may
172 submit the preceding fiscal year’s audited financial statement
173 within 5 months after the end of its fiscal year. An audited
174 financial statement prepared on a consolidated basis must
175 include a columnar consolidating or combining worksheet that
176 must be filed with the statement and must comply with the
177 following:
178 (a) Amounts shown on the consolidated audited financial
179 statement must be shown on the worksheet;
180 (b) Amounts for each entity must be stated separately; and
181 (c) Explanations of consolidating and eliminating entries
182 must be included.
183 Section 7. Paragraph (q) of subsection (1) of section
184 626.9541, Florida Statutes, is amended to read:
185 626.9541 Unfair methods of competition and unfair or
186 deceptive acts or practices defined.—
187 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
188 ACTS.—The following are defined as unfair methods of competition
189 and unfair or deceptive acts or practices:
190 (q) Certain insurance transactions through credit card
191 facilities prohibited.—
192 1. Except as provided in subparagraph 3., no person shall
193 knowingly solicit or negotiate any insurance; seek or accept
194 applications for insurance; issue or deliver any policy;
195 receive, collect, or transmit premiums, to or for an any
196 insurer; or otherwise transact insurance in this state, or
197 relative to a subject of insurance resident, located, or to be
198 performed in this state, through the arrangement or facilities
199 of a credit card facility or organization, for the purpose of
200 insuring credit card holders or prospective credit card holders.
201 The term “credit card holder” as used in this paragraph means a
202 any person who may pay the charge for purchases or other
203 transactions through the credit card facility or organization,
204 whose credit with such facility or organization is evidenced by
205 a credit card identifying such person as being one whose charges
206 the credit card facility or organization will pay, and who is
207 identified as such upon the credit card either by name, account
208 number, symbol, insignia, or any other method or device of
209 identification. This subparagraph does not apply as to health
210 insurance or to credit life, credit disability, or credit
211 property insurance.
212 2. If Whenever any person does or performs in this state
213 any of the acts in violation of subparagraph 1. for or on behalf
214 of an any insurer or credit card facility, such insurer or
215 credit card facility shall be deemed held to be doing business
216 in this state and, if an insurer, shall be subject to the same
217 state, county, and municipal taxes as insurers that have been
218 legally qualified and admitted to do business in this state by
219 agents or otherwise are subject, the same to be assessed and
220 collected against such insurers; and such person so doing or
221 performing any of such acts is shall be personally liable for
222 all such taxes.
223 3. A licensed agent or insurer may solicit or negotiate any
224 insurance; seek or accept applications for insurance; issue or
225 deliver any policy; receive, collect, or transmit premiums, to
226 or for an any insurer; or otherwise transact insurance in this
227 state, or relative to a subject of insurance resident, located,
228 or to be performed in this state, through the arrangement or
229 facilities of a credit card facility or organization, for the
230 purpose of insuring credit card holders or prospective credit
231 card holders if:
232 a. The insurance or policy which is the subject of the
233 transaction is noncancelable by any person other than the named
234 insured, the policyholder, or the insurer;
235 b. Any refund of unearned premium is made directly to the
236 credit card holder by mail or electronic transfer; and
237 c. The credit card transaction is authorized by the
238 signature of the credit card holder or other person authorized
239 to sign on the credit card account.
240
241 The conditions enumerated in sub-subparagraphs a.-c. do not
242 apply to health insurance or to credit life, credit disability,
243 or credit property insurance; and sub-subparagraph c. does not
244 apply to property and casualty insurance if so long as the
245 transaction is authorized by the insured.
246 4. No person may use or disclose information resulting from
247 the use of a credit card in conjunction with the purchase of
248 insurance if, when such information is to the advantage of the
249 such credit card facility or an insurance agent, or is to the
250 detriment of the insured or any other insurance agent; except
251 that this provision does not prohibit a credit card facility
252 from using or disclosing such information in a any judicial
253 proceeding or consistent with applicable law on credit
254 reporting.
255 5. No Such insurance may not shall be sold through a credit
256 card facility in conjunction with membership in any automobile
257 club. The term “automobile club” means a legal entity that
258 which, in consideration of dues, assessments, or periodic
259 payments of money, promises its members or subscribers to assist
260 them in matters relating to the ownership, operation, use, or
261 maintenance of a motor vehicle; however, the term definition of
262 automobile clubs does not include persons, associations, or
263 corporations that which are organized and operated solely for
264 the purpose of conducting, sponsoring, or sanctioning motor
265 vehicle races, exhibitions, or contests upon racetracks, or upon
266 race courses established and marked as such for the duration of
267 such particular event. The words “motor vehicle” used herein
268 shall be the same as defined in chapter 320.
