Florida Statutes 1981, 1982 Supplement Volume€¦ · 626.874 1982 SUPPLEMENT TO FLORIDA STATUTES 1981 s. ... The records of the adjuster relating to a par ticular claim or loss shall

s. 626.874 1982 SUPPLEMENT TO FLORIDA STATUTES 1981 s. 626.878

(2) If any person not a licensed adjuster who has been permitted to adjust such losses, claims, or damages under the conditions and circumstances set forth in subsection (1), engages in any of the misconduct described in or contemplated by ss. 626.611 and 626.621, the department, without notice and hearing, shall be authorized to issue its order denying such person the privileges granted under this section; and thereafter it shall be unlawful for any such person to adjust any such losses, claims, or damages in this state.

History.-s. 337, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 81-282; s. 2, ch. 81-318; ss. 289, 293, 807, 810, ch. 82-243.

'Note.- Expires October 1, 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'626.875 Office and records.-(1) Every licensed independent adjuster and ev

ery licensed public adjuster shall have and maintain in this state a place of business accessible to the public and keep therein the usual and customary records pertaining to transactions under the license. This provision shall not be deemed to prohibit maintenance of such an office in the home of the licensee. The license of the adjuster shall show the address of his place of business, and the licensee shall promptly give written notice to the department of any change of such address.

(2) The records of the adjuster relating to a particular claim or loss shall be so retained in the adjuster's place of business for a period of not less than 1 year after completion of the adjustment. This provision shall not be deemed to prohibit return or delivery to the insurer or insured of documents furnished to or prepared by the adjuster and required by the insurer or insured to be returned or delivered thereto.



'626.876 Exclusive employment; public adjusters, independent adjusters.-

(1) No individual licensed as a public adjuster shall be so employed during the same period by more than one public adjuster or public adjuster firm or corporation.

(2) No individual licensed as an independent adjuster shall be so employed during the same period by more than one independent adjuster or independent adjuster firm or corporation.

History.-s. 339, ch. 59-205; s. 3, ch. 81-282; s. 2, ch. 81-318; ss. 291, 293, 807, 810, ch. 82-243.

'Note.-Expires October 1, 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'626.877 Adjustments to comply with insurance contract and law.-Every adjuster and claims investigator shall adjust or investigate every claim, damage, or loss made or occurring under an insurance contract, in accordance with the terms and conditions of the contract and of the applicable laws of this state.

History.-s. 340, ch. 59-205; s. 3, ch. 81-282; s. 2, ch. 81-318; ss. 293, 807, 810, ch. 82-243.

'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'626.878 Rules; code of ethics.-The department may adopt such reasonable rules as may be nee-

essary for the proper administration of this part, including a code of ethics to foster the education of adjusters concerning the ethical, legal, and business principles which should govern their conduct.



PART VI

UNAUTHORIZED INSURERS AND SURPLUS LINES

626.901

626.902

626.903

626.904

626.905

626.906

626.907 626.908

626.909

626.910

626.911 626.912 626.913 626.914 626.915 626.916 626.917

626.918 626.919

626.920 626.921

626.922

626.923 626.924 626.925 626.926

626.927 626.9271

626.928 626.929

626.9295 626.930 626.931

626.932 626.933

Representing or aiding unauthorized insurer prohibited.

Penalty for representing unauthorized insurer.

Suits by unauthorized insurers prohibited.

Unauthorized Insurers Process Law; short title; interpretation.

Purpose of Unauthorized Insurers Process Law.

Acts constituting Insurance Commissioner and Treasurer as process agent.

Service of process; judgment by default. Defense of action by unauthorized insur

er; damages and attorney fee. Jurisdiction of department; service of

process on Secretary of State. Penalty for violation by unauthorized in-

surers. Attorney's fee. Exemptions from ss. 626.904-626.911. Surplus Lines Law; short title; purposes. Definitions. Surplus lines insurance authorized. Eligibility for export. Eligibility for export; wet marine and

transportation, aviation risks. Eligible surplus lines insurers. Withdrawal of eligibility; surplus lines in

surer. Export procedure. Surplus lines examining office; filings

confidential. Evidence of the insurance; changes; pen-

alty. Filing copy of policy or certificate. Information required on contract. Surplus lines insurance valid. Liability of insurer as to losses and un

earned premiums. Licensing of surplus lines agent. Temporary license; death, disability, ab

sence of surplus lines agent. Surplus lines agent's bond. Origination, acceptance, placement of

surplus lines business. Corporations, liability of agent. Records of surplus lines agent. Quarterly report; summary of exported

business. Surplus lines tax. Collection of tax.

801


626.934

626.935

626.936

626.937 626.938

626.939

Ac~ounting for funds; contingent commissions.

Suspension, revocation, or refusal of surplus lines agent's license.

Special procedure; failure to file report or pay tax.

Actions against insurer; service of process. Report and tax of independently pro

cured coverages. Records produced on order.

'626.901 Representing or aiding unauthorized insurer prohibited.-

(!) No person shall, from offices or by personnel or facilities located in this state or in any other state, directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not then authorized to transact such insurance in this state, or in any other state, in the solicitation, negotiation, procurement, or effectuation of insurance or annuity contracts, or renewals thereof; the dissemination of information as to coverage or rates; the forwarding of applications; the delivery of policies or contracts; the inspection of risks; the fixing of rates; the investigation or adjustment of claims or losses; or the collection or forwarding of premiums or in any other manner represent or assist such an insurer in the transaction of insurance with respect to subjects of insurance resident, located, or to be performed in this state. If the property or risk is located in any other state, then, subject to the provisions of subsection (2), insurance may only be written with or placed in an insurer authorized to do such business in such state or in an insurer with which a licensed insurance broker of such state may lawfully place such insurance.

(2) This section does not apply to: (a) Matters authorized to be done by the depart

ment under the Unauthorized Insurers Process Law, ss. 626.904-626.912.

(b) Surplus lines insurance when written pursuant to the Surplus Lines Law, ss. 626.913-626.937.

(c) Transactions as to which a certificate of authority is not required of an insurer, as stated in s. 624.402.

(3) No insurance contract entered into in violation of this section shall be deemed to have been rendered invalid thereby.

(4) If an unauthorized insurer fails to pay in full or in part any claim or loss within the provisions of any insurance contract which is entered into in violation of this section, any person who knew or reasonably should have known that such contract was entered into in violation of this section and who solicited, negotiated, took application for, or effectuated such insurance contract is liable to the insured for the full amount of the claim or loss not paid.

History.- s. 342, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 71-18; s. 2, ch. 81-318; ss. 294, 318, 807, ch. 82-243.


'626.902 Penalty for representing unauthorized insurer.-

(1) Any person who in this state represents or aids an unauthorized insurer in violation of s. 626.901 shall upon conviction thereof be guilty of a misde-

meanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.

(2) In addition to the penalties provided for in subsection (1), such violator shall be liable, personally, jointly and severally with any other person or persons liable therefor, for payment of taxes payable on account of such insurance under s. 626.938.

History.-s. 343, ch. 59-205; s. 643, ch. 71-136; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243.


'626.903 Suits by unauthorized insurers prohibited.-As to transactions not permitted under s. 624.402, no unauthorized insurer shall institute, file, or maintain, or cause to be instituted, filed, or maintained, any suit, action, or proceeding in this state to enforce any right, claim, or demand arising out of any insurance transaction in this state.

History.-s. 344, ch. 59-205; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243. 'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched

uled for review pursuant to s. 11.61 in advance of that date.

'626.904 Unauthorized Insurers Process Law; short title; interpretation.-

(!) Sections 626.904-626.912 may be cited as the "Unauthorized Insurers Process Law."

(2) Such law shall be so interpreted as to effectuate its general purpose to make uniform the law of those states which enact it.

History.-s. 345, ch. 59-205; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243. 'Note.- Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


'626.905 Purpose of Unauthorized Insurers Process Law.-The purpose of the Unauthorized Insurers Process Law is to subject certain insurers to the jurisdiction of courts of this state in suits by or on behalf of insureds or beneficiaries under insurance contracts. The Legislature declares that it is a subject of concern that many residents of this state hold policies of insurance issued or delivered in the state by insurers while not authorized to do business in this state, thus presenting to such residents the often insuperable obstacle of resorting to distant forums for the purpose of asserting legal rights under such policies. In furtherance of such state interest, the Legislature herein provides a method of substituted service of process upon such insurers and declares that in so doing it exercises its power to protect its residents and to define, for the purpose of this chapter, what constitutes doing business in this state, and also exercises powers and privileges available to the state by virtue of Pub. L. No. 15, 79th Congress of the United States, chapter 20, 1st session, s. 340, as amended, which declares that the business of insurance and every person engaged therein shall be subject to the laws of the several states.



'626.906 Acts constituting Insurance Commissioner and Treasurer as process agent. -Any of the following acts in this state, effected by mail or otherwise, by an unauthorized foreign or alien insurer is equivalent to and shall constitute an appointment by such insurer of the Insurance Commissioner and Treasurer, and his successor or successors

802


in office, to be its true and lawful attorney, upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary, arising out of any such contract of insurance; and any such act shall be signification of the insurer's agreement that such service of process is of the same legal force and validity as personal service of process in this state upon such insurer:

(1) The issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business therein;

(2) The solicitation of applications for such contracts;

(3) The collection of premiums, membership fees, assessments, or other considerations for such contracts; or

( 4) Any other transaction of insurance. History.-s. 347, ch. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 318,

807, ch. 82-243. . 'Note.- Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


'626.907 Service of process; judgment by default.-

(1) Service of process upon an insurer pursuant to s. 626.906 shall be made by delivering to and leaving with the Insurance Commissioner and Treasurer or some person in apparent charge of his office two copies thereof. The Insurance Commissioner and Treasurer shall forthwith mail by registered mail one of the copies of such process to the defendant at his last known principal place of business and shall keep a record of all process so served upon him. The service of process is sufficient, provided notice of such service and a copy of the process are sent within 10 days thereafter by registered mail by plaintiff or plaintiff's attorney to the defendant at his last known principal place of business, and the defendant's receipt, or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff or plaintiff's attorney showing a compliance herewith are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear, or within such further time as the court may allow.

(2) Service of process in any such action, suit, or proceeding shall, in addition to the manner provided in subsection (1), be valid if served upon any person within this state who, in this state on behalf of such insurer, is

(a) Soliciting insurance; (b) Making, issuing, or delivering any contract of

insurance; or (c) Collecting or receiving any premium, mem

bership fee, assessment, or other consideration for insurance;

and a copy of such process is sent within 10 days thereafter by registered mail by the plaintiff or plaintiff's attorney to the defendant at the last known principal place of business of the defendant, and the defendant's receipt, or the receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is ad-

dressed, and the affidavit of the plaintiff or plaintiff's attorney showing a compliance herewith are filed with the clerk of the court in which such action is pending on or before the date the defendant is required to appear, or within such further time as the court may allow.

(3) No plaintiff shall be entitled to a judgment by default or a decree pro confesso under this section until the expiration of 30 days from date of the filing of the affidavit of compliance.

(4) Nothing in this section shall limit or abridge the right to serve any process, notice, or demand upon any insurer in any other manner now or hereafter permitted by law.

History.-s. 348, ch. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 81 -318; ss. 318, 807. ch. 82-243.


'626.908 Defense of action by unauthorized insurer; damages and attorney fee.-

(1) Before an unauthorized insurer files or causes to be filed any pleading in any action or proceeding instituted against it under ss. 626.906 and 626.907, such insurer shall:

(a) Procure a certificate of authority to transact insurance in this state, or

(b) Deposit with the clerk of the court in which such action or proceeding is pending cash or securities or file with such clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be rendered in such action. The court may in its discretion make an order dispensing with such deposit or bond where the insurer makes a showing satisfactory to the court that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in such action or proceeding, and that the insurer will pay any final judgment entered therein without requiring suit to be brought on such judgment in the state where such funds or securities are located, and that if, nevertheless, such suit is brought on such final judgment the insurer shall waive all defenses thereto.

(c) Any proof, evidence, or testimony in support of such motion shall be taken in the jurisdiction of the court in which the action or proceeding is pending.

(d) If the unauthorized insurer seeks to take discovery or de bene esse depositions of witnesses beyond the jurisdiction of the court in which the action is pending, upon seasonable application by the plaintiff, the court by appropriate order shall require the unauthorized insurer, before such depositions are taken, to make similar deposit as described in paragraph (b), in sufficient amount to pay the reasonable expenses of the plaintiff and his attorney in attending the taking of such depositions, including reasonable attorney's fees to be fixed by the court.

(2) The court in any action or proceeding in which service is made in the manner provided in s. 626.907 may, in its discretion, order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (1) and to defend such action.

803


(3) Nothing in subsection (1) is to be construed to prevent an unauthorized insurer from filing a motion to quash or to set aside the service of any process made in the manner provided in s. 626.907 hereof on the ground either:

(a) That such unauthorized insurer has not done any of the acts enumerated in s. 626.906; or

(b) That the person on whom service was made pursuant to s. 626.907(2) was not doing any of the acts therein enumerated.

His tory.-s. 349, ch. 59-205; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243. 'Note.-Repealed effective October I, 1990, by s. 807, ch. 82-243, and sched

uled for review pursuant to s. p.61 in advance of that date.

'626.909 Jurisdiction of department; service of process on Secretary of State.-

(1) The Legislature hereby declares that it is a subject of concern that the purpose of the Unauthorized Insurers Process Law as expressed in s. 626.905 may be denied by the possibility that the right of service of process provided for in that law may be restricted only to those actions, suits, or proceedings brought by insureds or beneficiaries. It therefore declares that it is the intent of s. 626.905 that it is the obligation and duty of the state to protect its residents and also proceed under this law through the department in the courts of this state. It further declares that it is also the intent of the Legislature to subject unauthorized insurers to the jurisdiction of the department in proceedings, examinations, or hearings before it as provided for in this code.

(2) In addition to the procedure for service of process on unauthorized insurers contained in ss. 626.906 and 626.907, the department shall have the right to bring any action, suit, or proceeding in the name of the state or conduct any proceeding, examination, or hearing provided for in this code against any unauthorized insurer for violation of any lawful order of the department or any provision of this code, specifically including but not limited to the regulation of trade practices provided for in part VII of this chapter, if the insurer transacts insurance in this state as defined in ss. 624.10 and 626.906 and does not transact such business under a subsisting certificate of authority as required by s. 624.401. In the event the transaction of business is done by mail, the venue of the act is at the point where the matter transmitted by mail is delivered and takes effect.

(3) Transaction of business in this state, as so defined, by any unauthorized insurer shall be deemed consent by the insurer to the jurisdiction of the department in proceedings, examinations, and hearings before it as provided for in this code and shall constitute an irrevocable appointment by such insurer of the Secretary of State and his successor·or successors in office as its true and lawful attorney upon whom may be served all lawful process in any action, suit, or proceeding in any court by the department or by the state and upon whom may be served all notices and orders of the department arising out of any such transaction of business; and such transaction of business shall constitute the agreement of such insurer that any such process against it or any such notice or order which is so served shall be of the same legal force and validity as if served personally within this state on such insurer. Service of process shall be in accordance with and in the same manner as now pro-

vided for service of process upon nonresidents under the provision of s. 48.161, and service of process shall also be valid if made as provided in s. 626.907(2).

( 4) No plaintiff shall be entitled to a judgment by default or a decree pro confesso under this section until the expiration of 30 days from date of the filing of the affidavit of compliance.

(5) Nothing in this section shall limit or abridge the right to serve any process, notice, orders, or demand upon the insurer in any other manner now or hereafter permitted by law.

(6) Nothing in this section shall apply as to surplus lines insurance when written pursuant to the Surplus Lines Law, ss . 626.913-626.937, or as to transactions as to which a certificate of authority is not required of the insurer, as stated in s. 624.402.

History.-s. I, ch. 67- 118; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 295, 318, 807, ch. 82-243.

'Note.-Expires October I , 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'626.910 Penalty for violation by unauthorized insurers.-Any unauthorized insurer transacting insurance in this state and subject to service of process as referred to in s. 626.909 shall forfeit and pay to the state a civil penalty of not more than $1,000 for each nonwillful violation, or not more than $10,000 for each willful violation, of any lawful order of the department or any provision of this code.

History.-s. 2, ch. 67-118; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 296, 318, 807, ch. 82-243.

'Note.-Expires October I, 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'626.911 Attorney's fee.-In any action against an unauthorized foreign or alien insurer upon a contract of insurance issued or delivered in this state to a resident thereof or to a corporation authorized to do business therein, if the insurer has failed for 30 days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, the trial judge shall allow to the plaintiff a reasonable attorney's fee or compensation and include such fee or compensation in any judgment that may be rendered in such action.

History.-s. 350, ch. 59-205; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243. 'Note.- Repealed effective October I , 1990, by s. 807, ch. 82-243, and sched


'626.912 Exemptions from ss. 626.904-626.911.-The provisions of ss. 626.904-626.911 do not apply to any action, suit, or proceeding against any unauthorized foreign or alien insurer arising out of any contract of insurance:

(1) Covering reinsurance, wet marine and transportation, commercial aircraft, or railway insurance risks;

(2) Against legal liability arising out of the ownership, operation, or maintenance of any property having a permanent situs outside this state;

(3) Against loss of or damage to any property having a permanent situs outside this state; or

(4) Issued under and in accordance with the Surplus Lines Law, when such insurer enters a general appearance or when such contract of insurance contains a provision designating the Insurance Commissioner and Treasurer and his successor or successors in office or designating a Florida resident agent to be the true and lawful attorney of such unauthorized in-

804


surer upon whom may bE;J ·served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such contract of insurance; and service of process effected on such Insurance Commissioner and Treasurer, his successor or successors in office, or such resident agent shall be deemed to confer complete jurisdiction over such unauthorized insurer in such action.

History.-s. 351 , ch. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243.

' Note.- Repealed effect ive October I , 1990, by s. 807, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of tha t date.

'626.913 Surplus Lines Law; short title; purposes.-

(1) Sections 626.913-626.937 constitute and may be referred to as the "Surplus Lines Law."

(2) It is declared that the purposes of the Surplus Lines Law are to provide orderly access for the insuring public of this state to insurers not authorized to transact insurance in this state, through only qualified, licensed, and supervised surplus lines agents resident in this state, for insurance coverages and to the extent thereof not procurable from authorized insurers; to protect such authorized insurers, who under the laws of this state must meet certain standards as to policy forms and rates, from unwarranted competition by unauthorized insurers who, in the absence of this law, would not be subject to similar requirements; and for other purposes as set forth in this Surplus Lines Law.

