Florida Revises Workers’ Compensation Certificates, Excess Profits, Premium Audit Laws
May 7, 2012
The following article was published in The Insurance Journal on May 7, 2012:
Florida Revises Workers’ Comp Certficates, Excess Profits, Premium Audit Laws
By Michael Adams
Florida’s governor has signed workers’ compensation legislation streamlining the workers’ compensation certificate process, eliminating mandatory premium audits, and discontinuing refunds for insurers with excess profits.
Gov. Rick Scott signed into law HB 941, sponsored by Rep. Doug Holder, which made a number of noncontroversial changes including making the certificate of exemption process easier and clarifying the definition of a corporate officer. For the first time, business owners and officers will be able to file for an exemption electronically.
The new law clarifies that “corporate officers” include members of limited liability companies that own at least a 10 percent stake in the company. The LLC members would be considered employees, but may choose to be exempt from the workers’ compensation law. Starting next January 1, all exemptions will be valid for two years.
Workers’ compensation insurers will no longer be subject to the state’s excess profit law, which had required them to refund money to policyholders if their underwriting gains were greater than their anticipated profit by more than five percent over the three preceding calendar years. State regulators reported that workers’ comp insurers paid out only about $200 million in excess profits since 2003, which is less than one percent of the state’s total premium base.
Premium audits will now only apply to workers’ compensation insurers with more than $200 million in surplus. Audits may be required by policyholders and state regulators, but may no longer be required as part of a policy.
Workers’ compensation companies and other companies writing commercial lines of business can now also transfer policies to a different Florida-licensed subsidiary. The transfers would be considered a policy renewal. Currently, to conduct such a transfer, the policy must be nonrenewed and then rewritten by the other company. The provision does not apply to residential property insurers.
The new law changes take effect July 1.
Find this article here: http://www.insurancejournal.com/news/southeast/2012/05/07/246548.htm