House Bill hb1607

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    Florida House of Representatives - 2001                HB 1607

        By Representative Bennett






  1                      A bill to be entitled

  2         An act relating to rulemaking authority of the

  3         Department of Insurance; codifying department

  4         rules and granting the department additional

  5         rulemaking authority; amending s. 112.215,

  6         F.S.; providing for self-funding of

  7         administrative costs of deferred compensation;

  8         amending ss. 624.3161 and 626.171, F.S.;

  9         authorizing the department to adopt certain

10         rules; amending s. 626.748, F.S.; specifying

11         additional recordkeeping requirements for

12         agents; amending s. 626.9541, F.S.; providing

13         additional criteria for an unfair

14         discrimination prohibition; creating s.

15         626.9552, F.S.; specifying requirements for

16         single interest insurance; amending s. 627.062,

17         F.S.; clarifying certain information reporting

18         requirements; amending s. 627.0625, F.S.;

19         providing an additional requirement for

20         commercial motor vehicle insurance policies;

21         authorizing the department to adopt rules;

22         creating s. 627.385, F.S.; specifying conduct

23         prohibitions for residual market board members;

24         creating s. 627.4065, F.S.; requiring certain

25         notice provisions in health insurance policies;

26         providing for an insured's right to return a

27         policy; amending s. 627.7276, F.S.; revising a

28         limited coverage notice requirement; creating

29         s. 627.795, F.S.; providing title insurance

30         requirements for real estate closings; amending

31         s. 627.918, F.S.; requiring the department to

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  1         adopt certain reporting format standards;

  2         amending s. 627.9408, F.S.; authorizing the

  3         department to adopt long-term care insurance

  4         regulation rules; amending s. 641.2342, F.S.;

  5         providing for financial examination of contract

  6         providers by the department; amending s.

  7         641.31, F.S.; revising a reimbursement for

  8         covered services and supplies provision;

  9         amending s. 641.3108, F.S.; prohibiting health

10         maintenance organization cancellation of

11         certain contracts during a contract period;

12         providing exceptions; providing requirements

13         for nonrenewal of subscriber group contracts;

14         providing an effective date.

15

16  Be It Enacted by the Legislature of the State of Florida:

17

18         Section 1.  Paragraph (e) is added to subsection (4) of

19  section 112.215, Florida Statutes, to read:

20         112.215  Government employees; deferred compensation

21  program.--

22         (4)

23         (e)  The administrative costs of the deferred

24  compensation plan shall be wholly or partially self-funded.

25  Fees for such self-funding of the plan shall be paid by

26  investment providers and may be recouped from their respective

27  plan participants.  Such fees shall be deposited in the

28  Deferred Compensation Trust Fund.

29         Section 2.  Subsection (6) is added to section

30  624.3161, Florida Statutes, to read:

31         624.3161  Market conduct examinations.--

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  1         (6)  The department shall adopt rules to effectuate the

  2  market conduct examination process, including, but not limited

  3  to, rules which enable the department to ascertain compliance

  4  by the person examined with the applicable provisions of

  5  chapters 624, 626, 627, 634, 635, 642, and 651.

  6         Section 3.  Subsection (8) is added to section 626.171,

  7  Florida Statutes, to read:

  8         626.171  Application for license.--

  9         (8)  The department shall adopt rules to effectuate the

10  license application process, including, but not limited to,

11  photo identification, character and credit reports,

12  prelicensing courses, the impact of criminal and law

13  enforcement history, and other relevant information, in an

14  effort to determine an applicant's fitness and trustworthiness

15  to engage in the business of insurance.

16         Section 4.  Section 626.748, Florida Statutes, is

17  amended to read:

18         626.748  Agent's records.--

19         (1)  Every agent transacting any insurance policy must

20  maintain in his or her office, or have readily accessible by

21  electronic or photographic means, such records of policies

22  transacted by him or her as to enable the policyholders and

23  department to obtain all necessary information, including

24  daily reports, applications, change endorsements, or documents

25  signed or initialed by the insured concerning such policies.

