November 18, 2017
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The Florida Statutes

The 2010 Florida Statutes(including Special Session A)

Title XXXVII
INSURANCE
Chapter 627
INSURANCE RATES AND CONTRACTS
View Entire Chapter
CHAPTER 627
CHAPTER 627
INSURANCE RATES AND CONTRACTS
PART I
RATES AND RATING ORGANIZATIONS
(ss. 627.011-627.381)
PART II
THE INSURANCE CONTRACT
(ss. 627.401-627.442)
PART III
LIFE INSURANCE AND ANNUITY CONTRACTS
(ss. 627.451-627.482)
PART IV
INDUSTRIAL LIFE INSURANCE POLICIES
(ss. 627.501-627.522)
PART V
GROUP LIFE INSURANCE POLICIES
(ss. 627.551-627.575)
PART VI
HEALTH INSURANCE POLICIES
(ss. 627.601-627.6499)
PART VII
GROUP, BLANKET, AND FRANCHISE HEALTH INSURANCE POLICIES
(ss. 627.651-627.6699)
PART VIII
MEDICARE SUPPLEMENT POLICIES
(ss. 627.671-627.675)
PART IX
CREDIT LIFE AND DISABILITY INSURANCES
(ss. 627.676-627.6845)
PART X
PROPERTY INSURANCE CONTRACTS
(ss. 627.701-627.714)
PART XI
MOTOR VEHICLE AND CASUALTY INSURANCE CONTRACTS
(ss. 627.7261-627.746)
PART XII
SURETY INSURANCE CONTRACTS
(ss. 627.751-627.759)
PART XIII
TITLE INSURANCE CONTRACTS
(ss. 627.7711-627.798)
PART XIV
VARIABLE OR INDETERMINATE VALUE CONTRACTS
(ss. 627.801-627.807)
PART XV
PREMIUM FINANCE COMPANIES AND AGREEMENTS
(ss. 627.826-627.849)
PART XVI
PREMIUM FINANCING
(ss. 627.901-627.904)
PART XVII
INSURER REPORTING
(ss. 627.911-627.919)
PART XVIII
LONG-TERM CARE INSURANCE POLICIES
(ss. 627.9401-627.9408)
PART XIX
PURCHASING GROUPS AND RISK RETENTION GROUPS
(ss. 627.941-627.955)
PART XX
FINANCIAL GUARANTY INSURANCE
(ss. 627.971-627.975)
PART XXI
MORTGAGE INSURANCE CONSOLIDATIONS
(ss. 627.981-627.987)
PART I
RATES AND RATING ORGANIZATIONS
627.011 Short title.
627.021 Scope of this part.
627.031 Purposes of this part; interpretation.
627.041 Definitions.
627.0612 Administrative proceedings in rating determinations.
627.0613 Consumer advocate.
627.062 Rate standards.
627.0621 Transparency in rate regulation.
627.0625 Commercial property and casualty risk management plans.
627.0628 Florida Commission on Hurricane Loss Projection Methodology; public records exemption; public meetings exemption.
627.06281 Public hurricane loss projection model; reporting of data by insurers.
627.0629 Residential property insurance; rate filings.
627.06291 Excess profits of residential property insurer; return.
627.06292 Reports of hurricane loss data and associated exposure data; public records exemption.
627.0645 Annual filings.
627.06501 Insurance discounts for certain persons completing driver improvement course.
627.0651 Making and use of rates for motor vehicle insurance.
627.0652 Insurance discounts for certain persons completing safety course.
627.0653 Insurance discounts for specified motor vehicle equipment.
627.06535 Electric vehicles; restrictions on imposing surcharges.
627.0654 Insurance discounts for buildings with fire sprinklers.
627.0655 Policyholder loss or expense-related premium discounts.
627.066 Excessive profits for motor vehicle insurance prohibited.
627.0665 Automatic bank withdrawal agreements; notification required.
627.072 Making and use of rates.
627.091 Rate filings; workers’ compensation and employer’s liability insurances.
627.0915 Rate filings; workers’ compensation, drug-free workplace, and safe employers.
627.0916 Agricultural horse farms.
627.092 Workers’ Compensation Administrator.
627.093 Application of s. 286.011 to workers’ compensation and employer’s liability insurances.
627.096 Workers’ Compensation Rating Bureau.
627.101 When filing becomes effective; workers’ compensation and employer’s liability insurances.
627.111 Effective date of filing.
627.141 Subsequent disapproval of filing; workers’ compensation and employer’s liability insurances.
627.151 Basis of approval or disapproval of workers’ compensation or employer’s liability insurance filing; scope of disapproval power.
627.1615 Workers’ compensation applicant discrimination.
627.162 Requirements for premium installments; delinquency, collection, and check return charges; attorney’s fees.
627.171 Excess rates.
627.191 Adherence to filings; workers’ compensation and employer’s liability insurances.
627.192 Workers’ compensation insurance; employee leasing arrangements.
627.211 Deviations; workers’ compensation and employer’s liability insurances.
627.212 Workplace safety program surcharge.
627.215 Excessive profits for workers’ compensation, employer’s liability, commercial property, and commercial casualty insurance prohibited.
627.221 Rating organizations; licensing; fee.
627.231 Subscribers to rating organizations.
627.241 Notice of changes.
627.251 Bureau rules not to affect dividends.
627.261 Actuarial and technical services.
627.281 Appeal from rating organization; workers’ compensation and employer’s liability insurance filings.
627.285 Independent actuarial peer review of workers’ compensation rating organization.
627.291 Information to be furnished insureds; appeal by insureds; workers’ compensation and employer’s liability insurances.
627.301 Advisory organizations.
627.311 Joint underwriters and joint reinsurers; public records and public meetings exemptions.
627.312 Transitional provisions.
627.3121 Public records and public meetings exemptions.
627.313 Workers’ Compensation Joint Underwriting Plan; audit requirements.
627.314 Concerted action by two or more insurers.
627.318 Records.
627.331 Recording and reporting of loss, expense, and claims experience; rating information.
627.351 Insurance risk apportionment plans.
627.3511 Depopulation of Citizens Property Insurance Corporation.
627.3512 Recoupment of residual market deficit assessments.
627.3513 Standards for sale of bonds by Citizens Property Insurance Corporation.
627.3515 Market assistance plan; property and casualty risks.
627.3517 Consumer choice.
627.3519 Annual report of aggregate net probable maximum losses, financing options, and potential assessments.
627.35193 Consumer reporting agency request for claims data from Citizens Property Insurance Corporation.
627.357 Medical malpractice self-insurance.
627.361 False or misleading information.
627.371 Hearings.
627.381 Penalty for violation.
627.011 Short title.This part of this chapter may be referred to as the “Rating Law.”
History.s. 412, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.
627.021 Scope of this part.
(1) This part of this chapter applies only to property, casualty, and surety insurances on subjects of insurance resident, located, or to be performed in this state.
(2) This chapter does not apply to:
(a) Reinsurance, except joint reinsurance as provided in s. 627.311.
(b) Insurance against loss of or damage to aircraft, their hulls, accessories, or equipment, or against liability, other than workers’ compensation and employer’s liability, arising out of the ownership, maintenance, or use of aircraft.
(c) Insurance of vessels or craft, their cargoes, marine builders’ risks, marine protection and indemnity, or other risks commonly insured under marine insurance policies.
(d) Commercial inland marine insurance.
(e) Surplus lines insurance placed under the provisions of ss. 626.913-626.937.
(3) For the purposes of this chapter, all motor vehicle insurance shall be deemed to be casualty insurance only.
(4) This part does not apply to health insurance.
History.s. 413, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 92, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 337, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 2, ch. 88-166; s. 114, ch. 92-318; s. 1, ch. 98-173.
627.031 Purposes of this part; interpretation.
(1) The purposes of this part are:
(a) To promote the public welfare by regulating insurance rates as herein provided to the end that they shall not be excessive, inadequate, or unfairly discriminatory;
(b) To encourage independent action by, and reasonable price competition among, insurers;
(c) To authorize the existence and operation of qualified rating organizations and advisory organizations and to require that specified rating services of such rating organizations be generally available to all authorized insurers; and
(d) To authorize cooperation between insurers in ratemaking and other related matters.
(2) It is the purpose of this part to protect policyholders and the public against the adverse effects of excessive, inadequate, or unfairly discriminatory insurance rates, and to authorize the office to regulate such rates. If at any time the office has reason to believe any such rate is excessive, inadequate, or unfairly discriminatory under the law, it is directed to take the necessary action to cause such rate to comply with the laws of this state.
(3) Nothing in this part shall be construed to repeal or modify the provisions of part IX of chapter 626, relating to unfair trade practices.
History.s. 411, ch. 59-205; s. 1, ch. 67-9; ss. 13, 35, ch. 69-106; s. 1, ch. 71-3(B); s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 338, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 28, ch. 87-228; s. 114, ch. 92-318; s. 54, ch. 2001-63; s. 1061, ch. 2003-261.
627.041 Definitions.As used in this part:
(1) “Rate” means the unit charge by which the measure of exposure or the amount of insurance specified in a policy of insurance or covered thereunder is multiplied to determine the premium.
(2) “Premium” means the consideration paid or to be paid to an insurer for the issuance and delivery of any binder or policy of insurance.
(3) “Rating organization” means every person, other than an authorized insurer, whether located within or outside this state, who has as his or her object or purpose the making of rates, rating plans, or rating systems. Two or more authorized insurers that act in concert for the purpose of making rates, rating plans, or rating systems, and that do not operate within the specific authorizations contained in ss. 627.311, 627.314(2), (4), and 627.351, shall be deemed to be a rating organization. No single insurer shall be deemed to be a rating organization.
(4) “Advisory organization” means every group, association, or other organization of insurers, whether located within or outside this state, which prepares policy forms or makes underwriting rules incident to but not including the making of rates, rating plans, or rating systems or which collects and furnishes to authorized insurers or rating organizations loss or expense statistics or other statistical information and data and acts in an advisory, as distinguished from a ratemaking, capacity.
(5) “Member” means an insurer who participates in or is entitled to participate in the management of a rating, advisory, or other organization.
(6) “Subscriber” means an insurer which is furnished at its request:
(a) With rates and rating manuals by a rating organization of which it is not a member; or
(b) With advisory services by an advisory organization of which it is not a member.
(7) “Willful” or “willfully” in relation to an act or omission which constitutes a violation of this part means with actual knowledge or belief that such act or omission constitutes such violation and with specific intent nevertheless to commit such act or omission.
(8) “Motor vehicle insurance” means a policy of motor vehicle insurance delivered or issued for delivery in the state by an authorized insurer:
(a) Insuring a natural person as the named insured or one or more related individuals resident of the same household, or both; and
(b) Insuring a motor vehicle of the private passenger type or station wagon type, which motor vehicle is not used as public or livery conveyance for passengers or rented to others, or insuring any other four-wheeled motor vehicle having a capacity of 1,500 pounds or less which is not used in the occupation, profession, or business of the insured, other than farming;

other than any policy issued under an automobile insurance risk apportionment plan; or other than any policy insuring more than four automobiles; or other than any policy covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards.

(9) “Insurer,” for purposes of ss. 627.091, 627.096, 627.101, 627.111, 627.141, 627.171, 627.191, 627.211, and 627.291, includes a commercial self-insurance fund as defined in s. 624.462 and a group self-insurance fund as defined in s. 624.4621.
History.s. 414, ch. 59-205; s. 2, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 340, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 3, ch. 87-124; s. 114, ch. 92-318; s. 93, ch. 93-415; s. 315, ch. 97-102.
627.0612 Administrative proceedings in rating determinations.
(1) In any proceeding to determine whether rates, rating plans, or other matters governed by this part comply with the law, the appellate court shall set aside a final order of the office if the office has violated s. 120.57(1)(k) by substituting its findings of fact for findings of an administrative law judge which were supported by competent substantial evidence.
(2) In an administrative hearing to determine whether an insurer’s rates, rating schedules, rating manuals, premium credits, discount schedules, surcharge schedules, or changes thereto, for property insurance comply with the law, in addition to any other findings of fact, findings on the following matters shall be considered findings of fact:
(a) Whether a factor or factors used in a rate filing or applied by the office are consistent with standard actuarial techniques or practices or are otherwise based on reasonable actuarial judgment.
(b) Whether a factor for underwriting profit and contingencies is reasonable or excessive.
(c) Whether the cost of reinsurance is reasonable or excessive.
(3) In an administrative hearing to determine whether an insurer’s rates, rating schedules, rating manuals, premium credits, discount schedules, surcharge schedules, or changes thereto, for property insurance comply with the law, a recommended order may be entered that approves, modifies, or rejects the requested change. A recommended order modifying the requested rate change shall recommend such change as is supported by the record in the case.
History.s. 7, ch. 86-160; s. 2, ch. 87-50; s. 114, ch. 92-318; s. 272, ch. 96-410; s. 27, ch. 99-3; s. 1062, ch. 2003-261; s. 9, ch. 2008-66.
627.0613 Consumer advocate.The Chief Financial Officer must appoint a consumer advocate who must represent the general public of the state before the department and the office. The consumer advocate must report directly to the Chief Financial Officer, but is not otherwise under the authority of the department or of any employee of the department. The consumer advocate has such powers as are necessary to carry out the duties of the office of consumer advocate, including, but not limited to, the powers to:
(1) Recommend to the department or office, by petition, the commencement of any proceeding or action; appear in any proceeding or action before the department or office; or appear in any proceeding before the Division of Administrative Hearings relating to subject matter under the jurisdiction of the department or office.
(2) Have access to and use of all files, records, and data of the department or office.
(3) Examine rate and form filings submitted to the office, hire consultants as necessary to aid in the review process, and recommend to the department or office any position deemed by the consumer advocate to be in the public interest.
(4) Prepare an annual report card for each authorized personal residential property insurer, on a form and using a letter-grade scale developed by the commission by rule, which grades each insurer based on the following factors:
(a) The number and nature of consumer complaints, as a market share ratio, received by the department against the insurer.
(b) The disposition of all complaints received by the department.
(c) The average length of time for payment of claims by the insurer.
(d) Any other factors the commission identifies as assisting policyholders in making informed choices about homeowner’s insurance.
(5) Prepare an annual budget for presentation to the Legislature by the department, which budget must be adequate to carry out the duties of the office of consumer advocate.
History.s. 18, ch. 92-318; s. 1063, ch. 2003-261; s. 8, ch. 2006-12; s. 17, ch. 2007-1; s. 8, ch. 2007-90; s. 24, ch. 2008-66.
627.062 Rate standards.
(1) The rates for all classes of insurance to which the provisions of this part are applicable shall not be excessive, inadequate, or unfairly discriminatory.
(2) As to all such classes of insurance:
(a) Insurers or rating organizations shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on such classes of insurance written in this state. A copy of rates, rating schedules, rating manuals, premium credits or discount schedules, and surcharge schedules, and changes thereto, shall be filed with the office under one of the following procedures except as provided in subparagraph 3.:
1. If the filing is made at least 90 days before the proposed effective date and the filing is not implemented during the office’s review of the filing and any proceeding and judicial review, then such filing shall be considered a “file and use” filing. In such case, the office shall finalize its review by issuance of a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing. The notice of intent to approve and the notice of intent to disapprove constitute agency action for purposes of the Administrative Procedure Act. Requests for supporting information, requests for mathematical or mechanical corrections, or notification to the insurer by the office of its preliminary findings shall not toll the 90-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office does not issue a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing.
2. If the filing is not made in accordance with the provisions of subparagraph 1., such filing shall be made as soon as practicable, but no later than 30 days after the effective date, and shall be considered a “use and file” filing. An insurer making a “use and file” filing is potentially subject to an order by the office to return to policyholders portions of rates found to be excessive, as provided in paragraph (h).
3. For all property insurance filings made or submitted after January 25, 2007, but before December 31, 2010, an insurer seeking a rate that is greater than the rate most recently approved by the office shall make a “file and use” filing. For purposes of this subparagraph, motor vehicle collision and comprehensive coverages are not considered to be property coverages.
(b) Upon receiving a rate filing, the office shall review the rate filing to determine if a rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the following factors:
1. Past and prospective loss experience within and without this state.
2. Past and prospective expenses.
3. The degree of competition among insurers for the risk insured.
4. Investment income reasonably expected by the insurer, consistent with the insurer’s investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. The commission may adopt rules using reasonable techniques of actuarial science and economics to specify the manner in which insurers shall calculate investment income attributable to such classes of insurance written in this state and the manner in which such investment income shall be used to calculate insurance rates. Such manner shall contemplate allowances for an underwriting profit factor and full consideration of investment income which produce a reasonable rate of return; however, investment income from invested surplus may not be considered.
5. The reasonableness of the judgment reflected in the filing.
6. Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida policyholders, members, or subscribers.
7. The adequacy of loss reserves.
8. The cost of reinsurance. The office shall not disapprove a rate as excessive solely due to the insurer having obtained catastrophic reinsurance to cover the insurer’s estimated 250-year probable maximum loss or any lower level of loss.
9. Trend factors, including trends in actual losses per insured unit for the insurer making the filing.
10. Conflagration and catastrophe hazards, if applicable.
11. Projected hurricane losses, if applicable, which must be estimated using a model or method found to be acceptable or reliable by the Florida Commission on Hurricane Loss Projection Methodology, and as further provided in s. 627.0628.
12. A reasonable margin for underwriting profit and contingencies.
13. The cost of medical services, if applicable.
14. Other relevant factors which impact upon the frequency or severity of claims or upon expenses.
(c) In the case of fire insurance rates, consideration shall be given to the availability of water supplies and the experience of the fire insurance business during a period of not less than the most recent 5-year period for which such experience is available.
(d) If conflagration or catastrophe hazards are given consideration by an insurer in its rates or rating plan, including surcharges and discounts, the insurer shall establish a reserve for that portion of the premium allocated to such hazard and shall maintain the premium in a catastrophe reserve. Any removal of such premiums from the reserve for purposes other than paying claims associated with a catastrophe or purchasing reinsurance for catastrophes shall be subject to approval of the office. Any ceding commission received by an insurer purchasing reinsurance for catastrophes shall be placed in the catastrophe reserve.
(e) After consideration of the rate factors provided in paragraphs (b), (c), and (d), a rate may be found by the office to be excessive, inadequate, or unfairly discriminatory based upon the following standards:
1. Rates shall be deemed excessive if they are likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered.
2. Rates shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when the replenishment is attributable to investment losses.
3. Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.
4. A rating plan, including discounts, credits, or surcharges, shall be deemed unfairly discriminatory if it fails to clearly and equitably reflect consideration of the policyholder’s participation in a risk management program adopted pursuant to s. 627.0625.
5. A rate shall be deemed inadequate as to the premium charged to a risk or group of risks if discounts or credits are allowed which exceed a reasonable reflection of expense savings and reasonably expected loss experience from the risk or group of risks.
6. A rate shall be deemed unfairly discriminatory as to a risk or group of risks if the application of premium discounts, credits, or surcharges among such risks does not bear a reasonable relationship to the expected loss and expense experience among the various risks.
(f) In reviewing a rate filing, the office may require the insurer to provide at the insurer’s expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated in this section.
(g) The office may at any time review a rate, rating schedule, rating manual, or rate change; the pertinent records of the insurer; and market conditions. If the office finds on a preliminary basis that a rate may be excessive, inadequate, or unfairly discriminatory, the office shall initiate proceedings to disapprove the rate and shall so notify the insurer. However, the office may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for a period of 1 year after the effective date of the filing unless the office finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being so notified, the insurer or rating organization shall, within 60 days, file with the office all information which, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. The office shall issue a notice of intent to approve or a notice of intent to disapprove pursuant to the procedures of paragraph (a) within 90 days after receipt of the insurer’s initial response. In such instances and in any administrative proceeding relating to the legality of the rate, the insurer or rating organization shall carry the burden of proof by a preponderance of the evidence to show that the rate is not excessive, inadequate, or unfairly discriminatory. After the office notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the office withdraws the notification, the insurer shall not alter the rate except to conform with the office’s notice until the earlier of 120 days after the date the notification was provided or 180 days after the date of the implementation of the rate. The office may, subject to chapter 120, disapprove without the 60-day notification any rate increase filed by an insurer within the prohibited time period or during the time that the legality of the increased rate is being contested.
(h) In the event the office finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the office shall issue an order of disapproval specifying that a new rate or rate schedule which responds to the findings of the office be filed by the insurer. The office shall further order, for any “use and file” filing made in accordance with subparagraph (a)2., that premiums charged each policyholder constituting the portion of the rate above that which was actuarially justified be returned to such policyholder in the form of a credit or refund. If the office finds that an insurer’s rate or rate change is inadequate, the new rate or rate schedule filed with the office in response to such a finding shall be applicable only to new or renewal business of the insurer written on or after the effective date of the responsive filing.
(i) Except as otherwise specifically provided in this chapter, the office shall not prohibit any insurer, including any residual market plan or joint underwriting association, from paying acquisition costs based on the full amount of premium, as defined in s. 627.403, applicable to any policy, or prohibit any such insurer from including the full amount of acquisition costs in a rate filing.
(j) With respect to residential property insurance rate filings, the rate filing must account for mitigation measures undertaken by policyholders to reduce hurricane losses.
(k)1. An insurer may make a separate filing limited solely to an adjustment of its rates for reinsurance or financing costs incurred in the purchase of reinsurance or financing products to replace or finance the payment of the amount covered by the Temporary Increase in Coverage Limits (TICL) portion of the Florida Hurricane Catastrophe Fund including replacement reinsurance for the TICL reductions made pursuant to s. 215.555(17)(e); the actual cost paid due to the application of the TICL premium factor pursuant to s. 215.555(17)(f); and the actual cost paid due to the application of the cash build-up factor pursuant to s. 215.555(5)(b) if the insurer:
a. Elects to purchase financing products such as a liquidity instrument or line of credit, in which case the cost included in the filing for the liquidity instrument or line of credit may not result in a premium increase exceeding 3 percent for any individual policyholder. All costs contained in the filing may not result in an overall premium increase of more than 10 percent for any individual policyholder.
b. Includes in the filing a copy of all of its reinsurance, liquidity instrument, or line of credit contracts; proof of the billing or payment for the contracts; and the calculation upon which the proposed rate change is based demonstrates that the costs meet the criteria of this section and are not loaded for expenses or profit for the insurer making the filing.
c. Includes no other changes to its rates in the filing.
d. Has not implemented a rate increase within the 6 months immediately preceding the filing.
e. Does not file for a rate increase under any other paragraph within 6 months after making a filing under this paragraph.
f. That purchases reinsurance or financing products from an affiliated company in compliance with this paragraph does so only if the costs for such reinsurance or financing products are charged at or below charges made for comparable coverage by nonaffiliated reinsurers or financial entities making such coverage or financing products available in this state.
2. An insurer may only make one filing in any 12-month period under this paragraph.
3. An insurer that elects to implement a rate change under this paragraph must file its rate filing with the office at least 45 days before the effective date of the rate change. After an insurer submits a complete filing that meets all of the requirements of this paragraph, the office has 45 days after the date of the filing to review the rate filing and determine if the rate is excessive, inadequate, or unfairly discriminatory.

The provisions of this subsection shall not apply to workers’ compensation and employer’s liability insurance and to motor vehicle insurance.

(3)(a) For individual risks that are not rated in accordance with the insurer’s rates, rating schedules, rating manuals, and underwriting rules filed with the office and which have been submitted to the insurer for individual rating, the insurer must maintain documentation on each risk subject to individual risk rating. The documentation must identify the named insured and specify the characteristics and classification of the risk supporting the reason for the risk being individually risk rated, including any modifications to existing approved forms to be used on the risk. The insurer must maintain these records for a period of at least 5 years after the effective date of the policy.
(b) Individual risk rates and modifications to existing approved forms are not subject to this part or part II, except for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404, 627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132, 627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426, 627.4265, 627.427, and 627.428, but are subject to all other applicable provisions of this code and rules adopted thereunder.
(c) This subsection does not apply to private passenger motor vehicle insurance.
(d)1. The following categories or kinds of insurance and types of commercial lines risks are not subject to paragraph (2)(a) or paragraph (2)(f):
a. Excess or umbrella.
b. Surety and fidelity.
c. Boiler and machinery and leakage and fire extinguishing equipment.
d. Errors and omissions.
e. Directors and officers, employment practices, and management liability.
f. Intellectual property and patent infringement liability.
g. Advertising injury and Internet liability insurance.
h. Property risks rated under a highly protected risks rating plan.
i. Any other commercial lines categories or kinds of insurance or types of commercial lines risks that the office determines should not be subject to paragraph (2)(a) or paragraph (2)(f) because of the existence of a competitive market for such insurance, similarity of such insurance to other categories or kinds of insurance not subject to paragraph (2)(a) or paragraph (2)(f), or to improve the general operational efficiency of the office.
2. Insurers or rating organizations shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on insurance and risks described in subparagraph 1. which are written in this state.
3. An insurer must notify the office of any changes to rates for insurance and risks described in subparagraph 1. no later than 30 days after the effective date of the change. The notice must include the name of the insurer, the type or kind of insurance subject to rate change, total premium written during the immediately preceding year by the insurer for the type or kind of insurance subject to the rate change, and the average statewide percentage change in rates. Underwriting files, premiums, losses, and expense statistics with regard to insurance and risks described in subparagraph 1. written by an insurer shall be maintained by the insurer and subject to examination by the office. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the rate factors in paragraphs (2)(b), (c), and (d) and the standards in paragraph (2)(e) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
4. A rating organization must notify the office of any changes to loss cost for insurance and risks described in subparagraph 1. no later than 30 days after the effective date of the change. The notice must include the name of the rating organization, the type or kind of insurance subject to a loss cost change, loss costs during the immediately preceding year for the type or kind of insurance subject to the loss cost change, and the average statewide percentage change in loss cost. Loss and exposure statistics with regard to risks applicable to loss costs for a rating organization not subject to paragraph (2)(a) or paragraph (2)(f) shall be maintained by the rating organization and are subject to examination by the office. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the rate factors in paragraphs (2)(b)-(d) and the standards in paragraph (2)(e) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
5. In reviewing a rate, the office may require the insurer to provide at the insurer’s expense all information necessary to evaluate the condition of the company and the reasonableness of the rate according to the applicable criteria described in this section.
(4) The establishment of any rate, rating classification, rating plan or schedule, or variation thereof in violation of part IX of chapter 626 is also in violation of this section. In order to enhance the ability of consumers to compare premiums and to increase the accuracy and usefulness of rate-comparison information provided by the office to the public, the office shall develop a proposed standard rating territory plan to be used by all authorized property and casualty insurers for residential property insurance. In adopting the proposed plan, the office may consider geographical characteristics relevant to risk, county lines, major roadways, existing rating territories used by a significant segment of the market, and other relevant factors. Such plan shall be submitted to the President of the Senate and the Speaker of the House of Representatives by January 15, 2006. The plan may not be implemented unless authorized by further act of the Legislature.
(5) With respect to a rate filing involving coverage of the type for which the insurer is required to pay a reimbursement premium to the Florida Hurricane Catastrophe Fund, the insurer may fully recoup in its property insurance premiums any reimbursement premiums paid to the Florida Hurricane Catastrophe Fund, together with reasonable costs of other reinsurance, but except as otherwise provided in this section, may not recoup reinsurance costs that duplicate coverage provided by the Florida Hurricane Catastrophe Fund. An insurer may not recoup more than 1 year of reimbursement premium at a time. Any under-recoupment from the prior year may be added to the following year’s reimbursement premium, and any over-recoupment shall be subtracted from the following year’s reimbursement premium.
(6)(a) If an insurer requests an administrative hearing pursuant to s. 120.57 related to a rate filing under this section, the director of the Division of Administrative Hearings shall expedite the hearing and assign an administrative law judge who shall commence the hearing within 30 days after the receipt of the formal request and shall enter a recommended order within 30 days after the hearing or within 30 days after receipt of the hearing transcript by the administrative law judge, whichever is later. Each party shall be allowed 10 days in which to submit written exceptions to the recommended order. The office shall enter a final order within 30 days after the entry of the recommended order. The provisions of this paragraph may be waived upon stipulation of all parties.
(b) Upon entry of a final order, the insurer may request a expedited appellate review pursuant to the Florida Rules of Appellate Procedure. It is the intent of the Legislature that the First District Court of Appeal grant an insurer’s request for an expedited appellate review.
(7)(a) The provisions of this subsection apply only with respect to rates for medical malpractice insurance and shall control to the extent of any conflict with other provisions of this section.
(b) Any portion of a judgment entered or settlement paid as a result of a statutory or common-law bad faith action and any portion of a judgment entered which awards punitive damages against an insurer may not be included in the insurer’s rate base, and shall not be used to justify a rate or rate change. Any common-law bad faith action identified as such, any portion of a settlement entered as a result of a statutory or common-law action, or any portion of a settlement wherein an insurer agrees to pay specific punitive damages may not be used to justify a rate or rate change. The portion of the taxable costs and attorney’s fees which is identified as being related to the bad faith and punitive damages in these judgments and settlements may not be included in the insurer’s rate base and may not be utilized to justify a rate or rate change.
(c) Upon reviewing a rate filing and determining whether the rate is excessive, inadequate, or unfairly discriminatory, the office shall consider, in accordance with generally accepted and reasonable actuarial techniques, past and present prospective loss experience, either using loss experience solely for this state or giving greater credibility to this state’s loss data after applying actuarially sound methods of assigning credibility to such data.
(d) Rates shall be deemed excessive if, among other standards established by this section, the rate structure provides for replenishment of reserves or surpluses from premiums when the replenishment is attributable to investment losses.
(e) The insurer must apply a discount or surcharge based on the health care provider’s loss experience or shall establish an alternative method giving due consideration to the provider’s loss experience. The insurer must include in the filing a copy of the surcharge or discount schedule or a description of the alternative method used, and must provide a copy of such schedule or description, as approved by the office, to policyholders at the time of renewal and to prospective policyholders at the time of application for coverage.
(f) Each medical malpractice insurer must make a rate filing under this section, sworn to by at least two executive officers of the insurer, at least once each calendar year.
(8)(a)1. No later than 60 days after the effective date of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature, the office shall calculate a presumed factor that reflects the impact that the changes contained in such legislation will have on rates for medical malpractice insurance and shall issue a notice informing all insurers writing medical malpractice coverage of such presumed factor. In determining the presumed factor, the office shall use generally accepted actuarial techniques and standards provided in this section in determining the expected impact on losses, expenses, and investment income of the insurer. To the extent that the operation of a provision of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature is stayed pending a constitutional challenge, the impact of that provision shall not be included in the calculation of a presumed factor under this subparagraph.
2. No later than 60 days after the office issues its notice of the presumed rate change factor under subparagraph 1., each insurer writing medical malpractice coverage in this state shall submit to the office a rate filing for medical malpractice insurance, which will take effect no later than January 1, 2004, and apply retroactively to policies issued or renewed on or after the effective date of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature. Except as authorized under paragraph (b), the filing shall reflect an overall rate reduction at least as great as the presumed factor determined under subparagraph 1. With respect to policies issued on or after the effective date of such legislation and prior to the effective date of the rate filing required by this subsection, the office shall order the insurer to make a refund of the amount that was charged in excess of the rate that is approved.
(b) Any insurer or rating organization that contends that the rate provided for in paragraph (a) is excessive, inadequate, or unfairly discriminatory shall separately state in its filing the rate it contends is appropriate and shall state with specificity the factors or data that it contends should be considered in order to produce such appropriate rate. The insurer or rating organization shall be permitted to use all of the generally accepted actuarial techniques provided in this section in making any filing pursuant to this subsection. The office shall review each such exception and approve or disapprove it prior to use. It shall be the insurer’s burden to actuarially justify any deviations from the rates required to be filed under paragraph (a). The insurer making a filing under this paragraph shall include in the filing the expected impact of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature on losses, expenses, and rates.
(c) If any provision of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature is held invalid by a court of competent jurisdiction, the office shall permit an adjustment of all medical malpractice rates filed under this section to reflect the impact of such holding on such rates so as to ensure that the rates are not excessive, inadequate, or unfairly discriminatory.
(d) Rates approved on or before July 1, 2003, for medical malpractice insurance shall remain in effect until the effective date of a new rate filing approved under this subsection.
(e) The calculation and notice by the office of the presumed factor pursuant to paragraph (a) is not an order or rule that is subject to chapter 120. If the office enters into a contract with an independent consultant to assist the office in calculating the presumed factor, such contract shall not be subject to the competitive solicitation requirements of s. 287.057.
(9)(a) The chief executive officer or chief financial officer of a property insurer and the chief actuary of a property insurer must certify under oath and subject to the penalty of perjury, on a form approved by the commission, the following information, which must accompany a rate filing:
1. The signing officer and actuary have reviewed the rate filing;
2. Based on the signing officer’s and actuary’s knowledge, the rate filing does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading;
3. Based on the signing officer’s and actuary’s knowledge, the information and other factors described in paragraph (2)(b), including, but not limited to, investment income, fairly present in all material respects the basis of the rate filing for the periods presented in the filing; and
4. Based on the signing officer’s and actuary’s knowledge, the rate filing reflects all premium savings that are reasonably expected to result from legislative enactments and are in accordance with generally accepted and reasonable actuarial techniques.
(b) A signing officer or actuary knowingly making a false certification under this subsection commits a violation of s. 626.9541(1)(e) and is subject to the penalties under s. 626.9521.
(c) Failure to provide such certification by the officer and actuary shall result in the rate filing being disapproved without prejudice to be refiled.
(d) The commission may adopt rules and forms pursuant to ss. 120.536(1) and 120.54 to administer this subsection.
(10) The burden is on the office to establish that rates are excessive for personal lines residential coverage with a dwelling replacement cost of $1 million or more or for a single condominium unit with a combined dwelling and contents replacement cost of $1 million or more. Upon request of the office, the insurer shall provide to the office such loss and expense information as the office reasonably needs to meet this burden.
(11) Any interest paid pursuant to s. 627.70131(5) may not be included in the insurer’s rate base and may not be used to justify a rate or rate change.
History.s. 3, ch. 67-9; s. 3, ch. 71-3(B); s. 3, ch. 76-168; s. 21, ch. 77-468; s. 1, ch. 77-457; s. 93, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 341, 357, 809(2nd), ch. 82-243; ss. 45, 49, 79, ch. 82-386; s. 93, ch. 83-216; s. 9, ch. 86-160; ss. 19, 114, ch. 92-318; s. 8, ch. 92-328; s. 5, ch. 95-276; s. 4, ch. 96-194; s. 7, ch. 96-377; s. 8, ch. 2000-370; s. 55, ch. 2001-63; s. 1064, ch. 2003-261; ss. 40, 84, ch. 2003-416; s. 3, ch. 2005-111; s. 11, ch. 2006-12; s. 18, ch. 2007-1; s. 9, ch. 2007-90; s. 10, ch. 2008-66; s. 7, ch. 2009-87; s. 120, ch. 2010-5; s. 4, ch. 2010-175.
627.0621 Transparency in rate regulation.
(1) DEFINITIONS.As used in this section, the term:
(a) “Rate filing” means any original or amended rate residential property insurance filing.
(b) “Recommendation” means any proposed, preliminary, or final recommendation from an office actuary reviewing a rate filing with respect to the issue of approval or disapproval of the rate filing or with respect to rate indications that the office would consider acceptable.
(2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING INFORMATION.
(a) With respect to any residential property rate filing, the office shall provide the following information on a publicly accessible Internet website:
1. The overall rate change requested by the insurer.
2. The rate change approved by the office along with all of the actuary’s assumptions and recommendations forming the basis of the office’s decision.
3. Certification by the office’s actuary that, based on the actuary’s knowledge, his or her recommendations are consistent with accepted actuarial principles.
(b) For any rate filing, whether or not the filing is subject to a public hearing, the office shall provide on its website a means for any policyholder who may be affected by a proposed rate change to send an e-mail regarding the proposed rate change. Such e-mail must be accessible to the actuary assigned to review the rate filing.
History.s. 22, ch. 2008-66; s. 82, ch. 2009-21; s. 8, ch. 2009-87.
627.0625 Commercial property and casualty risk management plans.
(1) For the purposes of this section, the term:
(a) “Commercial property insurance” means insurance as defined in s. 624.604, but limited to coverage of commercial risks, excluding windstorm coverage, flood insurance, federal crop insurance, crop hail insurance, the Pollution Liability Insurance Association, and other federal governmental pools and associations. If separate rates and supporting experience data are not filed and justified for windstorm coverage, the insurer shall, using generally accepted actuarial and economic principles and techniques, identify and justify the premiums, losses, reserves, and associated data for the windstorm coverage excluded from commercial property insurance.
(b) “Commercial casualty insurance” means insurance as defined in s. 624.605, other than workers’ compensation and employer’s liability insurance, but limited to coverage of commercial risks.
(c) “Commercial umbrella liability insurance” means insurance as defined in s. 624.605 but limited to any policy or endorsement which provides coverage in the amount of $300,000 or more in excess of an underlying policy providing $300,000 liability or equivalent limits of insurance, on a specific insured vehicle, location, business operation, or other specific commercial risk.
(2) This section shall apply only to commercial property insurance and to commercial casualty insurance as those terms are defined in subsection (1), or any combination thereof.
(3) Each insurer or insurer group offering commercial casualty insurance or commercial property insurance covering risks located in this state shall develop and make available to insureds guidelines for risk management plans. The risk management program shall include the following:
(a) Safety measures, including, as applicable, the following areas:
1. Pollution and environmental hazards;
2. Disease hazards;
3. Accidental occurrences;
4. Fire hazards and fire prevention and detection;
5. Liability for acts from the course of business;
6. Slip and fall hazards;
7. Product injury; and
8. Hazards unique to a particular class or category of insureds.
(b) Training to insureds in safety management techniques.
(c) Safety management counseling services.

There shall be no civil cause of action against any insurer or its agents or employees for acts or omissions in any way connected with the requirements of this subsection. This shall not limit the authority for the office to enforce the provisions of this subsection.

History.s. 10, ch. 86-160; s. 2, ch. 87-50; s. 2, ch. 88-390; s. 18, ch. 89-167; s. 1, ch. 89-225; s. 114, ch. 92-318; s. 1065, ch. 2003-261.
627.0628 Florida Commission on Hurricane Loss Projection Methodology; public records exemption; public meetings exemption.
(1) LEGISLATIVE FINDINGS AND INTENT.
(a) Reliable projections of hurricane losses are necessary in order to assure that rates for residential property insurance meet the statutory requirement that rates be neither excessive nor inadequate. The ability to accurately project hurricane losses has been enhanced greatly in recent years through the use of computer modeling. It is the public policy of this state to encourage the use of the most sophisticated actuarial methods to assure that consumers are charged lawful rates for residential property insurance coverage.
(b) The Legislature recognizes the need for expert evaluation of computer models and other recently developed or improved actuarial methodologies for projecting hurricane losses, in order to resolve conflicts among actuarial professionals, and in order to provide both immediate and continuing improvement in the sophistication of actuarial methods used to set rates charged to consumers.
(c) It is the intent of the Legislature to create the Florida Commission on Hurricane Loss Projection Methodology as a panel of experts to provide the most actuarially sophisticated guidelines and standards for projection of hurricane losses possible, given the current state of actuarial science. It is the further intent of the Legislature that such standards and guidelines must be used by the State Board of Administration in developing reimbursement premium rates for the Florida Hurricane Catastrophe Fund, and, subject to paragraph (3)(d), must be used by insurers in rate filings under s. 627.062 unless the way in which such standards and guidelines were applied by the insurer was erroneous, as shown by a preponderance of the evidence.
(d) It is the intent of the Legislature that such standards and guidelines be employed as soon as possible, and that they be subject to continuing review thereafter.
(e) The Legislature finds that the authority to take final agency action with respect to insurance ratemaking is vested in the Office of Insurance Regulation and the Financial Services Commission, and that the processes, standards, and guidelines of the Florida Commission on Hurricane Loss Projection Methodology do not constitute final agency action or statements of general applicability that implement, interpret, or prescribe law or policy; accordingly, chapter 120 does not apply to the processes, standards, and guidelines of the Florida Commission on Hurricane Loss Projection Methodology.
(2) COMMISSION CREATED.
(a) There is created the Florida Commission on Hurricane Loss Projection Methodology, which is assigned to the State Board of Administration. For the purposes of this section, the term “commission” means the Florida Commission on Hurricane Loss Projection Methodology. The commission shall be administratively housed within the State Board of Administration, but it shall independently exercise the powers and duties specified in this section.
(b) The commission shall consist of the following 11 members:
1. The insurance consumer advocate.
2. The senior employee of the State Board of Administration responsible for operations of the Florida Hurricane Catastrophe Fund.
3. The Executive Director of the Citizens Property Insurance Corporation.
4. The Director of the Division of Emergency Management of the Department of Community Affairs.
5. The actuary member of the Florida Hurricane Catastrophe Fund Advisory Council.
6. An employee of the office who is an actuary responsible for property insurance rate filings and who is appointed by the director of the office.
7. Five members appointed by the Chief Financial Officer, as follows:
a. An actuary who is employed full time by a property and casualty insurer which was responsible for at least 1 percent of the aggregate statewide direct written premium for homeowner’s insurance in the calendar year preceding the member’s appointment to the commission.
b. An expert in insurance finance who is a full-time member of the faculty of the State University System and who has a background in actuarial science.
c. An expert in statistics who is a full-time member of the faculty of the State University System and who has a background in insurance.
d. An expert in computer system design who is a full-time member of the faculty of the State University System.
e. An expert in meteorology who is a full-time member of the faculty of the State University System and who specializes in hurricanes.
(c) Members designated under subparagraphs (b)1.-5. shall serve on the commission as long as they maintain the respective offices designated in subparagraphs (b)1.-5. The member appointed by the director of the office under subparagraph (b)6. shall serve on the commission until the end of the term of office of the director who appointed him or her, unless removed earlier by the director for cause. Members appointed by the Chief Financial Officer under subparagraph (b)7. shall serve on the commission until the end of the term of office of the Chief Financial Officer who appointed them, unless earlier removed by the Chief Financial Officer for cause. Vacancies on the commission shall be filled in the same manner as the original appointment.
(d) The State Board of Administration shall annually appoint one of the members of the commission to serve as chair.
(e) Members of the commission shall serve without compensation, but shall be reimbursed for per diem and travel expenses pursuant to s. 112.061.
(f) The State Board of Administration shall, as a cost of administration of the Florida Hurricane Catastrophe Fund, provide for travel, expenses, and staff support for the commission.
(g) There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member of the commission, any member of the State Board of Administration, or any employee of the State Board of Administration for any action taken in the performance of their duties under this section. In addition, the commission may, in writing, waive any potential cause of action for negligence of a consultant, contractor, or contract employee engaged to assist the commission.
(3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.
(a) The commission shall consider any actuarial methods, principles, standards, models, or output ranges that have the potential for improving the accuracy of or reliability of the hurricane loss projections used in residential property insurance rate filings. The commission shall, from time to time, adopt findings as to the accuracy or reliability of particular methods, principles, standards, models, or output ranges.
(b) The commission shall consider any actuarial methods, principles, standards, or models that have the potential for improving the accuracy of or reliability of projecting probable maximum loss levels. The commission shall adopt findings as to the accuracy or reliability of particular methods, principles, standards, or models related to probable maximum loss calculations.
(c) In establishing reimbursement premiums for the Florida Hurricane Catastrophe Fund, the State Board of Administration must, to the extent feasible, employ actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable.
(d) With respect to a rate filing under s. 627.062, an insurer shall employ and may not modify or adjust actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable in determining hurricane loss factors for use in a rate filing under s. 627.062. An insurer shall employ and may not modify or adjust models found by the commission to be accurate or reliable in determining probable maximum loss levels pursuant to paragraph (b) with respect to a rate filing under s. 627.062 made more than 60 days after the commission has made such findings.
(e) The commission shall adopt revisions to previously adopted actuarial methods, principles, standards, models, or output ranges every odd year.
(f)1. A trade secret, as defined in s. 688.002, that is used in designing and constructing a hurricane loss model and that is provided pursuant to this section, by a private company, to the commission, office, or consumer advocate appointed pursuant to s. 627.0613, is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
2.a. That portion of a meeting of the commission or of a rate proceeding on an insurer’s rate filing at which a trade secret made confidential and exempt by this paragraph is discussed is exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution. The closed meeting must be recorded, and no portion of the closed meeting may be off the record.
b. The recording of a closed portion of a meeting is exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
c. This subparagraph is subject to the Open Government Sunset Review Act in accordance with s. 119.15 and shall stand repealed on October 2, 2015, unless reviewed and saved from repeal through reenactment by the Legislature.
(4) REVIEW OF DISCOUNTS, CREDITS, OTHER RATE DIFFERENTIALS, AND REDUCTIONS IN DEDUCTIBLES RELATING TO WINDSTORM MITIGATION.The commission shall hold public meetings for the purpose of receiving testimony and data regarding the implementation of windstorm mitigation discounts, credits, other rate differentials, and appropriate reductions in deductibles pursuant to s. 627.0629. After reviewing the testimony and data as well as any other information the commission deems appropriate, the commission shall present a report by February 1, 2010, to the Governor, the Cabinet, the President of the Senate, and the Speaker of the House of Representatives, including recommendations on improving the process of assessing, determining, and applying windstorm mitigation discounts, credits, other rate differentials, and appropriate reductions in deductibles pursuant to s. 627.0629.
History.s. 6, ch. 95-276; s. 6, ch. 96-194; s. 3, ch. 97-55; s. 4, ch. 2000-333; s. 1066, ch. 2003-261; s. 79, ch. 2004-390; s. 4, ch. 2005-111; s. 3, ch. 2005-264; s. 12, ch. 2006-12; s. 145, ch. 2008-4; s. 11, ch. 2008-66; s. 83, ch. 2009-21; s. 10, ch. 2009-70; s. 16, ch. 2009-87; s. 1, ch. 2010-89.
627.06281 Public hurricane loss projection model; reporting of data by insurers.
(1) Within 30 days after a written request for loss data and associated exposure data by the office or the Florida International University center established to study mitigation, residential property insurers and licensed rating and advisory organizations that compile residential property insurance loss data shall provide loss data and associated exposure data for residential property insurance policies to the office or the Florida International University center established to study mitigation, as directed by the office, for the purposes of developing, maintaining, and updating a public model for hurricane loss projections. The loss data and associated exposure data provided shall be in writing.
(2) The public model must be submitted to the Florida Commission on Hurricane Loss Projection Methodology for review under s. 627.0628 by March 1, 2007. The office may continue to use the model for its review of rate filings pursuant to ss. 627.062 and 627.351 until such time as the Florida Commission on Hurricane Loss Projection Methodology determines that the public model is not accurate or reliable pursuant to the same process and standards as the commission uses for the review of other hurricane loss projection models.
(3)(a) A residential property insurer may have access to and use the public hurricane loss projection model, including all assumptions and factors and all detailed loss results, for the purpose of calculating rate indications in a rate filing and for analytical purposes, including any analysis or evaluation of the model required under actuarial standards of practice.
(b) By January 1, 2009, the office shall establish by rule a fee schedule for access to and the use of the model. The fee schedule must be reasonably calculated to cover only the actual costs of providing access to and the use of the model.
History.s. 6, ch. 2005-111; s. 13, ch. 2006-12; s. 59, ch. 2007-217; s. 18, ch. 2008-66.
627.0629 Residential property insurance; rate filings.
(1)(a) It is the intent of the Legislature that insurers must provide savings to consumers who install or implement windstorm damage mitigation techniques, alterations, or solutions to their properties to prevent windstorm losses. A rate filing for residential property insurance must include actuarially reasonable discounts, credits, or other rate differentials, or appropriate reductions in deductibles, for properties on which fixtures or construction techniques demonstrated to reduce the amount of loss in a windstorm have been installed or implemented. The fixtures or construction techniques shall include, but not be limited to, fixtures or construction techniques which enhance roof strength, roof covering performance, roof-to-wall strength, wall-to-floor-to-foundation strength, opening protection, and window, door, and skylight strength. Credits, discounts, or other rate differentials, or appropriate reductions in deductibles, for fixtures and construction techniques which meet the minimum requirements of the Florida Building Code must be included in the rate filing. All insurance companies must make a rate filing which includes the credits, discounts, or other rate differentials or reductions in deductibles by February 28, 2003. By July 1, 2007, the office shall reevaluate the discounts, credits, other rate differentials, and appropriate reductions in deductibles for fixtures and construction techniques that meet the minimum requirements of the Florida Building Code, based upon actual experience or any other loss relativity studies available to the office. The office shall determine the discounts, credits, other rate differentials, and appropriate reductions in deductibles that reflect the full actuarial value of such revaluation, which may be used by insurers in rate filings.
(b) By February 1, 2011, the Office of Insurance Regulation, in consultation with the Department of Financial Services and the Department of Community Affairs, shall develop and make publicly available a proposed method for insurers to establish discounts, credits, or other rate differentials for hurricane mitigation measures which directly correlate to the numerical rating assigned to a structure pursuant to the uniform home grading scale adopted by the Financial Services Commission pursuant to s. 215.55865, including any proposed changes to the uniform home grading scale. By October 1, 2011, the commission shall adopt rules requiring insurers to make rate filings for residential property insurance which revise insurers’ discounts, credits, or other rate differentials for hurricane mitigation measures so that such rate differentials correlate directly to the uniform home grading scale. The rules may include such changes to the uniform home grading scale as the commission determines are necessary, and may specify the minimum required discounts, credits, or other rate differentials. Such rate differentials must be consistent with generally accepted actuarial principles and wind-loss mitigation studies. The rules shall allow a period of at least 2 years after the effective date of the revised mitigation discounts, credits, or other rate differentials for a property owner to obtain an inspection or otherwise qualify for the revised credit, during which time the insurer shall continue to apply the mitigation credit that was applied immediately prior to the effective date of the revised credit. Discounts, credits, and other rate differentials established for rate filings under this paragraph shall supersede, after adoption, the discounts, credits, and other rate differentials included in rate filings under paragraph (a).
(2)(a) A rate filing for residential property insurance made on or before the implementation of paragraph (b) may include rate factors that reflect the manner in which building code enforcement in a particular jurisdiction addresses the risk of wind damage; however, such a rate filing must also provide for variations from such rate factors on an individual basis based on an inspection of a particular structure by a licensed home inspector, which inspection may be at the cost of the insured.
(b) A rate filing for residential property insurance made more than 150 days after approval by the office of a building code rating factor plan submitted by a statewide rating organization shall include positive and negative rate factors that reflect the manner in which building code enforcement in a particular jurisdiction addresses risk of wind damage. The rate filing shall include variations from standard rate factors on an individual basis based on inspection of a particular structure by a licensed home inspector. If an inspection is requested by the insured, the insurer may require the insured to pay the reasonable cost of the inspection. This paragraph applies to structures constructed or renovated after the implementation of this paragraph.
(c) The premium notice shall specify the amount by which the rate has been adjusted as a result of this subsection and shall also specify the maximum possible positive and negative adjustments that are approved for use by the insurer under this subsection.
(3) A rate filing made on or after July 1, 1995, for mobile home owner’s insurance must include appropriate discounts, credits, or other rate differentials for mobile homes constructed to comply with American Society of Civil Engineers Standard ANSI/ASCE 7-88, adopted by the United States Department of Housing and Urban Development on July 13, 1994, and that also comply with all applicable tie-down requirements provided by state law.
(4) The Legislature finds that separate consideration and notice of hurricane insurance premiums will assist consumers by providing greater assurance that hurricane premiums are lawful and by providing more complete information regarding the components of property insurance premiums. Effective January 1, 1997, a rate filing for residential property insurance shall be separated into two components, rates for hurricane coverage and rates for all other coverages. A premium notice reflecting a rate implemented on the basis of such a filing shall separately indicate the premium for hurricane coverage and the premium for all other coverages.
(5) In order to provide an appropriate transition period, an insurer may, in its sole discretion, implement an approved rate filing for residential property insurance over a period of years. An insurer electing to phase in its rate filing must provide an informational notice to the office setting out its schedule for implementation of the phased-in rate filing. An insurer may include in its rate the actual cost of private market reinsurance that corresponds to available coverage of the Temporary Increase in Coverage Limits, TICL, from the Florida Hurricane Catastrophe Fund. The insurer may also include the cost of reinsurance to replace the TICL reduction implemented pursuant to s. 215.555(17)(d)9. However, this cost for reinsurance may not include any expense or profit load or result in a total annual base rate increase in excess of 10 percent.
(6) Any rate filing that is based in whole or part on data from a computer model may not exceed 15 percent unless there is a public hearing.
(7) An insurer may implement appropriate discounts or other rate differentials of up to 10 percent of the annual premium to mobile home owners who provide to the insurer evidence of a current inspection of tie-downs for the mobile home, certifying that the tie-downs have been properly installed and are in good condition.
(8) EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL SOUNDNESS.
(a) It is the intent of the Legislature to provide a program whereby homeowners may obtain an evaluation of the wind resistance of their homes with respect to preventing damage from hurricanes, together with a recommendation of reasonable steps that may be taken to upgrade their homes to better withstand hurricane force winds.
(b) To the extent that funds are provided for this purpose in the General Appropriations Act, the Legislature hereby authorizes the establishment of a program to be administered by the Citizens Property Insurance Corporation for homeowners insured in the high-risk account.
(c) The program shall provide grants to homeowners, for the purpose of providing homeowner applicants with funds to conduct an evaluation of the integrity of their homes with respect to withstanding hurricane force winds, recommendations to retrofit the homes to better withstand damage from such winds, and the estimated cost to make the recommended retrofits.
(d) The Department of Community Affairs shall establish by rule standards to govern the quality of the evaluation, the quality of the recommendations for retrofitting, the eligibility of the persons conducting the evaluation, and the selection of applicants under the program. In establishing the rule, the Department of Community Affairs shall consult with the advisory committee to minimize the possibility of fraud or abuse in the evaluation and retrofitting process, and to ensure that funds spent by homeowners acting on the recommendations achieve positive results.
(e) The Citizens Property Insurance Corporation shall identify areas of this state with the greatest wind risk to residential properties and recommend annually to the Department of Community Affairs priority target areas for such evaluations and inclusion with the associated residential construction mitigation program.
(9) A property insurance rate filing that includes any adjustments related to premiums paid to the Florida Hurricane Catastrophe Fund must include a complete calculation of the insurer’s catastrophe load, and the information in the filing may not be limited solely to recovery of moneys paid to the fund.
History.s. 13, ch. 93-410; s. 7, ch. 95-276; s. 7, ch. 96-194; s. 4, ch. 97-55; s. 99, ch. 2000-141; ss. 34, 42, ch. 2001-186; ss. 3, 9, ch. 2001-372; s. 20, ch. 2002-293; s. 1067, ch. 2003-261; s. 5, ch. 2005-111; s. 14, ch. 2006-12; ss. 19, 44, ch. 2007-1; s. 12, ch. 2008-66; s. 9, ch. 2009-87.
627.06291 Excess profits of residential property insurer; return.A residential property insurer shall return all excess profits to policyholders except as otherwise directed by the Office of Insurance Regulation. A residential property insurer shall be deemed to have earned an excess profit if its surplus exceeds its direct probable maximum loss for a 1-in-250-year return period and it has earned a net underwriting gain in Florida in excess of 10 percent of earned premiums above its anticipated underwriting profit over the most recent 10-year period.
History.s. 26, ch. 2007-1.
627.06292 Reports of hurricane loss data and associated exposure data; public records exemption.
(1) Reports of hurricane loss data and associated exposure data that are specific to a particular insurance company, as reported by an insurer or a licensed rating organization to the office or to a center at a state university pursuant to s. 627.06281, are exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
(2) For the purposes of this section, “loss data and associated exposure data” means the type, age, wind mitigation features, and location of each property insured; the amount and type of coverage written on each of those properties; the amount, date, and type of damage paid for by the insurer on each property; and the amount of any reserves held by an insurer for future payments or expenses on damages associated with the date or dates of occurrence of hurricanes.
(3) On October 1, 2011, and on each October 1 thereafter, the Florida International University center that develops, maintains, and updates the public model for hurricane loss projections shall publish a report summarizing loss data and associated exposure data collected from residential property insurers and licensed rating and advisory organizations. The Florida International University center shall submit the report annually, on or before October 1, to the Governor, the President of the Senate, and the Speaker of the House of Representatives.
(a) Such report must include a summary of the data supplied by residential property insurers and licensed rating and advisory organizations from September 1 of the prior year to August 31 of the current year, and must include the following information:
1. The total amount of insurance written by county.
2. The number of property insurance policies by county.
3. The number of property insurance policies by county and by construction type.
4. The number of property insurance policies by county and by decade of construction.
5. The number of property insurance policies by county and by deductible amount.
6. The number of property insurance policies by county and by wind mitigation features when the information is supplied by the residential property insurer or licensed rating and advisory organization.
7. The total amount of hurricane losses by county and by decade of construction.
8. The total amount of hurricane losses by county and by deductible amount.
9. The total amount of hurricane losses by county and by wind mitigation features when the information is supplied by the residential property insurer or licensed rating and advisory organization.
(b) Separate compilations of the data obtained shall be presented in order to use the public model for calculating rate indications and to update, validate, or calibrate the public model. Additional detail and a description of the operation and maintenance of the public model may be included in the report.
(c) The report may not contain any information that identifies a specific insurer or policyholder.
History.s. 1, ch. 2005-264; s. 60, ch. 2007-217; s. 146, ch. 2008-4; s. 1, ch. 2010-137.
627.0645 Annual filings.
(1) Each rating organization filing rates for, and each insurer writing, any line of property or casualty insurance to which this part applies, except:
(a) Workers’ compensation and employer’s liability insurance; or
(b) Commercial property and casualty insurance as defined in s. 627.0625(1) other than commercial multiple line and commercial motor vehicle,

shall make an annual base rate filing for each such line with the office no later than 12 months after its previous base rate filing, demonstrating that its rates are not inadequate.

