Florida Senate - 2017 SENATOR AMENDMENT
Bill No. CS/HB 7085, 1st Eng.
Ì350454#Î350454
LEGISLATIVE ACTION
Senate . House
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Floor: WD/2R .
05/04/2017 03:37 PM .
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Senator Rodriguez moved the following:
1 Senate Amendment to Amendment (655850) (with title
2 amendment)
3
4 Delete lines 408 - 850
5 and insert:
6 Section 8. Section 440.34, Florida Statutes, is amended to
7 read:
8 440.34 Attorney Attorney’s fees; costs.—
9 (1)(a) A fee, gratuity, or other consideration may not be
10 paid by a carrier or employer for a claimant in connection with
11 any proceedings arising under this chapter, unless approved by
12 the judge of compensation claims or court having jurisdiction
13 over such proceedings. Any attorney fees attorney’s fee approved
14 by a judge of compensation claims for benefits secured on behalf
15 of a claimant must equal to 20 percent of the first $5,000 of
16 the amount of the benefits secured, 15 percent of the next
17 $5,000 of the amount of the benefits secured, 10 percent of the
18 remaining amount of the benefits secured to be provided during
19 the first 10 years after the date the claim is filed, and 5
20 percent of the benefits secured after 10 years.
21 (b) However, the judge of compensation claims shall
22 consider the following factors in each case and may increase or
23 decrease the attorney fees, based on a maximum hourly rate of
24 $225 per hour, if in his or her judgment he or she expressly
25 finds that the circumstances of the particular case warrant such
26 action:
27 1. The time and labor required, the novelty and difficulty
28 of the questions involved, and the skill requisite to perform
29 the legal service properly.
30 2. The fee customarily charged in the locality for similar
31 legal services.
32 3. The amount involved in the controversy and the benefits
33 resulting to the claimant.
34 4. The time limitation imposed by the claimant or the
35 circumstances.
36 5. The experience, reputation, and ability of the attorney
37 or attorneys performing services.
38 6. The contingency or certainty of a fee.
39 (c) The judge of compensation claims shall not approve a
40 compensation order, a joint stipulation for lump-sum settlement,
41 a stipulation or agreement between a claimant and his or her
42 attorney, or any other agreement related to benefits under this
43 chapter which provides for attorney fees paid by a carrier or
44 employer an attorney’s fee in excess of the amount permitted by
45 this section. The judge of compensation claims is not required
46 to approve any retainer agreement between the claimant and his
47 or her attorney. The retainer agreement as to fees and costs may
48 not be for compensation in excess of the amount allowed under
49 this subsection or subsection (7).
50 (2) In awarding a claimant’s attorney fees paid by a
51 carrier or employer attorney’s fee, the judge of compensation
52 claims shall consider only those benefits secured by the
53 attorney. An attorney is not entitled to attorney attorney’s
54 fees for representation in any issue that was ripe, due, and
55 owing and that reasonably could have been addressed, but was not
56 addressed, during the pendency of other issues for the same
57 injury. The amount, statutory basis, and type of benefits
58 obtained through legal representation shall be listed on all
59 attorney attorney’s fees awarded by the judge of compensation
60 claims. For purposes of this section, the term “benefits
61 secured” does not include future medical benefits to be provided
62 on any date more than 5 years after the date the claim is filed.
63 In the event an offer to settle an issue pending before a judge
64 of compensation claims, including attorney attorney’s fees as
65 provided for in this section, is communicated in writing to the
66 claimant or the claimant’s attorney at least 30 days prior to
67 the trial date on such issue, for purposes of calculating the
68 amount of attorney attorney’s fees to be taxed against the
69 employer or carrier, the term “benefits secured” shall be deemed
70 to include only that amount awarded to the claimant above the
71 amount specified in the offer to settle. If multiple issues are
72 pending before the judge of compensation claims, said offer of
73 settlement shall address each issue pending and shall state
74 explicitly whether or not the offer on each issue is severable.
75 The written offer shall also unequivocally state whether or not
76 it includes medical witness fees and expenses and all other
77 costs associated with the claim.
78 (3) If any party should prevail in any proceedings before a
79 judge of compensation claims or court, there shall be taxed
80 against the nonprevailing party the reasonable costs of such
81 proceedings, not to include attorney attorney’s fees. A claimant
82 is responsible for the payment of her or his own attorney
83 attorney’s fees, except that a claimant is entitled to recover
84 attorney fees an attorney’s fee in an amount equal to the amount
85 provided for in subsection (1) or subsection (7) from a carrier
86 or employer:
87 (a) Against whom she or he successfully asserts a petition
88 for medical benefits only, if the claimant has not filed or is
89 not entitled to file at such time a claim for disability,
90 permanent impairment, wage-loss, or death benefits, arising out
91 of the same accident;
92 (b) In any case in which the employer or carrier files a
93 response to petition denying benefits with the Office of the
94 Judges of Compensation Claims and the injured person has
95 employed an attorney in the successful prosecution of the
96 petition;
97 (c) In a proceeding in which a carrier or employer denies
98 that an accident occurred for which compensation benefits are
99 payable, and the claimant prevails on the issue of
100 compensability; or
101 (d) In cases where the claimant successfully prevails in
102 proceedings filed under s. 440.24 or s. 440.28.
103
104 Regardless of the date benefits were initially requested,
105 attorney attorney’s fees shall not attach under this subsection
106 until 30 days after the date the carrier or employer, if self
107 insured, receives the petition.
108 (4) In such cases in which the claimant is responsible for
109 the payment of her or his own attorney attorney’s fees, such
110 fees are a lien upon compensation payable to the claimant,
111 notwithstanding s. 440.22.
112 (5) If any proceedings are had for review of any claim,
113 award, or compensation order before any court, the court may
114 award the injured employee or dependent attorney fees an
115 attorney’s fee to be paid by the employer or carrier, in its
116 discretion, which shall be paid as the court may direct.
117 (6) A judge of compensation claims may not enter an order
118 approving the contents of a retainer agreement that permits
119 placing any portion of the employee’s compensation into an
120 escrow account until benefits have been secured.
