HB 1435 2003
1	A bill to be entitled
2	An act relating to medical malpractice insurance reform;
3	creating a medical mutual insurance company; providing
4	powers; providing purposes; providing for a board of
5	directors; providing for membership; providing for
6	appointment, qualifications, and terms of members;
7	providing for the annual election of a chair; providing
8	for compensation; providing for powers of the board;
9	providing for the hiring of an administrator and for that
10	administrator to act as the chief executive officer;
11	providing duties of the administrator; requiring a bond;
12	providing immunity from liability; providing for board
13	determination of rates; providing for methodologies;
14	specifying an investment policy; authorizing the board to
15	determine such policy; authorizing the administrator to
16	make investments; authorizing agents to sell certain
17	policies; providing for commissions; requiring the
18	administrator to develop a medical malpractice risk
19	management program; providing for medical malpractice risk
20	management plans; providing for premium effect of
21	compliance with the program; prohibiting the company from
22	receiving certain appropriations; providing an exception;
23	authorizing the board to issue revenue bonds under certain
24	circumstances; providing criteria, requirements, and
25	procedures; limiting bonds sold to public entities;
26	requiring audits; providing audit procedures; requiring
27	audit reports to the Governor and Legislature; specifying
28	report contents; requiring the administrator to formulate
29	a budget; providing insurance carrier examination
30	requirements for the Office of Insurance Regulation;
31	requiring the office to set medical malpractice rates;
32	providing requirements, responsibilities, and authority
33	relating to rate filings; requiring medical malpractice
34	insurers to file certain documents with the office;
35	providing requirements; providing review authority of the
36	office; authorizing the office to approve or disapprove
37	rates; providing requirements and limitations; providing
38	for setting new rates by the office; requiring notice;
39	prohibiting the office from restricting certain insurer
40	activities; providing construction relating to violations;
41	providing for alternative compliance sufficiency;
42	specifying initial rate submissions as inadequate or
43	excessive under certain circumstances; amending s.
44	627.062, F.S.; specifying nonapplication to professional
45	medical malpractice insurance; creating s. 627.3518, F.S.;
46	limiting rates for medical malpractice insurance; limiting
47	rate increases to approvals by the Chief Financial
48	Officer; creating s. 627.352, F.S.; prohibiting issuance
49	of certain types of insurance policies without also
50	issuing medical malpractice insurance policies;
51	prohibiting denial of medical malpractice insurance to
52	health care providers under certain circumstances;
53	providing application; amending s. 627.357, F.S.; deleting
54	a prohibition against forming a self-insurance fund;
55	amending s. 766.314, F.S.; exempting certain persons from
56	certain annual assessment payments; providing application;
57	providing an effective date.
58
59	Be It Enacted by the Legislature of the State of Florida:
60
61	Section 1. Medical mutual insurance company created;
62	powers; purpose.--The Medical Mutual Insurance Company is
63	created as an independent public corporation for the purpose of
64	insuring health care providers in this state against liability
65	for loss, damage, or expense arising out of the death or injury
66	of any person as a result of the negligence or malpractice of
67	any health care provider. The company shall be organized and
68	operated as a domestic mutual insurance company and shall not be
69	a state agency. The company shall have the powers granted a
70	general not-for-profit corporation. The company shall be a
71	member of the state property and casualty guaranty association,
72	and as such will be subject to assessments of the association,
73	and the members of such association shall bear responsibility in
74	the event of the insolvency of the company. The company shall
75	use flexibility and experimentation in the development of types
76	of policies and coverages offered to health care providers,
77	subject to the approval of the director of the Office of
78	Insurance Regulation.
79	Section 2. Board created; members; appointment;
80	qualifications; terms; chair.--
81	(1) A board of directors is established for the company.
82	The board shall be appointed by July 1, 2003, and shall consist
83	of five members appointed or selected as provided in this
84	section. The Governor shall appoint the initial five members of
85	the board with the advice and consent of the Senate. Each
86	director shall serve a 5-year term. Terms shall be staggered so
87	that no more than one director’s term expires each year on July
88	1. The five directors initially appointed by the Governor shall
89	determine their initial terms by lot. At the expiration of the
90	term of any member of the board, the company’s policyholders
91	shall elect a new director in accordance with provisions
92	determined by the board.
