Bill Text: FL S0828 | 2016 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Insurance Guaranty Association Assessments
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Passed) 2016-04-01 - Chapter No. 2016-170 [S0828 Detail]
Download: Florida-2016-S0828-Introduced.html
Bill Title: Insurance Guaranty Association Assessments
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Passed) 2016-04-01 - Chapter No. 2016-170 [S0828 Detail]
Download: Florida-2016-S0828-Introduced.html
Florida Senate - 2016 SB 828 By Senator Bean 4-00944-16 2016828__ 1 A bill to be entitled 2 An act relating to insurance guaranty association 3 assessments; amending s. 631.914, F.S.; requiring the 4 Office of Insurance Regulation to levy assessments for 5 certain purposes; revising and providing requirements 6 for the levy of assessments; requiring insurers and 7 self-insurance funds to report certain premiums; 8 requiring insurers to collect policy surcharges and 9 pay assessments to the association; revising 10 requirements for reporting premium for assessment 11 calculations; revising and providing requirements and 12 limitations for remittance of assessments to the 13 association; providing an effective date. 14 15 Be It Enacted by the Legislature of the State of Florida: 16 17 Section 1. Section 631.914, Florida Statutes, is amended to 18 read: 19 631.914 Assessments.— 20 (1)(a) To the extent necessary to secure the funds for the 21 payment of covered claims, and also to pay the reasonable costs 22 to administer the same, the Office of Insurance Regulation 23department, upon certification by the board, shall levy 24 assessments on each insurer initially estimated in the 25 proportion that the insurer’s net direct written premiums in 26 this state bears to the total of said net direct written 27 premiums received in this state by all such workers’ 28 compensation insurers for the preceding calendar year. 29 Assessments levied against insurers and self-insurance funds 30 pursuant to this paragraph must be computed and levied on the 31 basis of the full policy premium value on the net direct written 32 premium amount as set forth in the state for workers’ 33 compensation insurance without consideration of any applicable 34 discount or credit for deductibles. Insurers and self-insurance 35 funds must report premiums in compliance with this paragraph. 36 Assessments shall be remitted to and administered by the board 37 of directors in the manner specified by the approved plan of 38 operation and paragraph (d).The board shall give each insurer39so assessed at least 30 days’ written notice of the date the40assessment is due and payable.Each assessment shall be a 41 uniform percentage applicable to the net direct written premiums 42 of each insurer writing workers’ compensation insurance. 431. Beginning July 1, 1997,Assessments levied against 44 insurers and, other thanself-insurance funds,shall not exceed 45 in any calendar year more than 2 percent of that insurer’s net 46 direct written premiums in this state for workers’ compensation 47 insuranceduring the calendar year next preceding the date of48such assessments. 49 (b) Member insurers shall collect surcharges at a uniform 50 percentage rate for a period of 12 months beginning on January 51 1, April 1, July 1, or October 1, whichever is the first day of 52 the following calendar quarter as specified in an order issued 53 by the office directing insurers to pay an assessment to the 54 association. The surcharge may not begin until 90 days after the 55 board of directors certifies the assessment. 562. Beginning July 1, 1997, assessments levied against self57insurance funds shall not exceed in any calendar year more than581.50 percent of that self-insurance fund’s net direct written59premiums in this state for workers’ compensation insurance60during the calendar year next preceding the date of such61assessments.623. Beginning July 1, 2003, assessments levied against63insurers and self-insurance funds pursuant to this paragraph are64computed and levied on the basis of the full policy premium65value on the net direct premiums written in the state for66workers’ compensation insurance during the calendar year next67preceding the date of the assessment without taking into account68any applicable discount or credit for deductibles. Insurers and69self-insurance funds must report premiums in compliance with70this subparagraph.71(b) Assessments shall be included as an appropriate factor72in the making of rates.73 (c)1.Effective July 1, 1999,If assessments otherwise 74 authorized in paragraph (a) are insufficient to make all 75 payments on reimbursements then owing to claimants in a calendar 76 year, then upon certification by the board, the office 77departmentshall levy additional assessments of up to 1.5 78 percent of the insurer’s net direct written premiums in this 79 stateduring the calendar year next preceding the date of such80assessments against insurers to secure the necessary funds. 