121 (7) This section may not be interpreted to limit or
122 otherwise infringe on a claimant’s right to retain an attorney
123 and pay the attorney reasonable attorney fees for legal services
124 related to a claim under the Workers’ Compensation Law If an
125 attorney’s fee is owed under paragraph (3)(a), the judge of
126 compensation claims may approve an alternative attorney’s fee
127 not to exceed $1,500 only once per accident, based on a maximum
128 hourly rate of $150 per hour, if the judge of compensation
129 claims expressly finds that the attorney’s fee amount provided
130 for in subsection (1), based on benefits secured, fails to
131 fairly compensate the attorney for disputed medical-only claims
132 as provided in paragraph (3)(a) and the circumstances of the
133 particular case warrant such action.
134 Section 9. Effective July 1, 2018, subsection (10) of
135 section 624.482, Florida Statutes, is amended to read:
136 624.482 Making and use of rates.—
137 (10) Any self-insurance fund that writes workers’
138 compensation insurance and employer’s liability insurance is
139 subject to, and shall make all rate filings for workers’
140 compensation insurance and employer’s liability insurance in
141 accordance with, ss. 627.091, 627.101, 627.111, 627.141,
142 627.151, 627.171, and 627.191, and 627.211.
143 Section 10. Effective July 1, 2018, subsections (3), (4),
144 and (6) of section 627.041, Florida Statutes, are amended to
145 read:
146 627.041 Definitions.—As used in this part:
147 (3) “Rating organization” means every person, other than an
148 authorized insurer, whether located within or outside this
149 state, who has as his or her object or purpose the making of
150 prospective loss costs, rates, rating plans, or rating systems.
151 Two or more authorized insurers that act in concert for the
152 purpose of making prospective loss costs, rates, rating plans,
153 or rating systems, and that do not operate within the specific
154 authorizations contained in ss. 627.311, 627.314(2), (4), and
155 627.351, shall be deemed to be a rating organization. No single
156 insurer shall be deemed to be a rating organization.
157 (4) “Advisory organization” means every group, association,
158 or other organization of insurers, whether located within or
159 outside this state, which prepares policy forms or makes
160 underwriting rules incident to but not including the making of
161 prospective loss costs, rates, rating plans, or rating systems
162 or which collects and furnishes to authorized insurers or rating
163 organizations loss or expense statistics or other statistical
164 information and data and acts in an advisory, as distinguished
165 from a ratemaking, capacity.
166 (6) “Subscriber” means an insurer which is furnished at its
167 request:
168 (a) With prospective loss costs, rates, and rating manuals
169 by a rating organization of which it is not a member; or
170 (b) With advisory services by an advisory organization of
171 which it is not a member.
172 Section 11. Effective July 1, 2018, subsection (1) of
173 section 627.0612, Florida Statutes, is amended to read:
174 627.0612 Administrative proceedings in rating
175 determinations.—
176 (1) In any proceeding to determine whether prospective loss
177 costs, rates, rating plans, or other matters governed by this
178 part comply with the law, the appellate court shall set aside a
179 final order of the office if the office has violated s.
180 120.57(1)(k) by substituting its findings of fact for findings
181 of an administrative law judge which were supported by competent
182 substantial evidence.
183 Section 12. Effective July 1, 2018, subsection (1) of
184 section 627.062, Florida Statutes, is amended to read:
185 627.062 Rate standards.—
186 (1) The rates and loss costs for all classes of insurance
187 to which the provisions of this part are applicable may not be
188 excessive, inadequate, or unfairly discriminatory.
189 Section 13. Effective July 1, 2018, subsection (1) of
190 section 627.0645, Florida Statutes, is amended to read:
191 627.0645 Annual filings.—
192 (1) Each rating organization filing rates for, and each
193 insurer writing, any line of property or casualty insurance to
194 which this part applies, except:
195 (a) Workers’ compensation and employer’s liability
196 insurance;
197 (a)(b) Insurance as defined in ss. 624.604 and 624.605,
198 limited to coverage of commercial risks other than commercial
199 residential multiperil; or
200 (b)(c) Travel insurance, if issued as a master group policy
201 with a situs in another state where each certificateholder pays
202 less than $30 in premium for each covered trip and where the
203 insurer has written less than $1 million in annual written
204 premiums in the travel insurance product in this state during
205 the most recent calendar year,
206
207 shall make an annual base rate filing for each such line with
208 the office no later than 12 months after its previous base rate
209 filing, demonstrating that its rates are not inadequate.
210 Section 14. Effective July 1, 2018, subsections (1) and (5)
211 of section 627.072, Florida Statutes, are amended to read:
212 627.072 Making and use of rates.—
213 (1) As to workers’ compensation and employer’s liability
214 insurance, the following factors shall be used in the
215 determination and fixing of loss costs or rates, as applicable:
216 (a) The past loss experience and prospective loss
217 experience within and outside this state;
218 (b) The conflagration and catastrophe hazards;
219 (c) A reasonable margin for underwriting profit and
220 contingencies;
221 (d) Dividends, savings, or unabsorbed premium deposits
222 allowed or returned by insurers to their policyholders, members,
223 or subscribers;
224 (e) Investment income on unearned premium reserves and loss
225 reserves;
226 (f) Past expenses and prospective expenses, both those
227 countrywide and those specifically applicable to this state; and
228 (g) All other relevant factors, including judgment factors,
229 within and outside this state.
230 (5)(a) In the case of workers’ compensation and employer’s
231 liability insurance, the office shall consider utilizing the
232 following methodology in rate determinations: Premiums,
233 expenses, and expected claim costs would be discounted to a
234 common point of time, such as the initial point of a policy
235 year, in the determination of rates; the cash-flow pattern of
236 premiums, expenses, and claim costs would be determined
237 initially by using data from 8 to 10 of the largest insurers
238 writing workers’ compensation insurance in the state; such
239 insurers may be selected for their statistical ability to report
240 the data on an accident-year basis and in accordance with
241 subparagraphs (b)1., 2., and 3., for at least 2 1/2 years; such
242 a cash-flow pattern would be modified when necessary in
243 accordance with the data and whenever a radical change in the
244 payout pattern is expected in the policy year under
245 consideration.
