Bill Text: FL H1157 | 2011 | Regular Session | Introduced

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Bill Title: Insurance

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H1157 Detail]

Download: Florida-2011-H1157-Introduced.html

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HB 1157

1	A bill to be entitled
2	An act relating to insurance; amending s. 501.212, F.S.;
3	specifying that pt. II of ch. 501, F.S., the Deceptive and
4	Unfair Trade Practice Act, applies to the business of
5	insurance; creating s. 624.156, F.S.; providing
6	applicability of pt. II of ch. 501, F.S., to the business
7	of insurance; amending s. 627.062, F.S.; providing that
8	rate standards for medical malpractice insurance apply to
9	a separate affiliate of an insurer; revising provisions
10	relating to application of discounts or surcharges;
11	requiring a medical malpractice liability insurer to file
12	a surcharge or discount schedule with the Director of the
13	Office of Insurance Regulation before applying certain
14	rates or surcharges; requiring the office to consider
15	certain factors in determining an insurer's rate base;
16	requiring a medical malpractice insurer to provide
17	specified information when submitting a rate filing;
18	providing penalties; providing legislative findings and
19	intent with regard to medical malpractice rates; requiring
20	medical malpractice insurance rates to be approved by the
21	Director of the Office of Insurance Regulation after a
22	specified date; providing the Financial Services
23	Commission with rulemaking authority; amending s.
24	627.4147, F.S.; deleting provisions authorizing an insurer
25	covered by a medical malpractice insurance contract to
26	require an insured to be a member in good standing of
27	certain professional societies; creating s. 627.41491,
28	F.S.; requiring the office to publish a medical
29	malpractice insurance rate comparison chart and to post
30	the chart on its Internet website; amending s. 627.41495,
31	F.S.; requiring a medical malpractice insurer or self-
32	insurance fund to provide notice to its policyholders or
33	members and the consumer advocate of specified decreases
34	in rates; granting the consumer advocate standing with
35	regard to rate hearings; requiring the Director of the
36	Office of Insurance Regulation to hold a rate hearing
37	within a specified period of time after receiving a
38	request for a hearing; amending s. 627.912, F.S.; revising
39	requirements for reporting professional liability claims
40	and actions; requiring fines to be imposed under certain
41	circumstances; providing an effective date.
42
43	Be It Enacted by the Legislature of the State of Florida:
44
45	Section 1.  Subsection (4) of section 501.212, Florida
46	Statutes, is amended to read:
47	501.212  Application.-This part does not apply to:
48	(4)  Any person or activity regulated under laws
49	administered by:
50	(a)  The Office of Insurance Regulation of the Financial
51	Services Commission;
52	(a)(b)  Banks and savings and loan associations regulated
53	by the Office of Financial Regulation of the Financial Services
54	Commission;
55	(b)(c)  Banks or savings and loan associations regulated by
56	federal agencies; or
57	(c)(d)  Any person or activity regulated under the laws
58	administered by the former Department of Insurance which are now
59	administered by the Department of Financial Services, other than
60	laws relating to the regulation of the business of insurance.
61	Section 2.  Section 624.156, Florida Statutes, is created
62	to read:
63	624.156  Applicability of consumer protection laws to the
64	business of insurance.-Notwithstanding any provision of law to
65	the contrary, the business of insurance is subject to ss.
66	501.201-501.213, the Florida Deceptive and Unfair Trade
67	Practices Act, and the protections afforded consumers under that
68	act apply to insurance consumers.
69	Section 3.  Paragraphs (a) and (e) of subsection (7) of
70	section 627.062, are amended, present paragraph (f) of that
71	subsection is redesignated as paragraph (g) and amended, and new
72	paragraphs (f), (h), (i), and (j) are added to that subsection
73	to read:
74	627.062  Rate standards.-
75	(7)(a)  The provisions of This subsection applies apply
76	only with respect to rates for medical malpractice insurance and
77	shall control to the extent of any conflict with other
78	provisions of this section. Any separate affiliate of an insurer
79	is subject to this subsection.
80	(e)  The insurer must apply a discount or surcharge,
81	exclusive of any other discounts, credits, or rate
82	differentials, based on the health care provider's loss
83	experience and disciplinary action taken by the Federal
84	Government, the state, a health care facility, or a health care
85	plan or must shall establish an alternative method giving due