(2)(a) Deviations filed by an insurer to any rating organization’s base rate filing are not subject to this section.
(b) The office, after receiving a request to be exempted from the provisions of this section, may, for good cause due to insignificant numbers of policies in force or insignificant premium volume, exempt a company, by line of coverage, from filing rates or rate certification as required by this section.
(3) The filing requirements of this section shall be satisfied by one of the following methods:
(a) A rate filing prepared by an actuary which contains documentation demonstrating that the proposed rates are not excessive, inadequate, or unfairly discriminatory pursuant to the applicable rating laws and pursuant to rules of the commission.
(b) If no rate change is proposed, a filing which consists of a certification by an actuary that the existing rate level produces rates which are actuarially sound and which are not inadequate, as defined in s. 627.062.
(4) An insurer may satisfy the annual filing requirements of this section by being a member or subscriber of a licensed rating organization which complies with the requirements of this section.
(5) If an insurer does not employ or otherwise retain the services of an actuary, the insurer’s rate filing or certification that rates are actuarially sound shall be prepared by insurer personnel or consultants with a minimum of 5 years’ experience in insurance ratemaking. A rate filing or certification prepared by a consultant must be reviewed and signed by an employee of the insurer who is authorized to approve rate filings.
(6) If at the time a filing is required under this section an insurer is in the process of completing a rate review, the insurer may apply to the office for an extension of up to an additional 30 days in which to make the filing. The request for extension must be received by the office no later than the date the filing is due.
(7) Nothing in this section limits the office’s authority to review rates at any time or to find that a rate or rate change is excessive, inadequate, or unfairly discriminatory pursuant to s. 627.062.
(8) As used in this section, the term “actuary” means an individual who is a member of the Casualty Actuarial Society.
(9) If an insurer fails to meet the filing requirements of this section and does not submit the filing within 60 days after the date the filing is due, the office may, in addition to any other penalty authorized by law, order the insurer to discontinue the issuance of policies for the line of insurance for which the required filing was not made until such time as the office determines that the required filing is properly submitted.
History.s. 2, ch. 89-360; s. 1, ch. 90-192; s. 19, ch. 90-249; s. 11, ch. 90-366; ss. 21, 114, ch. 92-318; s. 1068, ch. 2003-261.
627.06501 Insurance discounts for certain persons completing driver improvement course.
(1) Any rate, rating schedule, or rating manual for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the office may provide for an appropriate reduction in premium charges as to such coverages when the principal operator on the covered vehicle has successfully completed a driver improvement course approved and certified by the Department of Highway Safety and Motor Vehicles which is effective in reducing crash or violation rates, or both, as determined pursuant to 1s. 318.1451(5). Any discount, not to exceed 10 percent, used by an insurer is presumed to be appropriate unless credible data demonstrates otherwise.
(2) The premium reduction authorized by this section shall be effective for an insured for a 3-year period after successful completion of the approved course, except that the insurer may require, as a condition of maintaining the reduction, that the insured:
(a) Not be involved in an accident for which the insured is at fault; and
(b) Not be convicted of or plead guilty or nolo contendere to a moving traffic violation.
(3) The organization offering the course shall, upon a person’s successful completion of the course, issue the person a certificate that the person may use to qualify for the premium discount authorized by this section.
(4) This section does not apply if the driver improvement course is taken in lieu of a court appearance for a traffic infraction as provided for in s. 318.14(9). However, the five-election restriction enumerated in that section is not applicable to taking the course for the purposes of receiving insurance premium reductions.
History.s. 1, ch. 97-178; s. 1069, ch. 2003-261.
1Note.Repealed by s. 14, ch. 99-5.
627.0651 Making and use of rates for motor vehicle insurance.
(1) Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on motor vehicle insurance written in this state. A copy of rates, rating schedules, and rating manuals, and changes therein, shall be filed with the office under one of the following procedures:
(a) If the filing is made at least 60 days before the proposed effective date and the filing is not implemented during the office’s review of the filing and any proceeding and judicial review, such filing shall be considered a “file and use” filing. In such case, the office shall initiate proceedings to disapprove the rate and so notify the insurer or shall finalize its review within 60 days after receipt of the filing. Notification to the insurer by the office of its preliminary findings shall toll the 60-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office does not issue notice to the insurer of its preliminary findings within 60 days after the filing.
(b) If the filing is not made in accordance with the provisions of paragraph (a), such filing shall be made as soon as practicable, but no later than 30 days after the effective date, and shall be considered a “use and file” filing. An insurer making a “use and file” filing is potentially subject to an order by the office to return to policyholders portions of rates found to be excessive, as provided in subsection (11).
(2) Upon receiving notice of a rate filing or rate change, the office shall review the rate or rate change to determine if the rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the office shall in accordance with generally accepted and reasonable actuarial techniques consider the following factors:
(a) Past and prospective loss experience within and outside this state.
(b) The past and prospective expenses.
(c) The degree of competition among insurers for the risk insured.
(d) Investment income reasonably expected by the insurer, consistent with the insurer’s investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. Such investment income shall not include income from invested surplus. The commission may adopt rules utilizing reasonable techniques of actuarial science and economics to specify the manner in which insurers shall calculate investment income attributable to motor vehicle insurance policies written in this state and the manner in which such investment income is used in the calculation of insurance rates. Such manner shall contemplate the use of a positive underwriting profit allowance in the rates that will be compatible with a reasonable rate of return plus provisions for contingencies. The total of the profit and contingency factor as specified in the filing shall be utilized in computing excess profits in conjunction with s. 627.066. In adopting such rules, the commission shall in all instances adhere to and implement the provisions of this paragraph.
(e) The reasonableness of the judgment reflected in the filing.
(f) Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida policyholders, members, or subscribers.
(g) The cost of repairs to motor vehicles.
(h) The cost of medical services, if applicable.
(i) The adequacy of loss reserves.
(j) The cost of reinsurance.
(k) Trend factors, including trends in actual losses per insured unit for the insurer making the filing.
(l) Other relevant factors which impact upon the frequency or severity of claims or upon expenses.
(3) Rates shall be deemed excessive if they are likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered.
(4) Rates shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when such replenishment is attributable to investment losses.
(5)(a) Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.
(b) The office has the responsibility to ensure that rates for private passenger vehicle insurance are adequate. To that end, the commission shall adopt rules establishing standards defining inadequate rates on private passenger vehicle insurance as defined in s. 627.041(8). In the event that the office finds that a rate or rate change is inadequate, the office shall order that a new rate or rate schedule be thereafter filed by the insurer and shall further provide information as to the manner in which noncompliance of the standards may be corrected. When a violation of this provision occurs, the office shall impose an administrative fine pursuant to s. 624.4211.
(6) One rate shall be deemed unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses.
(7) Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as rates reflect the differences with reasonable accuracy.
(8) Rates are not unfairly discriminatory if averaged broadly among members of a group; nor are rates unfairly discriminatory even though they are lower than rates for nonmembers of the group. However, such rates are unfairly discriminatory if they are not actuarially measurable and credible and sufficiently related to actual or expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against. Use of a single United States Postal Service zip code as a rating territory shall be deemed unfairly discriminatory.
(9) In reviewing the rate or rate change filed, the office may require the insurer to provide at the insurer’s expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated herein.
(10) The office may, at any time, review a rate or rate change, the pertinent records of the insurer, and market conditions; and, if the office finds on a preliminary basis that the rate or rate change may be excessive, inadequate, or unfairly discriminatory, the office shall so notify the insurer. However, the office may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for a period of 1 year after the effective date of the filing unless the office finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being so notified, the insurer or rating organization shall, within 60 days, file with the office all information which, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. In such instances and in any administrative proceeding relating to the legality of the rate, the insurer or rating organization shall carry the burden of proof by a preponderance of the evidence to show that the rate is not excessive, inadequate, or unfairly discriminatory. After the office notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the office withdraws the notification, the insurer shall not increase the rate until the earlier of 120 days after the date the notification was provided or 180 days after the date of the implementation of the rate. The office may, subject to chapter 120, disapprove without the 60-day notification any rate increase filed by an insurer within the prohibited time period or during the time that the legality of the increased rate is being contested.
(11) In the event the office finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the office shall issue an order of disapproval specifying that a new rate or rate schedule which responds to the findings of the office be filed by the insurer. The office shall further order for any “use and file” filing made in accordance with paragraph (1)(b), that premiums charged each policyholder constituting the portion of the rate above that which was actuarially justified be returned to such policyholder in the form of a credit or refund. If the office finds that an insurer’s rate or rate change is inadequate, the new rate or rate schedule filed with the office in response to such a finding shall be applicable only to new or renewal business of the insurer written on or after the effective date of the responsive filing.
(12) Any portion of a judgment entered as a result of a statutory or common-law bad faith action and any portion of a judgment entered which awards punitive damages against an insurer shall not be included in the insurer’s rate base, and shall not be used to justify a rate or rate change. Any portion of a settlement entered as a result of a statutory or common-law bad faith action identified as such and any portion of a settlement wherein an insurer agrees to pay specific punitive damages shall not be used to justify a rate or rate change. The portion of the taxable costs and attorney’s fees which is identified as being related to the bad faith and punitive damages in these judgments and settlements shall not be included in the insurer’s rate base and shall not be utilized to justify a rate or rate change.
(13)(a) Underwriting rules not contained in rating manuals shall be filed for private passenger automobile insurance and homeowners’ insurance.
(b) The submission of rates, rating schedules, and rating manuals to the office by a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this subsection for any insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating schedules, and rating manuals of such organization. All such information shall be available for public inspection, upon receipt by the office, during usual business hours.
(14)(a) Commercial motor vehicle insurance covering a fleet of 20 or more self-propelled vehicles is not subject to subsection (1), subsection (2), or subsection (9) or s. 627.0645.
(b) The rates for insurance described in this subsection may not be excessive, inadequate, or unfairly discriminatory.
(c) Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on commercial motor vehicle insurance written in this state covering a fleet of 20 or more self-propelled vehicles.
(d) An insurer must notify the office of any changes to rates for type of insurance described in this subsection no later than 30 days after the effective date of the change. The notice shall include the name of the insurer, the type or kind of insurance subject to rate change, total premium written during the immediately preceding year by the insurer for the type or kind of insurance subject to the rate change, and the average statewide percentage change in rates. Underwriting files, premiums, losses, and expense statistics for the type of insurance described in this subsection shall be maintained by the insurer and subject to examination by the office. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the factors in paragraphs (2)(a)–(l) and apply subsections (3)-(8) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
(e) A rating organization must notify the office of any changes to loss cost for the type of insurance described in this subsection no later than 30 days after the effective date of the change. The notice shall include the name of the rating organization, the type or kind of insurance subject to a loss cost change, loss costs during the immediately preceding year for the type or kind of insurance subject to the loss cost change, and the average statewide percentage change in loss cost. Loss and exposure statistics with regard to risks applicable to loss costs for a rating organization not subject to subsection (1), subsection (2), or subsection (9) shall be maintained by the rating organization and are subject to examination by the office. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the rate factors in paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
(f) In reviewing the rate, the office may require the insurer to provide at the insurer’s expense all information necessary to evaluate the condition of the company and the reasonableness of the rate according to the applicable criteria described herein.
History.s. 22, ch. 77-468; s. 8, ch. 78-374; s. 2, ch. 81-318; ss. 343, 357, 809(2nd), ch. 82-243; ss. 46, 47, 49, 79, ch. 82-386; s. 94, ch. 83-216; s. 16, ch. 85-245; s. 34, ch. 90-119; s. 114, ch. 92-318; s. 2, ch. 98-173; s. 1070, ch. 2003-261; s. 5, ch. 2010-175.
627.0652 Insurance discounts for certain persons completing safety course.
(1) Any rates, rating schedules, or rating manuals for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the office shall provide for an appropriate reduction in premium charges as to such coverages when the principal operator on the covered vehicle is an insured 55 years of age or older who has successfully completed a motor vehicle accident prevention course approved by the Department of Highway Safety and Motor Vehicles. Any discount used by an insurer is presumed to be appropriate unless credible data demonstrates otherwise.
(2) The premium reduction required by this section shall be effective for an insured for a 3-year period after successful completion of the approved course, except that the insurer may require, as a condition of maintaining the discount, that the insured:
(a) Not be involved in an accident for which the insured is at fault; and
(b) Not be convicted of or plead guilty or nolo contendere to a moving traffic violation.
(3) The Department of Highway Safety and Motor Vehicles shall approve motor vehicle accident prevention courses for the purposes of this section. The Department of Highway Safety and Motor Vehicles shall consider the competency of the personnel offering the course, the quality of the content and activities of the course with respect to its capability to prevent accidents by persons age 55 or older who complete the course, and the reasonableness of the fee for the course. The Department of Highway Safety and Motor Vehicles shall establish the minimum number of hours necessary for completion of a course. A course approved by the Department of Highway Safety and Motor Vehicles shall require each person completing the course to pass a written test given by the course evaluating the person’s knowledge of the content of the course.
(4) The organization offering the course shall, upon a person’s successful completion of the course, issue the person a certificate that the person may use to qualify for the premium discount required by this section.
(5) This section does not apply if the approved course is taken as punishment specified by a court or other governmental entity resulting from a moving traffic violation.
History.s. 1, ch. 85-244; s. 1, ch. 86-286; s. 1, ch. 88-250; ss. 22, 114, ch. 92-318; s. 1071, ch. 2003-261.
627.0653 Insurance discounts for specified motor vehicle equipment.
(1) Any rates, rating schedules, or rating manuals for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the office shall provide a premium discount if the insured vehicle is equipped with factory-installed, four-wheel antilock brakes.
(2) Each insurer writing motor vehicle comprehensive coverage in this state shall include in its rating manual discount provisions for comprehensive coverage which specifically relate to an antitheft device or vehicle recovery system utilized in the insured vehicle which are factory installed or approved by the office. The commission shall adopt, by rule, procedures under which manufacturers, distributors, or sellers may apply to the office for approval of non-factory-installed devices under this subsection. The rules must include, at a minimum, the test results that must accompany the application and the standards for approval.
(3) Any rates, rating schedules, or rating manuals for personal injury protection coverage and medical payments coverage, if offered, of a motor vehicle insurance policy filed with the office shall provide a premium discount if the insured vehicle is equipped with one or more air bags which are factory installed.
(4) The removal of a discount or credit does not constitute the imposition of, or request for, additional premium or a surcharge if the basis for the discount or credit no longer exists or is substantially eliminated.
(5) Each insurer writing motor vehicle comprehensive coverage in this state may provide a premium discount for this coverage if the insured vehicle has the complete manufacturer’s vehicle identification number permanently etched on the windshield and all windows of the vehicle. The etching must be by a tool or process that does not destroy the integrity of the glass or visibility for the operator of the motor vehicle. The identification numbers and letters must be at least 1/4 inch in height. A sticker may identify the presence of this identification system. The commission may, by rule, set forth appropriate guidelines to implement this subsection.
History.ss. 37, 52, ch. 90-119; ss. 23, 109, 114, ch. 92-318; s. 1072, ch. 2003-261.
627.06535 Electric vehicles; restrictions on imposing surcharges.An insurer may not impose a surcharge on the premium for motor vehicle insurance written on an electric vehicle, as defined in s. 320.01, if the surcharge is based on a factor such as new technology, passenger payload, weight-to-horsepower ratio, or types of materials, including composite materials or aluminum, used to manufacture the vehicle, unless the office determines from actuarial data submitted to it that the surcharge is justified.
History.s. 13, ch. 95-333; s. 1073, ch. 2003-261.
627.0654 Insurance discounts for buildings with fire sprinklers.
(1) Any rates, rating schedules, or rating manuals for a new or renewal fire insurance policy for an existing or newly constructed building, whether used for commercial or residential purposes, must provide for a premium discount if a fire sprinkler system has been installed in the building in accordance with nationally accepted fire sprinkler design standards, as adopted by the department, and if the fire sprinkler system is maintained in accordance with nationally accepted standards.
(2) The discount required by this section must provide a premium rate that is lower than that for a building in which a fire sprinkler system has not been installed. A discount used by an insurer is presumed appropriate unless credible data demonstrates otherwise.
History.s. 4, ch. 95-379.
627.0655 Policyholder loss or expense-related premium discounts.An insurer or person authorized to engage in the business of insurance in this state may include, in the premium charged an insured for any policy, contract, or certificate of insurance, a discount based on the fact that another policy, contract, or certificate of any type has been purchased by the insured from the same insurer or insurer group, the Citizens Property Insurance Corporation created under s. 627.351(6) if the same insurance agent is servicing both policies, or an insurer that has removed the policy from the Citizens Property Insurance Corporation if the same insurance agent is servicing both policies.
History.s. 20, ch. 2007-1; s. 10, ch. 2007-90; s. 19, ch. 2008-66.
627.066 Excessive profits for motor vehicle insurance prohibited.
(1) As used herein:
(a) “Private passenger automobile business” means that insurance business that is written on a family automobile policy, standard automobile policy, or personal automobile or similar private passenger automobile policy written for personal use, as opposed to commercial automobile insurance business.
(b) “Cash” means coins, currency, checks, drafts, or money orders.
(2) Each Florida private passenger automobile insurer group shall file with the office, prior to July 1 of each year on forms prescribed by the commission, the following data for Florida private passenger automobile business. The data filed for the group shall be a consolidation of the data of the individual insurers of the group. The data shall include both voluntary and joint underwriting association business, as follows:
(a) Calendar-year total limits earned premium.
(b) Accident-year incurred losses and loss adjustment expenses.
(c) The administrative and selling expenses incurred in this state or allocated to this state for the calendar year.
(d) Policyholder dividends incurred during the applicable calendar year.
(3)(a) Excessive profit has been realized if there has been an underwriting gain for the 3 most recent calendar-accident years combined which is greater than the anticipated underwriting profit plus 5 percent of earned premiums for those calendar-accident years.
(b) As used herein with respect to any 3-year period, “anticipated underwriting profit” means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during such period, the earned premiums applicable to such rate filing during such period by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by Florida business. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.
(4) Each insurer group shall also file a schedule of Florida private passenger automobile loss and loss adjustment experience for each of the 3 most recent accident years. The incurred losses and loss adjustment expenses shall be valued as of March 31 of the year following the close of the accident year, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of three evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1976, so that the reporting of 3 accident years will not take place until accident years 1977 and 1978 have become available.
(5) Each insurer group’s underwriting gain or loss for each calendar-accident year shall be computed as follows: The sum of the accident-year incurred losses and loss adjustment expenses as of March 31 of the following year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, will be subtracted from the calendar-year earned premium to determine the underwriting gain or loss.
(6) For the 3 most recent calendar-accident years, the underwriting gain or loss will be compared to the anticipated underwriting profit.
(7) If the insurer group has realized an excessive profit, the office shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the office that the refund of the excessive amounts will render a member of the insurer group financially impaired or will render it insolvent under the provisions of the Florida Insurance Code.
(8) The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the voluntary private passenger automobile policyholders of record of the insurer group on December 31 of the final compilation year.
(9) Any excess profit of an insurance company offering motor vehicle insurance shall be returned to policyholders in the form of a cash refund or a credit towards the future purchase of insurance.
(10)(a) Cash refunds to policyholders may be rounded to the nearest dollar.
(b) Data in required reports to the office may be rounded to the nearest dollar.
(c) Rounding, if elected by the insurer group, shall be applied consistently.
(11)(a) Refunds shall be completed in one of the following ways:
1. If the insurer group elects to make a cash refund, the refund shall be completed within 60 days of entry of a final order indicating that excessive profits have been realized.
2. If the insurer group elects to make refunds in the form of a credit to renewal policies, such credits shall be applied to policy renewal premium notices which are forwarded to insureds more than 60 calendar days after entry of a final order indicating that excessive profits have been realized. If an insurer group has made this election but an insured thereafter cancels his or her policy or otherwise allows the policy to terminate, the insurer group shall make a cash refund not later than 60 days after termination of such coverage.
(b) Upon completion of the renewal credits or refund payments, the insurer group shall immediately certify to the office that the refunds have been made.
(12) Any refund or renewal credit made pursuant to this section shall be treated as a policyholder dividend applicable to the year in which it is incurred, for purposes of reporting under this section for subsequent years.
History.s. 23, ch. 77-468; ss. 26, 27, ch. 80-236; s. 424, ch. 81-259; s. 2, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 2, ch. 90-366; s. 114, ch. 92-318; s. 316, ch. 97-102; s. 1074, ch. 2003-261.
627.0665 Automatic bank withdrawal agreements; notification required.Any insurer licensed to issue insurance in the state who has an automatic bank withdrawal agreement with an insured party for the payment of insurance premiums for any type of insurance shall give the named insured at least 15 days advance written notice of any increase in policy premiums prior to any automatic bank withdrawal of an increased premium.
History.ss. 1, 2, ch. 88-320; s. 114, ch. 92-318.
627.072 Making and use of rates.
(1) As to workers’ compensation and employer’s liability insurance, the following factors shall be used in the determination and fixing of rates:
(a) The past loss experience and prospective loss experience within and outside this state;
(b) The conflagration and catastrophe hazards;
(c) A reasonable margin for underwriting profit and contingencies;
(d) Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;
(e) Investment income on unearned premium reserves and loss reserves;
(f) Past expenses and prospective expenses, both those countrywide and those specifically applicable to this state; and
(g) All other relevant factors, including judgment factors, within and outside this state.
(2) As to all rates which are subject to this part, the systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.
(3) As to all rates which are subject to this part, risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that can be demonstrated to have a probable effect upon losses or expenses. Such classifications and modifications shall apply to all risks under the same or substantially the same circumstances or conditions.
(4)(a) In the case of workers’ compensation and employer’s liability insurance, the office shall consider utilizing the following methodology in rate determinations: Premiums, expenses, and expected claim costs would be discounted to a common point of time, such as the initial point of a policy year, in the determination of rates; the cash-flow pattern of premiums, expenses, and claim costs would be determined initially by using data from 8 to 10 of the largest insurers writing workers’ compensation insurance in the state; such insurers may be selected for their statistical ability to report the data on an accident-year basis and in accordance with subparagraphs (b)1., 2., and 3., for at least 21/2 years; such a cash-flow pattern would be modified when necessary in accordance with the data and whenever a radical change in the payout pattern is expected in the policy year under consideration.
(b) If the methodology set forth in paragraph (a) is utilized, to facilitate the determination of such a cash-flow pattern methodology:
1. Each insurer shall include in its statistical reporting to the rating bureau and the office the accident year by calendar quarter data for paid-claim costs;
2. Each insurer shall submit financial reports to the rating bureau and the office which shall include total incurred claim amounts and paid-claim amounts by policy year and by injury types as of December 31 of each calendar year; and
3. Each insurer shall submit to the rating bureau and the office paid-premium data on an individual risk basis in which risks are to be subdivided by premium size as follows:

Number of Risks in

Premium Range     Standard Premium Size

  (to be filled in by carrier)       $300—999

  (to be filled in by carrier)       1,000—4,999

  (to be filled in by carrier)       5,000—49,999

  (to be filled in by carrier)       50,000—99,999

  (to be filled in by carrier)       100,000 or more

Total:

History.s. 4, ch. 67-9; s. 1, ch. 70-179; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 24, ch. 77-468; s. 94, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 344, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 11, ch. 86-160; s. 114, ch. 92-318; s. 317, ch. 97-102; s. 5, ch. 2000-333; s. 94, ch. 2002-1; s. 1075, ch. 2003-261.
627.091 Rate filings; workers’ compensation and employer’s liability insurances.
(1) As to workers’ compensation and employer’s liability insurances, every insurer shall file with the office every manual of classifications, rules, and rates, every rating plan, and every modification of any of the foregoing which it proposes to use. Every insurer is authorized to include deductible provisions in its manual of classifications, rules, and rates. Such deductibles shall in all cases be in a form and manner which is consistent with the underlying purpose of chapter 440.
(2) Every such filing shall state the proposed effective date thereof, and shall indicate the character and extent of the coverage contemplated. When a filing is not accompanied by the information upon which the insurer supports the filing and the office does not have sufficient information to determine whether the filing meets the applicable requirements of this part, it shall within 15 days after the date of filing require the insurer to furnish the information upon which it supports the filing. The information furnished in support of a filing may include:
(a) The experience or judgment of the insurer or rating organization making the filing;
(b) Its interpretation of any statistical data it relies upon;
(c) The experience of other insurers or rating organizations; or
(d) Any other factors which the insurer or rating organization deems relevant.
(3) A filing and any supporting information shall be open to public inspection as provided in s. 119.07(1).
(4) An insurer may satisfy its obligation to make such filings by becoming a member of, or a subscriber to, a licensed rating organization which makes such filings and by authorizing the office to accept such filings in its behalf; but nothing contained in this chapter shall be construed as requiring any insurer to become a member or a subscriber to any rating organization.
(5) Pursuant to the provisions of s. 624.3161, the office may examine the underlying statistical data used in such filings.
(6) Whenever the committee of a recognized rating organization with responsibility for workers’ compensation and employer’s liability insurance rates in this state meets to discuss the necessity for, or a request for, Florida rate increases or decreases, the determination of Florida rates, the rates to be requested, and any other matters pertaining specifically and directly to such Florida rates, such meetings shall be held in this state and shall be subject to s. 286.011. The committee of such a rating organization shall provide at least 3 weeks’ prior notice of such meetings to the office and shall provide at least 14 days’ prior notice of such meetings to the public by publication in the Florida Administrative Weekly.
History.s. 419, ch. 59-205; s. 5, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 20, ch. 78-300; s. 95, ch. 79-40; ss. 20, 22, ch. 80-236; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 4, 9, 10, ch. 87-124; s. 63, ch. 91-108; s. 4, ch. 91-429; s. 1, ch. 93-289; s. 1076, ch. 2003-261.
627.0915 Rate filings; workers’ compensation, drug-free workplace, and safe employers.
(1) The office shall approve rating plans for workers’ compensation and employer’s liability insurance that give specific identifiable consideration in the setting of rates to employers that either implement a drug-free workplace program pursuant to s. 440.102 and rules adopted under such section or implement a safety program pursuant to provisions of the rating plan or implement both a drug-free workplace program and a safety program. The plans must be actuarially sound and must state the savings anticipated to result from such drug-testing and safety programs.
(2) An insurer offering a rate plan approved under this section shall notify the employer at the time of the initial quote for the policy and at the time of each renewal of the policy of the availability of the premium discount where a drug-free workplace plan is used by the employer pursuant to s. 440.102 and rules adopted under such section. The Financial Services Commission may adopt rules to implement the provisions of this subsection.
History.s. 51, ch. 90-201; s. 49, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429; s. 94, ch. 93-415; s. 5, ch. 98-126; s. 34, ch. 2001-91; s. 67, ch. 2002-194; s. 1077, ch. 2003-261; s. 26, ch. 2004-374.
627.0916 Agricultural horse farms.Notwithstanding any other provision of this chapter to the contrary, any rates, rating schedules, or rating manuals for workers’ compensation and employer’s liability insurance filed with the office shall provide for the rates of an agricultural horse farm engaged in breeding or training to be separated into the following three rate classifications and the premium paid shall be applied proportionately according to payroll: breeding activity involving stallions; breeding activity not involving stallions, including but not limited to boarding and foaling; and training.
History.s. 96, ch. 93-415; s. 2, ch. 95-219; s. 1078, ch. 2003-261.
627.092 Workers’ Compensation Administrator.There is created within the office the position of Workers’ Compensation Administrator to monitor carrier practices in the field of workers’ compensation.
History.s. 21, ch. 78-300; s. 96, ch. 79-40; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 6, ch. 97-93; s. 1079, ch. 2003-261.
627.093 Application of s. 286.011 to workers’ compensation and employer’s liability insurances.Section 286.011 shall be applicable to every rate filing, approval or disapproval of filing, rating deviation from filing, or appeal from any of these regarding workers’ compensation and employer’s liability insurances.
History.s. 97, ch. 79-40; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.
627.096 Workers’ Compensation Rating Bureau.
(1) There is created within the office a Workers’ Compensation Rating Bureau, which shall make an investigation and study of all insurers authorized to issue workers’ compensation and employer’s liability coverage in this state. Such bureau shall study the data, statistics, schedules, or other information as it may deem necessary to assist and advise the office in its review of filings made by or on behalf of workers’ compensation and employer’s liability insurers. The commission may adopt rules requiring all workers’ compensation and employer’s liability insurers to submit to the rating bureau any data, statistics, schedules, and other information deemed necessary to the rating bureau’s study and advisement.
(2) The acquisition by the Department of Management Services of data processing software, hardware, and services necessary to carry out the provisions of this act for the department or office shall be exempt from the provisions of part I of chapter 287.
History.s. 98, ch. 79-40; s. 2, ch. 81-318; ss. 345, 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 5, 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 313, ch. 92-279; s. 55, ch. 92-326; s. 1080, ch. 2003-261.
627.101 When filing becomes effective; workers’ compensation and employer’s liability insurances.
(1) The office shall review filings as to workers’ compensation and employer’s liability insurances as soon as reasonably possible after they have been made in order to determine whether they meet the applicable requirements of this part. If the office determines that part of a rate filing does not meet the applicable requirements of this part, it may reject so much of the filing as does not meet these requirements, and approve the remainder of the filing.
(2) The office shall specifically approve the filing before it becomes effective, unless the office has concluded it to be in the public interest to hold a public hearing to determine whether the filing meets the requirements of this chapter and has given notice of such hearing to the insurer or rating organization that made the filing, and in which case the effectiveness of the filing shall be subject to the further order of the office made as provided in s. 627.111. If the office specifically disapproves the filing, the provisions of subsection (4) shall apply.
(3) An insurer or rating organization may, at the time it makes a filing with the office, request a public hearing thereon. In such event, the office shall give notice of the hearing.
(4) If the office disapproves a filing, it shall promptly give notice of such disapproval to the insurer or rating organization that made the filing, stating the respects in which it finds that the filing does not meet the requirements of this chapter. If the office approves a filing, it shall give prompt notice thereof to the insurer or rating organization that made the filing, and in which case the filing shall become effective upon such approval or upon such subsequent date as may be satisfactory to the office and the insurer or rating organization that made the filing.
History.s. 420, ch. 59-205; s. 6, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 22, ch. 78-300; s. 99, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 2, ch. 93-289; s. 1081, ch. 2003-261.
627.111 Effective date of filing.
(1) If, pursuant to s. 627.101(2), the office determines to hold a public hearing as to a filing, or it holds such a public hearing pursuant to request therefor under s. 627.101(3), it shall give written notice thereof to the rating organization or insurer that made the filing and shall hold such hearing within 30 days, and not less than 10 days prior to the date of the hearing, it shall give written notice of the hearing to the insurer or rating organization that made the filing. The office may also, in its discretion, give advance public notice of such hearing by publication of notice in one or more daily newspapers of general circulation in this state.
(2) If the order of the office disapproves the filing, the filing shall not become effective during the effectiveness of such order. If the order of the office approves the filing, the filing shall become effective upon the date of the order or upon such subsequent date as may be satisfactory to the insurer or rating organization that made the filing.
History.s. 421, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 3, ch. 93-289; s. 1082, ch. 2003-261.
627.141 Subsequent disapproval of filing; workers’ compensation and employer’s liability insurances.If at any time after a filing has been approved by it or has otherwise become effective the office finds that the filing no longer meets the requirements of this chapter, it shall issue an order specifying in what respects it finds that such filing fails to meet such requirements and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. The order shall not affect any insurance contract or policy made or issued prior to the expiration of the period set forth in the order.
History.s. 424, ch. 59-205; s. 7, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 100, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 1083, ch. 2003-261.
627.151 Basis of approval or disapproval of workers’ compensation or employer’s liability insurance filing; scope of disapproval power.
(1) In determining at any time whether to approve or disapprove a filing as to workers’ compensation or employer’s liability insurance, or to permit the filing otherwise to become effective, the office shall give consideration only to the applicable standards and factors referred to in ss. 627.062 and 627.072.
(2) As to workers’ compensation and employer’s liability insurances, no manual of classifications, rule, rating plan, rating system, plan of operation, or any modification of any of the foregoing which establishes standards for measuring variations in hazards or expense provisions, or both, shall be disapproved if the rates thereby produced meet the applicable requirements of this part.
History.s. 425, ch. 59-205; s. 8, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 101, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 1084, ch. 2003-261.
627.1615 Workers’ compensation applicant discrimination.Insurers shall not refuse to provide workers’ compensation coverage on the basis of the applicant’s premium volume.
History.s. 52, ch. 90-201; s. 50, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429.
627.162 Requirements for premium installments; delinquency, collection, and check return charges; attorney’s fees.
(1) Insurers providing workers’ compensation coverage under chapter 440 shall provide, upon request of the employer, policies providing for the payment of premiums by installment for policies with annual premiums exceeding $1,000.
(2) Insurers providing workers’ compensation coverage under chapter 440 may charge the insured a delinquency and collection fee on each installment in default for a period of not less than 5 days in an amount not to exceed $25 or 5 percent of the delinquent installment, whichever is greater. Only one such delinquency and collection fee may be collected on any such installment regardless of the period during which it remains in default.
(3) If an installment in default under this section is referred for collection to an attorney, the insured is liable for the payment of attorney’s fees not exceeding 25 percent of the sum of the installment and any delinquency and collection fee charged by the insurer.
(4) Notwithstanding other provisions of this section, an insurer may not take or receive from or charge an insured any collection fee or attorney’s fee unless the insurer has mailed a notice of the default to the insured at his or her address as shown on the records of the insurer, giving the insured at least 5 days within which to make the payment in default. A notice of cancellation sent by the insurer to the insured in accordance with s. 440.42 is legally sufficient notice of the default for purposes of this section.
(5) If a payment is made to an insurer by check or draft and the instrument is returned because of insufficient funds, the insurer may impose a charge of $20 or 5 percent of the check amount, whichever is greater.
(6) The term “insurer,” for purposes of this section, includes a commercial self-insurance fund as defined in s. 624.462, an assessable mutual insurer as defined in s. 628.6011, and a group self-insurer’s fund as defined in s. 624.4621.
History.s. 53, ch. 90-201; s. 51, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429; s. 24, ch. 92-318; s. 318, ch. 97-102; s. 28, ch. 99-3; s. 33, ch. 2003-412.
627.171 Excess rates.
(1) With written consent of the insured signed prior to the policy inception date and filed with the insurer, the insurer may use a rate in excess of the otherwise applicable filed rate on any specific risk. The signed consent form must include the filed rate as well as the excess rate for the risk insured, and a copy of the form must be maintained by the insurer for 3 years and be available for review by the office.
(2) An insurer may not use excess rates pursuant to this section for more than 10 percent of its commercial insurance policies written or renewed in each calendar year for any line of commercial insurance or for more than 5 percent of its personal lines insurance policies written or renewed in each calendar year for any line of personal insurance. In determining the 10-percent limitation for commercial insurance policies, the insurer shall exclude any workers’ compensation policy that was written for an employer who had coverage in the joint underwriting plan created by s. 627.311(5) immediately prior to the writing of the policy by the insurer and any workers’ compensation policy that was written for an employer who had been offered coverage in the joint underwriting plan but who was written a policy by the insurer in lieu of accepting the joint underwriting plan policy. These workers’ compensation policies shall be excluded from the 10-percent limitation for the first 3 years of coverage.
History.s. 427, ch. 59-205; s. 9, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 53, ch. 89-360; s. 4, ch. 91-429; s. 1085, ch. 2003-261; s. 2, ch. 2004-82.
627.191 Adherence to filings; workers’ compensation and employer’s liability insurances.No insurer or employee thereof, and no agent, shall make or issue a contract or policy of workers’ compensation or employer’s liability insurance except in accordance with the filings which are in effect for such insurer, as provided in the applicable provisions of this part, or in accordance with s. 627.171.
History.s. 429, ch. 59-205; s. 11, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 102, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.
627.192 Workers’ compensation insurance; employee leasing arrangements.
(1) The purpose of this section is to ensure that an employer who leases some or all of its workers properly obtains workers’ compensation insurance coverage for all of its employees, including those leased from or coemployed with another entity, and that premium paid by an employee leasing company is commensurate with exposure and anticipated claim experience for all employees.
(2) For purposes of the Florida Insurance Code:
(a) “Employee leasing” shall have the same meaning as set forth in s. 468.520(4).
(b) “Experience rating modification” means a factor applied to a premium to reflect a risk’s variation from the average risk. The experience modification is determined by comparing actual losses to expected losses, using the risk’s own past experience.
(c) “Leased employee” means a person performing services for a lessee under an employee leasing arrangement.
(d) “Lessee” means an entity which obtains all or part of its workforce from another entity through an employee leasing arrangement or which employs the services of an entity through an employee leasing arrangement.
(e) “Lessor” means an employee leasing company, as set forth in part XI of chapter 468, engaged in the business of or holding itself out as being in the business of employee leasing. A lessor may also be referred to as an employee leasing company.
(f) “Premium subject to dispute” means that the insured has provided a written notice of dispute to the insurer or service carrier, has initiated any applicable proceeding for resolving such disputes as prescribed by law or rating organization procedures approved by the office, or has initiated litigation regarding the premium dispute. The insured must have detailed the specific areas of dispute and provided an estimate of the premium the insured believes to be correct. The insured must have paid any undisputed portion of the bill.
(3) A lessor that obtains coverage in the voluntary workers’ compensation market may elect, with the voluntary market insurer’s knowledge and consent, to secure the coverage on leased employees through a workers’ compensation policy issued to the lessor. The insurer of the lessor may, in its discretion, take all reasonable steps to ascertain exposure under the policy and collect the appropriate premium by:
(a) Requiring the lessor to provide a complete description of lessor’s operations.
(b) Requiring periodic reporting by the lessor of covered lessees’ payroll, classifications, claims information, loss data, and jurisdictions with exposure. This reporting may be supplemented by a requirement for lessees to submit to the carrier Internal Revenue Service Form 941 or its equivalent on a quarterly basis.
(c) Auditing the lessor’s operations.
(d) Using other reasonable measures to determine the appropriate premium.
(4) A lessor that applies for coverage or is covered through the voluntary market shall also maintain and furnish to the insurer on an annual basis, and as the insurer may otherwise reasonably require, sufficient information to permit the calculation of an experience modification factor for each lessee upon termination of the employee leasing relationship. Information accruing during the term of the leasing arrangement which is used to calculate an experience modification factor for a lessee upon termination of the leasing relationship shall continue to be used in the future experience ratings of the lessor. Such information shall include:
(a) The lessee’s corporate name.
(b) The lessee’s taxpayer or employer identification number.
(c) Payroll summaries and class codes applicable to each lessee, and, if requested by the insurer, a listing of all leased employees associated with a given lessee.
(d) Claims information grouped by lessee, and any other information maintained by or readily available to the lessor that is necessary for the calculation of an experience modification factor for each lessee.
(5) In addition to any other provision of law, any material violation of this section by an employee leasing company is grounds for cancellation or nonrenewal of the lessor’s insurance policy provided that the employee leasing company has been provided a reasonable opportunity to cure the violation. If an employee leasing company has received notice that its workers’ compensation insurance policy will be canceled or nonrenewed, the leasing company shall notify by certified mail, within 15 days after receipt of the notice, all of the lessees for which there is an employee leasing arrangement covered under the policy to be canceled, except notice is not required if the employee leasing company has obtained another insurance policy with an effective date that is the same as the date of cancellation or nonrenewal.
(6) If the employee leasing arrangement with a lessee is terminated, the lessee shall be assigned an experience modification factor which reflects its experience during the experience period specified by the approved experience rating plan, including, if applicable, experience incurred for leased employees under the employee leasing arrangements. The employee leasing company shall notify the insurer of its intent to terminate any lessee relationship prior to termination when feasible. When prior notice is not feasible, the employee leasing company shall notify its insurer within 5 working days following actual termination.
(7) This section shall not have any effect on the statutory obligation, if any, of a lessee to secure workers’ compensation coverage for employees that the lessee does not coemploy or lease pursuant to an employee leasing arrangement.
(8) A lessee shall not enter into an employee leasing relationship or be eligible for workers’ compensation coverage in the voluntary market if the lessee owes its current or a prior insurer any premium for workers’ compensation insurance, or if the lessee owes its current or prior employee leasing company amounts due under the service agreement, except for premium or amounts due that are subject to dispute. For the purposes of this section and compliance with other laws and regulations, a lessor may rely on a sworn statement by the lessee that the lessee has met any and all prior premium or fee obligations, unless the lessor has actual knowledge to the contrary.
(9) Insurers shall conduct annual audits of payroll and classifications of employee leasing companies in order to ensure that the appropriate premium is charged for workers’ compensation coverage. The audits shall be conducted to ensure that all sources of payment by lessors to employees, subcontractors, and independent contractors have been reviewed and the accuracy of classifications of employees has been verified. Insurers may provide for more frequent audits of lessors based on such factors as amount of premium, type of business, loss ratios, or other relevant factors. Payroll and classification verification audit rules of insurers must include, but need not be limited to, use by the insurer of state and federal reports of employee income, payroll and other accounting records, certificates of insurance maintained by subcontractors, and duties of employees.
(10) If a lessor or a lessee fails to provide reasonable access to payroll and classification records for a payroll and classification audit, the insured shall pay a premium to the insurer not to exceed three times the most recent estimated annual premium. However, the lessor is not subject to such penalty if the failure to obtain the needed records is the direct result of the acts or omissions of the lessee.
History.s. 95, ch. 98-199; s. 95, ch. 2002-1; s. 1086, ch. 2003-261.
627.211 Deviations; workers’ compensation and employer’s liability insurances.
(1) Every member or subscriber to a rating organization shall, as to workers’ compensation or employer’s liability insurance, adhere to the filings made on its behalf by such organization; except that any such insurer may make written application to the office for permission to file a uniform percentage decrease or increase to be applied to the premiums produced by the rating system so filed for a kind of insurance, for a class of insurance which is found by the office to be a proper rating unit for the application of such uniform percentage decrease or increase, or for a subdivision of workers’ compensation or employer’s liability insurance:
(a) Comprised of a group of manual classifications which is treated as a separate unit for ratemaking purposes; or
(b) For which separate expense provisions are included in the filings of the rating organization.

Such application shall specify the basis for the modification and shall be accompanied by the data upon which the applicant relies. A copy of the application and data shall be sent simultaneously to the rating organization.

(2) Every member or subscriber to a rating organization may, as to workers’ compensation and employer’s liability insurance, file a plan or plans to use deviations that vary according to factors present in each insured’s individual risk. The insurer that files for the deviations provided in this subsection shall file the qualifications for the plans, schedules of rating factors, and the maximum deviation factors which shall be subject to the approval of the office pursuant to s. 627.091. The actual deviation which shall be used for each insured that qualifies under this subsection may not exceed the maximum filed deviation under that plan and shall be based on the merits of each insured’s individual risk as determined by using schedules of rating factors which shall be applied uniformly. Insurers shall maintain statistical data in accordance with the schedule of rating factors. Such data shall be available to support the continued use of such varying deviations.
(3) In considering an application for the deviation, the office shall give consideration to the applicable principles for ratemaking as set forth in ss. 627.062 and 627.072 and the financial condition of the insurer. In evaluating the financial condition of the insurer, the office may consider: (1) the insurer’s audited financial statements and whether the statements provide unqualified opinions or contain significant qualifications or “subject to” provisions; (2) any independent or other actuarial certification of loss reserves; (3) whether workers’ compensation and employer’s liability reserves are above the midpoint or best estimate of the actuary’s reserve range estimate; (4) the adequacy of the proposed rate; (5) historical experience demonstrating the profitability of the insurer; (6) the existence of excess or other reinsurance that contains a sufficiently low attachment point and maximums that provide adequate protection to the insurer; and (7) other factors considered relevant to the financial condition of the insurer by the office. The office shall approve the deviation if it finds it to be justified, it would not endanger the financial condition of the insurer, and it would not constitute predatory pricing. The office shall disapprove the deviation if it finds that the resulting premiums would be excessive, inadequate, or unfairly discriminatory, would endanger the financial condition of the insurer, or would result in predatory pricing. The insurer may not use a deviation unless the deviation is specifically approved by the office. An insurer may apply the premiums approved pursuant to s. 627.091 or its uniform deviation approved pursuant to this section to a particular insured according to underwriting guidelines filed with and approved by the office, such approval to be based on ss. 627.062 and 627.072.
(4) Each deviation permitted to be filed shall be effective for a period of 1 year unless terminated, extended, or modified with the approval of the office. If at any time after a deviation has been approved the office finds that the deviation no longer meets the requirements of this code, it shall notify the insurer in what respects it finds that the deviation fails to meet such requirements and specify when, within a reasonable period thereafter, the deviation shall be deemed no longer effective. The notice shall not affect any insurance contract or policy made or issued prior to the expiration of the period set forth in the notice.
(5) For purposes of this section, the office, when considering the experience of any insurer, shall consider the experience of any predecessor insurer when the business and the liabilities of the predecessor insurer were assumed by the insurer pursuant to an order of the office which approves the assumption of the business and the liabilities.
(6) The office shall submit an annual report to the President of the Senate and the Speaker of the House of Representatives by January 1 of each year which evaluates competition in the workers’ compensation insurance market in this state. The report must contain an analysis of the availability and affordability of workers’ compensation coverage and whether the current market structure, conduct, and performance are conducive to competition, based upon economic analysis and tests. The purpose of this report is to aid the Legislature in determining whether changes to the workers’ compensation rating laws are warranted. The report must also document that the office has complied with the provisions of s. 627.096 which require the office to investigate and study all workers’ compensation insurers in the state and to study the data, statistics, schedules, or other information as it finds necessary to assist in its review of workers’ compensation rate filings.
History.s. 431, ch. 59-205; s. 12, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 103, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 6, 9, 10, ch. 87-124; s. 17, ch. 90-249; s. 7, ch. 90-366; s. 4, ch. 91-429; s. 1, ch. 96-405; s. 96, ch. 2002-1; s. 1087, ch. 2003-261; s. 3, ch. 2004-82.
627.212 Workplace safety program surcharge.The office shall approve a rating plan for workers’ compensation coverage insurance that provides for carriers voluntarily to impose a surcharge of no more than 10 percent on the premium of a policyholder or fund member if that policyholder or fund member has been identified by the department as having been required to implement a safety program and having failed to establish or maintain, either in whole or in part, a safety program. The department shall adopt rules prescribing the criteria for the employee safety programs.
History.s. 97, ch. 93-415; s. 12, ch. 99-240; s. 1088, ch. 2003-261.
627.215 Excessive profits for workers’ compensation, employer’s liability, commercial property, and commercial casualty insurance prohibited.
(1)(a) Each insurer group writing workers’ compensation and employer’s liability insurance as defined in s. 624.605(1)(c), commercial property insurance as defined in s. 627.0625, commercial umbrella liability insurance as defined in s. 627.0625, or commercial casualty insurance as defined in s. 627.0625 shall file with the office prior to July 1 of each year, on a form prescribed by the commission, the following data for the component types of such insurance as provided in the form:
1. Calendar-year earned premium.
2. Accident-year incurred losses and loss adjustment expenses.
3. The administrative and selling expenses incurred in this state or allocated to this state for the calendar year.
4. Policyholder dividends applicable to the calendar year.

Nothing herein is intended to prohibit an insurer from filing on a calendar-year basis.

(b) The data filed for the group shall be a consolidation of the data of the individual insurers of the group. However, an insurer may elect to either consolidate commercial umbrella liability insurance data with commercial casualty insurance data or to separately file data for commercial umbrella liability insurance. Each insurer shall elect its method of filing commercial umbrella liability insurance at the time of filing data for accident year 1987 and shall thereafter continue filing under the same method. In the case of commercial umbrella liability insurance data reported separately, a separate excessive profits test shall be applied and the test period shall be 10 years. In the case of workers’ compensation and employer’s liability insurance, the final report for the test period including accident years 1984, 1985, and 1986 must be filed prior to July 1, 1988. In the case of commercial property and commercial casualty insurance, the final report for the test period including accident years 1987, 1988, and 1989 must be filed prior to July 1, 1991.
(2) Each insurer group writing workers’ compensation and employer’s liability insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 3 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year to be reported, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of three evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1984, so that the reporting of 3 accident years under this revised evaluation will not take place until accident years 1985 and 1986 have become available. For reporting purposes unrelated to determining excessive profits, the loss and loss adjustment experience of each accident year shall continue to be reported until each accident year has been reported at eight stages of development.
(3)(a) Each insurer group writing commercial property insurance or commercial casualty insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 3 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of 3 evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1987, which shall first be reported on or before July 1, 1989, and the reporting of 3 accident years will not take place until accident years 1988 and 1989 have become available. For medical malpractice insurance, the first year to be so reported shall be accident year 1990, which shall first be reported on or before July 1, 1992, and the reporting of 3 accident years for full inclusion of medical malpractice experience in commercial casualty insurance will not take place until accident years 1991 and 1992 become available. Accordingly, no medical malpractice insured shall be eligible for refunds or credits until the reporting period ending with calendar-accident year 1992. For reporting purposes unrelated to determining excess profits, the loss and loss adjustment experience of each accident year shall continue to be reported until each accident year has been reported at eight stages of development.
(b) Each insurer group writing commercial umbrella liability insurance which elects to file separate data for such insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 10 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year, developed to an ultimate basis, and at nine 12-month intervals thereafter, each developed to an ultimate basis, so that a total of 10 evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1987, which shall first be reported on or before October 1, 1989, and the reporting of 10 accident years will not take place until accident year 1996 data is reported.
(4) Each insurer group’s underwriting gain or loss for each calendar-accident year shall be computed as follows: The sum of the accident-year incurred losses and loss adjustment expenses as of December 31 of the year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, shall be subtracted from the calendar-year earned premium to determine the underwriting gain or loss.
(5) For the 3 most recent calendar-accident years for which data is to be filed under this section, the underwriting gain or loss shall be compared to the anticipated underwriting profit, except in the case of separately reported commercial umbrella liability insurance for which such comparison shall be made for the 10 most recent calendar-accident years.
(6) For those insurer groups writing workers’ compensation and employer’s liability insurance during the years 1984, 1985, 1986, 1987, and 1988, an excessive profit has been realized if underwriting gain is greater than the anticipated underwriting profit plus 5 percent of earned premiums for the 3 most recent calendar years for which data is to be filed under this section. Any excess profit of an insurance company offering workers’ compensation or employer’s liability insurance during this period of time, shall be returned to policyholders in the form of a cash refund or a credit toward future purchase of insurance. The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the workers’ compensation policyholders of record of the insurer group on December 31 of the final compilation year.
(7)(a) Beginning with the July 1, 1991, report for workers’ compensation insurance, employer’s liability insurance, commercial property insurance, and commercial casualty insurance, an excessive profit has been realized if the net aggregate underwriting gain for all these lines combined is greater than the net aggregate anticipated underwriting profit for these lines plus 5 percent of earned premiums for the 3 most recent calendar years for which data is to be filed under this section. For calculation purposes commercial property insurance and commercial casualty insurance shall be broken down into sublines in order to ascertain the anticipated underwriting profit factor versus the actual underwriting gain for the given subline.
(b) Beginning with the July 1, 1998, report for commercial umbrella liability insurance, if an insurer has elected to file data separately for such insurance, an excessive profit has been realized if the underwriting gain for such insurance is greater than the anticipated underwriting profit for such insurance plus 5 percent of earned premiums for the 10 most recent calendar years for which data is to be filed under this section.
(8) As used in this section with respect to any 3-year period, or with respect to any 10-year period in the case of commercial umbrella liability insurance, “anticipated underwriting profit” means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during such period, the earned premiums applicable to such rate filing during such period by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by Florida business, except that the anticipated underwriting profit for the purposes of this section shall be calculated using a profit and contingencies factor that is not less than zero. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.
(9) If the insurer group has realized an excessive profit, the office shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the office that the refund of the excessive amounts will render a member of the insurer group financially impaired or will render it insolvent under the provisions of the Florida Insurance Code.
(10) Any excess profit of an insurance company as determined on July 1, 1991, and thereafter shall be returned to policyholders in the form of a cash refund or a credit toward the future purchase of insurance. The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the policyholders of record of the insurer group on December 31 of the final compilation year.
(11)(a) Cash refunds to policyholders may be rounded to the nearest dollar.
(b) Data in required reports to the office may be rounded to the nearest dollar.
(c) Rounding, if elected by the insurer, shall be applied consistently.
(12)(a) Refunds shall be completed in one of the following ways:
1. If the insurer group elects to make a cash refund, the refund shall be completed within 60 days of entry of a final order indicating that excessive profits have been realized.
2. If the insurer group elects to make refunds in the form of a credit to renewal policies, such credits shall be applied to policy renewal premium notices which are forwarded to insureds more than 60 calendar days after entry of a final order indicating that excessive profits have been realized. If an insurer group has made this election but an insured thereafter cancels her or his policy or otherwise allows the policy to terminate, the insurer group shall make a cash refund not later than 60 days after termination of such coverage.
(b) Upon completion of the renewal credits or refund payments, the insurer group shall immediately certify to the office that the refunds have been made.
(13) Any refund or renewal credit made pursuant to this section shall be treated as a policyholder dividend applicable to the year immediately succeeding the compilation period giving rise to the refund or credit, for purposes of reporting under this section for subsequent years.
(14) The application of this law to commercial property and commercial casualty insurance, which includes commercial umbrella liability insurance, ceases on January 1, 1997.
History.s. 104, ch. 79-40; ss. 21, 22, ch. 80-236; s. 425, ch. 81-259; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 7, 9, 10, ch. 87-124; s. 3, ch. 88-390; s. 2, ch. 89-225; s. 8, ch. 90-249; ss. 1, 3, ch. 90-366; s. 4, ch. 91-429; s. 15, ch. 95-276; s. 319, ch. 97-102; ss. 1, 2, ch. 97-292; s. 6, ch. 2000-333; s. 1089, ch. 2003-261.
627.221 Rating organizations; licensing; fee.
(1) A person, whether located within or outside this state, may make application to the office for a license as a rating organization. As to property or inland marine insurance, the application shall be for such kinds of insurance or subdivisions thereof or classes of risk or a part or combination thereof as are specified in the application. As to casualty and surety insurances, the application shall be for such kinds of insurance or subdivisions thereof as are specified in the application. The applicant shall file with its application:
(a) A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules, and regulations governing the conduct of its business;
(b) A list of its members and subscribers;
(c) The name and address of a resident of this state upon whom notices or orders of the office or process affecting such rating organization may be served; and
(d) A statement of its qualifications as a rating organization.

If the office finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules, and regulations governing the conduct of its business conform to the requirements of law, it shall issue a license specifying (in the case of a casualty or surety rating organization) the kinds of insurance or subdivisions thereof, or (in the case of a property insurance rating organization) the kinds of insurance or subdivisions thereof or classes of risk or a part or combination thereof, for which the applicant is authorized to act as a rating organization.

(2) Licenses issued pursuant to this section shall expire on the September 30 next following date of issuance and shall be subject to annual renewal.
(3) The fee for the license shall be in the amount specified therefor in s. 624.501. This fee, when collected, shall be deposited to the credit of the Insurance Regulatory Trust Fund.
History.s. 432, ch. 59-205; s. 17, ch. 65-269; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 346, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1090, ch. 2003-261.
627.231 Subscribers to rating organizations.
(1) Subject to rules and regulations which have been approved by the office as reasonable, each rating organization shall permit any insurer, not a member, to subscribe to its rating services. As to property and marine rating organizations, an insurer shall be so permitted to subscribe to rating services for any kind of insurance, subdivision thereof, or class of risk or a part or combination thereof for which the rating organization is authorized so to act. As to casualty and surety rating organizations, an insurer shall be so permitted to subscribe to rating services for any kind of insurance or subdivision thereof for which the rating organization is authorized so to act. The rating organization shall give notice to subscribers of proposed changes in such rules and regulations.
(2) The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber, shall, at the request of any subscriber or any such insurer, be reviewed by the office. If the office finds that such rule or regulation is unreasonable in its application to subscribers, it shall order that such rule or regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurer’s application for subscribership within 30 days after it was made, the insurer may request a review by the office as if the application had been rejected. If the office finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, it shall order the rating organization to admit the insurer as a subscriber. If it finds that the action of the rating organization was justified, it shall make an order affirming its action.
(3) Each rating organization shall furnish its rating services without discrimination to its members and subscribers.
History.s. 433, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1091, ch. 2003-261.
627.241 Notice of changes.Every rating organization shall notify the office promptly of every change in:
(1) Its constitution, its articles of agreement or association, or its certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business;
(2) Its list of members and subscribers; and
(3) The name and address of the resident of this state designated by it upon whom notices or orders of the office or process affecting such rating organization may be served.
History.s. 434, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1092, ch. 2003-261.
627.251 Bureau rules not to affect dividends.No rating organization shall adopt any rule the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.
History.s. 435, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.
627.261 Actuarial and technical services.Any rating organization may subscribe for or purchase actuarial, technical, or other services; and such services shall be available to all members and subscribers without discrimination.
History.s. 436, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.
627.281 Appeal from rating organization; workers’ compensation and employer’s liability insurance filings.
(1) Any member or subscriber to a rating organization may appeal to the office from the action or decision of such rating organization in approving or rejecting any proposed change in or addition to the workers’ compensation or employer’s liability insurance filings of such rating organization, and the office shall issue an order approving the decision of such rating organization or directing it to give further consideration to such proposal. If such appeal is from the action or decision of the rating organization in rejecting a proposed addition to its filings, the office may, in the event it finds that such action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings, on behalf of its members and subscribers, in a manner consistent with its findings, within a reasonable time after the issuance of such order.
(2) If such appeal is based upon the failure of the rating organization to make a filing on behalf of such member or subscriber which is based on a system of expense provisions which differs, in accordance with the right granted in s. 627.072(2), from the system of expense provisions included in a filing made by the rating organization, the office shall, if it grants the appeal, order the rating organization to make the requested filing for use by the appellant. In deciding such appeal, the office shall apply the applicable standards set forth in ss. 627.062 and 627.072.
History.s. 438, ch. 59-205; s. 13, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 105, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 1093, ch. 2003-261.
627.285 Independent actuarial peer review of workers’ compensation rating organization.The Financial Services Commission shall at least once every other year contract for an independent actuarial peer review and analysis of the ratemaking processes of any licensed rating organization that makes rate filings for workers’ compensation insurance, and the rating organization shall fully cooperate in the peer review. The contract shall require submission of a final report to the commission, the President of the Senate, and the Speaker of the House of Representatives by February 1. The first report shall be submitted by February 1, 2004. The costs of the independent actuarial peer review shall be paid from the Workers’ Compensation Administration Trust Fund.
History.s. 34, ch. 2003-412.
627.291 Information to be furnished insureds; appeal by insureds; workers’ compensation and employer’s liability insurances.
(1) As to workers’ compensation and employer’s liability insurances, every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate.
(2) As to workers’ compensation and employer’s liability insurances, every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his or her authorized representative, on his or her written request to review the manner in which such rating system has been applied in connection with the insurance afforded him or her. If the rating organization or insurer fails to grant or rejects such request within 30 days after it is made, the applicant may proceed in the same manner as if his or her application had been rejected. Any party affected by the action of such rating organization or insurer on such request may, within 30 days after written notice of such action, appeal to the office, which may affirm or reverse such action.
History.s. 439, ch. 59-205; s. 14, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 106, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 320, ch. 97-102; s. 1094, ch. 2003-261.
627.301 Advisory organizations.
(1) No advisory organization shall conduct its operations in this state unless and until it has filed with the office:
(a) A copy of its constitution, articles of incorporation, articles of agreement or of association, and bylaws or rules and regulations governing its activities, all duly certified by the custodian of the originals thereof;
(b) A list of its members and subscribers; and
(c) The name and address of a resident of this state upon whom notices or orders of the office or process may be served.
(2) Every such advisory organization shall notify the office promptly of every change in:
(a) Its constitution;
(b) Its articles of incorporation, agreement, or association;
(c) Its bylaws, rules and regulations governing the conduct of its business;
(d) The list of members and subscribers; and
(e) The name and address of the resident of this state designated by it upon whom notices or orders of the office or process affecting such organization may be served.
(3) No such advisory organization shall engage in any unfair or unreasonable practice with respect to such activities.
History.s. 440, ch. 59-205; s. 15, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1095, ch. 2003-261.
627.311 Joint underwriters and joint reinsurers; public records and public meetings exemptions.
(1) Every group, association, or other organization of insurers which engages in joint underwritings or joint reinsurance shall be subject to regulation with respect thereto as herein provided, subject, however, with respect to joint underwriting, to all other provisions of this chapter and, with respect to joint reinsurance, to ss. 624.15 and 624.3161.
(2) If the office finds that any activity or practice of any such group, association, or other organization is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, it may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, and requiring the discontinuance of such activity or practice.
(3) The office may, after consultation with insurers licensed to write automobile insurance in this state, approve a joint underwriting plan for purposes of equitable apportionment or sharing among insurers of automobile liability insurance and other motor vehicle insurance, as an alternate to the plan required in s. 627.351(1). All insurers authorized to write automobile insurance in this state shall subscribe to the plan and participate therein. The plan shall be subject to continuous review by the office which may at any time disapprove the entire plan or any part thereof if it determines that conditions have changed since prior approval and that in view of the purposes of the plan changes are warranted. Any disapproval by the office shall be subject to the provisions of chapter 120. The Florida Automobile Joint Underwriting Association is created under the plan. The plan and the association:
(a) Must be subject to all provisions of s. 627.351(1), except apportionment of applicants.
(b) May provide for one or more designated insurers, able and willing to provide policy and claims service, to act on behalf of all other insurers to provide insurance for applicants who are in good faith entitled to, but unable to, procure insurance through the voluntary insurance market at standard rates.
(c) Must provide that designated insurers will issue policies of insurance and provide policyholder and claims service on behalf of all insurers for the joint underwriting association.
(d) Must provide for the equitable apportionment among insurers of losses and expenses incurred.
(e) Must provide that the joint underwriting association will operate subject to the supervision and approval of a board of governors consisting of 11 individuals, including 1 who will be elected as chair. Five members of the board must be appointed by the Chief Financial Officer. Two of the Chief Financial Officer’s appointees must be chosen from the insurance industry. Any board member appointed by the Chief Financial Officer may be removed and replaced by her or him at any time without cause. Six members of the board must be appointed by the participating insurers, two of whom must be from the insurance agents’ associations. All board members, including the chair, must be appointed to serve for 2-year terms beginning annually on a date designated by the plan.
(f) Must provide that an agent appointed to a servicing carrier must be a licensed general lines agent of an insurer which is authorized to write automobile liability and physical damage insurance in the state and which is actively writing such coverage in the county in which the agent is located, or the immediately adjoining counties, or an agent who places a volume of other property and casualty insurance in an amount equal to the premium volume placed with the Florida Joint Underwriting Association. The office may, however, determine that an agent may be appointed to a servicing carrier if, after public hearing, the office finds that consumers in the agent’s operating area would not have adequate and reasonable access to the purchase of automobile insurance if the agent were not appointed to a servicing carrier.
(g) Must make available noncancelable coverage as provided in s. 627.7275(2).
(h) Must provide for the furnishing of a list of insureds and their mailing addresses upon the request of a member of the association or an insurance agent licensed to place business with an association member. The list must indicate whether the insured is currently receiving a good driver discount from the association. The plan may charge a reasonable fee to cover the cost incurred in providing the list.
(i) Must not provide a renewal credit or discount or any other inducement designed to retain a risk.
(j) Must not provide any other good driver credit or discount that is not actuarially sound. In addition to other criteria that the plan may specify, to be eligible for a good driver credit, an insured must not have any criminal traffic violations within the most recent 36-month period preceding the date the discount is received.
(k)1. Shall have no liability, and no cause of action of any nature shall arise against any member insurer or its agents or employees, agents or employees of the association, members of the board of governors of the association, the Chief Financial Officer, or the office or its representatives for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to actions for or arising out of breach of any contract or agreement pertaining to insurance, or any willful tort.
2. Notwithstanding the requirements of s. 624.155(3)(a), as a condition precedent to bringing an action against the plan under s. 624.155, the department and the plan must have been given 90 days’ written notice of the violation. If the department returns a notice for lack of specificity, the 90-day time period shall not begin until a proper notice is filed. This notice must comply with the information requirements of s. 624.155(3)(b). Effective October 1, 2007, this subparagraph shall expire unless reenacted by the Legislature prior to that date.
(l) May require from the insured proof that he or she has obtained the mandatory types and amounts of insurance from another admitted carrier prior to the cancellation of a policy the insured obtained from the plan and prior to the return of any unearned premium the insured paid for such coverage from the plan. This paragraph does not apply to any person who provides proof of sale or inoperability of the vehicle covered under the policy purchased from the plan or relocation outside the state.
(4) The Florida Automobile Joint Underwriting Association:
(a) Shall keep the following records confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution:
1. Underwriting files, except that a policyholder or an applicant shall have access to his or her own underwriting files.
2. Claims files, until termination of all litigation and settlement of all claims arising out of the same incident. Confidential and exempt claims files may be released to other governmental agencies in the furtherance of their duties and responsibilities. The receiving agency must maintain the confidential and exempt status of the claims files.
3. Records obtained or generated by an internal auditor pursuant to a routine audit, until the audit is completed or, if the audit is conducted as part of an investigation, until the investigation is closed or ceases to be active. An investigation is considered “active” while the investigation is being conducted with a reasonable, good faith belief that it could lead to the filing of administrative, civil, or criminal proceedings.
4. Proprietary information licensed to the association under contract when the contract provides for the confidentiality of such information.
5. All information relating to the medical condition or medical status of an association employee which is not relevant to that employee’s capacity to perform his or her duties, except as otherwise provided in this paragraph. Information which is confidential and exempt shall include, but is not limited to, information relating to workers’ compensation, insurance benefits, and retirement or disability benefits.
6. All records relating to an employee’s participation in an employee assistance program designed to assist any employee who has a behavioral or medical disorder, substance abuse problem, or emotional difficulty which affects the employee’s job performance, except as otherwise provided in s. 112.0455(11).
7. Information relating to negotiations for financing, reinsurance, depopulation, or contractual services, until the conclusion of the negotiations.
8. Minutes of closed meetings regarding confidential and exempt underwriting files or confidential and exempt claims files until termination of all litigation and settlement of all claims with regard to that claim, except that information otherwise made confidential or exempt by law must be redacted.

