Florida Senate - 2019                        COMMITTEE AMENDMENT
       Bill No. SB 496
                              LEGISLATIVE ACTION                        
                    Senate             .             House              

       The Committee on Banking and Insurance (Rader) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Section 626.8621, Florida Statutes, is created
    6  to read:
    7         626.8621 Adjustments by guaranty association employees.—
    8         (1)An employee of the Florida Insurance Guaranty
    9  Association, created under part II of chapter 631, may adjust
   10  losses for the association if such employee holds, or has held
   11  within the past 10 years, licensure in this state which allows
   12  for the adjustment of such losses.
   13         (2)An employee of a guaranty association established by
   14  another state and whose insurance regulators are members of the
   15  National Association of Insurance Commissioners may adjust
   16  losses for the Florida Insurance Guaranty Association. The
   17  authorization for such employees to adjust losses must be
   18  included in a contract with the Florida Insurance Guaranty
   19  Association and the employee’s guarantee association or
   20  association’s authorized representative. The Florida Insurance
   21  Guaranty Association shall contract only for employees of other
   22  state guaranty associations who maintain the appropriate
   23  experience and training for adjusting such claims.
   24         Section 2. Subsections (1), (2), and (3) of section
   25  631.914, Florida Statutes, are amended to read:
   26         631.914 Assessments.—
   27         (1)(a) To the extent necessary to secure the funds for the
   28  payment of covered claims, and also to pay the reasonable costs
   29  to administer the same, the Office of Insurance Regulation, upon
   30  certification by the board, shall levy assessments on each
   31  insurer initially estimated in the proportion that the insurer’s
   32  net direct written premiums in this state bears to the total of
   33  said net direct written premiums received in this state by all
   34  such workers’ compensation insurers for the preceding calendar
   35  year. An insurer shall fully recoup assessments by applying the
   36  uniform surcharge percentage levied by the office to all
   37  policies of the same kind or line as were considered by the
   38  office in determining the assessment liability of the insurer.
   39  Assessments levied against insurers and self-insurance funds
   40  pursuant to this paragraph must be computed and levied on the
   41  basis of the full policy premium value on the net direct written
   42  premium amount as set forth in the state for workers’
   43  compensation insurance without consideration of any applicable
   44  discount or credit for deductibles. An insurer’s direct written
   45  premium calculated for the purposes of determining the insurer’s
   46  assessment or policyholder surcharge may not be reduced by any
   47  discount or credit for deductibles in a policy or by any premium
   48  adjustment to a retrospectively rated policy. Insurers and self
   49  insurance funds must report premiums in compliance with this
   50  paragraph, and the association may audit the reports.
   51  Assessments shall be remitted to and administered by the board
   52  of directors in the manner specified by the approved plan of
   53  operation and paragraph (d). Each assessment shall be a uniform
   54  percentage applicable to the net direct written premiums of each
   55  insurer writing workers’ compensation insurance. Assessments
   56  levied against insurers and self-insurance funds shall not
   57  exceed in any calendar year more than 2 percent of that
   58  insurer’s net direct written premiums in this state for workers’
   59  compensation insurance.
   60         (c)(b)The office shall levy the uniform surcharge
   61  percentage on all policies of the same kind or line as were
   62  considered by the office in determining the assessment liability
   63  of the insurer. Member insurers shall collect policyholder
   64  surcharges at a uniform percentage rate on new and renewal
   65  policies issued and effective during the period of 12 months
   66  beginning on January 1, April 1, July 1, or October 1, whichever
   67  is the first day of the following calendar quarter as specified
   68  in an order issued by the office directing insurers to pay an
   69  assessment to the association. The policyholder surcharge may
   70  not begin until 90 days after the board of directors certifies
   71  the assessment.
   72         (b)(c) If assessments otherwise authorized in paragraph (a)
   73  are insufficient to make all payments on reimbursements then
   74  owing to claimants in a calendar year, then upon certification
   75  by the board, the office shall levy additional assessments of up
   76  to 1.5 percent of the insurer’s net direct written premiums in
   77  this state.
   78         (d) The association may use an installment method to
   79  require the insurer to remit the policyholder surcharge
   80  assessment as premium is collected written or may require the
   81  insurer to remit the assessment to the association before
   82  collecting the policyholder surcharge. If the assessment is
   83  remitted before the surcharge is collected, the assessment
   84  remitted must be based on an estimate of the assessment due
   85  based on the proportion of each insurer’s net direct written
   86  premium in this state for the preceding calendar year as
   87  described in paragraph (a) and adjusted following the end of the
   88  12-month period during which the assessment is levied.