26         (2)  Complete records of all policies issued, including

27  the name and address of all insureds and beneficiaries and the

28  type or scope of coverage provided, shall be maintained at all

29  times by the transacting agent. The transacting agent shall

30  report and promptly send to the insurer and issuing or

31  countersigning agent all applications for insurance. If the

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  1  policies are issued in the home or regional office of the

  2  company, a copy of the policy shall be sent to the

  3  countersigning agent for his or her file. If a policy covering

  4  personal property is issued by a mutual insurer or a

  5  participating stock insurer, the policyholder shall be

  6  entitled to the benefit of any dividend paid under an

  7  individual policy or certificate.

  8         Section 5.  Paragraph (o) of subsection (1) of section

  9  626.9541, Florida Statutes, is amended to read:

10         626.9541  Unfair methods of competition and unfair or

11  deceptive acts or practices defined.--

12         (1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR

13  DECEPTIVE ACTS.--The following are defined as unfair methods

14  of competition and unfair or deceptive acts or practices:

15         (o)  Illegal dealings in premiums; excess or reduced

16  charges for insurance.--

17         1.  Knowingly collecting any sum as a premium or charge

18  for insurance, which is not then provided, or is not in due

19  course to be provided, subject to acceptance of the risk by

20  the insurer, by an insurance policy issued by an insurer as

21  permitted by this code.

22         2.  Knowingly collecting as a premium or charge for

23  insurance any sum in excess of or less than the premium or

24  charge applicable to such insurance, in accordance with the

25  applicable classifications and rates as filed with and

26  approved by the department, and as specified in the policy;

27  or, in cases when classifications, premiums, or rates are not

28  required by this code to be so filed and approved, premiums

29  and charges in excess of or less than those specified in the

30  policy and as fixed by the insurer.  This provision shall not

31  be deemed to prohibit the charging and collection, by surplus

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  1  lines agents licensed under part VIII of this chapter, of the

  2  amount of applicable state and federal taxes, or fees as

  3  authorized by s. 626.916(4), in addition to the premium

  4  required by the insurer or the charging and collection, by

  5  licensed agents, of the exact amount of any discount or other

  6  such fee charged by a credit card facility in connection with

  7  the use of a credit card, as authorized by subparagraph (q)3.,

  8  in addition to the premium required by the insurer.  This

  9  subparagraph shall not be construed to prohibit collection of

10  a premium for a universal life or a variable or indeterminate

11  value insurance policy made in accordance with the terms of

12  the contract.

13         3.a.  Imposing or requesting an additional premium for

14  a policy of motor vehicle liability, personal injury

15  protection, medical payment, or collision insurance or any

16  combination thereof or refusing to renew the policy solely

17  because the insured was involved in a motor vehicle accident

18  unless the insurer's file contains information from which the

19  insurer in good faith determines that the insured was

20  substantially at fault in the accident.

21         b.  An insurer which imposes and collects such a

22  surcharge or which refuses to renew such policy shall, in

23  conjunction with the notice of premium due or notice of

24  nonrenewal, notify the named insured that he or she is

25  entitled to reimbursement of such amount or renewal of the

26  policy under the conditions listed below and will subsequently

27  reimburse him or her or renew the policy, if the named insured

28  demonstrates that the operator involved in the accident was:

29         (I)  Lawfully parked;

30

31

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  1         (II)  Reimbursed by, or on behalf of, a person

  2  responsible for the accident or has a judgment against such

  3  person;

  4         (III)  Struck in the rear by another vehicle headed in

  5  the same direction and was not convicted of a moving traffic

  6  violation in connection with the accident;

  7         (IV)  Hit by a "hit-and-run" driver, if the accident

  8  was reported to the proper authorities within 24 hours after

  9  discovering the accident;

10         (V)  Not convicted of a moving traffic violation in

11  connection with the accident, but the operator of the other

12  automobile involved in such accident was convicted of a moving

13  traffic violation;

14         (VI)  Finally adjudicated not to be liable by a court

15  of competent jurisdiction;

16         (VII)  In receipt of a traffic citation which was

17  dismissed or nolle prossed; or

18         (VIII)  Not at fault as evidenced by a written

19  statement from the insured establishing facts demonstrating

20  lack of fault which are not rebutted by information in the

21  insurer's file from which the insurer in good faith determines

22  that the insured was substantially at fault.