When an authorized insurer is considering underwriting a risk insured by the association, relevant confidential and exempt underwriting files and confidential and exempt claims files may be released to the insurer, provided the insurer agrees in writing, notarized and under oath, to maintain the confidential and exempt status of such files. When a file is transferred to an insurer, that file is no longer a public record because it is not held by an agency subject to the provisions of the public records law. The association may make the following information obtained from confidential and exempt underwriting files and confidential and exempt claims files available to licensed general lines insurance agents: name, address, and telephone number of the automobile owner or insured; location of the risk; rating information; loss history; and policy type. The receiving licensed general lines insurance agent must maintain the confidential and exempt status of the information received.

(b) Shall keep portions of association meetings during which confidential and exempt underwriting files or confidential and exempt claims files are discussed exempt from the provisions of s. 286.011 and s. 24(b), Art. I of the State Constitution. All closed portions of association meetings shall be recorded by a court reporter. The court reporter shall record the times of commencement and termination of the meeting, all discussion and proceedings, the names of all persons present at any time, and the names of all persons speaking. No portion of any closed meeting shall be off the record. Subject to the provisions of this paragraph and s. 119.07(1)(d)-(f), the court reporter’s notes of any closed meeting shall be retained by the association for a minimum of 5 years. A copy of the transcript, less any confidential and exempt information, of any closed meeting during which confidential and exempt claims files are discussed shall become public as to individual claims files after settlement of that claim.
(5)(a) The office shall, after consultation with insurers, approve a joint underwriting plan of insurers which shall operate as the Florida Workers’ Compensation Joint Underwriting Association, Inc., a nonprofit entity. For the purposes of this subsection, the term “insurer” includes group self-insurance funds authorized by s. 624.4621, commercial self-insurance funds authorized by s. 624.462, assessable mutual insurers authorized under s. 628.6011, and insurers licensed to write workers’ compensation and employer’s liability insurance in this state. The purpose of the plan is to provide workers’ compensation and employer’s liability insurance to applicants who are required by law to maintain workers’ compensation and employer’s liability insurance and who are in good faith entitled to but who are unable to procure such insurance through the voluntary market. Except as provided herein, the plan must have actuarially sound rates that ensure that the plan is self-supporting.
(b) The operation of the plan is subject to the supervision of a 9-member board of governors. Each member described in subparagraph 1., subparagraph 2., subparagraph 3., or subparagraph 5. shall be appointed by the Financial Services Commission and shall serve at the pleasure of the commission. The board of governors shall be comprised of:
1. Two representatives of the 20 domestic insurers, as defined in s. 624.06(1), having the largest voluntary direct premiums written in this state for workers’ compensation and employer’s liability insurance who shall be appointed by the commission from a list of five nominees for each vacancy submitted by those 20 domestic insurers. The commission may reject all of the nominees recommended for a position and request that the insurers submit a new list of five different recommended nominees for the position who have not previously been recommended by the insurers;
2. Two representatives of the 20 foreign insurers as defined in s. 624.06(2) having the largest voluntary direct premiums written in this state for workers’ compensation and employer’s liability insurance who shall be appointed by the commission from a list of five nominees for each vacancy submitted by those 20 foreign insurers. The commission may reject all of the nominees recommended for a position and request that the insurers submit a new list of five different recommended nominees for the position who have not previously been recommended by the insurers;
3. One representative of the largest property and casualty insurance agents’ association in this state who shall be appointed by the commission from a list of five nominees for each vacancy submitted by the association. The commission may reject all of the nominees recommended for a position and request that the association submit a new list of five different recommended nominees for the position who have not previously been recommended by the association;
4. The consumer advocate appointed under s. 627.0613 or the consumer advocate’s designee; and
5. Three other persons appointed by the commission.

Each board member shall be appointed to a 4-year term and may be appointed to consecutive terms. A vacancy on the board shall be filled in the same manner as the original appointment for the unexpired portion of the term. The Financial Services Commission shall designate a member of the board to serve as chair. The meetings and records of the board of governors and plan are subject to chapters 119 and 286, unless otherwise exempted by law.

(c) The operation of the plan shall be governed by a plan of operation that is prepared at the direction of the board of governors and approved by order of the office. The plan is subject to continuous review by the office. The office may, by order, withdraw approval of all or part of a plan if the office determines that conditions have changed since approval was granted and that the purposes of the plan require changes in the plan. The plan of operation shall:
1. Authorize the board to engage in the activities necessary to implement this subsection, including, but not limited to, borrowing money.
2. Develop criteria for eligibility for coverage by the plan, including, but not limited to, documented rejection by at least two insurers which reasonably assures that insureds covered under the plan are unable to acquire coverage in the voluntary market.
3. Require notice from the agent to the insured at the time of the application for coverage that the application is for coverage with the plan and that coverage may be available through an insurer, group self-insurers’ fund, commercial self-insurance fund, or assessable mutual insurer through another agent at a lower cost.
4. Establish programs to encourage insurers to provide coverage to applicants of the plan in the voluntary market and to insureds of the plan, including, but not limited to:
a. Establishing procedures for an insurer to use in notifying the plan of the insurer’s desire to provide coverage to applicants to the plan or existing insureds of the plan and in describing the types of risks in which the insurer is interested. The description of the desired risks must be on a form developed by the plan.
b. Developing forms and procedures that provide an insurer with the information necessary to determine whether the insurer wants to write particular applicants to the plan or insureds of the plan.
c. Developing procedures for notice to the plan and the applicant to the plan or insured of the plan that an insurer will insure the applicant or the insured of the plan, and notice of the cost of the coverage offered; and developing procedures for the selection of an insuring entity by the applicant or insured of the plan.
d. Provide for a market-assistance plan to assist in the placement of employers. All applications for coverage in the plan received 45 days before the effective date for coverage shall be processed through the market-assistance plan. A market-assistance plan specifically designed to serve the needs of small, good policyholders as defined by the board must be reviewed and updated periodically.
5. Provide for policy and claims services to the insureds of the plan of the nature and quality provided for insureds in the voluntary market.
6. Provide for the review of applications for coverage with the plan for reasonableness and accuracy, using any available historic information regarding the insured.
7. Provide for procedures for auditing insureds of the plan which are based on reasonable business judgment and are designed to maximize the likelihood that the plan will collect the appropriate premiums.
8. Authorize the plan to terminate the coverage of and refuse future coverage for any insured that submits a fraudulent application to the plan or provides fraudulent or grossly erroneous records to the plan or to any service provider of the plan in conjunction with the activities of the plan.
9. Establish service standards for agents who submit business to the plan.
10. Establish criteria and procedures to prohibit any agent who does not adhere to the established service standards from placing business with the plan or receiving, directly or indirectly, any commissions for business placed with the plan.
11. Provide for the establishment of reasonable safety programs for all insureds in the plan. All insureds of the plan must participate in the safety program.
12. Authorize the plan to terminate the coverage of and refuse future coverage to any insured who fails to pay premiums or surcharges when due; who, at the time of application, is delinquent in payments of workers’ compensation or employer’s liability insurance premiums or surcharges owed to an insurer, group self-insurers’ fund, commercial self-insurance fund, or assessable mutual insurer licensed to write such coverage in this state; or who refuses to substantially comply with any safety programs recommended by the plan.
13. Authorize the board of governors to provide the goods and services required by the plan through staff employed by the plan, through reasonably compensated service providers who contract with the plan to provide services as specified by the board of governors, or through a combination of employees and service providers.
a. Purchases that equal or exceed $2,500 but are less than or equal to $25,000, shall be made by receipt of written quotes, telephone quotes, or informal bids, whenever practical. The procurement of goods or services valued over $25,000 is subject to competitive solicitation, except in situations in which the goods or services are provided by a sole source or are deemed an emergency purchase, or the services are exempted from competitive-solicitation requirements under s. 287.057(3)(f). Justification for the sole-sourcing or emergency procurement must be documented. Contracts for goods or services valued at or over $100,000 are subject to board approval.
b. The board shall determine whether it is more cost-effective and in the best interests of the plan to use legal services provided by in-house attorneys employed by the plan rather than contracting with outside counsel. In making such determination, the board shall document its findings and shall consider the expertise needed; whether time commitments exceed in-house staff resources; whether local representation is needed; the travel, lodging, and other costs associated with in-house representation; and such other factors that the board determines are relevant.
14. Provide for service standards for service providers, methods of determining adherence to those service standards, incentives and disincentives for service, and procedures for terminating contracts for service providers that fail to adhere to service standards.
15. Provide procedures for selecting service providers and standards for qualification as a service provider that reasonably assure that any service provider selected will continue to operate as an ongoing concern and is capable of providing the specified services in the manner required.
16. Provide for reasonable accounting and data-reporting practices.
17. Provide for annual review of costs associated with the administration and servicing of the policies issued by the plan to determine alternatives by which costs can be reduced.
18. Authorize the acquisition of such excess insurance or reinsurance as is consistent with the purposes of the plan.
19. Provide for an annual report to the office on a date specified by the office and containing such information as the office reasonably requires.
20. Establish multiple rating plans for various classifications of risk which reflect risk of loss, hazard grade, actual losses, size of premium, and compliance with loss control. At least one of such plans must be a preferred-rating plan to accommodate small-premium policyholders with good experience as defined in sub-subparagraph 22.a.
21. Establish agent commission schedules.
22. For employers otherwise eligible for coverage under the plan, establish three tiers of employers meeting the criteria and subject to the rate limitations specified in this subparagraph.
a. Tier One.
(I) Criteria; rated employers.An employer that has an experience modification rating shall be included in Tier One if the employer meets all of the following:
(A) The experience modification is below 1.00.
(B) The employer had no lost-time claims subsequent to the applicable experience modification rating period.
(C) The total of the employer’s medical-only claims subsequent to the applicable experience modification rating period did not exceed 20 percent of premium.
(II) Criteria; non-rated employers.An employer that does not have an experience modification rating shall be included in Tier One if the employer meets all of the following:
(A) The employer had no lost-time claims for the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan.
(B) The total of the employer’s medical-only claims for the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan did not exceed 20 percent of premium.
(C) The employer has secured workers’ compensation coverage for the entire 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan.
(D) The employer is able to provide the plan with a loss history generated by the employer’s prior workers’ compensation insurer, except if the employer is not able to produce a loss history due to the insolvency of an insurer, the receiver shall provide to the plan, upon the request of the employer or the employer’s agent, a copy of the employer’s loss history from the records of the insolvent insurer if the loss history is contained in records of the insurer which are in the possession of the receiver. If the receiver is unable to produce the loss history, the employer may, in lieu of the loss history, submit an affidavit from the employer and the employer’s insurance agent setting forth the loss history.
(E) The employer is not a new business.
(III) Premiums.The premiums for Tier One insureds shall be set at a premium level 25 percent above the comparable voluntary market premiums until the plan has sufficient experience as determined by the board to establish an actuarially sound rate for Tier One, at which point the board shall, subject to paragraph (e), adjust the rates, if necessary, to produce actuarially sound rates, provided such rate adjustment shall not take effect prior to January 1, 2007.
b. Tier Two.
(I) Criteria; rated employers.An employer that has an experience modification rating shall be included in Tier Two if the employer meets all of the following:
(A) The experience modification is equal to or greater than 1.00 but not greater than 1.10.
(B) The employer had no lost-time claims subsequent to the applicable experience modification rating period.
(C) The total of the employer’s medical-only claims subsequent to the applicable experience modification rating period did not exceed 20 percent of premium.
(II) Criteria; non-rated employers.An employer that does not have any experience modification rating shall be included in Tier Two if the employer is a new business. An employer shall be included in Tier Two if the employer has less than 3 years of loss experience in the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan and the employer meets all of the following:
(A) The employer had no lost-time claims for the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan.
(B) The total of the employer’s medical-only claims for the 3-year period immediately preceding the inception date or renewal date of the employer’s coverage under the plan did not exceed 20 percent of premium.
(C) The employer is able to provide the plan with a loss history generated by the workers’ compensation insurer that provided coverage for the portion or portions of such period during which the employer had secured workers’ compensation coverage, except if the employer is not able to produce a loss history due to the insolvency of an insurer, the receiver shall provide to the plan, upon the request of the employer or the employer’s agent, a copy of the employer’s loss history from the records of the insolvent insurer if the loss history is contained in records of the insurer which are in the possession of the receiver. If the receiver is unable to produce the loss history, the employer may, in lieu of the loss history, submit an affidavit from the employer and the employer’s insurance agent setting forth the loss history.
(III) Premiums.The premiums for Tier Two insureds shall be set at a rate level 50 percent above the comparable voluntary market premiums until the plan has sufficient experience as determined by the board to establish an actuarially sound rate for Tier Two, at which point the board shall, subject to paragraph (e), adjust the rates, if necessary, to produce actuarially sound rates, provided such rate adjustment shall not take effect prior to January 1, 2007.
c. Tier Three.
(I) Eligibility.An employer shall be included in Tier Three if the employer does not meet the criteria for Tier One or Tier Two.
(II) Rates.The board shall establish, subject to paragraph (e), and the plan shall charge, actuarially sound rates for Tier Three insureds.
23. For Tier One or Tier Two employers which employ no nonexempt employees or which report payroll which is less than the minimum wage hourly rate for one full-time employee for 1 year at 40 hours per week, the plan shall establish actuarially sound premiums, provided, however, that the premiums may not exceed $2,500. These premiums shall be in addition to the fee specified in subparagraph 26. When the plan establishes actuarially sound rates for all employers in Tier One and Tier Two, the premiums for employers referred to in this paragraph are no longer subject to the $2,500 cap.
24. Provide for a depopulation program to reduce the number of insureds in the plan. If an employer insured through the plan is offered coverage from a voluntary market carrier:
a. During the first 30 days of coverage under the plan;
b. Before a policy is issued under the plan;
c. By issuance of a policy upon expiration or cancellation of the policy under the plan; or
d. By assumption of the plan’s obligation with respect to an in-force policy,

that employer is no longer eligible for coverage through the plan. The premium for risks assumed by the voluntary market carrier must be no greater than the premium the insured would have paid under the plan, and shall be adjusted upon renewal to reflect changes in the plan rates and the tier for which the insured would qualify as of the time of renewal. The insured may be charged such premiums only for the first 3 years of coverage in the voluntary market. A premium under this subparagraph is deemed approved and is not an excess premium for purposes of s. 627.171.

25. Require that policies issued and applications must include a notice that the policy could be replaced by a policy issued from a voluntary market carrier and that, if an offer of coverage is obtained from a voluntary market carrier, the policyholder is no longer eligible for coverage through the plan. The notice must also specify that acceptance of coverage under the plan creates a conclusive presumption that the applicant or policyholder is aware of this potential.
26. Require that each application for coverage and each renewal premium be accompanied by a nonrefundable fee of $475 to cover costs of administration and fraud prevention. The board may, with the prior approval of the office, increase the amount of the fee pursuant to a rate filing to reflect increased costs of administration and fraud prevention. The fee is not subject to commission and is fully earned upon commencement of coverage.
(d)1. The funding of the plan shall include premiums as provided in subparagraph (c)22. and assessments as provided in this paragraph.
2.a. If the board determines that a deficit exists in Tier One or Tier Two or that there is any deficit remaining attributable to any of the plan’s former subplans and that the deficit cannot be fully funded by using policyholder surplus attributable to former subplan C or, if the surplus in the former subplan C does not fully fund the deficit, the board shall request the office to levy, by order, a deficit assessment against premiums charged to insureds for workers’ compensation insurance by insurers as defined in s. 631.904(5). The office shall issue the order after verifying the amount of the deficit. The assessment shall be specified as a percentage of future premium collections, as recommended by the board and approved by the office. The same percentage shall apply to premiums on all workers’ compensation policies issued or renewed during the 12-month period beginning on the effective date of the assessment, as specified in the order.
b. With respect to each insurer collecting premiums that are subject to the assessment, the insurer shall collect the assessment at the same time as the insurer collects the premium payment for each policy and shall remit the assessments collected to the plan as provided in the order issued by the office. The office shall verify the accurate and timely collection and remittance of deficit assessments and shall report such information to the board. Each insurer collecting assessments shall provide such information with respect to premiums and collections as may be required by the office to enable the office to monitor and audit compliance with this paragraph.
c. Deficit assessments are not considered part of an insurer’s rate, are not premium, and are not subject to the premium tax, to the assessments under ss. 440.49 and 440.51, to the surplus lines tax, to any fees, or to any commissions. The deficit assessment imposed shall become plan funds at the moment of collection and shall not constitute income to the insurer for any purpose, including financial reporting on the insurer’s income statement. An insurer is liable for all assessments that the insurer collects and must treat the failure of an insured to pay an assessment as a failure to pay premium. An insurer is not liable for uncollectible assessments.
d. When an insurer is required to return unearned premium, the insurer shall also return any collected assessments attributable to the unearned premium.
e. Deficit assessments as described in this subparagraph shall not be levied after July 1, 2012.
3.a. All policies issued to Tier Three insureds shall be assessable. All Tier Three assessable policies must be clearly identified as assessable by containing, in contrasting color and in not less than 10-point type, the following statement:

“This is an assessable policy. If the plan is unable to pay its obligations, policyholders will be required to contribute on a pro rata earned premium basis the money necessary to meet any assessment levied.”

b. The board may from time to time assess Tier Three insureds to whom the plan has issued assessable policies for the purpose of funding plan deficits. Any such assessment shall be based upon a reasonable actuarial estimate of the amount of the deficit, taking into account the amount needed to fund medical and indemnity reserves and reserves for incurred but not reported claims, and allowing for general administrative expenses, the cost of levying and collecting the assessment, a reasonable allowance for estimated uncollectible assessments, and allocated and unallocated loss adjustment expenses.
c. Each Tier Three insured’s share of a deficit shall be computed by applying to the premium earned on the insured’s policy or policies during the period to be covered by the assessment the ratio of the total deficit to the total premiums earned during such period upon all policies subject to the assessment. If one or more Tier Three insureds fail to pay an assessment, the other Tier Three insureds shall be liable on a proportionate basis for additional assessments to fund the deficit. The plan may compromise and settle individual assessment claims without affecting the validity of or amounts due on assessments levied against other insureds. The plan may offer and accept discounted payments for assessments which are promptly paid. The plan may offset the amount of any unpaid assessment against unearned premiums which may otherwise be due to an insured. The plan shall institute legal action when necessary and appropriate to collect the assessment from any insured who fails to pay an assessment when due.
d. The venue of a proceeding to enforce or collect an assessment or to contest the validity or amount of an assessment shall be in the Circuit Court of Leon County.
e. If the board finds that a deficit in Tier Three exists for any period and that an assessment is necessary, the board shall certify to the office the need for an assessment. No sooner than 30 days after the date of such certification, the board shall notify in writing each insured who is to be assessed that an assessment is being levied against the insured, and informing the insured of the amount of the assessment, the period for which the assessment is being levied, and the date by which payment of the assessment is due. The board shall establish a date by which payment of the assessment is due, which shall be no sooner than 30 days nor later than 120 days after the date on which notice of the assessment is mailed to the insured.
f. Whenever the board makes a determination that the plan does not have a sufficient cash basis to meet 6 months of projected cash needs due to a deficit in Tier Three, the board may request the department to transfer funds from the Workers’ Compensation Administration Trust Fund to the plan in an amount sufficient to fund the difference between the amount available and the amount needed to meet a 6-month projected cash need as determined by the board and verified by the office, subject to the approval of the Legislative Budget Commission. If the Legislative Budget Commission approves a transfer of funds under this sub-subparagraph, the plan shall report to the Legislature the transfer of funds and the Legislature shall review the plan during the next legislative session or the current legislative session, if the transfer occurs during a legislative session. This sub-subparagraph shall not apply until the plan determines and the office verifies that assessments collected by the plan pursuant to sub-subparagraph b. are insufficient to fund the deficit in Tier Three and to meet 6 months of projected cash needs.
4. The plan may offer rating, dividend plans, and other plans to encourage loss prevention programs.
(e) For rates and rating plans effective on or after January 1, 2008, the plan shall establish and use its rates and rating plans, and the plan may establish and use changes in rating plans at any time, but no more frequently than two times per any rating class for any calendar year. By December 1 of each year thereafter, except as provided in subparagraph (c)22., the board shall establish and use actuarially sound rates for use by the plan to assure that the plan is self-funding while those rates are in effect. Such rates and rating plans must be filed with the office within 30 calendar days after their effective dates, and shall be considered a “use and file” filing. Any disapproval by the office must have an effective date that is at least 60 days from the date of disapproval of the rates and rating plan and must have prospective effect only. The plan shall be subject to any order by the office to return to policyholders any portion of the rates disapproved by the office. The office may not disapprove any rates or rating plans unless it demonstrates that such rates and rating plans are excessive, inadequate, or unfairly discriminatory.
(f) No later than June 1 of each year, the plan shall obtain an independent actuarial certification of the results of the operations of the plan for prior years, and shall furnish a copy of the certification to the office. If, after the effective date of the plan, the projected ultimate incurred losses and expenses and dividends for prior years exceed collected premiums, accrued net investment income, and prior assessments for prior years, the certification is subject to review and approval by the office before it becomes final.
(g) Whenever a deficit exists, the plan shall, within 90 days, provide the office with a program to eliminate the deficit within a reasonable time. The deficit may be funded through increased premiums charged to insureds of the plan for subsequent years, through the use of policyholder surplus attributable to any year, including policyholder surplus in former subplan C as authorized in subparagraph (d)2., through the use of assessments as provided in subparagraph (d)2., and through assessments on assessable policies as provided in subparagraph (d)3. Any entity that was a policyholder of former subplan C is not subject to any assessments that are attributable to deficits in former subplan C.
(h) Any premium or assessments collected by the plan in excess of the amount necessary to fund projected ultimate incurred losses and expenses of the plan and not paid to insureds of the plan in conjunction with loss prevention or dividend programs shall be retained by the plan for future use. Any state funds received by the plan in excess of the amount necessary to fund deficits in subplan D or any tier shall be returned to the state.
(i) The decisions of the board of governors do not constitute final agency action and are not subject to chapter 120.
(j) Policies for insureds shall be issued by the plan.
(k) The plan created under this subsection is liable only for payment for losses arising under policies issued by the plan with dates of accidents occurring on or after January 1, 1994.
(l) Plan losses are the sole and exclusive responsibility of the plan, and payment for such losses must be funded in accordance with this subsection and must not come, directly or indirectly, from insurers or any guaranty association for such insurers.
(m) Senior managers and officers, as defined in the plan of operation, and members of the board of governors are subject to the provisions of ss. 112.313, 112.3135, 112.3143, 112.3145, 112.316, and 112.317. Senior managers, officers, and board members are also required to file such disclosures with the Commission on Ethics and the Office of Insurance Regulation. The executive director of the plan or his or her designee shall notify each newly appointed and existing appointed member of the board of governors, senior manager, and officer of his or her duty to comply with the reporting requirements of s. 112.3145. At least quarterly, the executive director of the plan or his or her designee shall submit to the Commission on Ethics a list of names of the senior managers, officers, and members of the board of governors who are subject to the public disclosure requirements under s. 112.3145. Notwithstanding s. 112.313, an employee, officer, owner, or director of an insurance agency, insurance company, or other insurance entity may be a member of the board of governors unless such employee, officer, owner, or director of an insurance agency, insurance company, other insurance entity, or an affiliate provides policy issuance, policy administration, underwriting, claims handling, or payroll audit services. Notwithstanding s. 112.3143, such board member may not participate in or vote on a matter if the insurance agency, insurance company, or other insurance entity would obtain a special or unique benefit that would not apply to other similarly situated insurance entities.
(n) On or before July 1 of each year, employees of the plan shall sign and submit a statement to the plan attesting that they do not have a conflict of interest as defined in part III of chapter 112. As a condition of employment, all prospective employees shall sign and submit a conflict-of-interest statement to the plan.
(o) Any senior manager or officer of the plan who is employed by the plan as of January 1, 2008, regardless of the date of hire, and who subsequently retires or terminates employment may not represent another person or entity before the plan for 2 years after retirement or termination of employment from the plan.
(p) No part of the income of the plan may inure to the benefit of any private person.
(q) Notwithstanding ss. 112.3148 and 112.3149 or other provision of law, an employee or board member may not knowingly accept, directly or indirectly, any expenditure or gift from a person or entity, or an employee or representative of such person or entity, which has a contractual relationship with the plan or is under consideration for a contract. An employee or board member who fails to comply with paragraph (m) or this paragraph is subject to penalties provided under s. 112.317.
(r) This section does not prohibit the plan from providing insurance coverage to any employer with whom a former employee of the plan is affiliated or employing or reemploying any former employee of the plan in a part-time, full-time, temporary, or permanent capacity, so long as such employment does not violate any provision of part III of chapter 112.
(s) Neither the plan nor any member of the board of governors is liable for monetary damages to any person for any statement, vote, decision, or failure to act, regarding the management or policies of the plan, unless:
1. The member breached or failed to perform her or his duties as a member; and
2. The member’s breach of, or failure to perform, duties constitutes:
a. A violation of the criminal law, unless the member had reasonable cause to believe her or his conduct was not unlawful. A judgment or other final adjudication against a member in any criminal proceeding for violation of the criminal law estops that member from contesting the fact that her or his breach, or failure to perform, constitutes a violation of the criminal law; but does not estop the member from establishing that she or he had reasonable cause to believe that her or his conduct was lawful or had no reasonable cause to believe that her or his conduct was unlawful;
b. A transaction from which the member derived an improper personal benefit, either directly or indirectly; or
c. Recklessness or any act or omission that 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 sub-subparagraph, the term “recklessness” means the acting, or omission to act, in conscious disregard of a risk:
(I) Known, or so obvious that it should have been known, to the member; and
(II) Known to the member, 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 act or omission.
(t) No insurer shall provide workers’ compensation and employer’s liability insurance to any person who is delinquent in the payment of premiums, assessments, penalties, or surcharges owed to the plan or to any person who is an affiliated person of a person who is delinquent in the payment of premiums, assessments, penalties, or surcharges owed to the plan. For purposes of this paragraph, the term “affiliated person” of another person means:
1. The spouse of such other natural person;
2. Any person who directly or indirectly owns or controls, or holds with the power to vote, 5 percent or more of the outstanding voting securities of such other person;
3. Any person who directly or indirectly owns 5 percent or more of the outstanding voting securities that are directly or indirectly owned or controlled, or held with the power to vote, by such other person;
4. Any person or group of persons who directly or indirectly control, are controlled by, or are under common control with such other person;
5. Any officer, director, trustee, partner, owner, manager, joint venturer, or employee, or other person performing duties similar to persons in those positions, of such other persons; or
6. Any person who has an officer, director, trustee, partner, or joint venturer in common with such other person.
(u) Effective July 1, 2004, the plan is exempt from the premium tax under s. 624.509 and any assessments under ss. 440.49 and 440.51.
(v) The Office of Insurance Regulation shall perform a comprehensive market conduct examination of the plan periodically to determine compliance with its plan of operation and internal operating policies and procedures.
(w) Upon dissolution, the assets of the plan shall be applied first to pay all debts, liabilities, and obligations of the plan, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the plan shall become property of the state and shall be deposited in the Workers’ Compensation Administration Trust Fund. However, dissolution may not take effect as long as the plan has financial obligations outstanding unless adequate provision has been made for the payment of financial obligations pursuant to the documents authorizing the financial obligations.
(6) Each joint underwriting plan or association created under this section is not a state agency, board, or commission. However, for the purposes of s. 199.183(1) only, the joint underwriting plan created under subsection (5) is a political subdivision of the state and is exempt from the corporate income tax.
(7) Each joint underwriting plan or association may elect to pay premium taxes on the premiums received on its behalf or may elect to have the member insurers to whom the premiums are allocated pay the premium taxes if the member insurer had written the policy. The joint underwriting plan or association shall notify the member insurers and the Department of Revenue by January 15 of each year of its election for the same year. As used in this subsection, the term “premiums received” means the consideration for insurance, by whatever name called, but does not include any policy assessment or surcharge received by the joint underwriting association as a result of apportioning losses or deficits of the association pursuant to this section.
(8) As used in this section and ss. 215.555 and 627.351, the term “collateral protection insurance” means commercial property insurance of which a creditor is the primary beneficiary and policyholder and which protects or covers an interest of the creditor arising out of a credit transaction secured by real or personal property. Initiation of such coverage is triggered by the mortgagor’s failure to maintain insurance coverage as required by the mortgage or other lending document. Collateral protection insurance is not residential coverage.
(9)(a) The Florida Automobile Joint Underwriting Association created under this section shall be deemed to have appointed its general manager as its agent to receive service of all legal process issued against the association in any civil action or proceeding in this state. Process so served shall be valid and binding upon the insurer.
(b) Service of process upon the association’s general manager as the association’s agent pursuant to such an appointment shall be the sole method of service of process upon the association.
History.s. 441, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 74-51; s. 3, ch. 76-168; s. 16, ch. 77-290; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 107, ch. 79-40; ss. 1, 2, 4, ch. 79-394; s. 238, ch. 79-400; ss. 1, 2, ch. 80-360; ss. 1, 2, ch. 80-362; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 34, ch. 89-289; s. 4, ch. 91-106; s. 64, ch. 91-108; ss. 25, 114, ch. 92-318; s. 98, ch. 93-415; s. 7, ch. 97-93; s. 321, ch. 97-102; s. 4, ch. 97-214; s. 3, ch. 98-173; s. 1, ch. 98-315; s. 66, ch. 99-5; s. 1, ch. 99-237; s. 13, ch. 99-240; s. 8, ch. 2000-150; s. 35, ch. 2001-91; s. 97, ch. 2002-1; s. 1, ch. 2003-108; s. 1, ch. 2003-169; s. 1096, ch. 2003-261; s. 35, ch. 2003-412; s. 1, ch. 2004-266; s. 46, ch. 2004-335; s. 11, ch. 2004-370; s. 156, ch. 2004-390; s. 17, ch. 2006-26; s. 3, ch. 2007-39; s. 1, ch. 2007-146; s. 147, ch. 2008-4; s. 38, ch. 2010-151.
627.312 Transitional provisions.Effective upon this act becoming a law:
(1) Notwithstanding s. 627.311(5), no policy in subplan “D” of the Florida Workers’ Compensation Joint Underwriting Association is subject to an assessment for the purpose of funding a deficit.
(2) Any policy issued by the Florida Workers’ Compensation Joint Underwriting Association with an effective date between the date on which this act becomes a law and June 30, 2004, shall be rerated and placed in the appropriate tier provided in s. 627.311(5), as amended, effective July 1, 2004, and shall be subject to the premiums and charges provided for in that section as amended.
History.s. 6, ch. 2004-266.
627.3121 Public records and public meetings exemptions.
(1) The following records held by the Florida Workers’ Compensation Joint Underwriting Association, Inc., are confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution:
(a) Underwriting files, except that a policyholder or an applicant shall be provided access to his or her own underwriting files.
(b) Claims files until termination of all litigation and the settlement of all claims arising out of the same accident, except that portions of the claims files may remain confidential or exempt if otherwise provided by law.
(c) Records obtained or generated by an auditor pursuant to a routine audit until the audit is completed or, if the audit is conducted as part of an investigation, until the investigation is closed or ceases to be active. An investigation is considered “active” while the investigation is being conducted with a reasonable, good faith belief that it could lead to the filing of administrative, civil, or criminal proceedings.
(d) Proprietary information licensed to the association under contract if the contract requires the association to maintain the confidentiality of such information.
(e) Medical records, which include information relating to the medical condition or medical status of an individual.
(f) All records relative to an employee’s participation in an employee assistance program upon the entrance of the employee into the program, except as otherwise provided in s. 440.102(8).
(g) Information relating to negotiations for financing, reinsurance, reinsurance commutation agreements, depopulation, or contractual services until the conclusion of the negotiations.
(h) Reports provided to or submitted by the association regarding suspected fraud or other criminal activity and producer appeals and related reporting regarding suspected misconduct until such investigation is closed or ceases to be active.
(i) Information received from the Department of Revenue regarding payroll information and client lists of employee leasing companies obtained pursuant to ss. 440.381 and 468.529.
(j) A public record prepared by an attorney retained by the association to protect or represent the interests of the association, or prepared at the attorney’s express direction, that reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association. This protection is not waived by the release of such public record to another employee or officer of the same association or any person consulted by the association attorney.
(2)(a) The association may release confidential and exempt underwriting files and claims files to:
1. A carrier that is considering underwriting a risk insured by the association;
2. A producer seeking to place such a risk with such a carrier; or
3. Another entity seeking to arrange voluntary market coverage for association risks.
(b) Prior to the release authorized in paragraph (a), the carrier, producer, or other entity must agree in writing, notarized and under oath, to maintain the confidential and exempt status of such file until that carrier, producer, or other entity agrees to underwrite the risk or provide voluntary market coverage.
(3) Records made confidential and exempt by this section may be released, upon written request, to another agency in the performance of that agency’s official duties and responsibilities.
(4)(a) That portion of a meeting of the association’s board of governors, or any subcommittee of the association’s board, at which records made confidential and exempt by this section are discussed is exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution.
(b) All exempt portions of meetings shall be recorded and transcribed. The board shall record the times of commencement and termination of the meeting, all discussion and proceedings, the names of all persons present at any time, and the names of all persons speaking. An exempt portion of any meeting may not be off the record.
(c) Subject to this section and s. 119.021(2), the court reporter’s notes of any exempt portion of a meeting shall be retained by the association for a minimum of 5 years.
(d)1. A transcript and minutes of exempt portions of meetings are confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
2. Those portions of the transcript or the minutes pertaining to a confidential and exempt claims file are no longer confidential and exempt upon termination of all litigation with regard to that claim.
(5) This section is subject to the Open Government Sunset Review Act in accordance with s. 119.15 and shall stand repealed on October 2, 2012, unless reviewed and saved from repeal through reenactment by the Legislature.
History.s. 1, ch. 2007-202.
627.313 Workers’ Compensation Joint Underwriting Plan; audit requirements.The Workers’ Compensation Joint Underwriting Association is subject to the Florida Single Audit Act, as provided in s. 215.97, if the association expends a total amount of state financial assistance equal to or in excess of $300,000 in any fiscal year. Such audit reports shall be submitted to the President of the Senate, the Speaker of the House of Representatives, and the Governor pursuant to s. 215.97.
History.s. 4, ch. 2004-266.
627.314 Concerted action by two or more insurers.
(1) Subject to and in compliance with the provisions of this part authorizing insurers to be members or subscribers of rating or advisory organizations or to engage in joint underwriting or joint reinsurance, two or more insurers may act in concert with each other and with others with respect to any matters pertaining to:
(a) The making of rates or rating systems except for private passenger automobile insurance rates;
(b) The preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections, and investigations;
(c) The furnishing of loss or expense statistics or other information and data; or
(d) The carrying on of research.
(2) With respect to any matters pertaining to the making of rates or rating systems; the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections, and investigations; the furnishing of loss or expense statistics or other information and data; or the carrying on of research, two or more authorized insurers having a common ownership or operating in the state under common management or control are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer. To the extent that such matters relate to cosurety bonds, two or more authorized insurers executing such bonds are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer.
(3)(a) Members and subscribers of rating or advisory organizations may use the rates, rating systems, underwriting rules, or policy or bond forms of such organizations, either consistently or intermittently; but, except as provided in subsection (2) and ss. 627.311 and 627.351, they shall not agree with each other or rating organizations or others to adhere thereto.
(b) The fact that two or more authorized insurers, whether or not members or subscribers of a rating or advisory organization, use, either consistently or intermittently, the rates or rating systems made or adopted by a rating organization or the underwriting rules or policy or bond forms prepared by a rating or advisory organization shall not be sufficient in itself to support a finding that an agreement to so adhere exists, and may be used only for the purpose of supplementing or explaining direct evidence of the existence of any such agreement.
(c) This subsection does not apply as to workers’ compensation and employer’s liability insurances.
(4) Licensed rating organizations and authorized insurers are authorized to exchange information and experience data with rating organizations and insurers in this and other states and may consult with them with respect to ratemaking and the application of rating systems.
(5) Upon compliance with the provisions of this part applicable thereto, any rating organization or advisory organization, and any group, association, or other organization of authorized insurers which engages in joint underwriting or joint reinsurance through such organization or by standing agreement among the members thereof, may conduct operations in this state. As respects insurance risks or operations in this state, no insurer shall be a member or subscriber of any such organization, group, or association that has not complied with the provisions of this part applicable to it.
(6) Notwithstanding any other provisions of this part, insurers shall not participate directly or indirectly in the deliberations or decisions of rating organizations on private passenger automobile insurance. However, such rating organizations shall, upon request of individual insurers, be required to furnish at reasonable cost the rate indications resulting from the loss and expense statistics gathered by them. Individual insurers may modify the indications to reflect their individual experience in determining their own rates. Such rates shall be filed with the office for public inspection whenever requested and shall be available for public announcement only by the press, office, or insurer.
History.s. 16, ch. 67-9; s. 1, ch. 70-320; s. 1, ch. 71-6(B); s. 3, ch. 76-168; s. 1, ch. 77-457; s. 108, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1098, ch. 2003-261.
627.318 Records.Every insurer, rating organization, and advisory organization and every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance shall maintain reasonable records, of the type and kind reasonably adapted to its method of operation, of its experience or the experience of its members and of the data, statistics, or information collected or used by it in connection with the rates, rating plans, rating systems, underwriting rules, policy or bond forms, surveys, or inspections made or used by it, so that such records will be available at all reasonable times to enable the office to determine whether such organization, insurer, group, or association, and, in the case of an insurer or rating organization, every rate, rating plan, and rating system made or used by it, complies with the provisions of this part applicable to it. The maintenance of such records in the office of a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this section for any such insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating plans, rating systems, or underwriting rules of such organization. Such records shall be maintained in an office within this state or shall be made available for examination or inspection within this state by the department at any time upon reasonable notice.
History.s. 17, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 348, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1099, ch. 2003-261.
627.331 Recording and reporting of loss, expense, and claims experience; rating information.
(1) The commission may promulgate rules and statistical plans which shall thereafter be used by each insurer in the recording and reporting of its loss, expense, and claims experience, in order that the experience of all insurers may be made available at least annually in such form and detail as may be necessary to aid the office in determining whether the insurer’s activities comply with the applicable standards of this code.
(2) In promulgating such rules and plans, the commission shall give due consideration to the rating systems in use in this state and, in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states. No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system used by it, except for motor vehicle insurance as otherwise provided by law.
(3) The office may designate one or more rating organizations or other agencies to assist it in gathering such experience and making compilations thereof; and such compilations shall be made available, subject to reasonable rules adopted by the commission, to insurers and rating organizations.
History.s. 443, ch. 59-205; s. 19, ch. 67-9; ss. 13, 35, ch. 69-106; s. 1, ch. 70-75; s. 1, ch. 70-321; s. 1, ch. 70-439; s. 1, ch. 73-153; s. 1, ch. 74-320; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 27, ch. 77-468; ss. 2, 3, ch. 81-318; ss. 350, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 10, ch. 83-288; s. 1, ch. 84-352; s. 12, ch. 86-160; s. 22, ch. 89-360; s. 1, ch. 89-528; ss. 11, 35, ch. 90-119; s. 114, ch. 92-318; s. 1100, ch. 2003-261.
627.351 Insurance risk apportionment plans.
(1) MOTOR VEHICLE INSURANCE RISK APPORTIONMENT.Agreements may be made among casualty and surety insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but are unable to, procure such insurance through ordinary methods, and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the approval of the office. The office shall, after consultation with the insurers licensed to write automobile liability insurance in this state, adopt a reasonable plan or plans for the equitable apportionment among such insurers of applicants for such insurance who are in good faith entitled to, but are unable to, procure such insurance through ordinary methods, and, when such plan has been adopted, all such insurers shall subscribe thereto and shall participate therein. Such plan or plans shall include rules for classification of risks and rates therefor. The plan or plans shall make available noncancelable coverage as provided in s. 627.7275(2). Any insured placed with the plan shall be notified of the fact that insurance coverage is being afforded through the plan and not through the private market, and such notification shall be given in writing within 10 days of such placement. To assure that plan rates are made adequate to pay claims and expenses, insurers shall develop a means of obtaining loss and expense experience at least annually, and the plan shall file such experience, when available, with the office in sufficient detail to make a determination of rate adequacy. Prior to the filing of such experience with the office, the plan shall poll each member insurer as to the need for an actuary who is a member of the Casualty Actuarial Society and who is not affiliated with the plan’s statistical agent to certify the plan’s rate adequacy. If a majority of those insurers responding indicate a need for such certification, the plan shall include the certification as part of its experience filing. Such experience shall be filed with the office not more than 9 months following the end of the annual statistical period under review, together with a rate filing based on said experience. The office shall initiate proceedings to disapprove the rate and so notify the plan or shall finalize its review within 60 days of receipt of the filing. Notification to the plan by the office of its preliminary findings, which include a point of entry to the plan pursuant to chapter 120, shall toll the 60-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office does not issue notice to the plan of its preliminary findings within 60 days of the filing. In addition to provisions for claims and expenses, the ratemaking formula shall include a factor for projected claims trending and 5 percent for contingencies. In no instance shall the formula include a renewal discount for plan insureds. However, the plan shall reunderwrite each insured on an annual basis, based upon all applicable rating factors approved by the office. Trend factors shall not be found to be inappropriate if not in excess of trend factors normally used in the development of residual market rates by the appropriate licensed rating organization. Each application for coverage in the plan shall include, in boldfaced 12-point type immediately preceding the applicant’s signature, the following statement:

“THIS INSURANCE IS BEING AFFORDED THROUGH THE FLORIDA JOINT UNDERWRITING ASSOCIATION AND NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED THAT COVERAGE WITH A PRIVATE INSURER MAY BE AVAILABLE FROM ANOTHER AGENT AT A LOWER COST. AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE LOCAL YELLOW PAGES.”

The plan shall annually report to the office the number and percentage of plan insureds who are not surcharged due to their driving record.

(2) WINDSTORM INSURANCE RISK APPORTIONMENT.
(a) Agreements may be made among property insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but are unable to procure, such insurance through ordinary methods; and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the applicable provisions of this chapter.
(b) The department shall require all insurers holding a certificate of authority to transact property insurance on a direct basis in this state, other than joint underwriting associations and other entities formed pursuant to this section, to provide windstorm coverage to applicants from areas determined to be eligible pursuant to paragraph (c) who in good faith are entitled to, but are unable to procure, such coverage through ordinary means; or it shall adopt a reasonable plan or plans for the equitable apportionment or sharing among such insurers of windstorm coverage, which may include formation of an association for this purpose. As used in this subsection, the term “property insurance” means insurance on real or personal property, as defined in s. 624.604, including insurance for fire, industrial fire, allied lines, farmowners multiperil, homeowners’ multiperil, commercial multiperil, and mobile homes, and including liability coverages on all such insurance, but excluding inland marine as defined in s. 624.607(3) and excluding vehicle insurance as defined in s. 624.605(1)(a) other than insurance on mobile homes used as permanent dwellings. The department shall adopt rules that provide a formula for the recovery and repayment of any deferred assessments.
1. For the purpose of this section, properties eligible for such windstorm coverage are defined as dwellings, buildings, and other structures, including mobile homes which are used as dwellings and which are tied down in compliance with mobile home tie-down requirements prescribed by the Department of Highway Safety and Motor Vehicles pursuant to s. 320.8325, and the contents of all such properties. An applicant or policyholder is eligible for coverage only if an offer of coverage cannot be obtained by or for the applicant or policyholder from an admitted insurer at approved rates.
2.a.(I) All insurers required to be members of such association shall participate in its writings, expenses, and losses. Surplus of the association shall be retained for the payment of claims and shall not be distributed to the member insurers. Such participation by member insurers shall be in the proportion that the net direct premiums of each member insurer written for property insurance in this state during the preceding calendar year bear to the aggregate net direct premiums for property insurance of all member insurers, as reduced by any credits for voluntary writings, in this state during the preceding calendar year. For the purposes of this subsection, the term “net direct premiums” means direct written premiums for property insurance, reduced by premium for liability coverage and for the following if included in allied lines: rain and hail on growing crops; livestock; association direct premiums booked; National Flood Insurance Program direct premiums; and similar deductions specifically authorized by the plan of operation and approved by the department. A member’s participation shall begin on the first day of the calendar year following the year in which it is issued a certificate of authority to transact property insurance in the state and shall terminate 1 year after the end of the calendar year during which it no longer holds a certificate of authority to transact property insurance in the state. The commissioner, after review of annual statements, other reports, and any other statistics that the commissioner deems necessary, shall certify to the association the aggregate direct premiums written for property insurance in this state by all member insurers.
(II) Effective July 1, 2002, the association shall operate subject to the supervision and approval of a board of governors who are the same individuals that have been appointed by the Treasurer to serve on the board of governors of the Citizens Property Insurance Corporation.
(III) The plan of operation shall provide a formula whereby a company voluntarily providing windstorm coverage in affected areas will be relieved wholly or partially from apportionment of a regular assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II).
(IV) A company which is a member of a group of companies under common management may elect to have its credits applied on a group basis, and any company or group may elect to have its credits applied to any other company or group.
(V) There shall be no credits or relief from apportionment to a company for emergency assessments collected from its policyholders under sub-sub-subparagraph d.(III).
(VI) The plan of operation may also provide for the award of credits, for a period not to exceed 3 years, from a regular assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II) as an incentive for taking policies out of the Residential Property and Casualty Joint Underwriting Association. In order to qualify for the exemption under this sub-sub-subparagraph, the take-out plan must provide that at least 40 percent of the policies removed from the Residential Property and Casualty Joint Underwriting Association cover risks located in Miami-Dade, Broward, and Palm Beach Counties or at least 30 percent of the policies so removed cover risks located in Miami-Dade, Broward, and Palm Beach Counties and an additional 50 percent of the policies so removed cover risks located in other coastal counties, and must also provide that no more than 15 percent of the policies so removed may exclude windstorm coverage. With the approval of the department, the association may waive these geographic criteria for a take-out plan that removes at least the lesser of 100,000 Residential Property and Casualty Joint Underwriting Association policies or 15 percent of the total number of Residential Property and Casualty Joint Underwriting Association policies, provided the governing board of the Residential Property and Casualty Joint Underwriting Association certifies that the take-out plan will materially reduce the Residential Property and Casualty Joint Underwriting Association’s 100-year probable maximum loss from hurricanes. With the approval of the department, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the Residential Property and Casualty Joint Underwriting Association, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies removed from the Residential Property and Casualty Joint Underwriting Association.
b. Assessments to pay deficits in the association under this subparagraph shall be included as an appropriate factor in the making of rates as provided in s. 627.3512.
c. The Legislature finds that the potential for unlimited deficit assessments under this subparagraph may induce insurers to attempt to reduce their writings in the voluntary market, and that such actions would worsen the availability problems that the association was created to remedy. It is the intent of the Legislature that insurers remain fully responsible for paying regular assessments and collecting emergency assessments for any deficits of the association; however, it is also the intent of the Legislature to provide a means by which assessment liabilities may be amortized over a period of years.
d.(I) When the deficit incurred in a particular calendar year is 10 percent or less of the aggregate statewide direct written premium for property insurance for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the deficit.
(II) When the deficit incurred in a particular calendar year exceeds 10 percent of the aggregate statewide direct written premium for property insurance for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the greater of 10 percent of the deficit or 10 percent of the aggregate statewide direct written premium for property insurance for the prior calendar year for member insurers. Any remaining deficit shall be recovered through emergency assessments under sub-sub-subparagraph (III).
(III) Upon a determination by the board of directors that a deficit exceeds the amount that will be recovered through regular assessments on member insurers, pursuant to sub-sub-subparagraph (I) or sub-sub-subparagraph (II), the board shall levy, after verification by the department, emergency assessments to be collected by member insurers and by underwriting associations created pursuant to this section which write property insurance, upon issuance or renewal of property insurance policies other than National Flood Insurance policies in the year or years following levy of the regular assessments. The amount of the emergency assessment collected in a particular year shall be a uniform percentage of that year’s direct written premium for property insurance for all member insurers and underwriting associations, excluding National Flood Insurance policy premiums, as annually determined by the board and verified by the department. The department shall verify the arithmetic calculations involved in the board’s determination within 30 days after receipt of the information on which the determination was based. Notwithstanding any other provision of law, each member insurer and each underwriting association created pursuant to this section shall collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment. The emergency assessments so collected shall be transferred directly to the association on a periodic basis as determined by the association. The aggregate amount of emergency assessments levied under this sub-sub-subparagraph in any calendar year may not exceed the greater of 10 percent of the amount needed to cover the original deficit, plus interest, fees, commissions, required reserves, and other costs associated with financing of the original deficit, or 10 percent of the aggregate statewide direct written premium for property insurance written by member insurers and underwriting associations for the prior year, plus interest, fees, commissions, required reserves, and other costs associated with financing the original deficit. The board may pledge the proceeds of the emergency assessments under this sub-sub-subparagraph as the source of revenue for bonds, to retire any other debt incurred as a result of the deficit or events giving rise to the deficit, or in any other way that the board determines will efficiently recover the deficit. The emergency assessments under this sub-sub-subparagraph shall continue as long as any bonds issued or other indebtedness incurred with respect to a deficit for which the assessment was imposed remain outstanding, unless adequate provision has been made for the payment of such bonds or other indebtedness pursuant to the document governing such bonds or other indebtedness. Emergency assessments collected under this sub-sub-subparagraph are not part of an insurer’s rates, are not premium, and are not subject to premium tax, fees, or commissions; however, failure to pay the emergency assessment shall be treated as failure to pay premium.
(IV) Each member insurer’s share of the total regular assessments under sub-sub-subparagraph (I) or sub-sub-subparagraph (II) shall be in the proportion that the insurer’s net direct premium for property insurance in this state, for the year preceding the assessment bears to the aggregate statewide net direct premium for property insurance of all member insurers, as reduced by any credits for voluntary writings for that year.
(V) If regular deficit assessments are made under sub-sub-subparagraph (I) or sub-sub-subparagraph (II), or by the Residential Property and Casualty Joint Underwriting Association under sub-subparagraph (6)(b)3.a. or sub-subparagraph (6)(b)3.b., the association shall levy upon the association’s policyholders, as part of its next rate filing, or by a separate rate filing solely for this purpose, a market equalization surcharge in a percentage equal to the total amount of such regular assessments divided by the aggregate statewide direct written premium for property insurance for member insurers for the prior calendar year. Market equalization surcharges under this sub-sub-subparagraph are not considered premium and are not subject to commissions, fees, or premium taxes; however, failure to pay a market equalization surcharge shall be treated as failure to pay premium.
e. The governing body of any unit of local government, any residents of which are insured under the plan, may issue bonds as defined in s. 125.013 or s. 166.101 to fund an assistance program, in conjunction with the association, for the purpose of defraying deficits of the association. In order to avoid needless and indiscriminate proliferation, duplication, and fragmentation of such assistance programs, any unit of local government, any residents of which are insured by the association, may provide for the payment of losses, regardless of whether or not the losses occurred within or outside of the territorial jurisdiction of the local government. Revenue bonds may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and the protection and preservation of the economic stability of insurers operating in this state, and declaring it an essential public purpose to permit certain municipalities or counties to issue bonds as will provide relief to claimants and policyholders of the association and insurers responsible for apportionment of plan losses. Any such unit of local government may enter into such contracts with the association and with any other entity created pursuant to this subsection as are necessary to carry out this paragraph. Any bonds issued under this sub-subparagraph shall be payable from and secured by moneys received by the association from assessments under this subparagraph, and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds. If any of the bonds remain unsold 60 days after issuance, the department shall require all insurers subject to assessment to purchase the bonds, which shall be treated as admitted assets; each insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the insurer’s relative share of assessment liability under this subsection. An insurer shall not be required to purchase the bonds to the extent that the department determines that the purchase would endanger or impair the solvency of the insurer. The authority granted by this sub-subparagraph is additional to any bonding authority granted by subparagraph 6.
3. The plan shall also provide that any member with a surplus as to policyholders of $20 million or less writing 25 percent or more of its total countrywide property insurance premiums in this state may petition the department, within the first 90 days of each calendar year, to qualify as a limited apportionment company. The apportionment of such a member company in any calendar year for which it is qualified shall not exceed its gross participation, which shall not be affected by the formula for voluntary writings. In no event shall a limited apportionment company be required to participate in any apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds $50 million after payment of available plan funds in any calendar year. However, a limited apportionment company shall collect from its policyholders any emergency assessment imposed under sub-sub-subparagraph 2.d.(III). The plan shall provide that, if the department determines that any regular assessment will result in an impairment of the surplus of a limited apportionment company, the department may direct that all or part of such assessment be deferred. However, there shall be no limitation or deferment of an emergency assessment to be collected from policyholders under sub-sub-subparagraph 2.d.(III).
4. The plan shall provide for the deferment, in whole or in part, of a regular assessment of a member insurer under sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but not for an emergency assessment collected from policyholders under sub-sub-subparagraph 2.d.(III), if, in the opinion of the commissioner, payment of such regular assessment would endanger or impair the solvency of the member insurer. In the event a regular assessment against a member insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
5.a. The plan of operation may include deductibles and rules for classification of risks and rate modifications consistent with the objective of providing and maintaining funds sufficient to pay catastrophe losses.
b. It is the intent of the Legislature that the rates for coverage provided by the association be actuarially sound and not competitive with approved rates charged in the admitted voluntary market such that the association functions as a residual market mechanism to provide insurance only when the insurance cannot be procured in the voluntary market. The plan of operation shall provide a mechanism to assure that, beginning no later than January 1, 1999, the rates charged by the association for each line of business are reflective of approved rates in the voluntary market for hurricane coverage for each line of business in the various areas eligible for association coverage.
c. The association shall provide for windstorm coverage on residential properties in limits up to $10 million for commercial lines residential risks and up to $1 million for personal lines residential risks. If coverage with the association is sought for a residential risk valued in excess of these limits, coverage shall be available to the risk up to the replacement cost or actual cash value of the property, at the option of the insured, if coverage for the risk cannot be located in the authorized market. The association must accept a commercial lines residential risk with limits above $10 million or a personal lines residential risk with limits above $1 million if coverage is not available in the authorized market. The association may write coverage above the limits specified in this subparagraph with or without facultative or other reinsurance coverage, as the association determines appropriate.
d. The plan of operation must provide objective criteria and procedures, approved by the department, to be uniformly applied for all applicants in determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:
(I) Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and
(II) Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the association pursuant to such criteria and procedures must be construed as the private placement of insurance, and the provisions of chapter 120 do not apply.

e. If the risk accepts an offer of coverage through the market assistance program or through a mechanism established by the association, either before the policy is issued by the association or during the first 30 days of coverage by the association, and the producing agent who submitted the application to the association is not currently appointed by the insurer, the insurer shall:
(I) Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the association; or
(II) Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the association’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I). Subject to the provisions of s. 627.3517, the policies issued by the association must provide that if the association obtains an offer from an authorized insurer to cover the risk at its approved rates under either a standard policy including wind coverage or, if consistent with the insurer’s underwriting rules as filed with the department, a basic policy including wind coverage, the risk is no longer eligible for coverage through the association. Upon termination of eligibility, the association shall provide written notice to the policyholder and agent of record stating that the association policy must be canceled as of 60 days after the date of the notice because of the offer of coverage from an authorized insurer. Other provisions of the insurance code relating to cancellation and notice of cancellation do not apply to actions under this sub-subparagraph.

f. When the association enters into a contractual agreement for a take-out plan, the producing agent of record of the association policy is entitled to retain any unearned commission on the policy, and the insurer shall:
(I) Pay to the producing agent of record of the association policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the association; or
(II) Offer to allow the producing agent of record of the association policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the association’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I).