81 (d) The association may use an installment method to 82 require the insurer to remit the assessment as written or may 83 require the insurer to remit the assessment to the association 84 before collecting the policyholder surcharge. If the assessment 85 is remitted before the surcharge is collected, the assessment 86 remitted must be based on an estimate of the assessment due 87 based on the proportion of each insurer’s net direct written 88 premium in this state for the preceding calendar year as 89 described in paragraph (a) and adjusted following the end of the 90 12-month period during which the assessment is levied. 91 1. If the association elects to use the installment method, 92 the office may, in the order levying the assessment on insurers, 93 specify that the assessment is due and payable quarterly as 94 premium is written throughout the assessment year. Insurers 95 shall collect surcharges at a uniform percentage rate specified 96 by order as described in paragraph (b). Insurers are not 97 required to advance funds if the association and the office 98 elect to use the installment option. Assessments levied under 99 this subparagraph are paid after policy surcharges are billed, 100 and the recognition of assets is based on actual premium written 101 offset by the obligation to the association. 102 2. If the association elects to require insurers to remit 103 the assessment prior to surcharging the policyholder, the 104 following shall apply: 105 a. The levy order shall provide each insurer so assessed at 106 least 30 days written notice of the date the initial assessment 107 payment is due and payable by the insurer. 108 b. Insurers shall collect surcharges at a uniform 109 percentage rate specified by the order, as described in 110 paragraph (b). 111 c. Insurers must submit a reconciliation report to the 112 association within 120 days after the end of the 12-month 113 assessment period. The report must indicate the amount of the 114 initial payment made to the association and the amount of 115 written premium pursuant to paragraph (a) for the assessment 116 year. If the insurer’s calculated assessment is more than the 117 amount initially paid to the association, the insurer shall pay 118 the excess amount to the association. If the insurer’s 119 calculated assessment is less than the initial amount paid to 120 the association, the association shall credit the insurer that 121 amount against future assessments. 122 d. An insurer is not liable for any uncollectible 123 assessments. 124 e. Assessments levied under this subparagraph are paid 125 before policy surcharges are billed and result in a receivable 126 for policy surcharges to be billed in the future. This amount, 127 to the extent it is likely that it will be realized, meets the 128 definition of an admissible asset as specified in the National 129 Association of Insurance Commissioners’ Statement of Statutory 130 Accounting Principles No. 4. The asset shall be established and 131 recorded separately from the liability. If an insurer is unable 132 to fully recoup the amount of the assessment, the amount 133 recorded as an asset shall be reduced to the amount reasonably 134 expected to be recouped. 135 (2) Assessments levied under this section are not premium 136 and are not subject to any premium tax, fees, or commissions. 137 Insurers shall treat the failure of an insured to pay an 138 assessment surcharge or the recoupment of an assessment 139 surcharge as a failure to pay the premium. 140 (3) Assessments levied under this section may only be 141 levied upon insurers. This section does not create a cause of 142 action by a policyholder with respect to the levying of, or a 143 policyholder’s duty to pay, assessments. 1442. To assure that insurers paying assessments levied under145this paragraph continue to charge rates that are neither146inadequate nor excessive, each insurer that is to be assessed147pursuant to this paragraph, or a licensed rating organization to148which the insurer subscribes, may make, within 90 days after149being notified of such assessments, a rate filing for workers’150compensation coverage pursuant to ss. 627.072 and 627.091. If151the filing reflects a percentage rate change equal to the152difference between the rate of such assessment and the rate of153the previous year’s assessment under this paragraph, the filing154shall consist of a certification so stating and shall be deemed155approved when made. Any rate change of a different percentage156shall be subject to the standards and procedures of ss. 627.072157and 627.091.158 (4)(2)(a) The board may exempt any insurer from an 159 assessment if, in the opinion of the officedepartment, an 160 assessment would result in such insurer’s financial statement 161 reflecting an amount of capital or surplus less than the minimum 162 amount required by any jurisdiction in which the insurer is 163 authorized to transact insurance. 164 (b) The board may temporarily defer, in whole or in part, 165 assessments against an insurer if, in the opinion of the office 166department, payment of the assessment would endanger the ability 167 of the insurer to fulfill its contractual obligations. In the 168 case of a self-insurance fund, the trustees of the fund 169 determined to be endangered must immediately levy an assessment 170 upon the members of that self-insurance fund in an amount 171 sufficient to pay the assessments to the corporation. 172 (c) The board may allow an insurer to pay an assessment on 173 a quarterly basis. 174 Section 2. This act shall take effect July 1, 2016.