(3) This section, and this Surplus Lines Law, do not apply as to insurance coverages which are subject to s. 626.938.

History.-s. 352, ch. 59-205; s. 2, ch. 81-318; ss. 297, 318, 807, ch. 82-243; s. 42, ch. 82-386.

'Note.- Expires October I , 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'626.914 Definitions.-As used in this Surplus Lines Law, the term:

(1) "Surplus lines agent" means an individual licensed as provided in this part to handle the placement of insurance coverages with unauthorized insurers and to place such coverages with authorized insurers as to which the licensee is not licensed as an agent if so placed through a countersigning Florida licensed resident agent of such insurer.

(2) "Surplus lines insurer" means an unauthorized insurer in which an insurance coverage is placed or may be placed under this Surplus Lines Law.

(3) "To export" means to place in an unauthorized insurer under this Surplus Lines Law insurance covering a subject of insurance resident, located, or to be performed in this state.

(4) "Diligent effort" means contacting at least three companies.

History.- s. 35:!, ch. 59-205; s. 2, ch. 81-318; ss. 298, 318, 807, ch. 82-243. 'Note.- Expires October I , 1990, pursuant to s. 807, ch. 82-243, and is sched


'626.915 Surplus lines insurance authorized. - If certain insurance coverages of subjects resident, located, or to be performed in this state cannot be procured from authorized insurers, such coverages, hereinafter designated "surplus lines," may be procured from unauthorized insurers, subject to the following conditions:

(1) The insurance must be eligible for export under s. 626.916 or s. 626.917;

(2) The insurer must be an eligible surplus lines insurer under s. 626.917 or s. 626.918;

(3) The insurance must be so placed through a licensed Florida surplus lines agent resident in this state; and

( 4) The other applicable provisions of this Surplus Lines Law must be complied with.

History.-s. 354, ch. 59-205; s. 2, ch. 81-318; ss. 299, 318, 807, ch. 82-243. 'Note.-Expires October I, 1990, pursuant to s. 807, ch. 82-243, and IS sched


'626.916 Eligibility for export.-(1) No insurance coverage shall be eligible for ex

port unless it meets all of the following conditions: (a) The full amount of insurance required must

not be procurable, after a diligent effort has been made by the surplus lines agent to do so, from amo~g the insurers authorized to transact and actually writing that kind and class of insurance in this state, and the amount of insurance exported shall be only the excess over the amount so procurable from authorized insurers. However, if it is not possible to obtain the full amount of insurance required by layering the risk, it is permissible to export th_e full amount. .

(b) The premium rate at wh1ch the coverage IS exported shall not be lower than that rat~ ai?plicable, if any, in actual and current use by a maJority of. t~e authorized insurers for the same coverage on a S1m1-lar risk.

(c) The policy or contract form under which the insurance is exported shall not be more favorable to the insured as to the coverage or rate than under similar contracts on file and in actual current use in this state by the majority of authorized insurers actually writing similar coverages on similar risks; except that a coverage may be exported under a unique fo!m of policy designed for u~e with respect to a pa~tlc'!lar subject of insurance If a copy of su~h form Is fil~d with the department by the surplus hnes agent desiring to use the same and is subject to the disapproval of the department within 10 days of filing su~h fori? exclusive of Saturdays, Sundays, and legal holidays If it finds that the use of such special form is not reasonably necessary for the principal purposes of the coverage or that its use would be contrary to the purposes of this Surplus Lines Law with respect to the reasonable protection of authorized insurers from unwarranted competition by unauthorized insurers.

(d) Except as to extended coverage in connec~ion with fire insurance policies and except as to wmdstorm insurance, the policy or contract under which the insurance is exported shall not provide for deductible amounts, in determining the existence or extent of the insurer's liability, other than those available under similar policies or contracts in actual and current use by one or more authorized insurers. This paragraph does not apply with respect to workers' compensation self-insurance qualified as such under chapter 440.

(2) Except that the department may by rules and regulations declare eligible for export generally, and notwithstanding the provisions of paragraphs (a), (b), (c), and (d), any class or classes of insurance covera~e or risk for which it finds, after a hearing, that there IS no reasonable or adequate market among authorized

805


insurers. Any such rules and regulations shall continue in effect during the existence of the conditions upon which predicated, but subject to termination by the department.

(3) Subsection (1) does not apply to wet marine and transportation or aviation risks which are subject to s. 626.917.

(4) A reasonable per-policy fee, not to exceed $25, may be charged by the filing surplus lines agent for each policy certified for export.

History.-s. 355, ch. 59-205; s. 1, ch. 63-86; s. 1, ch. 67-380; ss. 13, 35, ch. 69-106; s. 91, ch. 79-40; s. 2, ch. 81-318; ss. 300, 318, 807, ch. 82-243.


'626.917 Eligibility for export; wet marine and transportation, aviation risks.-

(1) Insurance coverage of wet marine and transportation risks, as defined in this code in s. 624.607(2), or aviation risks, including airport and products liability incidental thereto and hangarkeeper's liability, may be exported under the following conditions:

(a) The insurance must be placed only by or through a licensed Florida surplus lines agent;

(b) The insurer must be one made eligible by the department specifically for such coverages, based upon information furnished by the insurer and indicating that the insurer is well able to meet its financial obligations; and

(c) The surplus lines agent shall, within 60 days after procurement of the policy or contract, file with the department a copy of the policy, cover note, or contract.

(2) This section does not apply as to boats or aircraft used solely for personal pleasure, family use, or the transportation of executives, employees, and guests of the insured.

History.-s. 356, ch. 59-205; s. 2, ch. 63-86; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 301, 318, 807, ch. 82-243.


in United States dollars, at an exchange rate (in the case of statements originally made in the currencies of other countries) then current and shown in the statement, and with such additional information relative to the insurer as the department may request;

(d) The insurer must have surplus as to policyholders of not less than the amount required under this code for a like authorized insurer; or, if an alien insurer, must have and maintain in the United States a trust fund for the protection of all its policyholders in the United States under terms deemed by the de-. partment to be reasonably adequate, in an amount equal to the capital and surplus required of authorized insurers. Any such surplus as to policyholders or trust fund shall be represented by investments consisting of public obligations of the United States, or of any state, county, or municipality thereof, or by other investments of the same general character and quality. as are eligible investments for like funds of like ~omestic insurers under part II of chapter 625;

(e) The insurer must be of good reputation as to the providing of service to its policyholders and the payment of losses and claims;

(f) The insurer must be eligible, as for authority to transact insurance in this state, under s. 624.404(3); and

(g) This subsection does not apply as to unauthorized insurers made eligible under s. 626.917 as to wet marine and aviation risks as in such section provided.

(3) The department shall from time to time publish a list of all currently eligible surplus lines insurers and shall mail a copy thereof to each licensed surplus lines agent at his office last of record with the department.

( 4) This section shall not be deemed to cast upon the department any duty or responsibility to determine the actual financial condition or claims practices of any unauthorized insurer; and the status of eligibility, if granted by the department, shall indicate only that the insurer appears to be sound financially and to have satisfactory claims practices and

'626.918 Eligible surplus lines insurers.- that the department has no credible evidence to the (1) No surplus lines agent shall place any cover- contrary.

age with any unauthorized insurer which is not then (5) When it appears that any particular insurance an eligible surplus lines insurer as provided for under risk which is eligible for export, but on which insurthis section. ance coverage, in whole or in part, is not procurable

(2) No unauthorized insurer shall be or become from the eligible surplus lines insurers, after a dilian eligible surplus lines insurer unless made eligible gent effort, then the surplus lines agent may file a by the department in accordance with the following supplemental affidavit stating such facts and advisconditions: ing the department that such part of the risk as shall

(a) Eligibility of the insurer must be requested in be unprocurable, as aforesaid, is being placed with writing by a licensed surplus lines agent; named unauthorized insurers, in the amounts and

(b) The insurer must be currently an authorized percentages set forth in the affidavit. Such named insurer in the state or country of its domicile as to the unauthorized insurer shall, however, before accepting kind or kinds of insurance proposed to be so placed any risk in this state, deposit with the department and must have been such an insurer for not less than cash or securities acceptable to the department of the the 3 years next preceding; or must be the wholly market value of $10,000 which shall be held by the owned subsidiary of an already eligible surplus lines department for the benefit of Florida policyholders insurer or authorized insurer that has been so eligible only; and the surplus lines agent shall procure from for a period of not less than the 3 years next preced- such unauthorized insurer and file with the departing; ment a certified copy of its statement of condition as

(c) Before granting eligibility, the requesting sur- of the close of the last calendar year. If such stateplus lines agent or the insurer shall furnish the de- ment reveals, including both capital and surplus, net partment with a duly authenticated copy of its cur- assets of at least $1,500,000, then the surplus lines rent annual financial statement in the English Ian- agent may proceed to consummate such contract of guage and with all monetary values therein expressed insurance. Whenever any insurance risk, or any part

806


thereof, is placed with an unauthorized insurer, as provided herein, the policy, binder, or cover note shall bear conspicuously on its face in boldfaced type the following notation: "All or part of the insurers participating in this risk have not been authorized to transact business in Florida, nor have they been declared eligible as a surplus lines insurer by the Department of Insurance of this state. The placing of such insurance by a duly licensed surplus lines agent in this state shall not be construed as approval of such insurer by the Department of Insurance of Florida. Consequently, you do not have the protection of the insurance laws of Florida." All other provisions of this code shall apply to such placement the same as if such risks were placed with an eligible surplus lines insurer.

(6) When any particular insurance risk subject to subsection (5) is eligible for placement with an unauthorized insurer and not more than 12.5 percent of the risk is so subject, the Department of Insurance may, at its discretion, permit the agent to obtain from the insured an affidavit stating: "The insured is aware that certain insurers participating in this risk have not been approved to transact business in Florida nor have they been declared eligible as surplus lines insurers by the Department of Insurance of Florida. The placing of such insurance by a duly licensed surplus lines agent in Florida shall not be construed as approval of such insurer by the Department of Insurance of Florida. Consequently, the insured is aware that the insured has severely limited the assistance available under the insurance laws of Florida." Whenever any part of any insurance risk is placed with an unauthorized insurer as provided herein, the policy, binder, or cover note shall bear conspicuously on its face in boldfaced type the notation required in subsection (5). All other provisions of this code apply to such placement the same as if such risks were placed with an eligible surplus lines insurer.

His tory.-s. 357, ch. 59-205; s. 1, ch. 61-105; s. 3, ch. 63-86; s. 1, ch. 63-209; ss. 13, 35, ch. 69- 106; s. 2, ch. 71-18; s. 2, ch. 81-318; ss. 302,318,807, ch. 82-243.

'Note.- Expires October 1, 1990, pursuant to s. 807, ch. 82-243, and is sched uled for review pursuant to s. 11.61 in advance of that da te.

'626.919 Withdrawal of eligibility; surplus lines insurer.-

(1) If at any time the department has reason to believe that any unauthorized insurer then on the list of eligible surplus lines insurers is insolvent, or in unsound financial condition, or does not make reasonable prompt payment of just losses and claims in this state, or that it is no longer eligible under the conditions therefor provided in s. 626.918, it shall withdraw the eligibility of the insurer to insure surplus lines risks in this state.

(2) If the department finds that an insurer currently eligible as a surplus lines insurer has willfully violated the laws of this state, it may, in its discretion, withdraw the eligibility of the insurer to insure surplus lines risks in this state.

(3) The department shall promptly mail notice of all such withdrawals of eligibility to each surplus lines agent at his address last of record with the department.

History.- s. 358, ch. 59-205; ss. 13, 35, ch. 69-106; s. 21, ch. 78-95; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243.

'Note.- Repealed effective October 1, 1990, by s. 807, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'626.920 Export procedure.-(!) Within 60 days after the effectuation of any

surplus lines insurance, exclusive of Saturdays, Sundays, and legal holidays, the surplus lines agent shall file with the department in its office at Tallahassee a copy of the binder, cover note, certificate, policy, or other confirmation of insurance showing the identity and location of the subject of the proposed insurance; name and address of proposed insured; name of proposed insurer or insurers; perils to be covered; form or type of policy or contract under which to be insured; any special or additional coverages or conditions; amount of premium or rate; and such other pertinent information as the department may reasonably require.

(2) This section does not apply as to wet marine and transportation or aviation coverages which are subject to s. 626.917.



'626.921 Surplus lines examining office; filings confidential.-

(!) For the expeditious examination of surplus lines insurance coverages as provided for in s. 626.920, the department shall establish and maintain in its offices at Tallahassee such facilities, as an examining office, as may reasonably be necessary for the purpose.

(2) In the operation of the examining office, the department may employ or obtain necessary personnel and office furniture, fixtures, and facilities , or may make joint use of personnel, furniture, fixtures, and facilities otherwise employed or used in its office.

(3) Filings made by surplus lines agents with the examining office, other than the affidavits provided for in s. 626.931(3), shall not be open to public inspection and shall be held as confidential information. This provision does not apply as to the quarterly reports filed by such agents pursuant to s. 626.931 or to any information in connection with a unique form of policy issued pursuant to s. 626.916(1)(c).

History.-s. 360, ch. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 81 -318; ss. 304, 318, 807, ch. 82-243.


'626.922 Evidence of the insurance; changes; penalty.-

(1) Upon placing a surplus lines coverage, the surplus lines agent shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if such policy is not then available, a certificate, cover note, or other confirmation of insurance. Such document shall be executed or countersigned by the surplus lines agent and shall show the description and location of the subject of the insurance; coverage, conditions, and term of the insurance; the premium and rate charged and taxes collected from the insured; and the name and address of the insured and insurer. If the direct risk is assumed by more than one insurer, the document shall state the name and address and proportion of the entire direct risk assumed by each insurer.

(2) No surplus lines agent shall issue any such

807


document, or purport to insure or represent that insurance will be or has been granted by any unauthorized insurer, unless he has prior written authority from the insurer for the insurance, or has received information from the insurer in the regular course of business that such insurance has been granted, or an insurance policy providing the insurance actually has been issued by the insurer and delivered to the in-sured. _

(3) If after the issuance and delivery of any such document there is any . change as to the identity of the insurers, or the proportion of the direct risk assumed by the insurer as stated in the original certificate, cover note, or confirmation, or in any other material respect as to the insurance coverage evidenced by such a document, the surplus lines agent shall promptly issue and deliver to the insured a substitute certificate, cover note, or confirmation, or an endorsement for the original such document, accurately showing the current status of the coverage and the insurers responsible thereunder. No such change shall result in a coverage or insurance contract which would be in violation of this Surplus Lines Law if originally issued on such basis.

( 4) If ·a policy issued by the insurer is not available upon placement of the insurance and the surplus lines agent has issued and delivered a certificate, cover note, or confirmation, as hereinabove provided, upon request therefor by the insured· the surplus lines agent shall as soon as reasonably possible procure from the insurer its policy evidencing the insurance and deliver the policy to the insured in replacement of the certificate, cover note, or confirmation theretofore issued.

(5) Any surplus lines agent who knowingly or negligently issues a false certificate, cover note, or confirmation of insurance, or false endorsement therefor, or who fails promptly to notify the insured of any material change with respect to such insurance by delivery to the insured of a substitute certificate, cover note, or confirmation, or endorsement as provided in subsection (3), shall, upon conviction, be subject to the penalties provided by s. 624.15 or to any greater applicable penalty otherwise provided by law.

History.-s. 361, ch. 59-205; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243. 'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


1626,923 Filing copy of policy or certificate. -Upon issuing a surplus lines policy, the surplus lines agent shall, within 60 days from the date of such issuance, file with the department an exact copy of the policy so issued. If.a policy has not been issued, the surplus lines agent shall so file an exact copy of his certificate, cover note, or other confirmation of insurance as delivered to the insured. The surplus lines agent shall likewise promptly file with the department an exact copy of any substitute certificate, cover note, or other confirmation of insurance, and of every endorsement of an original policy, certificate, cover note, or other confirmation of insurance, delivered to an insured, together with such surplus lines agent's memorandum informing the department as to the substance of any change represented by such substitute certificate, cover note, or other confirmation,

'or of any such endorsement, as compared with the coverage as originally placed or issued.

History.-s. 362, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 71-18; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243.

'Note.-Repealed effective October I, 1990, by s. 807, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1626.924 Information required on contract. -Each surplus lines agent through whom a surplus lines coverage is procured shall write or print on the outside of the policy and on any certificate, cover note, or other confirmation of the insurance his name, address, and identification number and the name and address of the local agent through whom the business originated and shall have stamped or written upon the first page of the policy or the certificate, cover note, or confirmation of insurance the words: THIS INSURANCE IS ISSUED PURSUANT TO THE FLORIDA SURPLUS LINES LAW. PERSONS INSURED BY SURPLUS LINES CARRIERS DO NOT HAVE THE PROTECTION OF THE FLORIDA INSURANCE GUARANTY ACT TO THE EXTENT OF ANY RIGHT OF RECOVERY FOR THE OBLIGATION OF AN INSOLVENT UNLICENSED INSURER.

History.-s. 363, ch. 59-205; s. 5, ch. 63-86; s. 2, ch. 81-318; ss. 305, 318, 807, ch. 82-243.

'Note.-Expires October I, 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

1626.925 Surplus lines insurance valid.-Insurance contracts procured as surplus lines coverages from unauthorized insurers in accordance with this law shall be fully valid and enforceable as to all parties and shall be given acceptance and recognition in all matters and respects to the same effect and extent as like contracts issued by authorized insurers.

History.-s. 364, ch. 59-205; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243. 'Note.-Repealed effective October I , 1990, by s. 807, ch. 82-243, and sched


1626.926 Liability of insurer as to losses and unearned premiums.-

(1) If an unauthorized insurer or a person authorized by it has bound the risk as to a surplus lines coverage placed under this Surplus Lines Law, and if the premium therefor has been received by the surplus lines agent or originating agent who placed such insurance, then in all questions thereafter arising under the coverage as between the insurer and the insured, the insurer shall be deemed to have received the premium due to it for such coverage; and the insurer shall be liable to the insured as to losses covered by such insurance, and for unearned premiums which may become payable to the insured upon cancellation of such insurance, whether or not in fact the surplus lines agent is indebted to the insurer with respect to such insurance or for any other cause.

