Florida Senate - 2021                                    SB 1470
       By Senator Boyd
       21-01280A-21                                          20211470__
    1                        A bill to be entitled                      
    2         An act relating to the Florida Life and Health
    3         Insurance Guaranty Association; amending s. 631.714,
    4         F.S.; defining the term “Moody’s Corporate Bond Yield
    5         Average”; revising the definition of the term
    6         “person”; amending s. 631.717, F.S.; authorizing the
    7         association to assume or reissue covered policies of
    8         impaired insurers; granting the association the right
    9         to appear or intervene before a court or an agency in
   10         certain proceedings; authorizing the association to
   11         take legal action to recover payment of improper
   12         claims; authorizing the association to join an
   13         organization of other state guaranty associations for
   14         certain purposes; amending s. 631.718, F.S.; revising
   15         the calculation of Class A assessments; specifying
   16         requirements for repayment of deferred assessments
   17         upon removal or rectification of the conditions
   18         causing a deferral; deleting a prohibition on certain
   19         nonprofit insurance companies being assessed more than
   20         a certain amount in a calendar year; amending s.
   21         631.721, F.S.; revising the requirements of the
   22         association’s plan of operation; providing an
   23         effective date.
   25  Be It Enacted by the Legislature of the State of Florida:
   27         Section 1. Present subsections (8), (9), and (10) of
   28  section 631.714, Florida Statutes, are redesignated as
   29  subsections (9), (10), and (11), respectively, a new subsection
   30  (8) is added to that section, and present subsection (9) of that
   31  section is amended, to read:
   32         631.714 Definitions.—As used in this part, the term:
   33         (8) “Moody’s Corporate Bond Yield Average” means the
   34  monthly average corporates as published by Moody’s Investors
   35  Service, Inc., or a similar successor organization.
   36         (10)(9) “Person” means any individual, corporation, limited
   37  liability company, partnership, association, governmental body
   38  or entity, or voluntary organization.
   39         Section 2. Subsections (1) and (7) and paragraph (f) of
   40  subsection (13) of section 631.717, Florida Statutes, are
   41  amended, and paragraph (h) is added to subsection (13) of that
   42  section, to read:
   43         631.717 Powers and duties of the association.—
   44         (1) If a domestic insurer is an impaired insurer, the
   45  association may, subject to the approval of the impaired insurer
   46  and the department:
   47         (a) Guarantee, assume, reissue, or reinsure, or cause to be
   48  guaranteed, assumed, reissued, or reinsured, any or all of the
   49  covered policies of the impaired insurer;
   50         (b) Provide such moneys, pledges, notes, guarantees, or
   51  other means as are proper to effectuate paragraph (a) and assure
   52  payment of the contractual obligations of the impaired insurer
   53  pending action under paragraph (a); and
   54         (c) Loan money to the impaired insurer.
   55         (7) The association has shall have standing to appear
   56  before any court in this state which has jurisdiction over an
   57  impaired or insolvent insurer to which the association is or may
   58  become obligated under this part. Such standing extends shall
   59  extend to all matters germane to the powers and duties of the
   60  association, including, but not limited to, proposals for
   61  reinsuring, reissuing, modifying, or guaranteeing the covered
   62  policies of the impaired or insolvent insurer and the
   63  determination of the covered policies and contractual
   64  obligations. The association has the right to appear or
   65  intervene before a court or an agency in another state with
   66  jurisdiction over an impaired or insolvent insurer for which the
   67  association is or may become obligated or with jurisdiction over
   68  any person or property against whom the association may have
   69  rights through subrogation or otherwise.
   70         (13) The association may:
   71         (f) Take such legal action as may be necessary to avoid or
   72  recover payment of improper claims.
   73         (h) Join an organization of other state guaranty
   74  associations to further the purposes and administer the powers
   75  and duties of the association.
   76         Section 3. Paragraph (a) of subsection (3) and subsections
   77  (4) and (9) of section 631.718, Florida Statutes, are amended to
   78  read:
   79         631.718 Assessments.—
   80         (3)(a) The amount of any Class A assessment shall be
   81  determined by the board and may be made on a pro rata or non-pro
   82  rata basis. If the assessment is made on a pro rata basis, the
   83  board may provide that it be credited against future Class B
   84  assessments The assessment may not be credited against future
   85  insolvency assessments and may not exceed $250 per member
   86  insurer in any one calendar year.
   87         (4) The association may abate or defer, in whole or in
   88  part, the assessment of a member insurer if, in the opinion of
   89  the board, payment of the assessment would endanger the ability
   90  of the member insurer to fulfill its contractual obligations. In
   91  the event an assessment against a member insurer is abated, or
   92  deferred in whole or in part, the amount by which such
   93  assessment is abated or deferred may be assessed against the
   94  other member insurers in a manner consistent with the basis for
   95  assessments set forth in this section. Once the conditions that
   96  caused a deferral have been removed or rectified, the member
   97  insurer shall pay all assessments that were deferred pursuant to
   98  a repayment plan approved by the association.
   99         (9) Notwithstanding any provision to the contrary, no
  100  member insurer that is a nonprofit insurance company which
  101  issues annuity contracts or group annuity contracts pursuant to
  102  s. 121.35, or for the benefit of employees of educational
  103  institutions situated in this state may be assessed in any one
  104  calendar year an amount greater than the amount which it paid to
  105  this state in the previous year as premium tax and corporate tax
  106  on the business to which this part applies or 0.1 percent of
  107  written premium on such business in this state, whichever is
  108  greater.
  109         Section 4. Paragraphs (h) and (i) are added to subsection
  110  (3) of section 631.721, Florida Statutes, to read:
  111         631.721 Plan of operation.—
  112         (3) The plan of operation shall, in addition to
  113  requirements enumerated elsewhere in this part:
  114         (h) Establish a procedure for removing a member insurer
  115  director when that member insurer becomes an impaired or
  116  insolvent insurer.
  117         (i)Require the board of directors to establish policies
  118  and procedures for addressing conflicts of interest.
  119         Section 5. This act shall take effect July 1, 2021.