The Committee on Banking and Insurance (Bennett) recommended the
Senate Amendment (with title amendment)
3. Notwithstanding any other provisions of law, any three
or more condominium associations may form a self-insurance fund
for the purposes of pooling and spreading the liabilities of its
participant associations arising from the deductible provisions
of the commercial lines residential property insurance policies
of the participants applicable to hurricane losses, if:
a. Such fund is a not-for-profit fund.
b. The fund is implemented through contracts among the
participating associations, or through contracts between the
participating associations and another legal entity established
for and limited to establishing and implementing the program.
c. The liability of the fund for claims is limited to funds
available for the payment of claims.
d. The contract provided to a participating association
clearly discloses the obligations of the participants in the fund
and the obligations of the fund, including the limited liability
of the fund as defined in sub-subparagraph c. The contract may
specify a reasonable date for the payment of claims which
provides the fund with adequate time to verify and account for
all claims for a given year so that claims payments can be
properly calculated after consideration of the funds available.
Before execution of the contract, the association or its
representative must be provided a separate disclosure form
specifying the limited liability of the fund and all
administrative fees and estimated expenses, and providing
examples of the manner in which available funds will be allocated
among claimants if claims exceed the funds available for the
payment thereof. Such disclosure must be signed by a
representative of the participating association before or at the
time of execution of the contract.
e. The contributions charged for participating in the fund
are established by the fund and calculated as a percentage of the
participant's hurricane deductible dollar amount. The fund may
determine the method and timing of payment of contributions.
f. The majority of the governing board of the fund are
participants in the fund and the governing body shall have all
powers necessary to establish and administer the fund as
authorized by the participants in the fund.
g. The fund uses and contracts with knowledgeable persons
or business entities to administer and service the fund,
including marketing, policy, contract administration, claims
administration, accounting services, and legal services.
h. The fund uses a properly licensed general lines
insurance agent who is a Florida resident for solicitation of
participation in the fund and does not prevent, impede, or
restrict any applicant or participant in the fund from
maintaining or selecting an agent of choice. The fund may not
favor one or more agents over another agent.
i. The fund is audited by an independent auditor no less
frequently than every 2 years.
4. The fund may accumulate funds or periodically distribute
excess funds to its participants on a pro rata basis, reflecting
loss experience of individual participants and proportionate
contributions paid by participants.
5. Participants in the fund must have a deductible no
greater than as provided in s. 627.701(8).
Self-insurance funds or pools established pursuant to this
paragraph are not subject to licensure requirements or regulation
pursuant to the Florida Insurance Code except for part IX of
chapter 626, and are not subject to any fees, taxes, or
assessments related to the writing or transaction of insurance in
================ T I T L E A M E N D M E N T ================
And the title is amended as follows:
Delete lines 10 and 11
insurance; providing that any three or more condominium
associations may form a self-insurance fund for certain
purposes under certain conditions; requiring that the
contract for participating in the fund disclose certain
information and contain certain provisions; requiring that
a disclosure be provided to an association before
execution of such contract; requiring that such disclosure
contain certain information; providing for the charging of
contributions for participation in the fund; requiring
that the majority of the governing board of the fund be
participants in the fund; providing powers of the
governing board; authorizing the fund to enter into
certain contracts; requiring that the fund use a general
lines agent meeting certain criteria when soliciting
participation in the fund; prohibiting the fund from
taking certain actions when selecting such agent;
requiring that the fund be independently audited at
specified intervals; authorizing the fund to accumulate
funds or distribute excess funds to participants on a pro
rata basis; providing for a deductible for participants in
the fund; exempting such self-insurance funds from certain
requirements, regulations, fees, taxes, and assessments;
4/4/2008 4:41:00 PM 21-06694-08