6.a. The plan of operation may authorize the formation of a private nonprofit corporation, a private nonprofit unincorporated association, a partnership, a trust, a limited liability company, or a nonprofit mutual company which may be empowered, among other things, to borrow money by issuing bonds or by incurring other indebtedness and to accumulate reserves or funds to be used for the payment of insured catastrophe losses. The plan may authorize all actions necessary to facilitate the issuance of bonds, including the pledging of assessments or other revenues.
b. Any entity created under this subsection, or any entity formed for the purposes of this subsection, may sue and be sued, may borrow money; issue bonds, notes, or debt instruments; pledge or sell assessments, market equalization surcharges and other surcharges, rights, premiums, contractual rights, projected recoveries from the Florida Hurricane Catastrophe Fund, other reinsurance recoverables, and other assets as security for such bonds, notes, or debt instruments; enter into any contracts or agreements necessary or proper to accomplish such borrowings; and take other actions necessary to carry out the purposes of this subsection. The association may issue bonds or incur other indebtedness, or have bonds issued on its behalf by a unit of local government pursuant to subparagraph (6)(q)2., in the absence of a hurricane or other weather-related event, upon a determination by the association subject to approval by the department that such action would enable it to efficiently meet the financial obligations of the association and that such financings are reasonably necessary to effectuate the requirements of this subsection. Any such entity may accumulate reserves and retain surpluses as of the end of any association year to provide for the payment of losses incurred by the association during that year or any future year. The association shall incorporate and continue the plan of operation and articles of agreement in effect on the effective date of chapter 76-96, Laws of Florida, to the extent that it is not inconsistent with chapter 76-96, and as subsequently modified consistent with chapter 76-96. The board of directors and officers currently serving shall continue to serve until their successors are duly qualified as provided under the plan. The assets and obligations of the plan in effect immediately prior to the effective date of chapter 76-96 shall be construed to be the assets and obligations of the successor plan created herein.
c. In recognition of s. 10, Art. I of the State Constitution, prohibiting the impairment of obligations of contracts, it is the intent of the Legislature that no action be taken whose purpose is to impair any bond indenture or financing agreement or any revenue source committed by contract to such bond or other indebtedness issued or incurred by the association or any other entity created under this subsection.
7. On such coverage, an agent’s remuneration shall be that amount of money payable to the agent by the terms of his or her contract with the company with which the business is placed. However, no commission will be paid on that portion of the premium which is in excess of the standard premium of that company.
8. Subject to approval by the department, the association may establish different eligibility requirements and operational procedures for any line or type of coverage for any specified eligible area or portion of an eligible area if the board determines that such changes to the eligibility requirements and operational procedures are justified due to the voluntary market being sufficiently stable and competitive in such area or for such line or type of coverage and that consumers who, in good faith, are unable to obtain insurance through the voluntary market through ordinary methods would continue to have access to coverage from the association. When coverage is sought in connection with a real property transfer, such requirements and procedures shall not provide for an effective date of coverage later than the date of the closing of the transfer as established by the transferor, the transferee, and, if applicable, the lender.
9. Notwithstanding any other provision of law:
a. The pledge or sale of, the lien upon, and the security interest in any rights, revenues, or other assets of the association created or purported to be created pursuant to any financing documents to secure any bonds or other indebtedness of the association shall be and remain valid and enforceable, notwithstanding the commencement of and during the continuation of, and after, any rehabilitation, insolvency, liquidation, bankruptcy, receivership, conservatorship, reorganization, or similar proceeding against the association under the laws of this state or any other applicable laws.
b. No such proceeding shall relieve the association of its obligation, or otherwise affect its ability to perform its obligation, to continue to collect, or levy and collect, assessments, market equalization or other surcharges, projected recoveries from the Florida Hurricane Catastrophe Fund, reinsurance recoverables, or any other rights, revenues, or other assets of the association pledged.
c. Each such pledge or sale of, lien upon, and security interest in, including the priority of such pledge, lien, or security interest, any such assessments, emergency assessments, market equalization or renewal surcharges, projected recoveries from the Florida Hurricane Catastrophe Fund, reinsurance recoverables, or other rights, revenues, or other assets which are collected, or levied and collected, after the commencement of and during the pendency of or after any such proceeding shall continue unaffected by such proceeding.
d. As used in this subsection, the term “financing documents” means any agreement, instrument, or other document now existing or hereafter created evidencing any bonds or other indebtedness of the association or pursuant to which any such bonds or other indebtedness has been or may be issued and pursuant to which any rights, revenues, or other assets of the association are pledged or sold to secure the repayment of such bonds or indebtedness, together with the payment of interest on such bonds or such indebtedness, or the payment of any other obligation of the association related to such bonds or indebtedness.
e. Any such pledge or sale of assessments, revenues, contract rights or other rights or assets of the association shall constitute a lien and security interest, or sale, as the case may be, that is immediately effective and attaches to such assessments, revenues, contract, or other rights or assets, whether or not imposed or collected at the time the pledge or sale is made. Any such pledge or sale is effective, valid, binding, and enforceable against the association or other entity making such pledge or sale, and valid and binding against and superior to any competing claims or obligations owed to any other person or entity, including policyholders in this state, asserting rights in any such assessments, revenues, contract, or other rights or assets to the extent set forth in and in accordance with the terms of the pledge or sale contained in the applicable financing documents, whether or not any such person or entity has notice of such pledge or sale and without the need for any physical delivery, recordation, filing, or other action.
f. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, agents or employees of the association, members of the board of directors of the association, or the department or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to actions for breach of any contract or agreement pertaining to insurance, or any willful tort.
(c) The provisions of paragraph (b) are applicable only with respect to:
1. Those areas that were eligible for coverage under this subsection on April 9, 1993; or
2. Any county or area as to which the department, after public hearing, finds that the following criteria exist:
a. Due to the lack of windstorm insurance coverage in the county or area so affected, economic growth and development is being deterred or otherwise stifled in such county or area, mortgages are in default, and financial institutions are unable to make loans;
b. The county or area so affected is enforcing the structural requirements of the Florida Building Code, as defined in s. 553.73, for new construction and has included adequate minimum floor elevation requirements for structures in areas subject to inundation; and
c. Extending windstorm insurance coverage to such county or area is consistent with and will implement and further the policies and objectives set forth in applicable state laws, rules, and regulations governing coastal management, coastal construction, comprehensive planning, beach and shore preservation, barrier island preservation, coastal zone protection, and the Coastal Zone Protection Act of 1985.

The department shall consider reports of the Florida Building Commission when evaluating building code enforcement. Any time after the department has determined that the criteria referred to in this subparagraph do not exist with respect to any county or area of the state, it may, after a subsequent public hearing, declare that such county or area is no longer eligible for windstorm coverage through the plan.

(d) For the purpose of evaluating whether the criteria of paragraph (c) are met, such criteria shall be applied as the situation would exist if policies had not been written by the Florida Residential Property and Casualty Joint Underwriting Association and property insurance for such policyholders was not available.
(e)1. Notwithstanding the provisions of subparagraph (c)2. or paragraph (d), eligibility shall not be extended to any area that was not eligible on March 1, 1997, except that the department may act with respect to any petition on which a hearing was held prior to May 9, 1997.
2. Notwithstanding the provisions of subparagraph 1., the following area is eligible for coverage under this subsection effective July 1, 2002: the area within Port Canaveral which is bordered on the south by the City of Cape Canaveral, bordered on the west by the Banana River, and bordered on the north by United States Government property.
(f) As used in this subsection, the term “department” means the former Department of Insurance.
(3) POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK APPORTIONMENT.
(a) The office shall, after consultation with the casualty insurers licensed in this state, adopt a plan or plans for the equitable apportionment among them of casualty insurance coverage which may be afforded political subdivisions which are in good faith entitled to, but are unable to, procure such coverage through the voluntary market at standard rates or through a statutorily approved plan authorized by the office. The office may adopt a joint underwriting plan which shall provide for one or more designated insurers able and willing to provide policyholder and claims service, including the issuance of insurance policies, to act on behalf of all other insurers required to participate in the joint underwriting plan. Any joint underwriting plan adopted shall provide for the equitable apportionment of any profits realized, or of losses and expenses incurred, among participating insurers. The plan shall include, but shall not be limited to:
1. Rules for the classification of risks and rates which reflect the past loss experience and prospective loss experience in different geographic areas.
2. A rating plan which reasonably reflects the prior claims experience of the insureds.
3. Excess coverage by insurers if the office, in its discretion, requires such coverage by insurers participating in the joint underwriting plan.
(b) In the event an underwriting deficit exists at the end of any year the plan is in effect, each policyholder shall pay to the joint underwriting plan a premium contingency assessment not to exceed one-third of the premium payment paid by such policyholder for that year. The joint underwriting plan shall pay no further claims on any policy for which the policyholder fails to pay the premium contingency assessment.
(c) Any deficit sustained under the plan shall first be recovered through a premium contingency assessment. Concurrently, the rates for insureds shall be adjusted for the next year so as to be actuarially sound in conformance with rules adopted by the commission.
(d) If there is any remaining deficit under the plan after maximum collection of the premium contingency assessment, such deficit shall be recovered from the companies participating in the plan in the proportion that the net direct premiums of each such member written during the preceding calendar year bear to the aggregate net direct premiums written in this state by all members of the joint underwriting plan.
(e) Upon adoption of a plan, all casualty insurers licensed in the state shall subscribe thereto and participate therein.
(4) MEDICAL MALPRACTICE RISK APPORTIONMENT.
(a) The office shall, after consultation with insurers as set forth in paragraph (b), adopt a joint underwriting plan as set forth in paragraph (d).
(b) Entities licensed to issue casualty insurance as defined in s. 624.605(1)(b), (k), and (q) and self-insurers authorized to issue medical malpractice insurance under s. 627.357 shall participate in the plan and shall be members of the Joint Underwriting Association.
(c) The Joint Underwriting Association shall operate subject to the supervision and approval of a board of governors consisting of representatives of five of the insurers participating in the Joint Underwriting Association, an attorney to be named by The Florida Bar, a physician to be named by the Florida Medical Association, a dentist to be named by the Florida Dental Association, and a hospital representative to be named by the Florida Hospital Association. The Chief Financial Officer shall select the representatives of the five insurers. One insurer representative shall be selected from recommendations of the American Insurance Association. One insurer representative shall be selected from recommendations of the Alliance of American Insurers. One insurer representative shall be selected from recommendations of the National Association of Independent Insurers. Two insurer representatives shall be selected to represent insurers that are not affiliated with these associations. The board of governors shall choose, during the first meeting of the board after June 30 of each year, one of its members to serve as chair of the board and another member to serve as vice chair of the board. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, self-insurer, or its agents or employees, the Joint Underwriting Association or its agents or employees, members of the board of governors, or the office or its representatives for any action taken by them in the performance of their powers and duties under this subsection.
(d) The plan shall provide coverage for claims arising out of the rendering of, or failure to render, medical care or services and, in the case of health care facilities, coverage for bodily injury or property damage to the person or property of any patient arising out of the insured’s activities, in appropriate policy forms for all health care providers as defined in paragraph (h). The plan shall include, but shall not be limited to:
1. Classifications of risks and rates which reflect past and prospective loss and expense experience in different areas of practice and in different geographical areas. To assure that plan rates are adequate to pay claims and expenses, the Joint Underwriting Association shall develop a means of obtaining loss and expense experience; and the plan shall file such experience, when available, with the office in sufficient detail to make a determination of rate adequacy. Within 60 days after a rate filing, the office shall approve such rates or rate revisions as are fully supported by the filing. In addition to provisions for claims and expenses, the ratemaking formula may include a factor for projected claims trending and a margin for contingencies. The use of trend factors shall not be found to be inappropriate.
2. A rating plan which reasonably recognizes the prior claims experience of insureds.
3. Provisions as to rates for:
a. Insureds who are retired or semiretired.
b. The estates of deceased insureds.
c. Part-time professionals.
4. Protection in an amount not to exceed $250,000 per claim, $750,000 annual aggregate for health care providers other than hospitals and in an amount not to exceed $1.5 million per claim, $5 million annual aggregate for hospitals. Such coverage for health care providers other than hospitals shall be available as primary coverage and as excess coverage for the layer of coverage between the primary coverage and the total limits of $250,000 per claim, $750,000 annual aggregate. The plan shall also provide tail coverage in these amounts to insureds whose claims-made coverage with another insurer or trust has or will be terminated. Such tail coverage shall provide coverage for incidents that occurred during the claims-made policy period for which a claim is made after the policy period.
5. A risk management program for insureds of the association. This program shall include, but not be limited to: investigation and analysis of frequency, severity, and causes of adverse or untoward medical injuries; development of measures to control these injuries; systematic reporting of medical incidents; investigation and analysis of patient complaints; and auditing of association members to assure implementation of this program. The plan may refuse to insure any insured who refuses or fails to comply with the risk management program implemented by the association. Prior to cancellation or refusal to renew an insured, the association shall provide the insured 60 days’ notice of intent to cancel or nonrenew and shall further notify the insured of any action which must be taken to be in compliance with the risk management program.
(e) In the event an underwriting deficit exists for any policy year the plan is in effect, any surplus which has accrued from previous years and is not projected within reasonable actuarial certainty to be needed for payment of claims in the year the surplus arose shall be used to offset the deficit to the extent available.
1. As to remaining deficit, except those relating to deficit assessment coverage, each policyholder shall pay to the association a premium contingency assessment not to exceed one-third of the premium payment paid by such policyholder to the association for that policy year. The association shall pay no further claims on any policy for the policyholder who fails to pay the premium contingency assessment.
2. If there is any remaining deficit under the plan after maximum collection of the premium contingency assessment, such deficit shall be recovered from the companies participating in the plan in the proportion that the net direct premiums of each such member written during the calendar year immediately preceding the end of the policy year for which there is a deficit assessment bear to the aggregate net direct premiums written in this state by all members of the association. The term “premiums” as used herein means premiums for the lines of insurance defined in s. 624.605(1)(b), (k), and (q), including premiums for such coverage issued under package policies.
(f) The plan shall provide for one or more insurers able and willing to provide policy service through licensed resident agents and claims service on behalf of all other insurers participating in the plan. In the event no insurer is able and willing to provide such services, the Joint Underwriting Association is authorized to perform any and all such services.
(g) All books, records, documents, or audits relating to the Joint Underwriting Association or its operation shall be open to public inspection, except that a claim file in the possession of the Joint Underwriting Association is confidential and exempt from the provisions of s. 119.07(1) during the processing of that claim. Any information contained in these files that identifies an injured person is confidential and exempt from the provisions of s. 119.07(1).
(h) As used in this subsection:
1. “Health care provider” means hospitals licensed under chapter 395; physicians licensed under chapter 458; osteopathic physicians licensed under chapter 459; podiatric physicians licensed under chapter 461; dentists licensed under chapter 466; chiropractic physicians licensed under chapter 460; naturopaths licensed under chapter 462; nurses licensed under part I of chapter 464; midwives licensed under chapter 467; clinical laboratories registered under chapter 483; physician assistants licensed under chapter 458 or chapter 459; physical therapists and physical therapist assistants licensed under chapter 486; health maintenance organizations certificated under part I of chapter 641; ambulatory surgical centers licensed under chapter 395; other medical facilities as defined in subparagraph 2.; blood banks, plasma centers, industrial clinics, and renal dialysis facilities; or professional associations, partnerships, corporations, joint ventures, or other associations for professional activity by health care providers.
2. “Other medical facility” means a facility the primary purpose of which is to provide human medical diagnostic services or a facility providing nonsurgical human medical treatment, to which facility the patient is admitted and from which facility the patient is discharged within the same working day, and which facility is not part of a hospital. However, a facility existing for the primary purpose of performing terminations of pregnancy or an office maintained by a physician or dentist for the practice of medicine shall not be construed to be an “other medical facility.”
3. “Health care facility” means any hospital licensed under chapter 395, health maintenance organization certificated under part I of chapter 641, ambulatory surgical center licensed under chapter 395, or other medical facility as defined in subparagraph 2.
(i) The manager of the plan or the manager’s assistant is the agent for service of process for the plan.
(5) PROPERTY AND CASUALTY INSURANCE RISK APPORTIONMENT.The commission shall adopt by rule a joint underwriting plan to equitably apportion among insurers authorized in this state to write property insurance as defined in s. 624.604 or casualty insurance as defined in s. 624.605, the underwriting of one or more classes of property insurance or casualty insurance, except for the types of insurance that are included within property insurance or casualty insurance for which an equitable apportionment plan, assigned risk plan, or joint underwriting plan is authorized under s. 627.311 or subsection (1), subsection (2), subsection (3), subsection (4), or subsection (5) and except for risks eligible for flood insurance written through the federal flood insurance program to persons with risks eligible under subparagraph (a)1. and who are in good faith entitled to, but are unable to, obtain such property or casualty insurance coverage, including excess coverage, through the voluntary market. For purposes of this subsection, an adequate level of coverage means that coverage which is required by state law or by responsible or prudent business practices. The Joint Underwriting Association shall not be required to provide coverage for any type of risk for which there are no insurers providing similar coverage in this state. The office may designate one or more participating insurers who agree to provide policyholder and claims service, including the issuance of policies, on behalf of the participating insurers.
(a) The plan shall provide:
1. A means of establishing eligibility of a risk for obtaining insurance through the plan, which provides that:
a. A risk shall be eligible for such property insurance or casualty insurance as is required by Florida law if the insurance is unavailable in the voluntary market, including the market assistance program and the surplus lines market.
b. A commercial risk not eligible under sub-subparagraph a. shall be eligible for property or casualty insurance if:
(I) The insurance is unavailable in the voluntary market, including the market assistance plan and the surplus lines market;
(II) Failure to secure the insurance would substantially impair the ability of the entity to conduct its affairs; and
(III) The risk is not determined by the Risk Underwriting Committee to be uninsurable.
c. In the event the Federal Government terminates the Federal Crime Insurance Program established under 44 C.F.R. ss. 80-83, Florida commercial and residential risks previously insured under the federal program shall be eligible under the plan.
d.(I) In the event a risk is eligible under this paragraph and in the event the market assistance plan receives a minimum of 100 applications for coverage within a 3-month period, or 200 applications for coverage within a 1-year period or less, for a given class of risk contained in the classification system defined in the plan of operation of the Joint Underwriting Association, and unless the market assistance plan provides a quotation for at least 80 percent of such applicants, such classification shall immediately be eligible for coverage in the Joint Underwriting Association.
(II) Any market assistance plan application which is rejected because an individual risk is so hazardous as to be practically uninsurable, considering whether the likelihood of a loss for such a risk is substantially higher than for other risks of the same class due to individual risk characteristics, prior loss experience, unwillingness to cooperate with a prior insurer, physical characteristics and physical location shall not be included in the minimum percentage calculation provided above. In the event that there is any legal or administrative challenge to a determination by the office that the conditions of this subparagraph have been met for eligibility for coverage in the Joint Underwriting Association for a given classification, any eligible risk may obtain coverage during the pendency of any such challenge.
e. In order to qualify as a quotation for the purpose of meeting the minimum percentage calculation in this subparagraph, the quoted premium must meet the following criteria:
(I) In the case of an admitted carrier, the quoted premium must not exceed the premium available for a given classification currently in use by the Joint Underwriting Association or the premium developed by using the rates and rating plans on file with the office by the quoting insurer, whichever is greater.
(II) In the case of an authorized surplus lines insurer, the quoted premium must not exceed the premium available for a given classification currently in use by the Joint Underwriting Association by more than 25 percent, after consideration of any individual risk surcharge or credit.
f. Any agent who falsely certifies the unavailability of coverage as provided by sub-subparagraphs a. and b., is subject to the penalties provided in s. 626.611.
2. A means for the equitable apportionment of profits or losses and expenses among participating insurers.
3. Rules for the classification of risks and rates which reflect the past and prospective loss experience.
4. A rating plan which reasonably reflects the prior claims experience of the insureds. Such rating plan shall include at least two levels of rates for risks that have favorable loss experience and risks that have unfavorable loss experience, as established by the plan.
5. Reasonable limits to available amounts of insurance. Such limits may not be less than the amounts of insurance required of eligible risks by Florida law.
6. Risk management requirements for insurance where such requirements are reasonable and are expected to reduce losses.
7. Deductibles as may be necessary to meet the needs of insureds.
8. Policy forms which are consistent with the forms in use by the majority of the insurers providing coverage in the voluntary market for the coverage requested by the applicant.
9. A means to remove risks from the plan once such risks no longer meet the eligibility requirements of this paragraph. For this purpose, the plan shall include the following requirements: At each 6-month interval after the activation of any class of insureds, the board of governors or its designated committee shall review the number of applications to the market assistance plan for that class. If, based on these latest numbers, at least 90 percent of such applications have been provided a quotation, the Joint Underwriting Association shall cease underwriting new applications for such class within 30 days, and notification of this decision shall be sent to the office, the major agents’ associations, and the board of directors of the market assistance plan. A quotation for the purpose of this subparagraph shall meet the same criteria for a quotation as provided in sub-subparagraph 1.e. All policies which were previously written for that class shall continue in force until their normal expiration date, at which time, subject to the required timely notification of nonrenewal by the Joint Underwriting Association, the insured may then elect to reapply to the Joint Underwriting Association according to the requirements of eligibility. If, upon reapplication, those previously insured Joint Underwriting Association risks meet the eligibility requirements, the Joint Underwriting Association shall provide the coverage requested.
10. A means for providing credits to insurers against any deficit assessment levied pursuant to paragraph (c), for risks voluntarily written through the market assistance plan by such insurers.
11. That the Joint Underwriting Association shall operate subject to the supervision and approval of a board of governors consisting of 13 individuals appointed by the Chief Financial Officer, and shall have an executive or underwriting committee. At least four of the members shall be representatives of insurance trade associations as follows: one member from the American Insurance Association, one member from the Alliance of American Insurers, one member from the National Association of Independent Insurers, and one member from an unaffiliated insurer writing coverage on a national basis. Two representatives shall be from two of the statewide agents’ associations. Each board member shall be appointed to serve for 2-year terms beginning on a date designated by the plan and shall serve at the pleasure of the Chief Financial Officer. Members may be reappointed for subsequent terms.
(b) Rates used by the Joint Underwriting Association shall be actuarially sound. To the extent applicable, the rate standards set forth in s. 627.062 shall be considered by the office in establishing rates to be used by the joint underwriting plan. The initial rate level shall be determined using the rates, rules, rating plans, and classifications contained in the most current Insurance Services Office (ISO) filing with the office or the filing of other licensed rating organizations with an additional increment of 25 percent of premium. For any type of coverage or classification which lends itself to manual rating for which the Insurance Services Office or another licensed rating organization does not file or publish a rate, the Joint Underwriting Association shall file and use an initial rate based on the average current market rate. The initial rate level for the rate plan shall also be subject to an experience and schedule rating plan which may produce a maximum of 25 percent debits or credits. For any risk which does not lend itself to manual rating and for which no rate has been promulgated under the rate plan, the board shall develop and file with the office, subject to its approval, appropriate criteria and factors for rating the individual risk. Such criteria and factors shall include, but not be limited to, loss rating plans, composite rating plans, and unique and unusual risk rating plans. The initial rates required under this paragraph shall be adjusted in conformity with future filings by the Insurance Services Office with the office and shall remain in effect until such time as the Joint Underwriting Association has sufficient data as to independently justify an actuarially sound change in such rates.
(c)1. In the event an underwriting deficit exists for any policy year the plan is in effect, any surplus which has accrued from previous years and is not projected within reasonable actuarial certainty to be needed for payment for claims in the year the surplus arose shall be used to offset the deficit to the extent available.
2. As to any remaining deficit, the board of governors of the Joint Underwriting Association shall levy and collect an assessment in an amount sufficient to offset such deficit. Such assessment shall be levied against the insurers participating in the plan during the year giving rise to the assessment. Any assessments against insurers for the lines of property and casualty insurance issued to commercial risks shall be recovered from the participating insurers in the proportion that the net direct premium of each insurer for commercial risks written during the preceding calendar year bears to the aggregate net direct premium written for commercial risks by all members of the plan for the lines of insurance included in the plan. Any assessments against insurers for the lines of property and casualty insurance issued to personal risks eligible under sub-subparagraph (a)1.a. or sub-subparagraph (a)1.c. shall be recovered from the participating insurers in the proportion that the net direct premium of each insurer for personal risks written during the preceding calendar year bears to the aggregate net direct premium written for personal risks by all members of the plan for the lines of insurance included in the plan.
3. The board shall take all reasonable and prudent steps necessary to collect the amount of assessment due from each participating insurer and policyholder, including, if prudent, filing suit to collect such assessment. If the board is unable to collect an assessment from any insurer, the uncollected assessments shall be levied as an additional assessment against the participating insurers and any participating insurer required to pay an additional assessment as a result of such failure to pay shall have a cause of action against such nonpaying insurer.
4. Any funds or entitlements that the state may be eligible to receive by virtue of the Federal Government’s termination of the Federal Crime Insurance Program referenced in sub-subparagraph (a)1.c. may be used under the plan to offset any subsequent underwriting deficits that may occur from risks previously insured with the Federal Crime Insurance Program.
5. Assessments shall be included as an appropriate factor in the making of rates as provided in s. 627.3512.
6.a. The Legislature finds that the potential for unlimited assessments under this paragraph may induce insurers to attempt to reduce their writings in the voluntary market, and that such actions would worsen the availability problems that the association was created to remedy. It is the intent of the Legislature that insurers remain fully responsible for covering any deficits of the association; however, it is also the intent of the Legislature to provide a means by which assessment liabilities may be amortized over a period of years.
b. The total amount of deficit assessments under this paragraph with respect to any year may not exceed 10 percent of the statewide total gross written premium for all insurers for the coverages referred to in the introductory language of this subsection for the prior year, except that if the deficit with respect to any plan year exceeds such amount and bonds are issued under sub-subparagraph c. to defray the deficit, the total amount of assessments with respect to such deficit may not in any year exceed 10 percent of the deficit, or such lesser percentage as is sufficient to retire the bonds as determined by the board, and shall continue annually until the bonds are retired.
c. The governing body of any unit of local government, any residents or businesses of which are insured by the association, may issue bonds as defined in s. 125.013 or s. 166.101 from time to time to fund an assistance program, in conjunction with the association, for the purpose of defraying deficits of the association. Revenue bonds may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and the protection and preservation of the economic stability of insurers operating in this state, and declaring it an essential public purpose to permit certain municipalities or counties to issue such bonds as will provide relief to claimants and policyholders of the joint underwriting association and insurers responsible for apportionment of association losses. The unit of local government shall enter into such contracts with the association as are necessary to carry out this paragraph. Any bonds issued under this sub-subparagraph shall be payable from and secured by moneys received by the association from assessments under this paragraph, and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds. If any of the bonds remain unsold 60 days after issuance, the office shall require all insurers subject to assessment to purchase the bonds, which shall be treated as admitted assets; each insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the insurer’s relative share of assessment liability under this subsection. An insurer shall not be required to purchase the bonds to the extent that the office determines that the purchase would endanger or impair the solvency of the insurer.
7. The plan shall provide for the deferment, in whole or in part, of the assessment of an insurer if the office finds that payment of the assessment would endanger or impair the solvency of the insurer. In the event an assessment against an insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in subparagraph 2.
(d) Upon adoption of the plan, all insurers authorized in this state to underwrite property or casualty insurance shall participate in the plan.
(e) A Risk Underwriting Committee of the Joint Underwriting Association composed of three members experienced in evaluating insurance risks is created to review risks rejected by the voluntary market for which application is made for insurance through the joint underwriting plan. The committee shall consist of a representative of the market assistance plan created under s. 627.3515, a member selected by the insurers participating in the Joint Underwriting Association, and a member named by the Chief Financial Officer. The Risk Underwriting Committee shall appoint such advisory committees as are provided for in the plan and are necessary to conduct its functions. The salaries and expenses of the members of the Risk Underwriting Committee and its advisory committees shall be paid by the joint underwriting plan. The plan approved by the office shall establish criteria and procedures for use by the Risk Underwriting Committee for determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:
1. Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and
2. Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the underwriting committee shall be construed as the private placement of insurance, and the provisions of chapter 120 shall not apply.

(f) There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, the Florida Property and Casualty Joint Underwriting Association or its agents or employees, members of the board of governors, the Chief Financial Officer, or the office or its representatives for any action taken by them in the performance of their duties under this subsection. Such immunity does not apply to actions for breach of any contract or agreement pertaining to insurance, or any other willful tort.
(6) CITIZENS PROPERTY INSURANCE CORPORATION.
(a)1. It is the public purpose of this subsection to ensure the existence of an orderly market for property insurance for Floridians and Florida businesses. The Legislature finds that private insurers are unwilling or unable to provide affordable property insurance coverage in this state to the extent sought and needed. The absence of affordable property insurance threatens the public health, safety, and welfare and likewise threatens the economic health of the state. The state therefore has a compelling public interest and a public purpose to assist in assuring that property in the state is insured and that it is insured at affordable rates so as to facilitate the remediation, reconstruction, and replacement of damaged or destroyed property in order to reduce or avoid the negative effects otherwise resulting to the public health, safety, and welfare, to the economy of the state, and to the revenues of the state and local governments which are needed to provide for the public welfare. It is necessary, therefore, to provide affordable property insurance to applicants who are in good faith entitled to procure insurance through the voluntary market but are unable to do so. The Legislature intends by this subsection that affordable property insurance be provided and that it continue to be provided, as long as necessary, through Citizens Property Insurance Corporation, a government entity that is an integral part of the state, and that is not a private insurance company. To that end, Citizens Property Insurance Corporation shall strive to increase the availability of affordable property insurance in this state, while achieving efficiencies and economies, and while providing service to policyholders, applicants, and agents which is no less than the quality generally provided in the voluntary market, for the achievement of the foregoing public purposes. Because it is essential for this government entity to have the maximum financial resources to pay claims following a catastrophic hurricane, it is the intent of the Legislature that Citizens Property Insurance Corporation continue to be an integral part of the state and that the income of the corporation be exempt from federal income taxation and that interest on the debt obligations issued by the corporation be exempt from federal income taxation.
2. The Residential Property and Casualty Joint Underwriting Association originally created by this statute shall be known, as of July 1, 2002, as the Citizens Property Insurance Corporation. The corporation shall provide insurance for residential and commercial property, for applicants who are in good faith entitled, but are unable, to procure insurance through the voluntary market. The corporation shall operate pursuant to a plan of operation approved by order of the Financial Services Commission. The plan is subject to continuous review by the commission. The commission may, by order, withdraw approval of all or part of a plan if the commission determines that conditions have changed since approval was granted and that the purposes of the plan require changes in the plan. The corporation shall continue to operate pursuant to the plan of operation approved by the Office of Insurance Regulation until October 1, 2006. For the purposes of this subsection, residential coverage includes both personal lines residential coverage, which consists of the type of coverage provided by homeowner’s, mobile home owner’s, dwelling, tenant’s, condominium unit owner’s, and similar policies, and commercial lines residential coverage, which consists of the type of coverage provided by condominium association, apartment building, and similar policies.
3. Effective January 1, 2009, a personal lines residential structure that has a dwelling replacement cost of $2 million or more, or a single condominium unit that has a combined dwelling and content replacement cost of $2 million or more is not eligible for coverage by the corporation. Such dwellings insured by the corporation on December 31, 2008, may continue to be covered by the corporation until the end of the policy term. However, such dwellings that are insured by the corporation and become ineligible for coverage due to the provisions of this subparagraph may reapply and obtain coverage if the property owner provides the corporation with a sworn affidavit from one or more insurance agents, on a form provided by the corporation, stating that the agents have made their best efforts to obtain coverage and that the property has been rejected for coverage by at least one authorized insurer and at least three surplus lines insurers. If such conditions are met, the dwelling may be insured by the corporation for up to 3 years, after which time the dwelling is ineligible for coverage. The office shall approve the method used by the corporation for valuing the dwelling replacement cost for the purposes of this subparagraph. If a policyholder is insured by the corporation prior to being determined to be ineligible pursuant to this subparagraph and such policyholder files a lawsuit challenging the determination, the policyholder may remain insured by the corporation until the conclusion of the litigation.
4. It is the intent of the Legislature that policyholders, applicants, and agents of the corporation receive service and treatment of the highest possible level but never less than that generally provided in the voluntary market. It also is intended that the corporation be held to service standards no less than those applied to insurers in the voluntary market by the office with respect to responsiveness, timeliness, customer courtesy, and overall dealings with policyholders, applicants, or agents of the corporation.
5. Effective January 1, 2009, a personal lines residential structure that is located in the “wind-borne debris region,” as defined in s. 1609.2, International Building Code (2006), and that has an insured value on the structure of $750,000 or more is not eligible for coverage by the corporation unless the structure has opening protections as required under the Florida Building Code for a newly constructed residential structure in that area. A residential structure shall be deemed to comply with the requirements of this subparagraph if it has shutters or opening protections on all openings and if such opening protections complied with the Florida Building Code at the time they were installed.
(b)1. All insurers authorized to write one or more subject lines of business in this state are subject to assessment by the corporation and, for the purposes of this subsection, are referred to collectively as “assessable insurers.” Insurers writing one or more subject lines of business in this state pursuant to part VIII of chapter 626 are not assessable insurers, but insureds who procure one or more subject lines of business in this state pursuant to part VIII of chapter 626 are subject to assessment by the corporation and are referred to collectively as “assessable insureds.” An authorized insurer’s assessment liability shall begin on the first day of the calendar year following the year in which the insurer was issued a certificate of authority to transact insurance for subject lines of business in this state and shall terminate 1 year after the end of the first calendar year during which the insurer no longer holds a certificate of authority to transact insurance for subject lines of business in this state.
2.a. All revenues, assets, liabilities, losses, and expenses of the corporation shall be divided into three separate accounts as follows:
(I) A personal lines account for personal residential policies issued by the corporation or issued by the Residential Property and Casualty Joint Underwriting Association and renewed by the corporation that provide comprehensive, multiperil coverage on risks that are not located in areas eligible for coverage in the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for such policies that do not provide coverage for the peril of wind on risks that are located in such areas;
(II) A commercial lines account for commercial residential and commercial nonresidential policies issued by the corporation or issued by the Residential Property and Casualty Joint Underwriting Association and renewed by the corporation that provide coverage for basic property perils on risks that are not located in areas eligible for coverage in the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for such policies that do not provide coverage for the peril of wind on risks that are located in such areas; and
(III) A high-risk account for personal residential policies and commercial residential and commercial nonresidential property policies issued by the corporation or transferred to the corporation that provide coverage for the peril of wind on risks that are located in areas eligible for coverage in the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002. The corporation may offer policies that provide multiperil coverage and the corporation shall continue to offer policies that provide coverage only for the peril of wind for risks located in areas eligible for coverage in the high-risk account. In issuing multiperil coverage, the corporation may use its approved policy forms and rates for the personal lines account. An applicant or insured who is eligible to purchase a multiperil policy from the corporation may purchase a multiperil policy from an authorized insurer without prejudice to the applicant’s or insured’s eligibility to prospectively purchase a policy that provides coverage only for the peril of wind from the corporation. An applicant or insured who is eligible for a corporation policy that provides coverage only for the peril of wind may elect to purchase or retain such policy and also purchase or retain coverage excluding wind from an authorized insurer without prejudice to the applicant’s or insured’s eligibility to prospectively purchase a policy that provides multiperil coverage from the corporation. It is the goal of the Legislature that there would be an overall average savings of 10 percent or more for a policyholder who currently has a wind-only policy with the corporation, and an ex-wind policy with a voluntary insurer or the corporation, and who then obtains a multiperil policy from the corporation. It is the intent of the Legislature that the offer of multiperil coverage in the high-risk account be made and implemented in a manner that does not adversely affect the tax-exempt status of the corporation or creditworthiness of or security for currently outstanding financing obligations or credit facilities of the high-risk account, the personal lines account, or the commercial lines account. The high-risk account must also include quota share primary insurance under subparagraph (c)2. The area eligible for coverage under the high-risk account also includes the area within Port Canaveral, which is bordered on the south by the City of Cape Canaveral, bordered on the west by the Banana River, and bordered on the north by Federal Government property.
b. The three separate accounts must be maintained as long as financing obligations entered into by the Florida Windstorm Underwriting Association or Residential Property and Casualty Joint Underwriting Association are outstanding, in accordance with the terms of the corresponding financing documents. When the financing obligations are no longer outstanding, in accordance with the terms of the corresponding financing documents, the corporation may use a single account for all revenues, assets, liabilities, losses, and expenses of the corporation. Consistent with the requirement of this subparagraph and prudent investment policies that minimize the cost of carrying debt, the board shall exercise its best efforts to retire existing debt or to obtain approval of necessary parties to amend the terms of existing debt, so as to structure the most efficient plan to consolidate the three separate accounts into a single account.
c. Creditors of the Residential Property and Casualty Joint Underwriting Association and of the accounts specified in sub-sub-subparagraphs a.(I) and (II) may have a claim against, and recourse to, the accounts referred to in sub-sub-subparagraphs a.(I) and (II) and shall have no claim against, or recourse to, the account referred to in sub-sub-subparagraph a.(III). Creditors of the Florida Windstorm Underwriting Association shall have a claim against, and recourse to, the account referred to in sub-sub-subparagraph a.(III) and shall have no claim against, or recourse to, the accounts referred to in sub-sub-subparagraphs a.(I) and (II).
d. Revenues, assets, liabilities, losses, and expenses not attributable to particular accounts shall be prorated among the accounts.
e. The Legislature finds that the revenues of the corporation are revenues that are necessary to meet the requirements set forth in documents authorizing the issuance of bonds under this subsection.
f. No part of the income of the corporation may inure to the benefit of any private person.
3. With respect to a deficit in an account:
a. After accounting for the Citizens policyholder surcharge imposed under sub-subparagraph i., when the remaining projected deficit incurred in a particular calendar year is not greater than 6 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year, the entire deficit shall be recovered through regular assessments of assessable insurers under paragraph (q) and assessable insureds.
b. After accounting for the Citizens policyholder surcharge imposed under sub-subparagraph i., when the remaining projected deficit incurred in a particular calendar year exceeds 6 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year, the corporation shall levy regular assessments on assessable insurers under paragraph (q) and on assessable insureds in an amount equal to the greater of 6 percent of the deficit or 6 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year. Any remaining deficit shall be recovered through emergency assessments under sub-subparagraph d.
c. Each assessable insurer’s share of the amount being assessed under sub-subparagraph a. or sub-subparagraph b. shall be in the proportion that the assessable insurer’s direct written premium for the subject lines of business for the year preceding the assessment bears to the aggregate statewide direct written premium for the subject lines of business for that year. The assessment percentage applicable to each assessable insured is the ratio of the amount being assessed under sub-subparagraph a. or sub-subparagraph b. to the aggregate statewide direct written premium for the subject lines of business for the prior year. Assessments levied by the corporation on assessable insurers under sub-subparagraphs a. and b. shall be paid as required by the corporation’s plan of operation and paragraph (q). Assessments levied by the corporation on assessable insureds under sub-subparagraphs a. and b. shall be collected by the surplus lines agent at the time the surplus lines agent collects the surplus lines tax required by s. 626.932 and shall be paid to the Florida Surplus Lines Service Office at the time the surplus lines agent pays the surplus lines tax to the Florida Surplus Lines Service Office. Upon receipt of regular assessments from surplus lines agents, the Florida Surplus Lines Service Office shall transfer the assessments directly to the corporation as determined by the corporation.
d. Upon a determination by the board of governors that a deficit in an account exceeds the amount that will be recovered through regular assessments under sub-subparagraph a. or sub-subparagraph b., plus the amount that is expected to be recovered through surcharges under sub-subparagraph i., as to the remaining projected deficit the board shall levy, after verification by the office, emergency assessments, for as many years as necessary to cover the deficits, to be collected by assessable insurers and the corporation and collected from assessable insureds upon issuance or renewal of policies for subject lines of business, excluding National Flood Insurance policies. The amount of the emergency assessment collected in a particular year shall be a uniform percentage of that year’s direct written premium for subject lines of business and all accounts of the corporation, excluding National Flood Insurance Program policy premiums, as annually determined by the board and verified by the office. The office shall verify the arithmetic calculations involved in the board’s determination within 30 days after receipt of the information on which the determination was based. Notwithstanding any other provision of law, the corporation and each assessable insurer that writes subject lines of business shall collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment. Emergency assessments levied by the corporation on assessable insureds shall be collected by the surplus lines agent at the time the surplus lines agent collects the surplus lines tax required by s. 626.932 and shall be paid to the Florida Surplus Lines Service Office at the time the surplus lines agent pays the surplus lines tax to the Florida Surplus Lines Service Office. The emergency assessments so collected shall be transferred directly to the corporation on a periodic basis as determined by the corporation and shall be held by the corporation solely in the applicable account. The aggregate amount of emergency assessments levied for an account under this sub-subparagraph in any calendar year may, at the discretion of the board of governors, be less than but may not exceed the greater of 10 percent of the amount needed to cover the deficit, plus interest, fees, commissions, required reserves, and other costs associated with financing of the original deficit, or 10 percent of the aggregate statewide direct written premium for subject lines of business and for all accounts of the corporation for the prior year, plus interest, fees, commissions, required reserves, and other costs associated with financing the deficit.
e. The corporation may pledge the proceeds of assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other insurance and reinsurance recoverables, policyholder surcharges and other surcharges, and other funds available to the corporation as the source of revenue for and to secure bonds issued under paragraph (q), bonds or other indebtedness issued under subparagraph (c)3., or lines of credit or other financing mechanisms issued or created under this subsection, or to retire any other debt incurred as a result of deficits or events giving rise to deficits, or in any other way that the board determines will efficiently recover such deficits. The purpose of the lines of credit or other financing mechanisms is to provide additional resources to assist the corporation in covering claims and expenses attributable to a catastrophe. As used in this subsection, the term “assessments” includes regular assessments under sub-subparagraph a., sub-subparagraph b., or subparagraph (q)1. and emergency assessments under sub-subparagraph d. Emergency assessments collected under sub-subparagraph d. are not part of an insurer’s rates, are not premium, and are not subject to premium tax, fees, or commissions; however, failure to pay the emergency assessment shall be treated as failure to pay premium. The emergency assessments under sub-subparagraph d. shall continue as long as any bonds issued or other indebtedness incurred with respect to a deficit for which the assessment was imposed remain outstanding, unless adequate provision has been made for the payment of such bonds or other indebtedness pursuant to the documents governing such bonds or other indebtedness.
f. As used in this subsection for purposes of any deficit incurred on or after January 25, 2007, the term “subject lines of business” means insurance written by assessable insurers or procured by assessable insureds for all property and casualty lines of business in this state, but not including workers’ compensation or medical malpractice. As used in the sub-subparagraph, the term “property and casualty lines of business” includes all lines of business identified on Form 2, Exhibit of Premiums and Losses, in the annual statement required of authorized insurers by s. 624.424 and any rule adopted under this section, except for those lines identified as accident and health insurance and except for policies written under the National Flood Insurance Program or the Federal Crop Insurance Program. For purposes of this sub-subparagraph, the term “workers’ compensation” includes both workers’ compensation insurance and excess workers’ compensation insurance.
g. The Florida Surplus Lines Service Office shall determine annually the aggregate statewide written premium in subject lines of business procured by assessable insureds and shall report that information to the corporation in a form and at a time the corporation specifies to ensure that the corporation can meet the requirements of this subsection and the corporation’s financing obligations.
h. The Florida Surplus Lines Service Office shall verify the proper application by surplus lines agents of assessment percentages for regular assessments and emergency assessments levied under this subparagraph on assessable insureds and shall assist the corporation in ensuring the accurate, timely collection and payment of assessments by surplus lines agents as required by the corporation.
i. If a deficit is incurred in any account in 2008 or thereafter, the board of governors shall levy a Citizens policyholder surcharge against all policyholders of the corporation for a 12-month period, which shall be collected at the time of issuance or renewal of a policy, as a uniform percentage of the premium for the policy of up to 15 percent of such premium, which funds shall be used to offset the deficit. Citizens policyholder surcharges under this sub-subparagraph are not considered premium and are not subject to commissions, fees, or premium taxes. However, failure to pay such surcharges shall be treated as failure to pay premium.
j. If the amount of any assessments or surcharges collected from corporation policyholders, assessable insurers or their policyholders, or assessable insureds exceeds the amount of the deficits, such excess amounts shall be remitted to and retained by the corporation in a reserve to be used by the corporation, as determined by the board of governors and approved by the office, to pay claims or reduce any past, present, or future plan-year deficits or to reduce outstanding debt.
(c) The plan of operation of the corporation:
1. Must provide for adoption of residential property and casualty insurance policy forms and commercial residential and nonresidential property insurance forms, which forms must be approved by the office prior to use. The corporation shall adopt the following policy forms:
a. Standard personal lines policy forms that are comprehensive multiperil policies providing full coverage of a residential property equivalent to the coverage provided in the private insurance market under an HO-3, HO-4, or HO-6 policy.
b. Basic personal lines policy forms that are policies similar to an HO-8 policy or a dwelling fire policy that provide coverage meeting the requirements of the secondary mortgage market, but which coverage is more limited than the coverage under a standard policy.
c. Commercial lines residential and nonresidential policy forms that are generally similar to the basic perils of full coverage obtainable for commercial residential structures and commercial nonresidential structures in the admitted voluntary market.
d. Personal lines and commercial lines residential property insurance forms that cover the peril of wind only. The forms are applicable only to residential properties located in areas eligible for coverage under the high-risk account referred to in sub-subparagraph (b)2.a.
e. Commercial lines nonresidential property insurance forms that cover the peril of wind only. The forms are applicable only to nonresidential properties located in areas eligible for coverage under the high-risk account referred to in sub-subparagraph (b)2.a.
f. The corporation may adopt variations of the policy forms listed in sub-subparagraphs a.-e. that contain more restrictive coverage.
2.a. Must provide that the corporation adopt a program in which the corporation and authorized insurers enter into quota share primary insurance agreements for hurricane coverage, as defined in s. 627.4025(2)(a), for eligible risks, and adopt property insurance forms for eligible risks which cover the peril of wind only. As used in this subsection, the term:
(I) “Quota share primary insurance” means an arrangement in which the primary hurricane coverage of an eligible risk is provided in specified percentages by the corporation and an authorized insurer. The corporation and authorized insurer are each solely responsible for a specified percentage of hurricane coverage of an eligible risk as set forth in a quota share primary insurance agreement between the corporation and an authorized insurer and the insurance contract. The responsibility of the corporation or authorized insurer to pay its specified percentage of hurricane losses of an eligible risk, as set forth in the quota share primary insurance agreement, may not be altered by the inability of the other party to the agreement to pay its specified percentage of hurricane losses. Eligible risks that are provided hurricane coverage through a quota share primary insurance arrangement must be provided policy forms that set forth the obligations of the corporation and authorized insurer under the arrangement, clearly specify the percentages of quota share primary insurance provided by the corporation and authorized insurer, and conspicuously and clearly state that neither the authorized insurer nor the corporation may be held responsible beyond its specified percentage of coverage of hurricane losses.
(II) “Eligible risks” means personal lines residential and commercial lines residential risks that meet the underwriting criteria of the corporation and are located in areas that were eligible for coverage by the Florida Windstorm Underwriting Association on January 1, 2002.
b. The corporation may enter into quota share primary insurance agreements with authorized insurers at corporation coverage levels of 90 percent and 50 percent.
c. If the corporation determines that additional coverage levels are necessary to maximize participation in quota share primary insurance agreements by authorized insurers, the corporation may establish additional coverage levels. However, the corporation’s quota share primary insurance coverage level may not exceed 90 percent.
d. Any quota share primary insurance agreement entered into between an authorized insurer and the corporation must provide for a uniform specified percentage of coverage of hurricane losses, by county or territory as set forth by the corporation board, for all eligible risks of the authorized insurer covered under the quota share primary insurance agreement.
e. Any quota share primary insurance agreement entered into between an authorized insurer and the corporation is subject to review and approval by the office. However, such agreement shall be authorized only as to insurance contracts entered into between an authorized insurer and an insured who is already insured by the corporation for wind coverage.
f. For all eligible risks covered under quota share primary insurance agreements, the exposure and coverage levels for both the corporation and authorized insurers shall be reported by the corporation to the Florida Hurricane Catastrophe Fund. For all policies of eligible risks covered under quota share primary insurance agreements, the corporation and the authorized insurer shall maintain complete and accurate records for the purpose of exposure and loss reimbursement audits as required by Florida Hurricane Catastrophe Fund rules. The corporation and the authorized insurer shall each maintain duplicate copies of policy declaration pages and supporting claims documents.
g. The corporation board shall establish in its plan of operation standards for quota share agreements which ensure that there is no discriminatory application among insurers as to the terms of quota share agreements, pricing of quota share agreements, incentive provisions if any, and consideration paid for servicing policies or adjusting claims.
h. The quota share primary insurance agreement between the corporation and an authorized insurer must set forth the specific terms under which coverage is provided, including, but not limited to, the sale and servicing of policies issued under the agreement by the insurance agent of the authorized insurer producing the business, the reporting of information concerning eligible risks, the payment of premium to the corporation, and arrangements for the adjustment and payment of hurricane claims incurred on eligible risks by the claims adjuster and personnel of the authorized insurer. Entering into a quota sharing insurance agreement between the corporation and an authorized insurer shall be voluntary and at the discretion of the authorized insurer.
3. May provide that the corporation may employ or otherwise contract with individuals or other entities to provide administrative or professional services that may be appropriate to effectuate the plan. The corporation shall have the power to borrow funds, by issuing bonds or by incurring other indebtedness, and shall have other powers reasonably necessary to effectuate the requirements of this subsection, including, without limitation, the power to issue bonds and incur other indebtedness in order to refinance outstanding bonds or other indebtedness. The corporation may, but is not required to, seek judicial validation of its bonds or other indebtedness under chapter 75. The corporation may issue bonds or incur other indebtedness, or have bonds issued on its behalf by a unit of local government pursuant to subparagraph (q)2., in the absence of a hurricane or other weather-related event, upon a determination by the corporation, subject to approval by the office, that such action would enable it to efficiently meet the financial obligations of the corporation and that such financings are reasonably necessary to effectuate the requirements of this subsection. The corporation is authorized to take all actions needed to facilitate tax-free status for any such bonds or indebtedness, including formation of trusts or other affiliated entities. The corporation shall have the authority to pledge assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other reinsurance recoverables, market equalization and other surcharges, and other funds available to the corporation as security for bonds or other indebtedness. In recognition of s. 10, Art. I of the State Constitution, prohibiting the impairment of obligations of contracts, it is the intent of the Legislature that no action be taken whose purpose is to impair any bond indenture or financing agreement or any revenue source committed by contract to such bond or other indebtedness.
4.a. Must require that the corporation operate subject to the supervision and approval of a board of governors consisting of eight individuals who are residents of this state, from different geographical areas of this state. The Governor, the Chief Financial Officer, the President of the Senate, and the Speaker of the House of Representatives shall each appoint two members of the board. At least one of the two members appointed by each appointing officer must have demonstrated expertise in insurance. The Chief Financial Officer shall designate one of the appointees as chair. All board members serve at the pleasure of the appointing officer. All members of the board of governors are subject to removal at will by the officers who appointed them. All board members, including the chair, must be appointed to serve for 3-year terms beginning annually on a date designated by the plan. However, for the first term beginning on or after July 1, 2009, each appointing officer shall appoint one member of the board for a 2-year term and one member for a 3-year term. Any board vacancy shall be filled for the unexpired term by the appointing officer. The Chief Financial Officer shall appoint a technical advisory group to provide information and advice to the board of governors in connection with the board’s duties under this subsection. The executive director and senior managers of the corporation shall be engaged by the board and serve at the pleasure of the board. Any executive director appointed on or after July 1, 2006, is subject to confirmation by the Senate. The executive director is responsible for employing other staff as the corporation may require, subject to review and concurrence by the board.
b. The board shall create a Market Accountability Advisory Committee to assist the corporation in developing awareness of its rates and its customer and agent service levels in relationship to the voluntary market insurers writing similar coverage. The members of the advisory committee shall consist of the following 11 persons, one of whom must be elected chair by the members of the committee: four representatives, one appointed by the Florida Association of Insurance Agents, one by the Florida Association of Insurance and Financial Advisors, one by the Professional Insurance Agents of Florida, and one by the Latin American Association of Insurance Agencies; three representatives appointed by the insurers with the three highest voluntary market share of residential property insurance business in the state; one representative from the Office of Insurance Regulation; one consumer appointed by the board who is insured by the corporation at the time of appointment to the committee; one representative appointed by the Florida Association of Realtors; and one representative appointed by the Florida Bankers Association. All members must serve for 3-year terms and may serve for consecutive terms. The committee shall report to the corporation at each board meeting on insurance market issues which may include rates and rate competition with the voluntary market; service, including policy issuance, claims processing, and general responsiveness to policyholders, applicants, and agents; and matters relating to depopulation.
5. Must provide a procedure for determining the eligibility of a risk for coverage, as follows:
a. Subject to the provisions of s. 627.3517, with respect to personal lines residential risks, if the risk is offered coverage from an authorized insurer at the insurer’s approved rate under either a standard policy including wind coverage or, if consistent with the insurer’s underwriting rules as filed with the office, a basic policy including wind coverage, for a new application to the corporation for coverage, the risk is not eligible for any policy issued by the corporation unless the premium for coverage from the authorized insurer is more than 15 percent greater than the premium for comparable coverage from the corporation. If the risk is not able to obtain any such offer, the risk is eligible for either a standard policy including wind coverage or a basic policy including wind coverage issued by the corporation; however, if the risk could not be insured under a standard policy including wind coverage regardless of market conditions, the risk shall be eligible for a basic policy including wind coverage unless rejected under subparagraph 8. However, with regard to a policyholder of the corporation or a policyholder removed from the corporation through an assumption agreement until the end of the assumption period, the policyholder remains eligible for coverage from the corporation regardless of any offer of coverage from an authorized insurer or surplus lines insurer. The corporation shall determine the type of policy to be provided on the basis of objective standards specified in the underwriting manual and based on generally accepted underwriting practices.
(I) If the risk accepts an offer of coverage through the market assistance plan or an offer of coverage through a mechanism established by the corporation before a policy is issued to the risk by the corporation or during the first 30 days of coverage by the corporation, and the producing agent who submitted the application to the plan or to the corporation is not currently appointed by the insurer, the insurer shall:
(A) Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(B) Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

(II) When the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on the policy, and the insurer shall:
(A) Pay to the producing agent of record of the corporation policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(B) Offer to allow the producing agent of record of the corporation policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

b. With respect to commercial lines residential risks, for a new application to the corporation for coverage, if the risk is offered coverage under a policy including wind coverage from an authorized insurer at its approved rate, the risk is not eligible for any policy issued by the corporation unless the premium for coverage from the authorized insurer is more than 15 percent greater than the premium for comparable coverage from the corporation. If the risk is not able to obtain any such offer, the risk is eligible for a policy including wind coverage issued by the corporation. However, with regard to a policyholder of the corporation or a policyholder removed from the corporation through an assumption agreement until the end of the assumption period, the policyholder remains eligible for coverage from the corporation regardless of any offer of coverage from an authorized insurer or surplus lines insurer.
(I) If the risk accepts an offer of coverage through the market assistance plan or an offer of coverage through a mechanism established by the corporation before a policy is issued to the risk by the corporation or during the first 30 days of coverage by the corporation, and the producing agent who submitted the application to the plan or the corporation is not currently appointed by the insurer, the insurer shall:
(A) Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(B) Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

(II) When the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on the policy, and the insurer shall:
(A) Pay to the producing agent of record of the corporation policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(B) Offer to allow the producing agent of record of the corporation policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

c. For purposes of determining comparable coverage under sub-subparagraphs a. and b., the comparison shall be based on those forms and coverages that are reasonably comparable. The corporation may rely on a determination of comparable coverage and premium made by the producing agent who submits the application to the corporation, made in the agent’s capacity as the corporation’s agent. A comparison may be made solely of the premium with respect to the main building or structure only on the following basis: the same coverage A or other building limits; the same percentage hurricane deductible that applies on an annual basis or that applies to each hurricane for commercial residential property; the same percentage of ordinance and law coverage, if the same limit is offered by both the corporation and the authorized insurer; the same mitigation credits, to the extent the same types of credits are offered both by the corporation and the authorized insurer; the same method for loss payment, such as replacement cost or actual cash value, if the same method is offered both by the corporation and the authorized insurer in accordance with underwriting rules; and any other form or coverage that is reasonably comparable as determined by the board. If an application is submitted to the corporation for wind-only coverage in the high-risk account, the premium for the corporation’s wind-only policy plus the premium for the ex-wind policy that is offered by an authorized insurer to the applicant shall be compared to the premium for multiperil coverage offered by an authorized insurer, subject to the standards for comparison specified in this subparagraph. If the corporation or the applicant requests from the authorized insurer a breakdown of the premium of the offer by types of coverage so that a comparison may be made by the corporation or its agent and the authorized insurer refuses or is unable to provide such information, the corporation may treat the offer as not being an offer of coverage from an authorized insurer at the insurer’s approved rate.
6. Must include rules for classifications of risks and rates therefor.
7. Must provide that if premium and investment income for an account attributable to a particular calendar year are in excess of projected losses and expenses for the account attributable to that year, such excess shall be held in surplus in the account. Such surplus shall be available to defray deficits in that account as to future years and shall be used for that purpose prior to assessing assessable insurers and assessable insureds as to any calendar year.
8. Must provide objective criteria and procedures to be uniformly applied for all applicants in determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:
a. Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and
b. Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the corporation shall be construed as the private placement of insurance, and the provisions of chapter 120 shall not apply.

