House Insurance Committee Meeting March 13 Recap; March 14 Agenda and Packet

On March 13, 2008, the Florida House of Representatives Committee on Insurance (“Committee”) met and discussed four bills regarding insurance-related matters, including a proposal by Representative Dennis Ross (R- Lakeland) that would provide consumer choice in the windstorm insurance market.  To view the meeting packet, click here.

Below is a brief recap of the activities and discussions that took place during the meeting.

 

House Bill 535 relating to Health Insurance by Representative Larry Cretul (R- Ocala)

This bill revises the definition of “bone marrow transplant” to include, for life insurance purposes, nonablative therapy and transplants intended to prolong life.  HB 535 also requires health insurers and health maintenance organizations to provide identification cards to policyholders that include specific information about the insured and the plan. 

Several committee members expressed concerns with HB 535 because it involves mandates and may add additional expenses.  The bill passed despite the concerns with Representative Alan Hayes as the lone “no” vote.  Next, HB 535 goes to the House Jobs and Entrepreneurship Council.

 

House Bill 239 relating to Employee Leasing Companies by Representative Dave Murzin (R- Pensacola)

This bill passed unanimously with a strike-everything amendment.  HB 239, pursuant to the amendment, makes several changes to the original bill.  It removes changes to the workers’ compensation statutes, chapter 440, F.S., and makes changes to the employee leasing statutes, chapter 468, F.S.  More specifically, the bill:

• Requires all employee leasing companies to have a workers’ compensation policy
• Requires employee leasing companies that require the client company to provide workers’ compensation coverage for the employee to obtain evidence of coverage
• Requires leasing agreements to state whether the leasing company or client company is providing workers’ compensation coverage
• Requires the employee leasing company to provide the leased employee with notice of whether his or her company or the client company is providing workers’ compensation coverage
• Requires the leasing company to notify the leased employee by mail when the leasing agreement with the client company ends
• Specifies when workers’ compensation coverage ends when an employee leasing agreement is terminated
• Requires the leasing company to notify a leased employee when his or her workers’ compensation coverage is terminated if the employee leasing company terminates the employee
• Provides circumstances under which a leased employee is deemed to have notice that he or she is not a leased employee and not covered by the employee leasing companies workers’ compensation coverage
• Extends workers’ compensation employer immunity to the leasing company and the client company, regardless of which company provides workers’ compensation coverage

During discussions on HB 239, it was noted that the bill attempts to address to potential gaps in coverage, especially during sporadic employment relationships.  The bill next goes to the House Jobs and Entrepreneurship Council.

 

House Bill 983 relating to Windstorm Insurance Coverage by Representative Dennis Ross (R- Lakeland)

This bill creates the Florida Windstorm Insurance Coverage Program (“Program”) and provides windstorm coverage for non-commercial residential property.  Insurers offering this type of windstorm coverage are not required, but have the option to participate in the Program.  If the insurer participates in the Program, then the Program will cover the wind portion and the insurer will cover the non-windstorm risk.  The premium rates for the Program will be set by the State Board of Administration (“SBA”) and are not required to be actuarially sound.  HB 983 also lowers the maximum amount the Florida Hurricane Catastrophe Fund (“FHCF”) coverage and lowers the retention/deductible of the FHCF.  If the FHCF incurs a deficit, then the FHCF may levy industry emergency assessments.

Representative Ross referred to HB 983 as a “consumer honesty bill,” explaining that it is not intended to be a solution to Florida’s insurance problems but rather to provide awareness of the issues faced by the State. 

There were five amendments to HB 983 that passed during the Committee. 

The amendments:

• Specify that insurers not participating in the Windstorm Program are still assessable for deficits associated with the FHCF
• Remove the bill’s provision that would require the SBA to set agent compensation amounts for Windstorm Program policies
• Remove the bill’s provision requiring the private insurers contracting with the Windstorm Program to comply with the Program rules relating to agent compensation
• Require the Windstorm Program to pay acquisition costs of the private insurers participating in the Program at usual and customary amounts
• Require Citizens to auction off only its personal lines residential policies, rather than all of its policies.

Several members of the Committee expressed concerns that the SBA would be authorized to charge non-actuarially sound rates.  Also, members were concerned that the Florida Office of Insurance Regulation (“OIR”) would be unable to set the rates.  Representative Ross responded that this is needed to ensure accountability of public officials and provides an ability to respond to the global market. 

The Florida Association of Insurance Agents and the Florida Chamber of Commerce publicly supported HB 983, which passed unanimously.  Next, the bill goes to the House Jobs and Entrepreneurship Council.

 

House Bill 1161 relating to Group Self-Insurance Funds by Representative Don Brown (R- Defuniak Springs)

This bill amends the laws relating to the process by which group self-insurance funds pay dividends to members by allowing the trustees of the fund to distribute fund dividends to fund members without prior approval of the OIR, but with notice to the OIR.  HB 1161 also restricts the amount of dividends distributed to no more than the sum total of the dividends declared on the audited financial statement of the fund.  The bill prohibits the distribution of dividends to jeopardize the financial condition of the fund. 

HB 1161 passed unanimously with one amendment, which removed a section of the bill pertaining to independent educational self-insurance funds.  Next, HB 1161 goes to the House Jobs and Entrepreneurship Council.

The meeting concluded immediately following the presentations and actions on the above mentioned bills. 

 

Committee to Meet Again for Six-Hour Session on Friday, March 14

The Committee convenes again on Friday, March 14 for a scheduled six-hour Workshop on pre and post-event catastrophe financing, assessments and deficit funding by Citizens, the FHCF, and the Florida Insurance Guaranty Fund.  
  
To review the Committee packet for the March 14 meeting, click here.

 

Should you have any questions or comments, please feel free to contact this office.    

 

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