CODING: Words stricken are deletions; words underlined are additions.





                                                  SENATE AMENDMENT

    Bill No. CS for SB 2532

    Amendment No.    

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11  Senator Dyer moved the following amendment:

12

13         Senate Amendment (with title amendment) 

14         On page 7, between lines 12 and 13,

15

16  insert:

17         Section 6.  Paragraph (b) of subsection (1) of section

18  440.38, Florida Statutes, is amended to read:

19         440.38  Security for compensation; insurance carriers

20  and self-insurers.--

21         (1)  Every employer shall secure the payment of

22  compensation under this chapter:

23         (b)  By furnishing satisfactory proof to the division

24  of its her or his financial ability to pay such compensation

25  individually and on behalf of its subsidiary and affiliated

26  companies with employees in this state and receiving an

27  authorization from the division to pay such compensation

28  directly in accordance with the following provisions:

29         1.  The division may, as a condition to such

30  authorization, require such employer to deposit in a

31  depository designated by the division either an indemnity bond

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2532

    Amendment No.    





 1  or securities, at the option of the employer, of a kind and in

 2  an amount determined by the division and subject to such

 3  conditions as the division may prescribe, which shall include

 4  authorization to the division in the case of default to sell

 5  any such securities sufficient to pay compensation awards or

 6  to bring suit upon such bonds, to procure prompt payment of

 7  compensation under this chapter.  In addition, the division

 8  shall require, as a condition to authorization to self-insure,

 9  proof that the employer has provided for competent personnel

10  with whom to deliver benefits and to provide a safe working

11  environment.  Further, the division shall require such

12  employer to carry reinsurance at levels that will ensure the

13  actuarial soundness of such employer in accordance with rules

14  promulgated by the division.  The division may by rule require

15  that, in the event of an individual self-insurer's insolvency,

16  such indemnity bonds, securities, and reinsurance policies

17  shall be payable to the Florida Self-Insurers Guaranty

18  Association, Incorporated, created pursuant to s. 440.385.

19  Any employer securing compensation in accordance with the

20  provisions of this paragraph shall be known as a self-insurer

21  and shall be classed as a carrier of her or his own insurance.

22         2.  If the employer fails to maintain the foregoing

23  requirements, the division shall revoke the employer's

24  authority to self-insure, unless the employer provides to the

25  division the certified opinion of an independent actuary who

26  is a member of the American Society of Actuaries as to the

27  actuarial present value of the employer's determined and

28  estimated future compensation payments based on cash reserves,

29  using a 4-percent discount rate, and a qualifying security

30  deposit equal to 1.5 times the value so certified. The

31  employer shall thereafter annually provide such a certified

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2532

    Amendment No.    





 1  opinion until such time as the employer meets the requirements

 2  of subparagraph 1.  The qualifying security deposit shall be

 3  adjusted at the time of each such annual report.  Upon the

 4  failure of the employer to timely provide such opinion or to

 5  timely provide a security deposit in an amount equal to 1.5

 6  times the value certified in the latest opinion, the division

 7  shall then revoke such employer's authorization to

 8  self-insure, and such failure shall be deemed to constitute an

 9  immediate serious danger to the public health, safety, or

10  welfare sufficient to justify the summary suspension of the

11  employer's authorization to self-insure pursuant to s. 120.68.

12         3.  Upon the suspension or revocation of the employer's

13  authorization to self-insure, the employer shall provide to

14  the division and to the Florida Self-Insurers Guaranty

15  Association, Incorporated, created pursuant to s. 440.385 the

16  certified opinion of an independent actuary who is a member of

17  the American Society of Actuaries of the actuarial present

18  value of the determined and estimated future compensation

19  payments of the employer for claims incurred while the member

20  exercised the privilege of self-insurance, using a discount

21  rate of 4 percent. The employer shall provide such an opinion

22  at 6-month intervals thereafter until such time as the latest

23  opinion shows no remaining value of claims.  With each such

24  opinion, the employer shall deposit with the division a

25  qualifying security deposit in an amount equal to the value

26  certified by the actuary.  The association has a cause of

27  action against an employer, and against any successor of the

28  employer, who fails to timely provide such opinion or who

29  fails to timely maintain the required security deposit with

30  the division. The association shall recover a judgment in the

31  amount of the actuarial present value of the determined and

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2532

    Amendment No.    





 1  estimated future compensation payments of the employer for

 2  claims incurred while the employer exercised the privilege of

 3  self-insurance, together with attorney's fees.  For purposes

 4  of this section, the successor of an employer means any

 5  person, business entity, or group of persons or business

 6  entities, which holds or acquires legal or beneficial title to

 7  the majority of the assets or the majority of the shares of

 8  the employer.

 9         4.  A qualifying security deposit shall consist, at the

10  option of the employer, of:

11         a.  Surety bonds, in a form and containing such terms

12  as prescribed by the division, issued by a corporation surety

13  authorized to transact surety business by the Department of

14  Insurance, and whose policyholders' and financial ratings, as

15  reported in A.M. Best's Insurance Reports, Property-Liability,

16  are not less than "A" and "V", respectively.

17         b.  Certificates of deposit with financial

18  institutions, the deposits of which are insured through the

19  Federal Deposit Insurance Corporation or the Federal Savings

20  and Loan Insurance Corporation.

21         c.  Irrevocable letters of credit in favor of the

22  division issued by financial institutions described in

23  sub-subparagraph b.

24         d.  Direct obligations of the United States Treasury

25  backed by the full faith and credit of the United States.

26         e.  Securities issued by this state and backed by the

27  full faith and credit of this state.

28         5.  The qualifying security deposit shall be held by

29  the division, or by a depository authorized by the division,

30  exclusively for the benefit of workers' compensation

31  claimants. The security shall not be subject to assignment,

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2532

    Amendment No.    





 1  execution, attachment, or any legal process whatsoever, except

 2  as necessary to guarantee the payment of compensation under

 3  this chapter.  No surety bond may be terminated, and no other

 4  qualifying security may be allowed to lapse, without 90 days'

 5  prior notice to the division and deposit by the self-insuring

 6  employer of other qualifying security of equal value within 10

 7  business days after such notice. Failure to provide such

 8  notice or failure to timely provide qualifying replacement

 9  security after such notice shall constitute grounds for the

10  division to call or sue upon the surety bond, or to act with

11  respect to other pledged security in any manner necessary to

12  preserve its value for the purposes intended by this section,

13  including the exercise of rights under a letter of credit, the

14  sale of any security at then prevailing market rates, or the

15  withdrawal of any funds represented by any certificate of

16  deposit forming part of the qualifying security deposit;

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19  ================ T I T L E   A M E N D M E N T ===============

20  And the title is amended as follows:

21         On page 1, line 17, after the semicolon,

22

23  insert:

24         amending s. 440.38, F.S.; revising certain

25         requirements relating to self-insurers;

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