(2) Each unauthorized insurer assuming a surplus lines direct risk under this Surplus Lines Law shall be deemed thereby to have subjected itself to the terms of this section.

History.-s. 365, ch. 59-205; s. 2, ch. 81-318; ss. 306, 318, 807, ch. 82-243. 'Note.-Expires October 1, 1990, pursuant to s. 807, ch. 82-243, and is sched


1626.927 Licensing of surplus lines agent.(1) Any individual while licensed as a resident

general lines agent as to property, casualty, and surety insurances, and who is deemed by the department

808


to have had sufficient experience in the insurance business to be competent for the purpose, and who has a minimum of 1 year's experience working for a licensed surplus lines agent or who has successfully completed 60 class hours in surplus and excess lines in a course approved by the department, may be licensed as a surplus lines agent, upon taking and successfully passing a written examination as to surplus lines, as given by the department.

(2) Any individual while employed as a supervising or managing general agent, as defined in s. 626.091, or the full-time salaried employee of such general agent, and who otherwise possesses all of the other qualifications of a general lines agent under this code, and who has a minimum of 1 year's experience working for a licensed surplus lines agent or who has successfully completed 60 class hours in surplus and excess lines in a course approved by the department, may, upon taking and successfully passing a written examination as to surplus lines, as given by the department, be licensed as a surplus lines agent solely for the purpose of placing with surplus lines insurers property, marine, casualty, or surety coverages originated by resident local general lines agents; except that no examination as for a general lines agent's license shall be required of any supervising or managing general agent, or such employee thereof, who held a Florida surplus lines agent's license as of January 1, 1959.

(3) Application for the license shall be made to the department on forms as designated and furnished by it.

(4) License fees in the amount specified in s. 624.501 shall be paid to the department in advance. The licensing of a surplus lines agent shall continue in force until suspended, revoked, or otherwise terminated, but subject to annual continuation by the licensee on or before September 1, 1983, and thereafter biennially on or before March 1, 1985, and each oddnumbered year, by payment of the fee for renewal or continuation of the license.

(5) The applicant must file and thereafter maintain the bond as required under s. 626.928.

(6) Examinations as to surplus lines, as required under subsections (1) and (2), shall be subject to the provisions of part I as applicable to applicants for licenses in general. But no such examination shall be required as to persons who held a Florida surplus lines agent's license as of the effective date of this code, except when examinations subsequent to issuance of an initial license are provided for in general under part I.

(7) Any individual who has been licensed by the department as a surplus lines agent as provided in this section may be subsequently licensed without additional written examination if his application for license is filed with the department within 24 months next following the date of cancellation or expiration of the prior license. Except that the department may, in its discretion, require any individual to take and successfully pass an examination as for original issuance of license as a condition precedent to the renewal or continuation of the licensee's current license.

History.- s. :166, ch . .09-205; s .. 6, ch. 6:1-86; ss. 13, 35, ch. 69 -106; s. 2, ch. 8 1-3 18: ss. :107. :1 18,807, ch. 82-24:1.

1Note.- Expires October 1, 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pu rsuant to s. 11.61 in advance of that date.

'626.9271 Temporary license; death, disability, absence of surplus lines agent.-

(1) The department may, in its discretion, issue a temporary license as a surplus lines agent to a licensed surplus lines agent's employee, family member, business associate, or personal representative for the purpose of continuing or winding up the business affairs of the surplus lines agent or agency, all subject to the following conditions:

(a) The surplus lines agent being replaced must have become deceased or unable to perform his duties as agent because of military service or illness or other physical or mental disability.

(b) There must be no other person connected with the surplus lines agent's business who is licensed as a surplus lines agent.

(c) The proposed temporary licensee must be qualified as for a regular surplus lines agent's license under this code except as to residence, examination, education, or experience.

(d) Application for the temporary license must be made by the applicant upon statements and affidavit filed with the department on forms as prescribed and furnished by it.

(e) The temporary license shall be issued and be valid for a period of not over 6 months, and, except as to disabling or confining illness, shall not be renewed either to the then holder of the temporary license or to any other person for or on behalf of the surplus lines agent or agency.

(2) The applicant for a temporary license shall pay to the department, prior to the issuance thereof, the applicable license fee as specified therefor in s. 624.501.

(3) The holder of a temporary license may be granted a regular surplus lines agent's license upon passing an examination as required by s. 626.927.

( 4) Except in the case of renewal of a temporary license due to the continuing disability of the surplus lines agent as defined and provided for in paragraph (1)(e), the department shall not grant to the same individual more than one temporary license during any 12-month period. There shall be not more than one renewal of the temporary license due to such disabling or confining illness of such licensed surplus lines agent, and such renewal shall follow consecutively the expiration of the original temporary license; and in no event shall the total period covered by any original temporary license and the renewal thereof exceed 12 consecutive months.

(5) If an absent or disabled surplus lines agent being replaced under a temporary license returns or becomes able to resume the active conduct of the agency, or if the disposition of the affairs of the agency of a deceased or mentally incompetent agent is completed, or the temporary licensee has qualified for a regular license, before expiration otherwise of the temporary license, the temporary registration shall thereupon forthwith terminate; and the licensee shall promptly deliver the temporary license certificate to the department at Tallahassee for cancellation.

(6) Except as in this section expressly provided, the holder of a temporary license shall be subject to the same requirements and responsibilities as apply under this code to agents regularly licensed.

History.- ss. 308, 807, ch. 82-243.

809


'Note .- Expires October 1, 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of t hat date.

'626.928 Surplus lines agent's bond.-Prior to issuance of license, the applicant shall file with the department, and thereafter for as long as any such license remains in effect he shall keep in force and unimpaired, a bond in favor of the department in the penal sum of not less than $5,000, aggregate lifibility, with authorized corporate surety or sureties approved by the department. The department may, in its discretion, require a bond in a larger amount commensurate with the volume of surplus lines business transacted or to be transacted by a particular surplus lines agent. The bond shall be conditioned tha~ the surplus lines agent will faithfull,Y conduct ~~smess under the license in accordance with the provisiOns of the Surplus Lines Law and rules and regulations of the department for the effectuation thereof and that the licensee will promptly remit to the department the taxes as provided for by such law. No such bond shall be terminated unless not less than 30 days' prior written notice thereof is given the licensee and filed with the department.

His tory.-s. 367, cb. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 8I -3I 8; ss. 309, 318, 807, ch. 82-243. .

'N o te.- Expires October 1, 1990, pursuant to s. 807, ch. 82·243, and IS sched uled for review pursuant to s. 11.61 in advance of that date.

'626.929 Origination, acceptance, placement of surplus lines business.-

(1) A resident general lines agent while licensed as a surplus lines agent under this part may origiJ?ate surplus lines business and may accept surplus lmes business from any other originating resident general lines agent appointed and licensed as to the kind or kinds of insurance involved and may compensate such agent therefor.

(2) A supervising or managing general agent while licensed as a surplus lines agent under this part may accept and place solely such surplus l_ines business as is originated by a resident ~enerall_mes ag~nt appointed and licensed as to the kmd or kmds of msurance involved and may compensate such general lines agent therefor.

(3) No such general lines agent shall knowingly misrepresent to the surplus lines agen.t any m~~er_i~l fact involved in any such insurance or m the ehgibihty thereof for placement with a surplus lines insurer.

His tory.- s. 368, ch. 59-205; s. 2, ch. 81-318; ss. 3IO, 3I8, 807, ch. 82-243; s. 43, ch. 82-386. · d

' Note.- Expires October 1, 1990, pursuant to s. 807, ch. 82-243, and IS scbe -uled for review pursuant to s. 11.61 in advance of that date.

'626.9295 Corporations, liability of agent. - Any surplus lines insurance agent who_is an officer, director stockholder, or employee of an mcorporated surplus hnes insurance agency shall remain personally and fully liable and acc~untable for any ~~ongful acts, misconduct, or violatiOns of any provisiOns of this code committed by such licensee or by any p~rson under his direct supervision and control while acting on behalf of the corporation.

History.-ss. 312, 807, ch. 82-243. . 'Note .- Expires October I, 1990, pursuant to s. 807, ch. 82-243, and IS sched


fice in this state a full and true record for a period of 3 years of each surplus lines contract procured by him, including a copy of the daily report, if any, and showing such of the following items as may be applicable:

(a) Amount of the insurance and perils insured against;

(b) Brief general description of property in-sured and where located;

(c) Gross premium charged; (d) Return premium paid, if any; (e) Rate of premium charged upon the several

items of property; (f) Effective date of the contract, and the terms

thereof; (g) Name and post-office address of the in-

sured; (h) Name and home-office address of the insur-

er· '(i) Amount collected from the insured; and (j) Other information as may be required by

the department. (2) The record shall at all times be open to exam

ination by the department without notice and shall be so kept available and open to the department for 3 years next following expiration or cancellation of the contract.

(3) Each surplus lines agent shall maintain all surplus lines business records in h~s general lin~s agency office, if licensed as a generallmes agent,_ or I? his supervising or managing general agency office, If licensed as a supervising or managing general agent or the full-time salaried employee of such general agent.

His tory.- s. 369, ch. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 81-3I8; ss. 311 , 3I8, 807, ch. 82-243. .

'Note.- Expires October 1, 1990, pursuant to s. 807, cb. 82-243, and IS scheduled for review pursuant to s. Il.6I in advance of that date.

'626.931 Quarterly report; summary of exported business.-

(1) Each surplus lines agent shall on or before the end of the month next following each calendar quarter file with the department a verified report in duplicate of all surplus lines insurance transacted by him during such calendar quarter.

(2) The report shall be on forms as prescribed and furnished by the department and shall show:

(a) Aggregate gross premiums charged; (b) Aggregate of returned premiums and taxes

paid to insureds; (c) Aggregate of net premiums; and (d) Additional information as required by the de

partment. (3) The report shall include the affidavit of the

surplus lines agent, on forms as prescribed and furnished by the department, as to efforts made to place coverages with authorized insurers and the results thereof.

(4) The report shall include a separate report of the applicable items referred to in subsection (2) as to wet marine and aviation coverages written under s. 626.917.

(5) Not less frequently than quarterly, the department shall prepare and make available, upon re-

'626.930 Records of surplus lines agent.- quest to persons interested therein, a report su~~a-(1) Each surplus lines agent shall keep in his of- rizing by lines of insurance, as reasonably classified

810


by the department, all insurance business exported under this Surplus Lines Law during such quarter, as based upon the quarterly reports hereinabove required.


•Note.-Expires October 1, 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'626.932 Surplus lines tax.-(1) The premiums charged for surplus lines cov

erages are subject to a premium receipts tax of 3 percent of all gross premiums charged for such insurance. The surplus lines agent shall collect from the insured the amount of the tax at the time of the delivery of the cover note, certificate of insurance, policy, or other initial confirmation of insurance, in addition to the full amount of the gross premium charged by the insurer for the insurance. The surplus lines agent is prohibited from absorbing such tax or, as an inducement for insurance or for any other reason, rebating all or any part of such tax or of his commission.

(2) The surplus lines agent shall pay to the department the tax related to each calendar quarter's business as reported, and at the same time as provided for the filing of the quarterly report, under s. 626.931.

(3) If a surplus lines policy covers risks or exposures only partially in this state, the tax payable shall be computed on the portion of the premium which is properly allocable to the risks or exposures located in this state.

(4) This section does not apply as to insurance of, or with respect to, vessels, cargo, or aircraft written under s. 626.917, or as to insurance of risks of the state government or its agencies, or of any county or municipality or of any agency thereof.

(5) The department shall deposit all taxes collected under this section to the credit of the Insurance Commissioner's Regulatory Trust Fund.

History.-s. 371, ch. 59-205; s. 15, ch. 65-269; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243.


'626.933 Collection of tax.-If the tax payable by a surplus lines agent under this Surplus Lines Law is not so paid within the time prescribed, the same shall be recoverable in a suit brought by the department against the surplus lines agent and the surety or sureties on the bond filed by the surplus lines agent under s. 626.928.

History.-s. 372, ch. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 318, 807, ch. 82-243.


'626.934 Accounting for funds; contingent commissions.-The following sections also apply as to surplus lines agents:

(1) Section 626.561. (2) Section 626.581. (3) Section 626.591.



'626.935 Suspension, revocation, or refusal of surplus lines agent's license.-

(1) The department shall suspend, revoke, or refuse to renew the license of a surplus lines agent and all other licenses and permits held by the licensee under this code, upon any one or more of the following grounds:

(a) Removal of the licensee's office from the state.

(b) Removal of the accounts and records of his surplus lines business from this state during the period when such accounts and records are required to be maintained under s. 626.930.

(c) Closure of the licensee's office for a period of more than 30 consecutive days.

(d) Failure to make and file his quarterly reports when due as required by s. 626.931.

(e) Failure to pay the tax on surplus lines premiums, as provided for in this Surplus Lines Law.

(f) Failure to maintain the bond as required by s. 626.928.

(g) Suspension, revocation, or refusal to renew or continue the license as a general lines agent.

(h) Lack of qualifications as for an original surplus lines agent's license.

(i) Violation of this Surplus Lines Law. U) For any other applicable cause for which the

license of a general lines agent could be suspended, revoked, or refused under s. 626.611.

(2) The department may, in its. discretion, suspend, revoke, or refuse to renew the license of any surplus lines agent upon any applicable ground for which a general lines agent's license could be suspended, revoked, or refused under s. 626.621.

(3) In the suspension or revocation of, or the refusal to renew, the license of a surplus lines agent, the department shall follow the same procedures, as applicable, as provided for suspension, revocation, or refusal of licenses of general lines agents, but subject to s. 626.936 as to failure to file an annual statement or pay the tax.

(4) The following sections also apply, to the ex-tent so applicable, as to surplus lines agents:

(a) Section 626.641. (b) Section 626.651. (c) Section 626.661. (d) Section 626.681. (e) Section 626.691.

History.-s. 374, ch. 59-205; ss. 13, 35, ch. 69-106; s. 21, ch. 78-95; s. 2, ch. 81-318; ss. 314, 318, 807, ch. 82-243.


'626.936 Special procedure; failure to file report or pay tax.-

(1) If any licensed surplus lines agent fails to file the quarterly report required or pay the taxes as required of him under this Surplus Lines Law, the department shall issue an order directed to the licensee requiring the licensee to file such report and pay such tax.

(2) The only defense available to the licensee with respect thereto shall be that the department is requiring the payment of a tax greater than that due from the licensee, and such defense will be available only if the licensee has filed a return purporting to show the tax payable by the licensee and has tendered the amount of tax computed by the licensee to be due.

811


(3) If the department determines that the licensee has failed to pay the tax required, it shall enter an order revoking the license of such licensee, which order shall not become effective until 5 days following its entry and shall not become effective if the licensee pays the tax owed within the 5-day period.

(4) If any such licensee is required by an order to pay any tax that he contends is .not legally due, he may pay such tax under protest.

History.- s. 375, ch. 59-205; ss. 13, 35, ch. 69-106; s. 21, ch. 78-95; s. 2, ch. 81-318; ss. 315, 318, 807, ch. 82-243.

'Note.- Expires October I , 1990, pursuant to s. 807, ch. 82,243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'626.937 Actions against insurer; service of process.-

( I) An unauthorized insurer may be sued upon any cause of action arising in this state under any surplus lines insurance contract issued by it or any certificate, cover note, or other confirmation of such insurance issued by the surplus lines agent, pursuant to the same procedure as is provided in s. 624.423 as to authorized insurers.

(2) The unauthorized insurer accepting the risk or issuing the policy shall be deemed thereby to have authorized service of process against it in the manner and to the effect as provided in this section, and to have appointed the Insurance Commissioner and Treasurer as its agent for service of process issuing upon any cause of action arising in this state under any such policy, contract, or insurance.

(3) Each unauthorized insurer requesting eligibility pursuant to s. 626.918 shall file with the department its appointment of the Insurance Commissioner and Treasurer and his successors in office, on a form as furnished by the department, as its attorney to receive service of all legal process issued against it in any civil action or proceeding in this state, and agreeing that process so served shall be valid and binding upon the insurer. The appointment shall be irrevocable, shall bind the insurer and any successor in interest as to the assets or liabilities of the insurer, and shall remain in effect as long as there is outstanding in this state any obligation or liability of the insurer resulting from its insurance transactions therein.

(4) At the time of such appointment of the Insurance Commissioner and Treasurer as its process agent, the insurer shall file with the department designation of the name and address of the person to whom process against it served upon the Insurance Commissioner and Treasurer is to be forwarded. The insurer may change the designation at any time by a new filing.

(5) This section shall be cumulative to any other methods which may be provided by law for service of process upon the insurer.

History.-s. 376, ch. 59-205; s. 8, ch. 63-86; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 318, 807 , ch. 82-243.

'Note.- Repealed effective October I , 1990, by s. 807, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'626.938 Report and tax of independently procured coverages.-

(!) Every insured who in this state procures or causes to be procured or continues or renews insurance with an unauthorized foreign or alien insurer, or any self-insurer who in this state ·so procures or continues excess loss, catastrophe, or other insurance,

upon a subject of insurance resident, located, or to be performed within this state, other than insurance procured through a surplus lines agent pursuant to the Surplus Lines Law of this state or exempted from tax under s. 626.932(4), shall, within 30 days after the date such insurance was so procured, continued, or renewed, file a report of the same with the department in writing and upon forms designated by the department and furnished to such an insured upon request. The report shall show the name and address of the insured .or insureds, the name and address of the insurer, the subject of the insurance, a general description of the coverage, the amount of premium currently charged therefor, and such additional pertinent information as is reasonably requested by the department.

(2) Any insurance in an unauthorized insurer procured through negotiations or an application, in whole or in part occurring or made within or from within this state, or for which premiums in whole or in part are remitted directly or indirectly from within this state, shall be deemed to be insurance procured, continued, or renewed in this state within the intent of subsection (1) .

(3) For the general support of the government of this state, there is levied upon the obligation, chose in action, or right represented by the premium charged for such insurance a tax at the rate of 3 percent of the gross amount of such premium. The insured shall withhold the amount of the tax from the amount of premium charged by and otherwise payable to the insurer for such insurance; and, within 30 days after the insurance was so procured, continued, or renewed, and coincidentally with the filing with the department of the report provided for in subsection ·(!), the insured shall pay the amount of the tax to the department.

( 4) If the insured fails to withhold from the premium the amount of tax herein levied, the insured shall be liable for the amount thereof and shall pay the same to the department within the time stated in subsection (3) .

