Florida Senate - 2013                        COMMITTEE AMENDMENT
       Bill No. SB 1046
       
       
       
       
       
       
                                Barcode 149498                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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       The Committee on Banking and Insurance (Hays) recommended the
       following:
       
    1         Senate Amendment to Amendment (457546) (with title
    2  amendment)
    3  
    4         Delete lines 1366 - 1390
    5  and insert:
    6         Section 41. Subsections (8), (9), and (13) of section
    7  628.901, Florida Statutes, are amended to read:
    8         628.901 Definitions.—As used in this part, the term:
    9         (8) “Industrial insured” means an insured that:
   10         (a) Has gross assets in excess of $50 million;
   11         (b) Procures insurance through the use of a full-time
   12  employee of the insured who acts as an insurance manager or
   13  buyer or through the services of a person licensed as a property
   14  and casualty insurance agent, broker, or consultant in such
   15  person’s state of domicile;
   16         (c) Has at least 100 full-time employees; and
   17         (d) Pays annual premiums of at least $200,000 for each line
   18  of insurance purchased from the industrial insured captive
   19  insurance company insurer or at least $75,000 for any line of
   20  coverage in excess of at least $25 million in the annual
   21  aggregate. The purchase of umbrella or general liability
   22  coverage in excess of $25 million in the annual aggregate shall
   23  be deemed to be the purchase of a single line of insurance.
   24         (9) “Industrial insured captive insurance company” means a
   25  captive insurance company that provides insurance only to the
   26  industrial insureds that are its stockholders or members, and
   27  affiliates thereof, or to the stockholders, and affiliates
   28  thereof, of its parent corporation. An industrial insured
   29  captive insurance company can also provide reinsurance to
   30  insurers only on risks written by such insurers for the
   31  industrial insureds that are the stockholders or members, and
   32  affiliates thereof, of the industrial insured captive insurance
   33  company insurer, or the stockholders, and affiliates thereof, of
   34  the parent corporation of the industrial insured captive
   35  insurance company insurer.
   36         (13) “Qualifying reinsurer parent company” means a
   37  reinsurer that which currently holds a certificate of authority,
   38  letter of eligibility or is an accredited or trusteed under s.
   39  624.610(3)(c) a satisfactory non-approved reinsurer in this
   40  state possessing a consolidated GAAP net worth of at least $500
   41  million and a consolidated debt to total capital ratio of not
   42  greater than 0.50.
   43         Section 42. Subsections (1), (2), (4), and (5) of section
   44  628.905, Florida Statutes, are amended to read:
   45         628.905 Licensing; authority.—
   46         (1) A captive insurance company insurer, if permitted by
   47  its charter or articles of incorporation, may apply to the
   48  office for a license to do any and all insurance authorized
   49  under the insurance code, other than workers’ compensation and
   50  employer’s liability, life, health, personal motor vehicle, and
   51  personal residential property insurance, except that:
   52         (a) A pure captive insurance company may not insure any
   53  risks other than those of its parent, affiliated companies,
   54  controlled unaffiliated businesses, or a combination thereof.
   55         (b) An industrial insured captive insurance company may not
   56  insure any risks other than those of the industrial insureds
   57  that comprise the industrial insured group and their affiliated
   58  companies, or its stockholders or members, and affiliates
   59  thereof, of the industrial insured captive, or the stockholders
   60  or affiliates of the parent corporation of the industrial
   61  insured captive insurance company.
   62         (c) A special purpose captive insurance company may insure
   63  only the risks of its parent.
   64         (d) A captive insurance company may not accept or cede
   65  reinsurance except as provided in this part.
   66         (e) An industrial insured captive insurance company with
   67  unencumbered capital and surplus of at least $20 million may be
   68  licensed to provide workers’ compensation and employer’s
   69  liability insurance in excess of $25 million in the annual
   70  aggregate. An industrial insured captive insurance company must
   71  maintain unencumbered capital and surplus of at least $20
   72  million to continue to write excess workers’ compensation
   73  insurance.
   74         (2) To conduct insurance business in this state, a captive
   75  insurance company insurer must:
   76         (a) Obtain from the office a license authorizing it to
   77  conduct insurance business in this state;
   78         (b) Hold at least one board of directors’ meeting each year
   79  in this state;
   80         (c) Maintain its principal place of business in this state;
   81  and
   82         (d) Appoint a resident registered agent to accept service
   83  of process and to otherwise act on its behalf in this state. In
   84  the case of a captive insurance company formed as a corporation
   85  or a nonprofit corporation, if the registered agent cannot with
   86  reasonable diligence be found at the registered office of the
   87  captive insurance company, the Chief Financial Officer of this
   88  state must be an agent of the captive insurance company upon
   89  whom any process, notice, or demand may be served.
   90         (4) A captive insurance company or captive reinsurance
   91  company must pay to the office a nonrefundable fee of $1,500 for
   92  processing its application for license.
   93         (a) A captive insurance company or captive reinsurance
   94  company must also pay an annual renewal fee of $1,000.
   95         (b) The office may charge a fee of $5 for any document
   96  requiring certification of authenticity or the signature of the
   97  office commissioner or his or her designee.
   98         (5) If the office commissioner is satisfied that the
   99  documents and statements filed by the captive insurance company
  100  comply with this chapter, the office commissioner may grant a
  101  license authorizing the company to conduct insurance business in
  102  this state until the next succeeding March 1, at which time the
  103  license may be renewed.
  104         Section 43. Subsection (1) of section 628.907, Florida
  105  Statutes, is amended to read:
  106         628.907 Minimum capital and net assets requirements;
  107  restriction on payment of dividends.—
