HB 1655 2003
1	A bill to be entitled
2	An act relating to workers' compensation insurance;
3	providing for startup funding for the Florida Employers
4	Mutual Insurance Company, as created by the act; requiring
5	workers' compensation insurers to report cost data to the
6	Department of Financial Services; requiring insurance
7	carriers to report medical claims data to the Department
8	of Health; providing for the data to be used to determine
9	trends and changes in health care costs associated with
10	workers' compensation claims; requiring the Chief
11	Financial Officer to approve a plan for operating a
12	residual market to guarantee insurance coverage for
13	employers; providing for rates; providing for any deficit
14	to be distributed through an assessment on insurance
15	carriers that write workers' compensation insurance;
16	requiring the Chief Financial Officer to adopt rules;
17	creating the Florida Employers Mutual Insurance Company
18	Act; providing definitions; creating the Florida Employers
19	Mutual Insurance Company to provide workers' compensation
20	insurance and employer's liability coverage; providing for
21	organization of the company as a not-for-profit
22	corporation; providing for a board of directors of the
23	company; providing for appointment of members and terms of
24	office; providing membership qualifications; requiring the
25	board to hire an administrator; providing powers and
26	duties; requiring the administrator to give a bond;
27	providing immunity from liability for official acts taken
28	by a board member, officer, or employee; authorizing the
29	board to establish insurance rates; requiring the board to
30	adopt an investment policy and supervise the investments
31	of the company; authorizing insurance agents or brokers
32	licensed in this state to sell workers' compensation
33	insurance policies for the company; requiring a workplace
34	safety program for policyholders; prohibiting the
35	appropriation of state funds to the company; requiring an
36	annual audit of the books of the company; requiring a
37	report to the Governor and the Legislature; requiring the
38	administrator to submit a budget to the board; requiring
39	the Department of Financial Services to examine the
40	company; providing definitions; prohibiting discrimination
41	in the payment of dividends; providing that it is an
42	unfair trade practice to condition payment of a dividend
43	upon renewal of a policy; prohibiting certain agreements
44	restraining trade; requiring uniform rating plans;
45	requiring the Chief Financial Officer to conduct certain
46	examinations of insurers; providing penalties; providing
47	for a determination of a competitive market in the
48	workers' compensation and employer's liability lines of
49	business; requiring the Chief Financial Officer to monitor
50	the degree of competition; amending s. 440.02, F.S.;
51	revising, providing, and deleting definitions; amending s.
52	440.05, F.S.; revising requirements relating to submitting
53	notice of election of exemption and maintenance of
54	records; amending s. 440.06, F.S.; revising provisions
55	relating to failure to secure compensation; amending s.
56	440.077, F.S.; providing that a corporate officer electing
57	to be exempt may not receive benefits under ch. 440, F.S.;
58	amending s. 440.09, F.S.; providing for an increase in
59	compensation if the employer knowingly refused or failed
60	to provide a safety appliance or observe a safety rule;
61	amending s. 440.11, F.S.; providing that certain
62	limitations with respect to an employer's liability do not
63	apply if the employer fails to secure coverage as
64	required; amending s. 440.13, F.S.; revising the number of
65	and period for certain medical services; revising the
66	requirements for contesting a disallowance of payment;
67	establishing certain maximum reimbursement allowances;
68	amending s. 440.15, F.S.; providing that certain time
69	limitations for temporary benefits are presumed
70	sufficient; revising certain benefits for impairment;
71	amending s. 440.16, F.S.; increasing the amount of
72	compensation for funeral expenses and for death; amending
73	s. 440.185, F.S.; revising certain requirements for notice
74	of injury or death; amending s. 440.19, F.S.; revising a
75	limitation on the period for filing a petition for
76	benefits; amending s. 440.381, F.S.; requiring an
77	application for coverage to include job descriptions for
78	the employment for which the employer seeks coverage;
79	requiring that a sworn statement be included with certain
80	audit documents; providing a penalty; amending s. 440.591,
81	F.S.; requiring the Division of Workers' Compensation to
82	adopt rules for a model settlement agreement; amending ss.
83	624.482 and 627.041, F.S.; correcting references; amending
84	s. 627.062, F.S.; deleting an exemption for the
85	application of certain rate standards to workers'
86	compensation or employer's liability insurance; amending
87	s. 627.0645, F.S.; deleting certain requirements for
88	annual filings; amending s. 627.072, F.S.; deleting
89	certain requirements with respect to setting rates for
90	workers' compensation and employer's liability insurance;
91	amending s. 627.096, F.S.; providing that certain data and
92	other information submitted to the Workers' Compensation
93	Rating Bureau is a public record; amending s. 627.111,
94	F.S.; deleting references; amending s. 627.291, F.S.;
95	deleting requirements for rating organizations to provide
96	certain information; amending s. 631.914, F.S.; deleting a
97	reference; repealing ss. 627.091, 627.101, 627.151,
98	627.211, and 627.281, F.S., relating to rate filings for
99	workers' compensation and employer's liability insurance;
100	providing an effective date.
101
102	Be It Enacted by the Legislature of the State of Florida:
103
104	Section 1. Florida Employers Mutual Insurance Company;
105	loans.--After January 1, 2004, the director of the Division of
106	Workers' Compensation shall make one or more loans to the
107	Florida Employers Mutual Insurance Company in an amount not to
108	exceed an aggregate amount of $5 million from the fund
109	maintained to administer sections 1 through 22 of this act for
110	startup funding and initial capitalization of the company. The
111	board of the company shall make application to the director for
112	the loans, stating the amount to be loaned to the company. The
113	loans shall be for a term of 5 years and, at the time the
114	application for such loans is approved by the director, shall
115	bear interest at the annual rate based on the rate for linked
116	deposit loans as calculated by the Chief Financial Officer.
117	Section 2. Workers' compensation insurers to report cost
118	data to the Department of Financial Services.--All workers'
119	compensation insurers or their designated agents, self-insurers,
120	and state agencies responsible for the collection or maintenance
121	of workers' compensation related data shall report claims
122	information necessary to determine and analyze costs of the
123	workers' compensation system to the Chief Financial Officer or
124	to such agents as the Chief Financial Officer designates. The
125	Chief Financial Officer may adopt rules to administer this
126	section. All data, statistics, schedules, or other information
127	submitted to, or considered by, the Department of Financial
128	Services shall be a public record.
129	Section 3. Insurers to report medical claims data to the
130	Department of Health; contents; consolidated health plan;
131	duties; purpose; costs.--
132	(1) Each commercial insurance carrier licensed to sell
133	workers' compensation insurance in this state shall provide to
134	the Department of Health at least every 6 months workers'
135	compensation medical claims history data as required by the
136	department. Such data shall be on electronic media and shall
137	include the current procedural and medical terminology codes
138	relating to the medical treatment, dates of treatment,
139	demographic characteristics of the worker, type of health care
140	provider rendering care, and charges for treatment. The
141	department may require a statistically valid sample of claims.
142	The department may, for purposes of verification, collect data
143	from health care providers relating to the treatment of workers'
144	compensation injuries.
145	(2) The data required in subsection (1) shall be used by
146	the department to determine historical and statistical trends,
147	variations, and changes in health care costs associated with
148	workers' compensation patients compared with nonworkers'
149	compensation patients with similar injuries and conditions. Such
150	data shall be readily available for review by users of the
151	workers' compensation system, members of the Legislature, the
152	Division of Workers' Compensation, and the Department of
153	Financial Services. Data released by the Department of Health
154	may not identify a patient or health care provider.
155	(3) Any additional personnel or equipment needed by the
156	Department of Health to meet the requirements of this section
157	shall be paid for by the workers' compensation fund.
158	Section 4. Residual market; Department of Financial
159	Services to develop plan; insurers to participate; rates;
160	procedures; duties of Chief Financial Officer.--
161	(1) Within 45 days after August 28, 2003, the Chief
162	Financial Officer shall approve a plan of operation for a new
163	residual market that will guarantee insurance coverage and
164	quality loss prevention and control services for employers
165	seeking coverage through the plan. The new residual market shall
166	begin operation January 1, 2004.
167	(2) Each insurer authorized to write workers' compensation
168	and employers' liability insurance shall participate in the
169	plan, providing for the equitable apportionment among insurers
170	of insurance that may be afforded applicants who are in good
171	faith entitled to but who are unable to procure such insurance
172	through ordinary methods, except that all employers that have
173	expiring annual premiums greater than $250,000 must negotiate a
174	retrospective rating plan with their insurer which is acceptable
175	to the Chief Financial Officer. The rates, supplementary rate
176	information, and policy forms to be used in such a plan and any
177	future modification thereof must be submitted to the Chief
178	Financial Officer for approval at least 75 days prior to the
179	effective date of the rate. Such rates shall be set by the Chief
180	Financial Officer after hearing so that the amount required in
181	premiums, together with reasonable investment income earned on
182	those premiums, is not excessive, inadequate, or unfairly
183	discriminatory and is actuarially sufficient to apply claims and
184	losses and reasonable operating expenses of the insurers. This
185	section does not prevent the Chief Financial Officer from
186	including a merit rating plan for nonexperienced rated employers
187	within the residual market plan. The Chief Financial Officer
188	shall adopt within the plan a system to distribute any residual
189	market deficit through an assessment on insurance carriers
190	authorized to write workers' compensation insurance in
191	proportion to the respective share of voluntary market premium
192	written by such carrier.
193	(3) The Chief Financial Officer shall disapprove any
194	filing that does not meet the requirements of this section. A
195	filing shall be deemed to meet such requirements unless
196	approved, disapproved, or modified by the Chief Financial
197	Officer within 75 days after the filing is made. In disapproving
198	a filing made pursuant to this section, the Chief Financial
199	Officer shall have the same authority and follow the same
200	procedures as in disapproving a rate filing pursuant to the
201	requirements for filings in the voluntary market. The designated
202	advisory organization may make and file the plan of operation,
203	rates, rating plans, rules, and policy forms under this section.
204	(4) The Chief Financial Officer shall establish by rule
205	standards to ensure that any employer insured through the plan
206	shall receive the same quality of service in the areas of
207	employee classification, safety engineering, loss control,
208	claims handling, and claim reserving practices as do employers
209	that are voluntarily insured. The standards established by the
210	Chief Financial Officer pursuant to this subsection shall also
211	specify the procedures and grounds according to which an
212	employer insured through the plan shall be assigned an insurer,
213	and the method by which such employers shall be informed of such
214	procedures and grounds. All insurers of the residual market
215	shall process applications, conduct safety engineering or other
216	loss control services, and provide claims handling within the
217	state or adjoining states.
218	Section 5. Florida Employers Mutual Insurance Company Act;
219	definitions.--
220	(1) Sections 5 through 15 of this act shall be known by
221	the popular name the "Florida Employers Mutual Insurance Company
222	Act."
223	(2) As used in sections 5 through 15 of this act, the
224	term:
225	(a) "Administrator" means the chief executive officer of
226	the Florida Employers Mutual Insurance Company.
227	(b) "Board" means the board of directors of the Florida
228	Employers Mutual Insurance Company.
229	(c) "Company" means the Florida Employers Mutual Insurance
230	Company.
231	Section 6. Florida Employers Mutual Insurance Company
232	created; powers; purpose.--The Florida Employers Mutual
233	Insurance Company is created as an independent public
234	corporation for the purpose of insuring employers in this state
235	against liability for workers' compensation, occupational
236	disease, and employers' liability coverage. The company shall be
237	organized and operated as a domestic mutual insurance company
238	and it shall not be a state agency. The company shall have the
239	powers granted a not-for-profit corporation under chapter 617,
240	Florida Statutes, to the extent that such provisions do not
241	conflict with sections 5 through 15 of this act. The company
242	shall be a member of the Florida Insurance Guaranty Association
243	and shall be subject to assessments therefrom, and the members
244	of such association shall bear responsibility in the event of
245	the insolvency of the company. The company shall be established
246	pursuant to sections 5 through 15 of this act. Preference shall
247	be given to employers that develop an annual premium of not
248	greater than $10,000. The company shall use flexibility and
249	experimentation in developing types of policies and coverages
250	offered to employers, subject to the approval of the Chief
251	Financial Officer.
252	Section 7. Board created; members, appointment,
253	qualifications, and terms.--
254	(1) There is created a board of directors for the company.
