Florida Senate - 2014                          SENATOR AMENDMENT
       Bill No. CS for HB 375
       
       
       
       
       
       
                                Ì481316!Î481316                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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                Floor: 1/RE/2R         .                                
             04/24/2014 07:33 PM       .                                
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       Senator Smith moved the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsection (1) of section 624.425, Florida
    6  Statutes, is amended to read:
    7         624.425 Agent countersignature required, property,
    8  casualty, surety insurance.—
    9         (1) Except as stated in s. 624.426, no authorized property,
   10  casualty, or surety insurer shall assume direct liability as to
   11  a subject of insurance resident, located, or to be performed in
   12  this state unless the policy or contract of insurance is issued
   13  by or through, and is countersigned by, an agent who is
   14  regularly commissioned and licensed currently as an agent and
   15  appointed as an agent for the insurer under this code. However,
   16  the absence of a countersignature does not affect the validity
   17  of the policy or contract. If two or more authorized insurers
   18  issue a single policy of insurance against legal liability for
   19  loss or damage to person or property caused by a the nuclear
   20  energy hazard, or a single policy insuring against loss or
   21  damage to property by radioactive contamination, whether or not
   22  also insuring against one or more other perils that may be
   23  insured proper to insure against in this state, such policy if
   24  otherwise lawful may be countersigned on behalf of all of the
   25  insurers by a licensed and appointed agent of the any insurer
   26  appearing thereon. The producing agent shall receive on each
   27  policy or contract the full and usual commission allowed and
   28  paid by the insurer to its agents on business written or
   29  transacted by them for the insurer.
   30         Section 2. Section 627.7311, Florida Statutes, is amended
   31  to read:
   32         627.7311 Effect of law on personal injury protection
   33  policies.—
   34         (1) The provisions and procedures authorized in ss.
   35  627.730-627.7405 shall be implemented by insurers offering
   36  policies pursuant to the Florida Motor Vehicle No-Fault Law. The
   37  Legislature intends that these provisions and procedures have
   38  full force and effect regardless of their express inclusion in
   39  an insurance policy form, and a specific provision or procedure
   40  authorized in ss. 627.730-627.7405 shall control over general
   41  provisions in an insurance policy form. An insurer is not
   42  required to amend its policy form or to expressly notify
   43  providers, claimants, or insureds in order to implement and
   44  apply such provisions or procedures.
   45         (2) Sections 627.730-627.7405 do not preclude a county from
   46  enacting and enforcing an ordinance applicable to health care
   47  clinics that receive reimbursement under the Florida Motor
   48  Vehicle No-Fault Law.
   49         Section 3. Subsection (2) of section 627.902, Florida
   50  Statutes, is amended to read:
   51         627.902 Premium financing by an insurer or subsidiary.—
   52         (2) Nothing in This part or in part XV of this chapter does
   53  not disallow disallows or otherwise apply applies to:
   54         (a) Installment payment arrangements offered by an insurer
   55  if such arrangements do not involve the advancement of funds
   56  which would constitute financing; or
   57         (b) A discount for an any insured who pays the entire
   58  premium for the entire policy term at the inception of the term
   59  if the discount is found to be actuarially justified by the
   60  office and approved by the office pursuant to the provisions of
   61  part I of this chapter. Such actuarially justified and approved
   62  discount may shall not be deemed a component of or related to
   63  premium financing.
   64         Section 4. Subsection (2) of section 627.94072, Florida
   65  Statutes, is amended to read:
   66         627.94072 Mandatory offers.—
   67         (2) An insurer that offers a long-term care insurance
   68  policy, certificate, or rider in this state shall must offer a
   69  nonforfeiture protection provision providing reduced paid-up
   70  insurance, extended term, shortened benefit period, or any other
   71  benefit benefits approved by the office if all or part of a
   72  premium is not paid. A nonforfeiture provision may also be
   73  offered in the form of a return of premium on the death of the
   74  insured, or on the complete surrender or cancellation of the
   75  policy or contract. Nonforfeiture benefits and any additional
   76  premium for such benefits must be computed in an actuarially
   77  sound manner, using a methodology that has been filed with and
   78  approved by the office.