246 (b) If the methodology set forth in paragraph (a) is
247 utilized, to facilitate the determination of such a cash-flow
248 pattern methodology:
249 1. Each insurer shall include in its statistical reporting
250 to the rating bureau and the office the accident year by
251 calendar quarter data for paid-claim costs;
252 2. Each insurer shall submit financial reports to the
253 rating bureau and the office which shall include total incurred
254 claim amounts and paid-claim amounts by policy year and by
255 injury types as of December 31 of each calendar year; and
256 3. Each insurer shall submit to the rating bureau and the
257 office paid-premium data on an individual risk basis in which
258 risks are to be subdivided by premium size as follows:
259
260 Number of Risks in
261 Premium Range Standard Premium Size
262
263 ...(to be filled in by carrier)... $300—999
264 ...(to be filled in by carrier)... 1,000—4,999
265 ...(to be filled in by carrier)... 5,000—49,999
266 ...(to be filled in by carrier)... 50,000—99,999
267 ...(to be filled in by carrier)... 100,000 or more
268 Total:
269 Section 15. Effective July 1, 2018, section 627.091,
270 Florida Statutes, is amended to read:
271 627.091 Rate filings; workers’ compensation and employer’s
272 liability insurances.—
273 (1) As used in this section, the term:
274 (a) “Expenses” means the portion of a rate which is
275 attributable to acquisition, field supervision, collection
276 expenses, taxes, reinsurance, assessments, and general expenses.
277 (b) “Loss cost modifier” means an adjustment to, or a
278 deviation from, the approved prospective loss costs filed by a
279 licensed rating organization.
280 (c) “Loss cost multiplier” means the profit and expense
281 factor, expressed as a single nonintegral number to be applied
282 to the prospective loss costs, which is associated with writing
283 workers’ compensation and employer’s liability insurance and
284 which is approved by the office in making rates for each
285 classification of risks used by that insurer.
286 (d) “Prospective loss costs” means the portion of a rate
287 which reflects historical industry average aggregate losses and
288 loss adjustment expenses projected through development to their
289 ultimate value and through trending to a future point in time.
290 The term does not include provisions for profit or expenses
291 other than loss adjustment expense.
292 (2)(1) As to workers’ compensation and employer’s liability
293 insurances, every insurer shall file with the office every
294 manual of classifications, rules, and rates, every rating plan,
295 and every modification of any of the foregoing which it proposes
296 to use. Each insurer or insurer group shall independently and
297 individually file with the office the final rates it proposes to
298 use. An insurer may satisfy this filing requirement by adopting
299 the most recent loss costs filed by a licensed rating
300 organization and approved by the office, and by otherwise
301 complying with this part. Each insurer shall file data in
302 accordance with the uniform statistical plan approved by the
303 office. Every filing under this subsection:
304 (a) Must state the proposed effective date and must be made
305 at least 90 days before such proposed effective date;
306 (b) Must indicate the character and extent of the coverage
307 contemplated;
308 (c) May use the most recent approved prospective loss costs
309 filed by a licensed rating organization in combination with the
310 insurer’s own approved loss cost multiplier and loss cost
311 modifier;
312 (d) Must include all deductibles required in chapter 440,
313 and may include additional deductible provisions in its manual
314 of classifications, rules, and rates. All deductibles must be in
315 a form and manner that is consistent with the underlying purpose
316 of chapter 440;
317 (e) May use variable or fixed expense loads or a
318 combination thereof, and may vary the expense, profit, or
319 contingency provisions by class or group of classes, if the
320 insurer files supporting data justifying such variations;
321 (f) May include a schedule of proposed premium discounts,
322 credits, and surcharges. The office may not approve discounts,
323 credits, and surcharges unless they are based on objective
324 criteria that bear a reasonable relationship to the expected
325 loss, expense, or profit experience of an individual
326 policyholder or a class of policyholders; and
327 (g) May file a minimum premium or expense constant Every
328 insurer is authorized to include deductible provisions in its
329 manual of classifications, rules, and rates. Such deductibles
330 shall in all cases be in a form and manner which is consistent
331 with the underlying purpose of chapter 440.
332 (3)(2) Every such filing shall state the proposed effective
333 date thereof, and shall indicate the character and extent of the
334 coverage contemplated. When a filing is not accompanied by the
335 information upon which the insurer or rating organization
336 supports the filing and the office does not have sufficient
337 information to determine whether the filing meets the applicable
338 requirements of this part, the office, it shall within 15 days
339 after the date of filing, shall require the insurer or rating
340 organization to furnish the information upon which it supports
341 the filing. The information furnished in support of a filing may
342 include:
343 (a) The experience or judgment of the insurer or rating
344 organization making the filing;
345 (b) The Its interpretation of any statistical data which
346 the insurer or rating organization making the filing it relies
347 upon;
348 (c) The experience of other insurers or rating
349 organizations; or
350 (d) Any other factors which the insurer or rating
351 organization making the filing deems relevant.
352 (4)(3) A filing and any supporting information are shall be
353 open to public inspection as provided in s. 119.07(1).
354 (5)(4) An insurer may become satisfy its obligation to make
355 such filings by becoming a member of, or a subscriber to, a
356 licensed rating organization that which makes loss costs such
357 filings and by authorizing the office to accept such filings in
358 its behalf; but nothing contained in this chapter shall be
359 construed as requiring any insurer to become a member or a
360 subscriber to any rating organization.
361 (6) A licensed rating organization may develop and file for
362 approval with the office reference filings containing
363 prospective loss costs and the underlying loss data, and other
364 supporting statistical and actuarial information. A rating
365 organization may not develop or file final rates or multipliers
366 for expenses, profit, or contingencies. After a loss cost
367 reference filing is filed with the office and is approved, the
368 rating organization must provide its member subscribers with a
369 copy of the approved reference filing.
370 (7) A rating organization may file supplementary rating
371 information and rules, including, but not limited to,
372 policywriting rules, rating plan classification codes and
373 descriptions, experience modification plans, statistical plans
374 and forms, and rules that include factors or relativities, such
375 as increased limits factors, classification relativities, or
376 similar factors, but that exclude minimum premiums. An insurer
377 may use supplementary rating information if such information is
378 approved by the office.
379 (8)(5) Pursuant to the provisions of s. 624.3161, the
380 office may examine the underlying statistical data used in such
381 filings.
382 (9)(6) Whenever the committee of a recognized rating
383 organization with authority to file prospective loss costs for
384 use by insurers in determining responsibility for workers’
385 compensation and employer’s liability insurance rates in this
386 state meets to discuss the necessity for, or a request for,
387 Florida rate increases or decreases in prospective loss costs in
388 this state, the determination of prospective loss costs in this
389 state Florida rates, the prospective loss costs rates to be
390 requested in this state, and any other matters pertaining
391 specifically and directly to prospective loss costs in this
392 state such Florida rates, such meetings shall be held in this
393 state and are shall be subject to s. 286.011. The committee of
394 such a rating organization shall provide at least 3 weeks’ prior
395 notice of such meetings to the office and shall provide at least
396 14 days’ prior notice of such meetings to the public by
397 publication in the Florida Administrative Register.