255	The board shall be appointed by January 1, 2004, and shall
256	consist of five members appointed or selected as provided in
257	this section. The Governor shall appoint the initial five
258	members of the board, who shall be subject to confirmation by
259	the Senate. Each director shall be appointed to a 4-year term.
260	Terms shall be staggered so that no more than two director's
261	terms expire in any year on the first day of July. The five
262	directors initially appointed by the Governor shall determine
263	their initial terms by lot. At the expiration of the term of any
264	member of the board, the company's policyholders shall elect a
265	new director in accordance with provisions determined by the
266	board.
267	(2) Any person may be a director who:
268	(a) Does not have any interest as a stockholder, employee,
269	attorney, agent, broker, or contractor of an insurance entity,
270	who writes workers' compensation insurance, or whose affiliates
271	write workers' compensation insurance; and
272	(b) Is of good moral character and who has never pleaded
273	guilty to, or been found guilty of, a felony.
274	(3) The board shall annually elect a chair and any other
275	officers it deems necessary for the performance of its duties.
276	Board committees and subcommittees may also be formed.
277	Section 8. Administrator; qualifications and compensation;
278	powers of board.--
279	(1) By March 1, 2004, the board shall hire an
280	administrator who shall serve at the pleasure of the board and
281	the company shall be fully prepared to be operational by March
282	1, 2005, and assume its responsibilities pursuant to sections 5
283	through 15 of this act. The administrator shall receive
284	compensation as established by the board and must have proven
285	successful experience as an executive at the general management
286	level in the insurance business.
287	(2) The board is vested with full power, authority, and
288	jurisdiction over the company. The board may perform all acts
289	necessary or convenient in the administration of the company or
290	in connection with the insurance business to be carried on by
291	the company. In this regard, the board is empowered to function
292	in all aspects as a governing body of a private insurance
293	carrier.
294	Section 9. Duties of administrator; bond required;
295	immunity from liability for board and employees.--
296	(1) The administrator of the company shall act as the
297	company's chief executive officer. The administrator shall be in
298	charge of the day-to-day operations and management of the
299	company.
300	(2) Before entering the duties of office, the
301	administrator shall give an official bond in an amount and with
302	sureties approved by the board. The premium for the bond shall
303	be paid by the company.
304	(3) The administrator or his or her designee shall be the
305	custodian of the moneys of the company, and all premiums,
306	deposits, or other moneys paid to the company shall be deposited
307	with a financial institution as designated by the administrator.
308	(4) A board member, officer, or employee of the company
309	may not be held liable in a private capacity for any act
310	performed or obligation entered into when done in good faith,
311	without intent to defraud, and in an official capacity in
312	connection with the administration, management, or conduct of
313	the company or affairs relating to it.
314	Section 10. Rates; board to determine.--The board shall
315	have full power and authority to establish rates to be charged
316	by the company for insurance. The board shall contract for the
317	services of or hire an independent actuary who is a member in
318	good standing with the American Academy of Actuaries to develop
319	and recommend actuarially sound rates. Rates shall be set at
320	amounts sufficient, when invested, to carry all claims to
321	maturity, meet the reasonable expenses of conducting the
322	business of the company, and maintain a reasonable surplus. The
323	company shall conduct a workers' compensation program that shall
324	be neither more nor less than self-supporting.
325	Section 11. Investment policy; board to determine;
326	administrator to make investments.--The board shall formulate
327	and adopt an investment policy and supervise the investment
328	activities of the company. The administrator may invest and
329	reinvest the surplus or reserves of the company subject to the
330	limitations imposed on domestic insurance companies by state
331	law. The company may retain an independent investment counsel.
332	The board shall periodically review and appraise the investment
333	strategy being followed and the effectiveness of such services.
334	Any investment counsel retained or hired shall periodically
335	report to the board on investment results and related matters.
336	Section 12. Agents authorized to sell policies;
337	commissions.--Any insurance agent or broker licensed to sell
338	workers' compensation insurance in this state shall be
339	authorized to sell insurance policies for the company in
340	compliance with the bylaws adopted by the company. The board
341	shall establish a schedule of commissions to pay for the
342	services of the agent.
343	Section 13. Workplace safety program; reduction in
344	rates.--
345	(1) The administrator shall formulate, implement, and
346	monitor a workplace safety program for all policyholders.
347	(2) The company shall have representatives whose sole
348	purpose is to develop, with policyholders, a written workplace
349	accident and injury reduction plan that promotes safe working
350	conditions and that is based upon clearly stated goals and
351	objectives. Company representatives shall have reasonable access
352	to the premises of any policyholder or applicant during regular
353	working hours. The company shall communicate the importance of a
354	well-defined safety plan and assist in any way to obtain this
355	objective.
356	(3) The administrator or board may refuse to insure, or
357	may terminate the insurance of, any subscriber who refuses to
358	permit on-site examinations or disregards the workplace accident
359	and injury reduction plan.
360	(4) Upon the completion of a detailed inspection and
361	recognition of a high regard for employee work safety, a
362	deviation may be applied to the rate structure of that insured
363	in recognition of those efforts.
364	Section 14. Company not to receive state
365	appropriation.--The Florida Employers Mutual Insurance Company
366	may not receive any state appropriation, directly or indirectly,
367	except as otherwise expressly provided by law.
368	Section 15. Audit required; procedure; report to Governor
369	and Legislature; administrator to formulate budget; subscribers
370	to be provided policy.--
371	(1) The board shall cause an annual audit of the books of
372	accounts, funds, and securities of the company to be made by a
373	competent and independent firm of certified public accountants
374	and the cost of the audit shall be charged against the company.
375	A copy of the audit report shall be filed with the Chief
376	Financial Officer and the administrator.
377	(2) The board shall submit an annual independently audited
378	report in accordance with procedures governing annual reports
379	adopted by the National Association of Insurance Commissioners
380	by March 1 of each year and the report shall be delivered to the
381	Governor and the Legislature and shall indicate the business
382	done by the company during the previous year and contain a
383	statement of the resources and liabilities of the company.
384	(3) The administrator shall annually submit to the board
385	for its approval an estimated budget of the entire expense of
386	administering the company for the succeeding calendar year,
387	having due regard to the business interests and contract
388	obligations of the company.
389	(4) The incurred loss experience and expense of the
390	company shall be ascertained each year to include, but not be
391	limited to, estimates of outstanding liabilities for claims
392	reported to the company but not yet paid and liabilities for
393	claims arising from injuries that have occurred but have not yet
394	been reported to the company. If there is an excess of assets
395	over liabilities, necessary reserves, and a reasonable surplus
396	for the catastrophe hazard, a cash dividend may be declared or a
397	credit allowed to an employer who has been insured with the
398	company in accordance with criteria approved by the board, which
399	may account for the employer's safety record and performance.
400	(5) The Department of Financial Services shall conduct an
401	examination of the company in the manner and under the
402	conditions provided by the Florida Insurance Code for the
403	examination of insurance carriers. The board shall pay the cost
404	of the examination as an expense of the company. The company is
405	subject to all provisions of law relating to private insurance
406	carriers and to the jurisdiction of the Department of Financial
407	Services in the same manner as private insurance carriers,
408	except as provided by the Chief Financial Officer.
409	(6) For the purpose of ascertaining the correctness of the
410	amount of payroll reported, the number of employees on the
411	employer's payroll, and other information required by the
412	administrator in the proper administration of the company, the
413	records and payrolls of each employer insured by the company
414	shall always be open to inspection by the administrator or his
415	or her authorized agent or representative.
416	(7) Each employer provided insurance coverage by the
417	company, upon complying with the underwriting standards adopted
418	by the company and completing the application form prescribed by
419	the company, shall be furnished with a policy showing the date
420	on which the insurance becomes effective.
421	Section 16. Definitions.--As used in sections 16 through
422	22 of this act, the term:
423	(1) "Accepted actuarial standards" means the standards
424	adopted by the Casualty Actuarial Society in its Statement of
425	Principles Regarding Property and Casualty Insurance Ratemaking,
426	and the Standards of Practice adopted by the Actuarial Standards
427	Board.
428	(2) "Advisory organization" means any entity that has two
429	or more member insurers or is controlled either directly or
430	indirectly by two or more insurers and that assists insurers in
431	ratemaking-related activities. Two or more insurers that have a
432	common ownership or operate in this state under common
433	management or control constitute a single insurer for the
434	purpose of this definition. The term does not include a joint
435	underwriting association, any actuarial or legal consultant, any
436	employee of an insurer, or insurers under common control or
437	management or their employees or manager.
438	(3) "Classification system" or "classification" means the
439	plan, system, or arrangement for recognizing differences in
440	exposure to hazards among industries, occupations, or operations
441	of insurance policyholders.
442	(4) "Competitive market" means a market that has not been
443	found to be noncompetitive pursuant to section 21 of this act.
444	(5) "Director" means the Chief Financial Officer.
445	(6) "Expenses" means that portion of any rate attributable
446	to acquisition and field supervision; collection expenses and
447	general expenses; and taxes, licenses, and fees.
448	(7) "Experience rating" means a rating procedure using
449	past insurance experience of the individual policyholder to
450	forecast future losses by measuring the policyholder's loss
451	experience against the loss experience of policyholders in the
452	same classification to produce a prospective premium credit,
453	debit, or unity modification.
454	(8) "Loss trending" means any procedure for projecting
455	developed losses to the average date of loss for the period
456	during which the policies are to be effective.
457	(9) "Market" means the interaction between buyers and
458	sellers of workers' compensation insurance within this state
459	pursuant to the provisions of sections 16 through 22 of this
460	act.
461	(10) "Noncompetitive market" means a market for which
462	there is a ruling in effect pursuant to section 21 of this act
463	that a reasonable degree of competition does not exist.
464	(11) "Prospective loss costs" means that portion of a rate
465	which does not include provisions for expenses, other than loss
466	adjustment expenses, or profit. Prospective loss costs are
467	developed losses projected through loss trending to a future
468	point in time, including any assessments that are loss-based and
469	ascertained by accepted actuarial standards.
470	(12) "Pure premium rate" means that portion of the rate
471	which represents the loss cost per unit of exposure, including
472	loss adjustments expense.
473	(13) "Rate" means the cost of insurance per exposure base
474	unit, prior to any application of individual risk variations
475	based on loss or expense considerations, and does not include
476	minimum premiums.
477	(14) "Residual market" means the plan, either voluntary or
478	mandated by law, involving participation by insurers in the
479	equitable apportionment among them of insurance that may be
480	afforded applicants who are unable to obtain insurance through
481	ordinary methods.
482	(15) "Statistical plan" means the plan, system, or
483	arrangement used in collecting data.
484	(16) "Supplementary rate information" means any manual or
485	plan of rates, classifications system, rating schedule, minimum
486	premium, policy fee, rating rule, rating plan, and any other
487	similar information needed to determine the applicable premium
488	for an insured.
489	(17) "Supporting information" means the experience and
490	judgment of the filer and the experience or data of other
491	insurers or organizations relied on by the filer, the
492	interpretation of any statistical data relied on by the filer,
493	descriptions of methods used in making the rates, and any other
494	similar information required to be filed by the director.
495	Section 17. Discrimination prohibited; unfair trade
496	practices.--
497	(1) Nothing in sections 16 through 22 of this act
498	prohibits or regulates the payment of dividends, savings, or
499	unabsorbed premium deposits allowed or returned by insurers to
500	their policyholders, members, or subscribers, but in the payment
501	of such dividends there may not be unfair discrimination between
502	policyholders.
503	(2) A plan for the payment of dividends, savings, or
504	unabsorbed premium deposits allowed or returned by insurers to
505	their policyholders, members, or subscribers is not a rating
506	plan or system.
507	(3) It is an unfair trade practice under the Florida
508	Deceptive and Unfair Trade Practices Act to make the payment of
509	a dividend or any portion thereof conditioned upon renewal of
510	the policy or contract.