23         c.  In addition to the other provisions of this

24  subparagraph, an insurer may not fail to renew a policy if the

25  insured has had only one accident in which he or she was at

26  fault within the current 3-year period. However, an insurer

27  may nonrenew a policy for reasons other than accidents in

28  accordance with s. 627.728.  This subparagraph does not

29  prohibit nonrenewal of a policy under which the insured has

30  had three or more accidents, regardless of fault, during the

31  most recent 3-year period.

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  1         4.  Imposing or requesting an additional premium for,

  2  or refusing to renew, a policy for motor vehicle insurance

  3  solely because the insured committed a noncriminal traffic

  4  infraction as described in s. 318.14 unless the infraction is:

  5         a.  A second infraction committed within an 18-month

  6  period, or a third or subsequent infraction committed within a

  7  36-month period.

  8         b.  A violation of s. 316.183, when such violation is a

  9  result of exceeding the lawful speed limit by more than 15

10  miles per hour.

11         5.  Upon the request of the insured, the insurer and

12  licensed agent shall supply to the insured the complete proof

13  of fault or other criteria which justifies the additional

14  charge or cancellation.

15         6.  No insurer shall impose or request an additional

16  premium for motor vehicle insurance, cancel or refuse to issue

17  a policy, or refuse to renew a policy because the insured or

18  the applicant is a handicapped or physically disabled person,

19  so long as such handicap or physical disability does not

20  substantially impair such person's mechanically assisted

21  driving ability.

22         7.  No insurer may cancel or otherwise terminate any

23  insurance contract or coverage, or require execution of a

24  consent to rate endorsement, during the stated policy term for

25  the purpose of offering to issue, or issuing, a similar or

26  identical contract or coverage to the same insured with the

27  same exposure at a higher premium rate or continuing an

28  existing contract or coverage with the same exposure at an

29  increased premium.

30         8.  No insurer may issue a nonrenewal notice on any

31  insurance contract or coverage, or require execution of a

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  1  consent to rate endorsement, for the purpose of offering to

  2  issue, or issuing, a similar or identical contract or coverage

  3  to the same insured at a higher premium rate or continuing an

  4  existing contract or coverage at an increased premium without

  5  meeting any applicable notice requirements.

  6         9.  No insurer shall, with respect to premiums charged

  7  for motor vehicle insurance, unfairly discriminate solely on

  8  the basis of age, sex, marital status, type of vehicle,

  9  location of risk, accidents more than 3 years old, or

10  scholastic achievement.

11         10.  Imposing or requesting an additional premium for

12  motor vehicle comprehensive or uninsured motorist coverage

13  solely because the insured was involved in a motor vehicle

14  accident or was convicted of a moving traffic violation.

15         11.  No insurer shall cancel or issue a nonrenewal

16  notice on any insurance policy or contract without complying

17  with any applicable cancellation or nonrenewal provision

18  required under the Florida Insurance Code.

19         12.  No insurer shall impose or request an additional

20  premium, cancel a policy, or issue a nonrenewal notice on any

21  insurance policy or contract because of any traffic infraction

22  when adjudication has been withheld and no points have been

23  assessed pursuant to s. 318.14(9) and (10).  However, this

24  subparagraph does not apply to traffic infractions involving

25  accidents in which the insurer has incurred a loss due to the

26  fault of the insured.