93	(2) Any person may be a director who:
94	(a) Does not have any interest as a stockholder, employee,
95	attorney, agent, broker, or contractor of an insurance entity
96	who writes medical malpractice insurance or whose affiliates
97	write medical malpractice insurance.
98	(b) Is of good moral character and who has never pleaded
99	guilty to, or been found guilty of, a felony.
100	(3) The board shall annually elect a chair and any other
101	officers the board deems necessary for the performance of its
102	duties. Board committees and subcommittees may also be formed.
103	Section 3. Hiring of administrator; qualifications;
104	compensation; powers of board; generally.--
105	(1) By October 1, 2003, the board shall hire an
106	administrator who shall serve at the pleasure of the board, and
107	the company shall be fully prepared to be operational by January
108	1, 2004, and assume its responsibilities pursuant to this
109	section. The administrator shall receive compensation as
110	established by the board and must have proven successful
111	experience as an executive at the general management level in
112	the insurance business.
113	(2) The board is vested with full power, authority, and
114	jurisdiction over the company. The board may perform all acts
115	necessary or convenient in the administration of the company or
116	in connection with the insurance business to be carried on by
117	the company. In this regard, the board is empowered to function
118	in all aspects as a governing body of a private insurance
119	carrier.
120	Section 4. Administrator; duties; bond required; immunity
121	from liability; board and employees.--
122	(1) The administrator of the company shall act as the
123	company’s chief executive officer. The administrator shall be in
124	charge of the day-to-day operations and management of the
125	company.
126	(2) Before entering the duties of office, the
127	administrator shall give an official bond in an amount and with
128	sureties approved by the board. The premium for the bond shall
129	be paid by the company.
130	(3) The administrator or his or her designee shall be the
131	custodian of the moneys of the company, and all premiums,
132	deposits, or other moneys paid to the company shall be deposited
133	with a financial institution as designated by the administrator.
134	(4) No board member, officer, or employee of the company
135	is liable in a private capacity for any act performed or
136	obligation entered into when done in good faith, without intent
137	to defraud, and in an official capacity in connection with the
138	administration, management, or conduct of the company or affairs
139	relating to it.
140	Section 5. Board to determine rates; methodology.--The
141	board shall have full power and authority to establish rates to
142	be charged by the company for insurance. The board shall
143	contract for the services of or hire an independent actuary who
144	is a member in good standing with the American Academy of
145	Actuaries to develop and recommend actuarially sound rates.
146	Rates shall be set at amounts sufficient, when invested, to
147	carry all claims to maturity, meet the reasonable expenses of
148	conducting the business of the company, and maintain a
149	reasonable surplus. The company shall conduct a medical
150	malpractice insurance program that shall be neither more nor
151	less than self-supporting.
152	Section 6. Board to determine investment policy;
153	administrator to make investments; methodology.--The board shall
154	formulate and adopt an investment policy and supervise the
155	investment activities of the company. The administrator may
156	invest and reinvest the surplus or reserves of the company
157	subject to the limitations imposed on domestic insurance
158	companies by state law. The company may retain an independent
159	investment counsel. The board shall periodically review and
160	appraise the investment strategy being followed and the
161	effectiveness of such services. Any investment counsel retained
162	or hired shall periodically report to the board on investment
163	results and related matters.
164	Section 7. Agents may sell policies; commissions.--Any
165	insurance agent or broker licensed to sell medical malpractice
166	insurance in this state shall be authorized to sell insurance
167	policies for the company in compliance with the bylaws adopted
168	by the company. The board shall establish a schedule of
169	commissions to pay for the services of the agent.
170	Section 8. Medical malpractice risk management program;
171	administrator to formulate; effect of compliance with program on
172	premiums.--
173	(1) The administrator shall formulate, implement, and
174	monitor a medical malpractice risk management program for all
175	policyholders.
176	(2) The company shall have representatives whose sole
177	purpose is to develop with policyholders a written medical
178	malpractice risk management plan which is based upon clearly
179	stated goals and objectives. The company shall communicate the
180	importance of such a plan and assist in any way to attain such
181	goals and objectives.