511	Section 18. Insurer and advisory organization not to make
512	agreement restraining trade; insurer must use uniform experience
513	rating plan; exceptions.--
514	(1) An insurer or advisory organization may not make any
515	arrangement with any other insurer, advisory organization, or
516	other person which has the purpose or effect of restraining
517	trade unreasonably or of substantially lessening competition in
518	the business of insurance.
519	(2) An insurer may not agree with any other insurer or
520	with the advisory organization to adhere to or use any rate,
521	rating plan, other than the uniform experience rating plan, or
522	rating rule except as otherwise expressly provided by law.
523	(3) The fact that two or more insurers, whether or not
524	members or subscribers of the advisory organization, use
525	consistently or intermittently the same rates, rating plans,
526	rating schedules, rating rules, policy forms, rate
527	classifications, underwriting rules, surveys or inspections, or
528	similar materials is not sufficient in itself to support a
529	finding that an agreement exists.
530	(4) Two or more insurers that have a common ownership or
531	operate in this state under common management or control may act
532	in concert between or among themselves with respect to any
533	matters pertaining to those activities authorized in sections 16
534	through 22 of this act as if they constituted a single insurer.
535	Section 19. Director may conduct examinations; insurer and
536	advisory organizations to maintain records; cost of examination;
537	out-of-state examination may be accepted.--
538	(1) The director may examine any insurer and the advisory
539	organization as deemed necessary to ascertain compliance with
540	sections 16 through 22 of this act.
541	(2) Each insurer and the advisory organization shall
542	maintain reasonable records of the type and kind reasonably
543	adapted to its method of operation containing its experiences or
544	the experience of its members, including the data, statistics,
545	or information collected or used by it in its activities. These
546	records shall be available at all reasonable times to enable the
547	director to determine whether the activities of the advisory
548	organization, insurer, or association comply with the provisions
549	of sections 16 through 22 of this act. Such records shall be
550	maintained in an office within this state or shall be made
551	available to the director for examination or inspection at any
552	time upon reasonable notice.
553	(3) The reasonable cost of an examination made pursuant to
554	this section shall be paid by the examined party upon
555	presentation of a detailed account of such costs.
556	(4) In lieu of any such examination, the director may
557	accept the report of an examination by the insurance supervisory
558	official of another state which is made pursuant to the laws of
559	such state.
560	Section 20. Penalties for violations; each day a separate
561	violation; license may be suspended or revoked.--
562	(1) The director may, upon a finding that any person or
563	organization has violated any provision of sections 16 through
564	22 of this act, impose a penalty of not more than $1,000 for
565	each such violation, but if the director finds such violation to
566	be willful, a penalty of not more than $10,000 for each such
567	violation may be imposed. Such penalties may be in addition to
568	any other penalty provided by law.
569	(2) For purposes of this section, any insurer using a rate
570	for which the insurer has failed to file the rate, supplementary
571	rate information, or supporting information, as required by
572	sections 16 through 22 of this act, commits a separate violation
573	for each day such failure continues.
574	(3) The director may suspend or revoke the license of any
575	advisory organization or insurer that fails to comply with an
576	order of the director within the time limit specified by such
577	order, or any extension thereof which the director may grant.
578	(4) The director may determine when a suspension of
579	license shall become effective and such suspension shall remain
580	in effect for the period fixed by the director unless the
581	director modifies or rescinds such suspension or until the order
582	upon which such suspension is based is modified, rescinded, or
583	reversed.
584	(5) A penalty may not be imposed and a license may not be
585	suspended or revoked except upon a written order of the director
586	stating the findings made after hearing.
587	Section 21. Competitive market presumed to exist;
588	reasonable degree of competition.--
589	(1) A competitive market is presumed to exist unless the
590	director, after hearing, determines that a reasonable degree of
591	competition does not exist in the market and the director issues
592	an order to that effect. Such an order shall expire no later
593	than 1 year after issue. In determining whether a reasonable
594	degree of competition exists, the director may consider relevant
595	tests of workable competition pertaining to market structure,
596	market performance, and market conduct. For the purposes of this
597	section, the term "market" means the statewide workers'
598	compensation and employer's liability lines of business.
599	(2) In determining whether a reasonable degree of
600	competition exists, the following factors shall be considered:
601	(a) Generally accepted and relevant tests of competition
602	pertaining to market structure, market performance, and market
603	conduct;
604	(b) Market concentration as measured by the Herfindahl-
605	Herschman Index;
606	(c) The number of insurers transacting workers'
607	compensation insurance in the market;
608	(d) Insurer market shares and changes in market shares;
609	(e) Ease of entry into the market;
610	(f) Whether long-term profitability for insurers in the
611	market is unreasonably high in relation to the risks being
612	insured; and
613	(g) Whether long-term profitability for insurers in the
614	market is reasonable in relation to industries of comparable
615	business risk.
616	Section 22. Director to monitor degree of competition;
617	purpose.--In determining whether or not a competitive market
618	exists pursuant to section 21 of this act, the director shall
619	monitor the degree of competition in this state. In doing so,
620	the director shall use existing relevant information, analytical
621	systems, and other sources; cause or participate in the
622	development of new relevant information, analytical systems, and
623	other sources; or rely on some combination thereof. Such
624	activities may be conducted internally within the Department of
625	Financial Services, in cooperation with other state insurance
626	agencies, through outside contractors, or in any other
627	appropriate manner.
628	Section 23. Subsections (8), (15), and (16), paragraph (c)
629	of subsection (17), and subsections (38), (41), and (42) of
630	section 440.02, Florida Statutes, are amended, and a new
631	subsection (41) is added to said section, to read:
632	440.02 Definitions.--When used in this chapter, unless the
633	context clearly requires otherwise, the following terms shall
634	have the following meanings:
635	(8) "Construction industry" means any business that
636	carries out for-profit activities involving the carrying out of
637	any building, clearing, filling, excavation, or substantial
638	improvement in the size or use of any structure or the
639	appearance of any land. When appropriate to the context,
640	"construction" refers to the act of construction or the result
641	of construction. However, "construction" doesshall not mean a
642	homeowner'slandowner'sact of construction or the result of a
643	construction upon his or her own premises, provided such
644	premises are not intended to be sold,or resold, or leased by
645	the owner within 1 year after the commencement of the
646	construction. The division may, by rule, establish those
647	standard industrial classification codes and their definitions
648	which meet the criteria of the term "construction industry" as
649	set forth in this section.
650	(15)(a) "Employee" means any person who receives
651	remuneration from an employer for the performance of any work or
652	service, whether byengaged in any employment under any
653	appointment or contract forofhire or apprenticeship, express
654	or implied, oral or written, whether lawfully or unlawfully
655	employed, and includes, but is not limited to, aliens and
656	minors.
657	(b) "Employee" includes any person who is an officer of a
658	corporation and who performs services for remuneration for such
659	corporation within this state, whether or not such services are
660	continuous.
661	1. Any officer of a corporation may elect to be exempt
662	from this chapter by filing written notice of the election with
663	the department as provided in s. 440.05.
664	2. As to officers of a corporation who are actively
665	engaged in the construction industry, no more than three
666	officers of a corporation or of any group of affiliated
667	corporationsmay elect to be exempt from this chapter by filing
668	written notice of the election with the department as provided
669	in s. 440.05. Officers must be shareholders, each owning at
670	least 10 percent of the stock of such corporation, in order to
671	elect exemptions under this chapter.However, any exemption
672	obtained by a corporate officer of a corporation actively
673	engaged in the construction industry is not applicable with
674	respect to any commercial building project estimated to be
675	valued at $250,000 or greater.
676	3. An officer of a corporation who elects to be exempt
677	from this chapter by filing a written notice of the election
678	with the department as provided in s. 440.05 is not an employee.
679
680	Services are presumed to have been rendered to the corporation
681	if the officer is compensated by other than dividends upon
682	shares of stock of the corporation which the officer owns.
683	(c)1. "Employee" includes:
684	1.A sole proprietor or a partner who devotes full time to
685	the proprietorship or partnership and, except as provided in
686	this paragraph,elects to be included in the definition of
687	employee by filing notice thereof as provided in s. 440.05.
688	2. Any person who is being paid by a construction
689	contractor, except as otherwise permitted by this chapter, for
690	work performed by or as a subcontractor or employee of a
691	subcontractor.
692	3. An independent contractor working or performing
693	services in the construction industry.Partners or sole
694	proprietors actively engaged in the construction industry are
695	considered employees unless they elect to be excluded from the
696	definition of employee by filing written notice of the election
697	with the department as provided in s. 440.05. However, no more
698	than three partners in a partnership that is actively engaged in
699	the construction industry may elect to be excluded.
700	4. A sole proprietor or partner who is activelyengaged in
701	the construction industry and a partner or partnership that is
702	engaged in the construction industry.who elects to be exempt
703	from this chapter by filing a written notice of the election
704	with the department as provided in s. 440.05 is not an employee.
705	For purposes of this chapter, an independent contractor is an
706	employee unless he or she meets all of the conditions set forth
707	in subparagraph (d)1.
708	2. Notwithstanding the provisions of subparagraph 1., the
709	term "employee" includes a sole proprietor or partner actively
710	engaged in the construction industry with respect to any
711	commercial building project estimated to be valued at $250,000
712	or greater. Any exemption obtained is not applicable, with
713	respect to work performed at such a commercial building project.
714	(d) "Employee" does not include:
715	1. An independent contractor that is not engaged in the
716	construction industry., if:
717	a. The independent contractor maintains a separate
718	business with his or her own work facility, truck, equipment,
719	materials, or similar accommodations;
720	b. The independent contractor holds or has applied for a
721	federal employer identification number, unless the independent
722	contractor is a sole proprietor who is not required to obtain a
723	federal employer identification number under state or federal
724	requirements;
725	c. The independent contractor performs or agrees to
726	perform specific services or work for specific amounts of money
727	and controls the means of performing the services or work;
728	d. The independent contractor incurs the principal
729	expenses related to the service or work that he or she performs
730	or agrees to perform;
731	e. The independent contractor is responsible for the
732	satisfactory completion of work or services that he or she
733	performs or agrees to perform and is or could be held liable for
734	a failure to complete the work or services;
735	f. The independent contractor receives compensation for
736	work or services performed for a commission or on a per-job or
737	competitive-bid basis and not on any other basis;
738	g. The independent contractor may realize a profit or
739	suffer a loss in connection with performing work or services;
740	h. The independent contractor has continuing or recurring
741	business liabilities or obligations; and
742	i. The success or failure of the independent contractor's
743	business depends on the relationship of business receipts to
744	expenditures.
745
746	However, the determination as to whether an individual included
747	in the Standard Industrial Classification Manual of 1987,
748	Industry Numbers 0711, 0721, 0722, 0751, 0761, 0762, 0781, 0782,
749	0783, 0811, 0831, 0851, 2411, 2421, 2435, 2436, 2448, or 2449,
750	or a newspaper delivery person, is an independent contractor is
751	governed not by the criteria in this paragraph but by common-law
752	principles, giving due consideration to the business activity of
753	the individual. Notwithstanding the provisions of this paragraph
754	or any other provision of this chapter, with respect to any
755	commercial building project estimated to be valued at $250,000
756	or greater, a person who is actively engaged in the construction
757	industry is not an independent contractor and is either an
758	employer or an employee who may not be exempt from the coverage
759	requirements of this chapter.
760	2. A real estate salesperson or agent, if that person
761	agrees, in writing, to perform for remuneration solely by way of
762	commission.
763	3. Bands, orchestras, and musical and theatrical
764	performers, including disk jockeys, performing in licensed
765	premises as defined in chapter 562, if a written contract
766	evidencing an independent contractor relationship is entered
767	into before the commencement of such entertainment.
768	4. An owner-operator of a motor vehicle who transports
769	property under a written contract with a motor carrier which
770	evidences a relationship by which the owner-operator assumes the
771	responsibility of an employer for the performance of the
772	contract, if the owner-operator is required to furnish the
773	necessary motor vehicle equipment and all costs incidental to
774	the performance of the contract, including, but not limited to,
775	fuel, taxes, licenses, repairs, and hired help; and the owner-
776	operator is paid a commission for transportation service and is
777	not paid by the hour or on some other time-measured basis.
