Governor Signs Bills Authorizing Unregulated Self-Insurance Fund, Insurance Claim Data Exchange

 

Legislation exempting a certain type of self-insurance fund from Florida regulatory oversight, along with a bill that uses insurer data to assist a federal program identifying noncustodial parents who owe past-due child support were among nine bills signed into law by Florida Governor Charlie Crist today, June 2, 2009.

Below are summaries of these two insurance-related bills:

 

HB 845 relating to Self-Insurance

House Bill 845 relating to Self-Insurance was originally sponsored by State Representative Brad Drake (R-DeFuniak Springs) and, with Governor Crist’s signature today, will become law on July 1, 2009.

The bill clarifies that independent educational institution self-insurance funds, a type of self-insurance authorized under current law, are exempt from the Florida Workers’ Compensation Insurance Guaranty Association (“FWCIGA”).  Because these funds have never participated in FWCIGA, nor will an electric cooperative self-insurance fund authorized by HB 845, future fund members will not be able to have any workers’ compensation claims against the fund paid by FWCIGA if the fund becomes insolvent.

Further, if the aforementioned electric cooperatives form the type of self-insurance fund authorized in HB 845, the Florida Office of Insurance Regulation (“OIR”) no longer will have regulatory responsibility for it.  Thus, any expenses incurred by the OIR relating to regulation of the existing electric cooperative self-insurance fund will be avoided.  

These electric cooperatives may have decreased costs if they choose to form the self-insurance fund authorized by the bill.  Any savings to the cooperatives then can be passed on to the cooperative’s consumer members. 

HB 845 bears no fiscal impact on Florida’s Workers’ Compensation Administration Trust Fund and the Special Disability Trust Funds, because the electric cooperative self-insurance fund authorized by the bill must pay assessments to these trust funds, just as the currently-operating electric cooperative self-insurance fund does.

 

HB 7039 relating to Open Government Sunset Review/Insurance Claim Data Exchange Information

Effective immediately with Governor Crist’s signature today, House Bill 7039 relating to Open Government Sunset Review/Insurance Claim Data Exchange Information secures another year of public records exemption for certain records obtained by the Florida Department of Revenue (“DOR”) under Florida’s Insurance Claim Data Exchange System (“ICDE”), which identifies noncustodial parents who owe past-due child support, and who also have a claim with an insurer.  This process allows insurers to voluntarily provide the DOR with the name, address, and if known, date of birth and social security number or other taxpayer identification number for each noncustodial parent identified as having a claim.  The data provided can be used only for purposes of child support enforcement.

HB 7039 extends the ICDE repeal date under the Open Government Sunset Review Act from October 2, 2009, to October 2, 2010, thereby reenacting the public records exemption for information obtained by the DOR pursuant to the ICDE.

However, the DOR currently does not match data files with insurance companies using the Insurance Claim Data Exchange statute.   Rather, according to the DOR, it had taken steps to implement the statute by contacting most of Florida’s top 25 insurers.  During this time, insurers were responding to claims resulting from damage caused during the 2004 hurricane season.  Therefore, the DOR decided to postpone working on the ICDE initiative at the request of those insurers. The DOR did not re-initiate contact with the insurers, nor did it attempt to resume implementation activities due to its resources being otherwise dedicated.

In February 2006, the Deficit Reduction Act of 2005 (“the Act”) was enacted by Congress.  The Act amended federal law to authorize the Federal Department of Health and Human Services (“HHS”) to compare information concerning individuals owing past-due child support with information maintained by insurers concerning insurance claims, settlements, awards, and payments. The Act further allowed HHS to furnish information resulting from the data matches to state agencies responsible for child support. 

Rather than re-engage insurers in the implementation of ICDE, Florida’s DOR chose to monitor the results of a federal workgroup charged with implementing the nationwide insurance data match program in other states before implementing the federal program in Florida.

Armed with the extension, the DOR reports it should be able to determine the success of the federal program by January, 2010.

The Open Government Sunset Review Act requires the Florida Legislature to review each public record and each public meeting exemption five years after enactment.  If the Legislature does not reenact the exemption, it automatically repeals on October 2 of the fifth year after enactment.

 

For additional information on Florida’s legislative process and terminology, click here.

 

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

 

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