182	(3) The administrator or board may refuse to insure or may
183	terminate the insurance of any insured who disregards the
184	medical malpractice risk management plan.
185	(4) In determining the premium payable by an insured, the
186	company shall consider the compliance of the insured with the
187	company’s medical malpractice risk management plan.
188	Section 9. Company not to receive state appropriation;
189	exception; revenue bonds; authorization; terms; execution;
190	procedures.--
191	(1) The company shall not receive any state appropriation,
192	directly or indirectly, except as provided in subsection (2).
193	(2) After July 1, 2003, the director of the Office of
194	Insurance Regulation shall make one or more loans to the company
195	in an amount not to exceed an aggregate amount of $5 million
196	from the General Revenue fund for startup funding and initial
197	capitalization of the company. The board of the company shall
198	make application to the Office of Insurance Regulation for the
199	loans, stating the amount to be loaned to the company. The loans
200	shall be for a term of 5 years and, at the time the application
201	for such loans is approved, shall bear interest at an annual
202	rate determined by the director of the Office of Insurance
203	Regulation.
204	(3) In order to provide funds for the creation, continued
205	development, and operation of the company, the board is
206	authorized to issue revenue bonds, from time to time, in a
207	principal amount outstanding not to exceed $40 million at any
208	given time, payable solely from premiums received from insurance
209	policies and other revenues generated by the company.
210	(4) The board may issue bonds to refund other bonds issued
211	pursuant to this section.
212	(5) The bonds shall have a maturity of no more than 10
213	years from the date of issuance. The board shall determine all
214	other terms, covenants, and conditions of the bonds, except that
215	no bonds may be redeemed prior to maturity unless the company
216	has established adequate reserves for the risks it has insured.
217	(6) The bonds shall be executed with the manual or
218	facsimile signature of the administrator or the chair of the
219	board and attested by another member of the board. The bonds may
220	bear the seal, if any, of the company.
221	(7) The proceeds of the bonds and the earnings on those
222	proceeds shall be used by the board for the development and
223	operation of the company, to pay expenses incurred in the
224	preparation, issuance, and sale of the bonds, and to pay any
225	obligations relating to the bonds and the proceeds of the bonds
226	under the United States Internal Revenue Code.
227	(8) The bonds may be sold at a public or private sale. If
228	the bonds are sold at a public sale, the notice of sale and
229	other procedures for the sale shall be determined by the
230	administrator or the company.
231	(9) This section constitutes the full authority for the
232	issuance and sale of the bonds, and the bonds shall not be
233	invalid for any irregularity or defect in the proceedings for
234	their issuance and sale and shall be incontestable in the hands
235	of bona fide purchasers or holders of the bonds for value.
236	(10) An amount of money from the sources specified in
237	subsection (2) sufficient to pay the principal of and any
238	interest on the bonds as they become due each year shall be set
239	aside and is hereby pledged for the payment of the principal and
240	interest on the bonds.
241	(11) The bonds shall be legal investments for any person
242	or board charged with the investment of public funds and may be
243	accepted as security for any deposit of public money, and the
244	bonds and interest thereon are exempt from taxation by the state
245	and any political subdivision or agency of the state.
246	(12) The bonds shall be payable by the company, which
247	shall keep a complete record relating to the payment of the
248	bonds.
249	(13) Not more than 50 percent of the bonds sold shall be
250	sold to public entities.
251	Section 10. Audit required; procedure; report; contents;
252	Governor and Legislature to receive; administrator to formulate
253	budget; Office of Insurance Regulation; duties.--
254	(1) The board shall cause an annual audit of the books of
255	accounts, funds, and securities of the company to be made by a
256	competent and independent firm of certified public accountants,
257	the cost of the audit to be charged against the company. A copy
258	of the audit report shall be filed with the director of the
259	Department of Insurance and the administrator. The audit shall
260	be open to the public for inspection.
261	(2) The board shall submit an annual independently audited
262	report in accordance with procedures governing annual reports
263	adopted by the National Association of Insurance Commissioners
264	by March 1 of each year, and the report shall be delivered to
265	the Governor, the President of the Senate, and the Speaker of
266	the House of Representatives. The report shall indicate the
267	business conducted by the company during the previous year and
268	contain a statement of the resources and liabilities of the
269	company.
