Senate Bill sb1966
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Florida Senate - 2006 SB 1966
By Senator Garcia
40-1145A-06
1 A bill to be entitled
2 An act relating to corporation not for profit
3 self-insurance funds; creating s. 624.4624,
4 F.S.; authorizing two or more corporations not
5 for profit to form a self-insurance fund for
6 certain purposes; providing specific
7 requirements; providing an effective date.
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9 Be It Enacted by the Legislature of the State of Florida:
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11 Section 1. Section 624.4624, Florida Statutes, is
12 created to read:
13 624.4624 Corporation not for profit self-insurance
14 funds.--
15 (1) Notwithstanding any other provision of law, any
16 two or more corporations not for profit located in and
17 organized under the laws of this state may form a
18 self-insurance fund for the purpose of pooling and spreading
19 liabilities of its group members in any property or casualty
20 risk or surety insurance or securing the payment of benefits
21 under chapter 440, provided the nonprofit organization
22 self-insurance fund that is created:
23 (a) Has annual normal premiums in excess of $5
24 million.
25 (b) Requires for qualification that each participating
26 member receive at least 75 percent of its revenues from local,
27 state, or federal governmental sources.
28 (c) Uses an actuary credentialed by the Casualty
29 Actuarial Society or the American Academy of Actuaries to
30 determine rates. Rates and rating factors must be established
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Florida Senate - 2006 SB 1966
40-1145A-06
1 using accepted actuarial principles to develop rates that are
2 not excessive, inadequate, or nondiscriminatory.
3 (d) Maintains a continuing program of excess insurance
4 coverage and reserve evaluation to protect the financial
5 stability of the fund in an amount and manner determined by a
6 qualified, independent actuary. At a minimum, this program
7 must:
8 1. Purchase excess insurance from authorized insurance
9 carriers; and
10 2. Retain a maximum per-loss occurrence of 2 percent
11 of normal premiums or $350,000, whichever is less.
12 (e) Submits to the office annually an audited fiscal
13 year-end financial statement by an independent certified
14 public accountant within 6 months after the end of the fiscal
15 year.
16 (f) Has a governing body that is comprised entirely of
17 nonprofit organization officials.
18 (g) Uses knowledgeable persons to administer or
19 service the fund in the areas of claims administration, claims
20 adjusting, underwriting, risk management, loss control, policy
21 administration, financial audit, and legal. Such persons must
22 have at least 5 years' experience with commercial
23 self-insurance funds formed under s. 624.462, self-insurance
24 funds formed under s. 624.4662, or domestic insurers.
25 (2) A corporation not for profit self-insurance fund
26 that meets the requirements of this section is not subject to
27 s. 624.4621 and is not required to file any report with the
28 department under s. 440.38(2)(b) which is uniquely required of
29 group self-insurer funds qualified under s. 624.4621. If any
30 of the requirements of this section are not met, the nonprofit
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Florida Senate - 2006 SB 1966
40-1145A-06
1 organization self-insurance fund is subject to the
2 requirements of s. 624.4621.
3 Section 2. This act shall take effect July 1, 2006.
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6 SENATE SUMMARY
7 Authorizes two or more nonprofit organizations to form a
self-insurance fund. Provides requirements for the fund.
8 Exempts the fund from the self-insurance premium tax
under certain circumstances.
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