   79         Section 5. Section 629.271, Florida Statutes, is amended to
   80  read:
   81         629.271 Distribution of savings.—
   82         (1) A reciprocal insurer may from time to time return to
   83  its subscribers any unused premiums, savings, or credits
   84  accruing to their accounts. Any Such distribution may shall not
   85  unfairly discriminate between classes of risks, or policies, or
   86  between subscribers, but such distribution may vary as to
   87  classes of subscribers based on upon the experience of such
   88  classes.
   89         (2) In addition to the option provided in subsection (1), a
   90  domestic reciprocal insurer may, upon the prior written approval
   91  of the office, pay to its subscribers a portion of unassigned
   92  funds of up to 10 percent of surplus with distribution limited
   93  to 50 percent of net income from the previous calendar year.
   94  Such distribution may not unfairly discriminate between classes
   95  of risks, or policies, or between subscribers, but may vary as
   96  to classes of subscribers based on the experience of such
   97  classes.
   98         Section 6. Subsections (2) through (9) of section 631.54,
   99  Florida Statutes, are renumbered as subsections (3) through
  100  (10), respectively, and a new subsection (2) is added to that
  101  section to read:
  102         631.54 Definitions.—As used in this part, the term:
  103         (2) “Assessment year” means the 12-month period, which may
  104  begin on the first day of any calendar quarter, whether January
  105  1, April 1, July 1, or October 1, as specified in an order
  106  issued by the office directing insurers to pay an assessment to
  107  the association. Upon entry of the order, insurers may begin
  108  collecting assessments from policyholders for the assessment
  109  year.
  110         Section 7. Subsections (3) and (4) of section 631.57,
  111  Florida Statutes, are amended to read:
  112         631.57 Powers and duties of the association.—
  113         (3)(a) To the extent necessary to secure the funds for the
  114  respective accounts for the payment of covered claims, to pay
  115  the reasonable costs to administer such accounts the same, and
  116  to the extent necessary to secure the funds for the account
  117  specified in s. 631.55(2)(b) or to retire indebtedness,
  118  including, without limitation, the principal, redemption
  119  premium, if any, and interest on, and related costs of issuance
  120  of, bonds issued under s. 631.695 and the funding of any
  121  reserves and other payments required under the bond resolution
  122  or trust indenture pursuant to which such bonds have been
  123  issued, the office, upon certification of the board of
  124  directors, shall levy assessments initially estimated in the
  125  proportion that each insurer’s net direct written premiums in
  126  this state in the classes protected by the account bears to the
  127  total of said net direct written premiums received in this state
  128  by all such insurers for the preceding calendar year for the
  129  kinds of insurance included within such account. Assessments
  130  shall be remitted to and administered by the board of directors
  131  in the manner specified by the approved plan and paragraph (f).
  132  Each insurer so assessed shall have at least 30 days’ written
  133  notice as to the date the initial assessment payment is due and
  134  payable. Every assessment shall be made as a uniform percentage
  135  applicable to the net direct written premiums of each insurer in
  136  the kinds of insurance included within the account in which the
  137  assessment is made. The assessments levied against any insurer
  138  may shall not exceed in any one year more than 2 percent of that
  139  insurer’s net direct written premiums in this state for the
  140  kinds of insurance included within such account during the
  141  calendar year next preceding the date of such assessments.
  142         (b) If sufficient funds from such assessments, together
  143  with funds previously raised, are not available in any one year
  144  in the respective account to make all the payments or
  145  reimbursements then owing to insurers, the funds available shall
  146  be prorated and the unpaid portion shall be paid as soon
  147  thereafter as funds become available.
  148         (c) The Legislature finds and declares that all assessments
  149  paid by an insurer or insurer group as a result of a levy by the
  150  office, including assessments levied pursuant to paragraph (a)
  151  and emergency assessments levied pursuant to paragraph (e),
  152  constitute advances of funds from the insurer to the
  153  association. An insurer may fully recoup such advances by
  154  applying the uniform assessment percentage levied by the office
  155  to all a separate recoupment factor to the premium of policies
  156  of the same kind or line as were considered by the office in
  157  determining the assessment liability of the insurer or insurer
  158  group as set forth in paragraph (f).