   89         1. If the association elects to use the installment method,
   90  the office may, in the order levying the assessment on insurers,
   91  specify that the policyholder surcharge assessment is due and
   92  payable quarterly as premium is collected written throughout the
   93  assessment year. Insurers shall collect policyholder surcharges
   94  at a uniform percentage rate specified by order as described in
   95  paragraph (c) (b). Insurers are not required to advance funds if
   96  the association and the office elect to use the installment
   97  option. Assessments levied under this subparagraph are paid
   98  after policyholder policy surcharges are collected, and the
   99  recognition of assets is based on actual premium collected
  100  written offset by the obligation to the association.
  101         2. If the association elects to require insurers to remit
  102  the assessment before surcharging the policyholder, the
  103  following shall apply:
  104         a.The assessment remitted must be based on an estimate of
  105  the assessment due based on the proportion of each insurer’s
  106  direct written premium in this state for the preceding calendar
  107  year as described in paragraph (a).
  108         b.a. The levy order shall provide each insurer so assessed
  109  at least 30 days’ written notice of the date the initial
  110  assessment payment is due and payable by the insurer.
  111         c.b. Insurers shall collect policyholder surcharges at a
  112  uniform percentage rate specified by the order, as described in
  113  paragraph (c) (b).
  114         d.c. Assessments levied under this subparagraph and are
  115  paid by an insurer constitute advances of funds from the insurer
  116  to the association before policy surcharges are billed and
  117  result in a receivable for policyholder policy surcharges to be
  118  billed in the future. The amount of billed policyholder
  119  surcharges, to the extent it is likely that it will be realized,
  120  meets the definition of an admissible asset as specified in the
  121  National Association of Insurance Commissioners’ Statement of
  122  Statutory Accounting Principles No. 4. The asset shall be
  123  established and recorded separately from the liability. If an
  124  insurer is unable to fully recoup the amount of the assessment,
  125  the amount recorded as an asset shall be reduced to the amount
  126  reasonably expected to be recouped.
  127         3. Insurers must submit a reconciliation report to the
  128  association within 120 days after the end of the 12-month
  129  assessment period and annually thereafter for a period of 3
  130  years. The report must indicate the amount of the initial
  131  payment or installment payments made to the association and the
  132  amount of policyholder surcharges collected written premium
  133  pursuant to paragraph (a) for the assessment year. If the
  134  insurer’s reconciled assessment obligation is more than the
  135  amount paid to the association, the insurer shall pay the excess
  136  policyholder surcharges collected to the association. If the
  137  insurer’s reconciled assessment obligation is less than the
  138  initial amount paid to the association, the association shall
  139  return the overpayment to the insurer.
  140         (2) Policyholder surcharges collected Assessments levied
  141  under this section are not premium and are not subject to any
  142  premium tax, fees, or commissions. Insurers shall treat the
  143  failure of an insured to pay policyholder assessment-related
  144  surcharges as a failure to pay premium. An insurer is not liable
  145  for any uncollectible policyholder assessment-related surcharges
  146  levied pursuant to this section.
  147         (3) Assessments levied under this section may be levied
  148  only upon insurers. This section does not create a cause of
  149  action by a policyholder with respect to the levying of an
  150  assessment or a policyholder’s duty to pay assessment-related
  151  policyholder surcharges.
  152         Section 3. This act shall take effect July 1, 2019.
  154  ================= T I T L E  A M E N D M E N T ================
  155  And the title is amended as follows:
  156         Delete everything before the enacting clause
  157  and insert:
  158                        A bill to be entitled                      
  159         An act relating to insurance guaranty associations;
  160         creating s. 626.8621, F.S.; authorizing an employee of
  161         the Florida Insurance Guaranty Association or an
  162         employee of a guaranty association of another state to
  163         adjust losses for the Florida Insurance Guaranty
  164         Association if certain conditions are met; amending s.
  165         631.914, F.S.; revising requirements for the Office of
  166         Insurance Regulation in levying assessments on
  167         workers’ compensation insurers; requiring such
  168         insurers to recoup the assessments by applying a
  169         certain surcharge percentage to certain policies;
  170         providing that an insurer’s direct written premium may
  171         not be reduced by certain amounts for the purposes of
  172         determining insurer assessments or policyholder
  173         surcharges; authorizing the Florida Workers’
  174         Compensation Insurance Guaranty Association to audit
  175         certain reports; revising requirements for remitting
  176         policy surcharges and assessments; conforming cross
  177         references; providing that assessments paid by an
  178         insurer constitute advances of funds to the
  179         association under certain circumstances; revising
  180         requirements for insurers’ reconciliation reports to
  181         the association; revising construction; providing an
  182         effective date.