Florida Senate - 2017                                     SB 454
       
       
        
       By Senator Brandes
       
       24-00600A-17                                           2017454__
    1                        A bill to be entitled                      
    2         An act relating to the regulation of insurance
    3         companies; amending s. 215.555, F.S.; deleting a
    4         future repeal of an exemption of medical malpractice
    5         insurance premiums from certain emergency assessments
    6         by the State Board of Administration relating to the
    7         Florida Hurricane Catastrophe Fund; amending s.
    8         625.012, F.S.; revising a definition of “assets” of an
    9         insurer to include certain assessments levied by the
   10         Office of Insurance Regulation; amending s. 627.062,
   11         F.S.; revising requirements for certain rate filings
   12         by medical malpractice insurers; amending s. 627.0645,
   13         F.S.; adding certain medical malpractice insurance to
   14         casualty insurance excluded from an annual base rate
   15         filing requirement for rating organizations; amending
   16         s. 627.4035, F.S.; revising the methods of paying
   17         premiums for insurance contracts; authorizing an
   18         insurer to impose a specified insufficient funds fee
   19         if certain premium payment methods are returned,
   20         declined, or cannot be processed; amending s. 627.421,
   21         F.S.; providing that an electronically delivered
   22         document in an insurance policy meets formatting
   23         requirements for printed documents under certain
   24         conditions; amending s. 627.7295, F.S.; conforming
   25         provisions to changes made by the act; creating s.
   26         627.747, F.S.; providing that certain provisions do
   27         not prohibit an insurer from excluding all coverage
   28         under a certain motor vehicle insurance policy for an
   29         identified household member under certain
   30         circumstances; providing an effective date.
   31          
   32  Be It Enacted by the Legislature of the State of Florida:
   33  
   34         Section 1. Paragraph (b) of subsection (6) of section
   35  215.555, Florida Statutes, is amended to read:
   36         215.555 Florida Hurricane Catastrophe Fund.—
   37         (6) REVENUE BONDS.—
   38         (b) Emergency assessments.—
   39         1. If the board determines that the amount of revenue
   40  produced under subsection (5) is insufficient to fund the
   41  obligations, costs, and expenses of the fund and the
   42  corporation, including repayment of revenue bonds and that
   43  portion of the debt service coverage not met by reimbursement
   44  premiums, the board shall direct the Office of Insurance
   45  Regulation to levy, by order, an emergency assessment on direct
   46  premiums for all property and casualty lines of business in this
   47  state, including property and casualty business of surplus lines
   48  insurers regulated under part VIII of chapter 626, but not
   49  including any workers’ compensation premiums or medical
   50  malpractice premiums. As used in this subsection, the term
   51  “property and casualty business” includes all lines of business
   52  identified on Form 2, Exhibit of Premiums and Losses, in the
   53  annual statement required of authorized insurers by s. 624.424
   54  and any rule adopted under this section, except for those lines
   55  identified as accident and health insurance and except for
   56  policies written under the National Flood Insurance Program. The
   57  assessment shall be specified as a percentage of direct written
   58  premium and is subject to annual adjustments by the board in
   59  order to meet debt obligations. The same percentage applies to
   60  all policies in lines of business subject to the assessment
   61  issued or renewed during the 12-month period beginning on the
   62  effective date of the assessment.
   63         2. A premium is not subject to an annual assessment under
   64  this paragraph in excess of 6 percent of premium with respect to
   65  obligations arising out of losses attributable to any one
   66  contract year, and a premium is not subject to an aggregate
   67  annual assessment under this paragraph in excess of 10 percent
   68  of premium. An annual assessment under this paragraph continues
   69  as long as the revenue bonds issued with respect to which the
   70  assessment was imposed are outstanding, including any bonds the
   71  proceeds of which were used to refund the revenue bonds, unless
   72  adequate provision has been made for the payment of the bonds
   73  under the documents authorizing issuance of the bonds.