9. Must provide that the corporation shall make its best efforts to procure catastrophe reinsurance at reasonable rates, to cover its projected 100-year probable maximum loss as determined by the board of governors.
10. The policies issued by the corporation must provide that, if the corporation or the market assistance plan obtains an offer from an authorized insurer to cover the risk at its approved rates, the risk is no longer eligible for renewal through the corporation, except as otherwise provided in this subsection.
11. Corporation policies and applications must include a notice that the corporation policy could, under this section, be replaced with a policy issued by an authorized insurer that does not provide coverage identical to the coverage provided by the corporation. The notice shall also specify that acceptance of corporation coverage creates a conclusive presumption that the applicant or policyholder is aware of this potential.
12. May establish, subject to approval by the office, different eligibility requirements and operational procedures for any line or type of coverage for any specified county or area if the board determines that such changes to the eligibility requirements and operational procedures are justified due to the voluntary market being sufficiently stable and competitive in such area or for such line or type of coverage and that consumers who, in good faith, are unable to obtain insurance through the voluntary market through ordinary methods would continue to have access to coverage from the corporation. When coverage is sought in connection with a real property transfer, such requirements and procedures shall not provide for an effective date of coverage later than the date of the closing of the transfer as established by the transferor, the transferee, and, if applicable, the lender.
13. Must provide that, with respect to the high-risk account, any assessable insurer with a surplus as to policyholders of $25 million or less writing 25 percent or more of its total countrywide property insurance premiums in this state may petition the office, within the first 90 days of each calendar year, to qualify as a limited apportionment company. A regular assessment levied by the corporation on a limited apportionment company for a deficit incurred by the corporation for the high-risk account in 2006 or thereafter may be paid to the corporation on a monthly basis as the assessments are collected by the limited apportionment company from its insureds pursuant to s. 627.3512, but the regular assessment must be paid in full within 12 months after being levied by the corporation. A limited apportionment company shall collect from its policyholders any emergency assessment imposed under sub-subparagraph (b)3.d. The plan shall provide that, if the office determines that any regular assessment will result in an impairment of the surplus of a limited apportionment company, the office may direct that all or part of such assessment be deferred as provided in subparagraph (q)4. However, there shall be no limitation or deferment of an emergency assessment to be collected from policyholders under sub-subparagraph (b)3.d.
14. Must provide that the corporation appoint as its licensed agents only those agents who also hold an appointment as defined in s. 626.015(3) with an insurer who at the time of the agent’s initial appointment by the corporation is authorized to write and is actually writing personal lines residential property coverage, commercial residential property coverage, or commercial nonresidential property coverage within the state.
15. Must provide, by July 1, 2007, a premium payment plan option to its policyholders which allows at a minimum for quarterly and semiannual payment of premiums. A monthly payment plan may, but is not required to, be offered.
16. Must limit coverage on mobile homes or manufactured homes built prior to 1994 to actual cash value of the dwelling rather than replacement costs of the dwelling.
17. May provide such limits of coverage as the board determines, consistent with the requirements of this subsection.
18. May require commercial property to meet specified hurricane mitigation construction features as a condition of eligibility for coverage.
(d)1. All prospective employees for senior management positions, as defined by the plan of operation, are subject to background checks as a prerequisite for employment. The office shall conduct background checks on such prospective employees pursuant to ss. 624.34, 624.404(3), and 628.261.
2. On or before July 1 of each year, employees of the corporation are required to sign and submit a statement attesting that they do not have a conflict of interest, as defined in part III of chapter 112. As a condition of employment, all prospective employees are required to sign and submit to the corporation a conflict-of-interest statement.
3. Senior managers and members of the board of governors are subject to the provisions of part III of chapter 112, including, but not limited to, the code of ethics and public disclosure and reporting of financial interests, pursuant to s. 112.3145. Senior managers and board members are also required to file such disclosures with the Commission on Ethics and the Office of Insurance Regulation. The executive director of the corporation or his or her designee shall notify each newly appointed and existing appointed member of the board of governors and senior managers of their duty to comply with the reporting requirements of part III of chapter 112. At least quarterly, the executive director or his or her designee shall submit to the Commission on Ethics a list of names of the senior managers and members of the board of governors who are subject to the public disclosure requirements under s. 112.3145.
4. Notwithstanding s. 112.3148 or s. 112.3149, or any other provision of law, an employee or board member may not knowingly accept, directly or indirectly, any gift or expenditure from a person or entity, or an employee or representative of such person or entity, that has a contractual relationship with the corporation or who is under consideration for a contract. An employee or board member who fails to comply with subparagraph 3. or this subparagraph is subject to penalties provided under ss. 112.317 and 112.3173.
5. Any senior manager of the corporation who is employed on or after January 1, 2007, regardless of the date of hire, who subsequently retires or terminates employment is prohibited from representing another person or entity before the corporation for 2 years after retirement or termination of employment from the corporation.
6. Any senior manager of the corporation who is employed on or after January 1, 2007, regardless of the date of hire, who subsequently retires or terminates employment is prohibited from having any employment or contractual relationship for 2 years with an insurer that has entered into a take-out bonus agreement with the corporation.
(e) Purchases that equal or exceed $2,500, but are less than $25,000, shall be made by receipt of written quotes, written record of telephone quotes, or informal bids, whenever practical. The procurement of goods or services valued at or over $25,000 shall be subject to competitive solicitation, except in situations where the goods or services are provided by a sole source or are deemed an emergency purchase; the services are exempted from competitive solicitation requirements under s. 287.057(3)(f); or the procurement of services is subject to s. 627.3513. Justification for the sole-sourcing or emergency procurement must be documented. Contracts for goods or services valued at or over $100,000 are subject to approval by the board.
(f) The corporation is subject to the provisions of chapter 255.
(g) The board shall determine whether it is more cost-effective and in the best interests of the corporation to use legal services provided by in-house attorneys employed by the corporation rather than contracting with outside counsel. In making such determination, the board shall document its findings and shall consider: the expertise needed; whether time commitments exceed in-house staff resources; whether local representation is needed; the travel, lodging and other costs associated with in-house representation; and such other factors that the board determines are relevant.
(h) The corporation may not retain a lobbyist to represent it before the legislative branch or executive branch. However, full-time employees of the corporation may register as lobbyists and represent the corporation before the legislative branch or executive branch.
(i)1. The Office of the Internal Auditor is established within the corporation to provide a central point for coordination of and responsibility for activities that promote accountability, integrity, and efficiency to the policyholders and to the taxpayers of this state. The internal auditor shall be appointed by the board of governors, shall report to and be under the general supervision of the board of governors, and is not subject to supervision by any employee of the corporation. Administrative staff and support shall be provided by the corporation. The internal auditor shall be appointed without regard to political affiliation. It is the duty and responsibility of the internal auditor to:
a. Provide direction for, supervise, conduct, and coordinate audits, investigations, and management reviews relating to the programs and operations of the corporation.
b. Conduct, supervise, or coordinate other activities carried out or financed by the corporation for the purpose of promoting efficiency in the administration of, or preventing and detecting fraud, abuse, and mismanagement in, its programs and operations.
c. Submit final audit reports, reviews, or investigative reports to the board of governors, the executive director, the members of the Financial Services Commission, and the President of the Senate and the Speaker of the House of Representatives.
d. Keep the board of governors informed concerning fraud, abuses, and internal control deficiencies relating to programs and operations administered or financed by the corporation, recommend corrective action, and report on the progress made in implementing corrective action.
e. Report expeditiously to the Department of Law Enforcement or other law enforcement agencies, as appropriate, whenever the internal auditor has reasonable grounds to believe there has been a violation of criminal law.
2. On or before February 15, the internal auditor shall prepare an annual report evaluating the effectiveness of the internal controls of the corporation and providing recommendations for corrective action, if necessary, and summarizing the audits, reviews, and investigations conducted by the office during the preceding fiscal year. The final report shall be furnished to the board of governors and the executive director, the President of the Senate, the Speaker of the House of Representatives, and the Financial Services Commission.
(j) All records of the corporation, except as otherwise provided by law, are subject to the record retention requirements of s. 119.021.
(k)1. The corporation shall establish and maintain a unit or division to investigate possible fraudulent claims by insureds or by persons making claims for services or repairs against policies held by insureds; or it may contract with others to investigate possible fraudulent claims for services or repairs against policies held by the corporation pursuant to s. 626.9891. The corporation must comply with reporting requirements of s. 626.9891. An employee of the corporation shall notify the corporation’s Office of the Internal Auditor and the Division of Insurance Fraud within 48 hours after having information that would lead a reasonable person to suspect that fraud may have been committed by any employee of the corporation.
2. The corporation shall establish a unit or division responsible for receiving and responding to consumer complaints, which unit or division is the sole responsibility of a senior manager of the corporation.
(l) The office shall conduct a comprehensive market conduct examination of the corporation every 2 years to determine compliance with its plan of operation and internal operations procedures. The first market conduct examination report shall be submitted to the President of the Senate and the Speaker of the House of Representatives no later than February 1, 2009. Subsequent reports shall be submitted on or before February 1 every 2 years thereafter.
(m) The Auditor General shall conduct an operational audit of the corporation every 3 years to evaluate management’s performance in administering laws, policies, and procedures governing the operations of the corporation in an efficient and effective manner. The scope of the review shall include, but is not limited to, evaluating claims handling, customer service, take-out programs and bonuses, financing arrangements, procurement of goods and services, internal controls, and the internal audit function. The initial audit must be completed by February 1, 2009.
(n)1. Rates for coverage provided by the corporation shall be actuarially sound and subject to the requirements of s. 627.062, except as otherwise provided in this paragraph. The corporation shall file its recommended rates with the office at least annually. The corporation shall provide any additional information regarding the rates which the office requires. The office shall consider the recommendations of the board and issue a final order establishing the rates for the corporation within 45 days after the recommended rates are filed. The corporation may not pursue an administrative challenge or judicial review of the final order of the office.
2. In addition to the rates otherwise determined pursuant to this paragraph, the corporation shall impose and collect an amount equal to the premium tax provided for in s. 624.509 to augment the financial resources of the corporation.
3. After the public hurricane loss-projection model under s. 627.06281 has been found to be accurate and reliable by the Florida Commission on Hurricane Loss Projection Methodology, that model shall serve as the minimum benchmark for determining the windstorm portion of the corporation’s rates. This subparagraph does not require or allow the corporation to adopt rates lower than the rates otherwise required or allowed by this paragraph.
4. The rate filings for the corporation which were approved by the office and which took effect January 1, 2007, are rescinded, except for those rates that were lowered. As soon as possible, the corporation shall begin using the lower rates that were in effect on December 31, 2006, and shall provide refunds to policyholders who have paid higher rates as a result of that rate filing. The rates in effect on December 31, 2006, shall remain in effect for the 2007 and 2008 calendar years except for any rate change that results in a lower rate. The next rate change that may increase rates shall take effect pursuant to a new rate filing recommended by the corporation and established by the office, subject to the requirements of this paragraph.
5. Beginning on July 15, 2009, and each year thereafter, the corporation must make a recommended actuarially sound rate filing for each personal and commercial line of business it writes, to be effective no earlier than January 1, 2010.
6. Beginning on or after January 1, 2010, and notwithstanding the board’s recommended rates and the office’s final order regarding the corporation’s filed rates under subparagraph 1., the corporation shall implement a rate increase each year which does not exceed 10 percent for any single policy issued by the corporation, excluding coverage changes and surcharges.
7. The corporation may also implement an increase to reflect the effect on the corporation of the cash buildup factor pursuant to s. 215.555(5)(b).
8. The corporation’s implementation of rates as prescribed in subparagraph 6. shall cease for any line of business written by the corporation upon the corporation’s implementation of actuarially sound rates. Thereafter, the corporation shall annually make a recommended actuarially sound rate filing for each commercial and personal line of business the corporation writes.
(o) If coverage in an account is deactivated pursuant to paragraph (p), coverage through the corporation shall be reactivated by order of the office only under one of the following circumstances:
1. If the market assistance plan receives a minimum of 100 applications for coverage within a 3-month period, or 200 applications for coverage within a 1-year period or less for residential coverage, unless the market assistance plan provides a quotation from admitted carriers at their filed rates for at least 90 percent of such applicants. Any market assistance plan application that is rejected because an individual risk is so hazardous as to be uninsurable using the criteria specified in subparagraph (c)8. shall not be included in the minimum percentage calculation provided herein. In the event that there is a legal or administrative challenge to a determination by the office that the conditions of this subparagraph have been met for eligibility for coverage in the corporation, any eligible risk may obtain coverage during the pendency of such challenge.
2. In response to a state of emergency declared by the Governor under s. 252.36, the office may activate coverage by order for the period of the emergency upon a finding by the office that the emergency significantly affects the availability of residential property insurance.
(p)1. The corporation shall file with the office quarterly statements of financial condition, an annual statement of financial condition, and audited financial statements in the manner prescribed by law. In addition, the corporation shall report to the office monthly on the types, premium, exposure, and distribution by county of its policies in force, and shall submit other reports as the office requires to carry out its oversight of the corporation.
2. The activities of the corporation shall be reviewed at least annually by the office to determine whether coverage shall be deactivated in an account on the basis that the conditions giving rise to its activation no longer exist.
(q)1. The corporation shall certify to the office its needs for annual assessments as to a particular calendar year, and for any interim assessments that it deems to be necessary to sustain operations as to a particular year pending the receipt of annual assessments. Upon verification, the office shall approve such certification, and the corporation shall levy such annual or interim assessments. Such assessments shall be prorated as provided in paragraph (b). The corporation shall take all reasonable and prudent steps necessary to collect the amount of assessment due from each assessable insurer, including, if prudent, filing suit to collect such assessment. If the corporation is unable to collect an assessment from any assessable insurer, the uncollected assessments shall be levied as an additional assessment against the assessable insurers and any assessable insurer required to pay an additional assessment as a result of such failure to pay shall have a cause of action against such nonpaying assessable insurer. Assessments shall be included as an appropriate factor in the making of rates. The failure of a surplus lines agent to collect and remit any regular or emergency assessment levied by the corporation is considered to be a violation of s. 626.936 and subjects the surplus lines agent to the penalties provided in that section.
2. The governing body of any unit of local government, any residents of which are insured by the corporation, may issue bonds as defined in s. 125.013 or s. 166.101 from time to time to fund an assistance program, in conjunction with the corporation, for the purpose of defraying deficits of the corporation. In order to avoid needless and indiscriminate proliferation, duplication, and fragmentation of such assistance programs, any unit of local government, any residents of which are insured by the corporation, may provide for the payment of losses, regardless of whether or not the losses occurred within or outside of the territorial jurisdiction of the local government. Revenue bonds under this subparagraph may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and declaring it an essential public purpose to permit certain municipalities or counties to issue such bonds as will permit relief to claimants and policyholders of the corporation. Any such unit of local government may enter into such contracts with the corporation and with any other entity created pursuant to this subsection as are necessary to carry out this paragraph. Any bonds issued under this subparagraph shall be payable from and secured by moneys received by the corporation from emergency assessments under sub-subparagraph (b)3.d., and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds.
3.a. The corporation shall adopt one or more programs subject to approval by the office for the reduction of both new and renewal writings in the corporation. Beginning January 1, 2008, any program the corporation adopts for the payment of bonuses to an insurer for each risk the insurer removes from the corporation shall comply with s. 627.3511(2) and may not exceed the amount referenced in s. 627.3511(2) for each risk removed. The corporation may consider any prudent and not unfairly discriminatory approach to reducing corporation writings, and may adopt a credit against assessment liability or other liability that provides an incentive for insurers to take risks out of the corporation and to keep risks out of the corporation by maintaining or increasing voluntary writings in counties or areas in which corporation risks are highly concentrated and a program to provide a formula under which an insurer voluntarily taking risks out of the corporation by maintaining or increasing voluntary writings will be relieved wholly or partially from assessments under sub-subparagraphs (b)3.a. and b. However, any “take-out bonus” or payment to an insurer must be conditioned on the property being insured for at least 5 years by the insurer, unless canceled or nonrenewed by the policyholder. If the policy is canceled or nonrenewed by the policyholder before the end of the 5-year period, the amount of the take-out bonus must be prorated for the time period the policy was insured. When the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on such policy, and the insurer shall either:
(I) Pay to the producing agent of record of the policy, for the first year, an amount which is the greater of the insurer’s usual and customary commission for the type of policy written or a policy fee equal to the usual and customary commission of the corporation; or
(II) Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the insurer’s usual and customary commission for the type of policy written. If the producing agent is unwilling or unable to accept appointment by the new insurer, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I).
b. Any credit or exemption from regular assessments adopted under this subparagraph shall last no longer than the 3 years following the cancellation or expiration of the policy by the corporation. With the approval of the office, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the corporation, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies so removed.
c. There shall be no credit, limitation, exemption, or deferment from emergency assessments to be collected from policyholders pursuant to sub-subparagraph (b)3.d.
4. The plan shall provide for the deferment, in whole or in part, of the assessment of an assessable insurer, other than an emergency assessment collected from policyholders pursuant to sub-subparagraph (b)3.d., if the office finds that payment of the assessment would endanger or impair the solvency of the insurer. In the event an assessment against an assessable insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other assessable insurers in a manner consistent with the basis for assessments set forth in paragraph (b).
5. Effective July 1, 2007, in order to evaluate the costs and benefits of approved take-out plans, if the corporation pays a bonus or other payment to an insurer for an approved take-out plan, it shall maintain a record of the address or such other identifying information on the property or risk removed in order to track if and when the property or risk is later insured by the corporation.
6. Any policy taken out, assumed, or removed from the corporation is, as of the effective date of the take-out, assumption, or removal, direct insurance issued by the insurer and not by the corporation, even if the corporation continues to service the policies. This subparagraph applies to policies of the corporation and not policies taken out, assumed, or removed from any other entity.
(r) Nothing in this subsection shall be construed to preclude the issuance of residential property insurance coverage pursuant to part VIII of chapter 626.
(s)1. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any assessable insurer or its agents or employees, the corporation or its agents or employees, members of the board of governors or their respective designees at a board meeting, corporation committee members, or the office or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to:
a. Any of the foregoing persons or entities for any willful tort;
b. The corporation or its producing agents for breach of any contract or agreement pertaining to insurance coverage;
c. The corporation with respect to issuance or payment of debt;
d. Any assessable insurer with respect to any action to enforce an assessable insurer’s obligations to the corporation under this subsection; or
e. The corporation in any pending or future action for breach of contract or for benefits under a policy issued by the corporation; in any such action, the corporation shall be liable to the policyholders and beneficiaries for attorney’s fees under s. 627.428.
2. The corporation shall manage its claim employees, independent adjusters, and others who handle claims to ensure they carry out the corporation’s duty to its policyholders to handle claims carefully, timely, diligently, and in good faith, balanced against the corporation’s duty to the state to manage its assets responsibly to minimize its assessment potential.
(t) For the purposes of s. 199.183(1), the corporation shall be considered a political subdivision of the state and shall be exempt from the corporate income tax. The premiums, assessments, investment income, and other revenue of the corporation are funds received for providing property insurance coverage as required by this subsection, paying claims for Florida citizens insured by the corporation, securing and repaying debt obligations issued by the corporation, and conducting all other activities of the corporation, and shall not be considered taxes, fees, licenses, or charges for services imposed by the Legislature on individuals, businesses, or agencies outside state government. Bonds and other debt obligations issued by or on behalf of the corporation are not to be considered “state bonds” within the meaning of s. 215.58(8). The corporation is not subject to the procurement provisions of chapter 287, and policies and decisions of the corporation relating to incurring debt, levying of assessments and the sale, issuance, continuation, terms and claims under corporation policies, and all services relating thereto, are not subject to the provisions of chapter 120. The corporation is not required to obtain or to hold a certificate of authority issued by the office, nor is it required to participate as a member insurer of the Florida Insurance Guaranty Association. However, the corporation is required to pay, in the same manner as an authorized insurer, assessments levied by the Florida Insurance Guaranty Association. It is the intent of the Legislature that the tax exemptions provided in this paragraph will augment the financial resources of the corporation to better enable the corporation to fulfill its public purposes. Any debt obligations issued by the corporation, their transfer, and the income therefrom, including any profit made on the sale thereof, shall at all times be free from taxation of every kind by the state and any political subdivision or local unit or other instrumentality thereof; however, this exemption does not apply to any tax imposed by chapter 220 on interest, income, or profits on debt obligations owned by corporations other than the corporation.
(u) Upon a determination by the office that the conditions giving rise to the establishment and activation of the corporation no longer exist, the corporation is dissolved. Upon dissolution, the assets of the corporation shall be applied first to pay all debts, liabilities, and obligations of the corporation, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the corporation shall become property of the state and shall be deposited in the Florida Hurricane Catastrophe Fund. However, no dissolution shall take effect as long as the corporation has bonds or other financial obligations outstanding unless adequate provision has been made for the payment of the bonds or other financial obligations pursuant to the documents authorizing the issuance of the bonds or other financial obligations.
(v)1. Effective July 1, 2002, policies of the Residential Property and Casualty Joint Underwriting Association shall become policies of the corporation. All obligations, rights, assets and liabilities of the Residential Property and Casualty Joint Underwriting Association, including bonds, note and debt obligations, and the financing documents pertaining to them become those of the corporation as of July 1, 2002. The corporation is not required to issue endorsements or certificates of assumption to insureds during the remaining term of in-force transferred policies.
2. Effective July 1, 2002, policies of the Florida Windstorm Underwriting Association are transferred to the corporation and shall become policies of the corporation. All obligations, rights, assets, and liabilities of the Florida Windstorm Underwriting Association, including bonds, note and debt obligations, and the financing documents pertaining to them are transferred to and assumed by the corporation on July 1, 2002. The corporation is not required to issue endorsements or certificates of assumption to insureds during the remaining term of in-force transferred policies.
3. The Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association shall take all actions as may be proper to further evidence the transfers and shall provide the documents and instruments of further assurance as may reasonably be requested by the corporation for that purpose. The corporation shall execute assumptions and instruments as the trustees or other parties to the financing documents of the Florida Windstorm Underwriting Association or the Residential Property and Casualty Joint Underwriting Association may reasonably request to further evidence the transfers and assumptions, which transfers and assumptions, however, are effective on the date provided under this paragraph whether or not, and regardless of the date on which, the assumptions or instruments are executed by the corporation. Subject to the relevant financing documents pertaining to their outstanding bonds, notes, indebtedness, or other financing obligations, the moneys, investments, receivables, choses in action, and other intangibles of the Florida Windstorm Underwriting Association shall be credited to the high-risk account of the corporation, and those of the personal lines residential coverage account and the commercial lines residential coverage account of the Residential Property and Casualty Joint Underwriting Association shall be credited to the personal lines account and the commercial lines account, respectively, of the corporation.
4. Effective July 1, 2002, a new applicant for property insurance coverage who would otherwise have been eligible for coverage in the Florida Windstorm Underwriting Association is eligible for coverage from the corporation as provided in this subsection.
5. The transfer of all policies, obligations, rights, assets, and liabilities from the Florida Windstorm Underwriting Association to the corporation and the renaming of the Residential Property and Casualty Joint Underwriting Association as the corporation shall in no way affect the coverage with respect to covered policies as defined in s. 215.555(2)(c) provided to these entities by the Florida Hurricane Catastrophe Fund. The coverage provided by the Florida Hurricane Catastrophe Fund to the Florida Windstorm Underwriting Association based on its exposures as of June 30, 2002, and each June 30 thereafter shall be redesignated as coverage for the high-risk account of the corporation. Notwithstanding any other provision of law, the coverage provided by the Florida Hurricane Catastrophe Fund to the Residential Property and Casualty Joint Underwriting Association based on its exposures as of June 30, 2002, and each June 30 thereafter shall be transferred to the personal lines account and the commercial lines account of the corporation. Notwithstanding any other provision of law, the high-risk account shall be treated, for all Florida Hurricane Catastrophe Fund purposes, as if it were a separate participating insurer with its own exposures, reimbursement premium, and loss reimbursement. Likewise, the personal lines and commercial lines accounts shall be viewed together, for all Florida Hurricane Catastrophe Fund purposes, as if the two accounts were one and represent a single, separate participating insurer with its own exposures, reimbursement premium, and loss reimbursement. The coverage provided by the Florida Hurricane Catastrophe Fund to the corporation shall constitute and operate as a full transfer of coverage from the Florida Windstorm Underwriting Association and Residential Property and Casualty Joint Underwriting to the corporation.
(w) Notwithstanding any other provision of law:
1. The pledge or sale of, the lien upon, and the security interest in any rights, revenues, or other assets of the corporation created or purported to be created pursuant to any financing documents to secure any bonds or other indebtedness of the corporation shall be and remain valid and enforceable, notwithstanding the commencement of and during the continuation of, and after, any rehabilitation, insolvency, liquidation, bankruptcy, receivership, conservatorship, reorganization, or similar proceeding against the corporation under the laws of this state.
2. No such proceeding shall relieve the corporation of its obligation, or otherwise affect its ability to perform its obligation, to continue to collect, or levy and collect, assessments, market equalization or other surcharges under 1subparagraph (c)10., or any other rights, revenues, or other assets of the corporation pledged pursuant to any financing documents.
3. Each such pledge or sale of, lien upon, and security interest in, including the priority of such pledge, lien, or security interest, any such assessments, market equalization or other surcharges, or other rights, revenues, or other assets which are collected, or levied and collected, after the commencement of and during the pendency of, or after, any such proceeding shall continue unaffected by such proceeding. As used in this subsection, the term “financing documents” means any agreement or agreements, instrument or instruments, or other document or documents now existing or hereafter created evidencing any bonds or other indebtedness of the corporation or pursuant to which any such bonds or other indebtedness has been or may be issued and pursuant to which any rights, revenues, or other assets of the corporation are pledged or sold to secure the repayment of such bonds or indebtedness, together with the payment of interest on such bonds or such indebtedness, or the payment of any other obligation or financial product, as defined in the plan of operation of the corporation related to such bonds or indebtedness.
4. Any such pledge or sale of assessments, revenues, contract rights, or other rights or assets of the corporation shall constitute a lien and security interest, or sale, as the case may be, that is immediately effective and attaches to such assessments, revenues, or contract rights or other rights or assets, whether or not imposed or collected at the time the pledge or sale is made. Any such pledge or sale is effective, valid, binding, and enforceable against the corporation or other entity making such pledge or sale, and valid and binding against and superior to any competing claims or obligations owed to any other person or entity, including policyholders in this state, asserting rights in any such assessments, revenues, or contract rights or other rights or assets to the extent set forth in and in accordance with the terms of the pledge or sale contained in the applicable financing documents, whether or not any such person or entity has notice of such pledge or sale and without the need for any physical delivery, recordation, filing, or other action.
5. As long as the corporation has any bonds outstanding, the corporation may not file a voluntary petition under chapter 9 of the federal Bankruptcy Code or such corresponding chapter or sections as may be in effect, from time to time, and a public officer or any organization, entity, or other person may not authorize the corporation to be or become a debtor under chapter 9 of the federal Bankruptcy Code or such corresponding chapter or sections as may be in effect, from time to time, during any such period.
6. If ordered by a court of competent jurisdiction, the corporation may assume policies or otherwise provide coverage for policyholders of an insurer placed in liquidation under chapter 631, under such forms, rates, terms, and conditions as the corporation deems appropriate, subject to approval by the office.
(x)1. The following records of the corporation are confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution:
a. Underwriting files, except that a policyholder or an applicant shall have access to his or her own underwriting files. Confidential and exempt underwriting file records may also be released to other governmental agencies upon written request and demonstration of need; such records held by the receiving agency remain confidential and exempt as provided herein.
b. Claims files, until termination of all litigation and settlement of all claims arising out of the same incident, although portions of the claims files may remain exempt, as otherwise provided by law. Confidential and exempt claims file records may be released to other governmental agencies upon written request and demonstration of need; such records held by the receiving agency remain confidential and exempt as provided herein.
c. Records obtained or generated by an internal auditor pursuant to a routine audit, until the audit is completed, or if the audit is conducted as part of an investigation, until the investigation is closed or ceases to be active. An investigation is considered “active” while the investigation is being conducted with a reasonable, good faith belief that it could lead to the filing of administrative, civil, or criminal proceedings.
d. Matters reasonably encompassed in privileged attorney-client communications.
e. Proprietary information licensed to the corporation under contract and the contract provides for the confidentiality of such proprietary information.
f. All information relating to the medical condition or medical status of a corporation employee which is not relevant to the employee’s capacity to perform his or her duties, except as otherwise provided in this paragraph. Information that is exempt shall include, but is not limited to, information relating to workers’ compensation, insurance benefits, and retirement or disability benefits.
g. Upon an employee’s entrance into the employee assistance program, a program to assist any employee who has a behavioral or medical disorder, substance abuse problem, or emotional difficulty which affects the employee’s job performance, all records relative to that participation shall be confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution, except as otherwise provided in s. 112.0455(11).
h. Information relating to negotiations for financing, reinsurance, depopulation, or contractual services, until the conclusion of the negotiations.
i. Minutes of closed meetings regarding underwriting files, and minutes of closed meetings regarding an open claims file until termination of all litigation and settlement of all claims with regard to that claim, except that information otherwise confidential or exempt by law shall be redacted.
2. If an authorized insurer is considering underwriting a risk insured by the corporation, relevant underwriting files and confidential claims files may be released to the insurer provided the insurer agrees in writing, notarized and under oath, to maintain the confidentiality of such files. If a file is transferred to an insurer, that file is no longer a public record because it is not held by an agency subject to the provisions of the public records law. Underwriting files and confidential claims files may also be released to staff and the board of governors of the market assistance plan established pursuant to s. 627.3515, who must retain the confidentiality of such files, except such files may be released to authorized insurers that are considering assuming the risks to which the files apply, provided the insurer agrees in writing, notarized and under oath, to maintain the confidentiality of such files. Finally, the corporation or the board or staff of the market assistance plan may make the following information obtained from underwriting files and confidential claims files available to licensed general lines insurance agents: name, address, and telephone number of the residential property owner or insured; location of the risk; rating information; loss history; and policy type. The receiving licensed general lines insurance agent must retain the confidentiality of the information received.
3. A policyholder who has filed suit against the corporation has the right to discover the contents of his or her own claims file to the same extent that discovery of such contents would be available from a private insurer in litigation as provided by the Florida Rules of Civil Procedure, the Florida Evidence Code, and other applicable law. Pursuant to subpoena, a third party has the right to discover the contents of an insured’s or applicant’s underwriting or claims file to the same extent that discovery of such contents would be available from a private insurer by subpoena as provided by the Florida Rules of Civil Procedure, the Florida Evidence Code, and other applicable law, and subject to any confidentiality protections requested by the corporation and agreed to by the seeking party or ordered by the court. The corporation may release confidential underwriting and claims file contents and information as it deems necessary and appropriate to underwrite or service insurance policies and claims, subject to any confidentiality protections deemed necessary and appropriate by the corporation.
4. Portions of meetings of the corporation are exempt from the provisions of s. 286.011 and s. 24(b), Art. I of the State Constitution wherein confidential underwriting files or confidential open claims files are discussed. All portions of corporation meetings which are closed to the public shall be recorded by a court reporter. The court reporter shall record the times of commencement and termination of the meeting, all discussion and proceedings, the names of all persons present at any time, and the names of all persons speaking. No portion of any closed meeting shall be off the record. Subject to the provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s notes of any closed meeting shall be retained by the corporation for a minimum of 5 years. A copy of the transcript, less any exempt matters, of any closed meeting wherein claims are discussed shall become public as to individual claims after settlement of the claim.
(y) It is the intent of the Legislature that the amendments to this subsection enacted in 2002 should, over time, reduce the probable maximum windstorm losses in the residual markets and should reduce the potential assessments to be levied on property insurers and policyholders statewide. In furtherance of this intent:
1. The board shall, on or before February 1 of each year, provide a report to the President of the Senate and the Speaker of the House of Representatives showing the reduction or increase in the 100-year probable maximum loss attributable to wind-only coverages and the quota share program under this subsection combined, as compared to the benchmark 100-year probable maximum loss of the Florida Windstorm Underwriting Association. For purposes of this paragraph, the benchmark 100-year probable maximum loss of the Florida Windstorm Underwriting Association shall be the calculation dated February 2001 and based on November 30, 2000, exposures. In order to ensure comparability of data, the board shall use the same methods for calculating its probable maximum loss as were used to calculate the benchmark probable maximum loss.
2. Beginning December 1, 2010, if the report under subparagraph 1. for any year indicates that the 100-year probable maximum loss attributable to wind-only coverages and the quota share program combined does not reflect a reduction of at least 25 percent from the benchmark, the board shall reduce the boundaries of the high-risk area eligible for wind-only coverages under this subsection in a manner calculated to reduce such probable maximum loss to an amount at least 25 percent below the benchmark.
3. Beginning February 1, 2015, if the report under subparagraph 1. for any year indicates that the 100-year probable maximum loss attributable to wind-only coverages and the quota share program combined does not reflect a reduction of at least 50 percent from the benchmark, the boundaries of the high-risk area eligible for wind-only coverages under this subsection shall be reduced by the elimination of any area that is not seaward of a line 1,000 feet inland from the Intracoastal Waterway.
(z) In enacting the provisions of this section, the Legislature recognizes that both the Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association have entered into financing arrangements that obligate each entity to service its debts and maintain the capacity to repay funds secured under these financing arrangements. It is the intent of the Legislature that nothing in this section be construed to compromise, diminish, or interfere with the rights of creditors under such financing arrangements. It is further the intent of the Legislature to preserve the obligations of the Florida Windstorm Underwriting Association and Residential Property and Casualty Joint Underwriting Association with regard to outstanding financing arrangements, with such obligations passing entirely and unchanged to the corporation and, specifically, to the applicable account of the corporation. So long as any bonds, notes, indebtedness, or other financing obligations of the Florida Windstorm Underwriting Association or the Residential Property and Casualty Joint Underwriting Association are outstanding, under the terms of the financing documents pertaining to them, the governing board of the corporation shall have and shall exercise the authority to levy, charge, collect, and receive all premiums, assessments, surcharges, charges, revenues, and receipts that the associations had authority to levy, charge, collect, or receive under the provisions of subsection (2) and this subsection, respectively, as they existed on January 1, 2002, to provide moneys, without exercise of the authority provided by this subsection, in at least the amounts, and by the times, as would be provided under those former provisions of subsection (2) or this subsection, respectively, so that the value, amount, and collectability of any assets, revenues, or revenue source pledged or committed to, or any lien thereon securing such outstanding bonds, notes, indebtedness, or other financing obligations will not be diminished, impaired, or adversely affected by the amendments made by this act and to permit compliance with all provisions of financing documents pertaining to such bonds, notes, indebtedness, or other financing obligations, or the security or credit enhancement for them, and any reference in this subsection to bonds, notes, indebtedness, financing obligations, or similar obligations, of the corporation shall include like instruments or contracts of the Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association to the extent not inconsistent with the provisions of the financing documents pertaining to them.
(aa) The corporation shall not require the securing of flood insurance as a condition of coverage if the insured or applicant executes a form approved by the office affirming that flood insurance is not provided by the corporation and that if flood insurance is not secured by the applicant or insured in addition to coverage by the corporation, the risk will not be covered for flood damage. A corporation policyholder electing not to secure flood insurance and executing a form as provided herein making a claim for water damage against the corporation shall have the burden of proving the damage was not caused by flooding. Notwithstanding other provisions of this subsection, the corporation may deny coverage to an applicant or insured who refuses to execute the form described herein.
(bb) A salaried employee of the corporation who performs policy administration services subsequent to the effectuation of a corporation policy is not required to be licensed as an agent under the provisions of s. 626.112.
(cc) There shall be no liability on the part of, and no cause of action of any nature shall arise against, producing agents of record of the corporation or employees of such agents for insolvency of any take-out insurer.
(dd) The assets of the corporation may be invested and managed by the State Board of Administration.
(ee) The office may establish a pilot program to offer optional sinkhole coverage in one or more counties or other territories of the corporation for the purpose of implementing s. 627.706, as amended by s. 30, chapter 2007-1, Laws of Florida. Under the pilot program, the corporation is not required to issue a notice of nonrenewal to exclude sinkhole coverage upon the renewal of existing policies, but may exclude such coverage using a notice of coverage change.
2(7) COLLATERAL PROTECTION INSURANCE.As used in this section and ss. 215.555 and 627.311, the term “collateral protection insurance” means commercial property insurance of which a creditor is the primary beneficiary and policyholder and which protects or covers an interest of the creditor arising out of a credit transaction secured by real or personal property. Initiation of such coverage is triggered by the mortgagor’s failure to maintain insurance coverage as required by the mortgage or other lending document. Collateral protection insurance is not residential coverage.
History.s. 445, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 69-199; ss. 1, 2, ch. 70-234; s. 1, ch. 72-22; s. 1, ch. 73-259; s. 1, ch. 74-216; s. 14, ch. 75-9; s. 3, ch. 75-279; s. 1, ch. 76-96; s. 3, ch. 76-168; s. 5, ch. 76-260; s. 3, ch. 77-64; s. 1, ch. 77-93; s. 1, ch. 77-174; s. 1, ch. 77-380; s. 1, ch. 77-457; s. 28, ch. 77-468; s. 1, ch. 78-47; s. 164, ch. 79-164; ss. 1, 2, ch. 79-185; ss. 1, 2, ch. 80-94; ss. 1, 2, ch. 81-4; ss. 2, 3, ch. 81-318; ss. 351, 357, 809(2nd), 810, ch. 82-243; ss. 48, 49, 79, ch. 82-386; ss. 1, 5, ch. 82-391; s. 1, ch. 83-124; s. 1, ch. 83-206; s. 95, ch. 83-216; s. 15, ch. 85-62; s. 24, ch. 85-175; s. 1, ch. 85-274; ss. 13, 44, ch. 86-160; s. 35, ch. 86-191; s. 14, ch. 86-287; s. 1, ch. 88-368; s. 5, ch. 88-390; s. 1, ch. 89-236; s. 1, ch. 90-108; s. 6, ch. 91-106; s. 59, ch. 91-110; s. 18, ch. 92-179; s. 114, ch. 92-318; s. 3, ch. 92-345; s. 21, ch. 93-260; s. 4, ch. 93-289; s. 3, ch. 93-401; s. 14, ch. 93-410; s. 1, ch. 95-233; s. 9, ch. 95-276; s. 8, ch. 96-194; s. 2, ch. 96-377; s. 379, ch. 96-406; s. 5, ch. 97-55; s. 28, ch. 97-94; ss. 1731, 1732, ch. 97-102; s. 57, ch. 97-264; s. 8, ch. 98-49; ss. 221, 290, ch. 98-166; s. 8, ch. 98-173; s. 56, ch. 98-287; s. 1, ch. 99-237; s. 132, ch. 2000-141; s. 139, ch. 2000-318; s. 35, ch. 2001-186; s. 4, ch. 2001-372; s. 2, ch. 2002-221; s. 2, ch. 2002-240; s. 11, ch. 2002-282; s. 90, ch. 2003-1; s. 1101, ch. 2003-261; s. 73, ch. 2003-281; s. 122, ch. 2004-5; s. 47, ch. 2004-335; s. 24, ch. 2004-374; s. 7, ch. 2005-111; s. 87, ch. 2006-1; s. 15, ch. 2006-12; s. 21, ch. 2007-1; s. 141, ch. 2007-5; s. 4, ch. 2007-39; s. 11, ch. 2007-90; s. 6, ch. 2007-126; s. 148, ch. 2008-4; s. 13, ch. 2008-66; s. 24, ch. 2008-191; s. 3, ch. 2008-220; s. 84, ch. 2009-21; s. 4, ch. 2009-77; s. 10, ch. 2009-87; s. 121, ch. 2010-5; s. 39, ch. 2010-151.
1Note.Repealed by s. 13, ch. 2008-66.
2Note.Also published at s. 215.555(15).
627.3511 Depopulation of Citizens Property Insurance Corporation.
(1) LEGISLATIVE INTENT.The Legislature finds that the public policy of this state requires the maintenance of a residual market for residential property insurance. It is the intent of the Legislature to provide a variety of financial incentives to encourage the replacement of the highest possible number of Citizens Property Insurance Corporation policies with policies written by admitted insurers at approved rates.
(2) TAKE-OUT BONUS.The Citizens Property Insurance Corporation shall pay the sum of up to $100 to an insurer for each risk that the insurer removes from the corporation, either by issuance of a policy upon expiration or cancellation of the corporation policy or by assumption of the corporation’s obligations with respect to an in-force policy. Such payment is subject to approval of the corporation board. In order to qualify for the bonus under this subsection, the take-out plan must include a minimum of 25,000 policies. Within 30 days after approval by the board, the office may reject the insurer’s take-out plan and disqualify the insurer from the bonus, based on the following criteria:
(a) The capacity of the insurer to absorb the policies proposed to be taken out of the corporation and the concentration of risks of those policies.
(b) Whether the geographic and risk characteristics of policies in the proposed take-out plan serve to reduce the exposure of the corporation sufficiently to justify the bonus.
(c) Whether coverage for risks to be taken out otherwise exists in the admitted voluntary market.
(d) The degree to which the take-out bonus is promoting new capital being allocated by the insurer to Florida residential property coverage.
(3) EXEMPTION FROM DEFICIT ASSESSMENTS.
(a) The calculation of an insurer’s assessment liability under s. 627.351(6)(b)3.a. or b. shall, for an insurer that in any calendar year removes 50,000 or more risks from the Citizens Property Insurance Corporation, either by issuance of a policy upon expiration or cancellation of the corporation policy or by assumption of the corporation’s obligations with respect to in-force policies, exclude such removed policies for the succeeding 3 years, as follows:
1. In the first year following removal of the risks, the risks are excluded from the calculation to the extent of 100 percent.
2. In the second year following removal of the risks, the risks are excluded from the calculation to the extent of 75 percent.
3. In the third year following removal of the risks, the risks are excluded from the calculation to the extent of 50 percent.

If the removal of risks is accomplished through assumption of obligations with respect to in-force policies, the corporation shall pay to the assuming insurer all unearned premium with respect to such policies less any policy acquisition costs agreed to by the corporation and assuming insurer. The term “policy acquisition costs” is defined as costs of issuance of the policy by the corporation which includes agent commissions, servicing company fees, and premium tax. This paragraph does not apply to an insurer that, at any time within 5 years before removing the risks, had a market share in excess of 0.1 percent of the statewide aggregate gross direct written premium for any line of property insurance, or to an affiliate of such an insurer. This paragraph does not apply unless either at least 40 percent of the risks removed from the corporation are located in Miami-Dade, Broward, and Palm Beach Counties, or at least 30 percent of the risks removed from the corporation are located in such counties and an additional 50 percent of the risks removed from the corporation are located in other coastal counties.

(b) An insurer that first wrote personal lines residential property coverage in this state on or after July 1, 1994, is exempt from regular deficit assessments imposed pursuant to s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., of the Citizens Property Insurance Corporation until the earlier of the following:
1. The end of the calendar year in which it first wrote 0.5 percent or more of the statewide aggregate direct written premium for any line of residential property coverage; or
2. December 31, 1997, or December 31 of the third year in which it wrote such coverage in this state, whichever is later.
(c) Other than an insurer that is exempt under paragraph (b), an insurer that in any calendar year increases its total structure exposure subject to wind coverage by 25 percent or more over its exposure for the preceding calendar year is, with respect to that year, exempt from deficit assessments imposed pursuant to s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., of the Citizens Property Insurance Corporation attributable to such increase in exposure.
(d) Any exemption or credit from regular assessments authorized by this section shall last no longer than 3 years following the cancellation or expiration of the policy by the corporation. With the approval of the office, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the corporation, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies so removed.
(4) AGENT BONUS.When the corporation enters into a contractual agreement for a take-out plan that provides a bonus to the insurer, the producing agent of record of the corporation policy is entitled to retain any unearned commission on such policy, and the insurer shall either:
(a) Pay to the producing agent of record of the association policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or
(b) Offer to allow the producing agent of record of the corporation policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with paragraph (a). The requirement of this subsection that the producing agent of record is entitled to retain the unearned commission on an association policy does not apply to a policy for which coverage has been provided in the association for 30 days or less or for which a cancellation notice has been issued pursuant to 1s. 627.351(6)(c)10. during the first 30 days of coverage.

