The bill also requires insurers to execute their contracts with the Cat Fund by March 1 and limits provisions that automatically expand the amount of coverage provided by the fund to match growth in exposure. SB 1460 was approved by the governor on April 15 and took effect on that date.
House Bill 7217 amends a provision relating to the Cat Fund emergency assessments. Under current law, medical malpractice insurance premiums are exempt from assessment, but the exemption expires on May 31, 2010. HB 7127 extends the exemption for an additional three years. SB 2044 also includes this three-year extension of the exemption. The governor has until June 1 to sign HB 7127, veto it, or allow it to become law without his signature. If it becomes a law, it will take effect immediately.
Commercial Insurance Ratemaking Senate Bill 2176 deregulates ratemaking for most forms of commercial insurance other than workers' compensation. The bill also includes provisions addressing several other areas, including warranty associations, workers' compensation, health insurance, and life insurance. An insurer will be able to implement rates for most forms of commercial insurance without the approval of the OIR, provided that the insurer notifies the regulator of any rate changes no later than 30 days after the effective date of the change. The regulator may subsequently review the rates to determine whether they are excessive, inadequate, or unfairly discriminatory. The affected lines of insurance include commercial motor vehicle insurance covering a fleet of 20 or more self-propelled vehicles, excess or umbrella coverage, surety and fidelity, boiler and machinery, errors and omissions, directors and officers, intellectual property liability, advertising and Internet liability, property risks rated under a highly protected risks rating plan, and other similar commercial lines as determined by the OIR. The governor has until June 1 to sign SB 2176, veto it, or allow it to become law without his signature. If it becomes a law, the commercial insurance rate deregulation provisions will take effect on Jan. 1, 2011.
Warranty Associations SB 2176 also substantially revises laws governing motor vehicle service agreement companies, home warranty associations, and service warranty associations. Among other things, the bill eliminates required rate and form filings for all three types of warranty associations, excludes non-consumer commercial motor vehicle service agreements from regulation, provides misdemeanor penalties for unlicensed activities, reduces the number of required financial reports, and makes examinations of warranty associations discretionary rather than mandatory. If SB 2176 becomes law, the provisions relating to warranty associations will take effect immediately.
Workers' Compensation House Bill 5603 addresses an issue that some workers' compensation carriers have identified as a major cost driver. According to the carriers, some pharmaceutical providers repackage or relabel drugs in an effort to avoid fee schedules. HB 5603 provides that statutory limitations on reimbursement for prescription drugs apply regardless of the location or provider from which the claimant receives the medication. The governor has until May 28 to sign HB 5603, veto it, or allow it to become law without his signature. If it becomes a law, it will take effect on July 1, 2010.
SB 2176 includes several provisions relating to workers' compensation coverage of law enforcement officers. It provides that a deputy sheriff's off-duty work will not impact the employing sheriff's workers' compensation premiums. The bill also makes correctional probation officers eligible for the same in-the-line-of-duty presumption relating to tuberculosis, heart disease, and hypertension as currently apply to law enforcement officers, correctional officers, and firefighters, and revises the presumption so that the presumption will not apply when the employee deviated from a prescribed course of treatment or delayed making a claim for benefits. If SB 2176 becomes a law, these provisions will take effect Jan. 1, 2011.
Senate Bill 2046 revises provisions governing licensure of employee leasing companies to remove certain restrictions on change of ownership. SB 2046 also changes the sanctions for failure to pay late fees for license renewals. The failure to pay the late fee will now be grounds for disciplinary action, rather than automatically voiding the license. The governor has until June 1 to sign SB 2046, veto it, or allow it to become law without his signature. If it becomes a law, it will take effect July 1, 2010.