398 (10) An insurer group with multiple insurers writing
399 workers’ compensation and employer’s liability insurance shall
400 file underwriting rules not contained in rating manuals.
401 Section 16. Effective July 1, 2018, section 627.093,
402 Florida Statutes, is amended to read:
403 627.093 Application of s. 286.011 to workers’ compensation
404 and employer’s liability insurances.—Section 286.011 shall be
405 applicable to every prospective loss cost and rate filing,
406 approval or disapproval of filing, rating deviation from filing,
407 or appeal from any of these regarding workers’ compensation and
408 employer’s liability insurances.
409 Section 17. Effective July 1, 2018, subsection (1) of
410 section 627.101, Florida Statutes, is amended to read:
411 627.101 When filing becomes effective; workers’
412 compensation and employer’s liability insurances.—
413 (1) The office shall review all required filings as to
414 workers’ compensation and employer’s liability insurances as
415 soon as reasonably possible after they have been made in order
416 to determine whether they meet the applicable requirements of
417 this part. If the office determines that part of a required rate
418 filing does not meet the applicable requirements of this part,
419 it may reject so much of the filing as does not meet these
420 requirements, and approve the remainder of the filing.
421 Section 18. Effective July 1, 2018, section 627.211,
422 Florida Statutes, is amended to read:
423 627.211 Annual report by the office on the workers’
424 compensation insurance market Deviations; workers’ compensation
425 and employer’s liability insurances.—
426 (1) Every member or subscriber to a rating organization
427 shall, as to workers’ compensation or employer’s liability
428 insurance, adhere to the filings made on its behalf by such
429 organization; except that any such insurer may make written
430 application to the office for permission to file a uniform
431 percentage decrease or increase to be applied to the premiums
432 produced by the rating system so filed for a kind of insurance,
433 for a class of insurance which is found by the office to be a
434 proper rating unit for the application of such uniform
435 percentage decrease or increase, or for a subdivision of
436 workers’ compensation or employer’s liability insurance:
437 (a) Comprised of a group of manual classifications which is
438 treated as a separate unit for ratemaking purposes; or
439 (b) For which separate expense provisions are included in
440 the filings of the rating organization.
441
442 Such application shall specify the basis for the modification
443 and shall be accompanied by the data upon which the applicant
444 relies. A copy of the application and data shall be sent
445 simultaneously to the rating organization.
446 (2) Every member or subscriber to a rating organization
447 may, as to workers’ compensation and employer’s liability
448 insurance, file a plan or plans to use deviations that vary
449 according to factors present in each insured’s individual risk.
450 The insurer that files for the deviations provided in this
451 subsection shall file the qualifications for the plans,
452 schedules of rating factors, and the maximum deviation factors
453 which shall be subject to the approval of the office pursuant to
454 s. 627.091. The actual deviation which shall be used for each
455 insured that qualifies under this subsection may not exceed the
456 maximum filed deviation under that plan and shall be based on
457 the merits of each insured’s individual risk as determined by
458 using schedules of rating factors which shall be applied
459 uniformly. Insurers shall maintain statistical data in
460 accordance with the schedule of rating factors. Such data shall
461 be available to support the continued use of such varying
462 deviations.
463 (3) In considering an application for the deviation, the
464 office shall give consideration to the applicable principles for
465 ratemaking as set forth in ss. 627.062 and 627.072 and the
466 financial condition of the insurer. In evaluating the financial
467 condition of the insurer, the office may consider: (1) the
468 insurer’s audited financial statements and whether the
469 statements provide unqualified opinions or contain significant
470 qualifications or “subject to” provisions; (2) any independent
471 or other actuarial certification of loss reserves; (3) whether
472 workers’ compensation and employer’s liability reserves are
473 above the midpoint or best estimate of the actuary’s reserve
474 range estimate; (4) the adequacy of the proposed rate; (5)
475 historical experience demonstrating the profitability of the
476 insurer; (6) the existence of excess or other reinsurance that
477 contains a sufficiently low attachment point and maximums that
478 provide adequate protection to the insurer; and (7) other
479 factors considered relevant to the financial condition of the
480 insurer by the office. The office shall approve the deviation if
481 it finds it to be justified, it would not endanger the financial
482 condition of the insurer, and it would not constitute predatory
483 pricing. The office shall disapprove the deviation if it finds
484 that the resulting premiums would be excessive, inadequate, or
485 unfairly discriminatory, would endanger the financial condition
486 of the insurer, or would result in predatory pricing. The
487 insurer may not use a deviation unless the deviation is
488 specifically approved by the office. An insurer may apply the
489 premiums approved pursuant to s. 627.091 or its uniform
490 deviation approved pursuant to this section to a particular
491 insured according to underwriting guidelines filed with and
492 approved by the office, such approval to be based on ss. 627.062
493 and 627.072.
494 (4) Each deviation permitted to be filed shall be effective
495 for a period of 1 year unless terminated, extended, or modified
496 with the approval of the office. If at any time after a
497 deviation has been approved the office finds that the deviation
498 no longer meets the requirements of this code, it shall notify
499 the insurer in what respects it finds that the deviation fails
500 to meet such requirements and specify when, within a reasonable
501 period thereafter, the deviation shall be deemed no longer
502 effective. The notice shall not affect any insurance contract or
503 policy made or issued prior to the expiration of the period set
504 forth in the notice.
505 (5) For purposes of this section, the office, when
506 considering the experience of any insurer, shall consider the
507 experience of any predecessor insurer when the business and the
508 liabilities of the predecessor insurer were assumed by the
509 insurer pursuant to an order of the office which approves the
510 assumption of the business and the liabilities.
511 (6) The office shall submit an annual report to the
512 President of the Senate and the Speaker of the House of
513 Representatives by January 15 of each year which evaluates
514 insurance company solvency and competition in the workers’
515 compensation insurance market in this state. The report must
516 contain an analysis of the availability and affordability of
517 workers’ compensation coverage and whether the current market
518 structure, conduct, and performance are conducive to
519 competition, based upon economic analysis and tests. The purpose
520 of this report is to aid the Legislature in determining whether
521 changes to the workers’ compensation rating laws are warranted.
