Financial Services Commission Meeting 3/22/2006

On March 16, 2006, there was a meeting of the Financial Services Commission (FSC), which consists of Governor Jeb Bush and Cabinet members Chief Financial Officer Tom Gallagher, Attorney General Charlie Crist and Agriculture and Consumer Services Commissioner Charles Bronson.

The FSC voted and approved seven rule-related items. The FSC approved the recommendation to publish a Notice of Public Hearing for Rule 69O-125.003 relating to Unfair Discrimination Because of Travel Plans. The rule prohibits unfair discrimination based upon an insured’s travel plans.

The FSC approved the recommendation to publish a notice of adopted amendments to Rule 69O-138.002 relating to Financial, Rate and Market Conduct Examination Reimbursement Expenses. The rule addresses reimbursement expenses for examinations, clarifies calculation of the number of days, clarifies the application of the NAIC Examiners Handbook for certain personnel and sets forth reimbursement amounts for other personnel.

The FSC approved the repeal of Rule 69O-154.303 relating to Initial Notice and approved the adoption of amendments to Rules 69O-154.304, .305, .306 relating to Notice of Occurrence of a Qualifying Event, Election and Premium Notice Form and Billing and Payment of Premium. These rule amendments provide for implementation of mini-COBRA continuation for small groups with fewer than 20 employees and update the Premium Notice Form. Rule 69O-154.303 is repealed as an outdated provision.

The FSC approved the adoption of amendments to Rule 69O-164.030 relating to Application of the Valuation of Life Insurance Policies. These amendments provide direction to insurers on how to apply Rule 69O-164.020 to various products.

The FSC approved the adoption of Rule 69O-167.013 relating to Residential Property Insurance Checklists and Disclosures. This new rule implements the provisions of Senate Bill 1486, which sets forth the requirement to prominently display the actual dollar value of the hurricane deductible on the declarations page of a policy at issuance and, in the case of renewal, on the renewal declarations page of a policy or on the premium renewal notice for any personal lines residential property insurance policy containing a separate hurricane deductible or an inflation guard rider. The rule also develops a comprehensive checklist of coverage that insurers are required to provide to policyholders, prior to issuance or accompanying delivery of a basic homeowners’, mobile homeowners’, dwelling or condominium unit owners’ policy. The coverage checklist form contains a list of the standard provisions and elements that are generally included in these types of policies in a format that allows the insurer to place a designation next to the provisions and elements that are included in a particular policy being issued, in order for the consumer to see what is included and not included in a policy.

The FSC approved the adoption of amendments to Rule 69O-203.204 relating to Filing, Approval of Discount Medical Plan Organization (DMPO) Plans, Rates and Related Forms, as well as the adoption of new Rule 69O-203.205 relating to Bundled Products. This rule clarifies the information that must be included in a filing when the DMPO plan includes other bundled services.

The FSC approved the repeal of Rule Chapter 69O-211 relating to Insurance Representatives. Parts 1 – 4 of the rule deal with applications for licenses issued by the Department of Financial Services. The Office of Insurance Regulation does not have any regulatory authority over these licensees or any rule authority; therefore, the rule was repealed.

Chief Financial Officer Tom Gallagher presented a Resolution supporting a National Catastrophe Insurance Plan to the FSC for approval. Florida Insurance Commissioner Kevin McCarty reported that he has been working with other state Commissioners on a National Catastrophe Plan, particularly during a summit in San Francisco last year. The Commissioner emphasized that 49 of 50 states have moderate to high risk of natural disaster, and the National Catastrophe Plan promotes a federal back-stop with emphasis on mitigation, personal responsibility and maximizing the private sector.

CFO Gallagher stated that, across the country, there have been 115 major declared natural disasters in 31 states over 2 years. CFO Gallagher praised the Florida Hurricane Catastrophe Fund (FHCF) for being the cornerstone of the Florida market, but reminded the FSC that the FHCF has recently reported financial trouble and the Fund’s lack of cash. He recommended that the FSC endorse the Resolution to support a National Catastrophe Insurance Plan, which would provide the FHCF with a national back-up.

The FSC approved the Resolution and reported that a similar resolution was currently before the House and Senate.

To view the Agenda, click here.