Florida Senate - 2017                        COMMITTEE AMENDMENT
       Bill No. SB 850
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  03/27/2017           .                                

       The Committee on Banking and Insurance (Rouson) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsections (1) and (7) of section 624.46226,
    6  Florida Statutes, are amended to read:
    7         624.46226 Public housing authorities self-insurance funds;
    8  exemption for taxation and assessments.—
    9         (1) Notwithstanding any other provision of law, any two or
   10  more public housing authorities in the state as defined in
   11  chapter 421 may form a self-insurance fund for the purpose of
   12  pooling and spreading liabilities of its members as to any one
   13  or combination of casualty risk or real or personal property
   14  risk of every kind and every interest in such property against
   15  loss or damage from any hazard or cause and against any loss
   16  consequential to such loss or damage, provided the self
   17  insurance fund that is created:
   18         (a) Has annual normal premiums in excess of $5 million.
   19         (b) Uses a qualified actuary to determine rates using
   20  accepted actuarial principles and annually submits to the office
   21  a certification by the actuary that the rates are actuarially
   22  sound and are not inadequate, as defined in s. 627.062.
   23         (c) Uses a qualified actuary to establish reserves for loss
   24  and loss adjustment expenses and annually submits to the office
   25  a certification by the actuary that the loss and loss adjustment
   26  expense reserves are adequate. If the actuary determines that
   27  reserves are not adequate, the fund shall file with the office a
   28  remedial plan for increasing the reserves or otherwise
   29  addressing the financial condition of the fund, subject to a
   30  determination by the office that the fund will operate on an
   31  actuarially sound basis and the fund does not pose a significant
   32  risk of insolvency.
   33         (d) Maintains a continuing program of excess insurance
   34  coverage and reserve evaluation to protect the financial
   35  stability of the fund in an amount and manner determined by a
   36  qualified and independent actuary. At a minimum, this program
   37  must:
   38         1. Purchase excess insurance from authorized insurance
   39  carriers or eligible surplus lines insurers.
   40         2. Retain a per-loss occurrence that does not exceed
   41  $350,000.
   42         (e) Submits to the office annually an audited fiscal year
   43  end financial statement by an independent certified public
   44  accountant within 6 months after the end of the fiscal year.
   45         (f) Has a governing body which is comprised entirely of
   46  commissioners of public housing authorities that are members of
   47  the public housing authority self-insurance fund or persons
   48  appointed by the commissioners of public housing authorities
   49  that are members of the public housing authority self-insurance
   50  fund.
   51         (g) Uses knowledgeable persons or business entities to
   52  administer or service the fund in the areas of claims
   53  administration, claims adjusting, underwriting, risk management,
   54  loss control, policy administration, financial audit, and legal
   55  areas. Such persons must meet all applicable requirements of law
   56  for state licensure and must have at least 5 years’ experience
   57  with commercial self-insurance funds formed under s. 624.462,
   58  self-insurance funds formed under s. 624.4622, or domestic
   59  insurers.
   60         (h) Submits to the office copies of contracts used for its
   61  members that clearly establish the liability of each member for
   62  the obligations of the fund.
   63         (i) Annually submits to the office a certification by the
   64  governing body of the fund that, to the best of its knowledge,
   65  the requirements of this section are met.
   67  A for-profit or not-for-profit corporation, limited liability
   68  company, or other similar business entity in which a public
   69  housing authority holds an ownership interest or participates in
   70  its governance under s. 421.08(8) may join a self-insurance fund
   71  formed under this section in which such public housing authority
   72  participates. Such for-profit or not-for-profit corporation,
   73  limited liability company, or other similar business entity may
   74  join the self-insurance fund solely to insure risks related to
   75  public housing.
   76         (7) Reinsurance companies complying with s. 624.610 may
   77  issue coverage directly to a public housing authority or an
   78  entity organized by a public housing authority under s.
   79  421.08(8) if such public housing authority or entity self
   80  insures self-insuring its liabilities under this section. A
   81  public housing authority purchasing reinsurance or an entity
   82  that is organized by a public housing authority under s.
   83  421.08(8) and that is purchasing reinsurance shall be considered
   84  an insurer for the sole purpose of entering into such
   85  reinsurance contracts. Contracts of reinsurance issued to public
   86  housing authorities self-insuring under this section or to
   87  entities that are organized by public housing authorities under
   88  s. 421.08(8) and that are self-insuring under this section shall
   89  receive the same tax treatment as reinsurance contracts issued
   90  to insurance companies. However, the purchase of reinsurance
   91  coverage by a public housing authority self-insuring under this
   92  section or by an entity that is organized by a public housing
   93  authority under s. 421.08(8) and that is self-insuring under
   94  this section shall not be construed as authorization to
   95  otherwise act as an insurer.
   96         Section 2. This act shall take effect July 1, 2017.
   98  ================= T I T L E  A M E N D M E N T ================
   99  And the title is amended as follows:
  100         Delete everything before the enacting clause
  101  and insert:
  102                        A bill to be entitled                      
  103         An act relating to public housing authority insurance;
  104         amending s. 624.46226, F.S.; authorizing certain
  105         business entities to join, solely for a specified
  106         purpose, self-insurance funds participated in by
  107         public housing authorities who hold ownership
  108         interests in or who participate in governing such
  109         entities; authorizing reinsurance companies to issue
  110         coverage directly to certain self-insuring entities
  111         organized by a public housing authority under certain
  112         circumstances; specifying that such entities are
  113         considered insurers under certain circumstances;
  114         requiring that reinsurance contracts issued to such
  115         entities receive the same tax treatment as contracts
  116         issued to insurance companies; revising construction;
  117         providing an effective date.