Senate Bill 2532c1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
By the Committee on Banking and Insurance; and Senator Thomas
311-2168A-00
1 A bill to be entitled
2 An act relating to workers' compensation;
3 clarifying the legislative intent that the
4 terms "net premiums written" and "net premiums
5 collected" as used in ch. 440, F.S., include
6 ceded reinsurance premiums in accord with
7 original intent; amending s. 440.49, F.S.,
8 relating to the assessment for the Special
9 Disability Trust Fund; amending s. 440.51,
10 F.S., relating to the assessment for the
11 Workers' Compensation Administration Trust Fund
12 and to expenses of administration; reducing the
13 assessment rate for calendar year 2001;
14 creating a Task Force on Workers' Compensation
15 Administration to study the way in which the
16 workers' compensation system is funded and
17 administered; providing an effective date.
18
19 Be It Enacted by the Legislature of the State of Florida:
20
21 Section 1. Legislative intent.--It is the intent of
22 the Legislature to clarify that the terms "net premiums
23 written" and "net premiums collected" as used in chapter 440,
24 Florida Statutes, have meant and continue to mean premiums
25 arising from workers' compensation policies issued by an
26 insurer in this state as the primary insurance carrier without
27 deduction for ceded reinsurance premiums transferred to an
28 insurance company for reinsurance purchased or any premium
29 expense attributable to purchasing reinsurance.
30 Section 2. Paragraph (b) of subsection (9) of section
31 440.49, Florida Statutes, is amended to read:
1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
311-2168A-00
1 440.49 Limitation of liability for subsequent injury
2 through Special Disability Trust Fund.--
3 (9) SPECIAL DISABILITY TRUST FUND.--
4 (b)1. The Special Disability Trust Fund shall be
5 maintained by annual assessments upon the insurance companies
6 writing compensation insurance in the state, the commercial
7 self-insurers under ss. 624.462 and 624.4621, the assessable
8 mutuals under s. 628.601, and the self-insurers under this
9 chapter, which assessments shall become due and be paid
10 quarterly at the same time and in addition to the assessments
11 provided in s. 440.51. The division shall estimate annually in
12 advance the amount necessary for the administration of this
13 subsection and the maintenance of this fund and shall make
14 such assessment in the manner hereinafter provided.
15 2. The annual assessment shall be calculated to
16 produce during the ensuing fiscal year an amount which, when
17 combined with that part of the balance in the fund on June 30
18 of the current fiscal year which is in excess of $100,000, is
19 equal to the average of:
20 a. The sum of disbursements from the fund during the
21 immediate past 3 calendar years, and
22 b. Two times the disbursements of the most recent
23 calendar year.
24
25 Such amount shall be prorated among the insurance companies
26 writing compensation insurance in the state and the
27 self-insurers. However, for those carriers that have excluded
28 ceded reinsurance premiums from their assessments on or before
29 January 1, 2000, no assessments shall be paid by those
30 carriers until the division advises each of those carriers of
31 the impact that the inclusion of ceded reinsurance premiums
2
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
311-2168A-00
1 has on its assessment. The division may not recover any past
2 underpayments of assessments levied against any carrier that
3 deleted ceded reinsurance premiums from its assessment prior
4 to the division advising of the appropriate assessment that
5 should have been paid.
6 3. The net premiums written by the companies for
7 workers' compensation in this state and the net premium
8 written applicable to the self-insurers in this state are the
9 basis for computing the amount to be assessed as a percentage
10 of net premiums. Such payments shall be made by each carrier
11 insurance company and self-insurer to the division for the
12 Special Disability Trust Fund in accordance with such
13 regulations as the division prescribes.
14 4. The Treasurer is authorized to receive and credit
15 to such Special Disability Trust Fund any sum or sums that may
16 at any time be contributed to the state by the United States
17 under any Act of Congress, or otherwise, to which the state
18 may be or become entitled by reason of any payments made out
19 of such fund.
20 Section 3. Subsections (1), (2), and (3) of section
21 440.51, Florida Statutes, are amended to read
22 440.51 Expenses of administration.--
23 (1) The division shall estimate annually in advance
24 the amounts necessary for the administration of this chapter,
25 in the following manner.
