HOUSE AMENDMENT Bill No. HB 1713
1	CHAMBER ACTION
2	Senate House
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12	Representative Homan offered the following:
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14	Amendment (with title amendment)
15	Remove line(s) 785-935, and insert:
16	Section 22. Section 627.3575, Florida Statutes, is created
17	to read:
18	627.3575 Health Care Professional Liability Insurance
19	Facility.--
20	(1) FACILITY CREATED; PURPOSE; STATUS.--There is created
21	the Health Care Professional Liability Insurance Facility. The
22	facility is intended to meet ongoing availability and
23	affordability problems relating to liability insurance for
24	health care professionals by providing an affordable, self-
25	supporting source of excess insurance coverage for those
26	professionals who are willing and able to self-insure for
27	smaller losses. The facility shall operate on a not-for-profit
28	basis. The facility is self-funding and is intended to serve a
29	public purpose but is not a state agency or program, and no
30	activity of the facility shall create any state liability.
31	(2) GOVERNANCE; POWERS.--
32	(a) The facility shall operate under a seven-member board
33	of governors consisting of the Secretary of Health, three
34	members appointed by the Governor, and three members appointed
35	by the Chief Financial Officer. The board shall be chaired by
36	the Secretary of Health. The secretary shall serve by virtue of
37	his or her office, and the other members of the board shall
38	serve terms concurrent with the term of office of the official
39	who appointed them. Any vacancy on the board shall be filled in
40	the same manner as the original appointment. Members serve at
41	the pleasure of the official who appointed them. Members are not
42	eligible for compensation for their service on the board, but
43	the facility may reimburse them for per diem and travel expenses
44	at the same levels as are provided in s. 112.061 for state
45	employees.
46	(b) The facility shall have such powers as are necessary
47	to operate as an insurer, including the power to:
48	1. Sue and be sued.
49	2. Hire such employees and retain such consultants,
50	attorneys, actuaries, and other professionals as it deems
51	appropriate.
52	3. Contract with such service providers as it deems
53	appropriate.
54	4. Maintain offices appropriate to the conduct of its
55	business.
56	5. Take such other actions as are necessary or appropriate
57	in fulfillment of its responsibilities under this section.
58	(3) COVERAGE PROVIDED.--The facility shall provide
59	liability insurance coverage for health care professionals. The
60	facility shall allow policyholders to select from policies with
61	deductibles of $25,000 per claim, $50,000 per claim, and
62	$100,000 per claim and with coverage limits of $100,000 per
63	claim and $300,000 annual aggregate, $250,000 per claim and
64	$750,000 annual aggregate, and $1 million per claim and $3
65	million annual aggregate. To the greatest extent possible, the
66	terms and conditions of the policies shall be consistent with
67	terms and conditions commonly used by professional liability
68	insurers.
69	(4) ELIGIBILITY; TERMINATION.--
70	(a) Any health care professional is eligible for coverage
71	provided by the facility if the professional at all times
72	maintains either:
73	1. An escrow account consisting of cash or assets eligible
74	for deposit under s. 625.52 in an amount equal to the deductible
75	amount of the policy; or
76	2. An unexpired, irrevocable letter of credit, established
77	pursuant to chapter 675, in an amount not less than the
78	deductible amount of the policy. The letter of credit shall be
79	payable to the health care professional as beneficiary upon
80	presentment of a final judgment indicating liability and
81	awarding damages to be paid by the physician or upon presentment
82	of a settlement agreement signed by all parties to such
83	agreement when such final judgment or settlement is a result of
84	a claim arising out of the rendering of, or the failure to
85	render, medical care and services. Such letter of credit shall
86	be nonassignable and nontransferable. Such letter of credit
87	shall be issued by any bank or savings association organized and
88	existing under the laws of this state or any bank or savings
89	association organized under the laws of the United States that
90	has its principal place of business in this state or has a
91	branch office which is authorized under the laws of this state
92	or of the United States to receive deposits in this state.
93	(b) The eligibility of a health care professional for
94	coverage terminates upon:
95	1. The failure of the professional to comply with
96	paragraph (a);
97	2. The failure of the professional to timely pay premiums;
98	or
99	3. The commission of any act of fraud in connection with
100	the policy, as determined by the board of governors.
101	(c) The board of governors, in its discretion, may
102	reinstate the eligibility of a health care professional whose
103	eligibility has terminated pursuant to paragraph (b) upon
104	determining that the professional has come back into compliance
105	with paragraph (a) or has paid the overdue premiums. Eligibility
106	may be reinstated in the case of fraud only if the board
107	determines that its initial determination of fraud was in error.
108	(5) PREMIUMS.--
109	(a) The facility shall charge the actuarially indicated
110	premium for the coverage provided and shall retain the services
111	of consulting actuaries to prepare its rate filings. The
112	facility shall not provide dividends to policyholders, and, to
113	the extent that premiums are more than the amount required to
114	cover claims and expenses, such excess shall be retained by the
115	facility for payment of future claims. In the event of
116	dissolution of the facility, any amounts not required as a
117	reserve for outstanding claims shall be transferred to the
118	policyholders of record as of the last day of operation.
119	(b) To ensure that the facility has the funds to pay
120	claims:
121	1. From each judgment awarded and settlement agreed to
122	from which a claim will be paid in whole or in part by the
123	facility, the facility shall retain 1 percent of its portion of
124	the award or settlement for deposit into a separate account for
125	guaranteeing payment of claims.
126	2. From the funds of the Florida Birth-Related
127	Neurological Injury Compensation Association, the facility shall
128	receive the interest on the association’s investments for
129	deposit into a separate account for guaranteeing payment of
130	claims.
131	(6) REGULATION; APPLICABILITY OF OTHER STATUTES.--
132	(a) The facility shall operate pursuant to a plan of
133	operation approved by order of the Office of Insurance
134	Regulation of the Financial Services Commission. The board of
135	governors may at any time adopt amendments to the plan of
136	operation and submit the amendments to the Office of Insurance
137	Regulation for approval.
138	(b) The facility is subject to regulation by the Office of
139	Insurance Regulation of the Financial Services Commission in the
140	same manner as other insurers.
141	(c) The facility is not subject to part II of chapter 631,
142	relating to the Florida Insurance Guaranty Association.
143	(7) STARTUP PROVISIONS.--
144	(a) It is the intent of the Legislature that the facility
145	begin providing coverage no later than January 1, 2004.
146	(b) The Governor and the Chief Financial Officer shall
147	make their appointments to the board of governors of the
148	facility no later than July 1, 2003. Until the board is
149	appointed, the Secretary of Health may perform ministerial acts
150	on behalf of the facility as chair of the board of governors.
151	(c) Until the facility is able to hire permanent staff and
152	enter into contracts for professional services, the office of
153	the Secretary of Health shall provide support services to the
154	facility.
155	(d) In order to provide startup funds for the facility,
156	the board of governors may incur debt or enter into agreements
157	for lines of credit, provided that the sole source of funds for
158	repayment of any debt is future premium revenues of the
159	facility. The amount of such debt or lines of credit may not
160	exceed $10 million. In addition to the debt or lines of credit
161	provided for in this paragraph, the facility shall be authorized
162	to borrow up to $10 million from the Florida Birth-Related
163	Neurological Injury Compensation Association and repay the
164	association in equal annual installments over a period of 10
165	years.
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168	================= T I T L E A M E N D M E N T =================
169	Remove line(s) 56, and insert: premiums; providing for
170	regulation;