   74         3. Emergency assessments shall be collected from
   75  policyholders. Emergency assessments shall be remitted by
   76  insurers as a percentage of direct written premium for the
   77  preceding calendar quarter as specified in the order from the
   78  Office of Insurance Regulation. The office shall verify the
   79  accurate and timely collection and remittance of emergency
   80  assessments and shall report the information to the board in a
   81  form and at a time specified by the board. Each insurer
   82  collecting assessments shall provide the information with
   83  respect to premiums and collections as may be required by the
   84  office to enable the office to monitor and verify compliance
   85  with this paragraph.
   86         4. With respect to assessments of surplus lines premiums,
   87  each surplus lines agent shall collect the assessment at the
   88  same time as the agent collects the surplus lines tax required
   89  by s. 626.932, and the surplus lines agent shall remit the
   90  assessment to the Florida Surplus Lines Service Office created
   91  by s. 626.921 at the same time as the agent remits the surplus
   92  lines tax to the Florida Surplus Lines Service Office. The
   93  emergency assessment on each insured procuring coverage and
   94  filing under s. 626.938 shall be remitted by the insured to the
   95  Florida Surplus Lines Service Office at the time the insured
   96  pays the surplus lines tax to the Florida Surplus Lines Service
   97  Office. The Florida Surplus Lines Service Office shall remit the
   98  collected assessments to the fund or corporation as provided in
   99  the order levied by the Office of Insurance Regulation. The
  100  Florida Surplus Lines Service Office shall verify the proper
  101  application of such emergency assessments and shall assist the
  102  board in ensuring the accurate and timely collection and
  103  remittance of assessments as required by the board. The Florida
  104  Surplus Lines Service Office shall annually calculate the
  105  aggregate written premium on property and casualty business,
  106  other than workers’ compensation and medical malpractice,
  107  procured through surplus lines agents and insureds procuring
  108  coverage and filing under s. 626.938 and shall report the
  109  information to the board in a form and at a time specified by
  110  the board.
  111         5. Any assessment authority not used for a particular
  112  contract year may be used for a subsequent contract year. If,
  113  for a subsequent contract year, the board determines that the
  114  amount of revenue produced under subsection (5) is insufficient
  115  to fund the obligations, costs, and expenses of the fund and the
  116  corporation, including repayment of revenue bonds and that
  117  portion of the debt service coverage not met by reimbursement
  118  premiums, the board shall direct the Office of Insurance
  119  Regulation to levy an emergency assessment up to an amount not
  120  exceeding the amount of unused assessment authority from a
  121  previous contract year or years, plus an additional 4 percent
  122  provided that the assessments in the aggregate do not exceed the
  123  limits specified in subparagraph 2.
  124         6. The assessments otherwise payable to the corporation
  125  under this paragraph shall be paid to the fund unless the Office
  126  of Insurance Regulation and the Florida Surplus Lines Service
  127  Office received a notice from the corporation and the fund,
  128  which shall be conclusive and upon which they may rely without
  129  further inquiry, that the corporation has issued bonds and the
  130  fund has no agreements in effect with local governments under
  131  paragraph (c). On or after the date of the notice and until the
  132  date the corporation has no bonds outstanding, the fund shall
  133  have no right, title, or interest in or to the assessments,
  134  except as provided in the fund’s agreement with the corporation.
  135         7. Emergency assessments are not premium and are not
  136  subject to the premium tax, to the surplus lines tax, to any
  137  fees, or to any commissions. An insurer is liable for all
  138  assessments that it collects and must treat the failure of an
  139  insured to pay an assessment as a failure to pay the premium. An
  140  insurer is not liable for uncollectible assessments.
  141         8. If an insurer is required to return an unearned premium,
  142  it shall also return any collected assessment attributable to
  143  the unearned premium. A credit adjustment to the collected
  144  assessment may be made by the insurer with regard to future
  145  remittances that are payable to the fund or corporation, but the
  146  insurer is not entitled to a refund.