778	5. A person whose employment is both casual and not in the
779	course of the trade, business, profession, or occupation of the
780	employer.
781	6. A volunteer, except a volunteer worker for the state or
782	a county, municipality, or other governmental entity. A person
783	who does not receive monetary remuneration for services is
784	presumed to be a volunteer unless there is substantial evidence
785	that a valuable consideration was intended by both employer and
786	employee. For purposes of this chapter, the term "volunteer"
787	includes, but is not limited to:
788	a. Persons who serve in private nonprofit agencies and who
789	receive no compensation other than expenses in an amount less
790	than or equivalent to the standard mileage and per diem expenses
791	provided to salaried employees in the same agency or, if such
792	agency does not have salaried employees who receive mileage and
793	per diem, then such volunteers who receive no compensation other
794	than expenses in an amount less than or equivalent to the
795	customary mileage and per diem paid to salaried workers in the
796	community as determined by the department; and
797	b. Volunteers participating in federal programs
798	established under Pub. L. No. 93-113.
799	7. Unless otherwise prohibited by this chapter,any
800	officer of a corporation who elects to be exempt from this
801	chapter.
802	8. AnA sole proprietor or officer of a corporation who
803	actively engages in the construction industry, and a partner in
804	a partnership that is activelyengaged in the construction
805	industry,who elects to be exempt from the provisions of this
806	chapter, as otherwise permitted in this chapter. Such sole
807	proprietor, officer, or partneris not an employee for any
808	reason until the notice of revocation of election filed pursuant
809	to s. 440.05 is effective.
810	9. An exercise rider who does not work for a single horse
811	farm or breeder, and who is compensated for riding on a case-by-
812	case basis, provided a written contract is entered into prior to
813	the commencement of such activity which evidences that an
814	employee/employer relationship does not exist.
815	10. A taxicab, limousine, or other passenger vehicle-for-
816	hire driver who operates said vehicles pursuant to a written
817	agreement with a company which provides any dispatch, marketing,
818	insurance, communications, or other services under which the
819	driver and any fees or charges paid by the driver to the company
820	for such services are not conditioned upon, or expressed as a
821	proportion of, fare revenues.
822	11. A person who performs services as a sports official
823	for an entity sponsoring an interscholastic sports event or for
824	a public entity or private, nonprofit organization that sponsors
825	an amateur sports event. For purposes of this subparagraph, such
826	a person is an independent contractor. For purposes of this
827	subparagraph, the term "sports official" means any person who is
828	a neutral participant in a sports event, including, but not
829	limited to, umpires, referees, judges, linespersons,
830	scorekeepers, or timekeepers. This subparagraph does not apply
831	to any person employed by a district school board who serves as
832	a sports official as required by the employing school board or
833	who serves as a sports official as part of his or her
834	responsibilities during normal school hours.
835	(16)(a)"Employer" means the state and all political
836	subdivisions thereof, all public and quasi-public corporations
837	therein, every person carrying on any employment, and the legal
838	representative of a deceased person or the receiver or trustees
839	of any person. If the employer is a corporation, parties in
840	actual control of the corporation, including, but not limited
841	to, the president, officers who exercise broad corporate powers,
842	directors, and all shareholders who directly or indirectly own a
843	controlling interest in the corporation, are considered the
844	employer for the purposes of ss. 440.105 and 440.106.
845	(b) However, a landowner shall not be considered the
846	employer of a person hired by the landowner to carry out
847	construction on the landowner's own premises if those premises
848	are not intended for immediate sale or resale.
849	(17)
850	(c) "Employment" does not include service performed by or
851	as:
852	1. Domestic servants in private homes.
853	2. Agricultural labor performed on a farm in the employ of
854	a bona fide farmer, or association of farmers, that employs 5 or
855	fewer regular employees and that employs fewer than 12 other
856	employees at one time for seasonal agricultural labor that is
857	completed in less than 30 days, provided such seasonal
858	employment does not exceed 45 days in the same calendar year.
859	The term "farm" includes stock, dairy, poultry, fruit, fur-
860	bearing animals, fish, and truck farms, ranches, nurseries, and
861	orchards. The term "agricultural labor" includes field foremen,
862	timekeepers, checkers, and other farm labor supervisory
863	personnel.
864	3. Professional athletes, such as professional boxers,
865	wrestlers, baseball, football, basketball, hockey, polo, tennis,
866	jai alai, and similar players, and motorsports teams competing
867	in a motor racing event as defined in s. 549.08.
868	4. Persons performinglabor under a sentence of a court to
869	perform community services as provided in s. 316.193.
870	5. State prisoners or county inmates, except those
871	performing services for private employers or those enumerated in
872	s. 948.03(8)(a).
873	(38) "Catastrophic injury" means a permanent impairment
874	constituted by:
875	(a) Spinal cord injury involving severe paralysis of an
876	arm, a leg, or the trunk;
877	(b) Amputation of an arm, a hand, a foot, or a leg
878	involving the effective loss of use of that appendage;
879	(c) Severe brain or closed-head injury as evidenced by:
880	1. Severe sensory or motor disturbances;
881	2. Severe communication disturbances;
882	3. Severe complex integrated disturbances of cerebral
883	function;
884	4. Severe episodic neurological disorders; or
885	5. Other severe brain and closed-head injury conditions at
886	least as severe in nature as any condition provided in
887	subparagraphs 1.-4.;
888	(d) Second-degree or third-degree burns of 25 percent or
889	more of the total body surface or third-degree burns of 5
890	percent or more to the face and hands; or
891	(e) Total or industrial blindness.; or
892	(f) Any other injury that would otherwise qualify under
893	this chapter of a nature and severity that would qualify an
894	employee to receive disability income benefits under Title II or
895	supplemental security income benefits under Title XVI of the
896	federal Social Security Act as the Social Security Act existed
897	on July 1, 1992, without regard to any time limitations provided
898	under that act.
899	(41) "Specificity" means information on the petition for
900	benefits sufficient to put the employer or carrier on notice of
901	the exact statutory classification and outstanding time period
902	of benefits being requested and includes a detailed explanation
903	of any benefits received that should be increased, decreased,
904	changed, or otherwise modified. If the petition is for medical
905	benefits, the information shall include specific details as to
906	why such benefits are being requested, why such benefits are
907	medically necessary, and why current treatment, if any, is not
908	sufficient.
909	(41) "Commercial building" means any building or structure
910	intended for commercial or industrial use, or any building or
911	structure intended for multifamily use of more than four
912	dwelling units, as well as any accessory use structures
913	constructed in conjunction with the principal structure. The
914	term, "commercial building," does not include the conversion of
915	any existing residential building to a commercial building.
916	(42) "Residential building" means any building or
917	structure intended for residential use containing four or fewer
918	dwelling units and any structures intended as an accessory use
919	to the residential structure.
920	Section 24. Subsections (3), (6), (10), and (13) of
921	section 440.05, Florida Statutes, are amended to read:
922	440.05 Election of exemption; revocation of election;
923	notice; certification.--
924	(3) Each sole proprietor, partner, orofficer of a
925	corporation who is activelyengaged in the construction industry
926	and who elects an exemption from this chapter or who, after
927	electing such exemption, revokes that exemption, must mail a
928	written notice to such effect to the department on a form
929	prescribed by the department. The notice of election to be
930	exempt from the provisions of this chapter must be notarized and
931	under oath. The notice of election to be exempt which is
932	submitted to the department by the sole proprietor, partner, or
933	officer of a corporation who is allowed to claim an exemption as
934	provided by this chaptermust list the name, federal tax
935	identification number, social security number, all certified or
936	registered licenses issued pursuant to chapter 489 held by the
937	person seeking the exemption, a copy of relevant documentation
938	as to employment status filed with the Internal Revenue Service
939	as specified by the department, a copy of the relevant
940	occupational license in the primary jurisdiction of the
941	business, and, for corporate officers and partners,the
942	registration number of the corporation or partnershipfiled with
943	the Division of Corporations of the Department of State along
944	with a copy of the stock certificate evidencing the required
945	ownership under this chapter. The notice of election to be
946	exempt must identify each sole proprietorship, partnership, or
947	corporation that employs the person electing the exemption and
948	must list the social security number or federal tax
949	identification number of each such employer and the additional
950	documentation required by this section. In addition, the notice
951	of election to be exempt must provide that the sole proprietor,
952	partner, orofficer electing an exemption is not entitled to
953	benefits under this chapter, must provide that the election does
954	not exceed exemption limits for officers and partnerships
955	provided in s. 440.02, and must certify that any employees of
956	the corporation whosesole proprietor, partner, or officer
957	electselectingan exemption are covered by workers'
958	compensation insurance. Upon receipt of the notice of the
959	election to be exempt, receipt of all application fees, and a
960	determination by the department that the notice meets the
961	requirements of this subsection, the department shall issue a
962	certification of the election to the sole proprietor, partner,
963	orofficer, unless the department determines that the
964	information contained in the notice is invalid. The department
965	shall revoke a certificate of election to be exempt from
966	coverage upon a determination by the department that the person
967	does not meet the requirements for exemption or that the
968	information contained in the notice of election to be exempt is
969	invalid. The certificate of election must list the namenamesof
970	the sole proprietorship, partnership, orcorporation listed in
971	the request for exemption. A new certificate of election must be
972	obtained each time the person is employed by a new sole
973	proprietorship, partnership, or differentcorporation that is
974	not listed on the certificate of election. A copy of the
975	certificate of election must be sent to each workers'
976	compensation carrier identified in the request for exemption.
977	Upon filing a notice of revocation of election, ana sole
978	proprietor, partner, or officer who is a subcontractor or an
979	officer of a corporate subcontractormust notify her or his
980	contractor. Upon revocation of a certificate of election of
981	exemption by the department, the department shall notify the
982	workers' compensation carriers identified in the request for
983	exemption.
984	(6) A construction industry certificate of election to be
985	exempt which is issued in accordance with this section shall be
986	valid for 2 years after the effective date stated thereon. Both
987	the effective date and the expiration date must be listed on the
988	face of the certificate by the department. The construction
989	industry certificate must expire at midnight, 2 years from its
990	issue date, as noted on the face of the exemption certificate.
991	Any person who has received from the division a construction
992	industry certificate of election to be exempt which is in effect
993	on December 31, 1998, shall file a new notice of election to be
994	exempt by the last day in his or her birth month following
995	December 1, 1998. A construction industry certificate of
996	election to be exempt may be revoked before its expiration by
997	the sole proprietor, partner, orofficer for whom it was issued
998	or by the department for the reasons stated in this section. At
999	least 60 days prior to the expiration date of a construction
1000	industry certificate of exemption issued after December 1, 1998,
1001	the department shall send notice of the expiration date and an
1002	application for renewal to the certificateholder at the address
1003	on the certificate.
1004	(10) Each sole proprietor, partner, orofficer of a
1005	corporation who is actively engaged in the construction industry
1006	and who elects an exemption from this chapter shall maintain
1007	business records as specified by the division by rule, which
1008	rules must include the provision that any corporation with
1009	exempt officers and any partnership activelyengaged in the
1010	construction industry with exempt partnersmust maintain written
1011	statements of those exempted persons affirmatively acknowledging
1012	each such individual' s exempt status.
1013	(13) Any corporate officer permitted by this chapter to
1014	claimclaiming an exemption under this sectionmust be listed on
1015	the records of this state's Secretary of State, Division of
1016	Corporations, as a corporate officer. If the person who claims
1017	an exemption as a corporate officer is not so listed on the
1018	records of the Secretary of State, the individual must provide
1019	to the division, upon request by the division, a notarized
1020	affidavit stating that the individual is a bona fide officer of
1021	the corporation and stating the date his or her appointment or
1022	election as a corporate officer became or will become effective.
1023	The statement must be signed under oath by both the officer and
1024	the president or chief operating officer of the corporation and
1025	must be notarized.The division shall issue a stop-work order
1026	under s. 440.107(1) to any corporation who employs a person who
1027	claims to be exempt as a corporate officer but who fails or
1028	refuses to produce the documents required under this subsection
1029	to the division within 3 business days after the request is
1030	made.
