Florida Senate - 2011                             CS for SB 1836
       By the Committee on Banking and Insurance; and Senator Diaz de
       la Portilla
       597-03867-11                                          20111836c1
    1                        A bill to be entitled                      
    2         An act relating to captive insurers; amending s.
    3         624.402, F.S.; exempting certain life or health
    4         insurers covering nonresidents from having to obtain a
    5         certificate of authority; amending s. 628.901, F.S.;
    6         providing definitions; repealing s. 628.903, F.S.,
    7         relating to the definition of the term “industrial
    8         insured captive insurer”; amending s. 628.905, F.S.;
    9         requiring a captive insurer to obtain a license and to
   10         file evidence that a person or firm with whom it
   11         intends to conduct business is reputable; providing
   12         that a certificate of insurance for an association
   13         captive insurer does not exceed the total funds of the
   14         association members; creating s. 628.908, F.S.;
   15         requiring a licensed captive insurer to maintain its
   16         principal place of business in this state and hold an
   17         annual meeting in this state; amending s. 628.909,
   18         F.S.; applying additional provisions of the insurance
   19         code to captive insurers; providing an effective date.
   21  Be It Enacted by the Legislature of the State of Florida:
   23         Section 1. Subsection (9) is added to section 624.402,
   24  Florida Statutes, to read:
   25         624.402 Exceptions, certificate of authority required.—A
   26  certificate of authority shall not be required of an insurer
   27  with respect to:
   28         (9) A life or health insurer domiciled outside the United
   29  States covering only persons who, at the time of issuance or
   30  renewal, are nonresidents of the United States but residing
   31  legally in the United States if:
   32         (a) The insurer does not solicit business from residents of
   33  the United States;
   34         (b) The insurer registers with the office via a letter of
   35  notification upon commencing business from this state;
   36         (c) Annually, by March 1, the insurer provides the
   37  following information to the office:
   38         1. The name of the insurer, the country of domicile, the
   39  address of the insurer’s principal office and office in this
   40  state, the names of the owners of the insurer and their
   41  percentage of ownership, the names of the officers and directors
   42  of the insurer, the name, e-mail, and telephone number of a
   43  contact person for the insurer, and the number of individuals
   44  who are employed by the insurer or its affiliates in this state;
   45         2. The type of products offered by the insurer;
   46         3. A statement from the applicable regulatory body of the
   47  insurer’s domicile certifying that the insurer is licensed or
   48  registered in that domicile; and
   49         4. A copy of the filings required by the insurer’s
   50  domicile;
   51         (d) All certificates issued in this state showing coverage
   52  under the insurer’s policy include the following statement in a
   53  contrasting color and at least 10-point type: “The policy
   54  providing your coverage and the insurer providing this policy
   55  have not been approved by the Florida Office of Insurance
   56  Regulation”; and
   57         (e) The insurer ceases to do business from this state and
   58  provides written notification to the office within 30 days after
   59  cessation.
   61  For purposes of this subsection, the term “nonresident” means a
   62  person who has not had his or her principal place of domicile in
   63  the United States for 180 days during the 365 days before
   64  purchasing or renewing the policy; registered to vote in any
   65  state; made a statement of domicile in any state; or filed for
   66  homestead tax exemption on property in any state.
   67         Section 2. Section 628.901, Florida Statutes, is amended to
   68  read:
   69         628.901 Definitions “Captive insurer” defined.—As used in
   70  For the purposes of this part, the term: except as provided in
   71  s. 628.903, a “captive insurer” is a domestic insurer
   72  established under part I to insure the risks of a specific
   73  corporation or group of corporations under common ownership
   74  owned by the corporation or corporations from which it accepts
   75  risk under a contract of insurance.
   76         (1) “Association” means a legal association of nursing
   77  homes, hospitals, skilled nursing facilities, assisted living
   78  facilities, or continuing care retirement communities.
   79         (2) “Association captive insurer” means a company that
   80  insures risks of the member organizations of the association and
   81  their affiliated companies.
   82         (3) “Captive insurer” means a pure captive insurer or an
   83  association captive insurer domiciled in this state and formed
   84  or licensed under this part.
   85         (4) “Industrial insured” means an insured that:
   86         (a)Has gross assets in excess of $50 million;
   87         (b)Procures insurance through the use of a full-time
   88  employee of the insured who acts as an insurance manager or
   89  buyer or through the services of a person licensed as a property
   90  and casualty insurance agent, broker, or consultant in such
   91  person’s state of domicile;
   92         (c)Has at least 100 full-time employees; and
   93         (d)Pays annual premiums of at least $200,000 for each line
   94  of insurance purchased from the industrial insured captive
   95  insurer, or at least $75,000 for any line of coverage in excess
   96  of at least $25 million in the annual aggregate. The purchase of
   97  umbrella or general liability coverage in excess of $25 million
   98  in the annual aggregate is deemed to be the purchase of a single
   99  line of insurance.