27         Section 6.  Section 626.9552, Florida Statutes, is

28  created to read:

29         626.9552  Single interest insurance.--

30         (1)  Whenever single interest insurance is written at

31  the expense of the purchaser or borrower in connection with a

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  1  finance or loan transaction, a clear and concise statement

  2  shall be furnished the purchaser or borrower advising the

  3  purchaser or borrower that the insurance effected is solely

  4  for the interest of the finance company, bank, or other

  5  lending institutions and that no protection under such

  6  insurance exists for the benefit of the purchaser or borrower.

  7  When single interest insurance is written, no effort shall be

  8  made by the insurer to recover the amount of any payment from

  9  the borrower. Such single interest insurance policies shall be

10  clearly stamped or printed on the declarations page "Single

11  Interest Only - No Subrogation." Single interest insurance may

12  be placed only after a determination has been made that no

13  other kind of insurance can be placed on the risk, except

14  that, with the consent of the purchaser or borrower, single

15  interest may be written in cases of inland marine installment

16  sales floater policies. If insurance cannot be obtained for

17  the dual protection of the purchaser or borrower and the

18  seller, lender, finance company, bank, or other lending

19  institutions, for all the coverages contemplated, or, if

20  obtained, is cancelled by the insurer prior to expiration, the

21  seller or lender, or finance company, bank, or other lending

22  institutions, may obtain insurance to protect his, her, or

23  their interest in the motor vehicle or other personal property

24  and the purchaser or borrower may be required to pay the cost

25  of such insurance. In such event, the seller or lender, or

26  finance company, bank, or other lending institutions, shall

27  promptly notify the purchaser or borrower that such insurance

28  cannot be obtained, or has been cancelled, and credit to the

29  purchaser or borrower the difference between the amount

30  charged for dual protection insurance and the actual cost of

31  such single interest insurance, less, in the event of

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  1  cancellation, the earned premium on the dual interest

  2  insurance for the period it was in force. If the purchaser or

  3  borrower procures acceptable dual interest insurance within 30

  4  days after the date of such notice and provides the seller or

  5  lender, or finance company, bank, or other lending

  6  institutions, with evidence that the premium for such

  7  insurance has been paid, there shall be no charge to the

  8  purchaser or borrower for the single interest coverage.

  9  However, those lenders licensed under chapter 516 shall

10  provide coverage issued in the name of the borrower containing

11  the customary mortgagee or loss payee clause.

12         (2)  If a certificate is issued under a master policy,

13  the same coverage as provided in an individual policy will

14  apply.

15         Section 7.  Paragraph (a) of subsection (2) of section

16  627.062, Florida Statutes, is amended to read:

17         627.062  Rate standards.--

18         (2)  As to all such classes of insurance:

19         (a)  Insurers or rating organizations shall establish

20  and use rates, rating schedules, or rating manuals to allow

21  the insurer a reasonable rate of return on such classes of

22  insurance written in this state.  A copy of Rates, rating

23  schedules, rating manuals, premium credits or discount

24  schedules, and surcharge schedules, and changes thereto, shall

25  be filed with the department, in a manner and on forms as

26  prescribed by the department, under one of the following

27  procedures:

28         1.  If the filing is made at least 90 days before the

29  proposed effective date and the filing is not implemented

30  during the department's review of the filing and any

31  proceeding and judicial review, then such filing shall be

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  1  considered a "file and use" filing.  In such case, the

  2  department shall finalize its review by issuance of a notice

  3  of intent to approve or a notice of intent to disapprove

  4  within 90 days after receipt of the filing. The notice of

  5  intent to approve and the notice of intent to disapprove

  6  constitute agency action for purposes of the Administrative

  7  Procedure Act. Requests for supporting information, requests

  8  for mathematical or mechanical corrections, or notification to

  9  the insurer by the department of its preliminary findings

10  shall not toll the 90-day period during any such proceedings

11  and subsequent judicial review. The rate shall be deemed

12  approved if the department does not issue a notice of intent

13  to approve or a notice of intent to disapprove within 90 days

14  after receipt of the filing.