  147         9. If a surplus lines insured or an insured who has
  148  procured coverage and filed under s. 626.938 is entitled to the
  149  return of an unearned premium, the Florida Surplus Lines Service
  150  Office shall provide a credit or refund to the agent or such
  151  insured for the collected assessment attributable to the
  152  unearned premium before remitting the emergency assessment
  153  collected to the fund or corporation.
  154         10. The exemption of medical malpractice insurance premiums
  155  from emergency assessments under this paragraph is repealed May
  156  31, 2019, and medical malpractice insurance premiums shall be
  157  subject to emergency assessments attributable to loss events
  158  occurring in the contract years commencing on June 1, 2019.
  159         Section 2. Paragraph (a) of subsection (15) of section
  160  625.012, Florida Statutes, is amended to read:
  161         625.012 “Assets” defined.—In any determination of the
  162  financial condition of an insurer, there shall be allowed as
  163  “assets” only such assets as are owned by the insurer and which
  164  consist of:
  165         (15)(a) Assessments levied pursuant to s. 631.57(3)(a) and
  166  (e) or s. 631.914 which that are paid before policy surcharges
  167  are collected and result in a receivable for policy surcharges
  168  to be collected in the future. This amount, to the extent it is
  169  likely that it will be realized, meets the definition of an
  170  admissible asset as specified in the National Association of
  171  Insurance Commissioners’ Statement of Statutory Accounting
  172  Principles No. 4. The asset shall be established and recorded
  173  separately from the liability regardless of whether it is based
  174  on a retrospective or prospective premium-based assessment. If
  175  an insurer is unable to fully recoup the amount of the
  176  assessment because of a reduction in writings or withdrawal from
  177  the market, the amount recorded as an asset shall be reduced to
  178  the amount reasonably expected to be recouped.
  179         Section 3. Paragraph (e) of subsection (7) of section
  180  627.062, Florida Statutes, is amended to read:
  181         627.062 Rate standards.—
  182         (7) The provisions of this subsection apply only to rates
  183  for medical malpractice insurance and control to the extent of
  184  any conflict with other provisions of this section.
  185         (e) For medical malpractice rates subject to paragraph
  186  (2)(a), the medical malpractice insurer shall make an annual
  187  base a rate filing in accordance with s. 627.0645 under this
  188  section, sworn to by at least two executive officers of the
  189  insurer, at least once each calendar year.
  190         Section 4. Subsection (1) of section 627.0645, Florida
  191  Statutes, is amended to read:
  192         627.0645 Annual filings.—
  193         (1) Each rating organization filing rates for, and each
  194  insurer writing, any line of property or casualty insurance to
  195  which this part applies, except:
  196         (a) Workers’ compensation and employer’s liability
  197  insurance;
  198         (b) Insurance as defined in ss. 624.604 and 624.605,
  199  limited to coverage of commercial risks other than commercial
  200  residential multiperil and medical malpractice insurance that is
  201  subject to s. 627.062(2)(a) and (f); or
  202         (c) Travel insurance, if issued as a master group policy
  203  with a situs in another state where each certificateholder pays
  204  less than $30 in premium for each covered trip and where the
  205  insurer has written less than $1 million in annual written
  206  premiums in the travel insurance product in this state during
  207  the most recent calendar year,
  208  
  209  shall make an annual base rate filing for each such line with
  210  the office no later than 12 months after its previous base rate
  211  filing, demonstrating that its rates are not inadequate.
  212         Section 5. Section 627.4035, Florida Statutes, is amended
  213  to read:
  214         627.4035 Cash Payment of premiums; claims.—
  215         (1)(a) The premiums for insurance contracts issued in this
  216  state or covering risk located in this state must shall be paid
  217  in cash consisting of coins, currency, checks, electronic
  218  checks, drafts, or money orders or by using a debit card, credit
  219  card, automatic electronic funds transfer, or payroll deduction
  220  plan. By July 1, 2007, Insurers issuing personal lines
  221  residential and commercial property policies shall provide a
  222  premium payment plan option to their policyholders which allows
  223  for a minimum of quarterly and semiannual payment of premiums.
