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. 17 18 Be It Enacted by the Legislature of the State of Florida: 19 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. 81 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-insuringits 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.