Florida Senate - 2011                        COMMITTEE AMENDMENT
       Bill No. SB 1836
                                Barcode 913194                          
                              LEGISLATIVE ACTION                        
                    Senate             .             House              

       The Committee on Banking and Insurance (Hays) recommended the
    1         Senate Amendment (with title amendment)
    4         Delete everything after the enacting clause
    5  and insert:
    6         Section 1. Subsection (9) is added to section 624.402,
    7  Florida Statutes, to read:
    8         624.402 Exceptions, certificate of authority required.—A
    9  certificate of authority shall not be required of an insurer
   10  with respect to:
   11         (9) A life or health insurer domiciled outside the United
   12  States covering only persons who, at the time of issuance or
   13  renewal, are nonresidents of the United States but residing
   14  legally in the United States if:
   15         (a) The insurer does not solicit business from residents of
   16  the United States;
   17         (b) The insurer registers with the office via a letter of
   18  notification upon commencing business from this state;
   19         (c) Annually, by March 1, the insurer provides the
   20  following information to the office:
   21         1. The name of the insurer, the country of domicile, the
   22  address of the insurer’s principal office and office in this
   23  state, the names of the owners of the insurer and their
   24  percentage of ownership, the names of the officers and directors
   25  of the insurer, the name, e-mail, and telephone number of a
   26  contact person for the insurer, and the number of individuals
   27  who are employed by the insurer or its affiliates in this state;
   28         2. The type of products offered by the insurer;
   29         3. A statement from the applicable regulatory body of the
   30  insurer’s domicile certifying that the insurer is licensed or
   31  registered in that domicile; and
   32         4. A copy of the filings required by the insurer’s
   33  domicile;
   34         (d) All certificates issued in this state showing coverage
   35  under the insurer’s policy include the following statement in a
   36  contrasting color and at least 10-point type: “The policy
   37  providing your coverage and the insurer providing this policy
   38  have not been approved by the Florida Office of Insurance
   39  Regulation”; and
   40         (e) The insurer ceases to do business from this state and
   41  provides written notification to the office within 30 days after
   42  cessation.
   44  For purposes of this subsection, the term “nonresident” means a
   45  person who has not had his or her principal place of domicile in
   46  the United States for 180 days during the 365 days before
   47  purchasing or renewing the policy; registered to vote in any
   48  state; made a statement of domicile in any state; or filed for
   49  homestead tax exemption on property in any state.
   50         Section 2. Section 628.901, Florida Statutes, is amended to
   51  read:
   52         628.901 Definitions “Captive insurer” defined.—As used in
   53  For the purposes of this part, the term: except as provided in
   54  s. 628.903, a “captive insurer” is a domestic insurer
   55  established under part I to insure the risks of a specific
   56  corporation or group of corporations under common ownership
   57  owned by the corporation or corporations from which it accepts
   58  risk under a contract of insurance.
   59         (1) “Association” means a legal association of nursing
   60  homes, hospitals, skilled nursing facilities, assisted living
   61  facilities, or continuing care retirement communities.
   62         (2) “Association captive insurer” means a company that
   63  insures risks of the member organizations of the association and
   64  their affiliated companies.
   65         (3) “Captive insurer” means a pure captive insurer or an
   66  association captive insurer domiciled in this state and formed
   67  or licensed under this part.
   68         (4) “Industrial insured” means an insured that:
   69         (a)Has gross assets in excess of $50 million;
   70         (b)Procures insurance through the use of a full-time
   71  employee of the insured who acts as an insurance manager or
   72  buyer or through the services of a person licensed as a property
   73  and casualty insurance agent, broker, or consultant in such
   74  person’s state of domicile;
   75         (c)Has at least 100 full-time employees; and
   76         (d)Pays annual premiums of at least $200,000 for each line
   77  of insurance purchased from the industrial insured captive
   78  insurer, or at least $75,000 for any line of coverage in excess
   79  of at least $25 million in the annual aggregate. The purchase of
   80  umbrella or general liability coverage in excess of $25 million
   81  in the annual aggregate is deemed to be the purchase of a single
   82  line of insurance.
   83         (5)“Industrial insured captive insurer” is a captive
   84  insurer that:
   85         (a)Has as its stockholders or members only industrial
   86  insureds that the captive insurer insures, or has as its sole
   87  stockholder a corporation whose sole stockholders are industrial
   88  insureds that the captive insurer insures; and
   89         1.Provides insurance only to the industrial insureds that
   90  are its stockholders or members, and affiliates thereof, or to
   91  the stockholders, and affiliates thereof, of its parent
   92  corporation; or
   93         2.Provides reinsurance only on risks written by insurers
   94  of industrial insureds who are the stockholders or members, and
   95  affiliates thereof, of the captive insurer, or the stockholders,
   96  and affiliates thereof, of the parent corporation of the captive
   97  insurer;
   98         (b)Maintains unimpaired capital and surplus of at least
   99  $20 million; and
  100         (c)If licensed in this state before December 31, 1999, or
  101  if any subsidiary formed by the licensed insurer on or after
  102  December 31, 1999, has:
  103         1.Gross assets in excess of $10 million and procures
  104  insurance through the use of a full-time employee of the insured
  105  who acts as an insurance manager or buyer or through the
  106  services of a person licensed as a property and casualty
  107  insurance agent, broker, or consultant in such person’s state of
  108  domicile;
  109         2.At least 25 full-time employees; and
  110         3.Annual aggregate premiums for all insurance risks which
  111  total at least $100,000.