  159         1. Assessments levied under subparagraph (f)1. are paid
  160  before policy surcharges are collected and result in a
  161  receivable for policy surcharges collected in the future. This
  162  amount, to the extent it is likely that it will be realized,
  163  meets the definition of an admissible asset as specified in the
  164  National Association of Insurance Commissioners’ Statement of
  165  Statutory Accounting Principles No. 4. The asset shall be
  166  established and recorded separately from the liability
  167  regardless of whether it is based on a retrospective or
  168  prospective premium-based assessment. If an insurer is unable to
  169  fully recoup the amount of the assessment because of a reduction
  170  in writings or withdrawal from the market, the amount recorded
  171  as an asset shall be reduced to the amount reasonably expected
  172  to be recouped.
  173         2. Assessments levied under subparagraph (f)2. are paid
  174  after policy surcharges are collected so that the recognition of
  175  assets is based on actual premium written offset by the
  176  obligation to the association.
  177         (d) No State funds may not of any kind shall be allocated
  178  or paid to the said association or any of its accounts.
  179         (e)1.a. In addition to assessments otherwise authorized in
  180  paragraph (a), and to the extent necessary to secure the funds
  181  for the account specified in s. 631.55(2)(b) for the direct
  182  payment of covered claims of insurers rendered insolvent by the
  183  effects of a hurricane and to pay the reasonable costs to
  184  administer such claims, or to retire indebtedness, including,
  185  without limitation, the principal, redemption premium, if any,
  186  and interest on, and related costs of issuance of, bonds issued
  187  under s. 631.695 and the funding of any reserves and other
  188  payments required under the bond resolution or trust indenture
  189  pursuant to which such bonds have been issued, the office, upon
  190  certification of the board of directors, shall levy emergency
  191  assessments upon insurers holding a certificate of authority.
  192  The emergency assessments payable under this paragraph by any
  193  insurer may shall not exceed in any single year more than 2
  194  percent of that insurer’s direct written premiums, net of
  195  refunds, in this state during the preceding calendar year for
  196  the kinds of insurance within the account specified in s.
  197  631.55(2)(b).
  198         2.b.Any Emergency assessments authorized under this
  199  paragraph shall be levied by the office upon insurers referred
  200  to in subparagraph 1. sub-subparagraph a., upon certification as
  201  to the need for such assessments by the board of directors. If
  202  In the event the board of directors participates in the issuance
  203  of bonds in accordance with s. 631.695, emergency assessments
  204  shall be levied in each year that bonds issued under s. 631.695
  205  and secured by such emergency assessments are outstanding, in
  206  such amounts up to such 2 percent 2-percent limit as required in
  207  order to provide for the full and timely payment of the
  208  principal of, redemption premium, if any, and interest on, and
  209  related costs of issuance of, such bonds. The emergency
  210  assessments provided for in this paragraph are assigned and
  211  pledged to the municipality, county, or legal entity issuing
  212  bonds under s. 631.695 for the benefit of the holders of such
  213  bonds, in order to enable such municipality, county, or legal
  214  entity to provide for the payment of the principal of,
  215  redemption premium, if any, and interest on such bonds, the cost
  216  of issuance of such bonds, and the funding of any reserves and
  217  other payments required under the bond resolution or trust
  218  indenture pursuant to which such bonds have been issued, without
  219  the necessity of any further action by the association, the
  220  office, or any other party. If To the extent bonds are issued
  221  under s. 631.695 and the association determines to secure such
  222  bonds by a pledge of revenues received from the emergency
  223  assessments, such bonds, upon such pledge of revenues, shall be
  224  secured by and payable from the proceeds of such emergency
  225  assessments, and the proceeds of emergency assessments levied
  226  under this paragraph shall be remitted directly to and
  227  administered by the trustee or custodian appointed for such
  228  bonds.
  229         3.c. Emergency assessments used to defease bonds issued
  230  under this part paragraph may be payable in a single payment or,
  231  at the option of the association, may be payable in 12 monthly
  232  installments with the first installment being due and payable at
  233  the end of the month after an emergency assessment is levied and
  234  subsequent installments being due by not later than the end of
  235  each succeeding month.
