Florida Cabinet Meeting 9/20/06
Jan 14, 2007
A Florida Cabinet Meeting was held September 19, 2006. The Florida Cabinet consists of Governor Jeb Bush, Attorney General Charlie Crist, Chief Financial Officer Tom Gallagher and Agriculture Commissioner Charles H. Bronson.
During the meeting, the following rules were proposed for approval by the Cabinet members.
1. Adoption of amendments to Rules 69O-149.005, .006, .007; “Reasonableness of Benefits in Relation to
Premiums”, “Actuarial Memorandum”, and “Annual Rate Certification (ARC) Filing Procedures”
The proposed rule amendments interpret, clarify and implement the related statutes for reasonableness of benefits in relation to premiums; establish ARC filing procedures; and require the experience exhibit in the actuarial memorandum be in an Excel document.
The proposed rule amendments are intended to accomplish the following:
a) Assure that when multiple products are available for sale with similar benefits, the rates are actuarially consistent.
b) Require that an offer to replace an issue age rate policy must recognize the policy reserve buildup (accumulated value) of the original policy, subject to a safe harbor provision.
c) Clarify that all blocks of business are subject to the loss ratio requirements of Rule 69O-149.005.
d) Clarify that the annual rate certification standard for long term care is contained in the applicable Rules for business issued subsequent to the adoption of the NAIC rate stability model.
e) Clarify the annual rate certification language.
The proposed rule amendments received approval for final adoption.
2. Adoption of amendments to Rules 69O-154.203, .204 “Categories of Reserves” and “Specific Minimum
Standards for Morbidity, Mortality and Interest”
The purpose of the proposed amendments is to revise the health reserve rules to reflect changes made by the NAIC in 2006 and to revise the specific minimum standards for morbidity, mortality and interest to reflect revisions made to the NAIC Accounting Practices and Procedures Manual in 2006.
The proposed rule amendments received approval for final adoption.
3. Repeal of Rule 69O-141.021, Procedures Implementing the Moratorium Phase-out in Section 627.7013, Florida Statutes
This is an action to repeal Rule 69O-141.021 (Moratorium Phase-out) because this rule implements a statute that was repealed in 2001.
Repeal of the Rule was approved.
4. Approval of Citizens Property Insurance Corporation’s Plan of Operation.
Since August 1, 2002, Citizens Property Insurance Corporation’s (‘Citizens”) Plan of Operation has been approved by order of the Florida Office of Insurance Regulation. In accordance with Senate Bill 1980, passed during the 2006 Legislative Session, the Citizens Plan of Operation shall be approved by order of the Financial Services Commission.
The Citizens Plan of Operation was approved with further amendments proposed by Attorney General Charlie Crist. The amendments included requirements regarding public hearings and restrictions against use of tax revenue for expenditures, such as hiring outside counsel, without prior approval.
Should you have any questions or concerns, please do not hesitate to contact this office.
Regards,
Fred E. Karlinsky