Florida Cabinet Meeting Report: June 9

The Florida Cabinet met on Tuesday, June 9, 2009, and considered insurance-related matters from state agencies within its purview as part of its regular agenda. To view the complete meeting agenda, click here.

Below is a brief description of the actions that took place during the meeting.

 

Florida Office of Insurance Regulation

Florida Insurance Commissioner Kevin McCarty presented the following items, all of which were approved with no discussion:

Request for Approval of Final Adoption

• 69O-149.205: Standard Risk Rates
  
  • In regard to health insurance, the Florida Office of Insurance Regulation (“OIR”) is required by Florida law to conduct an annual survey of the individual market (as contrasted with the group market) and determine “standard risk rates,” which are the average health insurance rates charged in the individual market and used by health insurers in setting their conversion rates.  The maximum a health insurer can charge for a conversion policy is 200 percent of the standard risk rate.  The OIR has determined that indemnity benefit plan rates provided in the existing Rule are unreasonably high due to the inclusion of rates charged by one particular out-of-state company that is no longer writing insurance in Florida.  Because inclusion of this company’s data had skewed the annual individual market survey results, the rates in this Rule were recalculated. The OIR has determined that the amended standard risk rates for indemnity plans are more reasonable.

Request for Approval of Publication

• 69O-189.003: Workers’ Compensation:  Application and Audit Procedures
  
  • Pursuant to Florida law, the Financial Services Commission (“FSC”) is required to promulgate workers’ compensation application coverage Rules, as well as Rules for worker classification and payroll audits.  This proposed Rule is based on a 2008 proposal made by the National Council on Compensation Insurance (“NCCI”) addressing these matters.  The proposed Rule would allow for electronic signatures on applications for workers’ compensation coverage, as well as in a company’s annual audit, so long as the electronic signature process complies with Florida’s Uniform Electronic Transaction Act.  The current Rule incorporates NCCI publications by reference; the proposed Rule would provide explicit procedures for audits required by the current Rule.  The proposed Rule also would raise the threshold for an on-site audit for policies with an estimated annual premium from $5,000 to $10,000.  Any audit for policies with an estimated annual premium under $10,000 will be handled by mail, in an effort to save costs for both the employer and carrier.
• Chapter 69O-156 Part I: Requirements of Medicare Supplement Insurance
  • On September 24, 2008, the National Association of Insurance Commissioners (“NAIC”) adopted revisions to its Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act.  The revised NAIC Model Regulation includes major changes to Medicare Supplement plans and benefits, which were first approved by the NAIC in March 2007, and authorized by the Medicare Improvements for Patients and Providers Act of 2008.  In addition, the Model Regulation revisions contain changes required by the Genetic Information Nondiscrimination Act of 2008.  States are required to adopt the NAIC Model Regulation revisions by September 24, 2009, in order to continue to regulate the Medicare Supplement Plan, or Medigap, market. 

 

Florida State Board of Administration

Florida State Board of Administration (“SBA”) Executive Director Ash Williams presented the following Florida Hurricane Catastrophe Fund (“FHCF”)-related items, all of which were approved with no discussion:

Request to File A Notice of Change

• 19-8.028:  Reimbursement Premium Formula
  • House Bill 1495, which became law on May 27, 2009, requires a five percent cash build-up factor to be added to the FHCF Premium Formula, makes changes to the Temporary Increase in Coverage Limit (“TICL”) coverage options and changes the price for TICL coverage.  Approval was granted to file a Notice of Change that would effect the legislative changes.  Approval also was given to file the amended Rule and its incorporated forms for adoption.
• 19-8.029:  Insurer Reporting Requirements
  • This Rule was amended to update a form revision date, add language regarding voluntary commutation and remove a requirement that insurers notarize documents.  The removal of the notary requirement is now unnecessary, since notary authority was granted to the FHCF with the passage of HB 1495. 

Request to File A Notice of Withdrawal

• 19-8.030:  Insurer Responsibilities
  • This Rule was being amended to reflect provisions in HB 1495 that authorize the Florida State Board of Administration to require insurers to notarize documents.  Therefore, approval was granted to withdraw a previously proposed Rule amendment.

Request to File A Notice of Proposed Rulemaking 

• 19-8.010:  Reimbursement Contract
  
  • Authority was granted to file a Notice of Proposed Rulemaking to incorporate changes made by Emergency Rule 19ER09-1, Reimbursement Contract, which was approved on May 13, 2009.  The amended Rule will be filed for adoption if no member of the public requests a Rule Hearing.

The next Cabinet meeting is scheduled to be held on July 28, 2009.

 

Should you have any questions or comments, please contact Colodny Fass.

 

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