522 The report must also document that the office has complied with
523 the provisions of s. 627.096 which require the office to
524 investigate and study all workers’ compensation insurers in the
525 state and to study the data, statistics, schedules, or other
526 information as it finds necessary to assist in its review of
527 workers’ compensation rate filings.
528 Section 19. Effective July 1, 2018, section 627.2151,
529 Florida Statutes, is created to read:
530 627.2151 Workers’ compensation excessive defense and cost
531 containment expenses.—
532 (1) As used in this section, the term “defense and cost
533 containment expenses” or “DCCE” includes the following Florida
534 expenses of an insurer group or insurer writing workers’
535 compensation insurance:
536 (a) Insurance company attorney fees;
537 (b) Expert witnesses;
538 (c) Medical examinations and autopsies;
539 (d) Medical fee review panels;
540 (e) Bill auditing;
541 (f) Treatment utilization reviews; and
542 (g) Preferred provider network expenses.
543 (2) Each insurer group or insurer writing workers’
544 compensation insurance shall file with the office a schedule of
545 Florida defense and cost containment expenses and total Florida
546 incurred losses for each of the 3 years before the most recent
547 accident year. The DCCE and incurred losses must be valued as of
548 December 31 of the first year following the latest accident year
549 to be reported, developed to an ultimate basis, and at two 12
550 month intervals thereafter, each developed to an ultimate basis,
551 so that a total of three evaluations will be provided for each
552 accident year. The first year reported shall be accident year
553 2018, so that the reporting of 3 accident years under this
554 evaluation will not take place until accident years 2019 and
555 2020 have become available.
556 (3) Excessive DCCE occurs when an insurer includes in its
557 rates Florida defense and cost containment expenses for workers’
558 compensation which exceed 15 percent of Florida workers’
559 compensation incurred losses by the insurer or insurer group for
560 the 3 most recent calendar years for which data is to be filed
561 under this section.
562 (4) If the insurer or insurer group realizes excessive
563 DCCE, the office must order a return of the excess amounts after
564 affording the insurer or insurer group an opportunity for a
565 hearing and otherwise complying with the requirements of chapter
566 120. Excessive DCCE amounts must be returned in all instances
567 unless the insurer or insurer group affirmatively demonstrates
568 to the office that the refund of the excessive DCCE amounts will
569 render a member of the insurer group financially impaired or
570 will render it insolvent under provisions of the Florida
571 Insurance Code.
572 (5) Any excess DCCE amount must be returned to
573 policyholders in the form of a cash refund or credit toward the
574 future purchase of insurance. The refund or credit must be made
575 on a pro rata basis in relation to the final compilation year
576 earned premiums to the policyholders of record of the insurer or
577 insurer group on December 31 of the final compilation year. Cash
578 refunds and data in required reports to the office may be
579 rounded to the nearest dollar and must be consistently applied.
580 (6)(a) Refunds must be completed in one of the following
581 ways:
582 1. A cash refund must be completed within 60 days after
583 entry of a final order indicating that excessive DCCE has been
584 realized.
585 2. A credit to renewal policies must be applied to policy
586 renewal premium notices that are forwarded to insureds more than
587 60 calendar days after entry of a final order indicating that
588 excessive DCCE has been realized. If the insured thereafter
589 cancels a policy or otherwise allows the policy to terminate,
590 the insurer or insurer group must make a cash refund not later
591 than 60 days after coverage termination.
592 (b) Upon completion of the renewal credits or refunds, the
593 insurer or insurer group shall immediately certify having made
594 the refunds to the office.
595 (7) Any refund or renewal credit made pursuant to this
596 section is treated as a policyholder dividend applicable to the
597 year immediately succeeding the compilation period giving rise
598 to the refund or credit, for purposes of reporting under this
599 section for subsequent years.
600 Section 20. Effective July 1, 2018, section 627.291,
601 Florida Statutes, is amended to read:
602 627.291 Information to be furnished insureds; appeal by
603 insureds; workers’ compensation and employer’s liability
604 insurances.—
605 (1) As to workers’ compensation and employer’s liability
606 insurances, every rating organization filing prospective loss
607 costs and every insurer which makes its own rates shall, within
608 a reasonable time after receiving written request therefor and
609 upon payment of such reasonable charge as it may make, furnish
610 to any insured affected by a rate made by it, or to the
611 authorized representative of such insured, all pertinent
612 information as to such rate.
613 (2) As to workers’ compensation and employer’s liability
614 insurances, every rating organization filing prospective loss
615 costs and every insurer which makes its own rates shall provide
616 within this state reasonable means whereby any person aggrieved
617 by the application of its rating system may be heard, in person
618 or by his or her authorized representative, on his or her
619 written request to review the manner in which such rating system
620 has been applied in connection with the insurance afforded him
621 or her. If the rating organization filing prospective loss costs
622 or the insurer making its own rates fails to grant or rejects
623 such request within 30 days after it is made, the applicant may
624 proceed in the same manner as if his or her application had been
625 rejected. Any party affected by the action of such rating
626 organization filing prospective loss costs or insurer making its
627 own rates on such request may, within 30 days after written
628 notice of such action, appeal to the office, which may affirm or
629 reverse such action.
630 Section 21. Effective July 1, 2018, section 627.318,
631 Florida Statutes, is amended to read:
632 627.318 Records.—Every insurer, rating organization filing
633 prospective loss costs, and advisory organization and every
634 group, association, or other organization of insurers which
635 engages in joint underwriting or joint reinsurance shall
636 maintain reasonable records, of the type and kind reasonably
637 adapted to its method of operation, of its experience or the
638 experience of its members and of the data, statistics, or
639 information collected or used by it in connection with the
640 prospective loss costs, rates, rating plans, rating systems,
641 underwriting rules, policy or bond forms, surveys, or
642 inspections made or used by it, so that such records will be
643 available at all reasonable times to enable the office to
644 determine whether such organization, insurer, group, or
645 association, and, in the case of an insurer or rating
646 organization, every prospective loss cost, rate, rating plan,
647 and rating system made or used by it, complies with the
648 provisions of this part applicable to it. The maintenance of
649 such records in the office of a licensed rating organization of
650 which an insurer is a member or subscriber will be sufficient
651 compliance with this section for any such insurer maintaining
652 membership or subscribership in such organization, to the extent
653 that the insurer uses the prospective loss costs, rates, rating
654 plans, rating systems, or underwriting rules of such
655 organization. Such records shall be maintained in an office
656 within this state or shall be made available for examination or
657 inspection within this state by the department at any time upon
658 reasonable notice.