270	(3) The administrator shall annually submit to the board
271	for its approval an estimated budget of the entire expense of
272	administering the company for the succeeding calendar year
273	having due regard for the business interests and contract
274	obligations of the company.
275	(4) The incurred loss experience and expense of the
276	company shall be ascertained each year to include, but not be
277	limited to, estimates of outstanding liabilities for claims
278	reported to the company but not yet paid and liabilities for
279	claims arising from injuries which have occurred but have not
280	yet been reported to the company. If there is an excess of
281	assets over liabilities, necessary reserves, and a reasonable
282	surplus, a cash dividend shall be declared or a credit allowed
283	to any health care provider who has complied with the company’s
284	medical malpractice risk management program.
285	(5) The Office of Insurance Regulation shall conduct an
286	examination of the company in the manner and under the
287	conditions provided by the statutes of the insurance code for
288	the examination of insurance carriers. The company is subject to
289	all provisions of law which relate to private insurance carriers
290	and to the jurisdiction of the Office of Insurance Regulation in
291	the same manner as private insurance carriers, except as
292	provided by the director.
293	Section 11. Medical malpractice rate standards and prior
294	approval of rates.--
295	(1) In addition to any other requirements imposed by law,
296	the rates for each self-insurance policy as authorized under s.
297	627.357, Florida Statutes, or an insurance policy providing
298	coverage for claims arising out of the rendering of, or the
299	failure to render, medical care or services, shall be set by the
300	director of the Office of Insurance Regulation and shall not be
301	excessive, inadequate, or unfairly discriminatory.
302	(2) As to all rate filings subject to approval in
303	accordance with this section:
304	(a) Insurers or rating organizations shall apply for
305	rates, rating schedules, or rating manuals to allow the insurer
306	a reasonable rate of return on such classes of insurance written
307	in this state. A copy of rates, rating schedules, rating
308	manuals, premium credits, or discount schedules and surcharge
309	schedules, and changes thereto, shall be filed with the Office
310	of Insurance Regulation. The filing must be made at least 180
311	days before the proposed effective date, and the filing shall
312	not be implemented during the Office of Insurance Regulation’s
313	review of the filing and any proceeding and judicial review.
314	(b) Upon receiving a rate filing and within a reasonable
315	time, the Office of Insurance Regulation shall review the rate
316	filing and set a rate or rate schedule that is not excessive,
317	inadequate, or unfairly discriminatory. In making that
318	determination, the Office of Insurance Regulation shall, in
319	accordance with generally accepted and reasonable actuarial
320	techniques, consider the following factors:
321	1. Past and prospective loss experience within and without
322	this state and the insurer or self insurer’s past and
323	prospective loss experience within this state, if applicable. A
324	medical malpractice insurer shall consider past and prospective
325	loss experience and catastrophic hazards, if any, solely within
326	this state. However, if there is insufficient experience within
327	this state upon which a rate can be based, the insurer may
328	consider experiences within any other state or states which have
329	a similar cost of claim and frequency of claim experience as
330	this state and, if insufficient experience is available, the
331	insurer may use nationwide experience. The insurer, in its rate
332	filing or in its records, shall expressly show the rate
333	experience it is using. In considering experience outside this
334	state, as much weight as possible shall be given to state
335	experience.
336	2. Past and prospective expenses.
337	3. Investment income reasonably expected by the insurer,
338	consistent with the insurer's investment practices, from
339	investable premiums anticipated in the filing, plus any other
340	expected income from currently invested assets representing the
341	amount expected on unearned premium reserves, loss reserves, and
342	surplus. The Office of Insurance Regulation may adopt rules
343	using reasonable techniques of actuarial science and economics
344	to specify the manner in which insurers shall calculate
345	investment income attributable to such classes of insurance
346	written in this state and the manner in which such investment
347	income shall be used in the calculation of insurance rates. Such
348	manner shall contemplate allowances for an underwriting profit
349	factor and full consideration of investment income which
350	produces a reasonable rate of return. The profit and contingency
351	factor as specified in the filing shall be used in computing
352	excess profits in conjunction with s. 627.0625, Florida
353	Statutes.
354	4. The reasonableness of the judgment reflected in the
355	filing.