  236         4.d. If emergency assessments are imposed, the report
  237  required by s. 631.695(7) must shall include an analysis of the
  238  revenues generated from the emergency assessments imposed under
  239  this paragraph.
  240         5.e. If emergency assessments are imposed, the references
  241  in sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
  242  assessments levied under paragraph (a) must shall include
  243  emergency assessments imposed under this paragraph.
  244         6.2. If the board of directors participates in the issuance
  245  of bonds in accordance with s. 631.695, an annual assessment
  246  under this paragraph shall continue while the bonds issued with
  247  respect to which the assessment was imposed are outstanding,
  248  including any bonds the proceeds of which were used to refund
  249  bonds issued pursuant to s. 631.695, unless adequate provision
  250  has been made for the payment of the bonds in the documents
  251  authorizing the issuance of such bonds.
  252         7.3. Emergency assessments under this paragraph are not
  253  premium and are not subject to the premium tax, to any fees, or
  254  to any commissions. An insurer is liable for all emergency
  255  assessments that the insurer collects and shall treat the
  256  failure of an insured to pay an emergency assessment as a
  257  failure to pay the premium. An insurer is not liable for
  258  uncollectible emergency assessments.
  259         (f) The recoupment factor applied to policies in accordance
  260  with paragraph (c) shall be selected by the insurer or insurer
  261  group so as to provide for the probable recoupment of both
  262  assessments levied pursuant to paragraph (a) and emergency
  263  assessments over a period of 12 months, unless the insurer or
  264  insurer group, at its option, elects to recoup the assessment
  265  over a longer period. The recoupment factor shall apply to all
  266  policies of the same kind or line as were considered by the
  267  office in determining the assessment liability of the insurer or
  268  insurer group issued or renewed during a 12-month period. If the
  269  insurer or insurer group does not collect the full amount of the
  270  assessment during one 12-month period, the insurer or insurer
  271  group may apply recalculated recoupment factors to policies
  272  issued or renewed during one or more succeeding 12-month
  273  periods. If, at the end of a 12-month period, the insurer or
  274  insurer group has collected from the combined kinds or lines of
  275  policies subject to assessment more than the total amount of the
  276  assessment paid by the insurer or insurer group, the excess
  277  amount shall be disbursed as follows:
  278         1. The association, office, and insurers remitting
  279  assessments pursuant to paragraph (a) or paragraph (e) must
  280  comply with the following:
  281         a. In the order levying an assessment, the office shall
  282  specify the actual percentage amount to be collected uniformly
  283  from all the policyholders of insurers subject to the assessment
  284  and the date on which the assessment year begins, which may not
  285  begin until 90 days after the association board certifies such
  286  an assessment.
  287         b. Insurers shall make an initial payment to the
  288  association before the beginning of the assessment year on or
  289  before the date specified in the order of the office.
  290         c. Insurers that have written insurance in the calendar
  291  year before the year in which the assessment is certified by the
  292  board shall make an initial payment based on the net direct
  293  written premium amount from the prior calendar year as set forth
  294  in the insurers’ annual statements, multiplied by the uniform
  295  percentage of premium specified in the order issued by the
  296  office. Insurers that have not written insurance in the prior
  297  calendar year in any of the lines under the account which are
  298  being assessed, but that are writing insurance as of, or after,
  299  the date the board certifies the assessment to the office, shall
  300  pay an amount based on a good faith estimate of the amount of
  301  net direct written premium anticipated to be written in the
  302  subject lines of business for the assessment year, multiplied by
  303  the uniform percentage of premium specified in the order issued
  304  by the office.
  305         d. Insurers shall file a reconciliation report with the
  306  association within 45 days after the end of the assessment year
  307  which indicates the amount of the initial payment to the
  308  association before the assessment year, whether such amount was
  309  based on net direct written premium contained in a prior
  310  calendar year annual statement or a good faith projection, the
  311  amount actually collected during the assessment year, and such
  312  other information contained on a form adopted by the association
  313  and provided to the insurers in advance. If the insurer
  314  collected from policyholders more than the amount initially
  315  paid, the insurer shall pay the excess amount to the
  316  association. If the insurer collected from policyholders an
  317  amount which is less than the amount initially paid to the
  318  association, the association shall credit the insurer that
  319  amount against future assessments. Such payment reconciliation
  320  report, and any payment of excess amounts collected from
  321  policyholders, shall be completed and remitted to the
  322  association within 90 days after the end of the assessment year.