26 (a) The division shall, by June 30 of as soon as
27 practicable after July 1 in each year, notify carriers and
28 self-insurers of the assessment rate, which shall be based on
29 determine the anticipated expenses expense of the
30 administration of this chapter for the next calendar preceding
31 fiscal year. Such assessment rate shall take effect January 1
3
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
311-2168A-00
1 of the next calendar year and shall be included in workers'
2 compensation rate filings approved by the Department of
3 Insurance which become effective on or after January 1 of the
4 next calendar year. Assessments shall become due and be paid
5 quarterly. The expense of administration for such preceding
6 fiscal year shall be used as the basis for determining the
7 amount to be assessed against each carrier in order to provide
8 for the expenses of the administration of this chapter for the
9 current fiscal year.
10 (b) The total expenses of administration shall be
11 prorated among the carriers insurance companies writing
12 compensation insurance in the state and self-insurers. The
13 net premiums collected by carriers the companies and the
14 amount of premiums calculated by the division for self-insured
15 employers a self-insurer would have to pay if insured are the
16 basis for computing the amount to be assessed. When reporting
17 deductible policy premium for purposes of computing
18 assessments levied after January 1, 2001, full policy premium
19 value must be reported prior to application of deductible
20 discounts or credits. This amount may be assessed as a
21 specific amount or as a percentage of net premiums payable as
22 the division may direct, provided such amount so assessed
23 shall not exceed 2.75 4 percent of such net premiums. The
24 carriers insurance companies may elect to make the payments
25 required under s. 440.15(1)(f) s. 440.15(1)(e) rather than
26 having these payments made by the division. In that event,
27 such payments will be credited to the carriers insurance
28 companies, and the amount due by the carrier insurance company
29 under this section will be reduced accordingly.
30 (2) The division shall provide by regulation for the
31 collection of the amounts assessed against each carrier. Such
4
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
311-2168A-00
1 amounts shall be paid within 30 days from the date that notice
2 is served upon such carrier. If such amounts are not paid
3 within such period, there may be assessed for each 30 days the
4 amount so assessed remains unpaid, a civil penalty equal to 10
5 percent of the amount so unpaid, which shall be collected at
6 the same time and a part of the amount assessed. The division
7 may recover underpayments of assessments from a carrier for
8 assessments levied against that carrier after July 1, 2000.
9 The division may not recover any past underpayments of
10 assessments related to ceded reinsurance premiums from a
11 carrier for assessments levied against that carrier prior to
12 July 1, 2000.
13 (3) If any carrier fails to pay the amounts assessed
14 against him or her under the provisions of this section within
15 60 days from the time such notice is served upon him or her,
16 the Department of Insurance upon being advised by the division
17 may suspend or revoke the authorization to insure compensation
18 in accordance with the procedure in s. 440.38(3)(a). The
19 division may permit a carrier to remit any underpayment of
20 assessments for assessments levied after July 1, 2000,
21 according to a payment schedule approved by the division.
22 Section 4. (1) Effective upon this act becoming a
23 law, there is created the Task Force on Workers' Compensation
24 Administration for the purpose of examining the way in which
25 the workers' compensation system is funded and administered.
26 The Task Force shall consist of seven members appointed as
27 follows: three members appointed by the Governor, one of whom
28 shall serve as chair; two members appointed by the President
29 of the Senate, and two members appointed by the Speaker of the
30 House of Representatives. Appointments shall be made no later
31 than July 1, 2000.
5
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
311-2168A-00
1 (2) The Task Force shall submit recommendations to the
2 Governor, the President of the Senate, and the Speaker of the
3 House of Representatives by January 15, 2001 concerning:
4 (a) Whether the administration of the workers'
5 compensation system should be funded through assessments,
6 general revenue, or some other source, and to what extent.
7 (b) How the funds should be used to accomplish the
8 goal of administering the workers' compensation system in the
9 most cost-effective manner.
10 (c) What services, functions, or entities, including
11 the Workers' Compensation Oversight Board, should be funded as
12 part of the administration of the workers' compensation
13 system.
