The Florida Senate

¹624.469  Premiums written; restrictions.--

(1)  If, during the first 6 full calendar years of its operation, a commercial self-insurance fund's actual or projected annual earned premiums exceed four times the sum of 10 percent of the fund's statutory unearned premium as reported in its most recent report made pursuant to s. 624.470(2)(a) plus the aggregate excess of loss reinsurance limits available for the year reported, established in accordance with subsection (2), the department may establish by order maximum net annual premiums to be written by the fund consistent with maintaining this ratio between actual or projected earned premiums and unearned premiums and aggregate excess of loss reinsurance, unless the fund demonstrates to the department's satisfaction that exceeding such limitations does not endanger the financial condition of the fund or endanger the interest of the fund's members or that the fund's operation is and will be actuarially sound without obtaining excess reinsurance. Such orders shall be in effect no longer than the end of the current calendar year. The fund's self-funded reinsurance, if any, shall be included as aggregate excess of loss reinsurance at an amount that will be sufficient to cover unpaid losses as actuarially determined.

(2)  With respect to subsection (1), the aggregate excess of loss reinsurance shall attach at a point not greater than the loss ratio, above which an assessment would be indicated pursuant to rules of the department adopted under the authority of this chapter. As a minimum, the aggregate excess of loss reinsurance shall also provide coverage for 100 percent of the losses between the attachment point required by this section and a loss ratio of 100 percent.

(3)  After the 6th full calendar year of operation, a commercial self-insurance fund may, instead of limiting actual or projected premium to the ratio specified in subsection (1), maintain aggregate excess of loss reinsurance limits, subject to minimum limits enumerated in subsection (4), equal to the difference between the loss ratio at which an assessment would be indicated pursuant to rules adopted by the department and a loss ratio 10 percentage points higher than the highest loss ratio from the most recent 6 calendar years as indicated on the property and casualty annual statement report, after including excess statutory reserves over statement reserves, for auto liability, other liability, medical malpractice, workers' compensation, and credit insurance. For commercial lines of business other than auto liability, other liability, medical malpractice, workers' compensation, and credit, the amount required by Schedule P will be calculated in the same manner as auto liability and shall be calculated for each line of business individually. However, if a fund fails or chooses not to maintain the aggregate excess reinsurance as specified in this subsection, it shall be subject to the provisions of subsection (1).

(4)  A commercial self-insurance fund maintaining aggregate excess of loss reinsurance pursuant to subsection (3) must, as a minimum, maintain dollar limits of aggregate excess of loss reinsurance as follows:

(a)  For funds with actual or projected earned premiums of $5,000,000 or less, the minimum shall be equal to either 25 percent of actual or projected earned premiums or $500,000, whichever is greater.

(b)  For funds with actual or projected earned premiums greater than $5,000,000, the minimum shall be:

Actual or Projected

Percent of Earned

Earned Premiums

Premium

$5,000,000.01-$10,000,000 ............ 22 percent

$10,000,000.01-$25,000,000 ............ 19 percent

$25,000,000.01-$50,000,000 ............ 16 percent

$50,000,000.01-$100,000,000 ............ 13 percent

$100,000,000.01-$250,000,000 ............ 10 percent

$250,000,000.01 and greater ............ 7 percent

(5)  Notwithstanding the other provisions of this section, the department may, by order, establish maximum gross or net annual premiums to be written if the department, for good cause shown, finds that the actual or projected premium volume of the fund endangers the interests of the fund's policyholders or the financial condition of the fund.

History.--s. 16, ch. 90-249; s. 6, ch. 90-366; s. 188, ch. 91-108; s. 13, ch. 95-211.

¹Note.--Repealed October 1, 2001, by s. 188, ch. 91-108, and scheduled for review pursuant to s. 11.61 Section 4, ch. 91-429, repealed s. 11.61 effective April 5, 1993. Section 33, ch. 96-318, confirmed the repeal of s. 11.61