356	5. Dividends, savings, or unabsorbed premium deposits
357	allowed or returned to policyholders, members, or subscribers in
358	this state.
359	6. The adequacy of loss reserves.
360	7. The cost of reinsurance.
361	8. Trend factors, including trends in actual losses per
362	insured unit for the insurer making the filing.
363	9. A reasonable margin for underwriting profit and
364	contingencies.
365	10. The cost of medical services.
366	11. Other relevant factors which impact upon the frequency
367	or severity of claims or upon expenses.
368	12. Other relevant public policy considerations.
369	(c) After consideration of the rate factors provided in
370	paragraph (b), the Office of Insurance Regulation shall
371	determine and set the appropriate rate, as long as the rate is
372	not excessive, inadequate, or unfairly discriminatory based upon
373	the following standards:
374	1. Rates shall be deemed excessive if they are likely to
375	produce a profit from Florida business that is unreasonably high
376	in relation to the risk involved in the class of business or if
377	expenses are unreasonably high in relation to services rendered.
378	2. Rates shall be deemed excessive if, among other things,
379	the rate structure established by a stock insurance company
380	provides for replenishment of reserves or surpluses from
381	premiums when the replenishment is attributable to investment
382	losses, the rate is unreasonably high for the insurance
383	provided, or expenses are unreasonably high in relation to
384	services rendered.
385	3. Rates shall be deemed inadequate if they are clearly
386	insufficient, together with the investment income attributable
387	to them, to sustain projected losses and expenses in the class
388	of business to which they apply and the continued use of such
389	rate endangers the solvency of the insurer using the rate.
390	4. A rating plan, including discounts, credits, or
391	surcharges, shall be deemed unfairly discriminatory if the plan
392	fails to clearly and equitably reflect consideration of the
393	policyholder's participation in a risk management program
394	adopted pursuant to s. 627.0625, Florida Statutes, or the
395	policyholder’s individual claims history, unless price
396	differentials fail to reflect equitably the differences in
397	expected losses and experiences.
398	5. A rate shall be deemed inadequate as to the premium
399	charged to a risk or group of risks if discounts or credits are
400	allowed which exceed a reasonable reflection of expense savings
401	and reasonably expected loss experience from the risk or group
402	of risks.
403	6. A rate shall be deemed unfairly discriminatory as to a
404	risk or group of risks if the application of premium discounts,
405	credits, or surcharges among such risks does not bear a
406	reasonable relationship to the expected loss and expense
407	experience among the various risks.
408	(d) In addition to the standards set forth in paragraph
409	(c), the Office of Insurance Regulation shall disapprove rates
410	that are 15 percent greater or less than the current approved
411	rate of the insurer or self-insurer.
412	(e) In reviewing a rate filing, the Office of Insurance
413	Regulation may require the insurer to provide at the insurer's
414	expense all information necessary to evaluate the condition of
415	the company and the reasonableness of the filing according to
416	the criteria enumerated in this section.
417	1. The director shall adopt rules which shall require each
418	medical malpractice insurer to record and report its loss and
419	expense experience and such other data, including reserves, as
420	may be necessary to determine whether rates comply with the
421	standards set forth in this section. Every medical malpractice
422	insurer shall provide such information in such form as the
423	director may require.
424	2. The director shall require that the annual report and
425	any such supplemental report which contains information of a
426	company’s loss and loss adjustment reserves be accompanied by an
427	opinion signed and sworn to by a qualified and independent
428	actuary verifying that, within the 9 months prior to the
429	submission of the report, the actuary has conducted a review and
430	analysis of the insurance company’s loss and loss adjustment
431	reserves, the reserves are computed in accordance with accepted
432	loss reserving standards, and the reserves are fairly stated in
433	accordance with sound loss reserving principles.
434	3. The director shall maintain for at least 10 years by
435	carrier all reports submitted by insurers pursuant to rules
436	adopted by the director under this section. The director shall
437	consider these reports in determining the appropriateness of
438	premium rates for medical malpractice insurance.