  224  Insurers may, but are not required to, offer monthly payment
  225  plans. Insurers issuing such policies must submit their premium
  226  payment plan option to the office for approval before use.
  227         (b) If, due to insufficient funds, a payment of premium
  228  under this subsection by debit card, credit card, electronic
  229  funds transfer, or electronic check is returned, is declined, or
  230  cannot be processed, the insurer may impose an insufficient
  231  funds fee of up to $15 per occurrence pursuant to the policy
  232  terms.
  233         (2) Subsection (1) is not applicable to:
  234         (a) Reinsurance agreements;
  235         (b) Pension plans;
  236         (c) Premium loans, whether or not subject to an automatic
  237  provision;
  238         (d) Dividends, whether to purchase additional paid-up
  239  insurance or to shorten the dividend payment period;
  240         (e) Salary deduction plans;
  241         (f) Preauthorized check plans;
  242         (g) Waivers of premiums on disability;
  243         (h) Nonforfeiture provisions affording benefits under
  244  supplementary contracts; or
  245         (i) Such other methods of paying for life insurance as may
  246  be permitted by the commission pursuant to rule or regulation.
  247         (3) All payments of claims made in this state under any
  248  contract of insurance shall be paid:
  249         (a) In cash consisting of coins, currency, checks, drafts,
  250  or money orders and, if by check or draft, shall be in such form
  251  as will comply with the standards for cash items adopted by the
  252  Federal Reserve System to facilitate the sorting, routing, and
  253  mechanized processing of such items; or
  254         (b) If authorized in writing by the recipient or the
  255  recipient’s representative, by debit card or any other form of
  256  electronic transfer. Any fees or costs to be charged against the
  257  recipient must be disclosed in writing to the recipient or the
  258  recipient’s representative at the time of written authorization.
  259  However, the written authorization requirement may be waived by
  260  the recipient or the recipient’s representative if the insurer
  261  verifies the identity of the insured or the insured’s recipient
  262  and does not charge a fee for the transaction. If the funds are
  263  misdirected, the insurer remains liable for the payment of the
  264  claim.
  265         Section 6. Subsection (5) is added to section 627.421,
  266  Florida Statutes, to read:
  267         627.421 Delivery of policy.—
  268         (5)An electronically delivered document satisfies any
  269  font, size, color, spacing, or other formatting requirement for
  270  printed documents if the format in the electronically delivered
  271  document has reasonably similar proportions or emphasis of the
  272  characters relative to the rest of the electronic document or is
  273  otherwise displayed in a reasonably conspicuous manner.
  274         Section 7. Subsection (9) of section 627.7295, Florida
  275  Statutes, is amended to read:
  276         627.7295 Motor vehicle insurance contracts.—
  277         (9)(a) In addition to the methods provided in s.
  278  627.4035(1), premium for motor vehicle insurance contracts
  279  issued in this state or covering risk located in this state may
  280  be paid in cash in the form of a draft or drafts.
  281         (b) If, due to insufficient funds, payment of premium under
  282  this subsection by debit card, credit card, electronic funds
  283  transfer, or electronic check is returned, is declined, or
  284  cannot be processed, the insurer may impose an insufficient
  285  funds fee of up to $15 per occurrence pursuant to the policy
  286  terms.
  287         Section 8. Section 627.747, Florida Statutes, is created to
  288  read:
  289         627.747 Named driver exclusion.—If the insurer identifies a
  290  household member by name and the named insured consents in
  291  writing, ss. 320.02, 324.022, and 627.727 do not prohibit an
  292  insurer that issues an insurance policy on a private passenger
  293  motor vehicle from excluding all coverage under the policy for
  294  the identified member of the household, unless the excluded
  295  household member is injured while he or she is not operating the
  296  motor vehicle.
  297         Section 9. This act shall take effect upon becoming a law.