HB 1007

1	A bill to be entitled
2	An act relating to insurer insolvency; creating s.
3	631.2715, F.S.; providing for Insurance Risk Management
4	Trust Fund coverage for specified officers, employees,
5	agents, and other representatives of the Department of
6	Financial Services for liability under specified federal
7	laws relating to receiverships; providing for retroactive
8	application; amending s. 631.54, F.S.; providing that a
9	covered claim for purposes of specified guaranty
10	provisions does not include a claim rejected by another
11	state's guaranty fund or liquidation law on the basis that
12	it constitutes a claim under a policy issued by an
13	insolvent insurer with a deductible or self-insured
14	retention; amending s. 631.56, F.S.; providing that any
15	board member of the Florida Insurance Guaranty Association
16	representing an insurer in receivership shall be
17	terminated as a board member; specifying a termination
18	date; amending s. 631.57, F.S.; providing for actions by
19	the Florida Insurance Guaranty Association to obtain
20	custody and control of records and data related to an
21	insolvent insurer; providing for award of attorney's fees
22	and costs in certain circumstances; providing for
23	construction with other rights and remedies; amending s.
24	631.904, F.S.; providing that a covered claim for purposes
25	of specified guaranty provisions does not include a claim
26	rejected by another state's guaranty fund or liquidation
27	law on the basis that it constitutes a claim under a
28	policy issued by an insolvent insurer with a deductible or
29	self-insured retention; amending s. 631.912, F.S.;
30	providing that any board member of the Florida Workers'
31	Compensation Insurance Guaranty Association who is
32	employed by, or has a material relationship with, an
33	insurer in receivership shall be terminated as a board
34	member; specifying a termination date; amending s.
35	631.913, F.S.; providing that a covered claim for purposes
36	of specified guaranty provisions does not include a claim
37	rejected by another state's guaranty fund or liquidation
38	law on the basis that it constitutes a claim under a
39	policy issued by an insolvent insurer with a deductible or
40	self-insured retention; providing an effective date.
41
42	Be It Enacted by the Legislature of the State of Florida:
43
44	Section 1.  Section 631.2715, Florida Statutes, is created
45	to read:
46	631.2715  Liability under federal priority of claims law.-
47	The Insurance Risk Management Trust Fund shall cover department
48	officers, employees, agents, and other representatives for any
49	liability under the federal act relating to priority of claims,
50	31 U.S.C. s. 3713, for any action taken by them in the
51	performance of their powers and duties under this chapter. This
52	section applies to any receivership commenced after July 1,
53	1957.
54	Section 2.  Subsection (3) of section 631.54, Florida
55	Statutes, is amended to read:
56	631.54  Definitions.-As used in this part:
57	(3)  "Covered claim" means an unpaid claim, including one
58	of unearned premiums, which arises out of, and is within the
59	coverage, and not in excess of, the applicable limits of an
60	insurance policy to which this part applies, issued by an
61	insurer, if such insurer becomes an insolvent insurer and the
62	claimant or insured is a resident of this state at the time of
63	the insured event or the property from which the claim arises is
64	permanently located in this state. For entities other than
65	individuals, the residence of a claimant, insured, or
66	policyholder is the state in which the entity's principal place
67	of business is located at the time of the insured event.
68	"Covered claim" does shall not include:
69	(a)  Any amount due any reinsurer, insurer, insurance pool,
70	or underwriting association, sought directly or indirectly
71	through a third party, as subrogation, contribution,
72	indemnification, or otherwise; or
73	(b)  Any claim that would otherwise be a covered claim
74	under this part that has been rejected by any other state
75	guaranty fund on the grounds that an insured's net worth is
76	greater than that allowed under that state's guaranty law, or
77	that was rejected by another state's guaranty fund or
78	liquidation law on the basis that it constitutes a claim under a
79	policy issued by an insolvent insurer with a deductible or self-
80	insured retention. Member insurers shall have no right of
81	subrogation, contribution, indemnification, or otherwise, sought
82	directly or indirectly through a third party, against the
83	insured of any insolvent member.
84	Section 3.  Subsection (4) is added to section 631.56,
85	Florida Statutes, to read:
86	631.56  Board of directors.-
87	(4)  Any board member representing an insurer in
88	receivership shall be terminated as a board member, effective as
89	of the date of the entry of the order of receivership.
90	Section 4.  Subsection (2) of section 631.57, Florida
91	Statutes, is amended to read:
92	631.57  Powers and duties of the association.-
93	(2)  The association may:
94	(a)  Employ or retain such persons as are necessary to
95	handle claims and perform other duties of the association;
96	(b)  Borrow funds necessary to effect the purposes of this
97	part in accord with the plan of operation;
98	(c)  Sue or be sued, provided that service of process shall
99	be made upon the person registered with the department as agent
100	for the receipt of service of process; and
101	(d)  Negotiate and become a party to such contracts as are
102	necessary to carry out the purpose of this part. Additionally,
103	the association may enter into such contracts with a
104	municipality, a county, or a legal entity created pursuant to s.
