Florida Senate - 2016                             CS for SB 1036
       By the Committee on Banking and Insurance; and Senator Brandes
       597-02612-16                                          20161036c1
    1                        A bill to be entitled                      
    2         An act relating to automobile insurance; amending s.
    3         627.0651, F.S.; providing an exception to a provision
    4         that deems use of a single zip code as a rating
    5         territory for insurance rates to be unfairly
    6         discriminatory; requiring the Office of Insurance
    7         Regulation to ensure that rates or rate changes
    8         contained in certain rate filings are not excessive,
    9         inadequate, or unfairly discriminatory; amending s.
   10         627.311, F.S.; authorizing the Florida Automobile
   11         Joint Underwriting Association and a joint
   12         underwriting plan approved by the Office of Insurance
   13         Regulation to cancel personal lines or commercial
   14         policies within a specified time for nonpayment of
   15         premium due to certain reasons; prohibiting an insured
   16         from cancelling a policy or binder within a specified
   17         time except under certain conditions; amending s.
   18         627.7283, F.S.; authorizing an insured who cancels a
   19         policy to apply the unearned portion of any premium
   20         paid to unpaid balances of other policies with the
   21         same insurer or insurer group; amending s. 627.7295,
   22         F.S.; updating applicability language to include a
   23         reference to recurring credit card or debit card
   24         payments; authorizing an additional form of payment
   25         for certain motor vehicle insurance contract premiums;
   26         authorizing an insurer to impose a specified
   27         insufficient funds fee under certain circumstances;
   28         amending s. 627.736, F.S.; requiring that a certain
   29         standard form be approved by the office and adopted by
   30         the Financial Services Commission, rather than
   31         approved by the office or adopted by the commission;
   32         revising standards for compliance for specified
   33         billings for medical services; adding a specified
   34         entity to a list of entities that are not required to
   35         be licensed as a clinic to receive reimbursement under
   36         the Florida Motor Vehicle No-Fault Law; amending s.
   37         627.744, F.S.; authorizing an insurer to opt out of
   38         the preinsurance inspection of private passenger motor
   39         vehicles and to establish its own preinsurance
   40         inspection program if it files a certain manual rule
   41         with the office; providing an effective date.
   43  Be It Enacted by the Legislature of the State of Florida:
   45         Section 1. Subsection (8) of section 627.0651, Florida
   46  Statutes, is amended to read:
   47         627.0651 Making and use of rates for motor vehicle
   48  insurance.—
   49         (8) Rates are not unfairly discriminatory if averaged
   50  broadly among members of a group; nor are rates unfairly
   51  discriminatory even though they are lower than rates for
   52  nonmembers of the group. However, such rates are unfairly
   53  discriminatory if they are not actuarially measurable and
   54  credible and sufficiently related to actual or expected loss and
   55  expense experience of the group so as to assure that nonmembers
   56  of the group are not unfairly discriminated against. Use of a
   57  single United States Postal Service zip code as a rating
   58  territory shall be deemed unfairly discriminatory unless filed
   59  pursuant to paragraph (1)(a) and the territory incorporates
   60  sufficient actual or expected loss and loss adjustment expense
   61  experience so as to be actuarially measurable and credible. The
   62  office shall ensure that any rate filing resulting from the use
   63  of a single zip code as a rating territory does not contain a
   64  rate or rate change that is excessive, inadequate, or unfairly
   65  discriminatory.