1031	Section 25. Section 440.06, Florida Statutes, is amended
1032	to read:
1033	440.06 Failure to secure compensation; effect.--Every
1034	employer who fails to secure the payment of compensation, as
1035	provided in s. 440.10, by failing to meet the requirements of
1036	under this chapter as provided ins. 440.38 may not, in any suit
1037	brought against him or her by an employee subject to this
1038	chapter to recover damages for injury or death, defend such a
1039	suit on the grounds that the injury was caused by the negligence
1040	of a fellow servant, that the employee assumed the risk of his
1041	or her employment, or that the injury was due to the comparative
1042	negligence of the employee.
1043	Section 26. Section 440.077, Florida Statutes, is amended
1044	to read:
1045	440.077 When a corporatesole proprietor, partner, or
1046	officer rejects chapter, effect.--AnA sole proprietor, partner,
1047	or officer of a corporation who is permitted to elect an
1048	exemption under this chapteractively engaged in the
1049	construction industryand who elects to be exempt from the
1050	provisions of this chapter may not recover benefits under this
1051	chapter.
1052	Section 27. Subsection (5) of section 440.09, Florida
1053	Statutes, is amended to read:
1054	440.09 Coverage.--
1055	(5) If injury is caused by the knowing refusal of the
1056	employee to use a safety appliance or observe a safety rule
1057	required by statute or lawfully adopted by the division, and
1058	brought prior to the accident to the employee's knowledge, or if
1059	injury is caused by the knowing refusal of the employee to use a
1060	safety appliance provided by the employer, the compensation as
1061	provided in this chapter shall be reduced 25 percent. If injury
1062	occurs while the employer has knowingly refused or failed to
1063	provide a safety appliance or observe a safety rule required by
1064	statute or lawfully adopted by the department, the compensation
1065	provided in this chapter shall be increased 25 percent.
1066	Section 28. Subsection (4) of section 440.11, Florida
1067	Statutes, is amended, and subsection (5) is added to said
1068	section, to read:
1069	440.11 Exclusiveness of liability.--
1070	(4) Notwithstanding the provisions of s. 624.155, the
1071	liability of a carrier to an employee or to anyone entitled to
1072	bring suit in the name of the employee shall be as provided in
1073	this chapter, which shall be exclusive and in place of all other
1074	liability, except as provided in s. 624.155.
1075	(5) The limits placed on the employer's liability under
1076	this section do not apply if the employer fails to have secured
1077	coverage mandated under this chapter at the time of a work-
1078	related accident.
1079	Section 29. Paragraph (a) of subsection (2), subsection
1080	(7), and paragraph (a) of subsection (12) of section 440.13,
1081	Florida Statutes, are amended to read:
1082	440.13 Medical services and supplies; penalty for
1083	violations; limitations.--
1084	(2) MEDICAL TREATMENT; DUTY OF EMPLOYER TO FURNISH.--
1085	(a) Subject to the limitations specified elsewhere in this
1086	chapter, the employer shall furnish to the employee such
1087	medically necessary remedial treatment, care, and attendance for
1088	such period as the nature of the injury or the process of
1089	recovery may require, including medicines, medical supplies,
1090	durable medical equipment, orthoses, prostheses, and other
1091	medically necessary apparatus. Remedial treatment, care, and
1092	attendance, including work-hardening programs or pain-management
1093	programs accredited by the Commission on Accreditation of
1094	Rehabilitation Facilities or Joint Commission on the
1095	Accreditation of Health Organizations or pain-management
1096	programs affiliated with medical schools, shall be considered as
1097	covered treatment only when such care is given based on a
1098	referral by a physician as defined in this chapter. Each
1099	facility shall maintain outcome data, including work status at
1100	discharges, total program charges, total number of visits, and
1101	length of stay. The department shall utilize such data and
1102	report to the President of the Senate and the Speaker of the
1103	House of Representatives regarding the efficacy and cost-
1104	effectiveness of such program, no later than October 1, 1994.
1105	Medically necessary treatment, care, and attendance does not
1106	include chiropractic services in excess of 3618treatments or
1107	rendered 168weeks beyond the date of the initial chiropractic
1108	treatment, whichever comes first, unless the carrier authorizes
1109	additional treatment or the employee is catastrophically
1110	injured.
1111	(7) UTILIZATION AND REIMBURSEMENT DISPUTES.--
1112	(a) Any health care provider, carrier, or employer who
1113	elects to contest the disallowance or adjustment of payment by a
1114	carrier under subsection (6) may file amust, within 30 days
1115	after receipt of notice of disallowance or adjustment of
1116	payment, petition under s. 440.192 and proceed in the same
1117	manner as a claimant, including the application of s. 440.34the
1118	agency to resolve the dispute. The petitioner must serve a copy
1119	of the petition on the carrier and on all affected parties by
1120	certified mail. The petition must be accompanied by all
1121	documents and records that support the allegations contained in
1122	the petition. Failure of a petitioner to submit such
1123	documentation to the agency results in dismissal of the
1124	petition.
1125	(b) The carrier must submit to the agency within 10 days
1126	after receipt of the petition all documentation substantiating
1127	the carrier's disallowance or adjustment. Failure of the carrier
1128	to submit the requested documentation to the agency within 10
1129	days constitutes a waiver of all objections to the petition.
1130	(c) Within 60 days after receipt of all documentation, the
1131	agency must provide to the petitioner, the carrier, and the
1132	affected parties a written determination of whether the carrier
1133	properly adjusted or disallowed payment. The agency must be
1134	guided by standards and policies set forth in this chapter,
1135	including all applicable reimbursement schedules, in rendering
1136	its determination.
1137	(d) If the agency finds an improper disallowance or
1138	improper adjustment of payment by an insurer, the insurer shall
1139	reimburse the health care provider, facility, insurer, or
1140	employer within 30 days, subject to the penalties provided in
1141	this subsection.
1142	(e) The agency shall adopt rules to carry out this
1143	subsection. The rules may include provisions for consolidating
1144	petitions filed by a petitioner and expanding the timetable for
1145	rendering a determination upon a consolidated petition.
1146	(b)(f)Any carrier that engages in a pattern or practice
1147	of arbitrarily or unreasonably disallowing or reducing payments
1148	to health care providers may be subject to one or more of the
1149	following penalties imposed by the agency:
1150	1. Repayment of the appropriate amount to the health care
1151	provider.
1152	2. An administrative fine assessed by the agency in an
1153	amount not to exceed $5,000 per instance of improperly
1154	disallowing or reducing payments.
1155	3. Award of the health care provider's costs, including a
1156	reasonable attorney's fee, for prosecuting the petition.
1157	(12) CREATION OF THREE-MEMBER PANEL; GUIDES OF MAXIMUM
1158	REIMBURSEMENT ALLOWANCES.--
1159	(a) A three-member panel is created, consisting of the
1160	Insurance Commissioner, or the Insurance Commissioner's
1161	designee, and two members to be appointed by the Governor,
1162	subject to confirmation by the Senate, one member who, on
1163	account of present or previous vocation, employment, or
1164	affiliation, shall be classified as a representative of
1165	employers, the other member who, on account of previous
1166	vocation, employment, or affiliation, shall be classified as a
1167	representative of employees. The panel shall determine statewide
1168	schedules of maximum reimbursement allowances for medically
1169	necessary treatment, care, and attendance provided by
1170	physicians, hospitals, ambulatory surgical centers, work-
1171	hardening programs, pain programs, and durable medical
1172	equipment. The maximum reimbursement allowances for inpatient
1173	hospital care shall be based on a schedule of per diem rates, to
1174	be approved by the three-member panel no later than March 1,
1175	1994, to be used in conjunction with a precertification manual
1176	as determined by the agency. All compensable charges for
1177	hospital outpatient care shall be reimbursed at 75 percent of
1178	usual and customary charges. Until the three-member panel
1179	approves a schedule of per diem rates for inpatient hospital
1180	care and it becomes effective, all compensable charges for
1181	hospital inpatient care must be reimbursed at 75 percent of
1182	their usual and customary charges. Annually, the three-member
1183	panel shall adopt schedules of maximum reimbursement allowances
1184	for physicians, hospital inpatient care, hospital outpatient
1185	care, ambulatory surgical centers, work-hardening programs, and
1186	pain programs. However, the maximum percentage of increase in
1187	the individual reimbursement allowance may not exceed the
1188	percentage of increase in the Consumer Price Index for the
1189	previous year. The maximum reimbursement allowance may not be
1190	less than 150 percent of the amount of reimbursement provided by
1191	Medicare for nonsurgical medical care and procedures, and may
1192	not be less than 200 percent of the amount of reimbursement
1193	provided by Medicare for surgical procedures.An individual
1194	physician, hospital, ambulatory surgical center, pain program,
1195	or work-hardening program shall be reimbursed either the usual
1196	and customary charge for treatment, care, and attendance, the
1197	agreed-upon contract price, or the maximum reimbursement
1198	allowance in the appropriate schedule, whichever is less.
1199	Section 30. Paragraph (a) of subsection (2), paragraphs
1200	(a) and (b) of subsection (3), and paragraph (b) of subsection
1201	(4) of section 440.15, Florida Statutes, are amended to read:
1202	440.15 Compensation for disability.--Compensation for
1203	disability shall be paid to the employee, subject to the limits
1204	provided in s. 440.12(2), as follows:
1205	(2) TEMPORARY TOTAL DISABILITY.--
1206	(a) In case of disability total in character but temporary
1207	in quality, 66 2/3 percent of the average weekly wages shall be
1208	paid to the employee during the continuance thereof, not to
1209	exceed 104 weeks except as provided in this subsection, s.
1210	440.12(1), and s. 440.14(3). This time limitation for temporary
1211	benefits shall be presumed sufficient unless there is clear and
1212	convincing evidence to the contrary as determined by the judge
1213	of compensation claims. Temporary benefits may not exceed 260
1214	weeks.Once the employee reaches the maximum number of weeks
1215	allowed, or the employee reaches the date of maximum medical
1216	improvement, whichever occurs earlier, temporary disability
1217	benefits shall cease and the injured worker's permanent
1218	impairment shall be determined.
1219	(3) PERMANENT IMPAIRMENT AND WAGE-LOSS BENEFITS.--
1220	(a) Impairment benefits.--
1221	1. Once the employee has reached the date of maximum
1222	medical improvement, impairment benefits are due and payable
1223	within 20 days after the carrier has knowledge of the
1224	impairment.
1225	2. The three-member panel, in cooperation with the
1226	department, shall establish and use a uniform permanent
1227	impairment rating schedule. This schedule must be based on
1228	medically or scientifically demonstrable findings as well as the
1229	systems and criteria set forth in the American Medical
1230	Association's Guides to the Evaluation of Permanent Impairment;
1231	the Snellen Charts, published by American Medical Association
1232	Committee for Eye Injuries; and the Minnesota Department of
1233	Labor and Industry Disability Schedules. The schedule should be
1234	based upon objective findings. The schedule shall be more
1235	comprehensive than the AMA Guides to the Evaluation of Permanent
1236	Impairment and shall expand the areas already addressed and
1237	address additional areas not currently contained in the guides.
1238	On August 1, 1979, and pending the adoption, by rule, of a
1239	permanent schedule, Guides to the Evaluation of Permanent
1240	Impairment, copyright 1977, 1971, 1988, by the American Medical
1241	Association, shall be the temporary schedule and shall be used
1242	for the purposes hereof. For injuries after July 1, 1990,
1243	pending the adoption by rule of a uniform disability rating
1244	agency schedule, the Minnesota Department of Labor and Industry
1245	Disability Schedule shall be used unless that schedule does not
1246	address an injury. In such case, the Guides to the Evaluation of
1247	Permanent Impairment by the American Medical Association shall
1248	be used. Determination of permanent impairment under this
1249	schedule must be made by a physician licensed under chapter 458,
1250	a doctor of osteopathic medicine licensed under chapters 458 and
1251	459, a chiropractic physician licensed under chapter 460, a
1252	podiatric physician licensed under chapter 461, an optometrist
1253	licensed under chapter 463, or a dentist licensed under chapter
1254	466, as appropriate considering the nature of the injury. No
1255	other persons are authorized to render opinions regarding the
1256	existence of or the extent of permanent impairment.