105	163.01(7)(g) as are necessary in order for the municipality,
106	county, or legal entity to issue bonds under s. 631.695. In
107	connection with the issuance of any such bonds and the entering
108	into of any such necessary contracts, the association may agree
109	to such terms and conditions as the association deems necessary
110	and proper; and
111	(e)  Bring an action against any third-party administrator,
112	agent, attorney, or other representative of the insolvent
113	insurer to obtain custody and control of all files, records, and
114	electronic data related to an insolvent company that are
115	appropriate or necessary for the association, or a similar
116	association in other states, to carry out its duties under this
117	part. In such a suit, the association has the absolute right
118	through emergency equitable relief to obtain custody and control
119	of all such claims information in the custody or control of such
120	third-party administrator, agent, attorney, or other
121	representative of the insolvent insurer, regardless of where
122	such claims information may be physically located. In bringing
123	such an action, the association is not subject to any defense,
124	possessory or nonpossessory lien, or other legal or equitable
125	ground whatsoever for refusal to surrender such claims
126	information that might be asserted against the liquidator of the
127	insolvent insurers. To the extent that litigation is required
128	for the association to obtain custody of the claims information
129	requested and it results in the relinquishment of claims
130	information to the association after refusal to provide the
131	information in response to a written demand, the court shall
132	award the association its costs, expenses, and reasonable
133	attorney's fees incurred in bringing the action. This paragraph
134	does not affect the rights and remedies that the custodian of
135	such claims information may have against the insolvent insurers,
136	so long as such rights and remedies do not conflict with the
137	rights of the association to custody and control of the claims
138	information under this part.
139	Section 5.  Subsection (2) of section 631.904, Florida
140	Statutes, is amended to read:
141	631.904  Definitions.-As used in this part, the term:
142	(2)  "Covered claim" means an unpaid claim, including a
143	claim for return of unearned premiums, which arises out of, is
144	within the coverage of, and is not in excess of the applicable
145	limits of, an insurance policy to which this part applies, which
146	policy was issued by an insurer and which claim is made on
147	behalf of a claimant or insured who was a resident of this state
148	at the time of the injury. The term "covered claim" includes
149	unpaid claims under any employer liability coverage of a
150	workers' compensation policy limited to the lesser of $300,000
151	or the limits of the policy. The term "covered claim" does not
152	include any amount sought as a return of premium under any
153	retrospective rating plan; any amount due any reinsurer,
154	insurer, insurance pool, or underwriting association, as
155	subrogation recoveries or otherwise; any claim that would
156	otherwise be a covered claim that has been rejected by any other
157	state guaranty fund on the grounds that the insured's net worth
158	is greater than that allowed under that state's guaranty fund or
159	liquidation law, or that was rejected by another state's
160	guaranty fund or liquidation law on the basis that it
161	constitutes a claim under a policy issued by an insolvent
162	insurer with a deductible or self-insured retention, except this
163	exclusion from the definition of covered claim does shall not
164	apply to employers who, prior to April 30, 2004, entered into an
165	agreement with the corporation preserving the employer's right
166	to seek coverage of claims rejected by another state's guaranty
167	fund; or any return of premium resulting from a policy that was
168	not in force on the date of the final order of liquidation.
169	Member insurers have no right of subrogation against the insured
170	of any insolvent insurer. This provision applies shall be
171	applied retroactively to cover claims of an insolvent self-
172	insurance fund resulting from accidents or losses incurred prior
173	to January 1, 1994, regardless of the date the petition in
174	circuit court was filed alleging insolvency and the date the
175	court entered an order appointing a receiver.
176	Section 6.  Subsection (3) is added to section 631.912,
177	Florida Statutes, to read:
178	631.912  Board of directors.-
179	(3)  Any board member who is employed by, or has a material
180	relationship with, an insurer in receivership shall be
181	terminated as a board member, effective as of the date of the
182	entry of the order of receivership.
183	Section 7.  Paragraph (e) is added to subsection (3) of
184	section 631.913, Florida Statutes, to read:
185	631.913  Powers and duties of the corporation.-
186	(3)  The corporation may:
187	(e)  Bring an action against any third-party administrator,
188	agent, attorney, or other representative of the insolvent
189	insurer to obtain custody and control of all files, records, and
190	electronic data related to an insolvent company that are
191	appropriate or necessary for the association, or a similar
192	association in other states, to carry out its duties under this
193	part. In such a suit, the association has the absolute right
194	through emergency equitable relief to obtain custody and control
195	of all such claims information in the custody or control of such
196	third-party administrator, agent, attorney, or other
197	representative of the insolvent insurer, regardless of where
198	such claims information may be physically located. In bringing
199	such an action, the association is not subject to any defense,
200	possessory or nonpossessory lien, or other legal or equitable
201	ground whatsoever for refusal to surrender such claims
202	information that might be asserted against the liquidator of the
203	insolvent insurers. To the extent that litigation is required
204	for the association to obtain custody of the claims information
205	requested and it results in the relinquishment of claims
206	information to the association after refusal to provide the
207	information in response to a written demand, the court shall
208	award the association its costs, expenses, and reasonable
209	attorney's fees incurred in bringing the action. This paragraph
210	does not affect the rights and remedies that the custodian of
211	such claims information may have against the insolvent insurers,
212	so long as such rights and remedies do not conflict with the
213	rights of the association to custody and control of the claims
214	information under this part.
215	Section 8.  This act shall take effect July 1, 2011.

CODING: Words stricken are deletions; words underlined are additions.