659 Section 22. Effective July 1, 2018, section 627.361,
660 Florida Statutes, is amended to read:
661 627.361 False or misleading information.—No person shall
662 willfully withhold information from or knowingly give false or
663 misleading information to the office, any statistical agency
664 designated by the office, any rating organization, or any
665 insurer, which will affect the prospective loss costs, rates, or
666 premiums chargeable under this part.
667 Section 23. Effective July 1, 2018, subsections (1) and (2)
668 of section 627.371, Florida Statutes, are amended to read:
669 627.371 Hearings.—
670 (1) Any person aggrieved by any rate charged, rating plan,
671 rating system, or underwriting rule followed or adopted by an
672 insurer, and any person aggrieved by any rating plan, rating
673 system, or underwriting rule followed or adopted by a rating
674 organization, may herself or himself or by her or his authorized
675 representative make written request of the insurer or rating
676 organization to review the manner in which the prospective loss
677 cost, rate, plan, system, or rule has been applied with respect
678 to insurance afforded her or him. If the request is not granted
679 within 30 days after it is made, the requester may treat it as
680 rejected. Any person aggrieved by the refusal of an insurer or
681 rating organization to grant the review requested, or by the
682 failure or refusal to grant all or part of the relief requested,
683 may file a written complaint with the office, specifying the
684 grounds relied upon. If the office has already disposed of the
685 issue as raised by a similar complaint or believes that probable
686 cause for the complaint does not exist or that the complaint is
687 not made in good faith, it shall so notify the complainant.
688 Otherwise, and if it also finds that the complaint charges a
689 violation of this chapter and that the complainant would be
690 aggrieved if the violation is proven, it shall proceed as
691 provided in subsection (2).
692 (2) If after examination of an insurer, rating
693 organization, advisory organization, or group, association, or
694 other organization of insurers which engages in joint
695 underwriting or joint reinsurance, upon the basis of other
696 information, or upon sufficient complaint as provided in
697 subsection (1), the office has good cause to believe that such
698 insurer, organization, group, or association, or any prospective
699 loss cost, rate, rating plan, or rating system made or used by
700 any such insurer or rating organization, does not comply with
701 the requirements and standards of this part applicable to it, it
702 shall, unless it has good cause to believe such noncompliance is
703 willful, give notice in writing to such insurer, organization,
704 group, or association stating therein in what manner and to what
705 extent noncompliance is alleged to exist and specifying therein
706 a reasonable time, not less than 10 days thereafter, in which
707 the noncompliance may be corrected, including any premium
708 adjustment.
709 Section 24. Effective July 1, 2017, the sums of $723,118 in
710 recurring funds and $100,000 in nonrecurring funds from the
711 Insurance Regulatory Trust Fund are appropriated to the Office
712 of Insurance Regulation, and eight full-time equivalent
713 positions with associated salary rate of 460,000 are authorized,
714 for the purpose of implementing this act.
715 Section 25. Effective July 1, 2017, the sum of $24,720 in
716 nonrecurring funds from the Operating Trust Fund is appropriated
717 to the Office of Judges of Compensation Claims within the
718 Division of Administrative Hearings for the purposes of
719 implementing this act.
720 Section 26. Section 440.345, Florida Statutes, is amended
721 to read:
722 440.345 Reporting of attorney attorney’s fees.—All fees
723 paid to attorneys for services rendered under this chapter shall
724 be reported to the Office of the Judges of Compensation Claims
725 as the Division of Administrative Hearings requires by rule. A
726 carrier must specify in its report the total amount of attorney
727 fees paid for and the total number of attorney hours spent on
728 services related to the defense of petitions, and the total
729 amount of attorney fees paid for services unrelated to the
730 defense of petitions.
731 Section 27. Paragraph (b) of subsection (6) of section
732 440.491, Florida Statutes, is amended to read:
733 440.491 Reemployment of injured workers; rehabilitation.—
734 (6) TRAINING AND EDUCATION.—
735 (b) When an employee who has attained maximum medical
736 improvement is unable to earn at least 80 percent of the
737 compensation rate and requires training and education to obtain
738 suitable gainful employment, the employer or carrier shall pay
739 the employee additional training and education temporary total
740 compensation benefits while the employee receives such training
741 and education for a period not to exceed 26 weeks, which period
742 may be extended for an additional 26 weeks or less, if such
743 extended period is determined to be necessary and proper by a
744 judge of compensation claims. The benefits provided under this
745 paragraph are shall not be in addition to the maximum number of
746 104 weeks as specified in s. 440.15(2). However, a carrier or
747 employer is not precluded from voluntarily paying additional
748 temporary total disability compensation beyond that period. If
749 an employee requires temporary residence at or near a facility
750 or an institution providing training and education which is
751 located more than 50 miles away from the employee’s customary
752 residence, the reasonable cost of board, lodging, or travel must
753 be borne by the department from the Workers’ Compensation
754 Administration Trust Fund established by s. 440.50. An employee
755 who refuses to accept training and education that is recommended
756 by the vocational evaluator and considered necessary by the
757 department will forfeit any additional training and education
758 benefits and any additional compensation payment for lost wages
759 under this chapter. The carrier shall notify the injured
760 employee of the availability of training and education benefits
761 as specified in this chapter. The Department of Financial
762 Services shall include information regarding the eligibility for
763 training and education benefits in informational materials
764 specified in ss. 440.207 and 440.40.
765 Section 28. Section 627.211, Florida Statutes, is amended
766 to read:
767 627.211 Deviations and departures; workers’ compensation
768 and employer’s liability insurances.—
769 (1) Except as provided in subsection (7), every member or
770 subscriber to a rating organization shall, as to workers’
771 compensation or employer’s liability insurance, adhere to the
772 filings made on its behalf by such organization; except that any
773 such insurer may make written application to the office for
774 permission to file a uniform percentage decrease or increase to
775 be applied to the premiums produced by the rating system so
776 filed for a kind of insurance, for a class of insurance which is
777 found by the office to be a proper rating unit for the
778 application of such uniform percentage decrease or increase, or
779 for a subdivision of workers’ compensation or employer’s
780 liability insurance:
781 (a) Comprised of a group of manual classifications which is
782 treated as a separate unit for ratemaking purposes; or
783 (b) For which separate expense provisions are included in
784 the filings of the rating organization.