14 (d) What services and functions, including workplace
15 safety, if any, should be housed within the Division of
16 Workers' Compensation.
17 (e) What cost savings could be achieved in the
18 administration of the workers' compensation system, including
19 the operations of the Division of Workers' Compensation.
20 (f) What organizational changes affecting the
21 administration of the workers' compensation system, if any,
22 should be made to make it more efficient.
23 (3) To assist the task force in its work, the
24 Executive Office of the Governor shall contract for the
25 completion of a budgetary and operational analysis of the
26 Division of Workers' Compensation, detailing the staffing of
27 the division, receipt and expenditure of revenues,
28 reliability of financial records and reports, and the
29 efficiency of internal controls and procedures. The Executive
30 Office of the Governor shall arrange for the study to be
31
6
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
311-2168A-00
1 completed and transmitted to the task force by September 1,
2 2000.
3 (4) The sum of $250,000 is appropriated from the
4 Workers' Compensation Administration Trust Fund to the
5 Executive Office of the Governor for the purpose of funding
6 the study required in subsection (3).
7 Section 5. If any provision of this act or its
8 application to any person or circumstance is held invalid, the
9 invalidity does not affect other provisions or applications of
10 the act which can be given effect without the invalid
11 provision or application, and to this end the provisions of
12 this act are severable.
13 Section 6. Except as otherwise expressly provided in
14 this act, this act shall take effect July 1, 2000.
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
7
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
311-2168A-00
1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 Senate Bill 2532
3
4 The Committee Substitute provides the following:
5 1. Lowers the maximum assessment rate for the Workers'
Compensation Administration Trust Fund from 4 percent to
6 2.75 percent, effective July 1, 2000. The calculation
for the assessment base would be determined based upon
7 the anticipated expenses of the Division of Workers'
Compensation for the next calendar year (2001), instead
8 of the prior fiscal year. For the purpose of calculating
the assessment, carriers would be required to use the
9 full premium policy reported prior to the application of
deductible discounts or credits and to include ceded
10 reinsurance premiums in the base used for calculating
the assessment.
11
2. Authorizes the division to recover under payments of
12 Workers' Compensation Administration Trust Fund
assessments from a carrier for assessments levied
13 against the carrier after July 1, 2000. The division
would not be authorized to recover any past under
14 payments of assessments related to ceded reinsurance
premiums from a carrier for assessments levied against
15 that carrier prior to July 1, 2000.
16 3. Authorizes the inclusion of ceded reinsurance premiums
for the purpose of determining the assessment base for
17 the Special Disability Trust Fund and calculating the
assessment due.
18
4. Would not require a carrier that excluded ceded
19 reinsurance premiums from their Special Disability Trust
Fund assessments on or before January 1, 2000, to pay
20 assessments until the Division of Workers' Compensation
notified each of these carriers of the impact of
21 including ceded insurance premium on their assessment.
The division would not be authorized to recover any past
22 underpayments of Special Disability Trust Fund
assessments levied against any carrier that did not
23 include ceded reinsurance premiums in their assessments
prior to that point in time that the division advised
24 the carrier of the appropriate assessment that should
have been paid.
25
5. Creates a Task Force on Workers' Compensation
26 Administration for the purpose of evaluating the method
in which the workers' compensation system is funded and
27 administered. The Task Force would be comprised of 3
members appointed by the Governor (including 1 member
28 serving as the chair), 2 members appointed by the
President of Senate and 2 members appointed by the
29 Speaker of the House of Representatives. A sum of
$250,000 would be appropriated from the Workers'
30 Compensation Administration Trust Fund to the Executive
Office of the Governor to conduct a financial and
31 operational analysis of the Division of Workers'
Compensation that would be submitted to the Task Force.
8
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 2532
311-2168A-00
1 The Task Force would be required to submit their
recommendations to the Governor, President of the
2 Senate, and the Speaker of the House of Representatives
by January 15, 2001.
3
6. Provides a severability clause so that in the event any
4 provision of the act or its application to any person is
held invalid, the remaining provisions of the bill would
5 not be affected.
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
9