86	consideration to the provider's loss experience and disciplinary
87	record. The insurer must include in the filing a copy of the
88	surcharge or discount schedule or a description of the
89	alternative method used, and must provide a copy of such
90	schedule or description, as approved by the office, to
91	policyholders at the time of renewal and to prospective
92	policyholders at the time of application for coverage. A medical
93	malpractice liability insurer may not use any rate or charge any
94	premium unless the insurer has filed such schedule or
95	alternative method with the Director of the Office of Insurance
96	Regulation and the director has approved such schedule or
97	alternative method.
98	(f)  In reviewing any rate filing under this subsection,
99	the office shall consider as part of the insurer's rate base the
100	insurer's loss cost adjustment expenses or defense cost and
101	containment expenses only to the extent that the expenses are at
102	or below the national average for such expenses, as determined
103	by the office, for the prior calendar year. An insurer's loss
104	cost adjustment expenses or defense cost and containment
105	expenses in excess of the national average may not be used to
106	justify a rate or rate change.
107	(g)(f)  Each medical malpractice insurer must make a rate
108	filing under this section, sworn to by at least two executive
109	officers of the insurer, at least once each calendar year.
110	1.  Effective July 1, 2011, a rate filing must be
111	accompanied by a certification by the chief executive officer or
112	chief financial officer of a medical malpractice insurer and the
113	chief actuary of a medical malpractice insurer, under oath and
114	subject to the penalty of perjury, on a form approved by the
115	commission, that the signing officer and actuary have reviewed
116	the rate filing and that, based on the signing officer's and
117	actuary's knowledge:
118	a.  The rate filing does not contain any untrue statement
119	of a material fact or any omission to state a material fact
120	necessary in order to make the statements made, in light of the
121	circumstances under which such statements were made, not
122	misleading.
123	b.  The factors described in paragraph (2)(b), including,
124	but not limited to, investment income, fairly present in all
125	material respects the basis of the rate filing for the periods
126	presented in the rate filing.
127	c.  The rate filing reflects all premium savings that are
128	reasonably expected to result from legislative enactments,
129	including, but not limited to, chapters 2003-416 and 2006-6,
130	Laws of Florida, and is in accordance with generally accepted
131	and reasonable actuarial techniques.
132	2.  A signing officer or actuary knowingly making a false
133	certification under this paragraph commits a violation of s.
134	626.9541(1)(e) and is subject to the penalties provided in s.
135	626.9521.
136	3.  Failure by the signing officer and actuary to provide
137	such certification shall result in the rate filing being
138	disapproved without prejudice to be refiled.
139	(h)  It is the intent of the Legislature that medical
140	malpractice rates be based upon projected losses and expenses
141	that reflect the current restrictions on the recovery of
142	individuals in medical malpractice claims in this state,
143	including, but not limited to, those provisions contained in
144	chapters 2003-416 and 2006-6, Laws of Florida. The Legislature
145	finds that there is no justification for basing rates on the
146	prior 10 years of loss experience and expenses when in the
147	intervening years significant restrictions on the legal rights
148	and recoveries of patients and their families have been enacted.
149	Accordingly, notwithstanding any law, rule, policy, or industry
150	practice to the contrary, rates for medical malpractice
151	insurance filed with the office after July 1, 2011, may not be
152	based upon the loss and expense experience of more than 5 years
153	prior to that date.
154	(i)  Notwithstanding any law to the contrary, beginning
155	July 1, 2011, insurance rates for medical malpractice subject to
156	this chapter must be approved by the Director of the Office of
157	Insurance Regulation prior to being used.
158	(j)  The commission may adopt rules pursuant to ss.
159	120.536(1) and 120.54 to administer this subsection.
160	Section 4.  Subsection (3) of section 627.4147, Florida
161	Statutes, is renumbered as subsection (2), and present
162	subsection (2) of that section is amended to read:
163	627.4147  Medical malpractice insurance contracts.-
164	(2)  Each insurer covered by this section may require the
165	insured to be a member in good standing, i.e., not subject to
166	expulsion or suspension, of a duly recognized state or local
