HB 429 — Insurance Guaranty Associations

F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HBCS/CS/HB 429 2019 A bill to be entitled An act relating to insurance guaranty associations;

authorizing an employee of the Florida Insurance Guaranty Association toor authorizean certainemployee employeesof a guaranty association of another state to adjust losses for the association;Florida Insurance Guaranty Association if certain conditions are met;

requiring such authorization to be included in a contract;

revising therequirements assessmentsfor levied by the Office of Insurance Regulation in levying assessments on workers' compensation insurers;

requiring such insurers to recoup the assessments by applying a specifiedcertain surcharge percentage to certain policies;

conformingproviding cross-references;that an insurer's direct written premium may not be reduced by certain amounts for the purposes of determining insurer assessments or policyholder surcharges;

authorizing the Florida Workers' Compensation Insurance Guaranty Association to audit certain reports;

revising requirements for remitting policy surcharges and assessments;

conforming cross- references;

providing anPage effective1 date.of 8 CODING:

Words stricken are deletions;

words underlined are additions.

hb0429-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB 429 2019 an effective date.

626.8621 Adjustments by guaranty association employees.—Anemployees.— (1) An employee of the Florida Insurance Guaranty Association, created Pageunder 1part II of 7chapter CODING:631, may adjust losses for the association if such employee holds, or has held within the past 10 years, licensure in this state which allows for the adjustment of such losses.

Words(2) strickenAn employee of a guaranty association established by another state and whose insurance regulators are deletions;members of the National Association of Insurance Commissioners may adjust losses for the Florida Insurance Guaranty Association.

wordsThe underlinedauthorization arefor additions.such employees to adjust losses must be included in a contract with the Florida Insurance Guaranty Association and the employee's guaranty association or association's authorized representative.

hb0429-01-c1The FFlorida LInsurance OGuaranty RAssociation Ishall Dcontract Aonly Hfor Oemployees U S E O F R E P R E S E N T A T I V E S CS/HB 429 2019 under part II of chapterother 631,state mayguaranty adjustassociations losseswho formaintain the associationappropriate withoutexperience beingand licensedtraining asfor anadjusting adjuster.such claims.

An employee of a guaranty association established by a state whose insurance regulators are members of the National Association of Insurance Commissioners may also adjust losses for the Florida Insurance Guaranty Association without being licensed as an adjuster when doing so under a contract with the Florida Insurance Guaranty Association.

631.914Page Assessments.—2 (1)(a) To the extent necessary to secure the funds for the payment of covered8 claims,CODING: and also to pay the reasonable costs to administer the same, the Office of Insurance Regulation, upon certification by the board, shall levy assessments on each insurer initially estimated in the proportion that the insurer's net direct written premiums in this state bears to the total of said net direct written premiums received in this state by all such workers' compensation insurers for the preceding calendar year.

An insurer shall fully recoup assessments by applying the uniform surcharge percentage levied by the office to all policies of the same kind or line as were considered by the office in determining the assessment liability of the insurer.

Assessments levied against insurers and self-insurance funds pursuant to this paragraph must be computed and levied on the Page 2 of 7 CODING:

hb0429-01-c1hb0429-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HBCS/CS/HB 429 2019 basis631.914 Assessments.— (1)(a) To the extent necessary to secure the funds for the payment of covered claims, and also to pay the fullreasonable policycosts premiumto valueadminister the same, the Office of Insurance Regulation, upon certification by the board, shall levy assessments on each insurer initially estimated in the proportion that the insurer's net direct written premiumpremiums amountin asthis setstate forthbears into the statetotal forof workers'said compensationnet insurancedirect withoutwritten considerationpremiums ofreceived anyin applicablethis discountstate orby creditall such workers' compensation insurers for deductibles.the preceding calendar year.

An insurer'sinsurer directshall writtenfully premiumrecoup calculatedassessments forby applying the purposesuniform ofsurcharge determiningpercentage thelevied insurer'sby premiumthe subjectoffice to surchargeall maypolicies notof bethe reducedsame bykind any discount or creditline foras deductibleswere inconsidered aby policythe oroffice byin anydetermining premiumthe adjustmentassessment onliability aof retrospectivelythe ratedinsurer. policy.

Assessments levied against insurers and self-insurance funds pursuant to this paragraph must be computed and levied on the basis of the full policy premium value on the net direct written premium amount as set forth in the state for workers' compensation insurance without consideration of any applicable discount or credit for deductibles.

An insurer's direct written premium calculated for the purposes of determining the insurer's assessment or policyholder surcharge may not be reduced by any discount or credit for deductibles in a policy or by any premium adjustment to a retrospectively rated policy.

AssessmentsPage shall3 be remitted to and administered by the board of directors8 inCODING: the manner specified by the approved plan of operation and paragraph (d).

Words stricken are deletions;

words underlined are additions.

hb0429-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB 429 2019 Assessments shall be remitted to and administered by the board of directors in the manner specified by the approved plan of operation and paragraph (d).

(c)(b)(b)(c) MemberIf insurersassessments shallotherwise collectauthorized policyholderin surchargesparagraph at(a) aare uniforminsufficient percentageto ratemake onall newpayments andon renewalreimbursements policiesthen issuedowing andto effectiveclaimants duringin thea periodcalendar ofyear, 12then monthsupon beginningcertification onby Januarythe 1,board, Aprilthe 1,office Julyshall 1,levy oradditional Octoberassessments 1,of whicheverup isto the1.5 firstpercent day of the followinginsurer's calendarnet quarterdirect aswritten specifiedpremiums in anthis orderstate. issued by the office directing insurers to pay an Page 3 of 7 CODING:

(c)(b) The office shall levy the uniform surcharge percentage on all policies of the same kind or line as were considered by the office in determining the assessment liability of the insurer.

Member insurers shall collect policyholder surcharges at a uniform percentage rate on new and renewal policies issued and effective during the period of 12 months beginning on January 1, April 1, July 1, or October 1, whichever is the first day of the following calendar quarter as specified in an order issued by the office directing insurers to pay an assessment to the association.

The policyholder surcharge may Page 4 of 8 CODING:

hb0429-01-c1hb0429-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HBCS/CS/HB 429 2019 assessmentnot tobegin until 90 days after the association.board of directors certifies the assessment.

The policyholder surcharge may not begin until 90 days after the board of directors certifies the assessment.

(b)(c) If assessments otherwise authorized in paragraph (a) are insufficient to make all payments on reimbursements then owing to claimants in a calendar year, then upon certification by the board, the office shall levy additional assessments of up to 1.5 percent of the insurer's net direct written premiums in this state.

Insurers shall collect Pagepolicyholder 4surcharges ofat 7a CODING:uniform percentage rate specified by order as described in paragraph (c) (b).

Insurers are not required to advance funds if the association and the office elect to use the installment option.

Assessments levied under this subparagraph are paid after policyholder policy surcharges are collected, and the recognition of assets is based on actual premium collected written offset by the obligation to the Page 5 of 8 CODING:

hb0429-01-c1hb0429-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HBCS/CS/HB 429 2019 policyholderassociation. surcharges at a uniform percentage rate specified by order as described in paragraph (c) (b).