  323  The association shall send a final reconciliation report on all
  324  insurers to the office within 120 days after each assessment
  325  year.
  326         e. Insurers remitting reconciliation reports to the
  327  association under this paragraph are subject to s.
  328  626.9541(1)(e). If the excess amount does not exceed 15 percent
  329  of the total assessment paid by the insurer or insurer group,
  330  the excess amount shall be remitted to the association within 60
  331  days after the end of the 12-month period in which the excess
  332  recoupment charges were collected.
  333         2. The association may use a monthly installment method
  334  instead of the method described in sub-subparagraphs 1.b. and c.
  335  or in combination thereof based on the association’s projected
  336  cash flow. If the association projects that it has cash on hand
  337  for the payment of anticipated claims in the applicable account
  338  for at least 6 months, the board may make an estimate of the
  339  assessment needed and may recommend to the office the assessment
  340  percentage that may be collected as a monthly assessment. The
  341  office may, in the order levying the assessment on insurers,
  342  specify that the assessment is due and payable monthly as the
  343  funds are collected from insureds throughout the assessment
  344  year, in which case the assessment shall be a uniform percentage
  345  of premium collected during the assessment year and shall be
  346  collected from all policyholders with policies in the classes
  347  protected by the account. All insurers shall collect the
  348  assessment without regard to whether the insurers reported
  349  premium in the year preceding the assessment. Insurers are not
  350  required to advance funds if the association and the office
  351  elect to use the monthly installment option. All funds collected
  352  shall be retained by the association for the payment of current
  353  or future claims. This subparagraph does not alter the
  354  obligation of an insurer to remit assessments levied pursuant to
  355  this subsection to the association. If the excess amount exceeds
  356  15 percent of the total assessment paid by the insurer or
  357  insurer group, the excess amount shall be returned to the
  358  insurer’s or insurer group’s current policyholders by refunds or
  359  premium credits. The association shall use any remitted excess
  360  recoupment amounts to reduce future assessments.
  361         (g) Amounts recouped pursuant to this subsection for
  362  assessments levied under paragraph (a) due to insolvencies on or
  363  after July 1, 2010, are considered premium solely for premium
  364  tax purposes and are not subject to fees or commissions.
  365  However, insurers shall treat the failure of an insured to pay a
  366  recoupment charge as a failure to pay the premium.
  367         (h) At least 15 days before applying the recoupment factor
  368  to any policies, the insurer or insurer group shall file with
  369  the office a statement for informational purposes only setting
  370  forth the amount of the recoupment factor and an explanation of
  371  how the recoupment factor will be applied. Such statement shall
  372  include documentation of the assessment paid by the insurer or
  373  insurer group and the arithmetic calculations supporting the
  374  recoupment factor. The insurer or insurer group may use the
  375  recoupment factor at any time after the expiration of the 15-day
  376  period. The insurer or insurer group need submit only one
  377  informational statement for all lines of business using the same
  378  recoupment factor.
  379         (i)No later than 90 days after the insurer or insurer
  380  group has completed the recoupment process, the insurer or
  381  insurer group shall file with the office, for information
  382  purposes only, a final accounting report documenting the
  383  recoupment. The report shall provide the amounts of assessments
  384  paid by the insurer or insurer group, the amounts and
  385  percentages recouped by year from each affected line of
  386  business, and the direct written premium subject to recoupment
  387  by year. The insurer or insurer group need submit only one
  388  report for all lines of business using the same recoupment
  389  factor.
  390         (h) Assessments levied under this subsection are levied
  391  upon insurers. This subsection does not create a cause of action
  392  by a policyholder with respect to the levying of, or a
  393  policyholder’s duty to pay, such assessments.
  394         (4) The office department may exempt or temporarily defer
  395  any insurer from any regular or emergency assessment if the
  396  office finds that the insurer is impaired or insolvent or if an
  397  assessment would result in such insurer’s financial statement
  398  reflecting an amount of capital or surplus less than the sum of
  399  the minimum amount required by any jurisdiction in which the
  400  insurer is authorized to transact insurance.
