Bill Text: FL S0846 | 2024 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Risk Retention Groups

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2024-03-05 - Laid on Table, refer to CS/HB 215 [S0846 Detail]

Download: Florida-2024-S0846-Introduced.html

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       Florida Senate - 2024                                     SB 846
       
       
        
       By Senator DiCeglie
       
       
       
       
       
       18-00549-24                                            2024846__
    1                        A bill to be entitled                      
    2         An act relating to risk retention groups; amending s.
    3         627.944, F.S.; providing that certain risk retention
    4         groups are deemed to be insurance companies authorized
    5         to do business in this state; making technical
    6         changes; providing an effective date.
    7          
    8  Be It Enacted by the Legislature of the State of Florida:
    9  
   10         Section 1. Section 627.944, Florida Statutes, is amended to
   11  read:
   12         627.944 Risk retention groups not certificated in this
   13  state.—Risk retention groups certificated or licensed in states
   14  other than this state and seeking to do business as a risk
   15  retention group in this state are deemed to be insurance
   16  companies authorized to do business in this state and must
   17  observe and abide by the laws of this state as follows:
   18         (1) NOTICE OF OPERATIONS AND DESIGNATION OF CHIEF FINANCIAL
   19  OFFICER AS AGENT.—Before offering insurance in this state, a
   20  risk retention group must shall submit to the office:
   21         (a) A statement identifying the state or states in which
   22  the risk retention group is certificated or licensed as a
   23  liability insurance company, date of certification or licensing,
   24  its principal place of business, and such other information,
   25  including information on its membership, as the office may
   26  require to verify that the risk retention group is qualified as
   27  a risk retention group under the provisions of this part.
   28         (b) A copy of its plan of operations or a feasibility study
   29  and revisions of such plan or study submitted to its state of
   30  domicile; provided, however, that the provision relating to the
   31  submission of a plan of operation or a feasibility study does
   32  shall not apply with respect to any line or classification of
   33  liability insurance which was defined in the Product Liability
   34  Risk Retention Act of 1981 before October 27, 1986, and which
   35  was offered before such date by any risk retention group which
   36  had been certificated or licensed and operating for not less
   37  than 3 years before such date.
   38         (c) A statement of registration which designates the Chief
   39  Financial Officer or her or his designee as its agent for the
   40  purpose of receiving service of legal documents of process.
   41         (2) FINANCIAL CONDITION.—Any risk retention group doing
   42  business in this state must shall submit to the office:
   43         (a) A copy of the group’s financial statement submitted to
   44  its state of domicile, which must shall be certified by an
   45  independent public accountant and contain a statement of opinion
   46  on loss and loss adjustment expense reserves made by a member of
   47  the American Academy of Actuaries or a qualified loss reserve
   48  specialist under criteria established by rule of the commission
   49  after considering any criteria established by the National
   50  Association of Insurance Commissioners.
   51         (b) A copy of each examination of the risk retention group
   52  as certified by the insurance commissioner or public official
   53  conducting the examination.
   54         (c) Upon request by the office, a copy of any audit
   55  performed with respect to the risk retention group.
   56         (d) Such information as may be required to verify its
   57  continuing qualification as a risk retention group under the
   58  provisions of this part.
   59         (3) TAXATION.—All premiums paid for insurance or coverages
   60  on risks located within this state to a risk retention group
   61  shall be subject to taxation at the same rate and subject to the
   62  same interest, fines, and penalties for nonpayment as that
   63  applicable to eligible surplus lines insurers. Each agent
   64  utilized in any transaction shall report and pay the taxes for
   65  the premiums for risks which they have placed with or on behalf
   66  of a risk retention group not certificated in this state. In the
   67  event that an agent fails to pay the tax, each risk retention
   68  group shall pay the tax for insured or covered risks located
   69  within this state. Further, each risk retention group shall
   70  report all premiums paid to it for insured or covered risks
   71  located within this state.
   72         (4) COMPLIANCE WITH UNFAIR CLAIM SETTLEMENT PRACTICES LAW.
   73  Any risk retention group, its agents, and its representatives
   74  shall comply with the unfair claim settlement practices law of
   75  this state as set forth in s. 626.9541(1)(i).
   76         (5) DECEPTIVE, FALSE, OR FRAUDULENT PRACTICES.—Any risk
   77  retention group shall comply with and be subject to the laws of
   78  this state regarding deceptive, false, or fraudulent acts or
   79  practices, including the provisions of part IX of chapter 626.
   80  If the office seeks an injunction regarding conduct in violation
   81  of these laws, the injunction may be obtained from any Florida
   82  court of competent jurisdiction.
   83         (6) EXAMINATION REGARDING FINANCIAL CONDITION.—Any risk
   84  retention group must submit to an examination by the office to
   85  determine its financial condition if the insurance commissioner
   86  of the jurisdiction in which the group is certificated or
   87  licensed has not initiated an examination or does not initiate
   88  an examination within 30 days after a request by the office. Any
   89  examination must shall be coordinated to avoid unjustified
   90  repetition and conducted in an expeditious manner.
   91         (7) NOTICE TO PURCHASERS.—Any policy issued by a risk
   92  retention group must shall contain in 10-point type on the front
   93  page and the declaration page, the following provision:
   94  
   95  “Notice, this policy is issued by your risk retention group.
   96  Your risk retention group may not be subject to all of the
   97  insurance laws and regulations of your state. State insurance
   98  insolvency guaranty funds are not available for your risk
   99  retention group.”
  100  
  101         (8) PROHIBITED ACTS REGARDING SOLICITATION OR SALE.—The
  102  following acts by a risk retention group are hereby prohibited:
  103         (a) The solicitation or sale of insurance by a risk
  104  retention group to any person who is not eligible for membership
  105  in the group.
  106         (b) The solicitation or sale of insurance by, or operation
  107  of, a risk retention group that is in a hazardous financial
  108  condition or is financially impaired.
  109         (9) PROHIBITED OWNERSHIP BY AN INSURANCE COMPANY.—No risk
  110  retention group shall be allowed to do business in this state if
  111  an insurer is directly or indirectly a member or owner of the
  112  risk retention group, other than in the case of a risk retention
  113  group all of whose members are insurers.
  114         (10) PROHIBITED COVERAGE.—No risk retention group may offer
  115  insurance coverage prohibited by the Florida Insurance Code or
  116  declared unlawful by the highest court of this state.
  117         (11) DELINQUENCY PROCEEDINGS.—A risk retention group not
  118  domiciled in this state but doing business in this state shall
  119  comply with a lawful order issued in a voluntary dissolution
  120  proceeding or in a delinquency proceeding commenced by the
  121  office if there has been a finding of financial impairment after
  122  an examination under subsection (6).
  123         (12) UTILIZATION OF AGENT.—A risk retention group shall
  124  utilize an agent licensed and appointed in this state in order
  125  to solicit, transact, underwrite, or provide insurance on a risk
  126  of a group member, which risk is located in this state.
  127         Section 2. This act shall take effect July 1, 2024.