(5) APPLICABILITY.
(a) The take-out bonus provided by subsection (2) and the exemption from assessment provided by paragraph (3)(a) apply only if the corporation policy is replaced by either a standard policy including wind coverage or, if consistent with the insurer’s underwriting rules as filed with the office, a basic policy including wind coverage; however, with respect to risks located in areas where coverage through the high-risk account of the corporation is available, the replacement policy need not provide wind coverage. The insurer must renew the replacement policy at approved rates on substantially similar terms for four additional 1-year terms, unless canceled or not renewed by the policyholder. If an insurer assumes the corporation’s obligations for a policy, it must issue a replacement policy for a 1-year term upon expiration of the corporation policy and must renew the replacement policy at approved rates on substantially similar terms for four additional 1-year terms, unless canceled or not renewed by the policyholder. For each replacement policy canceled or nonrenewed by the insurer for any reason during the 5-year coverage period required by this paragraph, the insurer must remove from the corporation one additional policy covering a risk similar to the risk covered by the canceled or nonrenewed policy. In addition to these requirements, the corporation must place the bonus moneys in escrow for a period of 5 years; such moneys may be released from escrow only to pay claims. If the policy is canceled or nonrenewed before the end of the 5-year period, the amount of the take-out bonus must be prorated for the time period the policy was insured. A take-out bonus provided by subsection (2) or subsection (6) shall not be considered premium income for purposes of taxes and assessments under the Florida Insurance Code and shall remain the property of the corporation, subject to the prior security interest of the insurer under the escrow agreement until it is released from escrow, and after it is released from escrow it shall be considered an asset of the insurer and credited to the insurer’s capital and surplus.
(b) It is the intent of the Legislature that an insurer eligible for the exemption under paragraph (3)(a) establish a preference in appointment of agents for those agents who lose a substantial amount of business as a result of risks being removed from the corporation.
(6) COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.
(a) The corporation shall pay a bonus to an insurer for each commercial residential policy that the insurer removes from the corporation pursuant to an approved take-out plan, either by issuance of a new policy upon expiration of the corporation policy or by assumption of the corporation’s obligations with respect to an in-force policy. The corporation board shall determine the amount of the bonus based on such factors as the coverage provided, relative hurricane risk, the length of time that the property has been covered by the corporation, and the criteria specified in paragraphs (b) and (c). The amount of the bonus with respect to a particular policy may not exceed 25 percent of the corporation’s 1-year premium for the policy. Such payment is subject to approval of the corporation board. In order to qualify for the bonus under this subsection, the take-out plan must include policies reflecting at least $100 million in structure exposure.
(b) In order for a plan to qualify for approval:
1. At least 40 percent of the policies removed from the corporation under the plan must be located in Miami-Dade, Broward, and Palm Beach Counties, or at least 30 percent of the policies removed from the corporation under the plan must be located in such counties and an additional 50 percent of the policies removed from the corporation must be located in other coastal counties.
2. The insurer must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled or nonrenewed by the insurer for a lawful reason other than reduction of hurricane exposure. If an insurer assumes the corporation’s obligations for a policy, it must issue a replacement policy for a 1-year term upon expiration of the corporation policy and must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled by the insurer for a lawful reason other than reduction of hurricane exposure. For each replacement policy canceled or nonrenewed by the insurer for any reason during the 3-year coverage period required by this subparagraph, the insurer must remove from the corporation one additional policy covering a risk similar to the risk covered by the canceled or nonrenewed policy.
(c) A take-out plan is deemed approved unless the office, within 120 days after the board votes to recommend the plan, disapproves the plan based on:
1. The capacity of the insurer to absorb the policies proposed to be taken out of the corporation and the concentration of risks of those policies.
2. Whether the geographic and risk characteristics of policies in the proposed take-out plan serve to reduce the exposure of the corporation sufficiently to justify the bonus.
3. Whether coverage for risks to be taken out otherwise exists in the admitted voluntary market.
4. The degree to which the take-out bonus is promoting new capital being allocated by the insurer to residential property coverage in this state.
(d) The calculation of an insurer’s regular assessment liability under s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., shall, with respect to commercial residential policies removed from the corporation under an approved take-out plan, exclude such removed policies for the succeeding 3 years, as follows:
1. In the first year following removal of the policies, the policies are excluded from the calculation to the extent of 100 percent.
2. In the second year following removal of the policies, the policies are excluded from the calculation to the extent of 75 percent.
3. In the third year following removal of the policies, the policies are excluded from the calculation to the extent of 50 percent.
(e) An insurer that first wrote commercial residential property coverage in this state on or after June 1, 1996, is exempt from regular assessments under s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., with respect to commercial residential policies until the earlier of:
1. The end of the calendar year in which such insurer first wrote 0.5 percent or more of the statewide aggregate direct written premium for commercial residential property coverage; or
2. December 31 of the third year in which such insurer wrote commercial residential property coverage in this state.
(f) An insurer that is not otherwise exempt from regular assessments under s. 627.351(6)(b)3.a. and b. with respect to commercial residential policies is, for any calendar year in which such insurer increased its total commercial residential hurricane exposure by 25 percent or more over its exposure for the preceding calendar year, exempt from regular assessments under s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., attributable to such increased exposure.
(7) A minority business, which is at least 51 percent owned by minority persons as described in s. 288.703(3), desiring to operate or become licensed as a property and casualty insurer may exempt up to $50 of the escrow requirements of the take-out bonus, as described in this section. Such minority business, which has applied for a certificate of authority to engage in business as a property and casualty insurer, may simultaneously file the business’ proposed take-out plan, as described in this section, with the corporation.
History.s. 10, ch. 95-276; s. 10, ch. 96-194; s. 6, ch. 97-55; s. 24, ch. 97-93; s. 1, ch. 99-142; s. 7, ch. 2000-333; s. 3, ch. 2002-221; s. 3, ch. 2002-240; s. 1102, ch. 2003-261; s. 88, ch. 2006-1; s. 17, ch. 2006-12; s. 12, ch. 2007-90; s. 149, ch. 2008-4.
1Note.Material in the cited provision relating to written notice of cancellation was deleted by s. 2, ch. 2002-240.
627.3512 Recoupment of residual market deficit assessments.
(1) The Legislature finds and declares that all assessments paid by an insurer or insurer group as a result of a levy by any residual market entity, including regular assessments levied on insurers by Citizens Property Insurance Corporation and any other assessments levied on insurers by an insurance risk apportionment plan or assigned risk plan under s. 627.311 or s. 627.351 constitute advances of funds from the insurer to the residual market entity, and that the insurer is entitled to fully recoup such advances. An insurer or insurer group may recoup any assessments that have been paid during or after 1995 by the insurer or insurer group to defray deficits of an insurance risk apportionment plan or assigned risk plan under ss. 627.311 and 627.351, net of any earnings returned to the insurer or insurer group by the association or plan for any year after 1993. A limited apportionment company as defined in s. 627.351(6)(c) may recoup any regular assessment that has been levied by, or paid to, Citizens Property Insurance Corporation.
(2) The recoupment shall be made by applying a separate recoupment factor on policies of the same line or type as were considered by the residual markets in determining the assessment liability of the insurer or insurer group. An insurer or insurer group shall calculate a separate assessment factor for personal lines and commercial lines. The separate assessment factor shall provide for full recoupment of the assessments over a period of 1 year, unless the insurer or insurer group, at its option, elects to recoup the assessments over a longer period. The assessment factor expires upon collection of the full amount allowed to be recouped. Amounts recouped under this section are not subject to premium taxes, fees, or commissions.
(3) The recoupment factor may not be more than 3 percentage points above the ratio of the deficit assessment to the Florida direct written premium for policies for the lines or types of business as to which the assessment was calculated, as written in the year the deficit assessment was paid. If an insurer or insurer group does not collect the full amount of the deficit assessment during one 12-month period, the insurer or insurer group may apply recalculated recoupment factors to policies issued or renewed during one or more succeeding 12-month periods.
(4) The insurer or insurer group shall file with the office a statement for informational purposes only setting forth the amount of the recoupment factor and an explanation of how the factor will be applied, at least 15 days prior to the factor being applied to any policies. The informational statement shall include documentation of the assessment paid by the insurer or insurer group and the arithmetic calculations supporting the recoupment factor. The insurer or insurer group may use the recoupment factor at any time after the expiration of the 15-day period. The recoupment factor shall apply to all policies described in subsection (3) that are issued or renewed by the insurer or insurer group during a 12-month period. If full recoupment requires the insurer or insurer group to apply a recoupment factor over a subsequent 12-month period, the insurer or insurer group must file a supplemental informational statement pursuant to this subsection.
(5) No later than 90 days after the insurer or insurer group has completed the recoupment process, it shall file with the office a final accounting report documenting the recoupment. The report shall provide the amounts of assessments paid by the insurer or insurer group, the amounts and percentages recouped by year from each affected line of business, and the direct written premium subject to recoupment by year.
(6) The commission may adopt rules to implement this section.
History.s. 11, ch. 95-276; s. 7, ch. 97-55; s. 1103, ch. 2003-261; s. 18, ch. 2006-12; s. 11, ch. 2009-87.
627.3513 Standards for sale of bonds by Citizens Property Insurance Corporation.
(1)(a) The purpose of this section is to provide standards for the sale of bonds pursuant to s. 627.351(2) and (6).
(b) The term “corporation,” as used in this section, means the Citizens Property Insurance Corporation.
(2) The plan of operation of the corporation shall provide for the selection of financial services providers and underwriters. Such provisions shall include the method for publicizing or otherwise providing reasonable notice to potential financial services providers, underwriters, and other interested parties, which may include expedited procedures and methods for emergency situations. The corporation shall not engage the services of any person or firm as a securities broker or bond underwriter that is not eligible to be engaged by the state under the provisions of s. 215.684. The corporation shall make all selections of financial service providers and managing underwriters at a noticed public meeting.
(3) The plan of operation of the corporation shall provide for any managing underwriter or financial adviser to provide to the corporation a disclosure statement containing at least the following information:
(a) An itemized list setting forth the nature and estimated amounts of expenses to be incurred by the managing underwriter in connection with the issuance of such bonds. Notwithstanding the foregoing, any such list may include an item for miscellaneous expenses, provided such item includes only minor items of expense which cannot be easily categorized elsewhere in the statement.
(b) The names, addresses, and estimated amounts of compensation of any finders connected with the issuance of the bonds.
(c) The amount of underwriting spread expected to be realized and the amount of fees and expenses expected to be paid to the financial adviser.
(d) Any management fee charged by the managing underwriter.
(e) Any other fee, bonus, or compensation estimated to be paid by the managing underwriter in connection with the bond issue to any person not regularly employed or retained by it.
(f) The name and address of each financial adviser or managing underwriter, if any, connected with the bond issue.
(g) Any other disclosure which the corporation may require.
(4)(a) No underwriter, commercial bank, investment banker, or financial consultant or adviser shall pay any finder any bonus, fee, or gratuity in connection with the sale of bonds issued by the corporation unless full disclosure is made in writing to the corporation prior to or concurrently with the submission of a purchase proposal for bonds by the underwriter, commercial bank, investment banker, or financial consultant or adviser, providing the name and address of any finder and the amount of bonus, fee, or gratuity paid to such finder. A violation of this subsection shall not affect the validity of the bond issue.
(b) As used in this subsection, the term “finder” means a person who is neither regularly employed by, nor a partner or officer of, an underwriter, bank, banker, or financial consultant or adviser and who enters into an understanding with either the issuer or the managing underwriter, or both, for any paid or promised compensation or valuable consideration, directly or indirectly, expressed or implied, to act solely as an intermediary between such issuer and managing underwriter for the purpose of influencing any transaction in the purpose of such bonds.
(5) This section is not intended to restrict or prohibit the employment of professional services relating to bonds issued under s. 627.351(6) or the issuance of bonds by the corporation.
(6) The failure of the corporation to comply with one or more provisions of this section shall not affect the validity of the bond issue; however, the failure of the corporation to comply in good faith both with this section and with the plan as amended shall be a violation of its plan of operation and a violation of the insurance code.
History.s. 8, ch. 97-55; s. 1104, ch. 2003-261.
627.3515 Market assistance plan; property and casualty risks.
(1) The office shall adopt a market assistance plan to assist in the placement of risks of applicants who are unable to procure property insurance as defined in s. 624.604 or casualty insurance as defined in s. 624.605(1)(b), (e), (f), (g), or (h) from authorized insurers when such insurance is otherwise generally available from insurers authorized to transact and actually writing that kind and class of insurance in this state. Through such measures as are found appropriate by the board of governors, the market assistance plan shall take affirmative steps to assist in the removal from the Citizens Property Insurance Corporation any risk that can be placed in the voluntary market. All property and casualty insurers licensed in this state shall participate in the plan.
(2)(a) Each person serving as a member of the board of governors of the Citizens Property Insurance Corporation shall also serve as a member of the board of governors of the market assistance plan.
(b) The plan shall be funded through payments from the Citizens Property Insurance Corporation and annual assessments of residential property insurers in the amount of $450.
(c) The plan is not required to assist in the placement of any workers’ compensation, employer’s liability, malpractice, or motor vehicle insurance coverage.
(3)(a) The plan and the corporation shall develop a business plan and present it to the Financial Services Commission for approval by September 1, 2007, to provide for the implementation of an electronic database for the purpose of confirming eligibility pursuant to s. 627.351(6). The business plan may provide that authorized insurers or agents of authorized insurers may submit to the plan or the corporation in electronic form, as determined by the plan or the corporation, information determined necessary by the plan or the corporation to deny coverage to risks ineligible for coverage by the corporation. Any authorized insurer submitting such information that results in a risk being denied coverage by the corporation is required to offer coverage to the risk at its approved rates, for the coverage and premium quoted, for at least 1 year.
(b) There shall be no liability on the part of, and no cause of action of any nature shall arise against, any authorized insurer acting within the scope of its authority under this subsection or its agents or employees for any action taken by them in the performance of their duties or responsibilities under this subsection.
History.s. 1, ch. 85-92; s. 43, ch. 86-160; s. 1, ch. 86-286; s. 6, ch. 88-390; ss. 26, 114, ch. 92-318; s. 12, ch. 95-276; s. 3, ch. 96-377; s. 1105, ch. 2003-261; s. 23, ch. 2007-1; s. 13, ch. 2007-90.
627.3517 Consumer choice.No provision of s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to impair the right of any insurance risk apportionment plan policyholder, upon receipt of any keepout or take-out offer, to retain his or her current agent, so long as that agent is duly licensed and appointed by the insurance risk apportionment plan or otherwise authorized to place business with the insurance risk apportionment plan. This right shall not be canceled, suspended, impeded, abridged, or otherwise compromised by any rule, plan of operation, or depopulation plan, whether through keepout, take-out, midterm assumption, or any other means, of any insurance risk apportionment plan or depopulation plan, including, but not limited to, those described in s. 627.351, s. 627.3511, or s. 627.3515. The commission shall adopt any rules necessary to cause any insurance risk apportionment plan or market assistance plan under such sections to demonstrate that the operations of the plan do not interfere with, promote, or allow interference with the rights created under this section. If the policyholder’s current agent is unable or unwilling to be appointed with the insurer making the take-out or keepout offer, the policyholder shall not be disqualified from participation in the appropriate insurance risk apportionment plan because of an offer of coverage in the voluntary market. An offer of full property insurance coverage by the insurer currently insuring either the ex-wind or wind-only coverage on the policy to which the offer applies shall not be considered a take-out or keepout offer. Any rule, plan of operation, or plan of depopulation, through keepout, take-out, midterm assumption, or any other means, of any property insurance risk apportionment plan under s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c) and 627.3511(4).
History.s. 4, ch. 2002-221; s. 4, ch. 2002-240; s. 1106, ch. 2003-261; s. 19, ch. 2006-12; s. 14, ch. 2007-90.
627.3519 Annual report of aggregate net probable maximum losses, financing options, and potential assessments.No later than February 1 of each year, the Financial Services Commission shall provide to the Legislature a report of the aggregate net probable maximum losses, financing options, and potential assessments of the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation. The report must include the respective 50-year, 100-year, and 250-year probable maximum losses of the fund and the corporation; analysis of all reasonable financing strategies for each such probable maximum loss, including the amount and term of debt instruments; specification of the percentage assessments that would be needed to support each of the financing strategies; and calculations of the aggregate assessment burden on Florida property and casualty policyholders for each of the probable maximum losses. The commission shall require the fund and the corporation to provide the commission with such data and analysis as the commission considers necessary to prepare the report.
History.s. 20, ch. 2006-12.
627.35193 Consumer reporting agency request for claims data from Citizens Property Insurance Corporation.Upon the request of a consumer reporting agency, as defined by the federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681 et seq., which consumer reporting agency is in compliance with the confidentiality requirements of such act, the Citizens Property Insurance Corporation shall electronically report claims data and histories to such consumer reporting agency which maintains a database of similar data for use in connection with the underwriting of insurance involving a consumer.
History.s. 28, ch. 2008-220; s. 85, ch. 2009-21.
627.357 Medical malpractice self-insurance.
(1) DEFINITIONS.As used in this section, the term:
(a) “Fund” means a group or association of health care providers authorized to self-insure.
(b) “Health care provider” means any:
1. Hospital licensed under chapter 395.
2. Physician licensed, or physician assistant licensed, under chapter 458.
3. Osteopathic physician or physician assistant licensed under chapter 459.
4. Podiatric physician licensed under chapter 461.
5. Health maintenance organization certificated under part I of chapter 641.
6. Ambulatory surgical center licensed under chapter 395.
7. Chiropractic physician licensed under chapter 460.
8. Psychologist licensed under chapter 490.
9. Optometrist licensed under chapter 463.
10. Dentist licensed under chapter 466.
11. Pharmacist licensed under chapter 465.
12. Registered nurse, licensed practical nurse, or advanced registered nurse practitioner licensed or registered under part I of chapter 464.
13. Other medical facility.
14. Professional association, partnership, corporation, joint venture, or other association established by the individuals set forth in subparagraphs 2., 3., 4., 7., 8., 9., 10., 11., and 12. for professional activity.
(c) “Other medical facility” means a facility the primary purpose of which is to provide human medical diagnostic services or a facility providing nonsurgical human medical treatment and in which the patient is admitted to and discharged from such facility within the same working day, and which is not part of a hospital. The term does not include a facility existing for the primary purpose of performing terminations of pregnancies or an office maintained by a physician or dentist for the practice of medicine.
(d) “Hospital subsidiary corporation” means any corporation over which a hospital or the hospital’s parent corporation exercises financial or operational control and which provides health care services to the hospital or the hospital parent corporation or another hospital subsidiary corporation.
(e) “Hospital parent corporation” means any corporation which has financial or operational control over a hospital and which provides health care services to the hospital or another hospital subsidiary corporation.
(f) “Committee” means a committee or board of trustees of a health care provider or group of health care providers established to make recommendations, policies, or decisions regarding patient institutional utilization, patient treatment, or institutional staff privileges or to perform other administrative or professional purposes or functions.
(2) A group or association of health care providers composed of any number of members, is authorized to self-insure against claims arising out of the rendering of, or failure to render, medical care or services, or against claims for injury or death to the insured’s patients arising out of the insured’s activities, upon obtaining approval from the office and upon complying with the following conditions:
(a) Establishment of a Medical Malpractice Risk Management Trust Fund to provide coverage against professional medical malpractice liability.
(b) Employment of professional consultants for loss prevention and claims management coordination under a risk management program.
(3) The fund may insure hospital parent corporations, hospital subsidiary corporations, and committees against claims arising out of the rendering of, or failure to render, medical care or services.
(4) The fund is subject to regulation and investigation by the office. The fund is subject to rules of the commission and to part IX of chapter 626, relating to trade practices and frauds.
(5) The trust fund may purchase medical malpractice insurance, specific excess insurance, and aggregate excess insurance, up to determined limits, as necessary to provide the insurance coverages authorized by this section, consistent with market availability. The trust fund may purchase such risk management services as may be required, pay claims as may arise under any deductible provisions, and engage in prudent investment of trust funds and other activities reasonably relating to the payment of claims and to providing medical malpractice self-insurance, to the extent otherwise consistent with this section and law generally applicable to medical malpractice insurers.
(6) The commission shall adopt rules to implement this section, including rules that ensure that a trust fund remains solvent and maintains a sufficient reserve to cover contingent liabilities under subsection (7) in the event of its dissolution.
(7)(a) The liability of each member for the obligations of the trust fund is individual, several, and proportionate, but not joint, except as provided in this subsection.
(b) Each member has a contingent assessment liability for payment of actual losses and expenses incurred while the member’s policy was in force.
(c) The trust fund may from time to time assess members of the fund liable therefor under the terms of their policies and pursuant to this section. The office may assess the members in the event of liquidation of the fund.
(d) A member’s share of a deficiency for which an assessment is made is computed by applying to the premium earned on the member’s policy or policies during the period to be covered by the assessment the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment. If one or more members fail to pay an assessment, the other members are liable on a proportionate basis for an additional assessment. The fund, acting on behalf of all members who paid the additional assessment, shall institute legal action, when necessary and appropriate, to recover the assessment from members who failed to pay it.
(e) In computing the earned premiums for the purposes of this section, the gross premium received by the fund for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy.
(f) No member has an offset against any assessment for which the member is liable, on account of any claim for unearned premium of losses payable.
(g) If the assets of a trust fund are at any time insufficient to comply with the requirements of law, discharge the fund’s liabilities, or meet the required conditions of financial soundness, or if a judgment against the fund has remained unsatisfied for 30 days, the trust fund must immediately make up the deficiency or levy an assessment upon the members for the amount needed to make up the deficiency, subject to the limitations set forth in this subsection.
(h) If the trust fund fails to make an assessment as required by paragraph (g), the office shall order the fund to do so. If the deficiency is not sufficiently made up within 60 days after the date of the order, the fund is deemed insolvent and grounds exist to proceed against the fund as provided for in part I of chapter 631.
(i) Subject to this section, any rehabilitation, liquidation, conservation, or dissolution of a trust fund shall be conducted under the supervision of the department, which has all power with respect thereto granted to it under part I of chapter 631 governing the rehabilitation, liquidation, conservation, or dissolution of insurers.
(8) The expense factors associated with rates used by a fund shall be filed with the office at least 30 days prior to use and may not be used until approved by the office. The office shall disapprove the rates unless the filed expense factors associated therewith are justified and reasonable for the benefits and services provided.
(9) Premiums, contributions, and assessments received by a fund are subject to ss. 624.509(1) and (2) and 624.5092, except that the tax rate is 1.6 percent of the gross amount of such premiums, contributions, or assessments.
History.ss. 1, 2, 3, ch. 72-265; s. 162, ch. 73-333; s. 4, ch. 75-9; s. 3, ch. 76-168; s. 8, ch. 76-260; s. 5, ch. 77-64; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 353, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 15, ch. 86-160; s. 30, ch. 87-226; s. 6, ch. 88-206; s. 17, ch. 89-167; s. 13, ch. 90-249; s. 60, ch. 91-110; ss. 27, 114, ch. 92-318; s. 58, ch. 97-264; s. 9, ch. 98-49; ss. 222, 291, ch. 98-166; s. 140, ch. 2000-318; s. 57, ch. 2001-63; s. 1107, ch. 2003-261; s. 42, ch. 2003-416.
Note.Former s. 627.355; s. 768.52, 1976 Supplement.
627.361 False or misleading information.No person shall willfully withhold information from or knowingly give false or misleading information to the office, any statistical agency designated by the office, any rating organization, or any insurer, which will affect the rates or premiums chargeable under this part.
History.s. 446, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 354, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1108, ch. 2003-261.
627.371 Hearings.
(1) Any person aggrieved by any rate charged, rating plan, rating system, or underwriting rule followed or adopted by an insurer, and any person aggrieved by any rating plan, rating system, or underwriting rule followed or adopted by a rating organization, may herself or himself or by her or his authorized representative make written request of the insurer or rating organization to review the manner in which the rate, plan, system, or rule has been applied with respect to insurance afforded her or him. If the request is not granted within 30 days after it is made, the requester may treat it as rejected. Any person aggrieved by the refusal of an insurer or rating organization to grant the review requested, or by the failure or refusal to grant all or part of the relief requested, may file a written complaint with the office, specifying the grounds relied upon. If the office has already disposed of the issue as raised by a similar complaint or believes that probable cause for the complaint does not exist or that the complaint is not made in good faith, it shall so notify the complainant. Otherwise, and if it also finds that the complaint charges a violation of this chapter and that the complainant would be aggrieved if the violation is proven, it shall proceed as provided in subsection (2).
(2) If after examination of an insurer, rating organization, advisory organization, or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance, upon the basis of other information, or upon sufficient complaint as provided in subsection (1), the office has good cause to believe that such insurer, organization, group, or association, or any rate, rating plan, or rating system made or used by any such insurer or rating organization, does not comply with the requirements and standards of this part applicable to it, it shall, unless it has good cause to believe such noncompliance is willful, give notice in writing to such insurer, organization, group, or association stating therein in what manner and to what extent noncompliance is alleged to exist and specifying therein a reasonable time, not less than 10 days thereafter, in which the noncompliance may be corrected, including any premium adjustment.
(3) If the office has good cause to believe that such noncompliance is willful or if, within the period prescribed by the office in the notice required by subsection (2), the insurer, organization, group, or association does not make such changes as may be necessary to correct the noncompliance specified by the office or establish to the satisfaction of the office that such specified noncompliance does not exist, then the office is required to proceed to further determine the matter. If no notice has been given as provided in subsection (2), the notice shall state in what manner and to what extent noncompliance is alleged to exist. The proceedings shall not consider any subject not specified in the notice required by subsections (2) and (3).
History.s. 447, ch. 59-205; s. 20, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 355, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 5, ch. 93-289; s. 322, ch. 97-102; s. 1109, ch. 2003-261.
627.381 Penalty for violation.
(1) The office may, if it finds that any person or organization has violated any provision of this part, impose an administrative fine pursuant to s. 624.4211.
(2) The office may suspend the license or authority of any rating organization or insurer which fails to comply with an order of the office within the time limited by such order, or any extension thereof which the office may grant. The office shall not suspend the license or authority of any rating organization or insurer for failure to comply with an order until the time prescribed for an appeal therefrom has expired or, if an appeal has been taken, until such order has been affirmed. The office may determine when a suspension of license or authority shall become effective and it shall remain in effect for the period fixed by it, unless it modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded, or reversed.
History.s. 448, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 356, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1110, ch. 2003-261.
PART II
THE INSURANCE CONTRACT
627.401 Scope of this part.
627.402 Definitions; specified certificates not included.
627.4025 Residential coverage and hurricane coverage defined.
627.403 “Premium” defined.
627.4035 Cash payment of premiums; claims.
627.404 Insurable interest; personal insurance.
627.405 Insurable interest; property.
627.406 Power to contract; purchase of insurance by or for minor.
627.407 Alteration of application.
627.408 Application as evidence.
627.4085 Insurer name, agent name, and license identification number required on application.
627.409 Representations in applications; warranties.
627.4091 Specific reasons for denial, cancellation, or nonrenewal.
627.40951 Standard personal lines residential insurance policy.
627.410 Filing, approval of forms.
627.4101 Credit insurance enrollment forms.
627.4105 Life and health insurance; reduced premiums upon rigorous physical examination.
627.4107 Government employees exposed to toxic drug chemicals; cancellation of life or health policy or certificate prohibited.
627.411 Grounds for disapproval.
627.412 Standard provisions, in general.
627.413 Contents of policies, in general; identification.
627.4131 Telephone number required.
627.4132 Stacking of coverages prohibited.
627.4133 Notice of cancellation, nonrenewal, or renewal premium.
627.4135 Casualty insurance contracts subject to general provisions for insurance contracts.
627.4136 Nonjoinder of insurers.
627.4137 Disclosure of certain information required.
627.414 Additional policy contents.
627.4143 Outline of coverage.
627.4145 Readable language in insurance policies.
627.4147 Medical malpractice insurance contracts.
627.4148 Medical malpractice insurers; required offer of coverage limits.
627.41495 Public notice of medical malpractice rate filings.
627.415 Charter, bylaw provisions.
627.416 Execution of policies.
627.417 Underwriters’ and combination policies.
627.418 Validity of noncomplying contracts.
627.419 Construction of policies.
627.4195 Health insurance; claims for payment of psychotherapeutic services; confidentiality.
627.420 Binders.
627.4205 Coverage identification number required.
627.421 Delivery of policy.
627.422 Assignment of policies.
627.423 Payment discharges insurer.
627.4232 Health insurance out-of-hospital benefits.
627.4233 Total disability defined.
627.4234 Health insurance cost containment provisions required.
627.4235 Coordination of benefits.
627.4236 Coverage for bone marrow transplant procedures.
627.4237 Sickness disability or disability due to sickness.
627.4238 Health insurer examinations.
627.4239 Coverage for use of drugs in treatment of cancer.
627.42395 Coverage for certain prescription and nonprescription enteral formulas.
627.424 Minor may give acquittance.
627.425 Forms for proof of loss to be furnished.
627.426 Claims administration.
627.4265 Payment of settlement.
627.427 Payment of judgment by insurer; penalty for failure.
627.428 Attorney’s fee.
627.429 Medical tests for HIV infection and AIDS for insurance purposes.
627.4295 Dental procedures; anesthesia and hospitalization coverage.
627.4301 Genetic information for insurance purposes.
627.4302 Identification cards for processing prescription drug claims.
627.441 Commercial general liability policies; coverage to contractors for completed operations.
627.442 Insurance contracts.
627.401 Scope of this part.No provision of this part of this chapter applies to:
(1) Reinsurance.
(2) Policies or contracts not issued for delivery in this state nor delivered in this state, except as otherwise provided in this code.
(3) Wet marine and transportation insurance, except ss. 627.409, 627.420, and 627.428.
(4) Title insurance, except ss. 627.406, 627.415, 627.416, 627.419, 627.427, and 627.428.
(5) Credit life or credit disability insurance, except ss. 627.419(5) and 627.428.
History.s. 450, ch. 59-205; s. 1, ch. 70-322; s. 1, ch. 70-371; s. 1, ch. 71-45; s. 163, ch. 73-333; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 358, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.402 Definitions; specified certificates not included.As used in this part, the term:
(1) “Policy” means a written contract of insurance or written agreement for or effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements, and papers which are a part thereof.
(2) The word “certificate” as used in this section does not include certificates as to group life or health insurance or as to group annuities issued to individual insureds.
History.s. 451, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 359, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 28, 114, ch. 92-318.
627.4025 Residential coverage and hurricane coverage defined.
(1) Residential coverage includes both personal lines residential coverage, which consists of the type of coverage provided by homeowner’s, mobile home owner’s, dwelling, tenant’s, condominium unit owner’s, cooperative unit owner’s, and similar policies, and commercial lines residential coverage, which consists of the type of coverage provided by condominium association, cooperative association, apartment building, and similar policies, including policies covering the common elements of a homeowners’ association. Residential coverage for personal lines and commercial lines as set forth in this section includes policies that provide coverage for particular perils such as windstorm and hurricane or coverage for insurer insolvency or deductibles.
(2) As used in policies providing residential coverage:
(a) “Hurricane coverage” is coverage for loss or damage caused by the peril of windstorm during a hurricane. The term includes ensuing damage to the interior of a building, or to property inside a building, caused by rain, snow, sleet, hail, sand, or dust if the direct force of the windstorm first damages the building, causing an opening through which rain, snow, sleet, hail, sand, or dust enters and causes damage.
(b) “Windstorm” for purposes of paragraph (a) means wind, wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane which results in direct physical loss or damage to property.
(c) “Hurricane” for purposes of paragraphs (a) and (b) means a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service. The duration of the hurricane includes the time period, in Florida:
1. Beginning at the time a hurricane watch or hurricane warning is issued for any part of Florida by the National Hurricane Center of the National Weather Service;
2. Continuing for the time period during which the hurricane conditions exist anywhere in Florida; and
3. Ending 72 hours following the termination of the last hurricane watch or hurricane warning issued for any part of Florida by the National Hurricane Center of the National Weather Service.
History.s. 8, ch. 95-276; s. 11, ch. 96-194; s. 10, ch. 97-55.
627.403 “Premium” defined.“Premium” is the consideration for insurance, by whatever name called. Any “assessment,” or any “membership,” “policy,” “survey,” “inspection,” “service” or similar fee or charge in consideration for an insurance contract is deemed part of the premium.
History.s. 452, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.4035 Cash payment of premiums; claims.
(1) The premiums for insurance contracts issued in this state or covering risk located in this state shall be paid in cash consisting of coins, currency, checks, or money orders or by using a debit card, credit card, automatic electronic funds transfer, or payroll deduction plan. By July 1, 2007, insurers issuing personal lines residential and commercial property policies shall provide a premium payment plan option to their policyholders which allows for a minimum of quarterly and semiannual payment of premiums. Insurers may, but are not required to, offer monthly payment plans. Insurers issuing such policies must submit their premium payment plan option to the office for approval before use.
(2) Subsection (1) is not applicable to:
(a) Reinsurance agreements;
(b) Pension plans;
(c) Premium loans, whether or not subject to an automatic provision;
(d) Dividends, whether to purchase additional paid-up insurance or to shorten the dividend payment period;
(e) Salary deduction plans;
(f) Preauthorized check plans;
(g) Waivers of premiums on disability;
(h) Nonforfeiture provisions affording benefits under supplementary contracts; or
(i) Such other methods of paying for life insurance as may be permitted by the commission pursuant to rule or regulation.
(3) All payments of claims made in this state under any contract of insurance shall be paid:
(a) In cash consisting of coins, currency, checks, drafts, or money orders and, if by check or draft, shall be in such form as will comply with the standards for cash items adopted by the Federal Reserve System to facilitate the sorting, routing, and mechanized processing of such items; or
(b) If authorized in writing by the recipient or the recipient’s representative, by debit card or any other form of electronic transfer. Any fees or costs to be charged against the recipient must be disclosed in writing to the recipient or the recipient’s representative at the time of written authorization. However, the written authorization requirement may be waived by the recipient or the recipient’s representative if the insurer verifies the identity of the insured or the insured’s recipient and does not charge a fee for the transaction. If the funds are misdirected, the insurer remains liable for the payment of the claim.
History.s. 1, ch. 70-69; s. 1, ch. 70-439; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 11, ch. 83-288; s. 114, ch. 92-318; s. 1, ch. 2000-113; s. 1111, ch. 2003-261; s. 1, ch. 2003-267; s. 1, ch. 2003-281; s. 21, ch. 2006-12; s. 24, ch. 2007-1; s. 15, ch. 2007-90.
627.404 Insurable interest; personal insurance.
(1) Any individual of legal capacity may procure or effect an insurance contract on his or her own life or body for the benefit of any person, but no person shall procure or cause to be procured or effected an insurance contract on the life or body of another individual unless the benefits under such contract are payable to the individual insured or his or her personal representatives, or to any person having, at the time such contract was made, an insurable interest in the individual insured. The insurable interest need not exist after the inception date of coverage under the contract.
(2) For purposes of this section, the term:
(a) “Business entity” includes, but is not limited to, a joint venture, partnership, corporation, limited liability company, and business trust.
(b) “Insurable interest” as to life, health, or disability insurance includes only the following interests:
1. An individual has an insurable interest in his or her own life, body, and health.
2. An individual has an insurable interest in the life, body, and health of another person to whom the individual is closely related by blood or by law and in whom the individual has a substantial interest engendered by love and affection.
3. An individual has an insurable interest in the life, body, and health of another person if such individual has an expectation of a substantial pecuniary advantage through the continued life, health, and safety of that other person and consequent substantial pecuniary loss by reason of the death, injury, or disability of that other person.
4. An individual party to a contract for the purchase or sale of an interest in any business entity has an insurable interest in the life of each other party to such contract for the purpose of such contract only.
5. A trust, or the trustee of a trust, has an insurable interest in the life of an individual insured under a life insurance policy owned by the trust, or the trustee of the trust acting in a fiduciary capacity, if the insured is the grantor of the trust; an individual closely related by blood or law to the grantor; or an individual in whom the grantor otherwise has an insurable interest if, in each of the situations described in subsection (5), the life insurance proceeds are primarily for the benefit of trust beneficiaries having an insurable interest in the life of the insured.
6. A guardian, trustee, or other fiduciary, acting in a fiduciary capacity, has an insurable interest in the life of any person for whose benefit the fiduciary holds property, and in the life of any other individual in whose life the person has an insurable interest so long as the life insurance proceeds are primarily for the benefit of persons having an insurable interest in the life of the insured.
7. A charitable organization meeting the requirements of s. 501(c)(3) of the United States Internal Revenue Code, as amended, has an insurable interest in the life of any person who consents in writing to the organization’s ownership or purchase of that insurance.
8. A trustee, sponsor, or custodian of assets held in any plan governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. ss. 1001 et seq., or in any other retirement or employee benefit plan, has an insurable interest in the life of any participant in the plan with the written consent of the prospective insured. An employer, trustee, sponsor, or custodian may not retaliate or take adverse action against any participant who does not consent to the issuance of insurance on the participant’s life.
9. A business entity has an insurable interest in the life, body, and health of any of the owners, directors, officers, partners, and managers of the business entity or any affiliate or subsidiary of the business entity, or key employees or key persons of the business entity or affiliate or subsidiary, if consent is obtained in writing from the key employees or persons before the insurance is purchased. The business entity or affiliate or subsidiary may not retaliate or take adverse action against any key employee or person who does not consent to the issuance of insurance on the key employee or key person’s life. For purposes of this subsection, a “key employee” or “key person” means an individual whose position or compensation is described in s. 101(j)(2)(A)(ii) of the Internal Revenue Code of 1986.
(3) An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest which such applicant has in the insured; and no insurer shall incur any legal liability except as set forth in the policy, by virtue of any untrue statements, declarations, or representations so relied upon in good faith by the insurer.
(4) If the beneficiary, assignee, or other payee under any insurance contract procured by a person not having an insurable interest in the insured at the time such contract was made receives from the insurer any benefits thereunder by reason of the death, injury, or disability of the insured, the insured or his or her personal representative or other lawfully acting agent may maintain an action to recover such benefits from the person receiving them.
(5) A contract of insurance upon a person, other than a policy of group life insurance or group or blanket accident, health, or disability insurance, may not be effectuated unless, on or before the time of entering into such contract, the person insured, having legal capacity to contract, applies for or consents in writing to the contract and its terms, except that any person having an insurable interest in the life of a minor younger than 15 years of age or any person upon whom a minor younger than 15 years of age is dependent for support and maintenance may effectuate a policy of insurance on the minor.
(6) For purposes of this section, the signature of the proposed insured, having capacity to contract, on the application for insurance shall constitute his or her written consent.
(7) This section does not apply to any policy of life insurance to which s. 624.402(8) applies.
History.s. 453, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 13, ch. 91-296; s. 114, ch. 92-318; s. 1, ch. 2008-36.
627.405 Insurable interest; property.
(1) No contract of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss.
(2) “Insurable interest” as used in this section means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.
(3) The measure of an insurable interest in property is the extent to which the insured might be damnified by loss, injury, or impairment thereof.
History.s. 454, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.406 Power to contract; purchase of insurance by or for minor.
(1) Any person of competent legal capacity may contract for insurance.
(2) Any minor of the age of 15 years or more, as determined by the nearest birthday, may, notwithstanding his or her minority, contract for annuities or for insurance on his or her own life, body, health, property, liabilities, or other interests or on the person of another in whom the minor has an insurable interest. Such a minor shall, notwithstanding such minority, be deemed competent to exercise all rights and powers with respect to or under any contract for annuity or for insurance upon his or her own life, body, or health or any contract such minor effected on his or her own property, liabilities, or other interests or on the person of another, as might be exercised by a person of full legal age. Such minor may at any time surrender his or her interest in any such contracts and give a valid discharge for any benefits accruing or money payable thereunder. Such a minor shall not, by reason of his or her minority, be entitled to rescind, avoid, or repudiate the contract, nor to rescind, avoid, or repudiate any exercise of a right or privilege thereunder, except that such a minor, not otherwise emancipated, shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on any such annuity or insurance contract.
(3) If any minor mentioned in subsection (2) is possessed of an estate that is being administered by a guardian or curator, no such contract shall be binding upon such estate as to payment of premiums, except as and when consented to by the guardian or curator and approved by the probate court of the county in which the administration of the estate is pending; and such consent and approval shall be required as to each premium payment.
(4) Any annuity contract or policy of life or health insurance procured by or for a minor under subsection (2) shall be made payable either to the minor or his or her estate or to a person having an insurable interest in the life of such minor.
History.s. 455, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 360, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 323, ch. 97-102.
627.407 Alteration of application.No alteration of any written application for any life or health insurance policy shall be made by any person other than the applicant without his or her written consent, except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant.
History.s. 456, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 361, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 324, ch. 97-102.
627.408 Application as evidence.
(1) An application for the issuance of any life or health insurance policy or annuity contract is not admissible in evidence in an action relative to the policy or contract unless a true copy of the application was attached to or otherwise made a part of the policy or contract when issued.
(2) After reinstatement or renewal of a policy of insurance delivered or issued for delivery in this state, the insured may, in writing, request from the insurer a copy of the original application, or the application for renewal or reinstatement, if any. The insured or the beneficiary or assignee of a life or health insurance policy may request the application. Within 30 days after receiving the request, the insurer must deliver or mail a legible copy of the application to the person requesting it. If the request is made by a beneficiary, the 30-day period does not begin to run until after receipt of evidence satisfactory to the insurer of the beneficiary’s vested interest in the policy or contract.
History.s. 457, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 362, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 29, 114, ch. 92-318.
627.4085 Insurer name, agent name, and license identification number required on application.
(1) All applications for an insurance policy or annuity contract shall prominently display the name of the insuring entity on the first page of the application form at the time the coverage is bound or premium is quoted. Such applications shall also disclose the name and license identification number of the agent as shown on the agent’s license issued by the department, which information may be typed, printed, stamped, or handwritten if legible.
(2) This section does not apply to surplus lines business under the provisions of ss. 626.913-626.937.
History.ss. 34, 65, ch. 88-166; s. 39, ch. 92-146; s. 114, ch. 92-318.
627.409 Representations in applications; warranties.
(1) Any statement or description made by or on behalf of an insured or annuitant in an application for an insurance policy or annuity contract, or in negotiations for a policy or contract, is a representation and is not a warranty. A misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply:
(a) The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.
(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.
(2) A breach or violation by the insured of any warranty, condition, or provision of any wet marine or transportation insurance policy, contract of insurance, endorsement, or application therefor does not void the policy or contract, or constitute a defense to a loss thereon, unless such breach or violation increased the hazard by any means within the control of the insured.
History.s. 458, ch. 59-205; s. 2, ch. 71-45; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 363, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 30, 114, ch. 92-318.
627.4091 Specific reasons for denial, cancellation, or nonrenewal.
(1) The denial of an application for an insurance policy must be accompanied by the specific reasons for denial, including the specific underwriting reasons, if applicable.
(2) Each notice of nonrenewal or cancellation must be accompanied by the specific reasons for nonrenewal or cancellation, including the specific underwriting reasons, if applicable.
(3) No cause of action in the nature of defamation, invasion of privacy, or negligence shall arise against any person for disclosing personal or privileged information in accordance with this section, nor shall such a cause of action arise against any person for furnishing personal or privileged information to an insurance institution, agent, or insurance-support organization; however, this section shall provide no immunity for disclosing or furnishing false information through gross negligence or with malice or willful intent to injure any person.
(4) The provisions of any other statute respecting disclosure of personal information control to the extent of any conflict with this section.
(5) When an insurer refuses to provide private passenger automobile insurance or personal lines residential property insurance, including, but not limited to, homeowner’s, mobile home owner’s, condominium unit owner’s, or other insurance covering a personal residential structure, to an applicant due to adverse underwriting information, the insurer shall:
(a) Provide to the applicant specific information regarding the reasons for the refusal to insure.
(b) If the reason for the refusal to insure is based on a loss underwriting history or report from a consumer reporting agency, to the extent applicable identify the loss underwriting history and notify the applicant of his or her right under the federal Fair and Accurate Credit Transactions Act to obtain a copy of the report from the consumer reporting agency.
History.s. 31, ch. 92-318; s. 12, ch. 2004-370; s. 157, ch. 2004-390.
627.40951 Standard personal lines residential insurance policy.
(1) The Legislature finds that many consumers who filed property loss claims as a result of the hurricanes that struck this state in 2004 were inadequately insured due to the difficulty consumers encounter in trying to understand the complex nature of property insurance policies. The purpose and intent of this section is to have property and casualty insurers offer standard personal lines residential property insurance policies and standard checklists of policy contents, in accordance with s. 627.4143, to consumers and to ensure that these policies and checklists are written in a simple format with easily readable language that will enable most consumers to understand the principal benefits and coverage provided in the policy; the principal exclusions and limitations or reductions contained in the policy, including, but not limited to, deductibles, coinsurance, and any other limitations or reductions; and any additional coverage provided through any rider or endorsement that accompanies the policy and renewal or cancellation provisions.
(2) The Chief Financial Officer shall appoint an advisory committee composed of two representatives of insurers currently selling personal lines residential property insurance coverage, two representatives of property and casualty agents, two representatives of consumers, two representatives of the Commissioner of Insurance Regulation, and the Insurance Consumer Advocate or her or his designee. The Chief Financial Officer or her or his designee shall serve as chair of the committee. The committee shall develop policy language for coverage that represents general industry standards in the market for comprehensive coverage under personal lines residential insurance policies and shall develop a checklist to be used with each type of personal lines residential property insurance policy. The committee shall review policies and related forms written by Insurance Services Office, Inc. The committee shall file a report containing its recommendations to the President of the Senate and the Speaker of the House of Representatives by January 15, 2006. No insurer shall be required to offer the standard policy unless required by further act of the Legislature.
History.s. 8, ch. 2005-111.
627.410 Filing, approval of forms.
(1) No basic insurance policy or annuity contract form, or application form where written application is required and is to be made a part of the policy or contract, or group certificates issued under a master contract delivered in this state, or printed rider or endorsement form or form of renewal certificate, shall be delivered or issued for delivery in this state, unless the form has been filed with the office by or in behalf of the insurer which proposes to use such form and has been approved by the office. This provision does not apply to surety bonds or to policies, riders, endorsements, or forms of unique character which are designed for and used with relation to insurance upon a particular subject (other than as to health insurance), or which relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or health insurance policies and are used at the request of the individual policyholder, contract holder, or certificateholder. As to group insurance policies effectuated and delivered outside this state but covering persons resident in this state, the group certificates to be delivered or issued for delivery in this state shall be filed with the office for information purposes only.
(2) Every such filing must be made not less than 30 days in advance of any such use or delivery. At the expiration of such 30 days, the form so filed will be deemed approved unless prior thereto it has been affirmatively approved or disapproved by order of the office. The approval of any such form by the office constitutes a waiver of any unexpired portion of such waiting period. The office may extend by not more than an additional 15 days the period within which it may so affirmatively approve or disapprove any such form, by giving notice of such extension before expiration of the initial 30-day period. At the expiration of any such period as so extended, and in the absence of such prior affirmative approval or disapproval, any such form shall be deemed approved.
(3) The office may, for cause, withdraw a previous approval. No insurer shall issue or use any form disapproved by the office, or as to which the office has withdrawn approval, after the effective date of the order of the office.
(4) The office may, by order, exempt from the requirements of this section for so long as it deems proper any insurance document or form or type thereof as specified in such order, to which, in its opinion, this section may not practicably be applied, or the filing and approval of which are, in its opinion, not desirable or necessary for the protection of the public.
(5) This section also applies to any such form used by domestic insurers for delivery in a jurisdiction outside this state if the insurance supervisory official of such jurisdiction informs the office that such form is not subject to approval or disapproval by such official, and upon the order of the office requiring the form to be submitted to it for the purpose. The applicable same standards apply to such forms as apply to forms for domestic use.
(6)(a) An insurer shall not deliver or issue for delivery or renew in this state any health insurance policy form until it has filed with the office a copy of every applicable rating manual, rating schedule, change in rating manual, and change in rating schedule; if rating manuals and rating schedules are not applicable, the insurer must file with the office applicable premium rates and any change in applicable premium rates. This paragraph does not apply to group health insurance policies, effectuated and delivered in this state, insuring groups of 51 or more persons, except for Medicare supplement insurance, long-term care insurance, and any coverage under which the increase in claim costs over the lifetime of the contract due to advancing age or duration is prefunded in the premium.
(b) The commission may establish by rule, for each type of health insurance form, procedures to be used in ascertaining the reasonableness of benefits in relation to premium rates and may, by rule, exempt from any requirement of paragraph (a) any health insurance policy form or type thereof (as specified in such rule) to which form or type such requirements may not be practically applied or to which form or type the application of such requirements is not desirable or necessary for the protection of the public. With respect to any health insurance policy form or type thereof which is exempted by rule from any requirement of paragraph (a), premium rates filed pursuant to ss. 627.640 and 627.662 shall be for informational purposes.
(c) Every filing made pursuant to this subsection shall be made within the same time period provided in, and shall be deemed to be approved under the same conditions as those provided in, subsection (2).
(d) Every filing made pursuant to this subsection, except disability income policies and accidental death policies, shall be prohibited from applying the following rating practices:
1. Select and ultimate premium schedules.
2. Premium class definitions which classify insured based on year of issue or duration since issue.
3. Attained age premium structures on policy forms under which more than 50 percent of the policies are issued to persons age 65 or over.
(e) Except as provided in subparagraph 1., an insurer shall continue to make available for purchase any individual policy form issued on or after October 1, 1993. A policy form shall not be considered to be available for purchase unless the insurer has actively offered it for sale in the previous 12 months.
1. An insurer may discontinue the availability of a policy form if the insurer provides to the office in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the office, the insurer shall no longer offer for sale the policy form or certificate form in this state.
2. An insurer that discontinues the availability of a policy form pursuant to subparagraph 1. shall not file for approval a new policy form providing similar benefits as the discontinued form for a period of 5 years after the insurer provides notice to the office of the discontinuance. The period of discontinuance may be reduced if the office determines that a shorter period is appropriate.
3. The experience of all policy forms providing similar benefits shall be combined for all rating purposes.
(7)(a) Each insurer subject to the requirements of subsection (6) shall make an annual filing with the office no later than 12 months after its previous filing, demonstrating the reasonableness of benefits in relation to premium rates. The office, after receiving a request to be exempted from the provisions of this section, may, for good cause due to insignificant numbers of policies in force or insignificant premium volume, exempt a company, by line of coverage, from filing rates or rate certification as required by this section.
(b) The filing required by this subsection shall be satisfied by one of the following methods:
1. A rate filing prepared by an actuary which contains documentation demonstrating the reasonableness of benefits in relation to premiums charged in accordance with the applicable rating laws and rules promulgated by the commission.
2. If no rate change is proposed, a filing which consists of a certification by an actuary that benefits are reasonable in relation to premiums currently charged in accordance with applicable laws and rules promulgated by the commission.
(c) As used in this section, “actuary” means an individual who is a member of the Society of Actuaries or the American Academy of Actuaries. If an insurer does not employ or otherwise retain the services of an actuary, the insurer’s certification shall be prepared by insurer personnel or consultants with a minimum of 5 years’ experience in insurance ratemaking. The chief executive officer of the insurer shall review and sign the certification indicating his or her agreement with its conclusions.
(d) If at the time a filing is required under this section an insurer is in the process of completing a rate review, the insurer may apply to the office for an extension of up to an additional 30 days in which to make the filing. The request for extension must be received by the office no later than the date the filing is due.
(e) If an insurer fails to meet the filing requirements of this subsection and does not submit the filing within 60 days following the date the filing is due, the office may, in addition to any other penalty authorized by law, order the insurer to discontinue the issuance of policies for which the required filing was not made, until such time as the office determines that the required filing is properly submitted.
(8)(a) For the purposes of subsections (6) and (7), benefits of an individual accident and health insurance policy form, including Medicare supplement policies as defined in s. 627.672, when authorized by rules adopted by the commission, and excluding long-term care insurance policies as defined in s. 627.9404, and other policy forms under which more than 50 percent of the policies are issued to individuals age 65 and over, are deemed to be reasonable in relation to premium rates if the rates are filed pursuant to a loss ratio guarantee and both the initial rates and the durational and lifetime loss ratios have been approved by the office, and such benefits shall continue to be deemed reasonable for renewal rates while the insurer complies with such guarantee, provided the currently expected lifetime loss ratio is not more than 5 percent less than the filed lifetime loss ratio as certified to by an actuary. The office shall have the right to bring an administrative action should it deem that the lifetime loss ratio will not be met. For Medicare supplement filings, the office may withdraw a previously approved filing which was made pursuant to a loss ratio guarantee if it determines that the filing is not in compliance with ss. 627.671-627.675 or the currently expected lifetime loss ratio is less than the filed lifetime loss ratio as certified by an actuary in the initial guaranteed loss ratio filing. If this section conflicts with ss. 627.671-627.675, ss. 627.671-627.675 shall control.
(b) The renewal premium rates shall be deemed to be approved upon filing with the office if the filing is accompanied by the most current approved loss ratio guarantee. The loss ratio guarantee shall be in writing, shall be signed by an officer of the insurer, and shall contain at least:
1. A recitation of the anticipated lifetime and durational target loss ratios contained in the actuarial memorandum filed with the policy form when it was originally approved. The durational target loss ratios shall be calculated for 1-year experience periods. If statutory changes have rendered any portion of such actuarial memorandum obsolete, the loss ratio guarantee shall also include an amendment to the actuarial memorandum reflecting current law and containing new lifetime and durational loss ratio targets.
2. A guarantee that the applicable loss ratios for the experience period in which the new rates will take effect, and for each experience period thereafter until new rates are filed, will meet the loss ratios referred to in subparagraph 1.
3. A guarantee that the applicable loss ratio results for the experience period will be independently audited at the insurer’s expense. The audit shall be performed in the second calendar quarter of the year following the end of the experience period, and the audited results shall be reported to the office no later than the end of such quarter. The commission shall establish by rule the minimum information reasonably necessary to be included in the report. The audit shall be done in accordance with accepted accounting and actuarial principles.
4. A guarantee that affected policyholders in this state shall be issued a proportional refund, based on the premium earned, of the amount necessary to bring the applicable experience period loss ratio up to the durational target loss ratio referred to in subparagraph 1. The refund shall be made to all policyholders in this state who are insured under the applicable policy form as of the last day of the experience period, except that no refund need be made to a policyholder in an amount less than $10. Refunds less than $10 shall be aggregated and paid pro rata to the policyholders receiving refunds. The refund shall include interest at the then-current variable loan interest rate for life insurance policies established by the National Association of Insurance Commissioners, from the end of the experience period until the date of payment. Payments shall be made during the third calendar quarter of the year following the experience period for which a refund is determined to be due. However, no refunds shall be made until 60 days after the filing of the audit report in order that the office has adequate time to review the report.
5. A guarantee that if the applicable loss ratio exceeds the durational target loss ratio for that experience period by more than 20 percent, provided there are at least 2,000 policyholders on the form nationwide or, if not, then accumulated each calendar year until 2,000 policyholder years is reached, the insurer, if directed by the office, shall withdraw the policy form for the purposes of issuing new policies.
(c) As used in this subsection:
1. “Loss ratio” means the ratio of incurred claims to earned premium.
2. “Applicable loss ratio” means the loss ratio attributable solely to this state if there are 2,000 or more policyholders in the state. If there are 500 or more policyholders in this state but less than 2,000, it is the linear interpolation of the nationwide loss ratio and the loss ratio for this state. If there are less than 500 policyholders in this state, it is the nationwide loss ratio.
3. “Experience period” means the period, ordinarily a calendar year, for which a loss ratio guarantee is calculated.
History.s. 459, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 71-17; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 364, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 2, ch. 84-235; s. 3, ch. 89-360; s. 20, ch. 90-249; s. 12, ch. 90-366; s. 1, ch. 91-73; ss. 32, 114, ch. 92-318; s. 62, ch. 93-129; s. 22, ch. 93-260; s. 325, ch. 97-102; s. 3, ch. 98-159; s. 4, ch. 98-173; s. 5, ch. 2002-282; s. 1112, ch. 2003-261; s. 20, ch. 2004-297.
627.4101 Credit insurance enrollment forms.All credit insurance enrollment forms must be approved by the office pursuant to the provisions of s. 627.410 or s. 627.682.
History.s. 11, ch. 2002-57; s. 1113, ch. 2003-261.
627.4105 Life and health insurance; reduced premiums upon rigorous physical examination.Upon request, the office may approve special life and health insurance policy forms providing for reduced premiums for each applicant passing a rigorous physical examination.
History.s. 1, ch. 78-248; s. 2, ch. 81-318; ss. 365, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1114, ch. 2003-261.
627.4107 Government employees exposed to toxic drug chemicals; cancellation of life or health policy or certificate prohibited.No life or health insurer may cancel or nonrenew a life or health insurance policy or certificate of insurance providing coverage to a state or local law enforcement officer as defined in s. 943.10, firefighter as defined in s. 633.30, emergency medical technician as defined in s. 401.23, or paramedic as defined in s. 401.23, a volunteer firefighter engaged by state or local government, a law enforcement officer employed by the Federal Government, or any other local, state, or Federal Government employee solely based on the fact that the individual has been exposed to toxic chemicals or suffered injury or disease as a result of the individual’s lawful duties arising out of the commission of a violation of chapter 893 by another person. This section does not apply to any person who commits an offense under chapter 893. This section does not prohibit an insurer from canceling or nonrenewing an insurance policy or certificate, as permitted under the applicable state insurance code, based on an act or practice of the policyholder or certificateholder that constitutes fraud or intentional misrepresentation of material fact by the policyholder or certificateholder.
History.s. 3, ch. 2006-306.
627.411 Grounds for disapproval.
(1) The office shall disapprove any form filed under s. 627.410, or withdraw any previous approval thereof, only if the form:
(a) Is in any respect in violation of, or does not comply with, this code.
(b) Contains or incorporates by reference, where such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses, or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract.
(c) Has any title, heading, or other indication of its provisions which is misleading.
(d) Is printed or otherwise reproduced in such manner as to render any material provision of the form substantially illegible.
(e) Is for residential property insurance and contains provisions that are unfair or inequitable or encourage misrepresentation.
(f) Is for health insurance, and:
1. Provides benefits that are unreasonable in relation to the premium charged.
2. Contains provisions that are unfair or inequitable or contrary to the public policy of this state or that encourage misrepresentation.
3. Contains provisions that apply rating practices that result in unfair discrimination pursuant to s. 626.9541(1)(g)2.
(g) Excludes coverage for human immunodeficiency virus infection or acquired immune deficiency syndrome or contains limitations in the benefits payable, or in the terms or conditions of such contract, for human immunodeficiency virus infection or acquired immune deficiency syndrome which are different than those which apply to any other sickness or medical condition.
(2) In determining whether the benefits are reasonable in relation to the premium charged, the office, in accordance with reasonable actuarial techniques, shall consider:
(a) Past loss experience and prospective loss experience within and without this state.
(b) Allocation of expenses.
(c) Risk and contingency margins, along with justification of such margins.
(d) Acquisition costs.
(3)(a) For health insurance coverage as described in s. 627.6561(5)(a)2., the minimum loss ratio standard of incurred claims to earned premium for the form shall be 65 percent.
(b) Incurred claims are claims occurring within a fixed period, whether or not paid during the same period, under the terms of the policy period.
1. Claims include scheduled benefit payments or services provided by a provider or through a provider network for dental, vision, disability, and similar health benefits.
2. Claims do not include state assessments, taxes, company expenses, or any expense incurred by the company for the cost of adjusting and settling a claim, including the review, qualification, oversight, management, or monitoring of a claim or incentives or compensation to providers for other than the provisions of health care services.
3. A company may at its discretion include costs that are demonstrated to reduce claims, such as fraud intervention programs or case management costs, which are identified in each filing, are demonstrated to reduce claims costs, and do not result in increasing the experience period loss ratio by more than 5 percent.
4. For scheduled claim payments, such as disability income or long-term care, the incurred claims shall be the present value of the benefit payments discounted for continuance and interest.
History.s. 460, ch. 59-205; ss. 13, 35, 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 366, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 48, ch. 88-380; s. 114, ch. 92-318; s. 63, ch. 93-129; s. 1, ch. 2003-139; s. 1115, ch. 2003-261; s. 9, ch. 2005-111.
627.412 Standard provisions, in general.
(1) Insurance contracts shall contain such standard or uniform provisions as are required by the applicable provisions of this code pertaining to contracts of particular kinds of insurance. The office may waive the required use of a particular provision in a particular insurance policy form if:
(a) It finds such provision unnecessary for the protection of the insured and inconsistent with the purposes of the policy; and
(b) The policy is otherwise approved by it.
(2) No policy shall contain any provision inconsistent with or contradictory to any standard or uniform provision used or required to be used, but the office may approve any substitute provision which is, in its opinion, not less favorable in any particular to the insured or beneficiary than the provisions otherwise required.
(3) In lieu of the provisions required by this code for contracts for particular kinds of insurance, substantially similar provisions required by the law of the domicile of a foreign or alien insurer may be used when approved by the office.
History.s. 461, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1116, ch. 2003-261.
627.413 Contents of policies, in general; identification.
(1) Every policy shall specify:
(a) The names of the parties to the contract.
(b) The subject of the insurance.
(c) The risks insured against.
(d) The time when the insurance thereunder takes effect and the period during which the insurance is to continue.
(e) The premium.
(f) The conditions pertaining to the insurance.
(g) The form numbers and edition dates or numeric code indicating edition dates, when such code has been supplied to the office, of all endorsements attached to a policy. This requirement applies to life insurance policies and health insurance policies only at the time of original issue.
(2) If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included.
(3) Subsections (1) and (2) do not apply to surety contracts or to group insurance policies.
(4) All policies and annuity contracts issued by insurers, and the forms thereof filed with the office, shall have printed thereon an appropriate designating letter or figure, or combination of letters or figures or terms identifying the respective forms of policies or contracts. Whenever any change is made in any such form, the designating letters, figures, or terms thereon shall be correspondingly changed.
(5) Any policy that is a minimum premium policy issued by an insurer pursuant to the minimum premium provisions of rules adopted by rating organizations licensed by the office, shall have typed, printed, stamped, or legibly handwritten on the certificate the words “minimum premium policy” or equivalent language. The office may impose an administrative fine pursuant to s. 624.4211 if the office finds any violation of this subsection.
(6) Notwithstanding any other provision of the Florida Insurance Code that is in conflict with federal requirements for a health savings account qualified high-deductible health plan, an insurer, or a health maintenance organization subject to part I of chapter 641, which is authorized to issue health insurance in this state may offer for sale an individual or group policy or contract that provides for a high-deductible plan that meets the federal requirements of a health savings account plan and which is offered in conjunction with a health savings account.
History.s. 462, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 367, 377, 809(2nd), ch. 82-243; ss. 50, 79, ch. 82-386; s. 114, ch. 92-318; s. 16, ch. 98-174; s. 1117, ch. 2003-261; s. 3, ch. 2005-231.
627.4131 Telephone number required.Each insurer issuing a policy subject to this part, or issuing a policy of title insurance, credit life insurance, or credit disability insurance in this state, must make a telephone number available for policyholders and certificateholders to present inquiries or obtain information about coverage and to provide assistance in resolving complaints. The policy or certificate must provide notice of the telephone number and its purposes.
History.s. 34, ch. 92-318.
627.4132 Stacking of coverages prohibited.If an insured or named insured is protected by any type of motor vehicle insurance policy for liability, personal injury protection, or other coverage, the policy shall provide that the insured or named insured is protected only to the extent of the coverage she or he has on the vehicle involved in the accident. However, if none of the insured’s or named insured’s vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with applicable coverage. Coverage on any other vehicles shall not be added to or stacked upon that coverage. This section does not apply:
(1) To uninsured motorist coverage which is separately governed by s. 627.727.
(2) To reduce the coverage available by reason of insurance policies insuring different named insureds.
History.s. 10, ch. 76-266; s. 1, ch. 80-364; s. 2, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 14, ch. 88-370; s. 114, ch. 92-318; s. 326, ch. 97-102.
627.4133 Notice of cancellation, nonrenewal, or renewal premium.
(1) Except as provided in subsection (2):
(a) An insurer issuing a policy providing coverage for workers’ compensation and employer’s liability insurance, property, casualty, except mortgage guaranty, surety, or marine insurance, other than motor vehicle insurance subject to s. 627.728, shall give the named insured at least 45 days’ advance written notice of nonrenewal or of the renewal premium. If the policy is not to be renewed, the written notice shall state the reason or reasons as to why the policy is not to be renewed. This requirement applies only if the insured has furnished all of the necessary information so as to enable the insurer to develop the renewal premium prior to the expiration date of the policy to be renewed.
(b) An insurer issuing a policy providing coverage for property, casualty, except mortgage guaranty, surety, or marine insurance, other than motor vehicle insurance subject to s. 627.728 or s. 627.7281, shall give the named insured written notice of cancellation or termination other than nonrenewal at least 45 days prior to the effective date of the cancellation or termination, including in the written notice the reason or reasons for the cancellation or termination, except that:
1. When cancellation is for nonpayment of premium, at least 10 days’ written notice of cancellation accompanied by the reason therefor shall be given. As used in this subparagraph, the term “nonpayment of premium” means failure of the named insured to discharge when due any of her or his obligations in connection with the payment of premiums on a policy or any installment of such premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit, or failure to maintain membership in an organization if such membership is a condition precedent to insurance coverage. “Nonpayment of premium” also means the failure of a financial institution to honor an insurance applicant’s check after delivery to a licensed agent for payment of a premium, even if the agent has previously delivered or transferred the premium to the insurer. If a dishonored check represents the initial premium payment, the contract and all contractual obligations shall be void ab initio unless the nonpayment is cured within the earlier of 5 days after actual notice by certified mail is received by the applicant or 15 days after notice is sent to the applicant by certified mail or registered mail, and if the contract is void, any premium received by the insurer from a third party shall be refunded to that party in full; and
2. When such cancellation or termination occurs during the first 90 days during which the insurance is in force and the insurance is canceled or terminated for reasons other than nonpayment of premium, at least 20 days’ written notice of cancellation or termination accompanied by the reason therefor shall be given except where there has been a material misstatement or misrepresentation or failure to comply with the underwriting requirements established by the insurer.

After the policy has been in effect for 90 days, no such policy shall be canceled by the insurer except when there has been a material misstatement, a nonpayment of premium, a failure to comply with underwriting requirements established by the insurer within 90 days of the date of effectuation of coverage, or a substantial change in the risk covered by the policy or when the cancellation is for all insureds under such policies for a given class of insureds. This subsection does not apply to individually rated risks having a policy term of less than 90 days.

(c) If an insurer fails to provide the 45-day or 20-day written notice required under this section, the coverage provided to the named insured shall remain in effect until 45 days after the notice is given or until the effective date of replacement coverage obtained by the named insured, whichever occurs first. The premium for the coverage shall remain the same during any such extension period except that, in the event of failure to provide notice of nonrenewal, if the rate filing then in effect would have resulted in a premium reduction, the premium during such extension of coverage shall be calculated based upon the later rate filing.
(2) With respect to any personal lines or commercial residential property insurance policy, including, but not limited to, any homeowner’s, mobile home owner’s, farmowner’s, condominium association, condominium unit owner’s, apartment building, or other policy covering a residential structure or its contents:
(a) The insurer shall give the named insured at least 45 days’ advance written notice of the renewal premium.
(b) The insurer shall give the named insured written notice of nonrenewal, cancellation, or termination at least 100 days prior to the effective date of the nonrenewal, cancellation, or termination. However, the insurer shall give at least 100 days’ written notice, or written notice by June 1, whichever is earlier, for any nonrenewal, cancellation, or termination that would be effective between June 1 and November 30. The notice must include the reason or reasons for the nonrenewal, cancellation, or termination, except that:
1. The insurer shall give the named insured written notice of nonrenewal, cancellation, or termination at least 180 days prior to the effective date of the nonrenewal, cancellation, or termination for a named insured whose residential structure has been insured by that insurer or an affiliated insurer for at least a 5-year period immediately prior to the date of the written notice.
2. When cancellation is for nonpayment of premium, at least 10 days’ written notice of cancellation accompanied by the reason therefor shall be given. As used in this subparagraph, the term “nonpayment of premium” means failure of the named insured to discharge when due any of her or his obligations in connection with the payment of premiums on a policy or any installment of such premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit, or failure to maintain membership in an organization if such membership is a condition precedent to insurance coverage. “Nonpayment of premium” also means the failure of a financial institution to honor an insurance applicant’s check after delivery to a licensed agent for payment of a premium, even if the agent has previously delivered or transferred the premium to the insurer. If a dishonored check represents the initial premium payment, the contract and all contractual obligations shall be void ab initio unless the nonpayment is cured within the earlier of 5 days after actual notice by certified mail is received by the applicant or 15 days after notice is sent to the applicant by certified mail or registered mail, and if the contract is void, any premium received by the insurer from a third party shall be refunded to that party in full.
3. When such cancellation or termination occurs during the first 90 days during which the insurance is in force and the insurance is canceled or terminated for reasons other than nonpayment of premium, at least 20 days’ written notice of cancellation or termination accompanied by the reason therefor shall be given except where there has been a material misstatement or misrepresentation or failure to comply with the underwriting requirements established by the insurer.
4. The requirement for providing written notice of nonrenewal by June 1 of any nonrenewal that would be effective between June 1 and November 30 does not apply to the following situations, but the insurer remains subject to the requirement to provide such notice at least 100 days prior to the effective date of nonrenewal:
a. A policy that is nonrenewed due to a revision in the coverage for sinkhole losses and catastrophic ground cover collapse pursuant to s. 627.706, as amended by s. 30, chapter 2007-1, Laws of Florida.
b. A policy that is nonrenewed by Citizens Property Insurance Corporation, pursuant to s. 627.351(6), for a policy that has been assumed by an authorized insurer offering replacement or renewal coverage to the policyholder.

After the policy has been in effect for 90 days, the policy shall not be canceled by the insurer except when there has been a material misstatement, a nonpayment of premium, a failure to comply with underwriting requirements established by the insurer within 90 days of the date of effectuation of coverage, or a substantial change in the risk covered by the policy or when the cancellation is for all insureds under such policies for a given class of insureds. This paragraph does not apply to individually rated risks having a policy term of less than 90 days.

(c) If the insurer fails to provide the notice required by this subsection, other than the 10-day notice, the coverage provided to the named insured shall remain in effect until the effective date of replacement coverage or until the expiration of a period of days after the notice is given equal to the required notice period, whichever occurs first. The premium for the coverage shall remain the same during any such extension period except that, in the event of failure to provide notice of nonrenewal, if the rate filing then in effect would have resulted in a premium reduction, the premium during such extension shall be calculated based on the later rate filing.
(d)1. Upon a declaration of an emergency pursuant to s. 252.36 and the filing of an order by the Commissioner of Insurance Regulation, an insurer may not cancel or nonrenew a personal residential or commercial residential property insurance policy covering a dwelling or residential property located in this state which has been damaged as a result of a hurricane or wind loss that is the subject of the declaration of emergency for a period of 90 days after the dwelling or residential property has been repaired. A structure is deemed to be repaired when substantially completed and restored to the extent that it is insurable by another authorized insurer that is writing policies in this state.
2. However, an insurer or agent may cancel or nonrenew such a policy prior to the repair of the dwelling or residential property:
a. Upon 10 days’ notice for nonpayment of premium; or
b. Upon 45 days’ notice:
(I) For a material misstatement or fraud related to the claim;
(II) If the insurer determines that the insured has unreasonably caused a delay in the repair of the dwelling; or
(III) If the insurer has paid policy limits.
3. If the insurer elects to nonrenew a policy covering a property that has been damaged, the insurer shall provide at least 90 days’ notice to the insured that the insurer intends to nonrenew the policy 90 days after the dwelling or residential property has been repaired. Nothing in this paragraph shall prevent the insurer from canceling or nonrenewing the policy 90 days after the repairs are complete for the same reasons the insurer would otherwise have canceled or nonrenewed the policy but for the limitations of subparagraph 1. The Financial Services Commission may adopt rules, and the Commissioner of Insurance Regulation may issue orders, necessary to implement this paragraph.
4. This paragraph shall also apply to personal residential and commercial residential policies covering property that was damaged as the result of Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances, Hurricane Ivan, or Hurricane Jeanne.
(e) If any cancellation or nonrenewal of a policy subject to this subsection is to take effect during the duration of a hurricane as defined in s. 627.4025(2)(c), the effective date of such cancellation or nonrenewal is extended until the end of the duration of such hurricane. The insurer may collect premium at the prior rates or the rates then in effect for the period of time for which coverage is extended. This paragraph does not apply to any property with respect to which replacement coverage has been obtained and which is in effect for a claim occurring during the duration of the hurricane.
(3) Claims on property insurance policies that are the result of an act of God may not be used as a cause for cancellation or nonrenewal, unless the insurer can demonstrate, by claims frequency or otherwise, that the insured has failed to take action reasonably necessary as requested by the insurer to prevent recurrence of damage to the insured property.
(4) Notwithstanding the provisions of s. 440.42(3), if cancellation of a policy providing coverage for workers’ compensation and employer’s liability insurance is requested by the insured, such cancellation shall be effective on the date the carrier sends the notice of cancellation to the insured. Any retroactive assumption of coverage and liabilities under a policy providing workers’ compensation and employer’s liability insurance may not exceed 21 days.
(5) An insurer that cancels a property insurance policy on property secured by a mortgage due to the failure of the lender to timely pay the premium when due shall reinstate the policy as required by s. 501.137.
(6) A single claim on a property insurance policy which is the result of water damage may not be used as the sole cause for cancellation or nonrenewal unless the insurer can demonstrate that the insured has failed to take action reasonably requested by the insurer to prevent a future similar occurrence of damage to the insured property.
(7)(a) Effective August 1, 2007, with respect to any residential property insurance policy, every notice of renewal premium must specify:
1. The dollar amounts recouped for assessments by the Florida Hurricane Catastrophe Fund, the Citizens Property Insurance Corporation, and the Florida Insurance Guaranty Association. The actual names of the entities must appear next to the dollar amounts.
2. The dollar amount of any premium increase that is due to an approved rate increase and the total dollar amount that is due to coverage changes.
(b) The Financial Services Commission may adopt rules pursuant to ss. 120.536(1) and 120.54 to implement this subsection.
History.s. 16, ch. 86-160; s. 2, ch. 87-50; s. 8, ch. 87-124; s. 12, ch. 90-119; ss. 35, 114, ch. 92-318; s. 15, ch. 93-410; s. 99, ch. 93-415; s. 13, ch. 2004-370; s. 43, ch. 2004-374; ss. 109, 158, ch. 2004-390; s. 10, ch. 2005-111; s. 47, ch. 2006-12; s. 12, ch. 2006-305; s. 25, ch. 2007-1; s. 16, ch. 2007-90; s. 150, ch. 2008-4; s. 14, ch. 2008-66.
627.4135 Casualty insurance contracts subject to general provisions for insurance contracts.All contracts of casualty insurance covering subjects resident, located, or to be performed in this state shall be subject to the applicable provisions of this part and to the other applicable provisions of this code.
History.s. 610, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 36, 114, ch. 92-318.
Note.Former s. 627.726.
627.4136 Nonjoinder of insurers.
(1) It shall be a condition precedent to the accrual or maintenance of a cause of action against a liability insurer by a person not an insured under the terms of the liability insurance contract that such person shall first obtain a settlement or verdict against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.
(2) Notwithstanding subsection (1), any insurer who pays any taxable costs or attorney’s fees which would be recoverable by the insured but for the fact that such costs or fees were paid by the insurer shall be considered a party for the purpose of recovering such fees or costs. No person who is not an insured under the terms of a liability insurance policy shall have any interest in such policy, either as a third-party beneficiary or otherwise, prior to first obtaining a settlement or verdict against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.
(3) Insurers are affirmatively granted the substantive right to insert in liability insurance policies contractual provisions that preclude persons who are not designated as insureds in such policies from joining a liability insurer as a party defendant with its insured prior to the rendition of a verdict. The contractual provisions authorized in this subsection shall be fully enforceable.
(4) At the time a judgment is entered or a settlement is reached during the pendency of litigation, a liability insurer may be joined as a party defendant for the purposes of entering final judgment or enforcing the settlement by the motion of any party, unless the insurer denied coverage under the provisions of s. 627.426(2) or defended under a reservation of rights pursuant to s. 627.426(2). A copy of the motion to join the insurer shall be served on the insurer by certified mail. If a judgment is reversed or remanded on appeal, the insurer’s presence shall not be disclosed to the jury in a subsequent trial.
History.s. 12, ch. 76-266; s. 2, ch. 81-318; ss. 542, 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 38, ch. 90-119; ss. 37, 114, ch. 92-318.
Note.Former s. 627.7262.
627.4137 Disclosure of certain information required.
(1) Each insurer which does or may provide liability insurance coverage to pay all or a portion of any claim which might be made shall provide, within 30 days of the written request of the claimant, a statement, under oath, of a corporate officer or the insurer’s claims manager or superintendent setting forth the following information with regard to each known policy of insurance, including excess or umbrella insurance:
(a) The name of the insurer.
(b) The name of each insured.
(c) The limits of the liability coverage.
(d) A statement of any policy or coverage defense which such insurer reasonably believes is available to such insurer at the time of filing such statement.
(e) A copy of the policy.

In addition, the insured, or her or his insurance agent, upon written request of the claimant or the claimant’s attorney, shall disclose the name and coverage of each known insurer to the claimant and shall forward such request for information as required by this subsection to all affected insurers. The insurer shall then supply the information required in this subsection to the claimant within 30 days of receipt of such request.

(2) The statement required by subsection (1) shall be amended immediately upon discovery of facts calling for an amendment to such statement.
History.ss. 543, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 22, ch. 83-288; ss. 38, 114, ch. 92-318; s. 327, ch. 97-102.
Note.Former s. 627.7264.
627.414 Additional policy contents.A policy may contain additional provisions not inconsistent with this code and which are:
(1) Required to be inserted by the laws of the insurer’s domicile;
(2) Necessary, on account of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties to the contract; or
(3) Desired by the insurer and neither prohibited by law nor in conflict with any provisions required to be included therein.
History.s. 463, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.4143 Outline of coverage.
(1) No private passenger automobile or basic homeowner’s policy shall be delivered or issued for delivery in this state unless an appropriate outline of coverage has been delivered prior to issuance of the policy or accompanies the policy when issued.
(2) The outline of coverage for a private passenger motor vehicle insurance policy shall contain all of the following:
(a) A brief description of the principal benefits and coverage provided in the policy, broken down by each class or type of coverage provided under the policy for which a premium is charged, and itemization of the applicable premium.
(b) A summary statement of the principal exclusions and limitations or reductions contained in the policy by class or type, including, but not limited to, deductibles, coinsurance, and any other limitations or reductions.
(c) A summary statement of any renewal or cancellation provisions.
(d) A description of the credit or surcharge plan that is being applied. The description may display numerical or alphabetical codes on the declarations page or premium notice to enable the insured to determine the reason or reasons why her or his policy is being surcharged or is receiving a credit.
(e) A list of any additional coverage provided through any rider or endorsement which accompanies the policy. The list shall contain a descriptive reference to each additional coverage, rather than solely a reference to a form or code number.
(f) The extent of coverage provided to the insured in the event of collision damage to a rental vehicle rented by the insured. The proof-of-insurance card required by s. 316.646 must also specify whether rental car coverage is provided, and may refer to the outline of coverage as to the details or extent of coverage.
(3) A basic homeowner’s, mobile home owner’s, dwelling, or condominium unit owner’s policy may not be delivered or issued for delivery in this state unless a comprehensive checklist of coverage on a form adopted by the commission and an appropriate outline of coverage have been delivered prior to issuance of the policy or accompanies the policy when issued. The commission shall, by rule, adopt a form for the checklist for each type of policy to which this subsection applies. Each form shall indicate that it was adopted by the commission.
(a) The checklist must contain a list of the standard provisions and elements that may typically be included in these policies, whether or not they are included in the particular policy being issued, in a format that allows the insurer to place a check mark next to the provisions elements that are included so that the consumer can see both what is included and what is not included in the policy. As an alternative to checking the boxes on the checklist, an insurer may delete the check boxes from the form and replace them with text indicating whether the provision’s elements are included or not. Limits of liability shall be listed for each item. The checklist must include, but is not limited to, the following:
1. Property coverage for the principal premises shown in the declarations.
2. Property coverage for other structures on the residence premises.
3. Whether the principal premises and other structures are insured against the following perils:
a. Fire.
b. Lightning.
c. Explosion.
d. Hurricane loss.
e. Nonhurricane wind loss.
f. Collapse.
g. Mold.
h. Sinkhole loss.
i. Vandalism.
4. Personal property coverage.
5. Whether personal property is insured against the following perils:
a. Fire.
b. Lightning.
c. Hurricane loss.
d. Nonhurricane wind loss.
e. Collapse.
f. Mold.
g. Sinkhole loss.
h. Theft.
6. The following additional coverages:
a. Debris removal.
b. Loss assessment.
c. Additional living expenses.
7. Personal liability coverage.
8. Medical payments coverage.
9. Discounts applied to the premium.
10. Deductibles for loss due to hurricane and loss to other perils.
11. Building ordinance or law coverage.
12. Replacement cost coverage.
13. Actual cash value coverage.
(b) The forms shall allow insurers to place other coverages on the checklists which may or may not be included in the insurer’s policies.
(c) The outline of coverage must contain:
1. A brief description of the principal benefits and coverage provided in the policy, broken down by each class or type of coverage provided under the policy for which a premium is charged, and itemization of the applicable premium.
2. A summary statement of the principal exclusions and limitations or reductions contained in the policy by class or type, including, but not limited to, deductibles, coinsurance, and any other limitations or reductions.
3. A summary statement of any renewal or cancellation provisions.
4. A description of the credit or surcharge plan that is being applied. The description may display numerical or alphabetical codes on the declarations page or premium notice to enable the insured to determine the reason or reasons why her or his policy is being surcharged or is receiving a credit.
5. A summary of any additional coverage provided through any rider or endorsement that accompanies the policy.
(4) The outline of coverage for a private passenger motor vehicle policy is required only on the initial policy issued by an insurer. The outline of coverage and the checklist for a basic homeowner’s, mobile home owner’s, dwelling, or condominium unit owner’s policy is required on the initial policy and each renewal thereof issued by an insurer.
(5) An insurer must insert the following language on the outline of coverage:

“The following outline of coverage or checklist is for informational purposes only. Florida law prohibits this outline or checklist from changing any of the provisions of the insurance contract which is the subject of this outline. Any endorsement regarding changes in types of coverage, exclusions, limitations, reductions, deductibles, coinsurance, renewal provisions, cancellation provisions, surcharges, or credits will be sent separately.”