167	professional society of health care providers which maintains a
168	medical review committee. No professional society shall expel or
169	suspend a member solely because he or she participates in a
170	health maintenance organization licensed under part I of chapter
171	641.
172	Section 5.  Section 627.41491, Florida Statutes, is created
173	to read:
174	627.41491  Public rate comparison information.-The office
175	shall publish a chart comparing the rates in effect for the
176	Florida Medical Malpractice Joint Underwriting Association and
177	each medical malpractice insurer, self-insurer, and risk
178	retention group. The chart shall include comparisons of the
179	rates of a variety of specialties and shall reflect the
180	differing rates by geographic region, years in practice, and
181	discounts and surcharges available, including those required
182	under s. 627.062(7)(e) for the loss and disciplinary record of
183	the potential insured. Such rate comparison chart shall be made
184	available to the public on the office website and shall be
185	updated at least annually beginning January 1, 2013.
186	Section 6.  Section 627.41495, Florida Statutes, is amended
187	to read:
188	627.41495  Public notice of medical malpractice rate
189	filings; consumer advocate participation in rate review.-
190	(1)  Upon the filing of a proposed rate change by a medical
191	malpractice insurer or self-insurance fund, which filing would
192	result in an average statewide increase or decrease of 10 25
193	percent or more, pursuant to standards determined by the office,
194	the insurer or self-insurance fund shall mail notice of such
195	filing to each of its policyholders or members and the consumer
196	advocate appointed pursuant to s. 627.0613.
197	(2)  The consumer advocate shall have standing to request
198	or intervene and to participate in a rate hearing in accordance
199	with the requirements of this section. The office shall receive
200	into evidence as part of the record any materials, information,
201	or studies submitted by the members of the public or the
202	consumer advocate.
203	(3)  The consumer advocate and any policyholder or member
204	of the insurer or self-insurer may request a rate hearing on the
205	proposed rate change within 30 days after the mailing of the
206	notification of the proposed rate change. The Director of the
207	Office of Insurance Regulation shall hold the hearing within 30
208	days after receiving a request for a hearing.
209	(4)(2)  The rate filing shall be available for public
210	inspection.
211	Section 7.  Paragraphs (h) and (i) of subsection (2) and
212	subsection (4) of section 627.912, Florida Statutes, are amended
213	to read:
214	627.912  Professional liability claims and actions; reports
215	by insurers and health care providers; annual report by office.-
216	(2)  The reports required by subsection (1) shall contain:
217	(h)  The total number, names, and health care provider
218	professional license numbers of all defendants involved in the
219	claim and any nonparty health care provider who appeared on the
220	jury verdict form in any case.
221	(i)  The date and amount of judgment or settlement, if any,
222	including the itemization of the verdict from the jury verdict
223	form.
224	(4)  There shall be no liability on the part of, and no
225	cause of action of any nature shall arise against, any person or
226	entity reporting hereunder or its agents or employees or the
227	office or its employees for any action taken by them under this
228	section. The office shall may impose a fine of up to $250 per
229	day per case, but not to exceed a total of $10,000 per case,
230	against an insurer, commercial self-insurance fund, medical
231	malpractice self-insurance fund, or risk retention group that
232	violates the requirements of this section, except that the
233	office shall may impose a fine of $250 per day per case, not to
234	exceed a total of $1,000 per case, against an insurer providing
235	professional liability insurance to a member of The Florida Bar,
236	which insurer violates the provisions of this section. If a
237	health care practitioner or health care facility violates the
238	requirements of this section, it shall be considered a violation
239	of the chapter or act under which the practitioner or facility
240	is licensed and shall be grounds for a fine or disciplinary
241	action as such other violations of the chapter or act. The
242	office may adjust a fine imposed under this subsection by
243	considering the financial condition of the licensee, premium
244	volume written, ratio of violations to compliancy, and other
245	mitigating factors as determined by the office.
246	Section 8.  This act shall take effect July 1, 2011.

CODING: Words stricken are deletions; words underlined are additions.