Bill Text: FL S1344 | 2014 | Regular Session | Enrolled
Bill Title: Insurance
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Passed) 2014-06-13 - Chapter No. 2014-103 [S1344 Detail]
Download: Florida-2014-S1344-Enrolled.html
ENROLLED 2014 Legislature CS for CS for SB 1344 20141344er 1 2 An act relating to insurance; amending s. 626.8805, 3 F.S.; revising insurance administrator application 4 requirements; amending s. 626.8817, F.S.; authorizing 5 an insurer’s designee to provide certain coverage 6 information to an insurance administrator; authorizing 7 an insurer to contract a third party to conduct a 8 review of the operations of an insurance administrator 9 under certain circumstances; amending s. 626.882, 10 F.S.; prohibiting a person from acting as an insurance 11 administrator without a specific written agreement; 12 amending s. 626.883, F.S.; requiring an insurance 13 administrator to furnish fiduciary account records to 14 an insurer or its designee; requiring administrator 15 withdrawals from a fiduciary account to be made 16 according to a specific written agreement; providing 17 that an insurer’s designee may authorize payment of 18 claims; amending s. 626.884, F.S.; revising an 19 insurer’s right of access to certain administrator 20 records; amending s. 626.89, F.S.; revising the 21 deadline for filing certain financial statements; 22 amending s. 626.9541, F.S.; revising provisions for 23 unfair methods of competition and unfair or deceptive 24 acts relating to conducting certain insurance 25 transactions through credit card facilities; amending 26 s. 627.351, F.S.; revising the entities that make 27 recommendations to the Chief Financial Officer for 28 appointment to the board of governors of the Joint 29 Underwriting Association; amending s. 627.7283, F.S.; 30 allowing the electronic transfer of unearned premiums 31 under specified circumstances; amending s. 631.912, 32 F.S.; revising the appointment process for members of 33 the board of directors of the Florida Workers’ 34 Compensation Insurance Guaranty Association; amending 35 s. 766.315, F.S.; revising the entities that make 36 recommendations to the Chief Financial Officer for 37 appointment to the board of directors of the Florida 38 Birth-Related Neurological Injury Compensation 39 Association; providing an effective date. 40 41 Be It Enacted by the Legislature of the State of Florida: 42 43 Section 1. Paragraph (c) of subsection (2) and subsection 44 (3) of section 626.8805, Florida Statutes, are amended to read: 45 626.8805 Certificate of authority to act as administrator.— 46 (2) The administrator shall file with the office an 47 application for a certificate of authority upon a form to be 48 adopted by the commission and furnished by the office, which 49 application shall include or have attached the following 50 information and documents: 51 (c) The names, addresses, official positions, and 52 professional qualifications of the individuals employed or 53 retained by the administrator who are responsible for the 54 conduct of the affairs of the administrator, including all 55 members of the board of directors, board of trustees, executive 56 committee, or other governing board or committee, and the 57 principal officers in the case of a corporation or,the partners 58 or members in the case of a partnership or association, and any59other person who exercises control or influence over the affairs60 of the administrator. 61 (3) The applicant shall make available for inspection by 62 the office copies of all contracts relating to services provided 63 by the administrator towithinsurers or other persons using 64utilizingthe services of the administrator. 65 Section 2. Subsections (1) and (3) of section 626.8817, 66 Florida Statutes, are amended to read: 67 626.8817 Responsibilities of insurance company with respect 68 to administration of coverage insured.— 69 (1) If an insurer uses the services of an administrator, 70 the insurer is responsible for determining the benefits, premium 71 rates, underwriting criteria, and claims payment procedures 72 applicable to the coverage and for securing reinsurance, if any. 73 The rules pertaining to these matters shall be provided, in 74 writing, by the insurer or its designee to the administrator. 75 The responsibilities of the administrator as to any of these 76 matters shall be set forth in athewritten agreement binding 77 uponbetweenthe administrator and the insurer. 78 (3) IfIn cases in whichan administrator administers 79 benefits for more than 100 certificateholders on behalf of an 80 insurer, the insurer shall, at least semiannually, conduct a 81 review of the operations of the administrator. At least one such 82 review must be an onsite audit of the operations of the 83 administrator. The insurer may contract with a qualified third 84 party to conduct such review. 85 Section 3. Subsections (1) and (4) of section 626.882, 86 Florida Statutes, are amended to read: 87 626.882 Agreement between administrator and insurer; 88 required provisions; maintenance of records.— 89 (1) ANoperson may not act as an administrator without a 90 written agreement, as required under s. 626.8817, which 91 specifies the rights, duties, and obligations of thebetween92such person asadministrator andaninsurer. 