1257	3. All impairment income benefits shall be based on an
1258	impairment rating using the impairment schedule referred to in
1259	subparagraph 2. Impairment income benefits are paid weekly at
1260	the rate of 66 2/350 percent of the employee's average weekly
1261	wagestemporary total disability benefitnot to exceed the
1262	maximum weekly benefit under s. 440.12. An employee's
1263	entitlement to impairment income benefits begins the day after
1264	the employee reaches maximum medical improvement or the
1265	expiration of temporary benefits, whichever occurs earlier, and
1266	continues until the earlier of:
1267	a. The expiration of a period computed at the rate of 3
1268	weeks for each percentage point of impairment; or
1269	b. The death of the employee.
1270	4. After the employee has been certified by a doctor as
1271	having reached maximum medical improvement or 6 weeks before the
1272	expiration of temporary benefits, whichever occurs earlier, the
1273	certifying doctor shall evaluate the condition of the employee
1274	and assign an impairment rating, using the impairment schedule
1275	referred to in subparagraph 2. Compensation is not payable for
1276	the mental, psychological, or emotional injury arising out of
1277	depression from being out of work. If the certification and
1278	evaluation are performed by a doctor other than the employee's
1279	treating doctor, the certification and evaluation must be
1280	submitted to the treating doctor, and the treating doctor must
1281	indicate agreement or disagreement with the certification and
1282	evaluation. The certifying doctor shall issue a written report
1283	to the department, the employee, and the carrier certifying that
1284	maximum medical improvement has been reached, stating the
1285	impairment rating, and providing any other information required
1286	by the department by rule. If the employee has not been
1287	certified as having reached maximum medical improvement before
1288	the expiration of 102 weeks after the date temporary total
1289	disability benefits begin to accrue, the carrier shall notify
1290	the treating doctor of the requirements of this section.
1291	5. The carrier shall pay the employee impairment income
1292	benefits for a period based on the impairment rating.
1293	6. The department may by rule specify forms and procedures
1294	governing the method of payment of wage loss and impairment
1295	benefits for dates of accidents before January 1, 1994, and for
1296	dates of accidents on or after January 1, 1994.
1297	(b) Supplemental benefits.--
1298	1. All supplemental benefits must be paid in accordance
1299	with this subsection. An employee is entitled to supplemental
1300	benefits as provided in this paragraph as of the expiration of
1301	the impairment period, if:
1302	a. The employee has an impairment rating from the
1303	compensable injury of 1020percent or more as determined
1304	pursuant to this chapter;
1305	b. The employee has not returned to work or has returned
1306	to work earning less than 80 percent of the employee's average
1307	weekly wage as a direct result of the employee's impairment; and
1308	c. The employee has in good faith attempted to obtain
1309	employment commensurate with the employee's ability to work.
1310	2. If an employee is not entitled to supplemental benefits
1311	at the time of payment of the final weekly impairment income
1312	benefit because the employee is earning at least 80 percent of
1313	the employee's average weekly wage, the employee may become
1314	entitled to supplemental benefits at any time within 1 year
1315	after the impairment income benefit period ends if:
1316	a. The employee earns wages that are less than 80 percent
1317	of the employee's average weekly wage for a period of at least
1318	90 days;
1319	b. The employee meets the other requirements of
1320	subparagraph 1.; and
1321	c. The employee's decrease in earnings is a direct result
1322	of the employee's impairment from the compensable injury.
1323	3. If an employee earns wages that are at least 80 percent
1324	of the employee's average weekly wage for a period of at least
1325	90 days during which the employee is receiving supplemental
1326	benefits, the employee ceases to be entitled to supplemental
1327	benefits for the filing period. Supplemental benefits that have
1328	been terminated shall be reinstated when the employee satisfies
1329	the conditions enumerated in subparagraph 2. and files the
1330	statement required under subparagraph 4. Notwithstanding any
1331	other provision, if an employee is not entitled to supplemental
1332	benefits for 12 consecutive months, the employee ceases to be
1333	entitled to any additional income benefits for the compensable
1334	injury. If the employee is discharged within 12 months after
1335	losing entitlement under this subsection, benefits may be
1336	reinstated if the employee was discharged at that time with the
1337	intent to deprive the employee of supplemental benefits.
1338	4. After the initial determination of supplemental
1339	benefits, the employee must file a statement with the carrier
1340	stating that the employee has earned less than 80 percent of the
1341	employee's average weekly wage as a direct result of the
1342	employee's impairment, stating the amount of wages the employee
1343	earned in the filing period, and stating that the employee has
1344	in good faith sought employment commensurate with the employee's
1345	ability to work. The statement must be filed quarterly on a form
1346	and in the manner prescribed by the department. The department
1347	may modify the filing period as appropriate to an individual
1348	case. Failure to file a statement relieves the carrier of
1349	liability for supplemental benefits for the period during which
1350	a statement is not filed.
1351	5. The carrier shall begin payment of supplemental
1352	benefits not later than the seventh day after the expiration
1353	date of the impairment income benefit period and shall continue
1354	to timely pay those benefits. The carrier may request a
1355	mediation conference for the purpose of contesting the
1356	employee's entitlement to or the amount of supplemental income
1357	benefits.
1358	6. Supplemental benefits are calculated quarterly and paid
1359	monthly. For purposes of calculating supplemental benefits, 80
1360	percent of the employee's average weekly wage and the average
1361	wages the employee has earned per week are compared quarterly.
1362	For purposes of this paragraph, if the employee is offered a
1363	bona fide position of employment that the employee is capable of
1364	performing, given the physical condition of the employee and the
1365	geographic accessibility of the position, the employee's weekly
1366	wages are considered equivalent to the weekly wages for the
1367	position offered to the employee.
1368	7. Supplemental benefits are payable at the rate of 80
1369	percent of the difference between 80 percent of the employee's
1370	average weekly wage determined pursuant to s. 440.14 and the
1371	weekly wages the employee has earned during the reporting
1372	period, not to exceed the maximum weekly income benefit under s.
1373	440.12.
1374	8. The department may by rule define terms that are
1375	necessary for the administration of this section and forms and
1376	procedures governing the method of payment of supplemental
1377	benefits for dates of accidents before January 1, 1994, and for
1378	dates of accidents on or after January 1, 1994.
1379	(4) TEMPORARY PARTIAL DISABILITY.--
1380	(b) Such benefits shall be paid during the continuance of
1381	such disability, not to exceed a period of 104 weeks, as
1382	provided by this subsection and subsection (2). This time
1383	limitation for temporary benefits shall be presumed sufficient
1384	unless there is clear and convincing evidence to the contrary as
1385	determined by the judge of compensation claims. Temporary
1386	benefits may not exceed 260 weeks.Once the injured employee
1387	reaches the maximum number of weeks, temporary disability
1388	benefits cease and the injured worker's permanent impairment
1389	must be determined. The department may by rule specify forms and
1390	procedures governing the method of payment of temporary
1391	disability benefits for dates of accidents before January 1,
1392	1994, and for dates of accidents on or after January 1, 1994.
1393	Section 31. Subsection (1) of section 440.16, Florida
1394	Statutes, is amended to read:
1395	440.16 Compensation for death.--
1396	(1) If death results from the accident within 1 year
1397	thereafter or follows continuous disability and results from the
1398	accident within 5 years thereafter, the employer shall pay:
1399	(a) Within 14 days after receiving the bill, actual
1400	funeral expenses not to exceed $10,000$5,000.
1401	(b) Compensation, in addition to the above, in the
1402	following percentages of the average weekly wages to the
1403	following persons entitled thereto on account of dependency upon
1404	the deceased, and in the following order of preference, subject
1405	to the limitation provided in subparagraph 2., but such
1406	compensation shall be subject to the limits provided in s.
1407	440.12(2), shall not exceed $250,000$100,000, and may be less
1408	than, but shall not exceed, for all dependents or persons
1409	entitled to compensation, 66 2/3 percent of the average wage:
1410	1. To the spouse, if there is no child, 50 percent of the
1411	average weekly wage, such compensation to cease upon the
1412	spouse's death.
1413	2. To the spouse, if there is a child or children, the
1414	compensation payable under subparagraph 1. and, in addition, 16
1415	2/3 percent on account of the child or children. However, when
1416	the deceased is survived by a spouse and also a child or
1417	children, whether such child or children are the product of the
1418	union existing at the time of death or of a former marriage or
1419	marriages, the judge of compensation claims may provide for the
1420	payment of compensation in such manner as may appear to the
1421	judge of compensation claims just and proper and for the best
1422	interests of the respective parties and, in so doing, may
1423	provide for the entire compensation to be paid exclusively to
1424	the child or children; and, in the case of death of such spouse,
1425	33 1/3 percent for each child. However, upon the surviving
1426	spouse's remarriage, the spouse shall be entitled to a lump-sum
1427	payment equal to 26 weeks of compensation at the rate of 50
1428	percent of the average weekly wage as provided in s. 440.12(2),
1429	unless the $100,000 limit provided in this paragraph is
1430	exceeded, in which case the surviving spouse shall receive a
1431	lump-sum payment equal to the remaining available benefits in
1432	lieu of any further indemnity benefits. In no case shall a
1433	surviving spouse's acceptance of a lump-sum payment affect
1434	payment of death benefits to other dependents.
1435	3. To the child or children, if there is no spouse, 33 1/3
1436	percent for each child.
1437	4. To the parents, 25 percent to each, such compensation
1438	to be paid during the continuance of dependency.
1439	5. To the brothers, sisters, and grandchildren, 15 percent
1440	for each brother, sister, or grandchild.
1441	(c) To the surviving spouse, payment of postsecondary
1442	student fees for instruction at any area technical center
1443	established under s. 1001.44 for up to 1,800 classroom hours or
1444	payment of student fees at any community college established
1445	under part III of chapter 1004 for up to 80 semester hours. The
1446	spouse of a deceased state employee shall be entitled to a full
1447	waiver of such fees as provided in ss. 1009.22 and 1009.23 in
1448	lieu of the payment of such fees. The benefits provided for in
1449	this paragraph shall be in addition to other benefits provided
1450	for in this section and shall terminate 7 years after the death
1451	of the deceased employee, or when the total payment in eligible
1452	compensation under paragraph (b) has been received. To qualify
1453	for the educational benefit under this paragraph, the spouse
1454	shall be required to meet and maintain the regular admission
1455	requirements of, and be registered at, such area technical
1456	center or community college, and make satisfactory academic
1457	progress as defined by the educational institution in which the
1458	student is enrolled.
1459	Section 32. Subsection (1) of section 440.185, Florida
1460	Statutes, is amended to read:
1461	440.185 Notice of injury or death; reports; penalties for
1462	violations.--
1463	(1) An employee who suffers an injury arising out of and
1464	in the course of employment shall advise his or her employer of
1465	the injury within 30 days after the date of or initial
1466	manifestation of the injury. Failure to so advise the employer
1467	shall bar a petition under this chapter unless:
1468	(a) The employer or the employer's agent had actual
1469	knowledge of the injury;
1470	(b) The cause of the injury could not be identified
1471	without a medical opinion and the employee advised the employer
1472	within 30 days after obtaining a medical opinion indicating that
1473	the injury arose out of and in the course of employment;
1474	(c) The employer did not put its employees on notice of
1475	the requirements of this section by posting notice pursuant to
1476	s. 440.055; or
1477	(d) The judge of compensation claims excuses such failure
1478	on the ground that, for some satisfactory reason, such notice
1479	could not be given.Exceptional circumstances, outside the scope
1480	of paragraph (a) or paragraph (b) justify such failure.
1481
1482	In the event of death arising out of and in the course of
1483	employment, the requirements of this subsection shall be
1484	satisfied by the employee's agent or estate. Documents prepared
1485	by counsel in connection with litigation, including but not
1486	limited to notices of appearance, petitions, motions, or
1487	complaints, shall not constitute notice for purposes of this
1488	section.
