HB 99

1
A bill to be entitled
2An act relating to commercial insurance rates; amending s.
3627.062, F.S.; exempting additional categories or kinds of
4insurance and types of commercial lines risks from being
5subject to certain otherwise applicable rate filing
6requirements; deleting a requirement that an insurer's
7rate change notice include total premium written for an
8exempt class of insurance; removing a requirement that
9specified types of records and information related to a
10rate change be retained by an insurer; requiring actuarial
11data regarding a rate change for an exempt class of
12insurance be retained by an insurer for a specified time;
13removing a requirement that a rating organization maintain
14certain statistics related to changes to loss cost for
15exempt classes of insurance; requiring certain actuarial
16data related to loss cost be retained by a rating
17organization for a specified time; deleting authority for
18the Office of Insurance Regulation to require all
19necessary information from an insurer in order to evaluate
20a rate change; amending s. 627.0651, F.S.; expanding an
21exemption from certain otherwise applicable rate filing
22requirements to include all commercial motor vehicle
23insurance; deleting a requirement that a commercial motor
24vehicle insurer's rate change notice include total premium
25written; removing a requirement that specified types of
26records and information related to a commercial motor
27vehicle insurance rate change be retained by an insurer;
28requiring actuarial data regarding a commercial motor
29vehicle insurance rate change be retained by an insurer
30for a specified time; removing a requirement that a rating
31organization maintain certain statistics related to
32changes to loss cost for commercial motor vehicle
33insurance; requiring actuarial data related to loss cost
34for commercial motor vehicle insurance be retained by a
35rating organization for a specified time; deleting
36authority for the Office of Insurance Regulation to
37require all necessary information from an commercial motor
38vehicle insurer in order to evaluate a rate change;
39providing an effective date.
40
41Be It Enacted by the Legislature of the State of Florida:
42
43     Section 1.  Paragraph (d) of subsection (3) of section
44627.062, Florida Statutes, is amended to read:
45     627.062  Rate standards.-
46     (3)
47     (d)1.  The following categories or kinds of insurance and
48types of commercial lines risks are not subject to paragraph
49(2)(a) or paragraph (2)(f):
50     a.  Excess or umbrella.
51     b.  Surety and fidelity.
52     c.  Boiler and machinery and leakage and fire extinguishing
53equipment.
54     d.  Errors and omissions professional liability.
55     e.  Directors and officers, employment practices, fiduciary
56liability, and other management liability.
57     f.  Intellectual property and patent infringement
58liability.
59     g.  Advertising injury and Internet liability insurance.
60     h.  Property risks rated under a highly protected risks
61rating plan.
62     i.  General liability.
63     j.  Nonresidential property.
64     k.  Nonresidential multiperil.
65     l.  Excess property.
66     m.i.  Any other commercial lines categories or kinds of
67insurance or types of commercial lines risks that the office
68determines should not be subject to paragraph (2)(a) or
69paragraph (2)(f) because of the existence of a competitive
70market for such insurance, similarity of such insurance to other
71categories or kinds of insurance not subject to paragraph (2)(a)
72or paragraph (2)(f), or to improve the general operational
73efficiency of the office.
74     2.  Insurers or rating organizations shall establish and
75use rates, rating schedules, or rating manuals to allow the
76insurer a reasonable rate of return on insurance and risks
77described in subparagraph 1. which are written in this state.
78     3.  An insurer must notify the office of any changes to
79rates for insurance and risks described in subparagraph 1. no
80later than 30 days after the effective date of the change. The
81notice must include the name of the insurer, the type or kind of
82insurance subject to rate change, total premium written during
83the immediately preceding year by the insurer for the type or
84kind of insurance subject to the rate change, and the average
85statewide percentage change in rates. Actuarial data
86Underwriting files, premiums, losses, and expense statistics
87with regard to rates for insurance and risks described in
88subparagraph 1. written by an insurer shall be maintained by the
89insurer for 2 years after the effective date of changes to those
90rates and are subject to examination by the office. Upon
91examination, the office shall, in accordance with generally
92accepted and reasonable actuarial techniques, consider the rate
93factors in paragraphs (2)(b), (c), and (d) and the standards in
94paragraph (2)(e) to determine if the rate is excessive,
95inadequate, or unfairly discriminatory.
