CS/CS/HB 99

1	A bill to be entitled
2	An act relating to commercial insurance rates; amending s.
3	627.062, F.S.; exempting additional categories or kinds of
4	insurance and types of commercial lines risks from being
5	subject to certain otherwise applicable rate filing
6	requirements; deleting a requirement that an insurer's
7	rate change notice include total premium written for an
8	exempt class of insurance; removing a requirement that
9	specified types of records and information related to a
10	rate change be retained by an insurer; requiring actuarial
11	data regarding a rate change for an exempt class of
12	insurance be retained by an insurer for a specified time;
13	requiring the insurer to incur examination expenses;
14	removing a requirement that a rating organization maintain
15	certain statistics related to changes to loss cost for
16	exempt classes of insurance; requiring certain actuarial
17	data related to loss cost be retained by a rating
18	organization for a specified time; requiring a rating
19	organization to incur examination expenses; deleting
20	authority for the Office of Insurance Regulation to
21	require all necessary information from an insurer in order
22	to evaluate a rate change; amending s. 627.0651, F.S.;
23	expanding an exemption from certain otherwise applicable
24	rate filing requirements to include all commercial motor
25	vehicle insurance; deleting a requirement that a
26	commercial motor vehicle insurer's rate change notice
27	include total premium written; removing a requirement that
28	specified types of records and information related to a
29	commercial motor vehicle insurance rate change be retained
30	by an insurer; requiring actuarial data regarding a
31	commercial motor vehicle insurance rate change be retained
32	by an insurer for a specified time; requiring an insurer
33	for commercial motor vehicle insurance to incur
34	examination expenses; removing a requirement that a rating
35	organization maintain certain statistics related to
36	changes to loss cost for commercial motor vehicle
37	insurance; requiring actuarial data related to loss cost
38	for commercial motor vehicle insurance be retained by a
39	rating organization for a specified time; requiring a
40	rating organization for commercial motor vehicle insurance
41	to incur examination expenses; deleting authority for the
42	Office of Insurance Regulation to require all necessary
43	information from an commercial motor vehicle insurer in
44	order to evaluate a rate change; providing an effective
45	date.
46
47	Be It Enacted by the Legislature of the State of Florida:
48
49	Section 1.  Paragraph (d) of subsection (3) of section
50	627.062, Florida Statutes, is amended to read:
51	627.062  Rate standards.-
52	(3)
53	(d)1.  The following categories or kinds of insurance and
54	types of commercial lines risks are not subject to paragraph
55	(2)(a) or paragraph (2)(f):
56	a.  Excess or umbrella.
57	b.  Surety and fidelity.
58	c.  Boiler and machinery and leakage and fire extinguishing
59	equipment.
60	d.  Errors and omissions.
61	e.  Directors and officers, employment practices, fiduciary
62	liability, and management liability.
63	f.  Intellectual property and patent infringement
64	liability.
65	g.  Advertising injury and Internet liability insurance.
66	h.  Property risks rated under a highly protected risks
67	rating plan.
68	i.  General liability.
69	j.  Nonresidential property, except for collateral
70	protection insurance as defined in s. 624.6085.
71	k.  Nonresidential multiperil.
72	l.  Excess property.
73	m.  Burglary and theft.
74	n.i.  Any other commercial lines categories or kinds of
75	insurance or types of commercial lines risks that the office
76	determines should not be subject to paragraph (2)(a) or
77	paragraph (2)(f) because of the existence of a competitive
78	market for such insurance, similarity of such insurance to other
79	categories or kinds of insurance not subject to paragraph (2)(a)
80	or paragraph (2)(f), or to improve the general operational
81	efficiency of the office.
82	2.  Insurers or rating organizations shall establish and
83	use rates, rating schedules, or rating manuals to allow the
84	insurer a reasonable rate of return on insurance and risks
85	described in subparagraph 1. which are written in this state.
86	3.  An insurer must notify the office of any changes to
87	rates for insurance and risks described in subparagraph 1. no
88	later than 30 days after the effective date of the change. The
89	notice must include the name of the insurer, the type or kind of
90	insurance subject to rate change, total premium written during
91	the immediately preceding year by the insurer for the type or
92	kind of insurance subject to the rate change, and the average
93	statewide percentage change in rates. Actuarial data
94	Underwriting files, premiums, losses, and expense statistics
95	with regard to rates for insurance and risks described in
96	subparagraph 1. written by an insurer shall be maintained by the
97	insurer for 2 years after the effective date of changes to those
98	rates and are subject to examination by the office. The office
99	may require the insurer to incur the costs associated with an
100	examination. Upon examination, the office shall, in accordance
101	with generally accepted and reasonable actuarial techniques,
102	consider the rate factors in paragraphs (2)(b), (c), and (d) and
103	the standards in paragraph (2)(e) to determine if the rate is
104	excessive, inadequate, or unfairly discriminatory.