(6) Neither this section nor the outline of coverage or checklist mandated by this section alters or modifies the terms of the insurance contract, creates a cause of action, or is admissible in any civil action.
History.s. 23, ch. 89-360; s. 1, ch. 90-192; ss. 39, 114, ch. 92-318; s. 328, ch. 97-102; s. 11, ch. 2005-111.
627.4145 Readable language in insurance policies.
(1) Every policy shall be readable as required by this section. For the purposes of this section, the term “policy” means a policy form or endorsement. A policy is deemed readable if:
(a) The text achieves a minimum score of 45 on the Flesch reading ease test as computed in subsection (5) or an equivalent score on any other test comparable in result and approved by the office;
(b) It uses layout and spacing which separate the paragraphs from each other and from the border of the paper;
(c) It has section titles that are captioned in boldfaced type or that otherwise stand out significantly from the text;
(d) It avoids the use of unnecessarily long, complicated, or obscure words, sentences, paragraphs, or constructions;
(e) The style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text of the policy or to any endorsements or riders; and
(f) It contains a table of contents or an index of the principal sections of the policy, if the policy has more than 3,000 words or more than three pages.
(2) The office may authorize a lower score than the Flesch reading ease test score required in subsection (1) whenever it finds that a lower score will provide a more accurate reflection of the readability of a policy form, is warranted by the nature of a particular policy form or type or class of policy forms, or is the result of language which is used to conform to the requirements of any law.
(3) A filing subject to this section shall be accompanied by a certification signed by an officer of the insurer stating that the policy meets the requirements of subsection (1). Such certification shall state that the policy meets the minimum reading ease test score on the test used or that the score is lower than the minimum required but should be approved in accordance with subsection (2). The office may require the submission of further information to verify any certification.
(4) Any non-English language policy shall be deemed to be in compliance with this section if the insurer certifies that such policy is translated from an English language policy which complies with this section.
(5) A Flesch reading ease test score shall be measured by the following method:
(a) For policy forms containing 10,000 words or fewer of text, the entire form shall be analyzed. For policy forms containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least 20 printed lines.
(b) The total number of words in the text shall be counted and divided by the total number of sentences, and the figure obtained shall be multiplied by a factor of 1.015.
(c) The total number of syllables shall be counted and divided by the total number of words, and the figure obtained shall be multiplied by a factor of 84.6.
(d) The sum of the figures computed under paragraphs (b) and (c) subtracted from 206.835 equals the Flesch reading ease test score for the policy form.
(e) For purposes of this subsection:
1. A contraction, hyphenated word, or numerals and letters, when separated by spaces, shall be counted as one word; and
2. A unit of words ending with a period, semicolon, or colon, excluding headings and captions, shall be counted as one sentence.
(f) The term “text” as used in this subsection includes all printed matter except:
1. The name and address of the insurer; the name, number, or title of the policy; the table of contents or index; captions and subcaptions; specification pages; schedules; or tables;
2. Policy language required by any collectively bargained agreement;
3. Any medical terminology;
4. Words which are defined in the policy; and
5. Any policy language required by law, if the insurer identifies the language or terminology excepted by this paragraph and certifies to the office, in writing, that the language or terminology is entitled to be excepted under this paragraph.
(g) At the option of the insurer, riders, endorsements, applications, and other forms made a part of the policy may be scored as separate forms or as part of the policy with which they are to be used.
(6) This section does not apply to:
(a) Any policy which is a security subject to federal jurisdiction;
(b) Any group policy covering a group of 1,000 or more lives at date of issue, other than a group credit life insurance policy or a group credit health insurance policy; however, this paragraph does not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;
(c) Any group annuity contract which serves as a funding vehicle for pension, profit-sharing, or deferred compensation plans;
(d) Any form used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates such forms must be approved under this section;
(e) Any policy or form, or partial revision thereof, or renewal thereof, which policy or form is filed prior to October 1, 1983; or
(f) Endorsements filed on or after October 1, 1983, which modify policy forms prior to October 1, 1983.
(g) Mortgage guaranty insurance policies, as defined in s. 635.011.
(7) This section applies to forms filed on or after October 1, 1983.
History.ss. 368, 809(2nd), ch. 82-243; ss. 51, 79, ch. 82-386; s. 96, ch. 83-216; s. 13, ch. 83-288; s. 2, ch. 84-352; s. 114, ch. 92-318; s. 1118, ch. 2003-261.
627.4147 Medical malpractice insurance contracts.
(1) In addition to any other requirements imposed by law, each self-insurance policy as authorized under s. 627.357 or s. 624.462 or insurance policy providing coverage for claims arising out of the rendering of, or the failure to render, medical care or services, including those of the Florida Medical Malpractice Joint Underwriting Association, shall include:
(a) A clause requiring the insured to cooperate fully in the review process prescribed under s. 766.106 if a notice of intent to file a claim for medical malpractice is made against the insured.
(b)1. Except as provided in subparagraph 2., a clause authorizing the insurer or self-insurer to determine, to make, and to conclude, without the permission of the insured, any offer of admission of liability and for arbitration pursuant to s. 766.106, settlement offer, or offer of judgment, if the offer is within the policy limits. It is against public policy for any insurance or self-insurance policy to contain a clause giving the insured the exclusive right to veto any offer for admission of liability and for arbitration made pursuant to s. 766.106, settlement offer, or offer of judgment, when such offer is within the policy limits. However, any offer of admission of liability, settlement offer, or offer of judgment made by an insurer or self-insurer shall be made in good faith and in the best interests of the insured.
2.a. With respect to dentists licensed under chapter 466, a clause clearly stating whether or not the insured has the exclusive right to veto any offer of admission of liability and for arbitration pursuant to s. 766.106, settlement offer, or offer of judgment if the offer is within policy limits. An insurer or self-insurer shall not make or conclude, without the permission of the insured, any offer of admission of liability and for arbitration pursuant to s. 766.106, settlement offer, or offer of judgment, if such offer is outside the policy limits. However, any offer for admission of liability and for arbitration made under s. 766.106, settlement offer, or offer of judgment made by an insurer or self-insurer shall be made in good faith and in the best interest of the insured.
b. If the policy contains a clause stating the insured does not have the exclusive right to veto any offer or admission of liability and for arbitration made pursuant to s. 766.106, settlement offer or offer of judgment, the insurer or self-insurer shall provide to the insured or the insured’s legal representative by certified mail, return receipt requested, a copy of the final offer of admission of liability and for arbitration made pursuant to s. 766.106, settlement offer or offer of judgment and at the same time such offer is provided to the claimant. A copy of any final agreement reached between the insurer and claimant shall also be provided to the insurer or his or her legal representative by certified mail, return receipt requested not more than 10 days after affecting such agreement.
(c) A clause requiring the insurer or self-insurer to notify the insured no less than 90 days prior to the effective date of cancellation of the policy or contract and, in the event of a determination by the insurer or self-insurer not to renew the policy or contract, to notify the insured no less than 90 days prior to the end of the policy or contract period. If cancellation or nonrenewal is due to nonpayment or loss of license, 10 days’ notice is required.
(d) A clause requiring the insurer or self-insurer to notify the insured no less than 60 days prior to the effective date of a rate increase. The provisions of s. 627.4133 shall apply to such notice and to the failure of the insurer to provide such notice to the extent not in conflict with this section.
(2) Each insurer covered by this section may require the insured to be a member in good standing, i.e., not subject to expulsion or suspension, of a duly recognized state or local professional society of health care providers which maintains a medical review committee. No professional society shall expel or suspend a member solely because he or she participates in a health maintenance organization licensed under part I of chapter 641.
(3) This section shall apply to all policies issued or renewed after October 1, 2003.
History.ss. 6, 44, ch. 85-175; s. 5, ch. 86-287; s. 114, ch. 92-318; s. 23, ch. 95-211; s. 1, ch. 96-361; s. 1733, ch. 97-102; s. 29, ch. 99-3; s. 43, ch. 2003-416.
627.4148 Medical malpractice insurers; required offer of coverage limits.An insurer issuing policies of professional liability coverage for claims arising out of the rendering of, or the failure to render, medical care or services shall make available to physicians licensed under chapter 458 and to osteopathic physicians licensed under chapter 459 coverage with the following limits, subject to usual underwriting standards:
(1) One hundred thousand dollars per claim, $300,000 annual aggregate; and
(2) Two hundred fifty thousand dollars per claim, $750,000 annual aggregate.
History.s. 46, ch. 86-160; s. 2, ch. 87-50; s. 1, ch. 90-249; s. 114, ch. 92-318.
Note.Former s. 627.6057.
627.41495 Public notice of medical malpractice rate filings.
(1) Upon the filing of a proposed rate change by a medical malpractice insurer or self-insurance fund, which filing would result in an average statewide increase of 25 percent or more, pursuant to standards determined by the office, the insurer or self-insurance fund shall mail notice of such filing to each of its policyholders or members.
(2) The rate filing shall be available for public inspection.
History.s. 44, ch. 2003-416.
627.415 Charter, bylaw provisions.No policy shall contain any provision purporting to make any portion of the charter, bylaws, or other constituent document of the insurer (other than the subscribers’ agreement or power of attorney of a reciprocal insurer) a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section is invalid.
History.s. 464, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.416 Execution of policies.
(1) Every insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney in fact, employee, or representative duly authorized by the insurer.
(2) A facsimile signature of any such executing individual may be used in lieu of an original signature.
(3) No insurance contract which is otherwise valid shall be rendered invalid by reason of the apparent execution thereof on behalf of the insurer by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the policy.
History.s. 465, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 369, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.417 Underwriters’ and combination policies.
(1) Two or more authorized insurers may jointly issue, and shall be jointly and severally liable on, an underwriters’ policy bearing their names. Any one insurer may issue a policy in the name of an underwriter’s department, and such policy shall plainly show the true name of the insurer.
(2) Two or more authorized insurers may, with the approval of the office, issue a combination policy which shall contain provisions substantially as follows:
(a) That the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy; and
(b) That service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers.
(3) This section does not apply to cosurety obligations.
History.s. 466, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1119, ch. 2003-261.
627.418 Validity of noncomplying contracts.
(1) Any insurance policy, rider, or endorsement otherwise valid which contains any condition or provision not in compliance with the requirements of this code shall not be thereby rendered invalid, except as provided in s. 627.415, but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this code. In the event an insurer issues or delivers any policy for an amount which exceeds any limitations otherwise provided in this code, such insurer shall be liable to the insured or his or her beneficiary for the full amount stated in the policy in addition to any other penalties that may be imposed under this code.
(2) Any insurance contract delivered or issued for delivery in this state covering a subject or subjects of insurance resident, located, or to be performed in this state, which subjects, pursuant to the provisions of this code, the insurer may not lawfully insure under such a contract, shall be cancelable at any time by the insurer, any provision of the contract to the contrary notwithstanding; and the insurer shall promptly cancel the contract in accordance with the request of the office therefor. No such illegality or cancellation shall be deemed to relieve the insurer of any liability incurred by it under the contract while in force, or to prohibit the insurer from retaining the pro rata earned premium thereon. This provision does not relieve the insurer from any penalty otherwise incurred by the insurer under this code on account of any such violation.
History.s. 467, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 72-23; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 370, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 329, ch. 97-102; s. 1120, ch. 2003-261.
Note.Former s. 627.0117.
627.419 Construction of policies.
(1) Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any application therefor or any rider or endorsement thereto.
(2) The word “physician” or “medical doctor,” when used in any health insurance policy, health care services plan, or other contract providing for the payment of surgical procedures which are specified in the policy or contract or are performed in an accredited hospital in consultation with a licensed physician and are within the scope of a dentist’s professional license, shall be construed to include a dentist who performs such specified procedures.
(3) Notwithstanding any other provision of law, when any health insurance policy, health care services plan, or other contract provides for the payment for procedures specified in the policy or contract which are within the scope of an optometrist’s or podiatric physician’s professional license, such policy shall be construed to include payment to an optometrist or podiatric physician who performs such procedures. In the case of podiatric services, such payments shall be made in accordance with the coverage now provided for medical and surgical benefits.
(4) Notwithstanding any other provision of law, when any health insurance policy, health care services plan, or other contract provides for the payment for medical expense benefits or procedures, such policy, plan, or contract shall be construed to include payment to a chiropractic physician who provides the medical service benefits or procedures which are within the scope of a chiropractic physician’s license. Any limitation or condition placed upon payment to, or upon services, diagnosis, or treatment by, any licensed physician shall apply equally to all licensed physicians without unfair discrimination to the usual and customary treatment procedures of any class of physicians.
(5) For purposes of coverage under a policy of disability income or credit disability insurance, no determination of disability shall be rejected solely on the basis of the chapter under which the physician is licensed; however, such determination may be rejected on the basis that the determination is outside the scope of the physician’s authorized practice. However, the insurance carrier shall have the option after 30 days of disability to seek a second physician’s opinion prior to paying additional benefits.
(6) Notwithstanding any other provision of law, when any health insurance policy, health care services plan, or other contract provides for payment for surgical first assisting benefits or services, the policy, plan, or contract is to be construed as providing for payment to a registered nurse first assistant or employers of a physician assistant or nurse first assistant who performs such services that are within the scope of a physician assistant’s or a registered nurse first assistant’s professional license. The provisions of this subsection apply only if reimbursement for an assisting physician, licensed under chapter 458 or chapter 459, would be covered and a physician assistant or a registered nurse first assistant who performs such services is used as a substitute.
(7) No health insurance policy, health care services plan, or other contract which provides coverage for any diagnostic or surgical procedure involving bones or joints of the skeleton shall discriminate against coverage for any similar diagnostic or surgical procedure involving bones or joints of the jaw and facial region, if, under accepted medical standards, such procedure or surgery is medically necessary to treat conditions caused by congenital or developmental deformity, disease, or injury. This subsection shall not be construed to affect any other coverage under this part or to restrict the scope of coverage under any policy, plan, or contract. Nothing in this subsection shall be construed to discourage appropriate nonsurgical procedures or to prohibit the continued coverage of nonsurgical procedures in the treatment of a bone or joint of the jaw and facial region. Furthermore, nothing in this subsection requires coverage for care or treatment of the teeth or gums, for intraoral prosthetic devices, or for surgical procedures for cosmetic purposes. This section does not apply to accident only, disability income, specified disease, hospital indemnity, credit, Medicare supplement, or long-term care insurance policies.
(8) If an insurer or licensee advertises an insurance policy in a language other than English, the advertisements shall not be construed to modify or change the insurance policy written in English. The advertisement must disclose that the policy written in English controls in the event of a dispute and that statements contained in the advertisement do not necessarily, as a result of possible linguistic differences, reflect the contents of the policy written in English. Nothing in this subsection shall affect the provisions of s. 626.9541 relating to misrepresentations and false advertising of insurance policies.
(9) With respect to any group or individual insurer covering dental services, each claimant, or dentist acting for a claimant, who has had a claim denied as not medically or dentally necessary or who has had a claim payment based on an alternate dental service in accordance with accepted dental standards for adequate and appropriate care must be provided an opportunity for an appeal to the insurer’s licensed dentist who is responsible for the medical necessity reviews under the plan or is a member of the plan’s peer review group. The appeal may be by telephone, and the insurer’s dentist must respond within a reasonable time, not to exceed 15 business days.
History.s. 468, ch. 59-205; s. 1, ch. 69-245; ss. 1, 2, ch. 72-11; s. 163A, ch. 73-333; s. 1, ch. 74-34; s. 1, ch. 74-87; s. 1, ch. 76-167; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 371, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 86-40; s. 3, ch. 90-255; s. 114, ch. 92-318; s. 5, ch. 94-96; s. 2, ch. 96-361; s. 1, ch. 97-5; s. 3, ch. 97-178; s. 223, ch. 98-166; s. 3, ch. 2001-176; s. 107, ch. 2001-277.
Note.Former s. 627.0118.
627.4195 Health insurance; claims for payment of psychotherapeutic services; confidentiality.An insurer must maintain strict confidentiality against unauthorized or inadvertent disclosure of confidential information to persons inside or outside the insurer’s organization regarding claims for payment of psychotherapeutic services provided by psychotherapists licensed under chapter 490 or chapter 491 and psychotherapeutic records and reports related to the claims. A report, in lieu of records, may be submitted by a psychotherapist in support of a claim. Such report must include clear statements summarizing the insured’s presenting symptoms, what transpired in any provided therapy, what progress, if any, was made by the insured and results obtained. However, the insurer may require the records upon which the report is based, if the report does not contain sufficient information for properly processing the claim. A psychotherapist submitting records in support of a claim may obscure portions to conceal the names, identities, or identifying information of people other than the insured if this information is unnecessary to utilization review, quality management, discharge planning, case management, or claims processing conducted by the insurer. An insurer may provide aggregate data which does not disclose subscriber identities or identities of other persons to entities such as payors, sponsors, researchers and accreditation bodies. As used in this section, “insurer” means an individual health insurance policy subject to this chapter, an insurer issuing a group health insurance policy or certificate pursuant to s. 627.651, a plan of self-insurance providing the health coverage benefits to residents of this state pursuant to s. 627.651, an insurer delivering a group health policy issued or delivered outside this state under which a resident of this state is provided coverage pursuant to s. 627.6515, a preferred provider organization as defined in s. 627.6471, an exclusive provider organization as defined in s. 627.6472, and prepaid health service organizations providing mental health services pursuant to chapter 636.
History.s. 2, ch. 96-180.
Note.Former s. 627.66995.
627.420 Binders.Binders or other contracts for temporary property, marine, casualty, or surety insurance may be made orally or in writing, and shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder. No notice of cancellation or notice of nonrenewal otherwise required by this chapter shall be required unless the duration of the binder exceeds 60 days. However, for purposes of ss. 627.728 and 627.7281, an insurer shall give 5 days’ prior notice of cancellation of a binder, unless the binder is replaced by a policy or another binder in the same or another company.
History.s. 469, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 85-51; s. 114, ch. 92-318.
627.4205 Coverage identification number required.An insurer shall provide to the named insured a coverage identification number no later than the time insurance coverage under a policy, binder, or other contract providing any insurance or surety coverage becomes effective. The coverage identification number shall be construed for regulatory purposes under this code as a policy number.
History.s. 17, ch. 86-160; s. 2, ch. 87-50; s. 114, ch. 92-318.
627.421 Delivery of policy.
(1) Subject to the insurer’s requirement as to payment of premium, every policy shall be mailed or delivered to the insured or to the person entitled thereto not later than 60 days after the effectuation of coverage.
(2) In the event the original policy is delivered or is so required to be delivered to or for deposit with any vendor, mortgagee, or pledgee of any motor vehicle, and in which policy any interest of the vendee, mortgagor, or pledgor in or with reference to such vehicle is insured, a duplicate of such policy setting forth the name and address of the insurer, insurance classification of vehicle, type of coverage, limits of liability, premiums for the respective coverages, and duration of the policy, or memorandum thereof containing the same such information, shall be delivered by the vendor, mortgagee, or pledgee to each such vendee, mortgagor, or pledgor named in the policy or coming within the group of persons designated in the policy to be so included. If the policy does not provide coverage of legal liability for injury to persons or damage to the property of third parties, a statement of such fact shall be printed, written, or stamped conspicuously on the face of such duplicate policy or memorandum. This subsection does not apply to inland marine floater policies.
(3) Any automobile liability or physical damage policy shall contain on the front page a summary of major coverages, conditions, exclusions, and limitations contained in that policy. Any such summary shall state that the issued policy should be referred to for the actual contractual governing provisions. The company may, in lieu of the summary, provide a readable policy.
History.s. 470, ch. 59-205; s. 1, ch. 75-218; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 18, ch. 86-160; s. 114, ch. 92-318.
627.422 Assignment of policies.A policy may be assignable, or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or health insurance policy under the terms of which the beneficiary may be changed upon the sole request of the policyowner may be assigned either by pledge or transfer of title, by an assignment executed by the policyowner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any such assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment, until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.
History.s. 471, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 372, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.423 Payment discharges insurer.Whenever the proceeds of or payments under a life or health insurance policy or annuity contract become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, and the insurer makes payment thereof in accordance with the terms of the policy or contract or in accordance with any written assignment thereof, the person then designated in the policy or contract or by such assignment as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor; and such payments shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.
History.s. 472, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 373, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.4232 Health insurance out-of-hospital benefits.No health insurance policy which provides coverage on a medical, hospital, or surgical expense-incurred basis shall be delivered or issued for delivery in this state unless coverage is provided for treatment performed outside a hospital for any accident or illness as defined in the policy, provided that such treatment would be covered on an inpatient basis and is provided by a health care provider whose services would be covered under the policy if the treatment were performed in a hospital and provided that treatment of the accident or illness is medically necessary and is provided as an alternative to inpatient treatment in a hospital. Reimbursement may be limited to amounts that are reasonable for the treatment or services provided and may be limited by any deductible and coinsurance provisions of the policy.
History.ss. 6, 10, ch. 84-235; s. 114, ch. 92-318.
627.4233 Total disability defined.
(1) If an individual or group policy of disability income insurance provides for the waiver of premiums or payment of claims upon total disability:
(a) The policy must, at a minimum, provide that for the first 12 months of the disability, a person is totally disabled if the person is unable to perform the material and substantial duties of the person’s regular occupation, or must include a provision at least as favorable to the insured.
(b) The policy may provide that after the first 12 months of disability as described in paragraph (a), the insurer may predicate the continuance of benefits on the person’s ability to perform any work or occupation for which the person is reasonably qualified or trained.
(2) If an individual or group policy of life insurance provides for the waiver of premiums or payment of claims upon total disability, the definition of total disability may not be more restrictive than the person’s inability to perform any work or occupation for which the person is reasonably qualified or trained.
(3) If an individual or group policy of medical expense insurance provides for extension of benefits for persons who are totally disabled on the date their insurance terminates, the definition of totally disabled may not be more restrictive than:
(a) For an employee, the person’s inability to perform any work or occupation for which the person is reasonably qualified or trained; or
(b) For a dependent, the person’s inability to engage in most normal activities of a person of like age and sex in good health.
History.s. 119, ch. 92-33; s. 1, ch. 95-364.
627.4234 Health insurance cost containment provisions required.A health insurance policy or health care services plan which provides medical, hospital, or surgical expense coverage delivered or issued for delivery in this state must contain one or more of the following procedures or provisions to contain health insurance costs or cost increases:
(1) Coinsurance.
(2) Deductible amounts.
(3) Utilization review.
(4) Audits of provider bills to verify that services and supplies billed were furnished and that proper charges were made.
(5) Scheduled benefits.
(6) Benefits for preadmission testing.
(7) Any lawful measure or combination of measures for which the insurer provides to the office information demonstrating that the measure or combination of measures is reasonably expected to have an effect toward containing health insurance costs or cost increases.
History.ss. 4, 10, ch. 84-235; ss. 40, 114, ch. 92-318; s. 1121, ch. 2003-261.
627.4235 Coordination of benefits.
(1) A group hospital, medical, or surgical expense policy, group health care services plan, or group-type self-insurance plan that provides protection or insurance against hospital, medical, or surgical expenses delivered or issued for delivery in this state must contain a provision for coordinating its benefits with any similar benefits provided by any other group hospital, medical, or surgical expense policy, any group health care services plan, or any group-type self-insurance plan that provides protection or insurance against hospital, medical, or surgical expenses for the same loss.
(2) A hospital, medical, or surgical expense policy, health care services plan, or self-insurance plan that provides protection or insurance against hospital, medical, or surgical expenses issued in this state or issued for delivery in this state may contain a provision whereby the insurer may reduce or refuse to pay benefits otherwise payable thereunder solely on account of the existence of similar benefits provided under insurance policies issued by the same or another insurer, health care services plan, or self-insurance plan which provides protection or insurance against hospital, medical, or surgical expenses only if, as a condition of coordinating benefits with another insurer, the insurers together pay 100 percent of the total reasonable expenses actually incurred of the type of expense within the benefits described in the policies and presented to the insurer for payment.
(3) The standards provided in subsection (2) apply to coordination of benefits payable under Medicare, Title XVIII of the Social Security Act.
(4) If a claim is submitted in accordance with any group hospital, medical, or surgical expense policy, or in accordance with any group health care service plan or group-type self-insurance plan, that provides protection, insurance, or indemnity against hospital, medical, or surgical expenses, and the policy or any other document that provides coverage includes a coordination-of-benefits provision and the claim involves another policy or plan which has a coordination-of-benefits provision, the following rules determine the order in which benefits under the respective health policies or plans will be determined:
(a)1. The benefits of a policy or plan which covers the person as an employee, member, or subscriber, other than as a dependent, are determined before those of the policy or plan which covers the person as a dependent.
2. However, if the person is also a Medicare beneficiary, and if the rule established under the Social Security Act of 1965, as amended, makes Medicare secondary to the plan covering the person as a dependent of an active employee, the order of benefit determination is:
a. First, benefits of a plan covering a person as an employee, member, or subscriber.
b. Second, benefits of a plan of an active worker covering a person as a dependent.
c. Third, Medicare benefits.
(b) Except as stated in paragraph (c), if two or more policies or plans cover the same child as a dependent of different parents:
1. The benefits of the policy or plan of the parent whose birthday, excluding year of birth, falls earlier in a year are determined before the benefits of the policy or plan of the parent whose birthday, excluding year of birth, falls later in that year; but
2. If both parents have the same birthday, the benefits of the policy or plan which covered the parent for a longer period of time are determined before those of the policy or plan which covered the parent for a shorter period of time.

However, if a policy or plan subject to the rule based on the birthdays of the parents coordinates with an out-of-state policy or plan which contains provisions under which the benefits of a policy or plan which covers a person as a dependent of a male are determined before those of a policy or plan which covers the person as a dependent of a female and if, as a result, the policies or plans do not agree on the order of benefits, the provisions of the other policy or plan determine the order of benefits.

(c) If two or more policies or plans cover a dependent child of divorced or separated parents, benefits for the child are determined in this order:
1. First, the policy or plan of the parent with custody of the child.
2. Second, the policy or plan of the spouse of the parent with custody of the child.
3. Third, the policy or plan of the parent not having custody of the child.

However, if the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child and if the entity obliged to pay or provide the benefits of the policy or plan of that parent has actual knowledge of those terms, the benefits of that policy or plan are determined first, except with respect to any claim determination period or plan or policy year during which any benefits are actually paid or provided before the entity has the actual knowledge.

(d) The benefits of a policy or plan which covers a person as an employee who is neither laid off nor retired, or as that employee’s dependent, are determined before those of a policy or plan which covers the person as a laid-off or retired employee or as the employee’s dependent. If the other policy or plan is not subject to this rule, and if, as a result, the policies or plans do not agree on the order of benefits, this paragraph does not apply.
(e) If none of the rules in paragraph (a), paragraph (b), paragraph (c), or paragraph (d) determine the order of benefits, the benefits of the policy or plan which covered an employee, member, or subscriber for a longer period of time are determined before those of the policy or plan which covered the person for the shorter period of time.
(5) Coordination of benefits is not permitted against an indemnity-type policy, an excess insurance policy as defined in s. 627.635, a policy with coverage limited to specified illnesses or accidents, or a Medicare supplement policy.
(6) If an individual is covered under a COBRA continuation plan as a result of the purchase of coverage as provided under the Consolidation Omnibus Budget Reconciliation Act of 1987 (Pub. L. No. 99-272), and also under another group plan, the following order of benefits applies:
(a) First, the plan covering the person as an employee, or as the employee’s dependent.
(b) Second, the coverage purchased under the plan covering the person as a former employee, or as the former employee’s dependent provided according to the provisions of COBRA.
History.s. 1, ch. 74-367; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 374, 377, 809(2nd), ch. 82-243; ss. 52, 79, ch. 82-386; s. 5, ch. 84-235; s. 2, ch. 85-244; ss. 41, 114, ch. 92-318.
627.4236 Coverage for bone marrow transplant procedures.
(1) As used in this section, the term “bone marrow transplant” means human blood precursor cells administered to a patient to restore normal hematological and immunological functions following ablative or nonablative therapy with curative or life-prolonging intent. Human blood precursor cells may be obtained from the patient in an autologous transplant or from a medically acceptable related or unrelated donor, and may be derived from bone marrow, circulating blood, or a combination of bone marrow and circulating blood. If chemotherapy is an integral part of the treatment involving bone marrow transplantation, the term “bone marrow transplant” includes both the transplantation and the chemotherapy.
(2) An insurer or a health maintenance organization may not exclude coverage for bone marrow transplant procedures recommended by the referring physician and the treating physician under a policy exclusion for experimental, clinical investigative, educational, or similar procedures contained in any individual or group health insurance policy or health maintenance organization contract issued, amended, delivered, or renewed in this state that covers treatment for cancer, if the particular use of the bone marrow transplant procedure is determined to be accepted within the appropriate oncological specialty and not experimental pursuant to subsection (3). Covered bone marrow transplant procedures must include costs associated with the donor-patient to the same extent and limitations as costs associated with the insured, except the reasonable costs of searching for the donor may be limited to immediate family members and the National Bone Marrow Donor Program.
(3)(a) The Agency for Health Care Administration shall adopt rules specifying the bone marrow transplant procedures that are accepted within the appropriate oncological specialty and are not experimental for purposes of this section. The rules must be based upon recommendations of an advisory panel appointed by the secretary of the agency, composed of:
1. One adult oncologist, selected from a list of three names recommended by the Florida Medical Association;
2. One pediatric oncologist, selected from a list of three names recommended by the Florida Pediatric Society;
3. One representative of the J. Hillis Miller Health Center at the University of Florida;
4. One representative of the H. Lee Moffitt Cancer Center and Research Institute, Inc.;
5. One consumer representative, selected from a list of three names recommended by the Chief Financial Officer;
6. One representative of the Health Insurance Association of America;
7. Two representatives of health insurers, one of whom represents the insurer with the largest Florida health insurance premium volume and one of whom represents the insurer with the second largest Florida health insurance premium volume; and
8. One representative of the insurer with the largest Florida small group health insurance premium volume.
(b) The director shall also appoint a member of the advisory panel to serve as chairperson.
(c) The agency shall provide, within existing resources, staff support to enable the panel to carry out its responsibilities under this section.
(d) In making recommendations and adopting rules under this section, the advisory panel and the director shall:
1. Take into account findings, studies, or research of the federal Agency for Health Care Policy, National Cancer Institute, National Academy of Sciences, Health Care Financing Administration, and Congressional Office of Technology Assessment, and any other relevant information.
2. Consider whether the federal Food and Drug Administration or National Cancer Institute is conducting or sponsoring assessment procedures to determine the safety and efficacy of the procedure or substantially similar procedures, or of any part of such procedures.
3. Consider practices of providers with respect to requesting or requiring patients to sign a written acknowledgment that a bone marrow transplant procedure is experimental.
(e) The advisory panel shall conduct, at least biennially, a review of scientific evidence to ensure that its recommendations are based on current research findings and that insurance policies offer coverage for the latest medically acceptable bone marrow transplant procedures.
(4) Any rule adopted under this section applies only to claims filed under policies issued or renewed after the effective date of the rule.
History.s. 42, ch. 92-318; s. 84, ch. 93-129; s. 5, ch. 95-188; s. 79, ch. 97-237; s. 2, ch. 99-299; s. 21, ch. 2000-305; s. 1122, ch. 2003-261; s. 1, ch. 2008-119.
627.4237 Sickness disability or disability due to sickness.Notwithstanding any provision of law to the contrary, the term “sickness disability” or “disability due to sickness,” as used in individual or group disability insurance policies 1issued in this state on or after October 1, 1992, includes any restriction of a health care practitioner’s ability to perform her or his 2occupation because of action taken by the state licensing board as a result of the practitioner’s testing positive on a human immunodeficiency virus test. The provisions of this section do not require payment of disability income benefits under any policy without the insured experiencing an actual loss of income as may be required under the terms of the policy as a condition of receiving such benefits.
History.s. 120, ch. 92-33; s. 1, ch. 92-171; s. 330, ch. 97-102.
1Note.Section 1, ch. 92-171, used the word “delivered” instead of the word “issued.”
2Note.Section 1, ch. 92-171, used the word “profession” instead of the word “occupation.”
627.4238 Health insurer examinations.The office may examine each authorized health insurer which transacts health insurance in this state. The purpose of the examination is to ascertain compliance by the insurer with the applicable provisions of this chapter. In lieu of the examination, the office may accept the report of a similar examination made by the insurance supervisory official of this state or another state. The reasonable cost of the examination shall be paid by the person examined, and such person is subject to the provisions of s. 624.320. Any examination is also subject to the applicable provisions of ss. 624.318, 624.319, 624.321, and 624.322. An examination under this section may not exceed 10 working days in length, may not be conducted more often than annually, and may not be conducted during the same calendar year as a market conduct examination conducted by the office, except in a case in which the office has prima facie evidence of a violation of this chapter or of chapter 626, which violation is of a nature so as to provide an immediate danger to the insurance-consuming public.
History.ss. 3, 10, ch. 84-235; s. 114, ch. 92-318; s. 1123, ch. 2003-261.
627.4239 Coverage for use of drugs in treatment of cancer.
(1) DEFINITIONS.As used in this section, the term:
(a) “Medical literature” means scientific studies published in a United States peer-reviewed national professional journal.
1(b) “Standard reference compendium” means authoritative compendia identified by the Secretary of the United States Department of Health and Human Services and recognized by the federal Centers for Medicare and Medicaid Services.
(2) COVERAGE FOR TREATMENT OF CANCER.
(a) An insurer may not exclude coverage in any individual or group insurance policy issued, amended, delivered, or renewed in this state which covers the treatment of cancer for any drug prescribed for the treatment of cancer on the ground that the drug is not approved by the United States Food and Drug Administration for a particular indication, if that drug is recognized for treatment of that indication in a standard reference compendium or recommended in the medical literature.
(b) Coverage for a drug required by this section also includes the medically necessary services associated with the administration of the drug.
(3) APPLICABILITY AND SCOPE.This section may not be construed to:
(a) Alter any other law with regard to provisions limiting coverage for drugs that are not approved by the United States Food and Drug Administration.
(b) Require coverage for any drug if the United States Food and Drug Administration has determined that the use of the drug is contraindicated.
(c) Require coverage for a drug that is not otherwise approved for any indication by the United States Food and Drug Administration.
(d) Affect the determination as to whether particular levels, dosages, or usage of a medication associated with bone marrow transplant procedures are covered under an individual or group health insurance policy or health maintenance organization contract.
(e) Apply to specified disease or supplemental policies.
(4) Nothing in this section is intended, expressly or by implication, to create, impair, alter, limit, modify, enlarge, abrogate, prohibit, or withdraw any authority to provide reimbursement for drugs used in the treatment of any other disease or condition.
History.s. 1, ch. 95-268; s. 1, ch. 2009-202; s. 72, ch. 2009-223.
1Note.As amended by s. 72, ch. 2009-223. For a description of multiple acts in the same session affecting a statutory provision, see preface to the Florida Statutes, “Statutory Construction.” Paragraph (1)(b) was also amended by s. 1, ch. 2009-202, and that version reads:

(b) “Standard reference compendium” means an authoritative compendium identified by the Secretary of the United States Department of Health and Human Services and recognized by the federal Centers for Medicare and Medicaid Services.

627.42395 Coverage for certain prescription and nonprescription enteral formulas.Notwithstanding any other provision of law, any health insurance policy delivered or issued for delivery, to any person in this state or any group, blanket, or franchise health insurance policy delivered or issued for delivery in this state shall make available to the policyholder as part of the application, for an appropriate additional premium, coverage for prescription and nonprescription enteral formulas for home use which are physician prescribed as medically necessary for the treatment of inherited diseases of amino acid, organic acid, carbohydrate, or fat metabolism as well as malabsorption originating from congenital defects present at birth or acquired during the neonatal period. Coverage for inherited diseases of amino acids and organic acids shall include food products modified to be low protein, in an amount not to exceed $2,500 annually for any insured individual, through the age of 24. This section applies to any person or family notwithstanding the existence of any preexisting condition.
History.s. 1, ch. 95-340.
Note.Former s. 627.64195.
627.424 Minor may give acquittance.
(1) Any minor domiciled in this state who has attained the age of 16 years shall be deemed competent to receive and to give full acquittance and discharge for a payment or payments in aggregate amount not exceeding $3,000 in any one year made by a life insurer under the maturity, death, or settlement agreement provisions in effect or elected by such minor under a life insurance policy or annuity contract, if such policy, contract, or agreement provides for the payment to such minor. No such minor shall be deemed competent to alienate the right to or to anticipate or commute such payments. This section shall not be deemed to restrict the rights of minors set forth in s. 627.406.
(2) If a guardian of the property of any such minor is duly appointed and written notice thereof is given to the insurer at its home office, any such payment thereafter falling due shall be paid to the guardian for the account of the minor, unless the policy or contract under which the payment is made expressly provides otherwise.
(3) This section shall not be deemed to require any insurer making any such payment to determine whether any other insurer may be effecting a similar payment to the same minor.
History.s. 473, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.425 Forms for proof of loss to be furnished.An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such person, but such insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of such proof or the manner of any such completion or attempted completion.
History.s. 474, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.426 Claims administration.
(1) Without limitation of any right or defense of an insurer otherwise, none of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder:
(a) Acknowledgment of the receipt of notice of loss or claim under the policy.
(b) Furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss, or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted.
(c) Investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.
(2) A liability insurer shall not be permitted to deny coverage based on a particular coverage defense unless:
(a) Within 30 days after the liability insurer knew or should have known of the coverage defense, written notice of reservation of rights to assert a coverage defense is given to the named insured by registered or certified mail sent to the last known address of the insured or by hand delivery; and
(b) Within 60 days of compliance with paragraph (a) or receipt of a summons and complaint naming the insured as a defendant, whichever is later, but in no case later than 30 days before trial, the insurer:
1. Gives written notice to the named insured by registered or certified mail of its refusal to defend the insured;
2. Obtains from the insured a nonwaiver agreement following full disclosure of the specific facts and policy provisions upon which the coverage defense is asserted and the duties, obligations, and liabilities of the insurer during and following the pendency of the subject litigation; or
3. Retains independent counsel which is mutually agreeable to the parties. Reasonable fees for the counsel may be agreed upon between the parties or, if no agreement is reached, shall be set by the court.
History.s. 475, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 375(1st), 377, 809(2nd), ch. 82-243; ss. 53, 79, ch. 82-386; s. 97, ch. 83-216; s. 114, ch. 92-318.
627.4265 Payment of settlement.In any case in which a person and an insurer have agreed in writing to the settlement of a claim, the insurer shall tender payment according to the terms of the agreement no later than 20 days after such settlement is reached. The tender of payment may be conditioned upon execution by such person of a release mutually agreeable to the insurer and the claimant, but if the payment is not tendered within 20 days, or such other date as the agreement may provide, it shall bear interest at a rate of 12 percent per year from the date of the agreement; however, if the tender of payment is conditioned upon the execution of a release, the interest shall not begin to accrue until the executed release is tendered to the insurer.
History.s. 12, ch. 83-288; s. 3, ch. 84-94; s. 114, ch. 92-318.
627.427 Payment of judgment by insurer; penalty for failure.
(1) Every judgment or decree for the recovery of money entered in any of the courts of this state against any authorized insurer shall be fully satisfied within 60 days from and after the entry thereof or, in the case of an appeal from such judgment or decree, within 60 days from and after the affirmance of the same by the appellate court.
(2) If the judgment or decree is not satisfied as required under subsection (1), and proof of such failure to satisfy is made by filing with the office a certified transcript of the docket of the judgment or decree together with a certificate by the clerk of the court wherein the judgment or decree was entered that the judgment or decree remains unsatisfied, in whole or in part, after the time aforesaid, the office shall forthwith revoke the insurer’s certificate of authority. The office shall not issue to such insurer any new certificate of authority until the judgment or decree is wholly paid and satisfied and proof thereof filed with the office under the official certificate of the clerk of the court wherein the judgment was recovered, showing that the same is satisfied of record, and until the expenses and fees incurred in the case are also paid by the insurer.
History.s. 476, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 375(2nd), 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1124, ch. 2003-261.
627.428 Attorney’s fee.
(1) Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.
(2) As to suits based on claims arising under life insurance policies or annuity contracts, no such attorney’s fee shall be allowed if such suit was commenced prior to expiration of 60 days after proof of the claim was duly filed with the insurer.
(3) When so awarded, compensation or fees of the attorney shall be included in the judgment or decree rendered in the case.
History.s. 477, ch. 59-205; s. 1, ch. 67-400; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 376, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.429 Medical tests for HIV infection and AIDS for insurance purposes.
(1) PURPOSE.The purpose of this section is to prohibit unfair practices in the underwriting of insurance with respect to exposure to the human immunodeficiency virus infection and related matters, and thereby to reduce the possibility that a person may suffer unfair discrimination when purchasing insurance.
(2) SCOPE.
(a) This section applies to all insurance policies, and the underwriting thereof, which are issued in this state or are issued outside this state pursuant to s. 627.5515 or s. 627.6515 covering residents of this state; to prepaid limited health organizations; and to multiple-employer welfare arrangements defined in s. 624.437. For the purposes of this section, “insurer” includes authorized multiple-employer welfare arrangements.
(b) This section does not prohibit an insurer from contesting a policy or claim to the extent allowed by law.
(3) DEFINITIONS.As used in this section:
(a) “AIDS” means acquired immune deficiency syndrome.
(b) “ARC” means AIDS-related complex.
(c) “HIV” means the human immunodeficiency virus identified as the causative agent of AIDS.
(4) USE OF MEDICAL TESTS FOR UNDERWRITING.
(a) With respect to the issuance of or the underwriting of a policy regarding exposure to the HIV infection and sickness or medical conditions derived from HIV infection, the insurer may use only medical tests that are reliable predictors of risk. A test which is recommended by the Centers for Disease Control and Prevention or by the federal Food and Drug Administration is reliable for the purposes of this section. A test which is rejected or not recommended by the Centers for Disease Control and Prevention or the federal Food and Drug Administration is not reliable for the purposes of this section. If a specific test recommended by the Centers for Disease Control and Prevention or the federal Food and Drug Administration indicates the existence or potential existence of exposure to the HIV infection or a sickness or medical condition related to the HIV infection, the insurer shall, before relying on a single test result to deny or limit coverage or to rate the coverage, follow the applicable Centers for Disease Control and Prevention or federal Food and Drug Administration recommended test protocol and shall use any applicable followup tests or series of tests recommended by the Centers for Disease Control and Prevention or federal Food and Drug Administration to confirm the indication.
(b) Prior to testing, the insurer shall disclose its intent to test the person for the HIV infection or for a specific sickness or medical condition derived therefrom and shall obtain the person’s written informed consent to administer the test. The written informed consent required by this paragraph shall include a fair explanation of the test, including its purpose, potential uses, and limitations, and the meaning of its results and the right to confidential treatment of information. Use of a form approved by the office raises a conclusive presumption of informed consent.
(c) An applicant shall be notified of a positive test result by a physician designated by the applicant or, in the absence of such designation, by the Department of Health. Notification must include all of the following:
1. Face-to-face posttest counseling on the meaning of the test results, the possible need for additional testing, and the need to eliminate behavior which might spread the disease to others.
2. The availability in the person’s geographic area of any appropriate health care services, including mental health care, and appropriate social and support services.
3. The benefits of locating and counseling any individual by whom the infected individual may have been exposed to human immunodeficiency virus and any individual whom the infected individual may have exposed to the virus.
4. The availability, if any, of the services of public health authorities with respect to locating and counseling any individual described in subparagraph 3.
(d) A medical test for exposure to the HIV infection or for a sickness or medical condition derived from such infection may be required of or given to a person only if the test is based on the person’s current medical condition or medical history or if the test is triggered by threshold coverage amounts which apply to all persons within the risk class. Sexual orientation may not be used in the underwriting process or in the determination of which applicants shall be tested for exposure to the HIV infection. The marital status, living arrangements, occupation, gender, beneficiary designation, or zip code or other territorial classification of an applicant may not be used to establish the applicant’s sexual orientation.
(e) An insurer may inquire whether a person has been tested positive for exposure to the HIV infection or been diagnosed as having ARC or AIDS caused by the HIV infection or other sickness or condition derived from such infection. An insurer may not inquire whether the person has been tested for or has received a negative result from a specific test for exposure to the HIV infection or for a sickness or a medical condition derived from such infection.
(f) Insurers shall maintain strict confidentiality regarding medical test results with respect to exposure to the HIV infection or a specific sickness or medical condition derived from such exposure. The insurer may not disclose information regarding specific test results outside of the insurance company or its employees, insurance affiliates, agents, or reinsurers, except to the person tested and to persons designated in writing by the person tested. The insurer may not furnish specific test results for exposure to the HIV infection to an insurer industry data bank if a review of the information would identify the individual and the specific test results.
(g) A laboratory may be used by an insurer or insurance support organization for the processing of HIV-related tests only if it is certified by the United States Department of Health and Human Services under the Clinical Laboratories Improvement Act of 1967, permitting testing of specimens obtained in interstate commerce, and only if the laboratory subjects itself to ongoing proficiency testing by the College of American Pathologists, the American Association of Bio Analysts, or an equivalent program approved by the Centers for Disease Control and Prevention of the United States Department of Health and Human Services.
(5) RESTRICTIONS ON COVERAGE EXCLUSIONS AND LIMITATIONS.
(a) An insurer of a group policy may not exclude coverage of an eligible individual because of a positive test result for exposure to the HIV infection or a specific sickness or medical condition derived from such exposure, either as a condition for or subsequent to the issuance of the policy. This paragraph does not apply to individuals applying for coverage where individual underwriting is otherwise allowed by law.
(b) Subject to the total benefits limits in a health insurance policy, no health insurance policy shall contain an exclusion or limitation with respect to coverage for exposure to the HIV infection or a specific sickness or medical condition derived from such infection, except as provided in a preexisting condition clause. This paragraph does not prohibit the issuance of accident-only or specified disease health policies.
(c) Except for preexisting conditions specifically applying to a sickness or medical condition of the insured, benefits under a life insurance policy shall not be denied or limited based on the fact that the insured’s death was caused, directly or indirectly, by exposure to the HIV infection or a specific sickness or medical condition derived from such infection. This paragraph does not prohibit the issuance of accidental death only or specified disease policies.
(d) Any major medical or comprehensive accident and health policy for which individual underwriting is authorized by law may contain a provision excluding coverage for expenses related to AIDS or ARC if, in the opinion of a legally qualified physician, the insured, prior to the first anniversary of the insured’s coverage under the policy, first exhibited objective manifestations of AIDS or ARC, as defined by the Centers for Disease Control and Prevention, which objective manifestations are attributable to no other cause or was diagnosed as having AIDS or ARC if all of the following apply:
1. The applicant for the policy is not required to submit to any medical test for HIV infection.
2. The policy provision:
a. Is set forth separately from the other exclusion and limitation provisions of the policy.
b. Has an appropriate caption or heading.
c. Is disclosed and referenced in a conspicuous manner on the policy data page.
d. Contains a statement that the exclusion will not apply to any person if the insurer does not assert the defense before the person has been insured under the policy for 2 years.
3. The insurer must notify the insured in writing of a determination that the insured would be subject to the effect of the exclusion within 90 days after the insurer first determines that an insured would be subject to the effect of the exclusion, even if there are no claims for AIDS or ARC. Failure to provide timely written notice under this subparagraph bars the insurer from using the exclusion.
4. Objective manifestations of AIDS or ARC first exhibited after the 12-month manifestation period must be covered the same as any other illness.
History.ss. 47, 53, ch. 88-380; s. 13, ch. 89-350; ss. 110, 114, ch. 92-318; s. 8, ch. 97-93; s. 259, ch. 99-8; s. 9, ch. 2000-370; s. 1125, ch. 2003-261.
627.4295 Dental procedures; anesthesia and hospitalization coverage.For purposes of this section, dental treatment or surgery shall be considered necessary when the dental condition is likely to result in a medical condition if left untreated. Any individual health insurance policy issued or issued for delivery in this state which provides coverage for general anesthesia and hospitalization services to a covered person shall not preclude such coverage in assuring the safe delivery of necessary dental care provided to a covered person who:
(1) Is under 8 years of age and is determined by a licensed dentist, and the child’s physician licensed under chapter 458 or chapter 459, to require necessary dental treatment in a hospital or ambulatory surgical center due to a significantly complex dental condition or a developmental disability in which patient management in the dental office has proved to be ineffective; or
(2) Has one or more medical conditions that would create significant or undue medical risk for the individual in the course of delivery of any necessary dental treatment or surgery if not rendered in a hospital or ambulatory surgical center.

As provided herein, all terms and conditions of the covered person’s health insurance policy shall apply to such services, and this section does not require coverage for the diagnosis or treatment of dental disease. An insurer may require prior authorization for general anesthesia and hospital services required under this section in the same manner the insurer requires prior authorization for hospitalization for other covered services. This section shall not apply to Medicare supplement, long-term care, disability, limited benefit, accident only, or specified disease policies.

History.s. 1, ch. 98-312.
627.4301 Genetic information for insurance purposes.
(1) DEFINITIONS.As used in this section, the term:
(a) “Genetic information” means information derived from genetic testing to determine the presence or absence of variations or mutations, including carrier status, in an individual’s genetic material or genes that are scientifically or medically believed to cause a disease, disorder, or syndrome, or are associated with a statistically increased risk of developing a disease, disorder, or syndrome, which is asymptomatic at the time of testing. Such testing does not include routine physical examinations or chemical, blood, or urine analysis, unless conducted purposefully to obtain genetic information, or questions regarding family history.
(b) “Health insurer” means an authorized insurer offering health insurance as defined in s. 624.603, a self-insured plan as defined in s. 624.031, a multiple-employer welfare arrangement as defined in s. 624.437, a prepaid limited health service organization as defined in s. 636.003, a health maintenance organization as defined in s. 641.19, a prepaid health clinic as defined in s. 641.402, a fraternal benefit society as defined in s. 632.601, or any health care arrangement whereby risk is assumed.
(2) USE OF GENETIC INFORMATION.
(a) In the absence of a diagnosis of a condition related to genetic information, no health insurer authorized to transact insurance in this state may cancel, limit, or deny coverage, or establish differentials in premium rates, based on such information.
(b) Health insurers may not require or solicit genetic information, use genetic test results, or consider a person’s decisions or actions relating to genetic testing in any manner for any insurance purpose.
(c) This section does not apply to the underwriting or issuance of a life insurance policy, disability income policy, long-term care policy, accident-only policy, hospital indemnity or fixed indemnity policy, dental policy, or vision policy or any other actions of an insurer directly related to a life insurance policy, disability income policy, long-term care policy, accident-only policy, hospital indemnity or fixed indemnity policy, dental policy, or vision policy.
History.s. 1, ch. 97-182; s. 43, ch. 2000-256; s. 10, ch. 2000-296.
627.4302 Identification cards for processing prescription drug claims.
(1) The purpose of this section is to improve patient care by minimizing confusion, eliminating unnecessary work, decreasing patient wait time, and improving business efficiencies.
(2) Any health insurer or health maintenance organization and all state and local government entities entering into an agreement to provide coverage for prescription drugs on an outpatient basis shall provide a benefits-identification card containing the following information:
(a) The name of the claim processor.
(b) The electronic-claims payor identification number or the issuer identification number, also referred to as the Banking Identification Number or “BIN,” assigned by the American National Standards Institute.
(c) The insured’s prescription group number.
(d) The insured’s identification number.
(e) The insured’s name.
(f) The claims submission name and address.
(g) The help desk telephone number.
(h) Any other information that the entity finds will assist in the processing of the claim.

The information required in paragraphs (a), (b), (g), and (h) must be provided on the card, unless instruction is provided on the card for ready access to such information by electronic means.

(3) The benefits-identification card must present the information in a manner readily identifiable or, alternatively, the information may be embedded in the card and available through magnetic stripe or smart card. The information may also be provided through other electronic technology.
(4) Any entity providing a health-benefits-identification card containing all of the information required by this section shall not be required to provide a separate identification card for prescription drug benefits.
(5) A benefits-identification card required under subsection (2) shall be issued no later than 60 days after any change in the information contained on the card becomes effective. An entity may issue a temporary sticker containing the new information in lieu of issuing a new card prior to the annual renewal date. Such sticker must be designed so that it can be attached to the existing card.
History.s. 1, ch. 2002-245.
627.441 Commercial general liability policies; coverage to contractors for completed operations.
(1) As used in this section, the term:
(a) “Contractor” means a contractor or subcontractor performing work on a public construction project under contract with a public agency, as described in s. 255.0517(2).
(b) “Liability insurer” means an insurer issuing a commercial general liability insurance policy in this state to a contractor that provides coverage for liability arising out of completed operations performed by the contractor or on the contractor’s behalf.
(2) A liability insurer must offer coverage at an appropriate additional premium for liability arising out of current or completed operations under an owner-controlled insurance program for any period beyond the period for which the program provides liability coverage, as specified in s. 255.0517(2)(b). The period of such coverage must be sufficient to protect against liability arising out of an action brought within the time limits provided in s. 95.11(3)(c).
History.s. 2, ch. 2004-377.
627.442 Insurance contracts.A person who requires a workers’ compensation insurance policy pursuant to a construction contract may not reject a workers’ compensation insurance policy issued by a self-insurance fund that is subject to part V of chapter 631 based upon the self-insurance fund not being rated by a nationally recognized insurance rating service.
History.s. 1, ch. 2007-178.
PART III
LIFE INSURANCE AND ANNUITY CONTRACTS
627.451 Scope of this part.
627.452 Standard provisions required.
627.453 Grace period.
627.454 Entire contract; statements in application.
627.455 Incontestability.
627.4554 Annuity investments by seniors.
627.4555 Secondary notice.
627.4556 Life insurance automatic policy loan provision.
627.456 Misstatement of age or sex.
627.457 Dividends.
627.458 Policy loan.
627.4585 Maximum rate of interest on policy loans.
627.459 Reinstatement.
627.460 Authority to alter contract.
627.4605 Replacement notice.
627.461 Settlement on proof of death.
627.4615 Interest payable on death claim payments.
627.462 Table of installments.
627.463 Excluded or restricted coverage.
627.464 Annuity contracts, pure endowment contracts; standard provisions.
627.465 Annuity contracts, pure endowment contracts; grace period.
627.466 Annuity contracts, pure endowment contracts; incontestability.
627.467 Annuity contracts, pure endowment contracts; entire contract.
627.468 Annuity contracts, pure endowment contracts; misstatement of age or sex.
627.469 Annuity contracts, pure endowment contracts; dividends.
627.470 Annuity contracts, pure endowment contracts; reinstatement.
627.471 Reversionary annuities; standard provisions.
627.472 Incontestability after reinstatement.
627.473 Policy settlements.
627.474 Policy must contain entire contract.
627.475 Nonforfeiture benefits; certain interim policies.
627.476 Standard Nonforfeiture Law for Life Insurance.
627.479 Prohibited policy plans.
627.480 Cash payments of single-premium life policies.
627.481 Requirements for certain annuity agreements.
627.482 Interest payable on cash surrender of policy.
627.451 Scope of this part.This part applies to life insurance and annuity contracts, other than reinsurance, group life insurance, group annuities, and industrial life insurance; except that ss. 627.463, 627.472, 627.476, and 627.479 also apply to industrial life insurance. This part does not apply to credit life insurance except as provided in part IX of chapter 627.
History.s. 478, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 378, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.452 Standard provisions required.
(1) No policy of life insurance, except as stated in subsection (3), shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions as required by ss. 627.453-627.462 inclusive and ss. 627.475 and 627.476, or provisions which in the opinion of the office are more favorable to the policyholder.
(2) Any of such provisions or portions thereof not applicable to single-premium or term policies shall to that extent not be incorporated therein.
(3) This section does not apply to annuity contracts, or to any provision of a life insurance policy or contract supplemental thereto relating to health benefits or to additional benefits in the event of death by accident or accidental means.
(4) Except as otherwise required under this code or rules adopted pursuant thereto, the style, arrangement, and overall appearance of the policy shall give no undue prominence to any portion of the text. Every printed portion of the text of the policy and any endorsements or attached papers shall be plainly printed in lightfaced type of a style in general use, the size of which shall be uniform and not less than 10 points with a lowercase, unspaced alphabet length of not less than 120 points. As used in this subsection, “text” includes all printed matter except the name and address of the insurer, the name or title of the policy, the brief description of the coverage provided, if any, and captions and subcaptions.
History.s. 479, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 379, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 4, ch. 91-296; s. 114, ch. 92-318; s. 1126, ch. 2003-261.
627.453 Grace period.Every insurance contract shall provide that the insured is entitled to a grace period of not less than 30 days within which payment of any premium after the first may be made. The payment may, at the option of the insurer, be subject to an interest charge not in excess of 8 percent per year for the number of days of grace elapsing before the payment of the premium, during which period of grace the policy shall continue in force. If the policy becomes a claim during the grace period before the overdue premium is paid, or the deferred premiums of the current policy year, if any, are paid, the amount of such premium or premiums with interest not in excess of 8 percent per year thereon may be deducted in any settlement under the policy.
History.s. 480, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 380, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.454 Entire contract; statements in application.Every insurance contract shall provide that the policy, or the policy and the application therefor if a copy of such application is endorsed upon or attached to the policy when issued, shall constitute the entire contract between the parties, and that all statements contained in the application shall, in the absence of fraud, be deemed representations and not warranties.
History.s. 481, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 381, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.455 Incontestability.Every insurance contract shall provide that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of 2 years from its date of issue except for nonpayment of premiums and except, at the option of the insurer, as to provisions relative to benefits in event of disability and as to provisions which grant additional insurance specifically against death by accident or accidental means.
History.s. 482, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 382, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.4554 Annuity investments by seniors.
(1) PURPOSE; CONSTRUCTION.
(a) The purpose of this section is to set forth standards and procedures for making recommendations to senior consumers which result in a transaction involving annuity products to appropriately address the insurance needs and financial objectives of senior consumers at the time of the transaction.
(b) A violation of this section does not create or imply a private cause of action.
(c) Nothing in this section shall subject an insurer to criminal or civil liability for the acts of independent individuals not affiliated with that insurer for selling its products, when such sales are made in a way not authorized by the insurer.
(2) APPLICATION.This section applies to any recommendation to purchase or exchange an annuity made to a senior consumer by an insurance agent, or an insurer where no agent is involved, and which results in the purchase or exchange recommended.
(3) DEFINITIONS.For purposes of this section, the term:
(a) “Annuity contract” means a fixed annuity, equity indexed annuity, fixed equity indexed annuity, or variable annuity that is individually solicited, whether the product is classified as an individual annuity or a group annuity.
(b) “Accredited investor” means any person who comes within any of the following categories, or who the issuer reasonably believes comes within any of the following categories, at the time of the sale of an annuity to that person:
1. The person’s net worth or joint net worth with his or her spouse, at the time of the purchase, exceeds $1 million; or
2. The person had an individual income in excess of $200,000 in each of the 2 most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year.
(c) “Recommendation” means advice provided by an insurance agent, or an insurer if no insurance agent is involved, to an individual senior consumer which results in a purchase or exchange of an annuity in accordance with that advice.
(d) “Senior consumer” means a person 65 years of age or older. In the event of a joint purchase by more than one party, a purchaser is considered to be a senior consumer if any of the parties is age 65 or older.
(4) DUTIES OF INSURERS AND INSURANCE AGENTS.
(a) In recommending to a senior consumer the purchase or exchange of an annuity that results in another insurance transaction or series of insurance transactions, an insurance agent, or an insurer if no insurance agent is involved, must have an objectively reasonable basis for believing that the recommendation is suitable for the senior consumer based on the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs.
(b) Before executing a purchase or exchange of an annuity resulting from a recommendation to a senior consumer, an insurance agent, or an insurer if no insurance agent is involved, shall make reasonable efforts to obtain information concerning the suitability of the recommendation. The information shall include, at a minimum:
1. Personal information, including the age and sex of the parties to the annuity and the ages and number of any dependents;
2. Tax status of the consumer;
3. Investment objectives of the consumer;
4. The source of the funds to be used to purchase the annuity;
5. The applicant’s annual income;
6. Intended use of the annuity;
7. The applicant’s existing assets, including investment holdings;
8. The applicant’s liquid net worth and liquidity needs;
9. The applicant’s financial situation and needs;
10. The applicant’s risk tolerance; and
11. Such other information used or considered to be relevant by the insurance agent or insurer in making recommendations to the consumer regarding the purchase or exchange of an annuity contract.

