Financial Exam, No-Fault Rules On May 13 Cabinet Agenda
May 7, 2009
Florida Governor Charlie Crist and the Cabinet (“Cabinet”) will hold a meeting on Wednesday, May 13, starting at 9:00 a.m. in the Cabinet Meeting Room, Lower Level, The Capitol, Tallahassee.
The complete Cabinet agenda, which may be viewed by clicking here, includes insurance-related matters from the following agencies:
The Florida State Board of Administration agenda will include a request for approval by the Florida Hurricane Catastrophe Fund (“FHCF”) to file Emergency Rule 19ER09-1–Reimbursement Contract and its attendant forms for adoption upon the recently-passed CS3-HB 1495 becoming law. With an effective date of June 1, 2009, and the FHCF contract year beginning at the same time, the Emergency Rule is deemed necessary to implement legislative changes in the FHCF’s Temporary Increase in Coverage Limits layer of coverage.
If Florida Governor Charlie Crist were to veto the bill, the Rule would not be needed. However, a veto is not anticipated.
The FHCF also will request the authority to file a Notice of Proposed Rulemaking to amend Rule 19-8.010, F.A.C., Reimbursement Contract, to incorporate those changes made in Emergency Rule 19ER09-1 once it has been filed and becomes effective.
The Florida Office of Insurance Regulation agenda will include the following:
- Request for Approval for Adoption of Proposed Rule 69O-175.008; Not at Fault Accidents
Florida law provides that an insurer may not impose additional premium on a motor vehicle policy because the insured was in a collision, unless the insurer determines the insured was substantially at fault in the collision. This Rule clarifies that the statute applies to both existing insureds (from having their existing premium raised) and new insureds (from having their initial premium higher than it would otherwise be).
- Request for Approval for Adoption of Proposed Rule 69O-138.005; Exams by Non-Employees
Note: This item was rescheduled from the April 28, 2009 Florida Cabinet meeting.
Florida law requires the OIR to examine licensees for compliance with Florida’s Insurance Code and regulations of the Florida Financial Services Commission (“FSC”). These examinations can be performed by OIR employees, or can be performed by outside contractors.
In 2007, the Florida Legislature took away an insurance company’s role in negotiating the contract with outside contractors by changing Subsection 624.316(2)(e), F.S. relating to examinations performed by contractors. That Subsection further states that the FSC shall adopt rules providing that an examination of an insurer may be conducted by independent (non-employee) certified public accountants, actuaries, investment specialists, information technology specialists, and reinsurance specialists meeting criteria specified by Rule.
The Legislature also set forth specific criteria for the selection of a contractor in order to make sure that consumers are safe from potential conflicts of interest between examiners and insurance companies. Rates charged by outside contractors must be consistent with rates charged in the industry. This Rule implements the subsection by setting criteria for the reinsurance specialists, establishing an application process, and regulating the manner by which contractors are compensated.
Should you have any questions or comments, please contact Colodny Fass.
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