Guaranty Funds House Bill 159 revises various provisions relating to the Florida Insurance Guaranty Association (FIGA), the Florida Life and Health Insurance Guaranty Association (FLAHIGA), and the Florida Workers' Compensation Insurance Guaranty Association (FWCIGA). Several provisions of the bill are intended to make Florida's guaranty fund laws more closely conform to National Association of Insurance Commissioners (NAIC) model laws. The bill revises the process by which insurers may pass their FIGA assessment costs through to their policyholders. The bill also streamlines FIGA by consolidating two auto insurance accounts into a single account.
HB 159 increases several FLAHIGA coverage limits for deferred annuities while in the accumulation phase to $250,000, removes a prohibition that prevents agents and insurers from mentioning FLAHIGA protections to prospective policyholders, provides circumstances under which FLAHIGA may protect persons who are not Florida residents, and excludes Medicare Advantage policies and several forms of indexed products from FLAHIGA coverage. The bill also excludes coverage under employers' liability policies from FIGA and covers those claims under FWCIGA, up to the lesser of $300,000 or policy limits. HB 159 was approved by the governor on May 11 and will take effect July 1, 2010.
Health Insurance House Joint Resolution 37 proposes an amendment to the Florida Constitution that would add a section on health-care services to the Declaration of Rights if approved by 60 percent of the voters in the 2010 general election.
The constitutional amendment provides that a law or rule may not directly or indirectly compel any person, employer, or health care provider to participate in any health-care system. It also provides that a person has the right to pay directly for health-care services and that a health-care provider has the right to accept direct payment for health-care services. It further provides that, subject to "reasonable and necessary rules that do not substantially limit a person's options," the purchase or sale of private health insurance may not be prohibited. These provisions may be superseded by a law passed by two-thirds of the membership of each house of the legislature. If approved by the voters, the amendment will take effect January 4, 2011.
SB 2176 includes provisions allowing Medicare supplement insurers to use inpatient facility networks. Under the bill, a Medicare supplement insurer may grant a premium credit to insureds who use an inpatient facility within the insurer's network. The bill also authorizes insurers to enter into network agreements with facilities that agree to waive the Medicare Part A deductible. If SB 2176 becomes a law, these provisions will take effect Jan. 1, 2011.
Life Insurance House Bill 885 amends several life insurance provisions. The bill exempts certain transactions from the requirement that the current insurer be notified of the replacement of a policy. The notice requirement will not apply in transactions involving an application to the current insurer when a contractual change or conversion privilege is being exercised, when a current contract is being replaced by the same insurer with regulatory approval, or when a term conversion privilege is being exercised among corporate affiliates.
The bill also allows coverage of spouses and dependent children under a group life insurance policy up to the full amount for which the employee is insured, prohibits creation of a class of employees for purposes of a group life policy that consists solely of employees covered under the employer's group health plan, and prohibits the sale or transfer to third parties of annuities that were obtained as part of a settlement to satisfy Medicare secondary payer requirements. HB 885 was approved by the governor on May 11 and took effect on that date.
SB 2176 also included a series of life insurance provisions known as the "Safeguard Our Seniors Act." The bill revises disclosure requirements for the sale of fixed or variable annuities and provides a 21-day "free look" period for buyers who are 65 years of age or older, instead of the 14-day period applicable to other buyers. It also prohibits surrender or deferred sales charges in excess of 10 percent for annuity contracts sold to senior consumers, subject to some exceptions, and allows the Department of Financial Services to order an insurance agent to pay restitution to a senior consumer who is the victim of misappropriation by the agent. In a provision not limited to senior consumers, the bill increases the penalties for willful violations of the prohibitions against "twisting" and "churning" to $75,000 and removes the requirement that criminal penalties may be imposed only if the conduct was fraudulent. If SB 2176 becomes a law, these provisions will take effect Jan. 1, 2011.
Thomas J. Maida is managing partner of the Tallahassee office of Foley & Lardner LLP and Leonard E. Schulte is a public affairs director with the firm. Both are members of the firm's insurance industry team and government & public policy practice. They can be reached at 850-222-6100 or by e-mail at [email protected] or [email protected]. www.foley.com.