15         2.  If the filing is not made in accordance with the

16  provisions of subparagraph 1., such filing shall be made as

17  soon as practicable, but no later than 30 days after the

18  effective date, and shall be considered a "use and file"

19  filing.  An insurer making a "use and file" filing is

20  potentially subject to an order by the department to return to

21  policyholders portions of rates found to be excessive, as

22  provided in paragraph (h).

23         Section 8.  Subsection (4) is added to section

24  627.0625, Florida Statutes, to read:

25         627.0625  Commercial property and casualty risk

26  management plans.--

27         (4)  Commercial motor vehicle policies which are issued

28  to satisfy mandatory financial responsibility requirements of

29  a state or local government shall provide first dollar

30  coverage to third-party claimants without a deductible.  The

31  department may adopt rules necessary to assure the proper

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  1  administration of claims and protection of third-party

  2  claimants from unfair policy defenses not attributable to the

  3  third-party claimant.

  4         Section 9.  Section 627.385, Florida Statutes, is

  5  created to read:

  6         627.385  Conduct of residual market board members.--

  7         (1)(a)  The Legislature finds that for various

  8  insurance coverages, a residual market has been created by

  9  legislation to provide a market of last resort for individuals

10  unable to secure coverage in the voluntary market. As such,

11  the coverage provided is not subject to competitive market

12  forces and must be provided and administered in a manner which

13  fairly balances the needs of the consumer and the member

14  insurers obligated to provide coverage for the residual

15  market.

16         (b)  The Legislature further finds that each residual

17  market's enabling legislation calls for the establishment of a

18  board of governors or directors which operates subject to a

19  plan of operation. The board, in carrying out its obligations,

20  must engage in business transactions in order to provide and

21  administer the required coverage and maintain adequate funds

22  to support the plan. In order for the board to fully execute

23  its responsibilities required by law, conflict of interest or

24  inappropriate activity by board members, or the appearance

25  thereof, with regard to member insurers or policyholders of

26  the residual market mechanism must be avoided. The Legislature

27  has determined that the provisions set forth in subsection (2)

28  are necessary to protect the public interest by ensuring fair,

29  reasonable, and beneficial board practice and activity.

30         (c)  This section applies to the Florida Medical

31  Malpractice Joint Underwriting Association, Florida Joint

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  1  Underwriting Association, Florida Comprehensive Health

  2  Association, Florida Windstorm Underwriting Association,

  3  Florida Property and Casualty Joint Underwriting Association,

  4  Florida Residential Property and Casualty Joint Underwriting

  5  Association, and the board members of such associations.

  6         (2)  To ensure that a board is free from potential

  7  conflict or inappropriate behavior, the following shall be

  8  adopted in the plans of operation of the subject residual

  9  market in this state:

10         (a)  No board member shall act as servicing carrier or

11  administering entity for the subject plan, other than a claim

12  adjustment contract open to all members of the plan.

13         (b)  No board member or board member representative

14  shall use his or her position to foster or facilitate any

15  pecuniary gain for himself or herself, his or her member

16  company, or any other entity in which the board member or

17  board member representative or the member company has a

18  substantial financial interest, except as otherwise provided

19  in paragraph (a).

20         (c)  No board member or board member representative

21  shall use his or her position on the board to secure or

22  promote any business relationship from which he or she may

23  derive a financial gain.

24         (d)  No board member or designee shall receive any gift

25  or gratuity, other than meals, in his or her capacity as a

26  board member.

27         (3)  Board members and board member representatives

28  shall maintain reasonable board expenses based on state travel

29  policy as set forth in s. 112.061. The board shall develop a

30  detailed policy regarding board member travel, which policy

31

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  1  shall be subject to the approval of the department based on

  2  the provisions of s. 112.061.