1489	Section 33. Subsection (2) of section 440.19, Florida
1490	Statutes, is amended to read:
1491	440.19 Time bars to filing petitions for benefits.--
1492	(2) Payment of any indemnity benefit or the furnishing of
1493	remedial treatment, care, or attendance pursuant to either a
1494	notice of injury or a petition for benefits shall toll the
1495	limitations period set forth above for 2 years following1 year
1496	from the date of such payment. This tolling period does not
1497	apply to the issues of compensability, date of maximum medical
1498	improvement, or permanent impairment.
1499	Section 34. Subsections (2) and (3) of section 440.381,
1500	Florida Statutes, are amended to read:
1501	440.381 Application for coverage; reporting payroll;
1502	payroll audit procedures; penalties.--
1503	(2) The application must contain a statement that the
1504	filing of an application containing false, misleading, or
1505	incomplete information with the purpose of avoiding or reducing
1506	the amount of premiums for workers' compensation coverage is a
1507	felony of the third degree, punishable as provided in s.
1508	775.082, s. 775.083, or s. 775.084. The application must contain
1509	a sworn statement by the employer attesting to the accuracy of
1510	the information submitted and acknowledging the provisions of
1511	former s. 440.37(4). The application must contain written job
1512	descriptions completed by the employer describing the job
1513	responsibilities of all forms of employment for which the
1514	employer seeks coverage as required by s. 440.38.The
1515	application must contain a sworn statement by the agent
1516	attesting that the agent explained to the employer or officer
1517	the classification codes that are used for premium calculations
1518	and for the accuracy of the classification codes used in
1519	accordance with the written job descriptions provided by the
1520	employer.
1521	(3) The department shall establish by rule minimum
1522	requirements for audits of payroll and classifications in order
1523	to ensure that the appropriate premium is charged for workers'
1524	compensation coverage. The rules shall ensure that audits
1525	performed by both carriers and employers are adequate to provide
1526	that all sources of payments to employees, subcontractors, and
1527	independent contractors have been reviewed and that the accuracy
1528	of classification of employees has been verified. The rules
1529	shall provide that employers in all classes other than the
1530	construction class be audited not less frequently than
1531	biennially and may provide for more frequent audits of employers
1532	in specified classifications based on factors such as amount of
1533	premium, type of business, loss ratios, or other relevant
1534	factors. In no event shall employers in the construction class,
1535	generating more than the amount of premium required to be
1536	experience rated, be audited less than annually. The annual
1537	audits required for construction classes shall consist of
1538	physical onsite audits. Payroll verification audit rules must
1539	include, but need not be limited to, the use of state and
1540	federal reports of employee income, payroll and other accounting
1541	records, certificates of insurance maintained by subcontractors,
1542	and duties of employees. At the completion of an audit, the
1543	employer or officer of the corporation and the auditor must
1544	print and sign their names on the audit document and attach
1545	proof of identification to the audit document. Each audit
1546	document must contain a sworn statement to be signed by the
1547	auditor which shall attest that the requirements for audits of
1548	payroll and classifications as established by the rules adopted
1549	by the Department of Financial Services have been strictly
1550	complied with in the performance of the audit. An auditor who
1551	fails to strictly comply with the rules adopted by the
1552	department setting forth the minimum requirements for audits of
1553	payroll and classifications commits a felony of the third
1554	degree, punishable as provided in s. 775.082, s. 775.083, or s.
1555	775.084.
1556	Section 35. Section 440.591, Florida Statutes, is amended
1557	to read:
1558	440.591 Administrative procedure; rulemaking authority;
1559	washouts.--
1560	(1) The divisiondepartment, the agency, and the
1561	Department of Education may adopt rules pursuant to ss.
1562	120.536(1) and 120.54 to implement the provisions of this
1563	chapter conferring duties upon it.
1564	(2) The division shall adopt rules to provide for a model
1565	settlement agreement that may be used in any washout agreement
1566	where the employee is represented by an attorney and that
1567	includes:
1568	(a) The amount of the settlement;
1569	(b) The amount allocated to past and future medical care
1570	which is potentially covered by Medicare;
1571	(c) The amount allocated to past and future medical care
1572	which is not potentially covered by Medicare;
1573	(d) The amount of past indemnity benefits;
1574	(e) The amount of future indemnity benefits; and
1575	(f) The amount of child support owed by the employee, if
1576	any, which will be deducted from the washout proceeds.
1577	(3) The washout of any workers' compensation case may not
1578	be made contingent on the execution of a release of other
1579	existing or potential employment rights.
1580	(4) Settlement agreements under this section shall be
1581	reviewed by the judge of compensation claims to determine if the
1582	settlement agreement complies with this section and the rules
1583	adopted under this section, in which case the judge of
1584	compensation claims shall approve the settlement.
1585	Section 36. Subsection (10) of section 624.482, Florida
1586	Statutes, is amended to read:
1587	624.482 Making and use of rates.--
1588	(10) Any self-insurance fund that writes workers'
1589	compensation insurance and employer's liability insurance is
1590	subject to, and shall make all rate filings for workers'
1591	compensation insurance and employer's liability insurance in
1592	accordance with, ss. 627.091, 627.101, 627.111, 627.141,
1593	627.151, 627.171, and 627.191, and 627.211.
1594	Section 37. Subsection (9) of section 627.041, Florida
1595	Statutes, is amended to read:
1596	627.041 Definitions.--As used in this part:
1597	(9) "Insurer," for purposes of ss. 627.091, 627.096,
1598	627.101, 627.111, 627.141, 627.171, 627.191, 627.211,and
1599	627.291, includes a commercial self-insurance fund as defined in
1600	s. 624.462 and a group self-insurance fund as defined in s.
1601	624.4621.
1602	Section 38. Subsection (2) of section 627.062, Florida
1603	Statutes, is amended to read:
1604	627.062 Rate standards.--
1605	(2) As to all such classes of insurance:
1606	(a) Insurers or rating organizations shall establish and
1607	use rates, rating schedules, or rating manuals to allow the
1608	insurer a reasonable rate of return on such classes of insurance
1609	written in this state. A copy of rates, rating schedules,
1610	rating manuals, premium credits or discount schedules, and
1611	surcharge schedules, and changes thereto, shall be filed with
1612	the department under one of the following procedures:
1613	1. If the filing is made at least 90 days before the
1614	proposed effective date and the filing is not implemented during
1615	the department's review of the filing and any proceeding and
1616	judicial review, then such filing shall be considered a "file
1617	and use" filing. In such case, the department shall finalize
1618	its review by issuance of a notice of intent to approve or a
1619	notice of intent to disapprove within 90 days after receipt of
1620	the filing. The notice of intent to approve and the notice of
1621	intent to disapprove constitute agency action for purposes of
1622	the Administrative Procedure Act. Requests for supporting
1623	information, requests for mathematical or mechanical
1624	corrections, or notification to the insurer by the department of
1625	its preliminary findings shall not toll the 90-day period during
1626	any such proceedings and subsequent judicial review. The rate
1627	shall be deemed approved if the department does not issue a
1628	notice of intent to approve or a notice of intent to disapprove
1629	within 90 days after receipt of the filing.
1630	2. If the filing is not made in accordance with the
1631	provisions of subparagraph 1., such filing shall be made as soon
1632	as practicable, but no later than 30 days after the effective
1633	date, and shall be considered a "use and file" filing. An
1634	insurer making a "use and file" filing is potentially subject to
1635	an order by the department to return to policyholders portions
1636	of rates found to be excessive, as provided in paragraph (h).
1637	(b) Upon receiving a rate filing, the department shall
1638	review the rate filing to determine if a rate is excessive,
1639	inadequate, or unfairly discriminatory. In making that
1640	determination, the department shall, in accordance with
1641	generally accepted and reasonable actuarial techniques, consider
1642	the following factors:
1643	1. Past and prospective loss experience within and without
1644	this state.
1645	2. Past and prospective expenses.
1646	3. The degree of competition among insurers for the risk
1647	insured.
1648	4. Investment income reasonably expected by the insurer,
1649	consistent with the insurer's investment practices, from
1650	investable premiums anticipated in the filing, plus any other
1651	expected income from currently invested assets representing the
1652	amount expected on unearned premium reserves and loss reserves.
1653	The department may promulgate rules utilizing reasonable
1654	techniques of actuarial science and economics to specify the
1655	manner in which insurers shall calculate investment income
1656	attributable to such classes of insurance written in this state
1657	and the manner in which such investment income shall be used in
1658	the calculation of insurance rates. Such manner shall
1659	contemplate allowances for an underwriting profit factor and
1660	full consideration of investment income which produce a
1661	reasonable rate of return; however, investment income from
1662	invested surplus shall not be considered. The profit and
1663	contingency factor as specified in the filing shall be utilized
1664	in computing excess profits in conjunction with s. 627.0625.
1665	5. The reasonableness of the judgment reflected in the
1666	filing.
1667	6. Dividends, savings, or unabsorbed premium deposits
1668	allowed or returned to Florida policyholders, members, or
1669	subscribers.
1670	7. The adequacy of loss reserves.
1671	8. The cost of reinsurance.
1672	9. Trend factors, including trends in actual losses per
1673	insured unit for the insurer making the filing.
1674	10. Conflagration and catastrophe hazards, if applicable.
1675	11. A reasonable margin for underwriting profit and
1676	contingencies.
1677	12. The cost of medical services, if applicable.
1678	13. Other relevant factors which impact upon the frequency
1679	or severity of claims or upon expenses.
1680	(c) In the case of fire insurance rates, consideration
1681	shall be given to the availability of water supplies and the
1682	experience of the fire insurance business during a period of not
1683	less than the most recent 5-year period for which such
1684	experience is available.
1685	(d) If conflagration or catastrophe hazards are given
1686	consideration by an insurer in its rates or rating plan,
1687	including surcharges and discounts, the insurer shall establish
1688	a reserve for that portion of the premium allocated to such
1689	hazard and shall maintain the premium in a catastrophe reserve.
1690	Any removal of such premiums from the reserve for purposes
1691	other than paying claims associated with a catastrophe or
1692	purchasing reinsurance for catastrophes shall be subject to
1693	approval of the department. Any ceding commission received by
1694	an insurer purchasing reinsurance for catastrophes shall be
1695	placed in the catastrophe reserve.
1696	(e) After consideration of the rate factors provided in
1697	paragraphs (b),(c), and (d), a rate may be found by the
1698	department to be excessive, inadequate, or unfairly
1699	discriminatory based upon the following standards:
1700	1. Rates shall be deemed excessive if they are likely to
1701	produce a profit from Florida business that is unreasonably high
1702	in relation to the risk involved in the class of business or if
1703	expenses are unreasonably high in relation to services rendered.
1704	2. Rates shall be deemed excessive if, among other things,
1705	the rate structure established by a stock insurance company
1706	provides for replenishment of surpluses from premiums, when the
1707	replenishment is attributable to investment losses.
1708	3. Rates shall be deemed inadequate if they are clearly
1709	insufficient, together with the investment income attributable
1710	to them, to sustain projected losses and expenses in the class
1711	of business to which they apply.
1712	4. A rating plan, including discounts, credits, or
1713	surcharges, shall be deemed unfairly discriminatory if it fails
1714	to clearly and equitably reflect consideration of the
1715	policyholder's participation in a risk management program
1716	adopted pursuant to s. 627.0625.
1717	5. A rate shall be deemed inadequate as to the premium
1718	charged to a risk or group of risks if discounts or credits are
1719	allowed which exceed a reasonable reflection of expense savings
1720	and reasonably expected loss experience from the risk or group
1721	of risks.
1722	6. A rate shall be deemed unfairly discriminatory as to a
1723	risk or group of risks if the application of premium discounts,
1724	credits, or surcharges among such risks does not bear a
1725	reasonable relationship to the expected loss and expense
1726	experience among the various risks.
1727	(f) In reviewing a rate filing, the department may require
1728	the insurer to provide at the insurer's expense all information
1729	necessary to evaluate the condition of the company and the
1730	reasonableness of the filing according to the criteria
1731	enumerated in this section.