  108         (1) A captive insurance company insurer may not be issued a
  109  license unless it possesses and thereafter maintains unimpaired
  110  paid-in capital of:
  111         (a) In the case of a pure captive insurance company, at
  112  least $100,000.
  113         (b) In the case of an industrial insured captive insurance
  114  company incorporated as a stock insurer, at least $200,000.
  115         (c) In the case of a special purpose captive insurance
  116  company, an amount determined by the office after giving due
  117  consideration to the company’s business plan, feasibility study,
  118  and pro forma financial statements and projections, including
  119  the nature of the risks to be insured.
  120         Section 44. Section 628.909, Florida Statutes, is amended
  121  to read:
  122         628.909 Applicability of other laws.—
  123         (1) The Florida Insurance Code does not apply to captive
  124  insurance companies insurers or industrial insured captive
  125  insurance companies insurers except as provided in this part and
  126  subsections (2) and (3).
  127         (2) The following provisions of the Florida Insurance Code
  128  apply to captive insurance companies insurers who are not
  129  industrial insured captive insurance companies insurers to the
  130  extent that such provisions are not inconsistent with this part:
  131         (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
  132  624.40851, 624.4095, 624.411, 624.425, and 624.426.
  133         (b) Chapter 625, part II.
  134         (c) Chapter 626, part IX.
  135         (d) Sections 627.730-627.7405, when no-fault coverage is
  136  provided.
  137         (e) Chapter 628.
  138         (3) The following provisions of the Florida Insurance Code
  139  apply to industrial insured captive insurance companies insurers
  140  to the extent that such provisions are not inconsistent with
  141  this part:
  142         (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
  143  624.40851, 624.4095, 624.411, 624.425, 624.426, and 624.609(1).
  144         (b) Chapter 625, part II, if the industrial insured captive
  145  insurance companies insurer is incorporated in this state.
  146         (c) Chapter 626, part IX.
  147         (d) Sections 627.730-627.7405 when no-fault coverage is
  148  provided.
  149         (e) Chapter 628, except for ss. 628.341, 628.351, and
  150  628.6018.
  151         Section 45. Subsection (2) of section 628.9142, Florida
  152  Statutes, is amended to read:
  153         628.9142 Reinsurance; effect on reserves.—
  154         (2) A captive insurance company may take credit for
  155  reserves on risks or portions of risks ceded to authorized
  156  insurers or reinsurers and unauthorized insurers or reinsurers
  157  complying with s. 624.610. A captive insurance company insurer
  158  may not take credit for reserves on risks or portions of risks
  159  ceded to an unauthorized insurer or reinsurer if the insurer or
  160  reinsurer is not in compliance with s. 624.610.
  161         Section 46. Section 628.915, Florida Statutes, is amended
  162  to read:
  163         628.915 Exemption from compulsory association.—
  164         (1) A No captive insurance company may not insurer shall be
  165  permitted to join or contribute financially to any joint
  166  underwriting association or guaranty fund in this state; nor
  167  shall any captive insurance company insurer, its insured, or its
  168  parent or any affiliated company receive any benefit from any
  169  such joint underwriting association or guaranty fund for claims
  170  arising out of the operations of such captive insurer.
  171         (2) An No industrial insured captive insurance company may
  172  not insurer shall be permitted to join or contribute financially
  173  to any joint underwriting association or guaranty fund in this
  174  state; nor shall any industrial insured captive insurance
  175  company insurer, its industrial insured, or its parent or any
  176  affiliated company receive any benefit from any such joint
  177  underwriting association or guaranty fund for claims arising out
  178  of the operations of such industrial insured captive insurance
  179  company insurer.
  180         Section 47. Section 628.917, Florida Statutes, is amended
  181  to read:
  182         628.917 Insolvency and liquidation.—In the event that a
  183  captive insurance company insurer is insolvent as defined in
  184  chapter 631, the office shall liquidate the captive insurance
  185  company insurer pursuant to the provisions of part I of chapter
  186  631.; except that The office may not shall make no attempt to
  187  rehabilitate such insurer.
  188         Section 48. Section 628.919, Florida Statutes, is amended
  189  to read:
  190         628.919 Standards to ensure risk management control by
  191  parent company.—A pure captive insurance company shall submit to
  192  the office for approval The Financial Services Commission shall
  193  adopt rules establishing standards to ensure that a parent or
  194  affiliated company is able to exercise control of the risk
  195  management function of any controlled unaffiliated business to
  196  be insured by the pure captive insurance company.
  197  
  198  ================= T I T L E  A M E N D M E N T ================
  199         And the title is amended as follows:
  200         Delete lines 1647 - 1650
  201  and insert:
  202         revising the definition of terms applicable to captive
  203         insurers; amending s. 628.905, F.S.; authorizing an
  204         industrial insured captive insurance company to write
  205         workers compensation and employer liability insurance
  206         in excess of a certain amount under certain
  207         conditions; conforming provisions to changes made by
  208         the act; redesignating the Office of Insurance
  209         Regulation instead of the Insurance Commissioner as
  210         the collector of certain fees and issuer of licenses;
  211         amending s. 628.907, F.S.; conforming provisions to
  212         changes made by the act; amending s. 628.909, F.S.;
  213         providing for applicability of certain provisions of
  214         the Insurance Code to specified captive insurers;
  215         conforming provisions to changes made by the act;
  216         amending s. 628.9142, F.S.; conforming provisions to
  217         changes made by the act; amending s. 628.915, F.S.;
  218         conforming provisions to changes made by the act;
  219         amending s. 628.917, F.S.; conforming provisions to
  220         changes made by the act; amending s. 628.919, F.S.;
  221         requiring a pure captive insurance company to submit
  222         certain risk management standards to the Office of
  223         Insurance Regulation;