   66         Section 2. Paragraph (m) is added to subsection (3) of
   67  section 627.311, Florida Statutes, to read:
   68         627.311 Joint underwriters and joint reinsurers; public
   69  records and public meetings exemptions.—
   70         (3) The office may, after consultation with insurers
   71  licensed to write automobile insurance in this state, approve a
   72  joint underwriting plan for purposes of equitable apportionment
   73  or sharing among insurers of automobile liability insurance and
   74  other motor vehicle insurance, as an alternate to the plan
   75  required in s. 627.351(1). All insurers authorized to write
   76  automobile insurance in this state shall subscribe to the plan
   77  and participate therein. The plan shall be subject to continuous
   78  review by the office which may at any time disapprove the entire
   79  plan or any part thereof if it determines that conditions have
   80  changed since prior approval and that in view of the purposes of
   81  the plan changes are warranted. Any disapproval by the office
   82  shall be subject to the provisions of chapter 120. The Florida
   83  Automobile Joint Underwriting Association is created under the
   84  plan. The plan and the association:
   85         (m) May cancel personal lines or commercial policies issued
   86  by the plan within the first 60 days after the effective date of
   87  the policy or binder for nonpayment of premium if the check
   88  issued for payment of the premium is dishonored for any reason
   89  or if any other form of payment is rejected or deemed invalid.
   90  An insured may not cancel a policy or binder within the first 90
   91  days after its effective date, or within a lesser period as
   92  required by the plan, except:
   93         1. Upon total destruction of the insured motor vehicle;
   94         2. Upon transfer of ownership of the insured motor vehicle;
   95  or
   96         3. After purchase of another policy or binder covering the
   97  motor vehicle that was covered under the policy being canceled.
   98         Section 3. Section 627.7283, Florida Statutes, is amended
   99  to read:
  100         627.7283 Cancellation; return of unearned premium.—
  101         (1) If the insured cancels a policy of motor vehicle
  102  insurance, the insurer must mail or electronically transfer the
  103  unearned portion of any premium paid within 30 days after the
  104  effective date of the policy cancellation or receipt of notice
  105  or request for cancellation, whichever is later. This
  106  requirement applies to a cancellation initiated by an insured
  107  for any reason. However, the insured may apply the unearned
  108  portion of any premium paid to unpaid balances of other policies
  109  with the same insurer or insurer group.
  110         (2) If an insurer cancels a policy of motor vehicle
  111  insurance, the insurer must mail or electronically transfer the
  112  unearned premium portion of any premium within 15 days after the
  113  effective date of the policy cancellation. However, the insured
  114  may apply the unearned portion of any premium paid to unpaid
  115  balances of other policies with the same insurer or insurer
  116  group.
  117         (3) If the unearned premium is not mailed, or
  118  electronically transferred, or applied to the unpaid balance of
  119  other policies within the applicable period, the insurer must
  120  pay to the insured 8 percent interest on the amount due. If the
  121  unearned premium is not mailed or electronically transferred
  122  within 45 days after the applicable period, the insured may
  123  bring an action against the insurer pursuant to s. 624.155.
  124         (4) If the insured cancels, the insurer may retain up to 10
  125  percent of the unearned premium and must refund at least 90
  126  percent of the unearned premium. If the insurer cancels, the
  127  insurer must refund 100 percent of the unearned premium.
  128  Cancellation is without prejudice to any claim originating prior
  129  to the effective date of the cancellation. For purposes of this
  130  section, unearned premiums must be computed on a pro rata basis.
  131         (5) The insurer must refund 100 percent of the unearned
  132  premium if the insured is a servicemember, as defined in s.
  133  250.01, who cancels because he or she is called to active duty
  134  or transferred by the United States Armed Forces to a location
  135  where the insurance is not required. The insurer may require a
  136  servicemember to submit either a copy of the official military
  137  orders or a written verification signed by the servicemember’s
  138  commanding officer to support the refund authorized under this
  139  subsection. If the insurer cancels, the insurer must refund 100
  140  percent of the unearned premium. Cancellation is without
  141  prejudice to any claim originating prior to the effective date
  142  of the cancellation. For purposes of this section, unearned
  143  premiums must be computed on a pro rata basis.