1732	(g) The department may at any time review a rate, rating
1733	schedule, rating manual, or rate change; the pertinent records
1734	of the insurer; and market conditions. If the department finds
1735	on a preliminary basis that a rate may be excessive, inadequate,
1736	or unfairly discriminatory, the department shall initiate
1737	proceedings to disapprove the rate and shall so notify the
1738	insurer. However, the department may not disapprove as excessive
1739	any rate for which it has given final approval or which has been
1740	deemed approved for a period of 1 year after the effective date
1741	of the filing unless the department finds that a material
1742	misrepresentation or material error was made by the insurer or
1743	was contained in the filing. Upon being so notified, the
1744	insurer or rating organization shall, within 60 days, file with
1745	the department all information which, in the belief of the
1746	insurer or organization, proves the reasonableness, adequacy,
1747	and fairness of the rate or rate change. The department shall
1748	issue a notice of intent to approve or a notice of intent to
1749	disapprove pursuant to the procedures of paragraph (a) within 90
1750	days after receipt of the insurer's initial response. In such
1751	instances and in any administrative proceeding relating to the
1752	legality of the rate, the insurer or rating organization shall
1753	carry the burden of proof by a preponderance of the evidence to
1754	show that the rate is not excessive, inadequate, or unfairly
1755	discriminatory. After the department notifies an insurer that a
1756	rate may be excessive, inadequate, or unfairly discriminatory,
1757	unless the department withdraws the notification, the insurer
1758	shall not alter the rate except to conform with the department's
1759	notice until the earlier of 120 days after the date the
1760	notification was provided or 180 days after the date of the
1761	implementation of the rate. The department may, subject to
1762	chapter 120, disapprove without the 60-day notification any rate
1763	increase filed by an insurer within the prohibited time period
1764	or during the time that the legality of the increased rate is
1765	being contested.
1766	(h) In the event the department finds that a rate or rate
1767	change is excessive, inadequate, or unfairly discriminatory, the
1768	department shall issue an order of disapproval specifying that a
1769	new rate or rate schedule which responds to the findings of the
1770	department be filed by the insurer. The department shall
1771	further order, for any "use and file" filing made in accordance
1772	with subparagraph (a)2., that premiums charged each policyholder
1773	constituting the portion of the rate above that which was
1774	actuarially justified be returned to such policyholder in the
1775	form of a credit or refund. If the department finds that an
1776	insurer's rate or rate change is inadequate, the new rate or
1777	rate schedule filed with the department in response to such a
1778	finding shall be applicable only to new or renewal business of
1779	the insurer written on or after the effective date of the
1780	responsive filing.
1781	(i) Except as otherwise specifically provided in this
1782	chapter, the department shall not prohibit any insurer,
1783	including any residual market plan or joint underwriting
1784	association, from paying acquisition costs based on the full
1785	amount of premium, as defined in s. 627.403, applicable to any
1786	policy, or prohibit any such insurer from including the full
1787	amount of acquisition costs in a rate filing.
1788
1789	The provisions of this subsection shall not apply to workers'
1790	compensation and employer's liability insurance and tomotor
1791	vehicle insurance.
1792	Section 39. Subsections (1) and (4) of section 627.0645,
1793	Florida Statutes, are amended to read:
1794	627.0645 Annual filings.--
1795	(1) Each rating organization filing rates for, and each
1796	insurer writing, any line of property or casualty insurance to
1797	which this part applies, except:
1798	(a) Workers' compensation and employer's liability
1799	insurance; or
1800	(b)commercial property and casualty insurance as defined
1801	in s. 627.0625(1) other than commercial multiple line and
1802	commercial motor vehicle, shall make an annual base rate filing
1803	for each such line with the department no later than 12 months
1804	after its previous base rate filing, demonstrating that its
1805	rates are not inadequate.
1806	(4) An insurer may satisfy the annual filing requirements
1807	of this section by being a member or subscriber of a licensed
1808	rating organization which complies with the requirements of this
1809	section, except workers' compensation and employer's liability
1810	insurance.
1811	Section 40. Section 627.072, Florida Statutes, is amended
1812	to read:
1813	627.072 Making and use of rates.--
1814	(1) As to workers' compensation and employer's liability
1815	insurance, the following factors shall be used in the
1816	determination and fixing of rates:
1817	(a) The past loss experience and prospective loss
1818	experience within and outside this state;
1819	(b) The conflagration and catastrophe hazards;
1820	(c) A reasonable margin for underwriting profit and
1821	contingencies;
1822	(d) Dividends, savings, or unabsorbed premium deposits
1823	allowed or returned by insurers to their policyholders, members,
1824	or subscribers;
1825	(e) Investment income on unearned premium reserves and
1826	loss reserves;
1827	(f) Past expenses and prospective expenses, both those
1828	countrywide and those specifically applicable to this state; and
1829	(g) All other relevant factors, including judgment
1830	factors, within and outside this state.
1831	(1)(2)As to all rates which are subject to this part, the
1832	systems of expense provisions included in the rates for use by
1833	an insurer or group of insurers may differ from those of other
1834	insurers or groups of insurers to reflect the requirements of
1835	the operating methods of any such insurer or group with respect
1836	to any kind of insurance or with respect to any subdivision or
1837	combination thereof for which subdivision or combination
1838	separate expense provisions are applicable.
1839	(2)(3)As to all rates which are subject to this part,
1840	risks may be grouped by classifications for the establishment of
1841	rates and minimum premiums. Classification rates may be
1842	modified to produce rates for individual risks in accordance
1843	with rating plans which establish standards for measuring
1844	variations in hazards or expense provisions, or both. Such
1845	standards may measure any difference among risks that can be
1846	demonstrated to have a probable effect upon losses or expenses.
1847	Such classifications and modifications shall apply to all risks
1848	under the same or substantially the same circumstances or
1849	conditions.
1850	(4)(a) In the case of workers' compensation and employer's
1851	liability insurance, the department shall consider utilizing the
1852	following methodology in rate determinations: Premiums,
1853	expenses, and expected claim costs would be discounted to a
1854	common point of time, such as the initial point of a policy
1855	year, in the determination of rates; the cash-flow pattern of
1856	premiums, expenses, and claim costs would be determined
1857	initially by using data from 8 to 10 of the largest insurers
1858	writing workers' compensation insurance in the state; such
1859	insurers may be selected for their statistical ability to report
1860	the data on an accident-year basis and in accordance with
1861	subparagraphs (b)1., 2., and 3., for at least 2 1/2 years; such
1862	a cash-flow pattern would be modified when necessary in
1863	accordance with the data and whenever a radical change in the
1864	payout pattern is expected in the policy year under
1865	consideration.
1866	(b) If the methodology set forth in paragraph (a) is
1867	utilized, to facilitate the determination of such a cash-flow
1868	pattern methodology:
1869	1. Each insurer shall include in its statistical reporting
1870	to the rating bureau and the department the accident year by
1871	calendar quarter data for paid-claim costs;
1872	2. Each insurer shall submit financial reports to the
1873	rating bureau and the department which shall include total
1874	incurred claim amounts and paid-claim amounts by policy year and
1875	by injury types as of December 31 of each calendar year; and
1876	3. Each insurer shall submit to the rating bureau and the
1877	department paid-premium data on an individual risk basis in
1878	which risks are to be subdivided by premium size as follows:
1879
1880
1881	Number of Risks in
1882	Premium RangeStandard Premium Size
1883
1884	. . . (to be filled in by carrier) . . . $300--999
1885	. . . (to be filled in by carrier) . . . 1,000--4,999
1886	. . . (to be filled in by carrier) . . . 5,000--49,999
1887	. . . (to be filled in by carrier) . . . 50,000--99,999
1888	. . . (to be filled in by carrier) . . . 100,000 or more
1889	Total:
1890	Section 41. Subsection (1) of section 627.096, Florida
1891	Statutes, is amended to read:
1892	627.096 Workers' Compensation Rating Bureau.--
1893	(1) There is created within the department a Workers'
1894	Compensation Rating Bureau, which shall make an investigation
1895	and study of all insurers authorized to issue workers'
1896	compensation and employer's liability coverage in this state.
1897	Such bureau shall study the data, statistics, schedules, or
1898	other information as it may deem necessary to assist and advise
1899	the department in its review of filings made by or on behalf of
1900	workers' compensation and employer's liability insurers. The
1901	department shall have the authority to promulgate rules
1902	requiring all workers' compensation and employer's liability
1903	insurers to submit to the rating bureau any data, statistics,
1904	schedules, and other information deemed necessary to the rating
1905	bureau's study and advisement. All data, statistics, schedules,
1906	or other information submitted to, or considered by, the
1907	Workers' Compensation Rating Bureau shall be a public record.
1908	Section 42. Subsection (1) of section 627.111, Florida
1909	Statutes, is amended to read:
1910	627.111 Effective date of filing.--
1911	(1) If, pursuant to s. 627.101(2),the department
1912	determines to hold a public hearing as to a filing, or it holds
1913	such a public hearing pursuant to request therefor under s.
1914	627.101(3),it shall give written notice thereof to the rating
1915	organization or insurer that made the filing and shall hold such
1916	hearing within 30 days, and not less than 10 days prior to the
1917	date of the hearing, it shall give written notice of the hearing
1918	to the insurer or rating organization that made the filing. The
1919	department may also, in its discretion, give advance public
1920	notice of such hearing by publication of notice in one or more
1921	daily newspapers of general circulation in this state.
1922	Section 43. Section 627.291, Florida Statutes, is amended
1923	to read:
1924	627.291 Information to be furnished insureds; appeal by
1925	insureds; workers' compensation and employer's liability
1926	insurances.--
1927	(1) As to workers' compensation and employer's liability
1928	insurances, every rating organization and every insurer that
1929	whichmakes its own rates shall, within a reasonable time after
1930	receiving written request therefor and upon payment of such
1931	reasonable charge as it may make, furnish to any insured
1932	affected by a rate made by it, or to the authorized
1933	representative of such insured, all pertinent information as to
1934	such rate.
1935	(2) As to workers' compensation and employer's liability
1936	insurances, every rating organization and every insurer that
1937	whichmakes its own rates shall provide within this state
1938	reasonable means whereby any person aggrieved by the application
1939	of its rating system may be heard, in person or by his or her
1940	authorized representative, on his or her written request to
1941	review the manner in which such rating system has been applied
1942	in connection with the insurance afforded him or her. If the
1943	rating organization orinsurer fails to grant or rejects such
1944	request within 30 days after it is made, the applicant may
1945	proceed in the same manner as if his or her application had been
1946	rejected. Any party affected by the action of such rating
1947	organization or insurer on such request may, within 30 days
1948	after written notice of such action, appeal to the department,
1949	which may affirm or reverse such action.
1950	Section 44. Paragraph (c) of subsection (1) of section
1951	631.914, Florida Statutes, is amended to read:
1952	631.914 Assessments.--
1953	(1)
1954	(c)1. Effective July 1, 1999, if assessments otherwise
1955	authorized in paragraph (a) are insufficient to make all
1956	payments on reimbursements then owing to claimants in a calendar
1957	year, then upon certification by the board, the department shall
1958	levy additional assessments of up to 1.5 percent of the
1959	insurer's net direct written premiums in this state during the
1960	calendar year next preceding the date of such assessments
1961	against insurers to secure the necessary funds.
1962	2. To assure that insurers paying assessments levied under
1963	this paragraph continue to charge rates that are neither
1964	inadequate nor excessive, each insurer that is to be assessed
1965	pursuant to this paragraph, or a licensed rating organization to
1966	which the insurer subscribes, may make, within 90 days after
1967	being notified of such assessments, a rate filing for workers'
1968	compensation coverage pursuant to s.ss. 627.072 and 627.091. If
1969	the filing reflects a percentage rate change equal to the
1970	difference between the rate of such assessment and the rate of
1971	the previous year's assessment under this paragraph, the filing
1972	shall consist of a certification so stating and shall be deemed
1973	approved when made. Any rate change of a different percentage
1974	shall be subject to the standards and procedures of s.ss.
1975	627.072 and 627.091.
1976	Section 45. Sections 627.091, 627.101, 627.151, 627.211,
1977	and 627.281, Florida Statutes, are repealed.
1978	Section 46. This act shall take effect July 1, 2003.