785
786 Such application shall specify the basis for the modification
787 and shall be accompanied by the data upon which the applicant
788 relies. A copy of the application and data shall be sent
789 simultaneously to the rating organization.
790 (2) Every member or subscriber to a rating organization
791 may, as to workers’ compensation and employer’s liability
792 insurance, file a plan or plans to use deviations that vary
793 according to factors present in each insured’s individual risk.
794 The insurer that files for the deviations provided in this
795 subsection shall file the qualifications for the plans,
796 schedules of rating factors, and the maximum deviation factors
797 which shall be subject to the approval of the office pursuant to
798 s. 627.091. The actual deviation which shall be used for each
799 insured that qualifies under this subsection may not exceed the
800 maximum filed deviation under that plan and shall be based on
801 the merits of each insured’s individual risk as determined by
802 using schedules of rating factors which shall be applied
803 uniformly. Insurers shall maintain statistical data in
804 accordance with the schedule of rating factors. Such data shall
805 be available to support the continued use of such varying
806 deviations.
807 (3) In considering an application for the deviation, the
808 office shall give consideration to the applicable principles for
809 ratemaking as set forth in ss. 627.062 and 627.072 and the
810 financial condition of the insurer. In evaluating the financial
811 condition of the insurer, the office may consider: (1) the
812 insurer’s audited financial statements and whether the
813 statements provide unqualified opinions or contain significant
814 qualifications or “subject to” provisions; (2) any independent
815 or other actuarial certification of loss reserves; (3) whether
816 workers’ compensation and employer’s liability reserves are
817 above the midpoint or best estimate of the actuary’s reserve
818 range estimate; (4) the adequacy of the proposed rate; (5)
819 historical experience demonstrating the profitability of the
820 insurer; (6) the existence of excess or other reinsurance that
821 contains a sufficiently low attachment point and maximums that
822 provide adequate protection to the insurer; and (7) other
823 factors considered relevant to the financial condition of the
824 insurer by the office. The office shall approve the deviation if
825 it finds it to be justified, it would not endanger the financial
826 condition of the insurer, and it would not constitute predatory
827 pricing. The office shall disapprove the deviation if it finds
828 that the resulting premiums would be excessive, inadequate, or
829 unfairly discriminatory, would endanger the financial condition
830 of the insurer, or would result in predatory pricing. The
831 insurer may not use a deviation unless the deviation is
832 specifically approved by the office. An insurer may apply the
833 premiums approved pursuant to s. 627.091 or its uniform
834 deviation approved pursuant to this section to a particular
835 insured according to underwriting guidelines filed with and
836 approved by the office, such approval to be based on ss. 627.062
837 and 627.072.
838 (4) Each deviation permitted to be filed shall be effective
839 for a period of 1 year unless terminated, extended, or modified
840 with the approval of the office. If at any time after a
841 deviation has been approved the office finds that the deviation
842 no longer meets the requirements of this code, it shall notify
843 the insurer in what respects it finds that the deviation fails
844 to meet such requirements and specify when, within a reasonable
845 period thereafter, the deviation shall be deemed no longer
846 effective. The notice shall not affect any insurance contract or
847 policy made or issued prior to the expiration of the period set
848 forth in the notice.
849 (5) For purposes of this section, the office, when
850 considering the experience of any insurer, shall consider the
851 experience of any predecessor insurer when the business and the
852 liabilities of the predecessor insurer were assumed by the
853 insurer pursuant to an order of the office which approves the
854 assumption of the business and the liabilities.
855 (6) The office shall submit an annual report to the
856 President of the Senate and the Speaker of the House of
857 Representatives by January 15 of each year which evaluates
858 competition in the workers’ compensation insurance market in
859 this state. The report must contain an analysis of the
860 availability and affordability of workers’ compensation coverage
861 and whether the current market structure, conduct, and
862 performance are conducive to competition, based upon economic
863 analysis and tests. The purpose of this report is to aid the
864 Legislature in determining whether changes to the workers’
865 compensation rating laws are warranted. The report must also
866 document that the office has complied with the provisions of s.
867 627.096 which require the office to investigate and study all
868 workers’ compensation insurers in the state and to study the
869 data, statistics, schedules, or other information as it finds
870 necessary to assist in its review of workers’ compensation rate
871 filings.
872 (7) Without approval of the office, a member or subscriber
873 to a rating organization may depart from the filings made on its
874 behalf by a rating organization for a period of 12 months by a
875 uniform decrease of up to 5 percent to be applied uniformly to
876 the premiums resulting from the approved rates for the policy
877 period. The member or subscriber must file an informational
878 departure statement with the office within 30 days after initial
879 use of such departure, specifying the percentage of the
880 departure from the approved rates and an explanation of how the
881 departure will be applied. If the departure is to be applied
882 over a subsequent 12-month period, the member or subscriber must
883 file a supplemental informational departure statement pursuant
884 to this subsection at least 30 days before the end of the
885 current period. If the office determines that a departure
886 violates the applicable principles for ratemaking under ss.
887 627.062 and 627.072, would result in predatory pricing, or
888 imperils the financial condition of the member or subscriber,
889 the office must issue an order specifying its findings and
890 stating the time period within which the departure expires,
891 which must be within a reasonable time period after the order is
892 issued. The order does not affect an insurance contract or
893 policy made or issued before the departure expiration period set
894 forth in the order.
895 Section 29. (1) The Department of Financial Services, in
896 consultation with the three-member panel, shall contract with an
897 independent consultant to evaluate Florida’s current
898 reimbursement methodology for medical services provided by
899 hospitals and ambulatory surgical centers pursuant to s. 440.13,
900 Florida Statutes. The study must evaluate the feasibility of
901 adopting other reimbursement methods, including group health
902 outpatient reimbursement rates. The study must include an
903 evaluation of the payments, prices, utilization, and outcomes
904 associated with each of the reimbursement methods. The
905 consultant shall submit a report with findings and
906 recommendations to the Speaker of the House of Representatives
907 and the President of the Senate by November 1, 2017.