96     4.  A rating organization must notify the office of any
97changes to loss cost for insurance and risks described in
98subparagraph 1. no later than 30 days after the effective date
99of the change. The notice must include the name of the rating
100organization, the type or kind of insurance subject to a loss
101cost change, loss costs during the immediately preceding year
102for the type or kind of insurance subject to the loss cost
103change, and the average statewide percentage change in loss
104cost. Actuarial data Loss and exposure statistics with regard to
105changes to loss cost for risks applicable to loss costs for a
106rating organization not subject to paragraph (2)(a) or paragraph
107(2)(f) shall be maintained by the rating organization for 2
108years after the effective date of the change and are subject to
109examination by the office. Upon examination, the office shall,
110in accordance with generally accepted and reasonable actuarial
111techniques, consider the rate factors in paragraphs (2)(b)-(d)
112and the standards in paragraph (2)(e) to determine if the rate
113is excessive, inadequate, or unfairly discriminatory.
114     5.  In reviewing a rate, the office may require the insurer
115to provide at the insurer's expense all information necessary to
116evaluate the condition of the company and the reasonableness of
117the rate according to the applicable criteria described in this
118section.
119     Section 2.  Subsection (14) of section 627.0651, Florida
120Statutes, is amended to read:
121     627.0651  Making and use of rates for motor vehicle
122insurance.-
123     (14)(a)  Commercial motor vehicle insurance covering a
124fleet of 20 or more self-propelled vehicles is not subject to
125subsection (1), subsection (2), or subsection (9) or s.
126627.0645.
127     (b)  The rates for insurance described in this subsection
128may not be excessive, inadequate, or unfairly discriminatory.
129     (c)  Insurers shall establish and use rates, rating
130schedules, or rating manuals to allow the insurer a reasonable
131rate of return on commercial motor vehicle insurance written in
132this state covering a fleet of 20 or more self-propelled
133vehicles.
134     (d)  An insurer must notify the office of any changes to
135rates for type of insurance described in this subsection no
136later than 30 days after the effective date of the change. The
137notice shall include the name of the insurer, the type or kind
138of insurance subject to rate change, total premium written
139during the immediately preceding year by the insurer for the
140type or kind of insurance subject to the rate change, and the
141average statewide percentage change in rates. Actuarial data
142with regard to rates for risks Underwriting files, premiums,
143losses, and expense statistics for the type of insurance
144described in this subsection shall be maintained by the insurer
145for 2 years after the effective date of changes to those rates
146and are subject to examination by the office. Upon examination,
147the office shall, in accordance with generally accepted and
148reasonable actuarial techniques, consider the factors in
149paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine
150if the rate is excessive, inadequate, or unfairly
151discriminatory.
152     (e)  A rating organization must notify the office of any
153changes to loss cost for the type of insurance described in this
154subsection no later than 30 days after the effective date of the
155change. The notice shall include the name of the rating
156organization, the type or kind of insurance subject to a loss
157cost change, loss costs during the immediately preceding year
158for the type or kind of insurance subject to the loss cost
159change, and the average statewide percentage change in loss
160cost. Actuarial data Loss and exposure statistics with regard to
161changes to loss cost for risks applicable to loss costs for a
162rating organization not subject to subsection (1), subsection
163(2), or subsection (9) shall be maintained by the rating
164organization for 2 years after the effective date of the change
165and are subject to examination by the office. Upon examination,
166the office shall, in accordance with generally accepted and
167reasonable actuarial techniques, consider the rate factors in
168paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine
169if the rate is excessive, inadequate, or unfairly
170discriminatory.
171     (f)  In reviewing the rate, the office may require the
172insurer to provide at the insurer's expense all information
173necessary to evaluate the condition of the company and the
174reasonableness of the rate according to the applicable criteria
175described herein.
176     Section 3.  This act shall take effect October 1, 2011.


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