93 (4) If a policy is issued to a trustee or trustees, a copy 94 of the trust agreement and any amendments to that agreement 95 shall be furnished to the insurer or its designee by the 96 administrator and shall be retained as part of the official 97 records of both the administrator and the insurer for the 98 duration of the policy and for 5 years thereafter. 99 Section 4. Subsections (3), (4), and (5) of section 100 626.883, Florida Statutes, are amended to read: 101 626.883 Administrator as intermediary; collections held in 102 fiduciary capacity; establishment of account; disbursement; 103 payments on behalf of insurer.— 104 (3) If charges or premiums deposited in a fiduciary account 105 have been collected on behalf of or for more than one insurer, 106 the administrator shall keep records clearly recording the 107 deposits in and withdrawals from such account on behalf of or 108 for each insurer. The administrator shall, upon request of an 109 insurer or its designee, furnish such insurer or designee with 110 copies of records pertaining to deposits and withdrawals on 111 behalf of or for such insurer. 112 (4) The administrator may not pay any claim by withdrawals 113 from a fiduciary account. Withdrawals from such account shall be 114 made as provided in the written agreement required under ss. 115 626.8817 and 626.882between the administrator and the insurer116 for any of the following: 117 (a) Remittance to an insurer entitled to such remittance. 118 (b) Deposit in an account maintained in the name of such 119 insurer. 120 (c) Transfer to and deposit in a claims-paying account, 121 with claims to be paid as provided by such insurer. 122 (d) Payment to a group policyholder for remittance to the 123 insurer entitled to such remittance. 124 (e) Payment to the administrator of the commission, fees, 125 or charges of the administrator. 126 (f) Remittance of return premium to the person or persons 127 entitled to suchreturnpremium. 128 (5) All claims paid by the administrator from funds 129 collected on behalf of the insurer shall be paid only on drafts 130 of, and as authorized by, such insurer or its designee. 131 Section 5. Subsection (3) of section 626.884, Florida 132 Statutes, is amended to read: 133 626.884 Maintenance of records by administrator; access; 134 confidentiality.— 135 (3) The insurer shall retain the right of continuing access 136 to books and records maintained by the administrator sufficient 137 to permit the insurer to fulfill all of its contractual 138 obligations to insured persons, subject to any restrictions in 139 the written agreement pertaining tobetween the insurer and the140administrator onthe proprietary rights of the parties in such 141 books and records. 142 Section 6. Subsections (1) and (2) of section 626.89, 143 Florida Statutes, are amended to read: 144 626.89 Annual financial statement and filing fee; notice of 145 change of ownership.— 146 (1) Each authorized administrator shall annually file with 147 the office a full and true statement of its financial condition, 148 transactions, and affairs within 3 months after the end of the 149 administrator’s fiscal year. The statement shall be filed150annually on or before March 1or within such extension of time 151thereforas the office for good cause may have granted. The 152 statement mustand shallbe for the preceding fiscalcalendar153 year and must. The statement shallbe in such form and contain 154 such matters as the commission prescribes and mustshallbe 155 verified by at least two officers of thesuchadministrator.An156administrator whose sole stockholder is an association157representing health care providers which is not an affiliate of158an insurer, an administrator of a pooled governmental self159insurance program, or an administrator that is a university may160submit the preceding fiscal year’s statement within 2 months161after its fiscal year end.162 (2) Each authorized administrator shall also file an 163 audited financial statement performed by an independent 164 certified public accountant. The audited financial statement 165 shall be filed with the office within 5 months after the end of 166 the administrator’s fiscal year and beon or before June 1for 167 the preceding fiscalcalendaryearending December 31.An168administrator whose sole stockholder is an association169representing health care providers which is not an affiliate of170an insurer, an administrator of a pooled governmental self171insurance program, or an administrator that is a university may172submit the preceding fiscal year’s audited financial statement173within 5 months after the end of its fiscal year.An audited 174 financial statement prepared on a consolidated basis must 175 include a columnar consolidating or combining worksheet that 176 must be filed with the statement and must comply with the 177 following: 178 (a) Amounts shown on the consolidated audited financial 179 statement must be shown on the worksheet; 180 (b) Amounts for each entity must be stated separately; and 181 (c) Explanations of consolidating and eliminating entries 182 must be included. 183 Section 7. Paragraph (q) of subsection (1) of section 184 626.9541, Florida Statutes, is amended to read: 185 626.9541 Unfair methods of competition and unfair or 186 deceptive acts or practices defined.— 187 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE 188 ACTS.