  113  As used in this subsection, the term “affiliate” means a person
  114  that directly or indirectly, through one or more intermediaries,
  115  controls, is controlled by, or is under common control with one
  116  or more of the stockholders or members of an industrial insured
  117  captive insurer or one or more of the stockholders of the parent
  118  corporation of an industrial insured captive insurer.
  119         (6) “Pure captive insurer” means a company that insures the
  120  risks of its parent, affiliated companies, controlled
  121  unaffiliated businesses, or a combination thereof.
  122         Section 3. Section 628.903, Florida Statutes, is repealed.
  123         Section 4. Section 628.905, Florida Statutes, is amended to
  124  read:
  125         628.905 Licensing; authority.—In order to conduct insurance
  126  business in this state, a captive insurer must obtain a license
  127  from the office.
  128         (1) A Any captive insurer, if when permitted by its charter
  129  or articles of incorporation, may apply to the office for a
  130  license to provide commercial property, commercial casualty, and
  131  commercial marine insurance. coverage other than workers’
  132  compensation and employer’s liability insurance coverage, except
  133  that An industrial insured captive insurer may also apply for a
  134  license to provide workers’ compensation and employer’s
  135  liability insurance as set forth in subsection (5) (6).
  136         (2) A No captive insurer, other than an industrial insured
  137  captive insurer, may not shall insure or accept reinsurance on
  138  any risks other than those of its parent and affiliated
  139  companies.
  140         (3) In addition to information otherwise required by this
  141  code, each applicant captive insurer shall file with the office
  142  evidence:
  143         (a) Of the adequacy of the loss prevention program of its
  144  insureds.
  145         (b) That it intends to employ or contract with a reputable
  146  person or firm that possesses the appropriate expertise,
  147  experience, and character to manage the association captive
  148  insurer.
  149         (4) If an association captive insurer operates with
  150  separate cells or segregated accounts, a certificate of
  151  insurance used to satisfy financial responsibility laws shall be
  152  issued in an amount not exceeding the total funds in the
  153  segregated accounts or separate cells of each member
  154  organization of the association.
  155         (5)(4) An industrial insured captive insurer:
  156         (a) Need not be incorporated in this state if it has been
  157  validly incorporated under the laws of another jurisdiction;.
  158         (b)(5)An industrial insured captive insurer Is subject to
  159  all provisions of this part except as otherwise indicated; and.
  160         (c)(6)An industrial insured captive insurer May not
  161  provide workers’ compensation and employer’s liability insurance
  162  except in excess of at least $25 million in the annual
  163  aggregate.
  164         Section 5. Section 628.908, Florida Statutes, is created to
  165  read:
  166         628.908Principal place of business; annual meeting.In
  167  order to conduct insurance business in this state, a licensed
  168  captive insurer must:
  169         (1) Maintain its principal place of business in this state;
  170  and
  171         (2) Annually hold in this state at least one board of
  172  directors’ meeting; or, in the case of a reciprocal insurer, one
  173  subscriber’s advisory committee meeting; or, in the case of a
  174  limited liability company, one managing board’s meeting.
  175         Section 6. Paragraph (a) of subsection (2) and paragraph
  176  (a) of subsection (3) of section 628.909, Florida Statutes, are
  177  amended to read:
  178         628.909 Applicability of other laws.—
  179         (2) The following provisions of the Florida Insurance Code
  180  shall apply to captive insurers who are not industrial insured
  181  captive insurers to the extent that such provisions are not
  182  inconsistent with this part:
  183         (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
  184  624.40851, 624.4095, 624.425, and 624.426.
  185         (3) The following provisions of the Florida Insurance Code
  186  shall apply to industrial insured captive insurers to the extent
  187  that such provisions are not inconsistent with this part:
  188         (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
  189  624.40851, 624.4095, 624.425, 624.426, and 624.609(1).
  190         Section 7. This act shall take effect July 1, 2011.
  192  ================= T I T L E  A M E N D M E N T ================
  193         And the title is amended as follows:
  194         Delete everything before the enacting clause
  195  and insert:
  196                        A bill to be entitled                      
  197         An act relating to captive insurers; amending s.
  198         624.402, F.S.; exempting certain life or health
  199         insurers covering nonresidents from having to obtain a
  200         certificate of authority; amending s. 628.901, F.S.;
  201         providing definitions; repealing s. 628.903, F.S.,
  202         relating to the definition of the term “industrial
  203         insured captive insurer”; amending s. 628.905, F.S.;
  204         requiring a captive insurer to obtain a license and to
  205         file evidence that a person or firm with whom it
  206         intends to conduct business is reputable; providing
  207         that a certificate of insurance for an association
  208         captive insurer does not exceed the total funds of the
  209         association members; creating s. 628.908, F.S.;
  210         requiring a licensed captive insurer to maintain its
  211         principal place of business in this state and hold an
  212         annual meeting in this state; amending s. 628.909,
  213         F.S.; applying additional provisions of the insurance
  214         code to captive insurers; providing an effective date.