  401         Section 8. Section 631.64, Florida Statutes, is amended to
  402  read:
  403         631.64 Recognition of assessments in rates.—Charges or
  404  recoupments shall be separately displayed on premium statements
  405  to enable policyholders to determine the amount charged for
  406  association assessments but may not be included in rates filed
  407  and approved by the office. The rates and premiums charged for
  408  insurance policies to which this part applies may include
  409  amounts sufficient to recoup a sum equal to the amounts paid to
  410  the association by the member insurer less any amounts returned
  411  to the member insurer by the association, and such rates shall
  412  not be deemed excessive because they contain an amount
  413  reasonably calculated to recoup assessments paid by the member
  414  insurer.
  415         Section 9. Subsection (5) of section 627.727, Florida
  416  Statutes, is amended to read:
  417         627.727 Motor vehicle insurance; uninsured and underinsured
  418  vehicle coverage; insolvent insurer protection.—
  419         (5) Any person having a claim against an insolvent insurer
  420  as defined in s. 631.54(6) under the provisions of this section
  421  shall present such claim for payment to the Florida Insurance
  422  Guaranty Association only. In the event of a payment to a any
  423  person in settlement of a claim arising under the provisions of
  424  this section, the association is not subrogated or entitled to
  425  any recovery against the claimant’s insurer. The association,
  426  however, has the rights of recovery as set forth in chapter 631
  427  in the proceeds recoverable from the assets of the insolvent
  428  insurer.
  429         Section 10. Subsection (1) of section 631.55, Florida
  430  Statutes, is amended to read:
  431         631.55 Creation of the association.—
  432         (1) There is created a nonprofit corporation to be known as
  433  the “Florida Insurance Guaranty Association, Incorporated.” All
  434  insurers defined as member insurers in s. 631.54(7) shall be
  435  members of the association as a condition of their authority to
  436  transact insurance in this state, and, further, as a condition
  437  of such authority, an insurer must shall agree to reimburse the
  438  association for all claim payments the association makes on the
  439  said insurer’s behalf if such insurer is subsequently
  440  rehabilitated. The association shall perform its functions under
  441  a plan of operation established and approved under s. 631.58 and
  442  shall exercise its powers through a board of directors
  443  established under s. 631.56. The corporation shall have all
  444  those powers granted or permitted nonprofit corporations, as
  445  provided in chapter 617.
  446         Section 11. This act shall take effect July 1, 2014.
  447  
  448  ================= T I T L E  A M E N D M E N T ================
  449  And the title is amended as follows:
  450         Delete everything before the enacting clause
  451  and insert:
  452                        A bill to be entitled                      
  453         An act relating to insurance; amending s. 624.425,
  454         F.S.; providing that the absence of a countersignature
  455         does not affect the validity of a policy or contract;
  456         amending s. 627.7311, F.S.; providing that a county
  457         may enact and enforce ordinances applicable to certain
  458         health care clinics; amending s. 627.902, F.S.;
  459         providing that premium financing does not apply to
  460         installment payment arrangements that do not involve
  461         the advancement of funds; amending s. 627.94072, F.S.;
  462         providing an alternative form of a nonforfeiture
  463         provision for long-term care insurance; amending s.
  464         629.271, F.S.; authorizing reciprocal insurers to
  465         return a portion of unassigned funds to their
  466         subscribers; amending s. 631.54, F.S.; defining the
  467         term “assessment year”; amending s. 631.57, F.S.;
  468         revising provisions relating to the levy of
  469         assessments on insurers by the Florida Insurance
  470         Guaranty Association; specifying the conditions under
  471         which such assessments are paid; revising procedures
  472         and timeframes for the levying of the assessments;
  473         deleting the requirement that insurers file a final
  474         accounting report documenting the recoupment; revising
  475         an exemption for assessments; amending s. 631.64,
  476         F.S.; requiring charges or recoupments to be displayed
  477         separately on premium statements to policyholders and
  478         prohibiting their inclusion in rates; amending ss.
  479         627.727 and 631.55, F.S.; conforming cross-references;
  480         providing an effective date.