Florida Senate - 2024 SB 846 By Senator DiCeglie 18-00549-24 2024846__ 1 A bill to be entitled 2 An act relating to risk retention groups; amending s. 3 627.944, F.S.; providing that certain risk retention 4 groups are deemed to be insurance companies authorized 5 to do business in this state; making technical 6 changes; providing an effective date. 7 8 Be It Enacted by the Legislature of the State of Florida: 9 10 Section 1. Section 627.944, Florida Statutes, is amended to 11 read: 12 627.944 Risk retention groups not certificated in this 13 state.—Risk retention groups certificated or licensed in states 14 other than this state and seeking to do business as a risk 15 retention group in this state are deemed to be insurance 16 companies authorized to do business in this state and must 17 observe and abide by the laws of this state as follows: 18 (1) NOTICE OF OPERATIONS AND DESIGNATION OF CHIEF FINANCIAL 19 OFFICER AS AGENT.—Before offering insurance in this state, a 20 risk retention group mustshallsubmit to the office: 21 (a) A statement identifying the state or states in which 22 the risk retention group is certificated or licensed as a 23 liability insurance company, date of certification or licensing, 24 its principal place of business, and such other information, 25 including information on its membership, as the office may 26 require to verify that the risk retention group is qualified as 27 a risk retention group underthe provisions ofthis part. 28 (b) A copy of its plan of operations or a feasibility study 29 and revisions of such plan or study submitted to its state of 30 domicile; provided, however, that the provision relating to the 31 submission of a plan of operation or a feasibility study does 32shallnot apply with respect to any line or classification of 33 liability insurance which was defined in the Product Liability 34 Risk Retention Act of 1981 before October 27, 1986, and which 35 was offered before such date by any risk retention group which 36 had been certificated or licensed and operating for not less 37 than 3 years before such date. 38 (c) A statement of registration which designates the Chief 39 Financial Officer or her or his designee as its agent for the 40 purpose of receiving service of legal documents of process. 41 (2) FINANCIAL CONDITION.—Any risk retention group doing 42 business in this state mustshallsubmit to the office: 43 (a) A copy of the group’s financial statement submitted to 44 its state of domicile, which mustshallbe certified by an 45 independent public accountant and contain a statement of opinion 46 on loss and loss adjustment expense reserves made by a member of 47 the American Academy of Actuaries or a qualified loss reserve 48 specialist under criteria established by rule of the commission 49 after considering any criteria established by the National 50 Association of Insurance Commissioners. 51 (b) A copy of each examination of the risk retention group 52 as certified by the insurance commissioner or public official 53 conducting the examination. 54 (c) Upon request by the office, a copy of any audit 55 performed with respect to the risk retention group. 56 (d) Such information as may be required to verify its 57 continuing qualification as a risk retention group underthe58provisions ofthis part. 59 (3) TAXATION.—All premiums paid for insurance or coverages 60 on risks located within this state to a risk retention group 61 shall be subject to taxation at the same rate and subject to the 62 same interest, fines, and penalties for nonpayment as that 63 applicable to eligible surplus lines insurers. Each agent 64 utilized in any transaction shall report and pay the taxes for 65 the premiums for risks which they have placed with or on behalf 66 of a risk retention group not certificated in this state. In the 67 event that an agent fails to pay the tax, each risk retention 68 group shall pay the tax for insured or covered risks located 69 within this state. Further, each risk retention group shall 70 report all premiums paid to it for insured or covered risks 71 located within this state. 72 (4) COMPLIANCE WITH UNFAIR CLAIM SETTLEMENT PRACTICES LAW. 73 Any risk retention group, its agents, and its representatives 74 shall comply with the unfair claim settlement practices law of 75 this state as set forth in s. 626.9541(1)(i). 76 (5) DECEPTIVE, FALSE, OR FRAUDULENT PRACTICES.—Any risk 77 retention group shall comply with and be subject to the laws of 78 this state regarding deceptive, false, or fraudulent acts or 79 practices, includingthe provisions ofpart IX of chapter 626. 80 If the office seeks an injunction regarding conduct in violation 81 of these laws, the injunction may be obtained from any Florida 82 court of competent jurisdiction. 83 (6) EXAMINATION REGARDING FINANCIAL CONDITION.—Any risk 84 retention group must submit to an examination by the office to 85 determine its financial condition if the insurance commissioner 86 of the jurisdiction in which the group is certificated or 87 licensed has not initiated an examination or does not initiate 88 an examination within 30 days after a request by the office. Any 89 examination mustshallbe coordinated to avoid unjustified 90 repetition and conducted in an expeditious manner. 91 (7) NOTICE TO PURCHASERS.—Any policy issued by a risk 92 retention group mustshallcontain in 10-point type on the front 93 page and the declaration page, the following provision: 94 95 “Notice, this policy is issued by your risk retention group. 96 Your risk retention group may not be subject to all of the 97 insurance laws and regulations of your state. State insurance 98 insolvency guaranty funds are not available for your risk 99 retention group.” 100 101 (8) PROHIBITED ACTS REGARDING SOLICITATION OR SALE.—The 102 following acts by a risk retention group areherebyprohibited: 103 (a) The solicitation or sale of insurance by a risk 104 retention group to any person who is not eligible for membership 105 in the group. 106 (b) The solicitation or sale of insurance by, or operation 107 of, a risk retention group that is in a hazardous financial 108 condition or is financially impaired. 109 (9) PROHIBITED OWNERSHIP BY AN INSURANCE COMPANY.—No risk 110 retention group shall be allowed to do business in this state if 111 an insurer is directly or indirectly a member or owner of the 112 risk retention group, other than in the case of a risk retention 113 group all of whose members are insurers. 114 (10) PROHIBITED COVERAGE.—No risk retention group may offer 115 insurance coverage prohibited by the Florida Insurance Code or 116 declared unlawful by the highest court of this state. 117 (11) DELINQUENCY PROCEEDINGS.—A risk retention group not 118 domiciled in this state but doing business in this state shall 119 comply with a lawful order issued in a voluntary dissolution 120 proceeding or in a delinquency proceeding commenced by the 121 office if there has been a finding of financial impairment after 122 an examination under subsection (6). 123 (12) UTILIZATION OF AGENT.—A risk retention group shall 124 utilize an agent licensed and appointed in this state in order 125 to solicit, transact, underwrite, or provide insurance on a risk 126 of a group member, which risk is located in this state. 127 Section 2. This act shall take effect July 1, 2024.