Final Administrative Hearing Scheduled for September 12, 2011 To Determine Whether Certain Terminated Out-of-State Group Policies Are Subject to Florida’s Conversion Law
Jun 8, 2011
A final administrative hearing has been rescheduled for September 12, 2011 to determine whether Guarantee Trust Group Life Insurance Company (“Guarantee”) is subject to Section 627.6675, F.S., known as Florida’s “conversion statute,” which requires that holders of certain medical expense-related insurance policies who have been insured for at least three months are entitled to be issued a “converted policy.” Subject to the approval of the Florida Office of Insurance Regulation (“OIR”), the law allows insurers to meet these requirements by contracting with another authorized insurer to issue such a policy on an individual basis.
In May 2010, shortly after Guarantee notified the OIR of its decision to stop offering and renewing its out-of-state major medical expense health insurance coverage, the Florida Department of Financial Services began fielding complaints from policyholders who had received Guarantee’s corresponding Notices of Termination.
Accordingly, the OIR advised Guarantee of its contractual and legal obligation to provide these policyholders with a converted policy.
Guarantee representatives disagreed, but were unable to resolve the issue with the OIR after mutual meetings in late September 2010, thus prompting the OIR to launch an investigation into Guarantee’s Florida business practices. As a result, the OIR determined that Guarantee violated provisions of the Florida Insurance Code.
In filing a formal petition for an administrative hearing on the matter, Guarantee claimed that it was not subject to the law, since it does not offer a group policy in Florida. The policies in question, the company explained, were offered to Florida residents through their membership in an out-of-state association, then delivered to the association outside of Florida. Each policy was individually underwritten and then evidenced by a certificate of coverage delivered to the individual association member in Florida.
As a result of Guarantee’s petition, the OIR issued a January 12, 2011 Notice and Order to Show Cause as to why the insurer’s Certificate of Authority should not be suspended or revoked.
Responding on March 15, 2011, Guarantee not only challenged the OIR’s allegations, but also said the I-File form that required Guarantee to choose to be an “out-of-state group” is an unadopted Rule.
Rescheduled from June 6, the resulting September 12 hearing will take place at the Florida Division of Administrative Hearings in Tallahassee.
To view the complete docket from Guarantee v. OIR, click here.
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