439	4. The director may examine and review the assignment and
440	assessment of risk for different classifications for different
441	specialties or practices of medicine. The director may hold a
442	public hearing on any filing containing a risk assignment for
443	medical malpractice insurance to determine whether such risk
444	assignment for medical malpractice insurance is reasonable and
445	may issue orders concerning such risk assignment.
446	(3)(a) Every medical malpractice insurer shall file with
447	the Office of Insurance Regulation every manual of
448	classifications, rules, and rates, every rating plan, and every
449	modification of any of the foregoing which the insurer proposes
450	to use in this state.
451	(b) The expense provisions included in the rates to be
452	used by a medical malpractice insurer shall reflect the
453	operating methods of the insurer and, so far as it is credible
454	and reasonable, its own actual and anticipated expense
455	experience.
456	(c) The rates to be used by a medical malpractice insurer
457	shall contain provisions for contingencies and an allowance
458	permitting a reasonable rate of return. In determining a
459	reasonable rate of return, consideration shall be given to all
460	investment income reasonably attributable to medical malpractice
461	insurance.
462	(d) Every filing shall state the proposed effective date
463	of the filing, shall indicate the character and extent of the
464	coverage contemplated, and shall contain supporting information.
465	Such supporting information may include the experience or
466	judgment of the insurer making the filing; the insurer’s
467	interpretation of any statistical data the insurer relied upon;
468	the experience of other insurers; and any other factors which
469	the insurer deems relevant.
470	(4) The Office of Insurance Regulation may at any time
471	review a rate, rating schedule, rating manual, or rate change,
472	the pertinent records of the insurer, and market conditions. If
473	the Office of Insurance Regulation finds on a preliminary basis
474	that a rate may be excessive, inadequate, or unfairly
475	discriminatory, the office shall initiate proceedings to set a
476	new rate and shall so notify the insurer. However, the office
477	may not disapprove as excessive any rate it has set for a period
478	of 1 year after the effective date of the filing unless the
479	office finds that a material misrepresentation or material error
480	was made by the insurer or was contained in the filing. Upon
481	being so notified, the insurer or rating organization shall,
482	within 60 days, file with the office all information which, in
483	the belief of the insurer or organization, proves the
484	reasonableness, adequacy, and fairness of the rate or rate
485	change. The office shall determine and set an appropriate rate
486	within a reasonable time after receipt of the insurer’s initial
487	response, pursuant to the procedures of paragraphs (2)(b)-(e).
488	In such instances and in any administrative proceeding relating
489	to the legality of any rate, the insurer or rating organization
490	shall carry the burden of proof by a preponderance of the
491	evidence to show that the rate is not excessive, inadequate, or
492	unfairly discriminatory.
493	(5) When the Office of Insurance Regulation sets a new
494	rate or rate schedule, the office shall issue an order
495	specifying the new rate or rate schedule and the findings of the
496	office. The order shall constitute agency action for purposes of
497	the Administrative Procedure Act.
498	(6) Except as otherwise specifically provided in chapter
499	627, Florida Statutes, the Office of Insurance Regulation shall
500	not prohibit any insurer, including any residual market plan or
501	joint underwriting association, from paying acquisition costs
502	based on the full amount of premium, as defined in s. 627.403,
503	Florida Statutes, applicable to any policy or prohibit any such
504	insurer from including the full amount of acquisition costs in a
505	rate filing.
506	(7) The establishment of any rate, rating classification,
507	rating plan or schedule, or variation thereof in violation of
508	part IX of chapter 626, Florida Statutes, is also in violation
509	of this section.
510	(8) The submission of rates, rating schedules, and rating
511	manuals to the Office of Insurance Regulation by a licensed
512	rating organization of which an insurer is a member or
513	subscriber will be sufficient compliance with this section for
514	any insurer maintaining membership or subscribership in such
515	organization, to the extent that the insurer uses the rates,
516	rating schedules, and rating manuals of such organization. All
517	such information shall be available for public inspection, upon
518	receipt by the office, during usual business hours.
519	(9) The initial submission of a rate by an insurer or
520	self-insurer shall be deemed inadequate or excessive if the rate
521	is less than or exceeds the average aggregate rate of the
522	individual insurer or self-insurer with at least 10-percent
523	market share in this state for the previous calendar year.
