Florida Senate - 2018 CS for SB 1866 By the Committee on Banking and Insurance; and Senator Broxson 597-03455-18 20181866c1 1 A bill to be entitled 2 An act relating to workers’ compensation shared 3 underwriting result participation programs; amending 4 s. 627.072, F.S.; defining terms; specifying 5 disclosure requirements for applications or proposals 6 for certain qualified shared underwriting result 7 participation programs; requiring, under certain 8 circumstances, a qualified shared underwriting result 9 participation program form to be filed with the Office 10 of Insurance Regulation, for informational purposes 11 only, and providing that such form is not subject to 12 certain approval; providing that a qualified shared 13 underwriting result participation program may be 14 issued to a qualified insured in connection with a 15 base workers’ compensation policy issued by a 16 qualified insurer; providing that the Rating Law does 17 not apply to certain charges, deposits, or other 18 payments in a qualified shared underwriting result 19 participation program; requiring qualified insurers to 20 comply with specified provisions of the Workers’ 21 Compensation Law; providing an effective date. 22 23 Be It Enacted by the Legislature of the State of Florida: 24 25 Section 1. Subsection (6) is added to section 627.072, 26 Florida Statutes, to read: 27 627.072 Making and use of rates; qualified shared 28 underwriting result participation programs.— 29 (6)(a) As used in this subsection, the term: 30 1. “Base workers’ compensation insurance policy” means a 31 workers’ compensation insurance policy that is subject to this 32 part. 33 2. “Qualified insured” means an insured that has its 34 principal place of business in this state and has an estimated 35 annual countrywide workers’ compensation standard premium of at 36 least $500,000. 37 3. “Qualified insurer” means an insurance company that: 38 a. Is authorized to transact insurance in this state; 39 b. Had a combined ratio of less than 100 percent on January 40 1 of each of the 2 preceding years for its nationwide book of 41 workers’ compensation insurance business; 42 c. Has a surplus in excess of $500 million on January 1 of 43 the year in which the base workers’ compensation insurance 44 policy is issued; and 45 d. Has a rating of A+ from A.M. Best Company or an AA 46 rating from Fitch Ratings. 47 4. “Qualified reinsurer” means a reinsurer that: 48 a. Is an affiliate of, is controlled by, or is under common 49 control of a qualified insurer; and 50 b. Is a reinsurer where credit for its reinsurance is 51 allowed under s. 624.610(3). 52 5. “Qualified shared underwriting result participation 53 program” means an offering that: 54 a. Is issued to the same insured in connection with a base 55 workers’ compensation insurance policy; 56 b. Is effected through a separate agreement with a 57 qualified reinsurer; 58 c. Provides that the insured may participate in the 59 underwriting profit or risk that is associated with the base 60 workers’ compensation insurance policy issued to that insured 61 and that is maintained in a segregated cell account; 62 d. Contains a minimum and maximum loss participation limit; 63 e. Discloses the duration of the program; 64 f. Discloses penalties, if any, for the early termination 65 of the program; 66 g. Provides an estimated schedule of payments; 67 h. Discloses the methodology for calculating charges, 68 deposits, or other payments due, including the frequency of 69 adjustments; and 70 i. Discloses how any disputes between the parties will be 71 resolved. 72 (b) An application or proposal for a qualified shared 73 underwriting result participation program with a term longer 74 than 1 year must clearly disclose the term duration in at least 75 14-point type. 76 (c) If a qualified insurer in this state issues a base 77 workers’ compensation insurance policy on an approved form and 78 with approved rates to a qualified insured, a qualified shared 79 underwriting result participation program form must be filed 80 with the office for informational purposes only. The qualified 81 shared underwriting result participation program form does not 82 require approval under s. 627.410. 83 (d) A qualified shared underwriting result participation 84 program may be issued to a qualified insured in connection with 85 a base workers’ compensation policy issued by a qualified 86 insurer. 87 (e) Charges, deposits, or other payments agreed to by a 88 qualified insured and a qualified reinsurer pursuant to a 89 qualified shared underwriting result participation program are 90 not subject to this part. 91 (f) A qualified insurer must comply with ss. 440.41 and 92 440.42 in connection with a base workers’ compensation insurance 93 policy. 94 Section 2. This act shall take effect July 1, 2018.