This information shall be collected on a form adopted by rule by the department and completed and signed by the applicant and agent. Questions requesting this information must be presented in at least 12-point type and be sufficiently clear so as to be readily understandable by both the agent and the consumer. A true and correct executed copy of the form shall be provided by the agent to the insurer, or the third party that has contracted with such insurer pursuant to subparagraph (f)3., within 10 days after execution of the form, and shall be provided to the consumer no later than the date of delivery of the contract or contracts.

(c)1. Except as provided under subparagraph 2., an insurance agent, or an insurer if no insurance agent is involved, has no obligation to a senior consumer under paragraph (a) related to any recommendation if the senior consumer:
a. Refuses to provide relevant information requested by the insurer or insurance agent;
b. Decides to enter into an insurance transaction that is not based on a recommendation of the insurer or insurance agent; or
c. Fails to provide complete or accurate information.
2. An insurer or insurance agent’s recommendation subject to subparagraph 1. shall be objectively reasonable under all the circumstances actually known to the insurer or insurance agent at the time of the recommendation.
3. If the consumer refuses to provide relevant information requested by the insurance agent or insurer, before the execution of the sale the insurance agent or insurer shall obtain a signed verification from the senior consumer on a form adopted by rule by the department that he or she refuses to provide the requested information and may be limiting protections afforded by this section regarding the suitability of the sale.
(d) In addition to the information required by paragraph (b), before the execution of a replacement or exchange of an annuity contract resulting from a recommendation, the insurance agent shall also provide, on a form adopted by rule by the department, information concerning differences between each existing annuity contract and the annuity contract being recommended in order to determine the suitability of the recommendation and its benefit to the consumer. A true and correct executed copy of this form shall be provided by the agent to the insurer, or the third party that has contracted with such insurer pursuant to subparagraph (f)3., within 10 days after execution of the form, and shall be provided to the consumer no later than the date of delivery of the contract or contracts. The information shall include, at a minimum:
1. A comparison of the benefits, terms, and limitations between the annuity contracts.
2. A comparison of any fees and charges between the annuity contracts.
3. A written basis for the recommended exchange, including the overall advantages and disadvantages to the consumer if the recommendation is followed.
4. Such other information used or considered to be relevant by the insurance agent or the insurer in making recommendations to the consumer regarding the replacement or exchange of an annuity contract.
(e) Prior to the execution of a purchase or exchange of an annuity contract resulting from a recommendation, an agent shall also disclose to the consumer that such purchase or exchange may have tax consequences and that the applicant should contact his or her tax advisor for more information.
(f)1. An insurer or insurance agent must ensure that a system to supervise recommendations, which is reasonably designed to achieve compliance with this section, is established and maintained by complying with subparagraphs 3., 4., and 5., or shall establish and maintain such a system, including, but not limited to:
a. Maintaining written procedures.
b. Conducting periodic reviews of its records that are reasonably designed to assist in detecting and preventing violations of this section.
2. A managing general agent and an insurance agency shall adopt a system established by an insurer to supervise recommendations of its insurance agents which is reasonably designed to achieve compliance with this section or shall establish and maintain such a system, including, but not limited to:
a. Maintaining written procedures.
b. Conducting periodic reviews of records that are reasonably designed to assist in detecting and preventing violations of this section.
3. An insurer may contract with a third party, including a managing general agent or an insurance agency, to establish and maintain a system of supervision as required by subparagraph 1. with respect to insurance agents under contract with or employed by the third party.
4. An insurer shall make reasonable inquiry to ensure that such third party contracting under subparagraph 3. is performing the functions required under subparagraph 1. and shall take such action as is reasonable under the circumstances to enforce the contractual obligation to perform the functions. An insurer may comply with its obligation to make reasonable inquiry by:
a. Annually obtaining a certification from a third party senior manager who has responsibility for the delegated functions that the manager has a reasonable basis to represent, and does represent, that the third party is performing the required functions.
b. Based on reasonable selection criteria, periodically selecting third parties contracting under subparagraph 3. for a review to determine whether the third parties are performing the required functions. The insurer shall perform any procedures necessary to conduct the review which are reasonable under the circumstances.
5. An insurer that contracts with a third party pursuant to subparagraph 3. and complies with the requirements specified in subparagraph 4. is deemed to have fulfilled its responsibilities under subparagraph 1.
6. An insurer, managing general agent, or insurance agency is not required by subparagraph 1. or subparagraph 2. to:
a. Review or provide for review of all transactions solicited by an insurance agent; or
b. Include in its system of supervision an insurance agent’s recommendations to senior consumers of products other than the annuities offered by the insurer, managing general agent, or insurance agency.
7. A managing general agent or insurance agency contracting with an insurer pursuant to subparagraph 3. shall promptly, when requested by the insurer pursuant to subparagraph 4., provide a certification as described in subparagraph 4. or provide a clear statement that the managing general agent or insurance agency is unable to meet the certification criteria.
8. A person may not provide a certification under sub-subparagraph 4.a. unless the person is a senior manager with responsibility for the delegated functions and has a reasonable basis for making the certification.
(5) MITIGATION OF RESPONSIBILITY.
(a) The office may order an insurer to take reasonably appropriate corrective action, including rescission of the policy or contract and a full refund of the premiums paid or the accumulation value, whichever is greater, for any senior consumer harmed by a violation of this section by the insurer or the insurer’s insurance agent.
(b) The department may order:
1. An insurance agent to take reasonably appropriate corrective action, including monetary restitution of penalties or fees incurred by the senior consumer, for any senior consumer harmed by a violation of this section by the insurance agent.
2. A managing general agency or insurance agency that employs or contracts with an insurance agent to sell or solicit the sale of annuities to senior consumers to take reasonably appropriate corrective action for any senior consumer harmed by a violation of this section by the insurance agent.
(c) The department shall, in addition to any other penalty authorized under chapter 626, order an insurance agent to pay restitution to any senior consumer who has been deprived of money by the agent’s misappropriation, conversion, or unlawful withholding of monies belonging to the senior consumer in the course of a transaction involving annuities. The amount of restitution required to be paid pursuant to this paragraph may not exceed the amount misappropriated, converted, or unlawfully withheld. This paragraph does not limit or restrict a person’s right to seek other remedies as provided by law.
(d) Any applicable penalty under the Florida Insurance Code for a violation of paragraph (4)(a), paragraph (4)(b), or subparagraph (4)(c)2. may be reduced or eliminated, according to a schedule adopted by the office or the department, as appropriate, if corrective action for the senior consumer was taken promptly after a violation was discovered.
(6) RECORDKEEPING.
(a) Insurers, managing general agents, insurance agencies, and insurance agents shall maintain or make available from the entity or entities responsible for maintaining the records pursuant to paragraph (4)(f), to the department or office, as appropriate, records of the information collected from the senior consumer and other information used in making the recommendations that were the basis for insurance transactions for 5 years after the insurance transaction is completed by the insurer. An insurer is permitted, but shall not be required, to maintain documentation on behalf of an insurance agent.
(b) Records required to be maintained by this subsection may be maintained in paper, photographic, microprocess, magnetic, mechanical, or electronic media, or by any process that accurately reproduces the actual document.
(7) EXEMPTIONS.Unless otherwise specifically included, this section does not apply to recommendations involving:
(a) Direct-response solicitations where there is no recommendation based on information collected from the senior consumer pursuant to this section.
(b) Contracts used to fund:
1. An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act;
2. A plan described by s. 401(a), s. 401(k), s. 403(b), s. 408(k), or s. 408(p) of the Internal Revenue Code of 1986, as amended, if established or maintained by an employer;
3. A government or church plan defined in s. 414 of the Internal Revenue Code of 1986, as amended, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax-exempt organization under s. 457 of the Internal Revenue Code of 1986, as amended;
4. A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;
5. Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process; or
6. Prepaid funeral contracts.
(8) APPLICATION TO ANNUITIES.Any person who is registered with a member of the Financial Industry Regulatory Authority, who is required to make a suitability determination, and who makes and documents such determination is deemed to satisfy the requirements under this section for the recommendation of annuities. This section does not limit the department’s ability to enforce the provisions of this section with respect to insurance agents, insurance agencies, and managing general agents, or the office’s ability to enforce the provisions of this section with respect to insurers.
(9) PROHIBITED CHARGES.An annuity contract issued to a senior consumer may not contain a surrender or deferred sales charge for a withdrawal of money from an annuity exceeding 10 percent of the amount withdrawn. The charge shall be reduced so that no surrender or deferred sales charge exists after the end of the 10th policy year or 10 years after the premium is paid, whichever is later. This subsection does not apply to annuities purchased by an accredited investor or to those annuities specified in paragraph (7)(b).
(10) RULES.The department and commission may adopt rules to administer this section.
History.s. 146, ch. 2004-390; s. 9, ch. 2008-237; s. 52, ch. 2010-175.
627.4555 Secondary notice.Except as provided in this section, a contract for life insurance issued or issued for delivery in this state on or after October 1, 1997, covering a natural person 64 years of age or older, which has been in force for at least 1 year, may not be lapsed for nonpayment of premium unless, after expiration of the grace period, and at least 21 days before the effective date of any such lapse, the insurer has mailed a notification of the impending lapse in coverage to the policyowner and to a specified secondary addressee if such addressee has been designated in writing by name and address by the policyowner. An insurer issuing a life insurance contract on or after October 1, 1997, shall notify the applicant of the right to designate a secondary addressee at the time of application for the policy, on a form provided by the insurer, and at any time the policy is in force, by submitting a written notice to the insurer containing the name and address of the secondary addressee. For purposes of any life insurance policy that provides a grace period of more than 51 days for nonpayment of premiums, the notice of impending lapse in coverage required by this section must be mailed to the policyowner and the secondary addressee at least 21 days before the expiration of the grace period provided in the policy. This section does not apply to any life insurance contract under which premiums are payable monthly or more frequently and are regularly collected by a licensed agent or are paid by credit card or any preauthorized check processing or automatic debit service of a financial institution.
History.s. 1, ch. 95-142; s. 11, ch. 97-292.
627.4556 Life insurance automatic policy loan provision.If an application for an individual life insurance policy provides an option to the applicant for an automatic policy loan against the cash value of the policy to pay the premium on the policy in the event of nonpayment of premium, such option shall be deemed to be elected by the applicant unless the applicant makes an affirmative election not to include this provision in the policy.
History.s. 2, ch. 95-142.
627.456 Misstatement of age or sex.Every insurance contract shall provide that if it is found that the age or sex of the insured, or of any other individual considered in determining the premium or benefit, has been misstated, the amount payable or benefit accruing under the policy shall be such as the premium would have purchased according to the correct age or sex. Such calculations shall be in accordance with the insurer’s rate at date of issue, and at the option of the insurer this may be so specified in the policy.
History.s. 483, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 383, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.457 Dividends.
(1) Every participating policy shall provide that, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy provided the policy is in force and all premiums to that date are paid.
(2) Except as provided in this section, any dividend so apportioned shall, at the option of the party entitled to elect such option, be either payable in cash or applied to any one of such other dividend options as may be provided by the policy. If any such other dividend options are provided, the policy shall further state which option shall be automatically effective if such party has not elected some other option. If the policy specifies a period within which such other option may be elected, such period shall be not less than 30 days following the date on which such dividend is due and payable.
(3) The annually apportioned dividend shall be deemed to be payable in cash within the meaning of subsection (2) even though the policy provides that payment of such dividend is to be deferred for a specified period, provided such period does not exceed 6 years from the date of apportionment and that interest will be added to such dividend at a specified rate.
(4) If a participating policy provides that the benefit under any paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus apportioned while the insurance is in force under such nonforfeiture provision be applied in the manner set forth in the policy.
History.s. 484, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 384, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.458 Policy loan.
(1) There shall be a provision that after the policy has a cash surrender value and while no premium is in default, the insurer will advance, on proper assignment or pledge of the policy and on the sole security thereof, at a rate of interest not exceeding 10 percent per year, for policies issued prior to October 1, 1981, payable in advance, an amount equal to or, at the option of the party entitled thereto, less than the loan value of the policy. The loan value of the policy shall be at least equal to the cash surrender value at the end of the then-current policy year, except that the insurer may deduct, either from such loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining such cash surrender value, including any interest then accrued but not due, any unpaid balance of the premium for the current policy year, and interest on the loan to the end of the current policy year. However, as a condition for approval of a policy loan interest rate in excess of 6 percent per year, the office shall require the insurer to furnish such assurances as the office deems necessary that the interest rate on such loans will bear a reasonable relationship to other interest rates and that the holders of such policies will benefit through higher dividends or lower premiums, or both.
(2) The policy may also provide that, if interest on any indebtedness is not paid when due, such interest shall then be added to the existing indebtedness and shall bear interest at the same rate and that, if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of loan value thereof, then the policy shall terminate and become void, but not until at least 30 days’ notice has been mailed by the insurer to the last known address of the insured or policyowner and of any assignee of record at the home office of the insurer.
(3) The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for 6 months after application therefor.
(4) This section does not apply to term policies or to term insurance benefits provided by riders or supplemental policy provisions.
History.s. 485, ch. 59-205; s. 3, ch. 76-168; ss. 1, 3, ch. 77-324; s. 1, ch. 77-457; ss. 2, 6, ch. 81-289; ss. 2, 3, ch. 81-318; ss. 385, 404, 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1127, ch. 2003-261.
627.4585 Maximum rate of interest on policy loans.
(1) For the purposes of this section, the “published monthly average” means the value of the interest rate index, as defined in s. 625.121(6)(e).
(2) Policies issued on or after October 1, 1981, shall provide for policy loan interest rates through:
(a) A provision permitting a maximum interest rate of not more than 10 percent a year; or
(b) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.
(3) The rate of interest charged on a policy loan made under paragraph (2)(b) shall not exceed the higher of the following:
(a) The published monthly average for the calendar month ending 2 months before the date on which the rate is determined; or
(b) The rate used to compute the cash surrender values under the policy during the applicable period plus 1 percent a year.
(4) If the maximum rate of interest is determined pursuant to paragraph (2)(b), the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.
(5) The maximum rate for each policy must be determined at regular intervals at least once every 12 months, but not more frequently than once in any 3-month period. At the intervals specified in the policy:
(a) The rate being charged may be increased whenever such increase as determined under subsection (3) would increase that rate by 50 basis points or more a year.
(b) The rate being charged must be reduced whenever such reduction as determined under subsection (3) would decrease that rate by 50 basis points or more a year.
(6) The life insurer shall:
(a) Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan.
(b) Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practicable to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in paragraph (c).
(c) Send to policyholders with loans reasonable advance notice of any increase or decrease in the rate.
(d) Include in the notices required in this section the substance of the pertinent provisions of subsections (2) and (4).
(7) No policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.
(8) The substance of the pertinent provisions of subsections (2) and (4) shall be set forth in the policies to which they apply.
(9) For purposes of this section:
(a) The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy.
(b) The term “policy loan” includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due.
(c) The term “policyholder” includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer.
(d) The term “policy” includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans.
(10) No other provision of law shall apply to policy loan interest rates unless made specifically applicable to such rates.
History.ss. 3, 6, ch. 81-289; ss. 386, 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386; s. 65, ch. 91-108; s. 114, ch. 92-318.
627.459 Reinstatement.Every contract shall provide that the policy may be reinstated upon written application therefor at any time within 3 years after the date of default in the payment of any premiums, unless the policy has been surrendered for its cash value or unless the paid-up term insurance, if any, has expired, upon evidence of insurability satisfactory to the insurer and the payment of all overdue premiums and payment (or, within the limits permitted by the then cash value of the policy, reinstatement) of any other indebtedness to the insurer upon the policy with interest as to both premiums and indebtedness at a rate not exceeding 6 percent per year compounded annually or, as to indebtedness for a policy issued on or after October 1, 1981, at an interest rate as provided for in s. 627.4585.
History.s. 486, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 4, 6, ch. 81-289; ss. 2, 3, ch. 81-318; ss. 387, 404, 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.460 Authority to alter contract.Every contract shall provide, at the option of the insurer, that no agent shall have the power or authority to waive, change, or alter any of the terms or conditions of any policy; except that, at the option of the insurer, the terms or conditions may be changed by an endorsement or rider signed by a duly authorized officer of the insurer.
History.s. 487, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 388, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.4605 Replacement notice.A notice to a current insurer of a replacement of a current life insurance policy is not required in a transaction involving:
(1) An application to the current insurer that issued the current policy or contract when a contractual change or conversion privilege is being exercised;
(2) A current policy or contract 1that is being replaced by the same insurer pursuant to a program filed with and approved by the office; or
(3) A term conversion privilege 1that is being exercised among corporate affiliates.
History.s. 2, ch. 2010-61.
1Note.The word “that” was inserted by the editors.
627.461 Settlement on proof of death.Every contract shall provide that, when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and surrender of the policy.
History.s. 488, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 389, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 14, ch. 83-288; s. 114, ch. 92-318.
627.4615 Interest payable on death claim payments.When a policy provides for payment of its proceeds in a lump sum upon the death of the insured, the payment must include interest, at an annual rate equal to or greater than the Moody’s Corporate Bond Yield Average-Monthly Average Corporate as of the day the claim was received, from the date the insurer receives written due proof of death of the insured. If the method of calculating such index is substantially changed from the method of calculation in use on January 1, 1993, the rate must not be less than 8 percent.
History.s. 15, ch. 83-288; s. 3, ch. 84-94; ss. 43, 114, ch. 92-318.
627.462 Table of installments.If a policy provides for payment of its proceeds in installments, a table showing the amount and period of such installments shall be included in the policy; except that certain tables may be omitted from the policy if in the judgment of the office it is not practical to include them.
History.s. 489, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1128, ch. 2003-261.
627.463 Excluded or restricted coverage.A clause in any policy of life insurance providing that such policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy and shall not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not such restrictions or exclusions are excepted in such clause.
History.s. 490, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.464 Annuity contracts, pure endowment contracts; standard provisions.
(1) No fixed-dollar annuity, variable annuity, or pure endowment contract, other than a reversionary annuity, survivorship annuity, or group annuity, shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions set forth in ss. 627.465-627.470, inclusive, or provisions which in the opinion of the office are more favorable to the policyholder. Any of such provisions not applicable to single-premium annuities or single-premium pure endowment contracts shall not to that extent be incorporated therein.
(2) An annuity purchased, dedicated, or otherwise allocated as part of a settlement to satisfy the requirements of 42 U.S.C. s. 1395y(b)(2) may not be sold to, or commuted by or for, a third party unconnected to the settlement.
(3) This section does not apply to contracts for annuities included in or upon the lives of beneficiaries under life insurance policies.
History.s. 491, ch. 59-205; s. 10, ch. 61-441; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1129, ch. 2003-261; s. 3, ch. 2010-61.
627.465 Annuity contracts, pure endowment contracts; grace period.In a fixed-dollar annuity, variable annuity, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that there shall be a period of grace of 1 month but not less than 30 days, within which any stipulated payment to the insurer falling due after the first may be made, subject, at the option of the insurer, to an interest charge thereon at a rate to be specified in the contract but not exceeding 6 percent per year for the number of days of grace elapsing before such payment, during which period of grace the contract shall continue in full force. If a claim arises under the contract on account of death prior to expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are paid, the amount of such payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement.
History.s. 492, ch. 59-205; s. 11, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 390, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.466 Annuity contracts, pure endowment contracts; incontestability.If any statements, other than those relating to age, sex, and identity, are required as a condition to issuing a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, and subject to s. 627.468, the contract shall provide that it shall be incontestable after it has been in force during the lifetime of the person, or of each of the persons as to whom such statements are required, for a period of 2 years from its date of issue except for nonpayment of stipulated payments to the insurer; and, at the option of the insurer, the contract may also except any provisions relative to benefits in the event of disability and any provisions which grant insurance specifically against death by accident or accidental means.
History.s. 493, ch. 59-205; s. 12, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 391, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.467 Annuity contracts, pure endowment contracts; entire contract.In a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that it shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the contract when issued, that the contract and the application therefor shall constitute the entire contract between the parties.
History.s. 494, ch. 59-205; s. 13, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 392, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.468 Annuity contracts, pure endowment contracts; misstatement of age or sex.In a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that if the age or sex of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age or sex; and that if the insurer shall make or has made any overpayment or overpayments on account of any such misstatement, the amount thereof, with interest at the rate to be specified in the contract but not exceeding 6 percent per year, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.
History.s. 495, ch. 59-205; s. 14, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 393, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.469 Annuity contracts, pure endowment contracts; dividends.If a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract is participating, the contract shall contain a provision that, beginning not later than the end of the third contract year, the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.
History.s. 496, ch. 59-205; s. 15, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 394, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.470 Annuity contracts, pure endowment contracts; reinstatement.In a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that it may be reinstated upon written application therefor at any time within 1 year from the date of default in making stipulated payments to the insurer, unless the cash surrender value has been paid, but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated, with interest thereon at a rate to be specified in the contract but not exceeding 6 percent per year payable annually; and, when applicable, the insurer may also include a requirement of evidence of insurability satisfactory to the insurer.
History.s. 497, ch. 59-205; s. 16, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 395, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.471 Reversionary annuities; standard provisions.
(1) Except as stated in this section, no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance:
(a) Those provisions specified in ss. 627.465-627.469, except that under s. 627.465 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue or deferred payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract; and
(b) A provision that the contract may be reinstated at any time within 3 years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract are paid (or, within the limits permitted by the then cash value of the contract, reinstated) with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding 8 percent per year compounded annually.
(2) This section does not apply to group annuities or to annuities included in life insurance policies, and any of such provisions not applicable to single-premium annuities shall not to that extent be incorporated therein.
History.s. 498, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 396, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.472 Incontestability after reinstatement.A reinstated policy of life insurance, fixed-dollar annuity contract, or variable annuity contract may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance.
History.s. 499, ch. 59-205; s. 17, ch. 61-441; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.473 Policy settlements.Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets.
History.s. 500, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.474 Policy must contain entire contract.No life insurer or its agent shall make any contract of insurance or agreement as to such contract other than as plainly expressed in the policy.
History.s. 501, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 397, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.475 Nonforfeiture benefits; certain interim policies.Each life insurance policy issued between the effective date of this code and the operative date of s. 627.476 shall provide:
(1) That, in the event of default in any premium, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy.
(2) That, upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least 3 full years, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value at least equal to the minimum cash surrender value hereinafter specified. The minimum cash surrender value shall be equal to:
(a) The reserve on the date of default of the premium less a sum of not more than 2.5 percent of the face amount; or
(b) An amount as defined in s. 627.476 but on the basis of the Commissioners’ 1941 Standard Ordinary Mortality Table in lieu of the Commissioners’ 1958 Standard Ordinary Mortality Table therein specified. The policy shall reserve to the insurer the right to defer the granting of any cash surrender value for 6 months after demand therefor with surrender of the policy.
(3) That a specified paid-up nonforfeiture benefit, the present value of which shall be at least equal to the cash surrender value, shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default; however, when the mortality table used is the Commissioners’ 1941 Standard Ordinary Mortality Table, the rates of mortality to be assumed in calculating any extended term insurance with accompanying pure endowment, if any, may be not more than 130 percent of the rates of mortality according to such table.
(4) A statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter.

This section does not apply to term policies of uniform amount of 15 years’ duration or less, to increasing term policies of 15 years’ duration or less, or to decreasing term policies.

History.s. 502, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.476 Standard Nonforfeiture Law for Life Insurance.
(1) SHORT TITLE.This section shall be known as the “Standard Nonforfeiture Law for Life Insurance.”
(2) NONFORFEITURE PROVISIONS.In the case of policies issued on or after the operative date of this section as defined in subsection (14), no policy of life insurance, except as set forth in subsection (13), shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the office are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements hereinafter specified and are essentially in compliance with subsection (12):
(a) That in the event of default in any premium payment, after premiums have been paid for at least 1 full year in the case of ordinary insurance or 3 full years in the case of industrial insurance, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified. In lieu of such stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits. With respect to all policy forms filed on or after October 1, 1990, the policy forms shall include, but not be limited to, a reduced paid-up nonforfeiture benefit. For the purposes of this subsection, the term “reduced paid-up nonforfeiture benefit” means a benefit whereby the policy may be continued at the option of the insured as reduced paid-up life insurance, the amount of which shall be as much as the surrender value of the policy will provide on the date of default, calculated using the surrender value of the policy as a net single premium on the due date of the first unpaid premium at the then-current age of the insured.
(b) That upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least 3 full years in the case of ordinary insurance or 5 full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified.
(c) That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default.
(d) That if the policy becomes paid up by completion of all premium payments, or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified.
(e) In the case of a policy which causes on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of any other policy, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy.
(f) A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of this state; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy.
(3) OMITTED PROVISIONS.Any of the provisions or portions thereof set forth in paragraphs (2)(a)-(f) which are not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of any cash surrender value for a period of 6 months after demand therefor with surrender of the policy.
(4) CASH SURRENDER VALUE.
(a) Any cash surrender value available under the policy in the event of default in the premium payment due on any policy anniversary, whether or not required by subsection (2), shall be an amount not less than the excess, if any, of the present value on such anniversary of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of:
1. The then-present value of the adjusted premiums as defined in subsections (6) and (9), corresponding to premiums which would have fallen due on and after such anniversary, and
2. The amount of any indebtedness to the insurer on account of or secured by the policy.
(b) For any policy issued on or after the operative date of subsection (9), as defined therein, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in paragraph (a) shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision. For any family policy issued on or after the operative date of subsection (9), as defined therein, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse reaches age 71, the cash surrender value referred to in paragraph (a) shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse.
(c) Any cash surrender value available within 30 days after any policy anniversary under any policy paid up by completion of all premium payments, or any policy continued under any paid-up nonforfeiture benefits, whether or not required by subsection (2), shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy.
(5) PAID-UP NONFORFEITURE BENEFITS.Any paid-up nonforfeiture benefit available under the policy in the event of default in the premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy, or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the condition that premiums shall have been paid for at least a specified period.
(6) THE ADJUSTED PREMIUM.This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. The adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:
(a) The then-present value of the future guaranteed benefits provided for by the policy;
(b) Two percent of the amount of the insurance if the insurance is uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with the duration of the policy;
(c) Forty percent of the adjusted premium for the first policy year; and
(d) Twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.

However, in applying the percentages specified in paragraphs (c) and (d), no adjusted premium shall be deemed to exceed 4 percent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.

(7) EQUIVALENT UNIFORM AMOUNT.This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. In the case of a policy providing an amount of insurance varying with the duration of the policy, the equivalent uniform amount thereof for the purpose of subsection (6) shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy, except that, in the case of a policy for a varying amount of insurance issued on the life of a child under age 10, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age 10 were the amount provided by such policy at age 10.
(8) MORTALITY TABLES; INTEREST.This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners’ 1958 Standard Ordinary Mortality Table, except that, for any category of such policies issued on female risks, adjusted premiums and present values may be calculated according to an age not more than 6 years younger than the actual age of the insured. Such calculations for all policies of industrial insurance shall be made on the basis of the following tables:
(a) For policies issued on and after the operative date of this section but before January 1, 1968, the 1941 Standard Industrial Mortality Table, unless the Commissioners’ 1961 Standard Industrial Mortality Table is applicable according to subsection (14);
(b) For policies issued on and after January 1, 1968, the Commissioners’ 1961 Standard Industrial Mortality Table.

All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; however, such rate of interest shall not exceed 3.5 percent per year, except that a rate of interest not exceeding 4 percent per year may be used for policies issued on or after July 1, 1973, and prior to October 1, 1979, and a rate of interest not exceeding 4.5 percent per year may be used for policies issued on or after October 1, 1979, and a rate of interest not exceeding 5.5 percent per year may be used for policies issued on or after October 1, 1980. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners’ 1958 Extended Term Insurance Table, for ordinary policies. In the case of industrial policies:

(c) For policies issued on and after the operative date of this section but before January 1, 1968, not more than 130 percent of the rates of mortality according to the 1941 Standard Industrial Mortality Table, unless the Commissioners’ 1961 Industrial Extended Term Insurance Table is applicable according to subsection (14), in which case not more than those of the latter table;
(d) For policies issued on and after January 1, 1968, not more than those of the Commissioners’ 1961 Industrial Extended Term Insurance Table.

For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the office.

(9) CALCULATION OF ADJUSTED PREMIUMS AND PRESENT VALUES FOR POLICIES ISSUED AFTER OPERATIVE DATE OF THIS SUBSECTION.
(a) This subsection shall apply to all policies issued on or after the operative date of this subsection, as defined herein. Except as provided in paragraph (g), the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of:
1. The then-present value of the future guaranteed benefits provided for by the policy;
2. One percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and
3. One hundred and twenty-five percent of the nonforfeiture net-level premium as hereinafter defined.

However, in applying the percentage specified in subparagraph 3., no nonforfeiture net-level premium shall be deemed to exceed 4 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.

(b) The nonforfeiture net-level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due.
(c) In the case of a policy which causes on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums, the future adjusted premiums, nonforfeiture net-level premiums, and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.
(d) Except as otherwise provided in paragraph (g), the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of the sum of the then-present value of the then future guaranteed benefits provided for by the policy and the additional expense allowance, if any, over the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.
(e) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of 1 percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first 10 policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and 125 percent of the increase, if positive, in the nonforfeiture net-level premium.
(f) The recalculated nonforfeiture net-level premium shall be equal to the result obtained by dividing (A) and (B) where:
1. (A) equals the sum of:
a. The nonforfeiture net-level premium applicable prior to the change times the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and
b. The present value of the increase in future guaranteed benefits provided for by the policy; and
2. (B) equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.
(g) Notwithstanding any other provisions of this subsection to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis.
(h) All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners’ 1980 Standard Ordinary Mortality Table or, at the election of the insurer for any one or more specified plans of life insurance, the Commissioners’ 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners’ 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year. However:
1. At the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year.
2. Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by subsection (2), shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any.
3. An insurer may calculate the amount of any guaranteed paid-up nonforfeiture benefit, including any paid-up additions under the policy, on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values.
4. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners’ 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners’ 1961 Industrial Extended Term Insurance Table for policies of industrial insurance.
5. In lieu of the mortality tables specified in this section, at the option of the insurance company and subject to rules adopted by the commission, the insurance company may substitute:
a. The 1958 CSO or CET Smoker and Nonsmoker Mortality Tables, whichever is applicable, for policies issued on or after the operative date of this subsection and before January 1, 1989;
b. The 1980 CSO or CET Smoker and Nonsmoker Mortality Tables, whichever is applicable, for policies issued on or after the operative date of this subsection;
c. A mortality table that is a blend of the sex-distinct 1980 CSO or CET mortality table standard, whichever is applicable, or a mortality table that is a blend of the sex-distinct 1980 CSO or CET smoker and nonsmoker mortality table standards, whichever is applicable, for policies that are subject to the United States Supreme Court decision in Arizona Governing Committee v. Norris to prevent unfair discrimination in employment situations.
6. Ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, adopted by rule by the commission for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners’ 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners’ 1980 Extended Term Insurance Table.
7. For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables.
(i) The nonforfeiture interest rate per year for any policy issued in a particular calendar year shall be equal to 125 percent of the calendar year statutory valuation interest rate for such policy as defined in the Standard Valuation Law, rounded to the nearest one-fourth of 1 percent.
(j) Notwithstanding any other provision in this code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.
(k) After October 1, 1981, any insurer may file with the office a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1989, which shall be the operative date of this subsection for that insurer. If an insurer makes no such election, the operative date of this subsection for the insurer shall be January 1, 1989.
(10) INDETERMINATE PREMIUMS OR MINIMUM VALUES.In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in subsections (2)-(9):
(a) The office must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by subsections (2)-(9);
(b) The office must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; and
(c) The cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by rules promulgated by the commission.
(11) CALCULATION OF VALUES.Any cash surrender value and any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections (4)-(9) may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. If term insurance benefits are provided by a rider or by a supplemental policy provision to which, if issued as a separate policy, this section would apply, additional cash surrender values and additional paid-up nonforfeiture benefits, if any, at least equal to those required if issued as a separate policy, may be provided by the insurer and shall be deemed to be in compliance with this section. Notwithstanding the provisions of subsection (4), additional benefits payable:
(a) In the event of death or dismemberment by accident or accidental means,
(b) In the event of total and permanent disability,
(c) As reversionary annuity or deferred reversionary annuity benefits,
(d) As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply,
(e) As term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child’s age is 26, is uniform in amount after the child’s age is 1, and has not become paid up by reason of the death of a parent of the child, and
(f) As other policy benefits additional to life insurance by endowment benefits,

and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section; and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits.

(12) CALCULATION OF VALUES FOR POLICIES ISSUED AFTER 1984.This subsection, in addition to all other applicable subsections of this section, shall apply to all policies issued on or after January 1, 1985. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than 0.2 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years, from the sum of the greater of zero and the basic cash value hereinafter specified and the present value of any existing paid-up additions less the amount of any indebtedness to the insurer under the policy. The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer, if there had been no default, less the then-present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary. However, the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection (4), shall be the same as are the effects specified in subsection (4) on the cash surrender values defined in that subsection. The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection (6) or subsection (9), whichever is applicable. Except as is required by the next succeeding sentence of this paragraph, such percentage:
(a) Must be the same percentage for each policy year between the second policy anniversary and the later of the fifth policy anniversary and the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least 0.2 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and
(b) Must be such that no percentage after the later of the two policy anniversaries specified in paragraph (a) may apply to fewer than 5 consecutive policy years.

However, no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in subsection (6) or subsection (9), whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value. All adjusted premiums and present values referred to in this subsection shall be calculated for a particular policy on the same mortality and interest bases as are used in demonstrating the compliance of the policy with the other subsections of this law. The cash surrender values referred to in this subsection shall include any endowment benefits provided for by the policy. Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment, shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in subsections (2), (3), (4), (5), (9), and (11). The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed in paragraphs (11)(a)-(f) shall conform with the principles of this subsection.

(13) EXCEPTIONS.This section does not apply to any:
(a) Reinsurance;
(b) Group insurance;
(c) Pure endowment contract;
(d) Annuity or reversionary annuity contract;
(e) Term policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of, 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy;
(f) Term policy of decreasing amount which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium calculated as specified in subsections (6)-(9) is less than the adjusted premium so calculated on a policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, issued at the same age and for the same initial amount of insurance for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy; or
(g) Policy which provides no guaranteed nonforfeiture or endowment benefits for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in subsections (4)-(9) exceeds 2.5 percent of the amount of insurance at the beginning of the same policy year.

For purposes of determining the applicability of this section, the age at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.

(14) OPERATIVE DATE.After the effective date of this code, any insurer may file with the office a written notice or notices of its election to comply with the provisions of this section on and after a specified date or dates before January 1, 1966, as to either or both of its policies of ordinary and industrial insurance, in which case such specified date or dates shall be the operative date of this section with respect to such policies. The operative date of this section for policies of both ordinary and industrial insurance shall be the earlier of January 1, 1966, and any prior operative date or dates resulting from such previously filed written notices. With respect to policies of industrial insurance issued on and after the operative date of this section for such policies but before January 1, 1968, any insurer may file with the office written notice of its election to have the Commissioners’ 1961 Standard Industrial Mortality Table and the Commissioners’ 1961 Industrial Extended Term Insurance Table applicable with respect to subsection (8) for policies issued on and after the date specified in such election.
History.s. 503, ch. 59-205; s. 3, ch. 61-106; ss. 2, 3, ch. 65-11; ss. 13, 35, ch. 69-106; s. 3, ch. 73-324; s. 3, ch. 76-168; s. 2, ch. 77-324; s. 1, ch. 77-457; ss. 2, 3, ch. 79-356; ss. 1, 2, ch. 80-137; ss. 5, 6, ch. 81-289; ss. 2, 3, ch. 81-318; ss. 398, 404, 809(2nd), 810, ch. 82-243; ss. 54, 79, ch. 82-386; s. 13, ch. 90-119; s. 114, ch. 92-318; s. 10, ch. 97-292; s. 1130, ch. 2003-261; s. 14, ch. 2004-370; s. 159, ch. 2004-390.
627.479 Prohibited policy plans.
(1) No insurer shall issue policies, certificates, or contracts to policyholders or members providing for the grouping of its policyholders or members into groups and divisions, classified according to age, and providing for payment of contingent endowment benefits, by whatever name called, from special funds created for such purpose to the oldest member in seniority of the group or division, or under any other similar plan.
(2) No insurer shall issue policies containing annual endowments or other specialty-type policies such as founder’s policies or coupon-bearing policies. The commission shall, by rule, define such prohibited policies.
(3) The office shall revoke the certificate of authority of any insurer which violates this section.
History.s. 506, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 74-50; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 401, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1131, ch. 2003-261.
627.480 Cash payments of single-premium life policies.Premiums for single-premium life insurance policies shall be paid in cash. This section is not applicable to the use of dividends to purchase paid-up additional insurance or to such other usual and customary methods of paying for life insurance as may be permitted by rule of the commission.
History.s. 1, ch. 70-66; s. 1, ch. 70-439; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 402, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1132, ch. 2003-261.
627.481 Requirements for certain annuity agreements.
(1) Any duly organized domestic or foreign nonstock corporation, or any unincorporated charitable trust, if such corporation or trust:
(a) Has been in active operation for at least 5 years prior thereto and has qualified as an exempt organization under the Internal Revenue Code, 26 U.S.C. s. 501(c)(3), or
(b) Has been wholly controlled for at least 10 years by a corporation or trust qualified under paragraph (a), if the subunit has been a corporation or trust for at least 2 years, and has engaged in the selling of annuity agreements authorized under this section in at least three other states without complaint,

may enter into annuity agreements with donors in accordance with this section. Such corporation or trust may receive gifts conditioned upon, or in return for, its agreement to pay an annuity to the donor or other designated beneficiary or beneficiaries and to make and carry out such annuity agreement. Annuity benefits under any such annuity agreement must be calculated to return to such corporation or trust upon the death of the annuitant a residue at least equal to one-half the original gift or other consideration for such annuity.

(2)(a) Every such domestic corporation or such domestic or foreign trust shall have and maintain admitted assets at least equal to the sum of the reserves on its outstanding annuity agreements, and a surplus of 10 percent of such reserves, calculated using:
1.a. The present value of future guaranteed benefits for individual annuities that have either commenced paying benefits or have fixed a future date of the first benefit payment.
b. The commissioner’s annuity reserve method, as set forth in s. 625.121(7)(c), for individual deferred annuities that have not fixed a date for the first benefit payment.
2. The mortality tables used to value individual annuities, as defined in s. 625.121(5).
a. For annuities issued prior to July 1, 1998:
(I) The mortality tables described in s. 625.121(5)(h), for individual annuities;
(II) At the option of the corporation or trust, the 1983 Individual Annuity Mortality Table; or
(III) At the option of the corporation or trust, the 2000 Individual Annuity Mortality Table for annuities issued between January 1, 1998, and June 30, 1998, inclusive.
b. For annuities issued on or after July 1, 1998:
(I) The mortality tables set forth in s. 625.121(5)(i)3.;
(II) Any other mortality tables required to be used by insurers in accordance with s. 625.121; or
(III) At the option of the corporation or trust, any other mortality tables authorized to be used by insurers in accordance with s. 625.121.
3. An interest rate not greater than the maximum interest rate permitted for the valuation of individual annuities issued during the same calendar year as the charitable gift annuity for individual annuities as set forth in s. 625.121(6)(b)-(f).
a. The maximum statutory valuation interest rates for single-premium immediate annuities for 1992 may be used for annuities issued in 1992 or any prior year. The maximum statutory valuation interest rates for single-premium immediate annuities issued in 1992 through 2001 are as follows:
Year of IssueSingle Premium Immediate
Annuity Interest Rate
 
19927.75 percent
19937.00 percent
19946.50 percent
19957.25 percent
19966.75 percent
19976.75 percent
19986.25 percent
19996.25 percent
20007.00 percent
20016.75 percent
b. For 2002 and subsequent years, until an interest rate for a specified year can be determined in accordance with s. 625.121(6), the prior year’s rate shall be used unless the office requires use of a lower rate.
(b) In determining the reserves of any such corporation or trust, a deduction shall be made for all or any portion of an annuity risk which is reinsured by a life insurance company authorized to do business in this state.
(c)1. The assets of such corporation or trust in an amount at least equal to the sum of such reserves and surplus shall be invested only in mutual funds or investments permitted under part II of chapter 625 for the investment of the reserves of authorized life insurance companies.
2. For purposes of this section, the provisions of s. 625.305(2)(a) shall not apply. In lieu thereof, the fair market value of investments made by such corporation or trust in stock authorized by s. 625.324 may not exceed 50 percent of such corporation’s or trust’s required reserves and surplus. The fair market value in stock of any one corporation or mutual fund may not exceed 10 percent of such corporation’s or trust’s required reserves and surplus. All other provisions of s. 625.305 shall apply. Such assets shall be segregated as separate and distinct funds, independent of all other funds of such corporation or trust, and shall not be applied for the payment of the debts and obligations of the corporation or trust or for any purpose other than the annuity benefits specified in this section.
(3) No such foreign corporation shall make these annuity agreements in this state unless it complies with all the requirements of this section imposed upon like domestic corporations, except that the corporation may invest its reserve and surplus funds in the kind of securities permitted by the laws of the state in which it was incorporated or organized.
(4) Any corporation or trust that engages in the business of issuing these annuity agreements shall notify the office in writing by the later of 90 days after the effective date of this act or the date on which it enters into the first of these annuity agreements. The notice must:
(a) Be signed by two or more officers or directors of the organization;
(b) Identify the organization; and
(c) Certify that the organization meets the requirements of this section.
(5) Any annuity agreement entered into by a corporation or trust must contain the following clause: “This annuity is not issued by an insurance company, is subject only to limited regulation by the State of Florida and is not protected or otherwise guaranteed by any government agency.”
(6) If the office finds that any such corporation or trust has failed to comply with the requirements of this section, it may order such corporation or trust to cease making any new annuity agreements until such requirements have been satisfied. The office may, in its discretion, require annual statements by such corporation or trust and may accept in lieu thereof a sworn statement by two or more of the principal officers thereof, in such form as will satisfy the office that the requirements of this section are being complied with.
(7) Except as provided in this section, every such corporation or trust shall be exempt from the provisions of this code in making annuity agreements issued under this section.
(8) Any annuity agreement entered into by a corporation or trust the sole purpose of which is to support a state institution of higher learning shall contain the following clause:

“This agreement is the entire contract between the parties, with rights and responsibilities of each party to the other as set forth herein. The donor or annuitant shall not have recourse against any assets of the state other than any funds or assets donated by, or funds derived from any assets donated by, the donor as set forth herein.”

(9) Agreements in the form of a charitable remainder unitrust trust, charitable remainder annuity trust, charitable lead trust, pooled income fund or other similar charitable split interest trust arrangement (not including a charitable gift annuity), described in ss. 170(f)(2)(A) and (B), 664(d)(1) and (2), and 642(c)(5) of the Internal Revenue Code are exempt from the provisions of subsections (1), (2), (3), and (5).
(10) The provisions of part IX of chapter 626 apply to issuers of annuity agreements under this section.
(11) The commission shall adopt rules and forms for the filing of annual statements and agreements pertaining to donor annuity organizations.
History.s. 1, ch. 74-149; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 403, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 44, 114, ch. 92-318; s. 16, ch. 96-168; s. 25, ch. 97-93; s. 15, ch. 99-307; s. 10, ch. 2000-370; s. 58, ch. 2001-63; s. 6, ch. 2002-247; s. 1133, ch. 2003-261.
627.482 Interest payable on cash surrender of policy.
(1) If an insured requests payment of the cash surrender value of a policy from its insurer, such payment shall include interest at the rate of interest specified in s. 625.121(6)(e), unless such payment is made by the insurer within 30 days of receipt of the insurance policy and request for cash surrender.
(2) An insurer shall be exempt from the requirements of this section if, upon petition by the insurer to the office, it is determined by the office that payment of such interest threatens the solvency of the insurer.
History.s. 1, ch. 89-360; s. 1, ch. 90-192; s. 66, ch. 91-108; s. 114, ch. 92-318; s. 1134, ch. 2003-261.
PART IV
INDUSTRIAL LIFE INSURANCE
POLICIES
627.501 Scope of this part.
627.502 “Industrial life insurance” defined; reporting.
627.503 Required provisions.
627.504 Grace period.
627.5045 Secondary notice.
627.505 Entire contract; statements in application.
627.506 Incontestability.
627.507 Misstatement of age or sex.
627.508 Dividends.
627.509 Reinstatement.
627.510 Settlement on proof of death.
627.511 Authority to alter contract.
627.512 Beneficiary.
627.513 Facility of payment.
627.514 Nonforfeiture benefits; certain interim policies.
627.515 Title of industrial life insurance policy.
627.516 Advance payment of premiums.
627.517 Conversion.
627.521 Disclosure statements.
627.522 Policy requirements and prohibitions.
627.501 Scope of this part.The provisions of this part apply only to industrial life insurance policies. Sections 627.463, 627.472, 627.476, and 627.479 also apply to industrial life insurance policies.
History.s. 507, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.502 “Industrial life insurance” defined; reporting.
(1) For the purposes of this code, “industrial life insurance” is that form of life insurance written under policies under which premiums are payable monthly or more often, bearing the words “industrial policy” or “weekly premium policy” or words of similar import imprinted upon the policies as part of the descriptive matter, and issued by an insurer which, as to such industrial life insurance, is operating under a system of collecting a debit by its agent.
(2) Every life insurer transacting industrial life insurance shall report to the office all annual statement data regarding the exhibit of life insurance, including relevant information for industrial life insurance.
History.s. 508, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 405, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1135, ch. 2003-261.
627.503 Required provisions.
(1) No policy of industrial life insurance shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions as required in s. 627.476 and ss. 627.504-627.521, or provisions which in the opinion of the office are more favorable to the policyholder.
(2) Any such provisions or portions not applicable to single-premium or term policies shall to that extent not be incorporated therein.
History.s. 509, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 406, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1136, ch. 2003-261.
627.504 Grace period.The policy shall provide that the insured is entitled to a grace period of 4 weeks within which the payment of any premiums due after the first premium payment may be made, except that in policies the premiums for which are payable monthly, the grace period shall be 1 month, but not less than 30 days; and that during the grace period the policy shall continue in full force, but if during the grace period there is a claim under the policy, then any premiums due and unpaid may be deducted from any settlement under the policy.
History.s. 510, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 407, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.5045 Secondary notice.Except as provided in this section, a contract for an industrial life insurance policy issued or issued for delivery in this state on or after October 1, 1997, for which premiums are paid monthly, covering a natural person 64 years of age or older or owned by a natural person 64 years of age or older, which has been in force for at least 1 year, may not be lapsed for nonpayment of premium unless, after expiration of the grace period, and at least 21 days before the effective date of such lapse, the insurer has mailed a notification of the impending lapse in coverage to the policyowner and to a specified secondary addressee if such addressee has been designated in writing by name and address by the policyowner. An insurer issuing an industrial life insurance contract on or after October 1, 1997, shall notify the applicant of the right to designate a secondary addressee at the time of application for the policy on a form provided by the insurer and at any time the policy is in force by submitting a written notice to the insurer containing the name and address of the secondary addressee. This section does not apply to any life insurance contract under which premiums are payable monthly or more frequently and are regularly collected by a licensed agent.
History.s. 3, ch. 95-142; s. 12, ch. 97-292.
627.505 Entire contract; statements in application.The policy shall provide that the policy shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the policy when issued, that the policy and the application therefor shall constitute the entire contract. If the application is so made a part of the contract, the policy shall also provide that all statements made by the applicant in such application shall, in the absence of fraud, be deemed to be representations and not warranties.
History.s. 511, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 408, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.506 Incontestability.The policy shall provide that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of 2 years from its date of issue except for nonpayment of premiums and except, at the option of the insurer, as to provisions providing benefits for disability or specifically for death by accident or accidental means.
History.s. 512, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 409, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.507 Misstatement of age or sex.The policy shall provide that if it is found that the age or sex of the insured, or of any other individual considered in determining the premium, has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased according to the correct sex or age. The calculations shall be in accordance with the insurer’s rate at the date of issue, and at the insurer’s option this may be so specified in the policy.
History.s. 513, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 410, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.508 Dividends.Every participating policy shall provide that the insurer shall annually ascertain and apportion any divisible surplus accruing on the policy. This provision shall not prohibit the payment of additional dividends on default of payment of premiums or termination of the policy.
History.s. 514, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 411, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.509 Reinstatement.The policy shall provide that the policy may be reinstated at any time within 3 years after the date of default in the payment of any premium, unless the policy has been surrendered for its cash value or unless the paid-up term insurance, if any, has expired, upon evidence of insurability satisfactory to the insurer and the payment of all overdue premiums and payment (or, within the limits permitted by the then cash value of the policy, reinstatement) of any other indebtedness to the insurer upon the policy with interest as to both premiums and indebtedness at a rate not exceeding 6 percent per year compounded annually.
History.s. 515, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 412, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.510 Settlement on proof of death.
(1) The policy shall provide that when the policy becomes a claim by the death of the insured, settlement shall be made upon surrender of the policy and receipt of due proof of death or after a specified period not exceeding 60 days after such surrender and receipt of such proof. At the insurer’s option, surrender of the premium receipt book may also be required.
(2) Insurers transacting industrial life insurance business in the state who require a claim form to be filed by a claimant for settlement of a policy shall allow the claimant to file the claim using the uniform life insurance claim form developed by the commission. The commission shall establish by rule a uniform life insurance claim form to be used by claimants for settlement of any industrial life insurance policy issued by an insurer transacting life insurance business in this state.
History.s. 516, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 413, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 1, ch. 87-37; s. 114, ch. 92-318; s. 1137, ch. 2003-261.
627.511 Authority to alter contract.The policy shall provide that no agent shall have the power or authority to waive, change, or alter any of the terms or conditions of any policy; except that, at the option of the insurer, the terms or conditions may be changed by an endorsement or rider signed by a duly authorized officer of the insurer.
History.s. 517, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 414, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.512 Beneficiary.The policy shall provide a space for the name of the beneficiary designated with a reservation of the right to designate or change the beneficiary after the issuance of the policy. The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured.
History.s. 518, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 415, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.513 Facility of payment.The policy may also provide that if the beneficiary designated in the policy does not make a claim under the policy or does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than 30 days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor, or dies before the insured or is not legally competent to give valid release, then the insurer may make payment to the executor or administrator of the insured; to any of the insured’s relatives by blood or legal adoption or connection by marriage; to any person appearing to the insurer to be equitably entitled thereto; or to any person who has incurred expense for the maintenance, medical attention, or burial of the insured. The policy may also include a similar provision applicable to any other payment due under the policy.
History.s. 519, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 416, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.514 Nonforfeiture benefits; certain interim policies.Each industrial life insurance policy delivered or issued for delivery between the effective date of this code and the operative date of s. 627.476 shall provide:
(1) That, in the event of default in any premiums, the insurer will grant, upon proper request not later than 13 weeks or 3 months after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy.
(2) That, upon surrender of the policy within 13 weeks or 3 months after the due date of any premium payment in default after premiums have been paid for at least 5 full years, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value at least equal to the minimum cash surrender value hereinafter specified. The minimum cash surrender value shall be equal to:
(a) The reserve on the date of default of the premium less a sum of not more than 2.5 percent of the face amount; or
(b) An amount as defined in s. 627.476. The policy shall reserve to the insurer the right to defer the granting of any cash surrender value for 6 months after demand therefor with surrender of the policy.
(3) That a specified paid-up nonforfeiture benefit, the present value of which shall be at least equal to the cash surrender value, shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 13 weeks or 3 months after the due date of the premium in default; however, when the mortality table used is the 1941 Standard Industrial Mortality Table, the rates of mortality to be assumed in calculating any extended term insurance with accompanying pure endowment, if any, may be not more than 130 percent of the rates of mortality according to such table.
(4) A statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefits, if any, available under the policy on each policy anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter.

This section does not apply to term policies of uniform amount of 15 years’ duration or less, to increasing term policies of 15 years’ duration or less, or to decreasing term policies.

History.s. 520, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 417, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.515 Title of industrial life insurance policy.There shall be a title on the face of each such policy briefly describing its form.
History.s. 521, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.516 Advance payment of premiums.Each insurer shall allow a refund or discount on advance premiums paid for an industrial life insurance policy if such premiums are paid in a single sum covering a period of at least 13 weeks. Such refund or discount shall reflect the difference in costs between weekly or monthly premium payment and the advance premiums being paid, with an interest factor used to reflect the time value of money.
History.s. 522, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 2, ch. 80-156; ss. 2, 3, ch. 81-318; ss. 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.517 Conversion.Each industrial life insurance policy delivered or issued for delivery on or after January 1, 1981, shall provide that if, upon the sale of any new industrial life insurance policy, the combined face value of all industrial life insurance policies, including the new policy, issued by any one insurer, insuring any one life and owned by any one person, would exceed $3,000, then the owner shall have the option of merging and converting such industrial life insurance policies into one regularly offered ordinary life insurance policy with the same insurer with no further evidence of insurability required.
History.s. 523, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 3, ch. 80-156; ss. 2, 3, ch. 81-318; ss. 418, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.521 Disclosure statements.Each industrial life insurance premium receipt book delivered in this state on or after January 1, 1983, shall contain the following disclosure statement: “You are entitled to a discount or refund from the company if you make your premium payment 13 weeks in advance.”
History.ss. 419, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.
627.522 Policy requirements and prohibitions.
(1) An industrial life insurance policy may not exclude or restrict the payment of the face amount by reason of the fact that the death of the insured occurred due to the act of another.
(2) Each of the optional benefits and charges provided under an industrial life insurance policy must be separately priced. The prices must be set forth in the policy in a clear, conspicuous, and understandable manner.
(3) This section does not limit the rights of any assignee of any industrial life insurance policy to enforce any assignment pursuant to its terms and does not prohibit an insurer from recognizing any such assignment pursuant to its terms.
History.s. 45, ch. 92-318.
PART V
GROUP LIFE INSURANCE POLICIES
627.551 Group contracts and plans of self-insurance must meet group requirements.
627.5515 Out-of-state groups.
627.552 Employee groups.
627.553 Debtor groups.
627.554 Labor union groups.
627.555 Trustee groups.
627.556 Credit union groups.
627.5565 Additional groups.
627.5567 Group life insurance; association groups.
627.5575 Group life insurance for dependents.
627.558 Provisions required in group contracts.
627.559 Grace period.
627.560 Incontestability.
627.561 Application; statements deemed representations.
627.562 Insurability.
627.563 Misstatement of age.
627.564 Payment of benefits.
627.565 Certificate.
627.566 Conversion on termination of eligibility.
627.567 Conversion on termination of policy.
627.568 Death pending conversion.
627.5685 Continuance of coverage during disability.
627.5686 Waiver of premium for disabled insured.
627.569 Use of dividends, refunds, rate reductions, commissions, service fees.
627.570 Premium rates.
627.571 Assignment of incidents of ownership in group life insurance policies, including conversion privileges.
627.5725 Notification to insureds of cancellation or expiration.
627.573 Replacement or termination of group life insurance; liability of prior insurer.
627.574 Liability of succeeding insurer on replacement of group policy.
627.575 Extension of benefits.
627.551 Group contracts and plans of self-insurance must meet group requirements.
(1)(a) A life insurance policy insuring the lives of more than one individual may be delivered or issued for delivery in this state only if the policy is issued to one of the groups specified in ss. 627.552-627.5575, and only if the policy complies with the other applicable provisions of this part.
(b) A plan of self-insurance providing benefits in the event of death to residents of this state may be established or maintained only if the plan complies with the applicable provisions of this part relating to the rights of individuals to specified benefits and coverages.
(2) Subsection (1) does not apply to life insurance policies or plans of self-insurance:
(a) Insuring or providing benefits only to individuals related by blood, marriage, or legal adoption.
(b) Insuring or providing benefits only to individuals who have a common interest through ownership of a business enterprise, or a substantial legal interest or equity therein, and who are actively engaged in the management of the business enterprise.
(c) Insuring or providing benefits only to individuals otherwise having an insurable interest in each other’s lives.
1(d) Insuring or providing benefits pursuant to s. 627.404(2)(b)8. or 9.
(3) As used in this part:
(a) “Policy,” “insurance policy,” and “group life insurance policy” include plans of self-insurance providing death benefits.
(b) “Amount of insurance” and “insurance” include the death benefits provided under a plan of self-insurance.
(c) “Insurer” includes any person or governmental unit providing a plan of self-insurance.
(4) A nongovernmental self-insurance plan providing life insurance may not be contributory by participants.
(5) This section does not apply to any plan which is established or maintained by an individual employer in accordance with the Employee Retirement Income Security Act of 1974. This subsection does not allow an authorized insurer to issue a group life insurance policy or certificate which does not comply with this part.
History.s. 524, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 3, 10, ch. 80-341; ss. 2, 3, ch. 81-318; ss. 421, 448, 809(2nd), ch. 82-243; ss. 55, 79, ch. 82-386; s. 5, ch. 83-203; s. 16, ch. 83-288; ss. 46, 114, ch. 92-318; s. 10, ch. 2008-237.
1Note.Section 12, ch. 2008-237, provides in part that “[e]ffective [June 30, 2008,] the Department of Financial Services may adopt rules to implement this act.”
627.5515 Out-of-state groups.
(1) Any group life insurance policy issued or delivered outside this state under which a resident of this state is provided coverage shall comply with the provisions of this part in the same manner as group life policies issued in this state.
(2) This part does not apply to a group life insurance policy issued or delivered outside this state under which a resident of this state is provided coverage if:
(a) The policy is issued to an employee group the composition of which is substantially as described in s. 627.552; a labor union group the composition of which is substantially as described in s. 627.554; a trustee group the composition of which is substantially as described in s. 627.555; a credit union group the composition of which is substantially as described in s. 627.556; an additional group complying with s. 627.5565; an association group the composition of which is substantially as described in s. 627.5567; an association group to cover persons associated in any other common group, which common group is formed primarily for purposes other than providing insurance; a group which is established primarily for the purpose of providing group insurance, provided the benefits are reasonable in relation to the premiums charged thereunder and issuance of the group policy has resulted, or will result, in economies of administration; or a group of insurance agents of an insurer, which insurer is the policyholder;
(b) Certificates evidencing coverage under the policy are issued to residents of this state and contain in contrasting color and not less than 10-point type the following statement: “The benefits of the policy providing your coverage are governed primarily by the law of a state other than Florida.”; and
(c) The policy provides the benefits specified in s. 627.566.
(3) Section 624.428 is not applicable when residents of this state are enrolled for coverage under a policy or certificate issued in accordance with subsection (2).
(4) Prior to solicitation in this state, a copy of the master policy and a copy of the form of the certificate evidencing coverage that will be issued to residents of this state shall be filed with the office for informational purposes.
(5) Prior to solicitation in this state, an officer of the insurer shall truthfully certify to the office that the policy and certificates evidencing coverage have been reviewed and approved by the state in which the group policy is issued.
(6) Any insurer who provides coverage under certificates of insurance issued to residents of this state shall designate one Florida-licensed resident agent as agent of record for the service of such certificates, unless the policy is issued to a group substantially as described in s. 627.552, s. 627.554, s. 627.555, s. 627.556, s. 627.5565, or s. 627.5567.
History.ss. 422, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 98, ch. 83-216; s. 114, ch. 92-31