Division of Administrative Hearings Issues Partial Final Order re Florida Insurance Council, Inc. v. OIR and Financial Services Commission 9/06/06
Jan 14, 2007
The Division of Administrative Hearings issued a Partial Final Order on Tuesday, September 5, 2006, in the matter of Florida Insurance Council, Inc., et al. v. Office of Insurance Regulation and Financial Services Commission, Case No. 05-1012RP. Judge Lawrence P. Stevenson ruled in favor of the petitioners and ordered that the Informational Memorandum OIR-06-10M “constitutes an unpromulgated rule and that OIR shall immediately discontinue reliance on the Memorandum to implement the provisions of proposed Florida Administrative Code Rule 69O-125.005.” An electronic copy of the Partial Final Order is attached for your reference.
The Florida Insurance Council (FIC), American Insurance Association (AIA), Property Casualty Insurers Association of America (PCI) and National Association of Mutual Insurance Companies (NAMIC) challenged the validity of the proposed Rule in 2005. Under the proposed Rule, insurers that use credit scores as part of the underwriting process must be able to demonstrate to OIR that such use does not discriminate against certain protected classes. As part of their challenge to the Rule, the petitioners argued that the Rule effectively would prohibit the use of credit scores by insurers licensed in Florida.
OIR issued the Informational Memorandum on May 22, 2006, and announced its intention to begin enforcing the Rule as of September 1, 2006. The Partial Final Order applies only to the Informational Memorandum and does not reach the validity of the Rule itself. We will provide updates on future decisions regarding the Rule as they become available.
OIR is expected to appeal Judge Stevenson’s ruling on the Informational Memorandum. OIR contends that it is entitled to an automatic stay of the decision and that it may continue with its plan to enforce the proposed Rule. The petitioners, of course, will likely challenge any appeal and seek to enforce the judge’s ruling.
Should you have any questions, please do not hesitate to contact this office.
Regards,
Fred E. Karlinsky