269 Section 8. Paragraph (c) of subsection (4) of section
270 627.351, Florida Statutes, is amended to read:
271 627.351 Insurance risk apportionment plans.—
272 (4) MEDICAL MALPRACTICE RISK APPORTIONMENT.—
273 (c) The Joint Underwriting Association shall operate
274 subject to the supervision and approval of a board of governors
275 consisting of representatives of five of the insurers
276 participating in the Joint Underwriting Association, an attorney
277 to be named by The Florida Bar, a physician to be named by the
278 Florida Medical Association, a dentist to be named by the
279 Florida Dental Association, and a hospital representative to be
280 named by the Florida Hospital Association. The Chief Financial
281 Officer shall select the representatives of the five insurers.
282 One insurer representative shall be selected from
283 recommendations of the American Insurance Association. One
284 insurer representative shall be selected from recommendations of
285 the Property Casualty Insurers Association of America Alliance
286 of American Insurers. One insurer representative shall be
287 selected from recommendations of the Florida Insurance Council
288 National Association of Independent Insurers. Two insurer
289 representatives shall be selected to represent insurers that are
290 not affiliated with these associations. The board of governors
291 shall choose, During the first meeting of the board after June
292 30 of each year, the board shall choose one of its members to
293 serve as chair of the board and another member to serve as vice
294 chair of the board. There is shall be no liability on the part
295 of, and no cause of action of any nature shall arise against,
296 any member insurer, self-insurer, or its agents or employees,
297 the Joint Underwriting Association or its agents or employees,
298 members of the board of governors, or the office or its
299 representatives for any action taken by them in the performance
300 of their powers and duties under this subsection.
301 Section 9. Subsections (1), (2), and (3) of section
302 627.7283, Florida Statutes, are amended to read:
303 627.7283 Cancellation; return of premium.—
304 (1) If the insured cancels a policy of motor vehicle
305 insurance, the insurer must mail or electronically transfer the
306 unearned portion of any premium paid within 30 days after the
307 effective date of the policy cancellation or receipt of notice
308 or request for cancellation, whichever is later. This
309 requirement applies to a cancellation initiated by an insured
310 for any reason.
311 (2) If an insurer cancels a policy of motor vehicle
312 insurance, the insurer must mail or electronically transfer the
313 unearned premium portion of any premium within 15 days after the
314 effective date of the policy cancellation.
315 (3) If the unearned premium is not mailed or electronically
316 transferred within the applicable period, the insurer must pay
317 to the insured 8 percent interest on the amount due. If the
318 unearned premium is not mailed or electronically transferred
319 within 45 days after the applicable period, the insured may
320 bring an action against the insurer pursuant to s. 624.155.
321 Section 10. Subsection (1) of section 631.912, Florida
322 Statutes, is amended to read:
323 631.912 Board of directors.—
324 (1) The board of directors of the corporation shall consist
325 of 11 persons, 1 of whom is the insurance consumer advocate
326 appointed under s. 627.0613 or designee and 1 of whom is
327 designated by the Chief Financial Officer. The department shall
328 appoint to the board 6 persons selected by private carriers from
329 among the 20 workers’ compensation insurers with the largest
330 amount of net direct written premium as determined by the
331 department, and 2 3 persons selected by the self-insurance
332 funds. The Governor shall appoint 1 person who has commercial
333 insurance experience. At least two of the private carriers shall
334 be foreign carriers authorized to do business in this state. The
335 board shall elect a chairperson from among its members. The
336 Chief Financial Officer may remove any board member for cause.
337 Each board member shall be appointed to serve for a 4-year term
338 and may be reappointed. A vacancy on the board shall be filled
339 for the remaining period of the term in the same manner by which
340 the original appointment was made.
341 Section 11. Paragraph (a) of subsection (2) of section
342 766.315, Florida Statutes, is amended to read:
343 766.315 Florida Birth-Related Neurological Injury
344 Compensation Association; board of directors.—
345 (2)(a) The Chief Financial Officer may select the
346 representative of the participating physicians from a list of at
347 least three names to be recommended by the American Congress of
348 Obstetricians and Gynecologists, District XII Florida Obstetric
349 and Gynecologic Society; the representative of hospitals from a
350 list of at least three names to be recommended by the Florida
351 Hospital Association; the representative of casualty insurers
352 from a list of at least three names, one of which is recommended
353 by the American Insurance Association, one of which is
354 recommended by the Florida Insurance Council Alliance of
355 American Insurers, and one of which is recommended by the
356 Property Casualty Insurers Association of America National
357 Association of Independent Insurers; and the representative of
358 physicians, other than participating physicians, from a list of
359 three names to be recommended by the Florida Medical Association
360 and a list of three names to be recommended by the Florida
361 Osteopathic Medical Association. However, In no case shall the
362 Chief Financial Officer is not required be bound to make an any
363 appointment from among the nominees of the such respective
364 associations.
365 Section 12. This act shall take effect July 1, 2014.