  3         Section 10.  Section 627.4065, Florida Statutes, is

  4  created to read:

  5         627.4065  Health insurance policy notice; insured's

  6  right to return.--A health insurance policy issued or issued

  7  for delivery in this state shall have printed or stamped on

  8  such policy or attached to such policy a notice in a prominent

  9  place stating in substance that the policyholder may return

10  the policy within 10 days after its delivery to the insurer

11  and have the premium paid refunded if, after examination of

12  the policy or contract, the policyholder is not satisfied with

13  the policy or contract for any reason. The notice shall

14  provide that if the policyholder pursuant to such notice

15  returns the policy or contract to the insurer at the insurer's

16  home office or branch office, or to the agent through whom the

17  policy or contract was purchased, the policy or contract shall

18  be void from the beginning and the parties shall be in the

19  same position as if no policy or contract had been issued.

20  This section shall not apply to either single premium

21  nonrenewable policies or travel accident policies.

22         Section 11.  Section 627.7276, Florida Statutes, is

23  amended to read:

24         627.7276  Notice of limited coverage.--

25         (1)  The following notice of limited coverage shall An

26  automobile policy that does not contain coverage for bodily

27  injury and property damage must be clearly stamped or printed

28  on any automobile insurance policy that only provides coverage

29  for first-party damage to the insured vehicle, but does not

30  provide coverage for bodily injury liability, property damage

31  liability, or personal injury protection to the effect that

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  1  such coverage is not included in the policy in the following

  2  manner:

  3

  4         "THIS POLICY DOES NOT PROVIDE BODILY INJURY

  5         LIABILITY, AND PROPERTY DAMAGE LIABILITY, OR

  6         PERSONAL INJURY PROTECTION INSURANCE OR ANY

  7         OTHER COVERAGE FOR WHICH A SPECIFIC PREMIUM

  8         CHARGE IS NOT MADE, AND DOES NOT COMPLY WITH

  9         ANY FINANCIAL RESPONSIBILITY LAW OR WITH THE

10         FLORIDA MOTOR VEHICLE NO-FAULT LAW."

11

12         (2)  This legend must appear on the policy declaration

13  page and on the filing back of the policy and be printed in a

14  contrasting color from that used on the policy and in type

15  larger than the largest type used in the text thereof, as an

16  overprint or by a rubber stamp impression.

17         Section 12.  Section 627.795, Florida Statutes, is

18  created to read:

19         627.795  Policy exceptions.--

20         (1)  A title insurance commitment shall be issued on

21  all real estate closing transactions whenever a title

22  insurance policy is to be issued, except multiple conveyances

23  on the same property, such as timesharing.

24         (2)  A gap exception shall not be deleted on a

25  commitment until the time of closing.

26         Section 13.  Subsection (1) of section 627.918, Florida

27  Statutes, is amended to read:

28         627.918  Reporting formats.--

29         (1)  The department shall require that the reporting

30  provided for in this part be made on forms approved

31  established by the department or in a format compatible with

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  1  its electronic data processing equipment. The department shall

  2  establish by rule standards for such approval.

  3         Section 14.  Section 627.9408, Florida Statutes, is

  4  amended to read:

  5         627.9408  Rules.--

  6         (1)  The department has authority to adopt rules

  7  pursuant to ss. 120.536(1) and 120.54 to implement the

  8  provisions of this part.

  9         (2)  The department may adopt by rule the model

10  regulation for the long-term care insurance regulation as

11  approved by the National Association of Insurance

12  Commissioners in June 2000, including provisions to protect

13  applicants for long-term care and comparison of long-term care

14  insurance coverage and to facilitate flexibility and

15  innovation in the development of long-term care insurance that

16  is not in conflict with the provisions of the insurance code.

17         Section 15.  Section 641.2342, Florida Statutes, is

18  amended to read:

19         641.2342  Contract providers.--Each health maintenance

20  organization shall file, upon the request of the department,

21  financial statements for all contract providers of

22  comprehensive health care services who have assumed, through

23  capitation or other means, more than 10 percent of the health

24  care risks of the health maintenance organization.  However,

25  this provision shall not apply to any individual physician.

26  Any contract provider subject to this section shall be subject

27  to financial examination by the department in accordance with

28  the provisions of this chapter.