524	Section 12. Subsection (7) is added to section 627.062,
525	Florida Statutes, to read:
526	627.062 Rate standards.--
527	(7) This section shall not apply to professional medical
528	malpractice insurance.
529	Section 13. Section 627.3518, Florida Statutes, is created
530	to read:
531	627.3518 Rates for medical malpractice insurance.--
532	(1) No insurer issuing policies of medical malpractice
533	insurance in this state may use a rate in excess of the rate
534	such insurer used in this state on January 1, 2001. Insurers
535	issuing polices of medical malpractice insurance if such insurer
536	had no rates in effect in this state on January 1, 2001, may not
537	use rates that exceed the rates used by the insurer with the
538	most policies of medical malpractice insurance in effect in this
539	state on January 1, 2001.
540	(2) Each insurer’s rates for medical malpractice insurance
541	may be increased only if the Chief Financial Officer determines,
542	after a hearing, that the insurer is substantially threatened
543	with insolvency unless its rates for medical malpractice
544	insurance are increased. In such cases, the Chief Financial
545	Officer shall set the medical malpractice insurance rates for
546	such insurer. Rates set by the Chief Financial Officer may not
547	be excessive, inadequate, or unfairly discriminatory.
548	Section 14. Section 627.352, Florida Statutes, is created
549	to read:
550	627.352 Medical malpractice insurance; issuance required
551	of certain insurers.--No insurer may issue policies of motor
552	vehicle insurance, commercial property insurance, or residential
553	property insurance in this state unless such insurer also issues
554	policies of medical malpractice insurance in this state. No
555	insurer issuing policies of medical malpractice insurance may
556	deny issuance of a policy of medical malpractice insurance to
557	any health care provider unless such denial is based on
558	underwriting standards approved by the Chief Financial Officer.
559	Section 15. Subsection (10) of section 627.357, Florida
560	Statutes, is amended to read:
561	627.357 Medical malpractice self-insurance.--
562	(10) A self-insurance fund may not be formed under this
563	section after October 1, 1992.
564	Section 16. Paragraph (a) of subsection (5) of section
565	766.314, Florida Statutes, is amended to read:
566	766.314 Assessments; plan of operation.--
567	(5)(a)1.Beginning January 1, 1990, the persons and
568	entities listed in paragraphs (4)(b) and (c), except those
569	persons or entities who are specifically excluded from said
570	provisions, as of the date determined in accordance with the
571	plan of operation, taking into account persons licensed
572	subsequent to the payment of the initial assessment, shall pay
573	an annual assessment in the amount equal to the initial
574	assessments provided in paragraphs (4)(b) and (c). On January 1,
575	1991, and on each January 1 thereafter, the association shall
576	determine the amount of additional assessments necessary
577	pursuant to subsection (7), in the manner required by the plan
578	of operation, subject to any increase determined to be necessary
579	by the Department of Insurance pursuant to paragraph (7)(b). On
580	July 1, 1991, and on each July 1 thereafter, the persons and
581	entities listed in paragraphs (4)(b) and (c), except those
582	persons or entities who are specifically excluded from said
583	provisions, shall pay the additional assessments which were
584	determined on January 1. Beginning January 1, 1990, the entities
585	listed in paragraph (4)(a), including those licensed on or after
586	October 1, 1988, shall pay an annual assessment of $50 per
587	infant delivered during the prior calendar year. The additional
588	assessments which were determined on January 1, 1991, pursuant
589	to the provisions of subsection (7) shall not be due and payable
590	by the entities listed in paragraph (4)(a) until July 1.
591	2. Any person or entity listed in paragraph (4)(b) or
592	paragraph (4)(c) who paid the annual assessment specified in
593	this section for the year beginning July 1, 2001, and the year
594	beginning July 1, 2002, shall be exempt from payment of the
595	annual assessment for the year beginning July 1, 2003, and the
596	year beginning July 1, 2004.
597	Section 17. This act shall take effect upon becoming a law
598	and shall apply to policies issued or renewed after that date,
599	and shall apply to all rates, rating schedules, or rating
600	manuals submitted to the Office of Insurance Regulation on or
601	after July 1, 2003.