Florida Senate Rules Committee Advances Insurer Insolvency, First-Named Insured Bills

 

 

During its meeting today, April 26, 2011, the Florida Senate Committee on Rules (“Committee”) passed CS/SB 1252 relating to Insurance by Senator Chris Smith, as well as CS/CS/SB 1568 by Senator Bill Montford relating to Insurer Insolvency.

Nine amendments had been filed to CS/SB 1252 in advance of today’s meeting.   Senator Smith advised that this bill had started as a mechanism to allow insurers to provide notices of policy changes to the first-named insured, but has been modified over time to address a number of additional insurance-related issues. 

The following amendments were adopted to CS/SB 1252 without objection.  All were sponsored by Senator Smith, except where noted:

• Amendment 493226 would require use of the long form of the Florida Traffic Crash Report during the investigation of a motor vehicle crash that resulted in death, personal injury, or any indication of complaints of pain or discomfort by any of the parties or passengers involved in the crash, or a crash that involved one or more passengers other than the drivers of the vehicles, in any of the vehicles involved in the crash.
• Amendment 710518 provides for application of the Special Disability Trust Fund assessment on workers’ compensation premiums on a calendar year basis.
• Amendment 276584 clarified the intent of CS/SB 1252 to refer to the laws of State of Florida rather than “state law.”
• Amendment 948544 corrects a scriveners error contained in CS/SB 1252 relating to its requirement for premium audits in connection with workers’ compensation insurance policies.
• Amendment 213992 by Senator Garrett Richter was presented as a courtesy amendment on behalf of Senator Miguel Diaz de la Portilla, since he is not a member of the Rules Committee. This amendment would expand Florida’s laws with regard to captive insurance companies. Senator Diaz de la Portilla noted that 33 other states have similar captive legislation.
• Amendment 822592 would modify provisions of law allowing for automobile insurance premiums to be paid pursuant to a payroll deduction plan or automatic funds transfer payment from the policyholder. This amendment also would modify certain exceptions for licensure of service warranty associations.
• Amendment 442984 deletes a provision of CS/SB 1252 that was previously inserted relating to premiums payable under certain warranty contracts.
• Amendment 154520 provides that, in addition to criminal liability, individuals who commit automobile insurance fraud are subject to civil penalties.

During the debate, Senator Richter withdrew Amendment 249360, which would establish the Automobile Insurance Fraud Strike Force, whose sole purpose would be to support the prosecution, investigation and prevention of motor vehicle insurance fraud.  Senator Richter withdrew his amendment at the request of Senator Smith, so that it could be further refined.

To access the text of each amendment, click here.

Several members of the public had requested to testify on CS/SB 1252, but all waived their time in support of the bill.

With no debate on the amended bill, it proceeded to a roll call vote, whereupon it was passed as a committee substitute.

The Committee also considered CS/CS/SB 1568 by Senator Montford, who explained that it would effect the following:

• Clarify the requirement that third-party claims companies provide records in the event of an insolvency
• Provide that the State Risk Management Trust Fund cover state employees for any action taken in the performance of their powers and duties in connection with a receivership
• Adopt coverage limits and exclusions for claims rejected or denied by other state funds based on that state’s statutory exclusions and/or limitations
• Provide that board members of insolvent insurers are terminated from their positions
• Allow for insurers to request renegotiation of terms of surplus notes issued under Florida’s Insurance Capital Build-Up Incentive Program
• Conform Florida law to the National Association of Insurance Commissioners’ (“NAICs'”) model act with respect to use of accounting firms preparing audited financial statements
• Conform Florida law to NAIC requirements with regard to credit for reinsurance

There was no public testimony or debate on CS/CS/SB 1568.  The bill was passed unanimously by a roll call vote.

CS/SB 1714 relating to Citizens Property Insurance Corporation by Senator Alan Hays, also was on the Committee’s agenda, but was not heard, since it had not been received from the Budget Committee (which adjourned before considering it yesterday).

 

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