Florida Senate - 2017                              CS for SB 850
       By the Committee on Banking and Insurance; and Senator Rouson
       597-02937-17                                           2017850c1
    1                        A bill to be entitled                      
    2         An act relating to public housing authority insurance;
    3         amending s. 624.46226, F.S.; authorizing certain
    4         business entities to join, solely for a specified
    5         purpose, self-insurance funds participated in by
    6         public housing authorities who hold ownership
    7         interests in or who participate in governing such
    8         entities; authorizing reinsurance companies to issue
    9         coverage directly to certain self-insuring entities
   10         organized by a public housing authority under certain
   11         circumstances; specifying that such entities are
   12         considered insurers under certain circumstances;
   13         requiring that reinsurance contracts issued to such
   14         entities receive the same tax treatment as contracts
   15         issued to insurance companies; revising construction;
   16         providing an effective date.
   18  Be It Enacted by the Legislature of the State of Florida:
   20         Section 1. Subsections (1) and (7) of section 624.46226,
   21  Florida Statutes, are amended to read:
   22         624.46226 Public housing authorities self-insurance funds;
   23  exemption for taxation and assessments.—
   24         (1) Notwithstanding any other provision of law, any two or
   25  more public housing authorities in the state as defined in
   26  chapter 421 may form a self-insurance fund for the purpose of
   27  pooling and spreading liabilities of its members as to any one
   28  or combination of casualty risk or real or personal property
   29  risk of every kind and every interest in such property against
   30  loss or damage from any hazard or cause and against any loss
   31  consequential to such loss or damage, provided the self
   32  insurance fund that is created:
   33         (a) Has annual normal premiums in excess of $5 million.
   34         (b) Uses a qualified actuary to determine rates using
   35  accepted actuarial principles and annually submits to the office
   36  a certification by the actuary that the rates are actuarially
   37  sound and are not inadequate, as defined in s. 627.062.
   38         (c) Uses a qualified actuary to establish reserves for loss
   39  and loss adjustment expenses and annually submits to the office
   40  a certification by the actuary that the loss and loss adjustment
   41  expense reserves are adequate. If the actuary determines that
   42  reserves are not adequate, the fund shall file with the office a
   43  remedial plan for increasing the reserves or otherwise
   44  addressing the financial condition of the fund, subject to a
   45  determination by the office that the fund will operate on an
   46  actuarially sound basis and the fund does not pose a significant
   47  risk of insolvency.
   48         (d) Maintains a continuing program of excess insurance
   49  coverage and reserve evaluation to protect the financial
   50  stability of the fund in an amount and manner determined by a
   51  qualified and independent actuary. At a minimum, this program
   52  must:
   53         1. Purchase excess insurance from authorized insurance
   54  carriers or eligible surplus lines insurers.
   55         2. Retain a per-loss occurrence that does not exceed
   56  $350,000.
   57         (e) Submits to the office annually an audited fiscal year
   58  end financial statement by an independent certified public
   59  accountant within 6 months after the end of the fiscal year.
   60         (f) Has a governing body which is comprised entirely of
   61  commissioners of public housing authorities that are members of
   62  the public housing authority self-insurance fund or persons
   63  appointed by the commissioners of public housing authorities
   64  that are members of the public housing authority self-insurance
   65  fund.
   66         (g) Uses knowledgeable persons or business entities to
   67  administer or service the fund in the areas of claims
   68  administration, claims adjusting, underwriting, risk management,
   69  loss control, policy administration, financial audit, and legal
   70  areas. Such persons must meet all applicable requirements of law
   71  for state licensure and must have at least 5 years’ experience
   72  with commercial self-insurance funds formed under s. 624.462,
   73  self-insurance funds formed under s. 624.4622, or domestic
   74  insurers.
   75         (h) Submits to the office copies of contracts used for its
   76  members that clearly establish the liability of each member for
   77  the obligations of the fund.
   78         (i) Annually submits to the office a certification by the
   79  governing body of the fund that, to the best of its knowledge,
   80  the requirements of this section are met.
   82  A for-profit or not-for-profit corporation, limited liability
   83  company, or other similar business entity in which a public
   84  housing authority holds an ownership interest or participates in
   85  its governance under s. 421.08(8) may join a self-insurance fund
   86  formed under this section in which such public housing authority
   87  participates. Such for-profit or not-for-profit corporation,
   88  limited liability company, or other similar business entity may
   89  join the self-insurance fund solely to insure risks related to
   90  public housing.
   91         (7) Reinsurance companies complying with s. 624.610 may
   92  issue coverage directly to a public housing authority or an
   93  entity organized by a public housing authority under s.
   94  421.08(8) if such public housing authority or entity self
   95  insures self-insuring its liabilities under this section. A
   96  public housing authority purchasing reinsurance or an entity
   97  that is organized by a public housing authority under s.
   98  421.08(8) and that is purchasing reinsurance shall be considered
   99  an insurer for the sole purpose of entering into such
  100  reinsurance contracts. Contracts of reinsurance issued to public
  101  housing authorities self-insuring under this section or to
  102  entities that are organized by public housing authorities under
  103  s. 421.08(8) and that are self-insuring under this section shall
  104  receive the same tax treatment as reinsurance contracts issued
  105  to insurance companies. However, the purchase of reinsurance
  106  coverage by a public housing authority self-insuring under this
  107  section or by an entity that is organized by a public housing
  108  authority under s. 421.08(8) and that is self-insuring under
  109  this section shall not be construed as authorization to
  110  otherwise act as an insurer.
  111         Section 2. This act shall take effect July 1, 2017.