908 (2) Effective July 1, 2017, the sum of $50,000 in
909 nonrecurring funds from the Workers’ Compensation Administration
910 Trust Fund is appropriated to the Department of Financial
911 Services for the purpose of funding the study.
912 Section 30. (1) The Office of Insurance Regulation shall
913 contract with an independent consultant to evaluate the
914 competition, availability, and affordability of workers’
915 compensation insurance in Florida, which evaluation must include
916 a review of the current administered pricing rating system,
917 including deviations authorized under s. 627.211(7), to evaluate
918 the advantages and disadvantages of a loss cost system and to
919 evaluate other mechanisms that can be used to increase
920 competition in the marketplace. The consultant shall submit a
921 report of its findings and recommendations to the Governor, the
922 Senate, and the House of Representatives no later than November
923 1, 2017.
924 (2) Effective July 1, 2017, the sum of $25,000 in
925 nonrecurring funds from the Workers’ Compensation Administration
926 Trust Fund is appropriated to the Office of Insurance Regulation
927 for the purpose of funding the study.
928 Section 31. Except as otherwise expressly provided by this
929 act, this act shall take effect July 1, 2017.
930
931 ================= T I T L E A M E N D M E N T ================
932 And the title is amended as follows:
933 Delete lines 903 - 966
934 and insert:
935 under which certain attorney fees attach; amending s.
936 440.34, F.S.; prohibiting the payment of certain
937 consideration by carriers or employers, rather than
938 prohibiting such payment for claimants, in connection
939 with certain proceedings under certain circumstances;
940 requiring judges of compensation claims to consider
941 specified factors in increasing or decreasing attorney
942 fees; specifying a maximum hourly rate for attorney
943 fees; revising provisions that prohibit such judges
944 from approving certain agreements and that limit
945 attorney fees in retainer agreements; providing
946 construction; deleting a provision authorizing such
947 judges to approve alternative attorney fees under
948 certain circumstances; conforming a cross-reference;
949 amending s. 624.482, F.S.; conforming a provision to
950 changes made by the act; amending s. 627.041, F.S.;
951 redefining terms; amending s. 627.0612, F.S.; adding
952 prospective loss costs to a list of reviewable matters
953 in certain proceedings by appellate courts; amending
954 s. 627.062, F.S.; prohibiting loss costs for specified
955 classes of insurance from being excessive, inadequate,
956 or unfairly discriminatory; amending s. 627.0645,
957 F.S.; deleting an annual base rate filing requirement
958 exception relating to workers’ compensation and
959 employer’s liability insurance for certain rating
960 organizations; amending s. 627.072, F.S.; requiring
961 certain factors to be used in determining and fixing
962 loss costs; deleting a specified methodology that may
963 be used by the Office of Insurance Regulation in rate
964 determinations; amending s. 627.091, F.S.; defining
965 terms; requiring insurers or insurer groups writing
966 workers’ compensation and employer’s liability
967 insurances to independently and individually file
968 their proposed final rates; specifying requirements
969 for such filings; deleting a requirement that such
970 filings contain certain information; revising
971 requirements for supporting information required to be
972 furnished to the office under certain circumstances;
973 deleting a specified method for insurers to satisfy
974 filing obligations; specifying requirements for a
975 licensed rating organization that elects to develop
976 and file certain reference filings and certain other
977 information; authorizing insurers to use supplementary
978 rating information approved by the office; revising
979 applicability of public meetings and records
980 requirements to certain meetings of recognized rating
981 organization committees; requiring certain insurer
982 groups to file underwriting rules not contained in
983 rating manuals; amending s. 627.093, F.S.; revising
984 applicability of public meetings and records
985 requirements to prospective loss cost filings or
986 appeals; amending s. 627.101, F.S.; conforming a
987 provision to changes made by the act; amending s.
988 627.211, F.S.; deleting provisions relating to
989 deviations; requiring that the office’s annual report
990 to the Legislature relating to the workers’
991 compensation insurance market evaluate insurance
992 company solvency; creating s. 627.2151, F.S.; defining
993 the term “defense and cost containment expenses” or
994 “DCCE”; requiring insurer groups or insurers writing
995 workers’ compensation insurance to file specified
996 schedules with the office at specified intervals;
997 providing construction relating to excessive DCCE;
998 requiring the office to order returns of excess
999 amounts of DCCE, subject to certain hearing
1000 requirements; providing requirements for, and an
1001 exception from, the return of excessive DCCE amounts;
1002 providing construction; amending s. 627.291, F.S.;
1003 providing applicability of certain disclosure and
1004 hearing requirements for rating organizations filing
1005 prospective loss costs; amending s. 627.318, F.S.;
1006 providing applicability of certain recordkeeping
1007 requirements for rating organizations or insurers
1008 filing or using prospective loss costs, respectively;
1009 amending s. 627.361, F.S.; providing applicability of
1010 a prohibition against false or misleading information
1011 relating to prospective loss costs; amending s.
1012 627.371, F.S.; providing applicability of certain
1013 hearing procedures and requirements relating to the
1014 application, making, or use of prospective loss costs;
1015 providing appropriations; amending s. 440.345, F.S.;
1016 revising requirements for a carrier’s reporting of
1017 attorney fees to the Office of the Judges of
1018 Compensation Claims; amending s. 440.491, F.S.;
1019 conforming a provision to changes made by the act;
1020 revising a provision that provides for forfeiture of
1021 certain compensation if an employee refuses to accept
1022 certain training and education; amending s. 627.211,
1023 F.S.; authorizing rating organization members or
1024 subscribers to depart up a specified percentage from
1025 certain filings without approval from the Office of
1026 Insurance Regulation for a specified timeframe;
1027 requiring such members or subscribers to file
1028 informational departure statements with the office
1029 within a specified timeframe; requiring such members
1030 or subscribers, under certain circumstances, to file
1031 supplemental informational departure statements within
1032 a specified timeframe; requiring the office to issue a
1033 specified order if it finds the order violates certain
1034 ratemaking principles, would result in predatory
1035 pricing, or imperils the financial condition of the
1036 member or subscriber; providing construction;
1037 requiring the Department of Financial Services, in
1038 consultation with the three-member panel, to contract
1039 with an independent consultant to conduct a specified
1040 study; requiring the consultant to submit a report to
1041 the Legislature by a specified date; providing an
1042 appropriation; requiring the office to contract with
1043 an independent consultant to make certain evaluations;
1044 requiring such consultant to submit a report to the
1045 Governor and Legislature by a specified date;
1046 providing an appropriation; providing effective dates.