  144         Section 4. Subsection (7) of section 627.7295, Florida
  145  Statutes, is amended, and a new subsection (9) is added to that
  146  section, to read:
  147         627.7295 Motor vehicle insurance contracts.—
  148         (7) A policy of private passenger motor vehicle insurance
  149  or a binder for such a policy may be initially issued in this
  150  state only if, before the effective date of such binder or
  151  policy, the insurer or agent has collected from the insured an
  152  amount equal to 2 months’ premium. An insurer, agent, or premium
  153  finance company may not, directly or indirectly, take any action
  154  resulting in the insured having paid from the insured’s own
  155  funds an amount less than the 2 months’ premium required by this
  156  subsection. This subsection applies without regard to whether
  157  the premium is financed by a premium finance company or is paid
  158  pursuant to a periodic payment plan of an insurer or an
  159  insurance agent. This subsection does not apply if an insured or
  160  member of the insured’s family is renewing or replacing a policy
  161  or a binder for such policy written by the same insurer or a
  162  member of the same insurer group. This subsection does not apply
  163  to an insurer that issues private passenger motor vehicle
  164  coverage primarily to active duty or former military personnel
  165  or their dependents. This subsection does not apply if all
  166  policy payments are paid pursuant to a payroll deduction plan,
  167  or an automatic electronic funds transfer payment plan from the
  168  policyholder, or a recurring credit card or debit card agreement
  169  with the insurer. This subsection and subsection (4) do not
  170  apply if all policy payments to an insurer are paid pursuant to
  171  an automatic electronic funds transfer payment plan from an
  172  agent, a managing general agent, or a premium finance company
  173  and if the policy includes, at a minimum, personal injury
  174  protection pursuant to ss. 627.730-627.7405; motor vehicle
  175  property damage liability pursuant to s. 627.7275; and bodily
  176  injury liability in at least the amount of $10,000 because of
  177  bodily injury to, or death of, one person in any one accident
  178  and in the amount of $20,000 because of bodily injury to, or
  179  death of, two or more persons in any one accident. This
  180  subsection and subsection (4) do not apply if an insured has had
  181  a policy in effect for at least 6 months, the insured’s agent is
  182  terminated by the insurer that issued the policy, and the
  183  insured obtains coverage on the policy’s renewal date with a new
  184  company through the terminated agent.
  185         (9)(a) In addition to the methods provided in s.
  186  627.4035(1), the premiums for motor vehicle insurance contracts
  187  issued in this state or covering risk located in this state may
  188  be paid in cash in the form of a draft or drafts.
  189         (b) If a payment of premium under this subsection by debit
  190  card, credit card, or automatic electronic funds transfer is
  191  returned or declined or cannot be processed due to insufficient
  192  funds, the insurer may impose an insufficient funds fee of up to
  193  $15 per occurrence pursuant to the policy terms.
  194         Section 5. Paragraphs (d) and (h) of subsection (5) of
  195  section 627.736, Florida Statutes, are amended to read:
  196         627.736 Required personal injury protection benefits;
  197  exclusions; priority; claims.—
  199         (d) All statements and bills for medical services rendered
  200  by a physician, hospital, clinic, or other person or institution
  201  shall be submitted to the insurer on a properly completed
  202  Centers for Medicare and Medicaid Services (CMS) 1500 form, UB
  203  92 forms, or any other standard form approved by the office and
  204  or adopted by the commission for purposes of this paragraph. All
  205  billings for such services rendered by providers must, to the
  206  extent applicable, comply with the CMS 1500 form instructions,
  207  the American Medical Association CPT Editorial Panel, and the
  208  Healthcare Common Procedure Coding System (HCPCS); and must
  209  follow the Physicians’ Current Procedural Terminology (CPT), the
  210  HCPCS in effect for the year in which services are rendered, and
  211  the International Classification of Diseases (ICD) adopted by
  212  the United States Department of Health and Human Services for
  213  the service year in which the services, supplies, or care is
  214  rendered as described in subparagraph (a)2. follow the
  215  Physicians’ Current Procedural Terminology (CPT) or Healthcare
  216  Correct Procedural Coding System (HCPCS), or ICD-9 in effect for
  217  the year in which services are rendered and comply with the CMS
  218  1500 form instructions, the American Medical Association CPT
  219  Editorial Panel, and the HCPCS. All providers, other than
  220  hospitals, must include on the applicable claim form the
  221  professional license number of the provider in the line or space
  222  provided for “Signature of Physician or Supplier, Including
  223  Degrees or Credentials.” In determining compliance with
  224  applicable CPT and HCPCS coding, guidance shall be provided by
  225  the Physicians’ Current Procedural Terminology (CPT) or the
  226  Healthcare Correct Procedural Coding System (HCPCS) in effect
  227  for the year in which services were rendered, the Office of the
  228  Inspector General, Physicians Compliance Guidelines, and other
  229  authoritative treatises designated by rule by the Agency for
  230  Health Care Administration. A statement of medical services may
  231  not include charges for medical services of a person or entity
  232  that performed such services without possessing the valid
  233  licenses required to perform such services. For purposes of
  234  paragraph (4)(b), an insurer is not considered to have been
  235  furnished with notice of the amount of covered loss or medical
  236  bills due unless the statements or bills comply with this
  237  paragraph and are properly completed in their entirety as to all
  238  material provisions, with all relevant information being
  239  provided therein.