(5) The tax imposed hereunder, if delinquent, shall bear interest at the rate of 6 percent per year, compounded annually.

(6) The tax shall be collectible from the insured by civil action brought by the department, or by distraint.

(7) The department shall deposit all taxes and interest collected under this section to the credit of the Insurance Commissioner's Regulatory Trust Fund. ··

(8) This section does not abrogate or modify, and shall not be construed or deemed to abrogate or modify, any provision of s. 626.901, s. 626.902, or s. 626.903 or any other provision of this code.

· (9)' This section does not apply as to life insurance or health insurance.

History.-s. 377, ch. 59-205; s. 9, ch. 63-86; s. 16, ch. 65-269; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 316, 318, 807 , ch. 82-243.

'Note.- Expires October l , 1990, pursuant to s. 807 , ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of thai date.

'626.939 Records produced on order.-(1) Every person by or as to whom insurance is

procured or placed in an unauthorized insurer, upon the order of the department shall produce for examination by the department all policies and other docu-

812


ments evidencing the insurance and shall disclose to the department the amount of gross premiums paid or agreed to be paid for the insurance. For each refusal to obey such order, such person upon conviction thereof shall be liable to a fine of not more than $500.

(2) This section does not apply to life insurance or health insurance.

His tory.-s. 378, ch. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 317, 318, 807, ch. 82-243.

'Note.- Expires October I, 1990, pursuant to s. 807, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

PART VII

UNFAIR INSURANCE TRADE PRACTICES

626.951 626.9511 626.9521

626.9541

626.9551

626.9561 626.9571

626.9581 626.9591 626.9601

626.9611 626.9621

626.9631 626.9641 626.9701

626.9702

626.9705

626.9706

626.9707

626.973 626.988

626.989

626.99

Declaration of purpose. Definitions. Unfair methods of competition and unfair

or deceptive acts or practices prohibited.

Unfair methods of competition and unfair or deceptive acts or practices defined.

Favored agent or insurer; coercion of debtors.

Power of department. Defined practices; hearings, witnesses, ap

pearances, production of books and service of process.

Cease and desist and penalty orders. Appeals from the department. Penalty for violation of cease and desist

orders. Rules. Provisions of part additional to existing

law. Civil liability. Policyholders, bill of rights. Rate increases and premium surcharges;

consideration of certain noncriminal violations for excessive speed prohibited.

Illegal dealings in premiums; excess charges for insurance.

Life or disability insurance; illegal dealings.

Life insurance; discrimination on basis of sickle-cell trait prohibited.

Disability insurance; discrimination on basis of sickle-cell trait prohibited.

Fictitious groups. Financial institutions; agents and solici

tors prohibited from employment; exceptions.

Division of Insurance Fraud; investigative, subpoena powers; accident reports to division; personnel and expenses; division of costs.

Life insurance solicitation.

'626.951 Declaration of purpose.-(1) The purpose of this part is to regulate trade

practices relating to the business of insurance in accordance with the intent of Congress as expressed in the Act of Congress of March 9, 1945 (Pub. L. No. 15, 79th Congress), by defining, or providing for the determination of, all such practices in this state which constitute unfair methods of competition or unfair or

deceptive acts or practices and by prohibiting the trade practices so defined or determined.

(2) This part shall be entitled the "Unfair Insurance Trade Practices Act."

History .- s. 379, ch. 59-205; s. 9, ch. 76-260; s. 807, ch. 82-243. 'Note.- Repealed effective October I, 1990, by s. 807, ch. 82-243, and sched


'626.9511 Definitions.-When used in this part: (1) "Person" means any individual, corporation,

association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society, or business trust or any entity involved in the business of insurance.

(2) "Department" means the Department of Insurance of this state.

(3) "Insurance policy" or "insurance contract" means a written contract of, or a written agreement for or effecting, insurance, or the certificate thereof, by whatever name. called, and includes all clauses, riders, endorsements, and papers which are a part thereof.

History.-s. 9, ch. 76-260; s. I , ch. 77- 174; s. 807, ch. 82-243. . ' Note.- Repealed effective October I, 1990, by s. 807, ch. 82-243, and sched


'626.9521 Unfair methods of competition and unfair or deceptive acts or practices prohibited. -No person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to s. 626.9561 to be, an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance. Any person who violates any provision of this part shall be subject to the penalties provided in s. 627.381.

History.-s. 9, ch. 76-260; s. 807, ch. 82-243. 'Note.- Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


'626.9541 Unfair methods of competition and unfair or deceptive acts or practices defined. -The following are defined as unfair methods of competition and unfair or deceptive acts or practices:

(1) MISREPRESENTATIONS AND FALSE ADVERTISING OF INSURANCE POLICIES.Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which:

(a) Misrepresents the benefits, advantages, conditions, or terms of any insurance policy.

(b) Misrepresents the dividends or share of the surplus to be received on any insurance policy.

(c) Makes any false or misleading statements as to the dividends or share of surplus previously paid on any insurance policy.

(d) Is misleading, or is a misrepresentation, as to the financial condition of any person or as to the legal reserve system upon which any life insurer operates.

(e) Uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof.

(f) Is a misrepresentation for the purpose of inducing, or tending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy.

(g) Is a misrepresentation for the purpose of ef-

813


fecting a pledge or assignment of, or effecting a loan against, any insurance policy.

(h) Misrepresents any insurance policy as being shares of stock or misrepresents ownership interest in the company.

(2) FALSE INFORMATION AND ADVERTISING GENERALLY.-Knowingly making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public:

(a) In a newspaper, magazine, or other publication,

(b) In the form of a notice, circular, pamphlet, letter, or poster,

(c) Over any radio or television station, or (d) In any other way,

an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance, which is untrue, deceptive, or misleading.

(3) DEFAMATION.-Knowingly making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating of, any oral or written statement, or any pamphlet, circular, article, or literature, which is false or maliciously critical of, or derogatory to, any person and which is calculated to injure such person.

(4) BOYCOTT, COERCION, AND INTIMIDATION.-Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion, or intimidation resulting in, or tending to result in, unreasonable restraint of, or monopoly in, the business of insurance.

(5) FALSE STATEMENTS AND ENTRIES.(a) Knowingly: 1. Filing with any supervisory or other public of-

ficial, 2. Making, publishing, disseminating, circulating, 3. Delivering to any person, 4. Placing before the public, 5. Causing, directly or indirectly, to be made,

published, disseminated, circulated, delivered to any person, or placed before the public,

any false material statement. (b) Knowingly making any false entry of a mate

rial fact in any book, report, or statement of any person, or knowingly omitting to make a true entry of any material fact pertaining to the business of such person in any book, report, or statement of such person.

(6) STOCK OPERATIONS AND ADVISORY BOARD CONTRACTS.-Issuing or delivering, promising to issue or deliver, or permitting agents, officers, or employees to issue or deliver, agency company stock or other capital stock, benefit certificates or shares in any common-law corporation, or securities or any special or advisory board contracts or other contracts of any kind promising returns or profits as an inducement to insurance.

(7) UNFAIR DISCRIMINATION.-(a) Knowingly making or permitting any unfair

discrimination between individuals of the same actu-

arially supportable class and equal expectation of life, in the rates charged for any life insurance or annuity contract, in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract.

(b) Knowingly making or permitting any unfair discrimination between individuals of the same actuarially supportable class and essentially the same hazard, in the amount of premium, policy fees, or rates charged for any policy or contract of accident, disability, or health insurance, in the benefits payable thereunder, in any of the terms or conditions of such contract, or in any other manner whatever.

(8) REBATES.-(a) Except as otherwise expressly provided by

law, or in an applicable filing with the department, knowingly:

1. Permitting, or offering to make, or making, any contract or agreement as to such contract other than as plainly expressed in the insurance contract issued thereon;

2. Paying, allowing, or giving, or offering to pay, allow, or give, directly or indirectly, as inducement to such insurance contract, any rebate of premiums payable on the contract, any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract;

3. Giving, selling, or purchasing, or offering to give, sell, or purchase, as inducement to such insurance contract or in connection therewith, any stocks, bonds, or other securities of any insurance company or other corporation, association, or partnership, or any dividends or profits accrued thereon, or anything of value whatsoever not specified in the insurance contract.

(b) Nothing in subsection (7) or paragraph (a) of this subsection shall be construed as including within the definition of discrimination or rebates:

1. In the case of any contract of life insurance or life annuity, paying bonuses to all policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance; provided that any such bonuses or abatement of premiums is fair and equitable to all policyholders and for the best interests of the company and its policyholders.

2. In the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expenses.

3. Readjustment of the rate of premium for a group insurance policy based on the loss or expense thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year.

4. Issuance of life insurance policies or annuity contracts at rates less than the usual rates of premiums for such policies or contracts, as group insurance or employee insurance as defined in this code.

5. Issuing life or disability insurance policies on a salary savings, bank draft, preauthorized check, payroll deduction, or other similar plan at a reduced rate

814


reasonably related to the savings made by the use of such plan.

(c)l. No title insurer, or any member, employee, attorney, agent, or solicitor thereof, shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as inducement to title insurance, or after such insurance has been effected, any rebate or abatement of the charge made incident to the issuance of such insurance, any special favor or advantage, or any monetary consideration or inducement whatever. The words "charge made incident to the issuance of such insurance" shall be construed to encompass underwriting premium, agent's commission, abstracting charges, title examination fee, and closing charges; however, nothing herein contained shall preclude an abatement in an attorney's fee charged for services rendered incident to the issuance of such insurance.

2. Nothing in this paragraph shall be construed as prohibiting the payment of fees to attorneys at law duly licensed to practice law in the courts of this state, for professional services in the actual examination of title to real property as a condition to the issuance of title insurance, or as prohibiting the payment of earned commissions to duly appointed agents who actually issue the policy of title insurance for the underwriting company.

3. No insured named in a policy, or any other person directly or indirectly connected with the transaction involving the issuance of said policy, including, but not limited to, mortgage broker, real estate broker, builder, or attorney, any employee, agent, representative, or solicitor thereof, or any other person whatsoever, shall knowingly receive or accept, directly or indirectly, any such rebate or abatement of said charge, or any monetary consideration or inducement, other than as set forth in subparagraph 2.

(9) UNFAIR CLAIM SETTLEMENT PRACTICES.-

(a) Attempting to settle claims on the basis of an application, when serving as a binder or intended to become a part of the policy, or any other material document which was altered without notice to, or knowledge or consent of, the insured;

(b) A material misrepresentation made to an insured or any other person having an interest in the proceeds -payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy; or

(c) Committing or performing with such frequency as to indicate a general business practice any of the following:

1. Failing to adopt and implement standards for the proper investigation of claims;

2. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;

3. Failing to acknowledge and act promptly upon communications with respect to claims;

4. Denying claims without conducting reasonable investigations based upon available information;

5. Failing to affirm or deny coverage of claims upon written request of the insured within a reasonable time after proof-of-loss statements have been completed; or

6. Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement.

(10) FAILURE TO MAINTAIN COMPLAINTHANDLING PROCEDURES.-Failure of any person to maintain a complete record of all the complaints received since the date of the last examination. For purposes of this subsection, "complaint" means any written communication primarily expressing a grievance.

(11) MISREPRESENTATION IN INSURANCE APPLICATIONS.-

(a) Knowingly making false or fraudulent statements or representations on, or relative to, an application for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, agent, broker, or individual.

(b) Any agent, solicitor, examining physician, applicant, or other person who knowingly makes any false and fraudulent statement or representation in, or with reference to, any application or negotiation for insurance, in addition to any other penalty provided in this act, shall, upon conviction, be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(12) "TWISTING."-Knowingly making any misleading representations or incomplete or fraudulent comparisons of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance in another insurer.

(13) ADVERTISING GIFTS PERMITTED.No provision of subsection (6), subsection (7), or subsection (8) shall be deemed to prohibit a licensed insurer or its agent from giving to insureds, prospective insureds, and others, for the purpose of advertising, any article of merchandise having a value of not more than $10.

(14) FREE INSURANCE PROHIBITED.-(a) Advertising, offering, or providing free insur

ance as an inducement to the purchase or sale of real or personal property or of services directly or indirectly connected with such real or personal property.

(b) For the purposes of this subsection, "free" insurance is:

1. Insurance for which no identifiable and additional charge is made to the purchaser of such real property, personal property, or services.

2. Insurance for which an identifiable or additional charge is made in an amount less than the cost of such insurance as to the seller or other person, other than the insurer, providing the same.

(c) Paragraphs (a) and (b) do not apply to: 1. Insurance of loss of or damage· to the real or

personal property involved in any such sale or services, under a policy covering the interests therein of the seller or vendor.

2. Blanket disability insurance as defined in s. 627.659.

3. Credit life insurance or credit disability insurance.

4. Any individual, isolated, nonrecurring unad-

815


vertised transaction not in the regular course of business.

5. Title insurance. 6. Any purchase agreement involving the pur

chase of a cemetery lot or lots in which, under stated conditions, any balance due is forgiven upon the death of the purchaser.

(d) Using the word "free" to describe life or disability insurance, in connection with the advertising or offe~ing for sale of any kind of goods, merchandise, or services.

(15) ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED CHARGES FOR INSURANCE.-

(a) Knowingly collecting any sum as a premium or charge for insurance, which is not then provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code.

(b) Knowingly collecting as a premium or charge for insurance any sum in excess of or less than the premium or charge applicable to such insurance, in accordance with the applicable classifications and rates as filed with and approved by the department, and as specified in the policy; or, in cases when classifications, premiums, or rates are not required by this code to be so filed and approved, premiums and charges in excess of or less than those specified in the policy and as fixed by the insurer. This provision shall not be deemed to prohibit the charging and collection, by surplus lines agents licensed under part VI of this chapter, of the amount of applicable state and federal taxes , or fees as authorized by s. 626.916(4) , in addition to the premium required by the insurer, or the charging and collection, by licensed agents, of the exact amount of any discount or other such fee charged by a credit card facility in connection with the use of a credit card, as authorized by paragraph (17)(c), in addition to the premium required by the insurer.

(c) Imposing or requesting an additional premium for automobile liability insurance, or refusing to renew the policy, solely because the insured was involved in an automobile accident, unless the applicant's or insured's insurer has incurred a loss under the insured's policy, other than with respect to uninsured motorist coverage, arising out of the accident, or unless the insurer's file contains sufficient proof of fault , or other criteria, to justify the additional charge or refusal to renew. An insurer which imposes and collects such a surcharge shall, in conjunction with the notice of premium due, notify the named insured that he is entitled to reimbursement of such amount under the conditions listed below, and shall subsequently reimburse him, if the named insured demonstrates that the operator involved in the accident was:

1. Lawfully parked. 2. Reimbursed by, or on behalf of, a person re

sponsible for the accident or has a judgment against such person.

3. Struck in the rear by another vehicle headed in the same direction and was not convicted of a moving traffic violation in connection with the accident.

4. Hit by a "hit-and-run" driver, if the accident

was reported to the proper authorities within 24 hours after discovering the accident.

5. Not convicted of a moving traffic violation in connection with the accident, but the operator of the other automobile involved in such accident was convicted of a moving traffic violation.

6. Finally adjudicated not to be liable by a court of competent jurisdiction.

7. In receipt of a traffic citation which was dismissed or nolle prossed.

(d) Upon the request of the insured, the insurer and licensed agent shall supply to the insured the complete proof of fault or other criteria which justifies the additional charge of cancellation.

(e) No insurer shall impose or request an additional premium for motor vehicle insurance, cancel or refuse to issue a policy, or refuse to renew a policy because the insured or the applicant is a handicapped or physically disabled person, so long as such handicap or physical disability does not substantially impair such person's mechanically assisted driving ability.

(f) No insurer may cancel or otherwise terminate any insurance contract, or require execution of a consent to rate endorsement, during the stated policy term for the purpose of offering to issue, or issuing, a similar or identical contract to the same insured at a higher premium rate or continuing an existing contract at an increased premium.

(g) No insurer shall, with 1'espect to premiums charged for automobile insurance, unfairly discriminate solely on the basis of age, sex, marital status, or scholastic achievement.

(h) Imposing or requesting an additional premium for automobile comprehensive or uninsured motorist coverage solely because the insured was involved in an automobile accident or was convicted of a moving traffic violation.

This subsection does not apply to life insurance or 'health insurance.

(16) INSURANCE COST SPECIFIED IN "PRICE PACKAGE."-

(a) . When the premium or charge for insurance of or involving such property or merchandise is included in the overall purchase price or financing of the purchase of merchandise or property, the vendor or lender shall separately state and identify the amount charged and to be paid for the insurance, and the classifications, if any, upon which based; and the inclusion or exclusion of the cost of insurance in such purchase price or financing shall not increase, reduce, or otherwise affect any other factor involved in the cost of the merchandise, property, or financing as to the purchaser or borrower.

(b) This subsection does not apply to transactions which are subject to the provisions of part I of chapter 520, entitled "The Motor Vehicle Sales Finance Act."

(c) This subsection does not apply to credit life or credit disability insurance which is in compliance with s. 627.681(2).

(17) CERTAIN INSURANCE TRANSACTIONS THROUGH CREDIT CARD FACILITIES PROHIBITED.-

(a) Except as provided in paragraph (c), no per-

816


son shall knowingly solicit or negotiate any insurance; seek or accept applications for insurance; issue or deliver any policy; receive, collect, or transmit premiums, to or for any insurer; or otherwise transact insurance in this state, or relative to a subject of insurance resident, located, or to be performed in this state, through the arrangement or facilities of a credit card facility or organization, for the purpose of insuring credit card holders or prospective credit card holders. The term "credit card holder" as used in this subsection means any person who may pay the charge for purchases or other transactions through the credit card facility or organization, whose credit with such facility or organization is evidenced by a credit card identifying such person as being one whose charges the credit card facility or organization will pay, and who is identified as such upon the credit card either by name, account number, symbol, insignia, or any other method or device of identification. This paragraph does not apply as to health insurance or to credit life, credit disability, or credit property insurance.

(b) Whenever any person does or performs in this state any of the acts in violation of paragraph (a) for or on behalf of any insurer or credit card facility, such insurer or credit card facility shall be held to be doing business in this state and, if an insurer, shall be subject to the same state, county, and municipal taxes as insurers that have been legally qualified and admitted to do business in this state by agents or otherwise are subject, the same to be assessed and collected against such insurers; and such person so doing or performing any of such acts shall be personally liable for all such taxes.