  100         (5)“Industrial insured captive insurer” is a captive
  101  insurer that:
  102         (a)Has as its stockholders or members only industrial
  103  insureds that the captive insurer insures, or has as its sole
  104  stockholder a corporation whose sole stockholders are industrial
  105  insureds that the captive insurer insures; and
  106         1.Provides insurance only to the industrial insureds that
  107  are its stockholders or members, and affiliates thereof, or to
  108  the stockholders, and affiliates thereof, of its parent
  109  corporation; or
  110         2.Provides reinsurance only on risks written by insurers
  111  of industrial insureds who are the stockholders or members, and
  112  affiliates thereof, of the captive insurer, or the stockholders,
  113  and affiliates thereof, of the parent corporation of the captive
  114  insurer;
  115         (b)Maintains unimpaired capital and surplus of at least
  116  $20 million; and
  117         (c)If licensed in this state before December 31, 1999, or
  118  if any subsidiary formed by the licensed insurer on or after
  119  December 31, 1999, has:
  120         1.Gross assets in excess of $10 million and procures
  121  insurance through the use of a full-time employee of the insured
  122  who acts as an insurance manager or buyer or through the
  123  services of a person licensed as a property and casualty
  124  insurance agent, broker, or consultant in such person’s state of
  125  domicile;
  126         2.At least 25 full-time employees; and
  127         3.Annual aggregate premiums for all insurance risks which
  128  total at least $100,000.
  130  As used in this subsection, the term “affiliate” means a person
  131  that directly or indirectly, through one or more intermediaries,
  132  controls, is controlled by, or is under common control with one
  133  or more of the stockholders or members of an industrial insured
  134  captive insurer or one or more of the stockholders of the parent
  135  corporation of an industrial insured captive insurer.
  136         (6) “Pure captive insurer” means a company that insures the
  137  risks of its parent, affiliated companies, controlled
  138  unaffiliated businesses, or a combination thereof.
  139         Section 3. Section 628.903, Florida Statutes, is repealed.
  140         Section 4. Section 628.905, Florida Statutes, is amended to
  141  read:
  142         628.905 Licensing; authority.—In order to conduct insurance
  143  business in this state, a captive insurer must obtain a license
  144  from the office.
  145         (1) A Any captive insurer, if when permitted by its charter
  146  or articles of incorporation, may apply to the office for a
  147  license to provide commercial property, commercial casualty, and
  148  commercial marine insurance. coverage other than workers’
  149  compensation and employer’s liability insurance coverage, except
  150  that An industrial insured captive insurer may also apply for a
  151  license to provide workers’ compensation and employer’s
  152  liability insurance as set forth in subsection (5) (6).
  153         (2) A No captive insurer, other than an industrial insured
  154  captive insurer, may not shall insure or accept reinsurance on
  155  any risks other than those of its parent and affiliated
  156  companies.
  157         (3) In addition to information otherwise required by this
  158  code, each applicant captive insurer shall file with the office
  159  evidence:
  160         (a) Of the adequacy of the loss prevention program of its
  161  insureds.
  162         (b) That it intends to employ or contract with a reputable
  163  person or firm that possesses the appropriate expertise,
  164  experience, and character to manage the association captive
  165  insurer.
  166         (4) If an association captive insurer operates with
  167  separate cells or segregated accounts, a certificate of
  168  insurance used to satisfy financial responsibility laws shall be
  169  issued in an amount not exceeding the total funds in the
  170  segregated accounts or separate cells of each member
  171  organization of the association.
  172         (5)(4) An industrial insured captive insurer:
  173         (a) Need not be incorporated in this state if it has been
  174  validly incorporated under the laws of another jurisdiction;.
  175         (b)(5)An industrial insured captive insurer Is subject to
  176  all provisions of this part except as otherwise indicated; and.
  177         (c)(6)An industrial insured captive insurer May not
  178  provide workers’ compensation and employer’s liability insurance
  179  except in excess of at least $25 million in the annual
  180  aggregate.
  181         Section 5. Section 628.908, Florida Statutes, is created to
  182  read:
  183         628.908Principal place of business; annual meeting.—In
  184  order to conduct insurance business in this state, a licensed
  185  captive insurer must:
  186         (1) Maintain its principal place of business in this state;
  187  and
  188         (2) Annually hold in this state at least one board of
  189  directors’ meeting; or, in the case of a reciprocal insurer, one
  190  subscriber’s advisory committee meeting; or, in the case of a
  191  limited liability company, one managing board’s meeting.
  192         Section 6. Paragraph (a) of subsection (2) and paragraph
  193  (a) of subsection (3) of section 628.909, Florida Statutes, are
  194  amended to read:
  195         628.909 Applicability of other laws.—
  196         (2) The following provisions of the Florida Insurance Code
  197  shall apply to captive insurers who are not industrial insured
  198  captive insurers to the extent that such provisions are not
  199  inconsistent with this part:
  200         (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
  201  624.40851, 624.4095, 624.425, and 624.426.
  202         (3) The following provisions of the Florida Insurance Code
  203  shall apply to industrial insured captive insurers to the extent
  204  that such provisions are not inconsistent with this part:
  205         (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
  206  624.40851, 624.4095, 624.425, 624.426, and 624.609(1).
  207         Section 7. This act shall take effect July 1, 2011.