—The following are defined as unfair methods of competition 189 and unfair or deceptive acts or practices: 190 (q) Certain insurance transactions through credit card 191 facilities prohibited.— 192 1. Except as provided in subparagraph 3., no person shall 193 knowingly solicit or negotiateanyinsurance; seek or accept 194 applications for insurance; issue or deliver any policy; 195 receive, collect, or transmit premiums, to or for anany196 insurer; or otherwise transact insurance in this state, or 197 relative to a subject of insurance resident, located, or to be 198 performed in this state, through the arrangement or facilities 199 of a credit card facility or organization, for the purpose of 200 insuring credit card holders or prospective credit card holders. 201 The term “credit card holder” as used in this paragraph means a 202anyperson who may pay the charge for purchases or other 203 transactions through the credit card facility or organization, 204 whose credit with such facility or organization is evidenced by 205 a credit card identifying such person as being one whose charges 206 the credit card facility or organization will pay, and who is 207 identified as such upon the credit cardeitherby name, account 208 number, symbol, insignia, oranyother method or device of 209 identification. This subparagraph does not apply as to health 210 insurance or to credit life, credit disability, or credit 211 property insurance. 212 2. IfWheneverany person does or performs in this state 213 any of the acts in violation of subparagraph 1. for or on behalf 214 of ananyinsurer or credit card facility, such insurer or 215 credit card facility shall be deemedheldto be doing business 216 in this state and, if an insurer, shall be subject to the same 217 state, county, and municipal taxes as insurers that have been 218 legally qualified and admitted to do business in this state by 219 agents or otherwise are subject, the same to be assessed and 220 collected against such insurers; and such person so doing or 221 performing any of such acts isshall bepersonally liable for 222 all such taxes. 223 3. A licensed agent or insurer may solicit or negotiateany224 insurance; seek or accept applications for insurance; issue or 225 deliver any policy; receive, collect, or transmit premiums, to 226 or for ananyinsurer; or otherwise transact insurance in this 227 state, or relative to a subject of insurance resident, located, 228 or to be performed in this state, through the arrangement or 229 facilities of a credit card facility or organization, for the 230 purpose of insuring credit card holders or prospective credit 231 card holders if: 232 a. The insurance or policy which is the subject of the 233 transaction is noncancelable by any person other than the named 234 insured, the policyholder, or the insurer; 235 b. Any refund of unearned premium is madedirectlyto the 236 credit card holder by mail or electronic transfer; and 237 c. The credit card transaction is authorized by the 238 signature of the credit card holder or other person authorized 239 to sign on the credit card account. 240 241 The conditions enumerated in sub-subparagraphs a.-c. do not 242 apply to health insurance or to credit life, credit disability, 243 or credit property insurance; and sub-subparagraph c. does not 244 apply to property and casualty insurance ifso long asthe 245 transaction is authorized by the insured. 246 4. No person may use or disclose information resulting from 247 the use of a credit card in conjunction with the purchase of 248 insurance if, whensuch information is to the advantage of the 249suchcredit card facility or an insurance agent, or is to the 250 detriment of the insured or any other insurance agent; except 251 that this provision does not prohibit a credit card facility 252 from using or disclosing such information in aanyjudicial 253 proceeding or consistent with applicable law on credit 254 reporting. 255 5.NoSuch insurance may notshallbe sold through a credit 256 card facility in conjunction with membership in any automobile 257 club. The term “automobile club” means a legal entity that 258which, in consideration of dues, assessments, or periodic 259 payments of money, promises its members or subscribers to assist 260 them in matters relating to the ownership, operation, use, or 261 maintenance of a motor vehicle; however, the termdefinition of262automobile clubsdoes not include persons, associations, or 263 corporations thatwhichare organized and operated solely for 264 the purpose of conducting, sponsoring, or sanctioning motor 265 vehicle races, exhibitions, or contests upon racetracks, or upon 266 race courses established and marked as such for the duration of 267 such particular event. The words “motor vehicle” used herein 268 shall be the same as defined in chapter 320. 269 Section 8. Paragraph (c) of subsection (4) of section 270 627.351, Florida Statutes, is amended to read: 271 627.351 Insurance risk apportionment plans.— 272 (4) MEDICAL MALPRACTICE RISK APPORTIONMENT.— 273 (c) The Joint Underwriting Association shall operate 274 subject to the supervision and approval of a board of governors 275 consisting of representatives of five of the insurers 276 participating in the Joint Underwriting Association, an attorney 277to benamed by The Florida Bar, a physicianto benamed by the 278 Florida Medical Association, a dentistto benamed by the 279 Florida Dental Association, and a hospital representativeto be280 named by the Florida Hospital Association. The Chief Financial 281 Officer shall select the representatives of the five insurers. 