(c) A licensed agent or insurer may solicit or negotiate any insurance; seek or accept applications for insurance; issue or deliver any policy; receive, collect, or transmit premiums, to or for any insurer; or otherwise transact insurance in this state, or relative to a subject of insurance resident, located, or to be performed in this state, through the arrangement or facilities of a credit card facility or organization, for the purpose of insuring credit card holders or prospective credit card holders if:

1. The insurance or policy which is the subject of the transaction is noncancellable by any person other than the named insured, the policyholder, or the insurer;

2. Any refund of unearned premium is made directly to the credit card holder; and

3. The credit card transaction is authorized by the signature of the credit card holder or other person authorized to sign on the credit card account.

The conditions enumerated in subparagraphs 1. through 3. do not apply to health insurance or to credit life, credit disability, or credit property insurance.

(d) No person may use or disclose information resulting from the use of a credit card in conjunction with the purchase of insurance, when such information is to the advantage of such credit card facility or an insurance agent, or is to the detriment of the insured or any other insurance agent; except that this provision shall not prohibit a credit card facility from using or disclosing such information in any judicial

proceeding or consistent with applicable law on credit reporting.

(e) No such insurance shall be sold through a credit card facility in conjunction with membership in any automobile club. The term "automobile club" means a legal entity which, in consideration of dues, assessments, or periodic payments of money, promises its members or subscribers to assist them in matters relating to the ownership, operation, use, or maintenance of a motor vehicle; however, the definition of automobile clubs does not include persons, associations, or corporations which are organized and operated solely for the purpose of conducting, sponsoring, or sanctioning motor vehicle races, exhibitions, or contests upon race tracks, or upon race courses established and marked as such for the duration of such particular event. The words "motor vehicle" used herein shall be the same as defined in chapter 320.

(18) INTERLOCKING OWNERSHIP AND MANAGEMENT.-

(a) Any domestic insurer may retain, invest in, or acquire the whole or any part of the capital stock of any other insurer or insurers, or have a common management with any other insurer or insurers, unless such retention, investment, acquisition, or common management is inconsistent with any other provision of this code, or unless by reason thereof the business of such insurers with the public is conducted in a manner which substantially lessens competition generally in the insurance business.

(b) Any person otherwise qualified may be a director of two or more domestic insurers which are competitors, unless the effect thereof is substantially to lessen competition between insurers generally or materially tend to create a monopoly.

(c) Any limitation contained in this subsection does not apply to any person who is a director of two or more insurers under common control or management.

(19) PROHIBITED ARRANGEMENTS AS TO FUNERALS.-

( a) No life insurer shall designate in any life insurance policy the person to conduct the funeral of the insured, or organize, promote, or operate any enterprise or plan to enter into any contract with any insured under which the freedom of choice in the open market of the person having the legal right to such choice is restricted as to the purchase, arrangement, and conduct of a funeral service or any part thereof for any individual insured by the insurer.

(b) No insurer shall contract or agree to furnish funeral merchandise or services in connection with the burial of any person upon the death of any person insured by such insurer.

(c) No insurer shall contract or agree with any funeral director or undertaker to the effect that such funeral director or undertaker shall conduct the funeral of any person insured by such insurer.

(d) No insurer shall provide, in any insurance contract covering the life of any person in this state, for the payment of the proceeds or benefits thereof in other than legal tender of the United States and of this state, or for the withholding of such proceeds or benefits, all for the purpose of either directly or indirectly providing, inducing, or furthering any arrange-

817

s. 626.9541 1982 SUPPLEMENT TO FLORIDA STATUTES 1981 s. 626;9551

ment or agreement designed to require or induce the employment of a particular person to conduct the funeral of the insured.

(20) CERTAIN LIFE INSURANCE RELATIONS WITH FUNERAL DIRECTORS PROHIBITED.-

(a) No life insurer shall permit any funeral director or undertaker to act as its representative, adjuster, claim agent, special claim agent, or agent for such insurer in soliciting, negotiating, or effecting contracts of life insurance on any plan or of any nature issued by such insurer or in collecting premiums for holders of any such contracts.

(b) No life insurer shall: 1. Affix, or permit to be affixed, advertising mat

ter of any kind or character of any funeral director or undertaker to such policies of insurance.

2. Circulate, or permit to be circulated, any such advertising matter with such insurance policies.

3. Attempt in any manner or form to influence policyholders of the insurer to employ the services of any particular funeral director or undertaker.

(c) No such insurer shall maintain, or permit its agent to maintain, an office or place of business in the office, establishment, or place of business of any funeral director or undertaker in this state.

(21) FALSE CLAIMS; OBTAINING OR RETAINING MONEY DISHONESTLY.-

(a) Any agent, physician, claimant, or other person who causes to be presented to any insurer a false claim for payment, knowing the same to be false; or

(b) Any agent, solicitor, collector, or other person who represents any insurer or collects or does business without the authority of the insurer, secures cash advances by false statements, or fails to turn over when required, or satisfactorily account for, all collections of such insurer,

shall, in addition to the other penalties provided in this act, be guilty of a misdemeanor of the second degree and, upon conviction thereof, shall be subject to the penalties provided by s. 775.082, s. 775.083, or s. 775.084.

(22) PROPOSAL REQUIRED.-If a person simultaneously holds a securities license and a life insurance license, he shall prepare and leave with each prospective buyer a written proposal, on or before delivery of any investment plan. "Investment plan" means a mutual funds program, and the proposal shall consist of a prospectus describing the investment feature and a full illustration of any life insurance feature. The proposal shall be prepared in duplicate, dated, and signed by the licensee. The original shall be left with the prospect, the duplicate shall be retained by the licensee for a period of not less than 3 years, and a copy shall be furnished to the department upon its request. In lieu of a duplicate copy, a receipt for standardized proposals filed with the department may be obtained and held by the licensee.

(23) SOLICITING OR ACCEPTING NEW OR RENEWAL INSURANCE RISKS BY INSOLVENT INSURER PROHIBITED; PENALTY.-

(a) Whether or not delinquency proceedings as to the insurer have been or are to be initiated, but while such insolvency exists, no director or officer of an in-

surer, except with the written permission of the Department of Insurance, shall authorize or permit the insurer to solicit or accept new or renewal insurance risks in this state after such director or officer knew, or reasonably should have known, that the insurer was insolvent.

(b) Any such director or officer, upon conviction of a violation of this subsection, shall be guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(24) REFUSAL TO INSURE.-In addition to other provisions· of this code, the refusal to insure, or continue to insure, any individual or risk solely because of:

(a) Race, color, creed, marital status, sex, or national origin;

(b) The residence, age, or lawful occupation of the individual or the location of the risk, unless there is a reasonable relationship between the residence, age, or lawful occupation of the individual or the location of the risk and the coverage issued or to be issued;

(c) The insured's or applicant's failure to agree to place collateral business with a particular insurer; or

(d) The fact that the insured or applicant had been previously refused insurance coverage by any insurer, when such refusal to insure or continue to insure for this reason occurs with such frequency as to indicate a general business practice.

History.-s. 9, ch. 76-260; s. 1, ch. 77-174; s. 19, ch. 77-468; s. 1, ch. 78-377; s. 1, ch. 79-289; s. 1, ch. 80-152; s. 1, ch. 80-373; s. 1, ch. 82-235; s. 807, ch. 82-243.

' Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'Note.- The word "health" was substituted by the editors for t he word "disability."

'626.9551 Favored agent or insurer; coercion of debtors.-

(1) No person may: (a) Require, as a condition precedent or condition

subsequent to the lending of money or extension of credit or any renewal thereof, that the person to whom such money or credit is extended, or whose obligation the creditor is to acquire or finance, negotiate any policy or contract of insurance through a particular insurer or group of insurers or agent or broker or group of agents or brokers.

(b) Unreasonably disapprove the insurance policy provided by a borrower for the protection of the property securing the credit or lien. For purposes of this paragraph, such disapproval shall be deemed unreasonable if it is not based solely on reasonable standards, uniformly applied, relating to the extent of coverage required by such lender or person extending credit and the financial soundness and the services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for the disapproval of an insurance policy because such policy contains coverage in addition to that required.

(c) Require, directly or indirectly, that any borrower, mortgagor, purchaser, insurer, broker, or agent pay a separate charge in connection with the handling of any insurance policy required as security for a loan on real estate or pay a separate charge to substitute the insurance policy of one insurer for that of another. This paragraph does not include the interest

818


which may be charged on premium loans or premium advances in accordance with the security instrument.

(d) Use or disclose information resulting from a requirement that a borrower, mortgagor, or purchaser furnish insurance of any kind on real property being conveyed or used as collateral security to a loan, when such information is to the advantage of the mortgagee, vendor, or lender, or is to the detriment of the borrower, mortgagor, purchaser, or insurer, or the agent or broker, complying with such a requirement.

(2) The department may investigate the affairs of any person to whom this section applies to determine whether such person has violated this section. If a violation of this section is found to have been committed knowingly, the person in violation shall be subject to the same procedures and penalties as provided in ss. 626.9571, 626.9581, 626.9591, and 626.9601.

His to r y.-s. 9, ch. 76-260; s. 1, ch. 77-174; s. 2, ch. 79-289; s. 236, ch. 79-400; s. 807, ch. 82-243.

'Not e.- Repealed effective October I, 1990, by s. 807, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1626.9561 Power of department.-The department shall have power to examine and investigate the affairs of every person involved in the business of insurance in this state in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by s. 626.9521.

History.-s. 9, ch. 76-260; s. 807, ch. 82-243. •Not e .- Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched

uled for review pursuant to s. ll .61 in advance of that date.

1626.9571 Defined practices; hearings, witnesses, appearances, production of books and service of process.-

(1) Whenever the department has reason to believe that any person has engaged, or is engaging, in this state in any unfair method of competition or any unfair or deceptive aCt or practice as defined in s. 626.9541 or s. 626.9551 or is engaging in the business of insurance without being properly licensed as required by this code and that a proceeding by it in respect thereto would be to the interest of the public, it shall conduct or cause to have conducted a hearing in accordance with chapter 120.

(2) The department or a duly empowered hearing officer shall, during the conduct of such hearing, have those powers enumerated in s. 120.58; however, the penalties for failure to comply with a subpoena or with an order directing discovery shall be limited to a fine not to exceed $1,000 per violation.

(3) Statements of charges, notices, and orders under this act may be served by anyone duly authorized by the department, either in the manner provided by law for service of process in civil actions or by certifying and mailing a copy thereof to the person affected by such statement, notice, order, or other process at his or its residence or principal office or place of business. The verified return by the person so serving such statement, notice, order, or other process, setting forth the manner of the service, shall be proof of the same, and the return postcard receipt for such statement, notice, order, or other process, certified and mailed as aforesaid, shall be proof of service of the same.

Histor y.-s. 9, ch. 76-260; s. 807, ch. 82-243. 'Not e .-Repealed effective October I, 1990, by s. 807, ch. 82-243, and sched


'626.9581 Cease and desist and penalty orders.-After the hearing provided ins. 626.9571, the department shall enter a final order in accordance with s. 120.59. If it is determined that the person charged has engaged in an unfair or deceptive act or practice or the unlawful transaction of insurance, the department shall also issue an order requiring the violator to cease and desist from engaging in such method of competition, act, or practice or the unlawful transaction of insurance. Further, if the act or practice is a violation of s. 626.9541 or s. 626.9551, the department may, at its discretion, order any one or more of the following:

(1) Suspension or revocation of the person's certificate of authority, license, or eligibility for any certificate of authority or license, if he knew, or reasonably should have known, he was in violation of this act.

(2) Such other relief as may be provided in the insurance code.

History.-s. 9, ch. 76-260; s. 807, ch. 82-243. ' Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched

uled for review pursuant to s. 11 .61 in advance of that date.

'626.9591 Appeals from the department. -Any person subject to an order of the department under s. 626.9581 or s. 626.9601 may obtain a review of such order by filing an appeal therefrom in accordance with the provisions and procedures for appeal from the orders of the department in general under 2s. 624.329 or s. 120.68.

History.-s. 9, ch. 76-260; s. 807, ch. 82-243. ' Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched

uled for review pursuant to s. 11.61 in advance of that date. ' Note.-Section 624.329 was repealed by s. 21, ch. 78-95.

'626.9601 Penalty for violation of cease and desist orders.-Any person who violates a cease and desist order of the department under s. 626.9581 while such order is in effect, after notice and hearing as provided in s. 626.9571, shall be subject, at the discretion of the · department, to any one or more of the following:

(1) A monetary penalty of not more than $50,000 as to all matters determined in such hearing.

(2) Suspension or revocation of such person's certificate of authority, license, or eligibility to hold such certificate of authority or license.

(3) Such other relief as may be provided in the insurance code.



1626.9611 Rules.-The department may, in accordance with chapter 120, promulgate reasonable rules as are necessary or proper to identify specific methods of competition or acts or practices which are prohibited by s. 626.9541 or s. 626.9551, but the rules shall not enlarge upon or extend the provisions of ss. 626.9541 and 626.9551.

History.-s. 9, ch. 76-260; s. 1, ch. 77-174; s. 807, ch. 82-243. 'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


'626.9621 Provisions of part additional to existing law.-The powers vested in the department by this part shall be additional to any other powers to

819


enforce any penalties, fines, or forfeitures authorized by law.

History.-s. 9, ch. 76-260; s. 807, ch. 82-243. 'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


'626.9631 Civil liability.-The provisions of this part are cumulative to rights under the general civil and common law, and no action of the department shall abrogate such rights to damages or other relief in any court.



'626.9641 Policyholders, bill of rights.-( I) The principles expressed in the following

statements shall serve as standards to be followed by the department in exercising its powers and duties, in exercising administrative discretion, in dispensing administrative interpretations of the law, and in promulgating rules:

(a) Policyholders shall have the right to competitive pricing practices and marketing methods that enable them to determine the best value among comparable policies. ·

(b) Policyholder!:! shall have the right to obtain comprehensive coverage.

(c) Policyholders shall have the right to insurance advertising and other selling approaches that provide accurate and balanced information on the benefits and limitations of a policy.

(d) Policyholders shall have a right to an insurance company that is financially stable.

(e) Policyholders shall have the right to be serviced by a competent, honest insurance agent or broker.

(f) Policyholders shall have the right to a readable policy.

(g) Policyholders shall have the right to an insurance company that provides an economic delivery of coverage and that tries to prevent losses. ·

(h) Policyholders shall have the right to a balanced and positive regulation by the department.

(2) This section shall not be construed as creating a civil cause of action by any individual policyholder against any individual insurer.

History.-s. 9, ch. 76-260; s. 807, ch. 82-243. 'Note.-Repealed effective October I, 1990, by s. 807, ch. 82-243, and sched


'626.9701 Rate increases and premium surcharges; consideration of certain noncriminal violations for excessive speed prohibited.-Noncriminal violations solely for excessive speed less than 70 m.p.h. on highways which are outside business and residential districts and which have at least four lanes divided by a median strip at least 20 feet wide and on highways which comprise a part of the national system of interstate and defense highways shall not be considered by insurance companies in rate increases for individuals or surcharges for insurance premiums.



'626.9702 Illegal dealings in premiums; excess charges for insurance.-

(1) No insurer shall impose or request an additional premium for automobile insurance, or refuse to renew a policy, solely because the insured or applicant was convicted of one or more traffic violations which do not involve an accident or do not cause revocation or suspension of the driving privileges of the insured, without adequate proof of a direct, demonstrable, objective relationship between the violation for which the surcharge was imposed and the increased risk of highway accidents.

(2) No insurer shall cancel or otherwise terminate any automobile insurance contract with an insured after the insured has paid the premiums on such policy for 5 years or more solely because the insured is involved in a single traffic accident.

(3) Any person or organization which violates any provision of this section shall be subject to the penalties provided in s. 627.381.



'626.9705 Life or disability insurance; illegal dealings.-

( I) No life or disability insurer shall refuse to renew, sell, or issue a life or disability insurance policy, establish or charge a premium or rate to ;m applicant or a prospective policyholder, or establish or charge an unfair, discriminatory premium or rate to such person solely on the ground that the applicant or policyholder suffers from a severe disability.

(2) "Severe disability," as used in this section, means any spinal cord disease or injury resulting in permanent and total disability, amputation of any extremity that requires prosthesis, permanent' visual acuity · of 20/200 or worse in the better eye with the best correction, a peripheral field so contracted that the widest diameter of such field subtends an angular distance no greater than 20 degrees, or neurosensory deafness.

(3) Nothing in this section should be construed as requiring an insurer to provide insurance coverage against a severe disability which the applicant or policyholder has already sustained.

History.-ss. 1, 7, ch. 75-279; s. I, ch. 77-174; s. 1, ch. 79-171; s. 807, ch. 82-243.


'626.9706 Life insurance; discrimination on basis of sickle-cell trait prohibi.ted.-

(1) No insurer authorized to transact insurance in this state shall refuse to issue and deliver any policy of life insurance solely because the person to be insured has the sickle-cell trait.

(2) No life insurance policy issued and delivered in this state shall carry a higher premium rate or charge solely because the person to be insured has the sickle-cell trait.

History.-s. 1, ch. 78-35; s. 807, ch. 82-243. 'Note.-Repealed effective October I, 1990, by s. 807, ch. 82-243, and sched


'626.9707 Disability insurance; discrimination on basis of sickle-cell trait prohibited.-

( I) No insurer authorized to transact insurance in this state shall refuse to issue and deliver in this state any policy of disability insurance, whether such poli-

820


cy is defined as individual, group, blanket, franchise, industrial, or otherwise, which is currently being issued for delivery in this state and which affords benefits and coverage for any medical treatment or service authorized and permitted to be furnished by a hospital, clinic, health clinic, neighborhood health clinic, health maintenance organization, physician, physician's assistant, nurse practitioner, or medical service facility or personnel solely because the person to be insured has the sickle-cell trait.

(2) No disability insurance policy issued or delivered in this state shall carry a higher premium rate or charge solely because the person to be insured has the sickle-cell trait.

History.-s. I, ch. 78-~5; s. 807, ch. 82-243. 'Note.- Repealed effective October I, 1990, by s. 807, ch. 82-243, and sched


'626.973 Fictitious groups.-(1) No insurer or any person on behalf of any in

surer shall make, offer to make, or permit any preference or distinction in property, marine, casualty, or surety insurance as to form of policy, certificate, premium, rate, benefits, or conditions of insurance, based upon membership, nonmembership , employment, or of any person or persons by or in any particular group, association, corporation, or organization, and shall not make the foregoing preference or distinction available in any event based upon any "fictitious grouping" of persons as defined in this code, such "fictitious grouping" being hereby defined and declared to be any grouping by way of membership, nonmembership, license, franchise, employment, contract, agreement, or any other method or means.

