(1) Any self-insurance fund regulated under the insurance code other than a commercial self-insurance fund may, with the approval of a majority of the members of the fund and after written notice to the sponsoring association and approved by the office, elect to convert to an assessable mutual insurer in accordance with part I.
(2) An assessable mutual insurer formed by the conversion of a commercial self-insurance fund pursuant to former s. 624.463 or by the conversion of a group self-insurer’s fund organized under s. 624.4621 shall be endorsed at the time of conversion by a statewide not-for-profit trade association, industry association, or professional association of employers or professionals which has a constitution or bylaws, which is incorporated under the laws of this state, and which has been organized for purposes other than that of obtaining or providing insurance and operated in good faith for a continuous period of 1 year. The association shall not be liable for any actions of the insurer, nor shall it require the establishment or enforcement of any policy of the insurer. Fees, services, and other aspects of the relationship between the association and the insurer must be reasonable and are subject to contractual agreement.
(3) Neither the endorsing association nor any of its officers or directors may have any direct financial interest in the insurer’s management company.
(4) The board of directors of the assessable mutual insurer shall:
(a) Be responsible to members of the insurer;
(b) Appoint independent certified public accountants and actuaries, as needed;
(c) Approve payment of dividends to members;
(d) Approve changes in corporate structure; and
(e) Adopt a plan submitted by the management company establishing requirements for membership in the insurer, including, but not limited to, loss prevention, claims experience, billing, underwriting criteria and qualifications, including dues paid by members of the insurer for membership in the endorsing association, and the credit worthiness of membership applicants, termination, and reinstatement.
(5) The board of directors of the assessable mutual insurer may contract with an authorized management company which, except as specifically provided in this part, shall be solely responsible for managing and administering the affairs of the insurer, including, but not limited to, marketing, underwriting, billing, collection, claims administration, termination, reinstatement, safety and loss prevention, reinsurance, policy issuance, accounting, regulatory reporting, investment, and general administration. The fees or compensation for services under such contract shall be comparable to the costs for similar services incurred by insurers writing the same lines of insurance, or, where available, such expenses as filed by boards, bureaus, and associations designated by insurers to file such data.
(6) At least one director, but less than a majority of the directors, must be an officer or director of the management company and must be appointed by the management company. The remaining directors must be elected by the membership, and must be owners, partners, officers, or directors of members of the insurer. Except for directors of the insurer who are officers or directors of the management company, no two directors of the insurer may be owners, partners, officers, or directors of the same member of the insurer.
(7) If the board of directors contracts with a management company, no person may serve as an officer of the assessable mutual insurer unless he or she is an officer or director of the management company.
(8) If the board of directors contracts with a management company, a member of the board of directors is not personally liable for monetary damages to any person for any statement, vote, decision, or failure to act, regarding the management or policy of the fund, by a director, unless:
(a) The director breached or failed to perform his or her duties as a director; and
(b) The director’s breach of, or failure to perform, his or her duties constitutes:
1. A violation of the criminal law, unless the director had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful. A judgment or other final adjudication against a director in any criminal proceeding for violation of the criminal law estops that director from contesting the fact that his or her breach, or failure to perform, constitutes a violation of the criminal law; but does not estop the director from establishing that he or she had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that his or her conduct was unlawful.
2. A transaction from which the director derived an improper personal benefit, either directly or indirectly; or
3. Recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property. For purposes of this section, the term “recklessness” means the acting, or omission to act, in conscious disregard of a risk:
a. Known, or so obvious that it should have been known, to the director; and
b. Known to the director, or so obvious that it should have been known, to be so great as to make it highly probable that harm would follow from such action or omission.
(9) A management company may be authorized by the office to manage and operate an assessable mutual insurer only if its owners, partners, stockholders, officers, or directors, and other persons who directly or indirectly exercise or have the ability to exercise effective control of the management company, possess the competency and business experience to manage and operate an assessable mutual insurer.
(10) As used in this section, the term “management company” includes the servicing company, if any, which administered the day-to-day affairs of the commercial self-insurance fund or group self-insurers fund before its conversion to an assessable mutual insurer.