  240         (h) As provided in s. 400.9905, an entity excluded from the
  241  definition of a clinic shall be deemed a clinic and must be
  242  licensed under part X of chapter 400 in order to receive
  243  reimbursement under ss. 627.730-627.7405. However, this
  244  licensing requirement does not apply to:
  245         1. An entity wholly owned by a physician licensed under
  246  chapter 458 or chapter 459, or by the physician and the spouse,
  247  parent, child, or sibling of the physician;
  248         2. An entity wholly owned by a dentist licensed under
  249  chapter 466, or by the dentist and the spouse, parent, child, or
  250  sibling of the dentist;
  251         3. An entity wholly owned by a chiropractic physician
  252  licensed under chapter 460, or by the chiropractic physician and
  253  the spouse, parent, child, or sibling of the chiropractic
  254  physician;
  255         4. A hospital or ambulatory surgical center licensed under
  256  chapter 395;
  257         5. An entity that wholly owns or is wholly owned, directly
  258  or indirectly, by a hospital or hospitals licensed under chapter
  259  395;
  260         6. An entity that is a clinical facility affiliated with an
  261  accredited medical school at which training is provided for
  262  medical students, residents, or fellows; or
  263         7. An entity that is certified under 42 C.F.R. part 485,
  264  subpart H; or
  265         8.An entity that is owned by a publicly traded
  266  corporation, either directly or indirectly through its
  267  subsidiaries, that has $250 million or more in total annual
  268  sales of health care services provided by licensed health care
  269  practitioners, if one or more of the persons responsible for the
  270  operations of the entity are health care practitioners who are
  271  licensed in this state and are responsible for supervising the
  272  business activities of the entity and the entity’s compliance
  273  with state law for purposes of this section.
  274         Section 6. Section 627.744, Florida Statutes, is amended to
  275  read:
  276         627.744 Required Preinsurance inspection of private
  277  passenger motor vehicles.—
  278         (1) A private passenger motor vehicle insurance policy
  279  providing physical damage coverage, including collision or
  280  comprehensive coverage, may not be issued in this state unless
  281  the insurer has inspected the motor vehicle in accordance with
  282  this section or has opted out of the inspection under this
  283  section. An insurer opting out of the inspection must file a
  284  manual rule with the office indicating that the insurer will not
  285  be participating in the inspection program under this section
  286  and will not require the preinsurance inspection of its
  287  insureds’ motor vehicles. An insurer that files such a manual
  288  rule with the office may establish its own preinsurance
  289  inspection program.
  290         (2) This section does not apply:
  291         (a) To a policy for a policyholder who has been insured for
  292  2 years or longer, without interruption, under a private
  293  passenger motor vehicle policy that provides physical damage
  294  coverage for any vehicle if the agent of the insurer verifies
  295  the previous coverage.