(2) The restrictions and limitations of this section do not extend to life insurance and 'health insur-ance.

His tory.-s. ~98, ch. 59-205; s. 807, ch. 82-243. 'Note.- Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched

uled for review pursuant to s. 11.61 in advance of that date. "~Note .-The word "health" was substituted by the editors for the word "dis~

ability."'

'626.988 Financial institutions; agents and solicitors prohibited from employment; exceptions.-

(1) For the purpose of this section, the following definitions shall apply:

(a) . "Financial institution" means any bank, bank holding company, savings and loan association, savings and loan association holding company, or savings and loan association service corporation or any subsidiary, affiliate, or foundation of any of the foregoing. This definition shall not, however, include any financial institution which has been granted an exemption by the Board of Governors of the Federal Reserve System pursuant to s. 4(d) of the Federal Bank Holding Company Act of 1956, as amended, or any financial institution which neither owns more than 10 percent of the capital stock, nor exercises effective control, of a bank, savings and loan association, or entity licensed under chapter 494 and licensed or authorized to transact business in this state. Specifically excluded from this definition is any bank which is not a subsidiary or affiliate of a bank holding company and is located in a city having a population of less than 5,000 according to the last preceding census.

(b) "Insurance agency activities" means the procurement of applications for, or the solicitation, negotiation, selling, effectuating, or servicing of, any policy or contract of insurance other than credit life insurance and credit disability insurance.

(c) "Financial institution agency" means any person, firm, partnership, or corporate entity which is engaged in insurance agency activities, as herein defined, and is associated with, or owned, controlled, employed, or retained by, a financial institution as herein defined.

(2) No insurance agent or solicitor licensed by the Department of Insurance under the provisions of this chapter who is associated with, under contract with, retained by, owned or controlled by, to any degree, directly or indirectly, or employed by, a financial institution shall engage in insurance agency activities as an employee, officer, director, agent, or associate of a financial institution agency.

(3) Notwithstanding any other provision of this section, an insurance agent or solicitor licensed by the Department of Insurance under the provisions of this chapter who is affiliated with, under contract with, retained by, or owned or controlled directly or indirectly to any degree by, a bank holding company subsidiary or affiliate, which is not a bank, licensed and operating primarily under chapter 494, may engage in insurance agency activities if permitted by the Board of Governors of the Federal Reserve System, but only to the extent that such activities are directly related to the extension of credit, specifically real estate mortgage loans made or brokered by licensees under chapter 494, and only to the extent necessary to protect the real property which is subject to the mortgage loan against loss or damage. With respect only to residential property consisting of not more than four individual dwelling units, such agent or solicitor may offer a policy affording insurance on the primary residence, appurtenant structures, personal property, and personal liability, but excluding any insurance customarily written under an inland marine form. In addition, such agent may offer decreasing term life insurance on the life of the borrower not to exceed the amount and term of the mortgage.

(4) The Department of Insurance shall not grant, renew, continue, or permit to exist any license as such agent or solicitor as to any applicant therefor or licensee thereunder if it finds that the license has been, is being, or will probably be used by the applicant or licensee for any purpose prohibited by this section.

(5) · Notwithstanding any provision of this section, the Department of Insurance shall permit the continued operation under the same ownership and control of all financial institution agencies which were in existence and engaged in insurance agency activities as of April 2, 1974. To make possible such continuation, the Department of Insurance may license agents and solicitors who are otherwise qualified, as successors to those agents and solicitors who are exempt from the provisions of this section and their successors, for so long as the specified financial institution agency continues to function as it was constituted on April 2, 1974. However, no agent or solicitor so licensed under this section shall be permitted to be employed, or

821


controlled to any degree, directly or indirectly, by any financial institution agency except the particular agency for which he was so licensed as a successor for the purposes of this section.

(6) This section shall not prevent an agent or solicitor from serving as an officer or director of a financial institution, provided he conducts all of his insurance activities free of ownership or control of the financial institution and provided further that the financial institution does not participate directly or indirectly in the earnings from his insurance activities.

(7) This section shall not apply to agents or solicitors who were engaged as of April 2, 1974, in activities prohibited by this section and who have been continuously so engaged since that date, but this exemption applies only with respect to the specific type of license held and the financial institution wit h which the agent or solicitor was associated on said date.

His tory.-s. 1, ch. 74-35; s. 1, ch. 77-174; s. 807, ch. 82-243. ' Note.- Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


'626.989 Division of Insurance Fraud; investigative, subpoena powers; accident reports to division; personnel and expenses; division of costs.-

(1) If, by its own inquiries or as a result of complaints, the Division of Insurance Fraud has reason to believe that a person has engaged in, or is engaging in, an act or practice that violates s. 817.234 or s. 624.15, it may administer oaths and affirmations, request the attendance of witnesses or proffering of matter, and collect evidence. The department shall not compel the attendance of any person or matter in any such investigation except pursuant to subsection (3).

(2) If matter that the division seeks to obtain by request is located outside the state, the person so requested may make it available to the division or its representative to examine the matter at the place where it is located. The division may designate representatives, including officials of the state in which the matter is located, to inspect the matter on its behalf, and it may respond to similar requests from officials of other states.

(3) The division may request that an individual who refuses to comply with any such request be ordered by the circuit court to provide the testimony or matter. The court shall not order such compliance unless the division has demonstrated to the satisfaction of the court that the testimony of the witness or the matter under request has a direct bearing on a violation of s. 817.234 or s. 624.15 or is pertinent and necessary to further such investigation. Except in a prosecution for perjury, an individual who complies with a court order to provide testimony or matter after asserting a privilege against self-incrimination to which he is entitled by law may not be subjected to a criminal proceeding or to a civil penalty with respect to the act concerning which he is required to testify or produce relevant matter.

(4) The department's papers, documents, reports, or evidence relative to the subject of an investigation under this section shall not be subject to public inspection for so long as the department deems reasonably necessary to complete the investigation, to pro-

teet the person investigated from unwarranted injury, or to be in the public interest. Further, such papers, documents, reports, or evidence relative to the subject of an investigation under this section shall not be subject to subpoena until opened for public inspection by the department, unless the department consents, or until , after notice to the department and a hearing, the court determines the department would not be unnecessarily hindered by such subpoena. Division investigators shall not be subject to subpoena in civil actions by any court of this state to testify concerning any matter of which they have knowledge pursuant to a pending insurance fraud investigation by the division.

(5) Any company which believes that such a fraudulent claim is being made shall, within 60 days of the receipt of such notice, send to the Division of Insurance Fraud, on a form prescribed by the department, the information requested and such additional information relative to the claim and the parties claiming loss or damages because of the accident as the department may require. The Division of Insurance Fraud shall review such reports and select such claims as, in its judgment, may require further investigation. It shall then cause an independent examination of the facts surrounding such claim to be made to determine the extent, if any, to which fraud, deceit, or intentional misrepresentation of any kind exists in the submission of the claim. The Division of Insurance Fraud shall report any alleged violations of law which its investigations disclose to the appropriate licensing agency and state attorney having jurisdiction with respect to any such violation, as provided in s. 624.310. If prosecution by the state attorney is not begun within 60 days of the division's report, the state attorney shall inform the division of the reasons for the lack of prosecution.

(6) No insurer, or employees or agents of any insurer, shall be subject to civil liability for libel or otherwise by virtue of the filing of reports or furnishing other information required by this section or required by the Division of Insurance Fraud as a result of the authority herein granted.

(7) All costs of administration and operation of said Division of Insurance Fraud shall be borne by the insurers licensed to write fire and casualty insurance in this state. The Insurance Commissioner shall equally divide such costs among all such companies, charging each such company an identical amount adequate to provide the total cost of each fiscal year of operation. Such amounts as derived by said assessment shall be deposited in the State Treasurer and Insurance Commissioner's Regulatory Trust Fund. The total budget of said division shall be as determined annually in the General Appropriations Act.

(8) Division investigators shall have the power to make arrests for criminal violations established as a result of investigations only. The general laws applicable to arrests by peace officers of this state shall also be applicable to such investigators. Such investigators shall have the power to execute arrest warrants and search warrants for the same criminal violations, serve subpoenas issued for the examination, investigation, and trial of all offenses determined by their investigations, and arrest upon probable cause without warrant any person found in the act of vio-

822


lating any of the provisions of applicable laws. Investigators empowered to make arrests under this section shall not be empowered to carry firearms or other weapons in the performance of their duties.

(9) It is unlawful for any person to resist an arrest authorized by this section or in any manner to interfere, either by abetting or assisting such resistance or otherwise interfering, with division investigators in the duties imposed upon them by law or department regulation. His tory.~s. 9, ch. 76-266; s. 211, ch. 77-104; s. 20, ch. 77-468; s. 2, ch. 78-258;

s. 2, ch. 79-81; s. 237, ch. 79-400; s. 3, ch. 81-48; ss. 807, 810, ch. 82-243. ' Note.~Repea l ed effective October I , 1990, by s. 807, ch. 82-243, and sched·

uled for review pursuant to s. 11.61 in advance of that da te.

'626.99 Life insurance solicitation.-(!) PURPOSE.-The purpose of this section is to

require insurers to deliver to purchasers of life insurance information which will improve the buyer's ability to select the most appropriate plan of life insurance for his needs, improve the buyer's understanding of the basic features of the policy which has been purchased or which is under consideration, and improve the ability of the buyer to evaluate the relative costs of similar plans of life insurance. This section does not prohibit an insurer from using additional material which is not in violation of this chapter or any other statute or regulation.

(2) SCOPE; EXEMPTIONS.-(a) Except as hereafter exempted, this section

shall apply to any solicitation, negotiation, or procurement of life insurance occurring within this state. This section shall apply to any issuer of life insurance contracts, including a fraternal benefit society.

(b) Unless they are otherwise specifically includ-ed, this section shall not apply to:

1. Annuities; 2. Credit life insurance; 3. Group life insurance; 4. Life insurance policies issued in connection

with pension and welfare plans as defined by and which are subject to the federal Employee Retirement Income Security Act of 1974 (ERISA); or

5. Variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account.

(3) DEFINITIONS AND FORMULAS.-As used in this section:

(a) "Buyer's guide" means a document which shall contain all the requirements of, and which is in substantial compliance with, subsection (6).

(b) "Cash dividend" means the current illustrated dividend which can be applied toward payment of the gross premium.

(c) "Equivalent level annual dividend" is calculated by applying the following steps:

1. Accumulate the annual cash dividends at 5 percent interest compounded annually to the end of the lOth and the end of the 20th policy years.

2. Divide each accumulation of step 1. under this paragraph by an interest factor that converts it into one, equivalent level annual amount that, if paid at the beginning of each year, would accrue to the values in step 1. under this paragraph over the respective periods stipulated in step 1. under this paragraph. If the period is 10 years, the factor is 13.207; and if the period is 20 years, the factor is 34.719.

3. Divide the results of step 2. under this paragraph by the number of thousands of the equivalent level death benefits to arrive at the equivalent level annual dividend.

(d) "Equivalent level death benefit" of a policy or term life insurance rider is an amount calculated by applying the following steps:

1. Accumulate the guaranteed amount payable upon death, regardless of the cause of death, at the beginning of each policy year for 10 and 20 years at 5 percent interest compounded annually to the end of the lOth and 20th policy years respectively.

2. Divide each accumulation of step 1. under this paragraph by an interest factor that converts it into one, equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in step 1. of this paragraph over the respective periods stipulated in step 1. under this paragraph. If the period is 10 years, the factor is 13.207; and if the period is 20 years, the factor is 34.719.

(e) "Generic name" means a short title which is descriptive of the premium and benefit patterns of a policy or a rider.

(f) "Life insurance surrender cost index" is calculated by applying the following steps:

1. Determine the guaranteed cash surrender value, if any, available at the end of the lOth and the end of the 20th policy years.

2. For participating policies, add the terminal dividend payable upon surrender, if any, to the accumulation of the annual cash dividends at 5 percent interest compounded annually to the end of the period selected and add this sum to the amount determined in step 1. under this paragraph.

3. Divide the result of step 2. under this paragraph (step 1. for guaranteed-cost policies) by an interest factor that converts it into an equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in step 2. under this paragraph (step 1. for guaranteed-cost policies) over the respective periods stipulated in step 1. If the period is 10 years, the factor is 13.207; and if the period is 20 years, the factor is 34.719.

4. Determine the equivalent level premium by accumulating each annual premium payable for the basic policy or rider at 5 percent interest compounded annually to the end of the period stipulated in step 1. under this paragraph and· dividing the result by the respective factors stated in step 3. under this paragraph (this amount is the annual premium payable for a level premium plan) .

5. Subtract the result of step 3. from step 4. 6. Divide the result of step 5. by the number of

thousands of the equivalent level death benefit to arrive at the life insurance surrender cost index.

(g) "Life insurance net payment cost index" is calculated in the same manner as the comparable life insurance cost index, except that the cash surrender value and any terminal dividend are set at zero.

(h) "Policy summary" means a written statement describing the elements of the policy, including, but not limited to, the following:

1. A prominently placed title as follows: STATEMENT OF POLICY COST AND BENEFIT INFORMATION;

2. The name and address of the insurance agent

823


or, if no agent is involved, a statement of the procedure to be followed in order to receive responses to inquiries regarding the policy summary;

3. The full name and home office or administrative office address of the company in which the life insurance policy is to be or has been written;

4. The generic name of the basic policy and of each rider;

5. The following amounts, when applicable, for the first 5 policy years and representative policy years thereafter, sufficient to clearly illustrate the premium and benefit patterns, including, but not necessarily limited to, the years for which life insurance cost indexes are displayed and at least one age from 60 through 65, or maturity of the policy, whichever is earlier:

a. The annual premium for the basic policy; b. The annual premium for each optional rider; c. The guaranteed amount payable upon death,

at the beginning of the policy year regardless of the cause of death other than suicide, or other specifically enumerated exclusions, which is provided by the basic policy and each optional rider, with benefits provided under the basic policy and each rider shown separately;

d. The total guaranteed cash surrender values at the end of the year, with values shown separately for the basic policy and each rider;

e. The cash dividends payable at the end of the year, with values shown separately for the basic policy and each rider (dividends need not be displayed beyond the 20th policy year); and

f. The guaranteed endowment amounts payable under the policy which are not included under guaranteed cash surrender values above;

6. The effective policy loan annual percentage interest rate, if the policy contains this provision, specifying whether this rate is applied in advance or in arrears. If the policy loan interest rate is variable, the policy summary shall include the maximum annual percentage rate;

7. Life insurance cost indexes for 10 and 20 years, but in no case beyond the premium-paying period. Separate indexes must be displayed for the basic policy and for each optional term life insurance rider. Such indexes need not be included for optional riders which are limited to benefits such as accidental death benefits, disability waiver of premium, preliminary term life insurance coverage of less than 12 months, and guaranteed insurability benefits, nor need they be included for the basic policies or optional riders covering more than one life;

8. The equivalent level annual dividend, in the case of participating policies and participating optional term life insurance riders, under the same circumstances and for the same durations at which life insurance cost indexes are displayed;

9. For a policy summary which includes dividends, a statement that dividends are based on the company's current dividend scale and are not guaranteed, in addition to a statement in close proximity to the equivalent level annual dividend as follows: "An-explanation of the intended use of the equivalent level annual dividend is included in the life insurance buyer's guide";

10. A statement in close proximity to the life in-

surance cost indexes as follows: "An explanation of the intended use of these indexes is provided in the life insurance buyer's guide"; and

11. The date on which the policy summary is prepared. The policy summary must consist of a separate document. All information required to be disclosed must be set out in such a manner as not to minimize the effect of any portion thereof or to render any portion thereof obscure. Any amounts which remain level for 2 or more years of the policy may be represented by a single number if it is clearly indicated what amounts are applicable for each policy year. Amounts in subparagraph 5. shall be listed in total, not on a per-thousand or per-unit basis. If more than one insured is covered under one policy or rider, guaranteed death benefits shall be displayed separately for each insured or for each class of insureds, if death benefits do not differ within the class. Zero amounts shall be displayed as zero and shall not be displayed as a blank space.

(4) DISCLOSURE REQUIREMENTS.-(a) The insurer shall provide to each prospective

purchaser a buyer's guide and a policy summary prior to accepting any applicant's initial premium or premium deposit, unless the policy for which application is made contains a provision for an unconditional refund for a period of at least 10 days, or unless the policy summary contains an offer of such an unconditional refund, in which event the buyer's guide and policy summary must be delivered with the policy or prior to delivery of the policy.

(b) The insurer shall provide a buyer's guide and a policy summary to any prospective purchaser upon request.

(5) GENERAL RULES RELATING TO SOLICITATION.-

(a) Each insurer subject to this section shall maintain at its home office or principal office a complete file containing one copy of each document authorized by the insurer for use pursuant to this section. Such file shall contain one copy of each authorized form for a period of 3 years following the date of its last authorized use.

(b) An agent shall inform the prospective purchaser, prior to commencing a life insurance sales presentation, that he is acting as a life insurance agent and shall inform the prospective purchaser of the full name of the insurance company which he is representing. In sales situations in which an agent is not involved, the insurer shall identify its full name.

(c) Terms such as "financial planner," "investment adviser," "financial consultant," or "financial counseling" shall not be used in such a way as to imply that the insurance agent is generally engaged in an advisory business in which compensation is unrelated to sales unless such is actually the case.

(d) Any reference to policy dividends must include a statement that dividends are not guaranteed.

(e) A system or presentation which does not recognize the time value of money through the use of appropriate interest adjustments shall not be used for comparing the cost of two or more life insurance policies. Such a system may be used for the purpose of demonstrating the cash-flow pattern of a policy if such presentation is accompanied by a statement disclosing that the presentation does not recognize that,

824


because of interest, a dollar in the future has less value than a dollar today.

(f) A presentation of benefits shall not display guaranteed and nonguaranteed benefits as a single sum unless they are shown separately in close proximity thereto.

(g) A statement regarding the use of the life insurance cost indexes shall include an explanation to the effect that the indexes are useful only for the comparison of the relative costs of two or more similar policies.