105	4.  A rating organization must notify the office of any
106	changes to loss cost for insurance and risks described in
107	subparagraph 1. no later than 30 days after the effective date
108	of the change. The notice must include the name of the rating
109	organization, the type or kind of insurance subject to a loss
110	cost change, loss costs during the immediately preceding year
111	for the type or kind of insurance subject to the loss cost
112	change, and the average statewide percentage change in loss
113	cost. Actuarial data Loss and exposure statistics with regard to
114	changes to loss cost for risks applicable to loss costs for a
115	rating organization not subject to paragraph (2)(a) or paragraph
116	(2)(f) shall be maintained by the rating organization for 2
117	years after the effective date of the change and are subject to
118	examination by the office. The office may require the rating
119	organization to incur the costs associated with an examination.
120	Upon examination, the office shall, in accordance with generally
121	accepted and reasonable actuarial techniques, consider the rate
122	factors in paragraphs (2)(b)-(d) and the standards in paragraph
123	(2)(e) to determine if the rate is excessive, inadequate, or
124	unfairly discriminatory.
125	5.  In reviewing a rate, the office may require the insurer
126	to provide at the insurer's expense all information necessary to
127	evaluate the condition of the company and the reasonableness of
128	the rate according to the applicable criteria described in this
129	section.
130	Section 2.  Subsection (14) of section 627.0651, Florida
131	Statutes, is amended to read:
132	627.0651  Making and use of rates for motor vehicle
133	insurance.-
134	(14)(a)  Commercial motor vehicle insurance covering a
135	fleet of 20 or more self-propelled vehicles is not subject to
136	subsection (1), subsection (2), or subsection (9) or s.
137	627.0645.
138	(b)  The rates for insurance described in this subsection
139	may not be excessive, inadequate, or unfairly discriminatory.
140	(c)  Insurers shall establish and use rates, rating
141	schedules, or rating manuals to allow the insurer a reasonable
142	rate of return on commercial motor vehicle insurance written in
143	this state covering a fleet of 20 or more self-propelled
144	vehicles.
145	(d)  An insurer must notify the office of any changes to
146	rates for type of insurance described in this subsection no
147	later than 30 days after the effective date of the change. The
148	notice shall include the name of the insurer, the type or kind
149	of insurance subject to rate change, total premium written
150	during the immediately preceding year by the insurer for the
151	type or kind of insurance subject to the rate change, and the
152	average statewide percentage change in rates. Actuarial data
153	with regard to rates for risks Underwriting files, premiums,
154	losses, and expense statistics for the type of insurance
155	described in this subsection shall be maintained by the insurer
156	for 2 years after the effective date of changes to those rates
157	and are subject to examination by the office. The office may
158	require the insurer to incur the costs associated with an
159	examination. Upon examination, the office shall, in accordance
160	with generally accepted and reasonable actuarial techniques,
161	consider the factors in paragraphs (2)(a)-(l) and apply
162	subsections (3)-(8) to determine if the rate is excessive,
163	inadequate, or unfairly discriminatory.
164	(e)  A rating organization must notify the office of any
165	changes to loss cost for the type of insurance described in this
166	subsection no later than 30 days after the effective date of the
167	change. The notice shall include the name of the rating
168	organization, the type or kind of insurance subject to a loss
169	cost change, loss costs during the immediately preceding year
170	for the type or kind of insurance subject to the loss cost
171	change, and the average statewide percentage change in loss
172	cost. Actuarial data Loss and exposure statistics with regard to
173	changes to loss cost for risks applicable to loss costs for a
174	rating organization not subject to subsection (1), subsection
175	(2), or subsection (9) shall be maintained by the rating
176	organization for 2 years after the effective date of the change
177	and are subject to examination by the office. The office may
178	require the rating organization to incur the costs associated
179	with an examination. Upon examination, the office shall, in
180	accordance with generally accepted and reasonable actuarial
181	techniques, consider the rate factors in paragraphs (2)(a)-(l)
182	and apply subsections (3)-(8) to determine if the rate is
183	excessive, inadequate, or unfairly discriminatory.
184	(f)  In reviewing the rate, the office may require the
185	insurer to provide at the insurer's expense all information
186	necessary to evaluate the condition of the company and the
187	reasonableness of the rate according to the applicable criteria
188	described herein.
189	Section 3.  This act shall take effect October 1, 2011.

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