  296         (b) To a new, unused motor vehicle purchased or leased from
  297  a licensed motor vehicle dealer or leasing company. The insurer
  298  may require:
  299         1. A bill of sale, buyer’s order, or lease agreement that
  300  contains a full description of the motor vehicle; or
  301         2. A copy of the title or registration that establishes
  302  transfer of ownership from the dealer or leasing company to the
  303  customer and a copy of the window sticker.
  305  For the purposes of this paragraph, the physical damage coverage
  306  on the motor vehicle may not be suspended during the term of the
  307  policy due to the applicant’s failure to provide or the
  308  insurer’s option not to require the documents. However, if the
  309  insurer requires a document under this paragraph at the time the
  310  policy is issued, payment of a claim may be conditioned upon the
  311  receipt by the insurer of the required documents, and no
  312  physical damage loss occurring after the effective date of the
  313  coverage may be payable until the documents are provided to the
  314  insurer.
  315         (c) To a temporary substitute motor vehicle.
  316         (d) To a motor vehicle which is leased for less than 6
  317  months, if the insurer receives the lease or rental agreement
  318  containing a description of the leased motor vehicle, including
  319  its condition. Payment of a physical damage claim is conditioned
  320  upon receipt of the lease or rental agreement.
  321         (e) To a vehicle that is 10 years old or older, as
  322  determined by reference to the model year.
  323         (f) To any renewal policy.
  324         (g) To a motor vehicle policy issued in a county with a
  325  1988 estimated population of less than 500,000.
  326         (h) To any other vehicle or policy exempted by rule of the
  327  commission. The commission may base a rule under this paragraph
  328  only on a determination that the likelihood of a fraudulent
  329  physical damage claim is remote or that the inspection would
  330  cause a serious hardship to the insurer or the applicant.
  331         (i) When the insurer’s authorized inspection service has no
  332  inspection facility either in the municipality in which the
  333  automobile is principally garaged or within 10 miles of such
  334  municipality.
  335         (j) When the insured vehicle is insured under a
  336  commercially rated policy that insures five or more vehicles.
  337         (k) When an insurance producer is transferring a book of
  338  business from one insurer to another.
  339         (l) When an individual insured’s coverage is being
  340  transferred and initiated by a producer to a new insurer.
  341         (3) This subsection does not prohibit an insurer from
  342  requiring a preinsurance inspection of any motor vehicle as a
  343  condition of issuance of physical damage coverage.
  344         (4) The inspection required by this section shall be
  345  provided by the insurer or by a person or organization
  346  authorized by the insurer. The applicant may be required to pay
  347  the cost of the inspection, not to exceed $5. The inspection
  348  shall be recorded on a form prescribed by the commission, and
  349  the form or a copy shall be retained by the insurer with its
  350  policy records for the insured. The insurer shall provide a copy
  351  of the form to the insured upon request. Any inspection fee paid
  352  directly by the applicant may not be considered part of the
  353  premium. However, an insurer that provides the inspection at no
  354  cost to the applicant may include the expense of the inspection
  355  within a rate filing.
  356         (5) The inspection shall include at least the following:
  357         (a) Taking a physical imprint of the vehicle identification
  358  number of the vehicle or otherwise recording the vehicle
  359  identification number in a manner prescribed by the commission.
  360         (b) Recording the presence of accessories required by the
  361  commission to be recorded.
  362         (c) Recording the locations of and a description of
  363  existing damage to the vehicle.
  364         (6) An insurer may defer an inspection for 30 calendar days
  365  following the effective date of coverage for a new policy, but
  366  not for a renewal policy, and for additional or replacement
  367  vehicles to an existing policy, if an inspection at the time of
  368  the request for coverage would create a serious inconvenience
  369  for the applicant and such hardship is documented in the
  370  insured’s policy record.
  371         (7) The commission may, by rule, establish such procedures
  372  and notice requirements that it finds necessary to implement
  373  this section.
  374         Section 7. This act shall take effect July 1, 2016.