(h) A life insurance cost index which reflects dividends or an equivalent level annual dividend shall be accompanied by a statement that it is based on the insurer's current dividend scale and is not guaranteed.

(i) For the purposes of this section, the annual premium for a basic policy or rider, for which the insurer reserves the right to change the premium, shall be the maximum annual premium.

(6) ADOPTION OF BUYER'S GUIDE; REQUIREMENTS.-Any insurer soliciting life insurance in this state on or after October 1, 1980, shall adopt and use a buyer's guide, and the adoption and use by an insurer of the buyer's guide adopted May 4, 1976, by the National Association of Insurance Commissioners in the NAIC Life Insurance Solicitation Model Regulation shall be in compliance with the requirements of this section.

(7) FAILURE TO COMPLY.-The failure of an insurer to provide or deliver a buyer's guide or a policy summary as provided in subsection (4) shall constitute an omission which misrepresents the benefits, advantages, conditions, or terms of an insurance policy within the meaning of this part.

History .- s. I, ch. 80- 156; s. 423, ch. 81-259; s. 807, ch. 82-243. 'Note.- Repealed effective October I , 1990, by s. 807, ch. 82-243, and sched


CHAPTER 627

INSURANCE CODE: RATES AND CONTRACTS

PART I RATES AND RATING ORGANIZATIONS

PARTIITHEINSURANCECONTRACT

PART III LIFE INSURANCE POLICIES AND ANNUITY CONTRACTS

PART IV INDUSTRIAL LIFE INSURANCE POLICIES

PART V GROUP LIFE INSURANCE

PART VI DISABILITY INSURANCE POLICIES

PART VII GROUP, BLANKET, AND FRANCHISE DISABILITY INSURANCE

PART VIII MEDICARE SUPPLEMENT POLICIES

PART IX CREDIT LIFE AND DISABILITY INSURANCE

PART X PROPERTY INSURANCE CONTRACTS

PART XI CASUALTY INSURANCE CONTRACTS

PART XII SURETY INSURANCE CONTRACTS

PART XIII TITLE INSURANCE CONTRACTS

PART XIV VARIABLE CONTRACTS

PART XV PREMIUM FINANCE COMPANIES

PART XVI PREMIUM FINANCING

PART XVII INSURER REPORTING

PART I

RATES AND RATING ORGANIZATIONS

627.011 627.021 627.031 627.032

627.041 627.062 627.063 627.0651

627.066

627.071 627.072 627.091

627.092 627.093

627.096 627.101

627.111 627.141

627.151

Short title. Scope of this part. Purposes of this part; interpretation. "California Plan" repealed as to motor ve-

hicle insurance. Definitions. Rate standards. "Motor vehicle insurance" defined. Making and use of rates for motor vehicle

insurance. Excessive profits for motor vehicle insur-

ance prohibited. "Inland marine in<urance" defined. Making and use of rates. Rate filings; workers' compensation and

employer's liability insurances. Workers' Compensation Administrator. Application of s. 286.011 to workers' com

pensation and employer's liability insurances.

Workers' Compensation Rating Bureau. When filing becomes effective; workers'

compensation and employer's liability insurances.

Effective date of filing. Subsequent disapproval of filing; workers'

compensation and employer's liability insurances.

Basis of approval or disapproval of workers' compensation or employer's liability insurance filing; scope of disapproval power.

627.171 Excess rates. 627.191 Adherence to filings; workers' compensa-

tion and employer's liability insurances. 627.211 Deviations; workers' compensation and

employer's liability insurances.

825


627.215

627.221 627.231 627.241 627.251 627.261 627.271 627.281

627.291

627.301 627.311 627.314 627.318 627.321 627.331

627.343

627.351 627.356 627.357 627.361 627.371 627.381

Excessive profits for workers' compensation and employer's liability insurances prohibited.

Rating organizations; licensing; fee. Subscribers to rating organizations. Notice of changes. Bureau rules not to affect dividends. Actuarial and technical services. Stamping bureau. Appeal from rating organization; workers'

compensation and employer's liability insurance filings.

Information to be furnished insureds; appeal by insureds; workers' compensation and employer's liability insurances.

Advisory organizations. Joint underwriters and joint reinsurers. Concerted action by two or more insurers. Records. Examinations. Recording and reporting of loss, expense,

and claims experience; rating information.

Uniform risk classification reporting sys-tem for motor vehicle insurance.

Insurance risk apportionment plans. Professional malpractice self-insurance. Medical malpractice self-insurance. False or misleading information. Hearings. Penalty for violation.

'627.011 Short title.-This part of this chapter may be referred to as the "Rating Law."

History.-s. 412, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

'Note .- Repealed effective October 1, 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.021 Scope of this part.-(1) This part of this chapter applies only to prop

erty, casualty, and surety insurances on subjects of insurance resident, located, or to be performed in this state.

(2) This chapter does not apply to: (a) Reinsurance, except joint reinsurance as pro

vided ins. 627.311. (b) Insurance against loss of or damage to air

craft, their hulls, accessories, or equipment, or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance, or use of aircraft.

(c) Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, a~ distinguished from inland marine, insurance poliCies.

(3) For the purposes of this chapter, all motor vehicle insurance shall be deemed to be casualty insurance only.

(4) This part does not apply to health insurance. His tory.-s. 413, ch. 59-205; s. 3, ch. 76-168; s. l , ch. 77-457; s. 92, ch. 79-40;

ss. 2, 3, ch. 81-318; ss. 337, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386. 'Note .- Expires October l , 1992, pursuant to s. 809(2nd), ch. 82-243, and is

scheduled for review pursuant to s. 11.61 in advance of that date.

'627.031 Purposes of this part; interpretation.-

(1) The purposes of this part are: (a) To promote the public welfare by regulating

insurance rates as herein provided to the end that they shall not be excessive, inadequate, or unfairly discriminatory;

(b) To encourage independent action by, and reasonable price competition among, insurers;

(c) To authorize the existence and operation of qualified rating organizations and advisory organizations and to require that specified rating services of such rating organizations be generally available to all authorized insurers; and

(d) To authorize cooperation between insurers in ratemaking and other related matters.

(2) It is the purpose of this part to protect policyholders and the public against the adverse effects of excessive, inadequate, or unfairly discriminatory insurance rates, and to authorize the department to regulate such rates. If at any time the department has reason to believe any such rate is excessive, inadequate, or unfairly discriminatory under the law, it is directed to take the necessary action to cause such rate to comply with the laws of this state.

(3) Nothing in this part shall be construed to repeal or modify the provisions of part VII of chapter 626, relating to unfair trade practices.

History.-s. 411, ch. 59-205; s. l, ch. 67-9; ss. 13, 35, ch. 69-106; s. l , ch. 7l -3(B); s. 3, ch. 76-168; s. l, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 338, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

' Note.-Expires October l , 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

627.032 "California Plan" repealed as to motor vehicle insurance.-[Repealed by s. 339, ch. 82-243.]

'627.041 Definitions.-As used in this part: (1) "Rate" means the unit charge by which the

measure of exposure or the amount of insurance specified in a policy of insurance or covered thereunder is multiplied to determine the premium.

(2) "Premium" means the consideration paid or to be paid to an insurer for the issuance and delivery of any binder or policy of insurance.

(3) "Rating organization" means every person, other than an authorized insurer, whether located within or outside this state, who has as his object or purpose the making of rates, rating plans, or rating systems. Two or more authorized insurers that act in concert for the purpose of making rates, rating plans, or rating systems, and that do not operate within the specific authorizations contained in ss. 627.311, 627.314(2), (4), and 627.351, shall be deemed to be a rating organization. No single insurer shall be deemed to be a rating organization.

(4) "Advisory organization" means every group, association, or other organization of insurers, whether located within or outside this state, which prepares policy forms or makes underwriting rules incident to but not including the making of rates, rating plans, or rating systems or which collects and furnishes to authorized insurers or rating organizations loss or expense statistics or other statistical information and data and acts in an advisory, as distinguished from a ratemaking, capacity.

(5) "Member" means an insurer who participates

826


in or is entitled to participate in the management of a rating, advisory, or other organization.

(6) "Subscriber" means an insurer which is furnished at its request:

(a) With rates and rating manuals by a rating organization of which it is not a member; or

(b) With advisory services by an advisory organization of which it is not a member.

(7) "Willful" or "willfully" in relation to an act or omission which constitutes a violation of this part means with actual knowledge or belief that such act or omission constitutes such violation and with specific intent nevertheless to commit such act or omission.

(8) "Motor vehicle insurance" means a policy of motor vehicle insurance delivered or issued for delivery in the state by an authorized insurer:

(a) Insuring a natural person as the named insured or one or more related individuals resident of the same household, or both; and

(b) Insuring a motor vehicle of the private passenger type or station wagon type, which motor vehicle is not used as public or livery conveyance for passengers or rented to others, or insuring any other four-wheeled motor vehicle having a capacity of 1,500 pounds or less which is not used in the occupation, profession, or business of the insured, other than farming;

other than any policy issued under an automobile insurance risk apportionment plan; or other than any policy insuring more than four automobiles; or other than any policy covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards.

His tory.-s. 414, ch. 59-205; s. 2, ch. 67-9; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 340, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

'Note.-Expires October I , 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'627.062 Rate standards.-(!) The rates for all classes of insurance to which

the provisions of this part are applicable shall not be excessive, inadequate, or unfairly discriminatory.

(2) As to all such classes of insurance, other than workers' compensation, employer's liability insurance, and motor vehicle insurance:

(a) No rate shall be held to be excessive unless: 1. Such rate is unreasonably high for the insur

ance provided; and 2. A reasonable degree of competition does not

exist in the area with respect to the classification to which the rate is applicable. The department may promulgate rules utilizing generally accepted actuarial and economic principles to describe the factors that will be utilized in determining when price competition and other elements of competition are sufficient to assure that rates are not excessive in relation to the benefits provided.

(b) No rate shall be held to be inadequate unless: 1. The rate is unreasonably low for the insurance

provided, and the continued use of the rate endangers the solvency of the insurer using the same; or

2. The rate is unreasonably low for the insurance provided, and the use of the rate by the insurer using the same has, or if continued will have, the effect of destroying competition or of creating a monopoly.

(c) A rate shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when such replenishment is attributable to investment losses.

(d) This subsection does not apply to motor vehicle insurance as defined in s. 627.041.

(3) Nothing contained in this section or elsewhere in this part shall be construed to repeal or modi!y the provisions of 'ss. 626.951 through 626.986, relatmg to unfair trade practices; and any rate, rating classification, rating plan or schedule, or variation thereof established in violation of such sections shall, in addition to the consequences stated in such sections or elsewhere, be deemed a violation of this section.

History.-s. 3, ch. 67-9; s. 3, ch. 71-3(8) ; s. 3, ch. 76-168; s. 21, ch. 77-468; s. I , ch. 77-457; s. 93, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 341, 357, 809(2nd), ch. 82-243; ss. 45, 49, 79, ch. 82-386.

'Note.-Expires October I , 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

' Note.-Section 626.986 was repealed by s. 10, ch. 76-260.

627.063 "Motor vehicle insurance" defined. -[Repealed by s. 342, ch. 82-243.]

'627.0651 Making and use of rates for motor vehicle insurance.-

(1) Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on motor vehicle insurance written in this state. A copy of rates, rating schedules, and rating manuals, and changes therein, shall be filed with the department as soon as practicable following their effective date, but no later than 30 days after that date.

(2) Upon receiving notice of a rate filing or rate change, the department shall review the rate or rate change to determine if the rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the department shall in accordance with generally accepted and reasonable actuarial techniques consider the following factors:

(a) Past and prospective loss experience within and outside this state.

(b) The past and prospective expenses. (c) The degree of competition among insurers for

the risk insured. (d) Investment income reasonably expected by

the insurer, consistent with the insurer's investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. Such investment income shall not include income from invested surplus. The department may promulgate rules utilizing reasonable techniques of actuarial science and economics to specify the manner in which insurers shall calculate investment income attributable to motor vehicle insurance policies written in this state and the manner in which such investment income is used in the calculation of insurance rates. Such manner shall contemplate the use of a positive underwriting profit allowance in the rates that will be compatible with a reasonable rate of return plus provisions for contingencies. The total of the profit and contingency factor as specified in the filing shall be utilized in computing excess profits in conjunction with s. 627.066. In promulgating such

827


rules, the department shall in all instances adhere to and implement the provisions of this paragraph.

(e) The reasonableness of the judgment reflected in the filing.

(f) Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida policyholders, members, or subscribers.

(g) The cost of repairs to motor vehicles. (h) The cost of medical services, if applicable. (i) The adequacy of loss reserves. (j) The cost of reinsurance. (k) Trend factors, including trends in actual loss

es per insured unit for the insurer making the filing. (I) Other relevant factors which impact upon the

frequency or severity of claims or upon expenses. (3) Rates shall be deemed excessive if they are

likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered.

(4) Rates shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when such replenishment is attributable to investment losses.

(5) Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.

(6) One rate shall be deemed unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses.

(7) Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as rates reflect the differences with reasonable accuracy.

(8) Rates are not unfairly discriminatory if averaged broadly among members of a group; nor are rates unfairly discriminatory even though they are lower than rates for nonmembers of the group. However, such rates are unfairly discriminatory if they are not actuarially measurable and credible and sufficiently related to actual or expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against.

(9) In reviewing the rate or rate change filed, the department may require the insurer to provide at the insurer's expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated herein.

(10) The department may, at any time, review a rate or rate change, the pertinent records of the insurer, and market conditions; and, if the department finds on a preliminary basis that the rate or rate change may be excessive, inadequate, or unfairly discriminatory, the department shall so notify the insurer. Upon being so notified, the insurer or rating organization shall, within 60 days, file with the department all information which, in the belief of the insurer or organization, proves the reasonableness, ade-

quacy, and fairness of the rate or rate change. In such instances and in any administrative proceeding relating to the legality of the rate, the insurer or rating organization shall carry the burden of proof by a preponderance of the evidence to show that the rate is not excessive, inadequate, or unfairly discriminatory. After the department notifies an insurer that a rate may be excessive, inadequate, or unfairly discrimina- ·: tory, unless the department withdraws the notification, the insurer shall n0t increase the rate until the earlier of 120 days after 2the date the notification was provided or 180 days after ' the date of the implementation of the rate. The department may, subject to chapter 120, disapprove without the 60-day notification any rate increase filed by an insurer within the prohibited time period or during the time that the legality of the increased rate is being contested.

(11) In the event the department finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the department shall order that a new rate or rate schedule be thereafter filed by the insurer and shall further provide information as to the manner in which noncompliance may be corrected. Supporting information responsive to the findings of the department shall be submitted with the filing.

History.-s. 22, ch. 77-468; s. 8, ch. 78-374; s. 2, ch. 81-318; ss. 343, 357, 809(2nd), ch. 82-243; ss. 46, 47, 49, 79, ch. 82-368.

'Note.-Expires October I, 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

2Note.- The words "the date" were inserted by the editors. 2Note.- The words "the date of" were inserted by the editors.

'627.066 Excessive profits for motor vehicle insurance prohibited.-

(!) As used herein: (a) "Private passenger automobile business"

means that insurance business that is written on a family automobile policy, standard automobile policy, or personal automobile or similar private passenger automobile policy written for personal use, as opposed to commercial automobile insurance business.

(b) "Cash" 'means coins, currency, checks, drafts, or money orders.

(2) Each Florida private passenger automobile insurer group shall file with the department, prior to July 1 of each year on forms prescribed by the department, the following ·data for Florida private passenger automobile business. The data filed for the group shall be a consolidation of the data of the individual insurers of the group. The data shall include both voluntary and joint underwriting association business, as follows:

(a) Calendar-year total limits earned premium. (b) Accident-year incurred losses and loss

adjustment expenses. (c) The administrative and selling expenses in

curred in this state or allocated to this state for the calendar year.

(d) Policyholder dividends incurred during the applicable calendar year.

(3)(a) Excessive profit has been realized if there has been an underwriting gain for the 3 most recent calendar-accident years combined which is greater than the anticipated underwriting profit plus 5 percent of earned premiums for those calendar-accident years.

(b) As used herein with respect to any 3-year pe-

828


riod, "anticipated underwriting profit" means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during such period, the earned premiums applicable to such rate filing during such period by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by Florida business. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.

(4) Each insurer group shall also file a schedule of Florida private passenger automobile loss and lossadjustment experience for each of the 3 most recent accident years. The incurred losses and lossadjustment expenses shall be valued as of March 31 of the year following the close of the accident year, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of three evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1976, so that the reporting of 3 accident years will not take place until accident years 1977 and 1978 have become available.

(5) Each insurer group's underwriting gain or loss for each calendar-accident year shall be computed as follows: The sum of the accident-year incurred losses and loss-adjustment expenses as of March 31 of the following year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, will be subtracted from the calendar-year earned premium to determine the underwriting gain or loss.

(6) For the 3 most recent calendar-accident years, the underwriting gain or loss will be compared to the anticipated underwriting profit.

(7) If the insurer group has realized an excessive profit, the department shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the department that the refund of the excessive amounts will render a member of the insurer group insolvent under the provisions of the Florida Insurance Code.

(8) The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the voluntary private passenger automobile policyholders of record of the insurer group on December 31 of the final compilation year.

(9) Any excess profit of an insurance company offering motor vehicle insurance shall be returned to policyholders in the form of a cash refund or a credit towards the future purchase of insurance.

(lO)(a) Cash refunds to policyholders may be rounded to the nearest dollar.

(b) Data in required reports to the department may be rounded to the nearest dollar.

(c) Rounding, if elected by the insurer group, shall be applied consistently.

(ll)(a) Refunds shall be completed in one of the following ways:

1. If the insurer group elects to make a cash re-

fund, the refund shall be completed within 60 days of entry of a final order indicating that excessive profits have been realized.

2. If the insurer group elects to make refunds in the form of a credit to renewal policies, such credits shall be applied to policy renewal premium notices which are forwarded to insureds more than 60 calendar days after entry of a final order indicating that excessive profits have been realized. If an insurer group has made this election but an insured thereafter cancels his policy or otherwise allows his policy to terminate, the insurer group shall make a cash refund not later than 60 days after termination of such coverage.

(b) Upon completion of the renewal credits or refund payments, the insurer group shall immediately certify to the department that the refunds have been made.