29         Section 16.  Subsection (12) of section 641.31, Florida

30  Statutes, is amended to read:

31         641.31  Health maintenance contracts.--

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  1         (12)  Each health maintenance contract, certificate, or

  2  member handbook shall state that emergency services and care

  3  shall be provided to subscribers in emergency situations not

  4  permitting treatment through the health maintenance

  5  organization's providers, without prior notification to and

  6  approval of the organization. Reimbursement for covered

  7  services and supplies under this section shall be governed by

  8  the provisions of s. 641.513(5), up to the subscriber contract

  9  benefits limits. Not less than 75 percent of the reasonable

10  charges for covered services and supplies shall be paid by the

11  organization, up to the subscriber contract benefit limits.

12  Payment also may be subject to additional applicable copayment

13  provisions, not to exceed $100 per claim.  The health

14  maintenance contract, certificate, or member handbook shall

15  contain the definitions of "emergency services and care" and

16  "emergency medical condition" as specified in s. 641.19(7) and

17  (8), shall describe procedures for determination by the health

18  maintenance organization of whether the services qualify for

19  reimbursement as emergency services and care, and shall

20  contain specific examples of what does constitute an

21  emergency. In providing for emergency services and care as a

22  covered service, a health maintenance organization shall be

23  governed by s. 641.513.

24         Section 17.  Subsections (1) and (3) of section

25  641.3108, Florida Statutes, are amended to read:

26         641.3108  Notice of cancellation of contract.--

27         (1)  Except for nonpayment of premium or termination of

28  eligibility, no health maintenance organization may cancel or

29  otherwise terminate or fail to renew a health maintenance

30  contract without giving the subscriber at least 45 days'

31  notice in writing of the cancellation, termination, or

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    Florida House of Representatives - 2001                HB 1607

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  1  nonrenewal of the contract. The written notice shall state the

  2  reason or reasons for the cancellation, termination, or

  3  nonrenewal.  All health maintenance contracts shall contain a

  4  clause which requires that this notice be given. No individual

  5  or group contract may be cancelled by a health maintenance

  6  organization during the contract period except for nonpayment

  7  of premium or termination of eligibility.

  8         (3)  In the case of a health maintenance contract

  9  issued to an employer or person holding the contract on behalf

10  of the subscriber group, the health maintenance organization

11  may make the notification through the employer or group

12  contract holder, and, if the health maintenance organization

13  elects to take this action through the employer or group

14  contract holder, the organization shall be deemed to have

15  complied with the provisions of this section upon notifying

16  the employer or group contract holder of the requirements of

17  this section and requesting the employer or group contract

18  holder to forward to all subscribers the notice required

19  herein. If a subscriber group contract is not renewed due to

20  claim experience, the subscriber group shall be entitled to

21  receive the loss ratio of the group. If requested by a

22  subscriber group, a detailed claim experience record may be

23  provided at a reasonable expense. The record shall maintain

24  subscriber confidentiality.

25         Section 18.  This act shall take effect October 1,

26  2001.

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  1            *****************************************

  2                          HOUSE SUMMARY

  3
      Revises various provisions of insurance law. Provides
  4    additional rulemaking authority for the Department of
      Insurance. Requires self-funding of administrative costs
  5    of deferred compensation. Revises provisions relating to
      recordkeeping requirements for agents, unfair
  6    discrimination prohibitions, information reporting
      requirements, commercial motor vehicle insurance
  7    policies, and limited coverage notice requirements.
      Specifies prohibited conduct for residual market board
  8    members. Requires health insurance policies to notify an
      insured of a right to return a policy. Provides title
  9    insurance requirements for real estate closings.
      Specifies requirements for single interest insurance.
10    Requires the department to adopt certain reporting format
      standards. Provides for financial examination of contract
11    providers by the department. Revises a provision for
      reimbursement for covered services and supplies by health
12    maintenance organizations. Prohibits health maintenance
      organizations from cancelling contracts during a contract
13    period except for nonpayment of premium or termination of
      eligibility. Provides requirements for nonrenewal of
14    subscriber group contracts. See bill for details.

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