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.