282 One insurer representative shall be selected from 283 recommendations of the American Insurance Association. One 284 insurer representative shall be selected from recommendations of 285 the Property Casualty Insurers Association of AmericaAlliance286of American Insurers. One insurer representative shall be 287 selected from recommendations of the Florida Insurance Council 288National Association of Independent Insurers. Two insurer 289 representatives shall be selected to represent insurers that are 290 not affiliated with these associations.The board of governors291shall choose,During the first meeting of the board after June 292 30 of each year, the board shall choose one of its members to 293 serve as chair of the board and another member to serve as vice 294 chair of the board. There isshall beno liability on the part 295 of, and no cause of actionof any natureshall arise against, 296 any member insurer, self-insurer, or its agents or employees, 297 the Joint Underwriting Association or its agents or employees, 298 members of the board of governors, or the office or its 299 representatives for any action taken by them in the performance 300 of their powers and duties under this subsection. 301 Section 9. Subsections (1), (2), and (3) of section 302 627.7283, Florida Statutes, are amended to read: 303 627.7283 Cancellation; return of premium.— 304 (1) If the insured cancels a policy of motor vehicle 305 insurance, the insurer must mail or electronically transfer the 306 unearned portion of any premium paid within 30 days after the 307 effective date of the policy cancellation or receipt of notice 308 or request for cancellation, whichever is later. This 309 requirement applies to a cancellation initiated by an insured 310 for any reason. 311 (2) If an insurer cancels a policy of motor vehicle 312 insurance, the insurer must mail or electronically transfer the 313 unearned premium portion of any premium within 15 days after the 314 effective date of the policy cancellation. 315 (3) If the unearned premium is not mailed or electronically 316 transferred within the applicable period, the insurer must pay 317 to the insured 8 percent interest on the amount due. If the 318 unearned premium is not mailed or electronically transferred 319 within 45 days after the applicable period, the insured may 320 bring an action against the insurer pursuant to s. 624.155. 321 Section 10. Subsection (1) of section 631.912, Florida 322 Statutes, is amended to read: 323 631.912 Board of directors.— 324 (1) The board of directors of the corporation shall consist 325 of 11 persons, 1 of whom is the insurance consumer advocate 326 appointed under s. 627.0613 or designee and 1 of whom is 327 designated by the Chief Financial Officer. The department shall 328 appoint to the board 6 persons selected by private carriers from 329 among the 20 workers’ compensation insurers with the largest 330 amount of net direct written premium as determined by the 331 department, and 23persons selected by the self-insurance 332 funds. The Governor shall appoint 1 person who has commercial 333 insurance experience. At least two of the private carriers shall 334 be foreign carriers authorized to do business in this state. The 335 board shall elect a chairperson from among its members. The 336 Chief Financial Officer may remove any board member for cause. 337 Each board member shall be appointed to servefora 4-year term 338 and may be reappointed. A vacancy on the board shall be filled 339 for the remaining period of the term in the same manner by which 340 the original appointment was made. 341 Section 11. Paragraph (a) of subsection (2) of section 342 766.315, Florida Statutes, is amended to read: 343 766.315 Florida Birth-Related Neurological Injury 344 Compensation Association; board of directors.— 345 (2)(a) The Chief Financial Officer may select the 346 representative of the participating physicians from a list of at 347 least three namesto berecommended by the American Congress of 348 Obstetricians and Gynecologists, District XIIFlorida Obstetric349and Gynecologic Society; the representative of hospitals from a 350 list of at least three namesto berecommended by the Florida 351 Hospital Association; the representative of casualty insurers 352 from a list of at least three names, one of which is recommended 353 by the American Insurance Association, one of which is 354 recommended by the Florida Insurance CouncilAlliance of355American Insurers, and one of which is recommended by the 356 Property Casualty Insurers Association of AmericaNational357Association of Independent Insurers; and the representative of 358 physicians, other than participating physicians, from a list of 359 three namesto berecommended by the Florida Medical Association 360 and a list of three namesto berecommended by the Florida 361 Osteopathic Medical Association. However,In no case shallthe 362 Chief Financial Officer is not requiredbe boundto make anany363 appointment from among the nominees of thesuchrespective 364 associations. 365 Section 12. This act shall take effect July 1, 2014.