(12) Any refund or renewal credit made pursuant to this section shall be treated as a policyholder dividend applicable to the year in which it is incurred, for purposes of reporting under this section for subsequent years.

(13) Since it appears to the Legislature that private passenger automobile insurer groups have realized excessive profits during all or part of the years 1977, 1978, and 1979 and that such profits were realized in part due to statutory changes for which rates were not adequately adjusted, it is the desire and intent of the Legislature that the provisions of this section, as amended by chapter 80-236, Laws of Florida, shall apply retroactively to excessive profits realized during the years 1977, 1978, and 1979. In the event that such retroactive application is judicially determined to be unconstitutional, it is the intent of the Legislature that the act be given prospective application as stated hereinafter. Prior to July 1, 1982, the data required by this section shall be submitted to the department for the years 1979, 1980, and 1981. Excessive profits shall be calculated in accordance with the provisions of this section. However, only the excessive profits realized by the insurer group in 1981 shall be refunded to policyholders, and such refunds shall be made in accordance with this section. Prior to July 1, 1983, the data required by this section shall be submitted to the department for the years 1980, 1981, and 1982. Excessive profits shall be calculated in accordance with this section; however, refunds shall only be made for excessive profits realized in the years 1981 and 1982. Thereafter, excessive profits shall be calculated and refunded on the . basis of 3 years as set forth in this section.

History.-s. 23, ch. 77-468; ss. 26, 27, ch. 80-236; s. 424, ch. 81-259; s. 2, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

'Note.-Repealed effective October 1, 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

627.071 "Inland marine insurance" defined. -[Amended and transferred to s. 624.607(3) by s. 80, ch. 82-243; the repeal of this section by s. 2, ch. 82-318, was nullified by s. 357, ch. 82-243.]

1627.072 Making and use of rates.-(1)(a) As to all rates which are subject to this

part, other than motor vehicle insurance, the following factors shall be used in the determination and fixing of rates:

829


1. The past loss experience and prospective loss experience within and outside this state;

2. The conflagration and catastrophe hazards; 3. A reasonable margin for underwriting profit

and contingencies; 4. Dividends, savings, or unabsorbed premium

deposits allowed or returned by insurers to their policyholders, members, or subscribers;

5. Investment income on unearned premium reserves and loss reserves;

6. Past expenses and prospective expenses, both those countrywide and those specifically applicable to this state; and

7. All other relevant factors, including judgment factors, within and outside this state.

(b) In the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent 5-year period for which such experience is available.

(2) The systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

(3) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that can be demonstrated to have a probable effect upon losses or expenses. Such classifications and modifications shall apply to all risks under the same or substantially the same circumstances or conditions.

(4)(a) In the case of workers' compensation and employer's liability insurance, the department shall consider utilizing the following methodology in rate determinations: Premiums, expenses, and expected claim costs would be discounted to a common point of time, such as the initial point of a policy year, in the determination of rates; the cash-flow pattern of premiums, expenses, and claim costs would be determined initially by using data from 8 to 10 of the largest insurers writing workers' compensation insurance in the state; such insurers may be selected for their statistical ability to report the data on an accidentyear basis and in accordance with subparagraphs (b) 1., 2., and 3. , for at least 21f2 years; such a cash-flow pattern would be modified when necessary in accordance with the data and whenever a radical change in the payout pattern is expected in the policy year under consideration.

(b) If the methodology set forth in paragraph (a) is utilized, to facilitate the determination of such a cash-flow pattern methodology:

1. Each insurer shall include in its statistical reporting to the rating bureau and the department the accident year by calendar quarter data for paid-claim costs;

2. Each insurer shall submit financial reports to

the rating bureau and the department which shall include total incurred claim amounts and paid-claim amounts by policy year and by injury types as of December 31 of each calendar year; and

3. Each insurer shall submit to the rating bureau and the department paid-premium data on an individual risk basis in which risks are to be subdivided by premium size as follows:

Number of Risks in Premium Range

[to be filled in by carrier]

Total:

Standard Premium Size

$300-999 1,000-4,999

5,000-49,999 50,000-99,999

100,000 or more

4. Each insurer which does not have the capability of reporting in accordance with subparagraphs 1., 2. , and 3. shall be required to commence such reporting procedures as of January 1, 1980.

(c) The Insurance Commissioner is directed to consider using the methodology specified in paragraph (a) prior to March 31, 1980; and, in the event he decides not to use this methodology, he shall report such decision and his reasons therefor to the committees of substance in the area of insurance in each house of the Legislature by March 31, 1980.

History.-s. 4, ch. 67-9; s. I , ch. 70-179; s. 3, ch. 76-168; s. I , ch. 77-457; s. 24, ch. 77-468; s. 94 , ch. 79-40; ss. 2, 3, ch. 81-318; ss. 344, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.


'627.091 Rate filings; workers' compensation and employer's liability insurances.-

(1) As to workers' compensation and employer's liability insurances, every insurer shall file with the department every manual of classifications, rules, and rates, every rating plan, and every modification of any of the foregoing which it proposes to use. Every insurer is authorized to include deductible provisions in its manual of classifications, rules, and rates. Such deductibles shall in all cases be in a form and manner which is consistent with the underlying purpose of chapter 440.

(2) Every such filing shall state the proposed effective date thereof, and shall indicate the character and extent of the coverage contemplated. When a filing is not accompanied by the information upon which the insurer supports the filing and the department does not have sufficient information to determine whether the filing meets the applicable requirements of this part, it shall within 15 days after the date of filing require the insurer to furnish the information upon which it supports the filing; and, in such event, the waiting period provided for ins. 627.101(2) shall commence as of the date such information is furnished. The information furnished in support of a filing may include:

(a) The experience or judgment of the insurer or rating organization making the filing;

(b) Its interpretation of any statistical data it relies upon;

(c) The experience of other insurers or rating organizations; or

830


(d) Any other factors which the insurer or rating organization deems relevant.

(3) A filing and any supporting information shall be open to public inspection as provided ins. 627.101.

(4) An insurer may satisfy its obligation to make such filings by becoming a member of, or a subscriber to, a licensed rating organization which makes such filings and by authorizing the department to accept such filings in its behalf; but nothing contained in this chapter shall be construed as requiring any insurer to become a member or a subscriber to any rating organization.

(5) Pursuant to the provisions of s. 627.321, the department may examine the underlying statistical data used in such filings.

(6) Whenever the committee of a recognized rating organization with responsibility for workers ' compensation and employer's liability insurance rates in this state meets to discuss the necessity for, or a request for, Florida rate increases or decreases, the determination of Florida rates, the rates to be requested, and any other matters pertaining specifically and directly to such Florida rates, such meetings shall be held in this state and shall be subject to s. 286.011. The committee of such a rating organization shall provide 6 weeks' notice to the department. The department shall provide at least 3 weeks' notice to the public of such meetings.

His to r y.-s. 419, ch. 59-205; s. 5, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 77-457; s. 20, ch. 78-300; s. 95, ch. 79-40; ss. 20, 22, ch. 80-236; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.

'Note.-Repealed effective October 1, 1987, by s. 806, ch. 82-243, and scheduled fo r review pursuant to s. 11.61 in advance of that date.

'627.092 Workers' Compensation Administrator.-There is created within the Division of Insurance Company Regulation of the Department of Insurance the position of Workers' Compensation Administrator to monitor carrier practices in the field of workers' compensation.

History.-s. 21, ch. 78-300; s. 96, ch. 79-40; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.


'627.093 Application of s. 286.011 to workers' compensation and employer's liability insurances.-Section 286.011 shall be applicable to every rate filing, approval or disapproval of filing, rating deviation from filing, or appeal from any of these regarding workers' compensation and employer's liability insurances.

History.-s. 97, ch. 79-40; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.


have the authority to promulgate rules requiring all workers ' compensation and employer's liability insurers to submit to the rating bureau any data, statistics, schedules, and other information deemed necessary to the rating bureau's study and advisement.

(2) The acquisition by the Department of General Services of data processing software, hardware, and services necessary to carry out the provisions of this act for the Treasurer's Management Information Center of the Department of Insurance shall be exempt from the provisions of part I of chapter 287.

His tory.-s. 98, ch. 79-40; s. 2, ch. 81-318; ss. 345, 357, 806, ch. 82-243; s. 49, ch. 82-386.


'627.101 When filing becomes effective; workers' compensation and employer's liability insurances.-

(!) The department shall review filings as t o workers ' compensation and employer's liability insurances as soon as reasonably possible after they have been made in order to determine whether they meet the applicable requirements of this part. If the department determines that part of a rate filing does not meet the applicable requirements of this part, it may reject so much of the filing as does not meet these requirements, and approve the remainder of the filing.

(2) Within 15 days after the date the filing , together with any additional informat ion, if any, in support of the filing which has been requested by the department under s. 627.091(2), has been received by the department, the department shall place the filing and its supporting information on file in its office for public inspection and give notice thereof to the insurer or rating organization that made the filing.

(3) A filing which the department has placed on file for public inspection as provided in subsection (2) shall so remain on file for 15 days (counting such filing date as the first day of such public inspection period) and shall not be approved, be disapproved, or become effective during such 15-day period except after a public hearing. After the 15-day public inspection period, the department shall specifically approve the filing before it becomes effective, unless within such 15-day period the department has concluded it to be in the public interest to hold a public hearing to determine whether the filing meets the requirements of this chapter and has given notice of such hearing to the insurer or rating organization that made the filing, and in which case the effectiveness of the filing shall be subject to the further order of the department made as provided ins. 627.111. If after the 15-day public inspection period the department specifi-

'627.096 Workers' Compensation Rating Bu- cally disapproves the filing, the provisions of subsec-reau.- tion (5) shall apply.

(1) There is created within the department a (4) An insurer or rating organization may, at the Workers' Compensation Rating Bureau, which shall time it makes a filing with the department, request a make an investigation and study of all insurance public hearing thereon. In such event, the departcompanies authorized to issue workers' compensation ment shall forthwith place the filing on file in its ofand employer's liability coverage in this state. Such fice for public inspection and shall give notice of the bureau shall study the data, statistics, schedules, or hearing. other information as it may deem necessary to assist (5) If the department disapproves a filing, it shall and advise the department in its review of filings promptly give notice of such disapproval to the insurmade by or on behalf of workers' compensation and er or rating organization that made the filing, stating employer's liability insurers. The department shall the respects in which it finds that the filing does not

831

s. 627.101 1982 ·SUPPLEMENT TO FLORIDA STATUTES 1981 s. 627.211

meet the requirements of this chapter. If the department approves a filing, it shall give prompt notice thereof to the insurer or rating organization that made the filing, and in which case the filing shall become effective upon such approval or upon such subsequent date as may be satisfactory to the department and the insurer or rating organization that made the filing. If the filing becomes effective in the absence of affirmative approval, or disapproval, as provided in subsection (3) , the filing shall become operative upon such effective date or upon such subsequent date as may be provided for therein.

History.-s. 420, ch. 59-205; s. 6, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I , ch. 77-457; s. 21, ch. 78-95; s. 22, ch. 78-300; s. 99, ch. 79-40; ss. 2, :1, ch. 81-:1 18: ss. 3fi7, 806, ch. 82-243; s. 49, ch. 82-386.

'Note .- Repealed effective October I, 1987, by s. 806, ch. 82-243, and scheduled for review pursuant to s. 11.6 1 in advance of t hat date.

1627.111 Effective date orfiling.-(1) If, pursuant to s. 627.101(3), the department

determines to hold a public hearing as to a filing, or it holds such a public hearing pursuant to request therefor under s. 627.101(4), it shall give written notice thereof to the rating organization or insurer that made the filing and shall hold such hearing within 30 days after commencement of the public inspection period provided for in s. 627.101(2) or (4); and, not less than 10 days prior to the date of the hearing, it shall give written notice of the hearing to the insurer or rating organization that made the filing. The department may also, in its discretion, give advance public notice of such hearing by publication of notice in one or more daily newspapers of general circulation in this state.

(2) If the order of the department disapproves the filing, the filing shall not become effective during the effectiveness of such order. If the order of the department approves the filing, the filing shall become effective upon the date of the order or upon such subsequent date as may be satisfactory to the insurer or rating organization that made the filing.

His tory .-s. 421, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I , ch. 77-457: s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.

'Note.-Repealed effective October I, 1987, by s. 806, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that da te.

1627.141 Subsequent disapproval of filing; workers' compensation and employer's liability insurances.-If at any time after a filing has been approved by it or has otherwise become effective the department finds that the filing no longer meets the requirements of this chapter, it shall issue an order specifying in what respects it finds that such filing fails to meet such requirements and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. The order shall not affect any insurance contract or policy made or issued prior to the expiration of the period set forth in the order.

History.-s. 424, ch. 59-205; s. 7, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I , ch. 77-457; s. 21, ch. 78-95; s. 100, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-24:1; s. 49, ch. 82-386.

'Note.-Repealed effect ive October I , 1987, by s. 806, ch. 82-243, and scheduled for review pursuant to s. 11.6 1 in advance of t hat date.

tion or employer's liability insurance, or to permit the filing otherwise to become effective, the department shall give consideration only to the applicable standards and factors referred to in ss. 627.062 and 627.o72.

(2) As to -workers' compensation and employer's liability insurances, no manual of classifications, rule, rating plan, rating system, plan of operation, or any modification of any of the foregoing which establishes standards for measuring variations in hazards or expense provisions, or both, shall be disapproved if the rates thereby produced meet the applicable requirements of this part.

History.-s. 425, ch. 59-205; s. 8, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I , ch. 77-457; s. 101 , ch. 79-40; ss. 2, 3, ch. 81-:ll8; ss. 357,806, ch. 82-243; s. 49, ch. 82-386. .

'Note.-Repealed effective October 1, 1987, by s. 806, ch. 82-243, and scheduled· for review pursuant to s. 11.61 ih advance of that date.

1627.171 Excess rates.-With written consent of the insured filed with the insurer, a rate in excess of that otherwise applicable may be used on any specific risk.

His tory.-s. 427, ch. 59-205; s. 9, ch. 67-9; s. 3, ch. 76- 168; s. I , ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.

'Note.-Repealed effective October I , 1987, by s. 806, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1627.191 Adherence to filings; workers' compensation and employer's liability insurances. -No insurer or employee thereof, and no agent, shall make or issue a contract or policy of workers' compensation or employer's liability insurance except in accordance with the filings which are in effect for such insurer, as provided in the applicable provisions of this part, or in accordance with s. 627.171.

History.-s. 429, ch. 59-205; s. 11 , ch. 67-9; s. 3, ch. 76-168; s. I , ch. 77-457; s. 102, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.

'Note.- Repealed effect ive October I , 1987, by s. 806, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1627.211 Deviations; workers' compensation and employer's liability insurances.-

(1) Every member or subscriber to a rating organization shall, as to workers ' compensation or employer's liability insurance, adhere to the filings made on its behalf by such organization; except that any such insurer may make written application to the department for permission to file a uniform percentage decrease or increase to be applied to the premiums produced by the rating system so filed for a kind of insurance, for a class of insurance which is found by the department to be a proper rating unit for the application of such uniform percentage decrease or increase, or for a subdivision of workers' compensation or employer's liability insurance:

(a) Comprised of a group of manual classifications which is treated as a separate unit for ratemaking purposes; or

(b) For which separate expense provisions are included in the filings of the rating organization.

Such application shall specify the basis for the modi fication and shall be accompanied by the data upon which the applicant relies. A copy of the application

1627.151 Basis of approval or disapproval of and data shall be sent simultaneously to the rating workers' compensation or employer's liability organization. insurance filing; scope of disapproval power.- (2) In considering the application for permission

(1) In determining at any time whether to ap- to file the deviation, the department shall give conprove or disapprove a filing as to workers ' compensa- sideration to the applicable principles for ratemaking

832


as set forth in ss. 627.062 and 627.072. The department shall issue an order permitting the deviation for such insurer to be filed if it finds it to be justified. It shall issue an order denying such application if it finds that the resulting premiums would be excessive, inadequate, or unfairly discriminatory.

(3) Each deviation permitted to be filed shall be effective for a period of 1 year from the date of such permission unless terminated sooner with the approval of the department, but no such termination shall be effectuated until after the deviation has been in effect for a period of at least 6 months.

His tory.-s. 431, ch. 59-205; s. 12, ch. 67-9; ss. 13, 35, ch. 69- 106; s. 3, ch. 76-168; s. I, ch. 77-457; s. 21, ch. 78-95; s. 103, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.

' Note.-Repealed effective October I , 1987, by s. 806, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.215 Excessive profits for workers' compensation and employer's liability insurances prohibited.-

(!) Each insurer group shall file with the department prior to July 1 of each year, on a form prescribed by the department, the following data for workers ' compensation and employer's liability insurances:

(a) Calendar-year earned premium. (b) Accident-year incurred losses and loss

adjustment expenses. (c) The administrative and selling expenses in

curred in this state or allocated to this state for the calendar year.

(d) Policyholder dividends applicable to the calendar year.

The data filed for the group shall be a consolidation of the data of the individual insurers of the group.

(2)(a) Excessive profit has been realized if underwriting gain is greater than the anticipated underwriting profit plus 5 percent of earned premiums for the 3 most recent calendar years.

(b) As used in this section with respect to any 3-year period, "anticipated underwriting profit" means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during such period, the earned premiums applicable to such rate filing during such period by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by Florida business. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.

(3) Each insurer group shall also file a schedule of Florida loss and loss-adjustment experience for each of the 3 most recent accident years. The incurred losses and loss-adjustment expenses shall be valued as of December 31 of the accident year, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of three evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1979, so that the reporting of 3 accident years will not take place until accident years 1980 and 1981 have become available. For reporting purposes unrelated to determining excessive profits,

the loss and loss-adjustment experience of each accident year shall continue to be reported until each accident year has been reported at eight stages of development.

(4) Each insurer group's underwriting gain or loss for each calendar-accident year shall be computed as follows: The sum of the accident-year incurred losses and loss-adjustment expenses as of December 31 of the year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, shall be subtracted from the calendar-year earned premium to determine the underwriting gain or loss.

(5) For the 3 most recent calendar-accident years, the underwriting gain or loss shall be compared to the anticipated underwriting profit.

(6) If the insurer group has realized an excessive profit, the department shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the department that the refund of the excessive amounts will render a member of the insurer group insolvent under the provisions of the Florida Insurance Code.

(7) Any excess profit of an insurance company offering workers' compensation or employer's liability insurance shall be returned to policyholders in the form of a cash refund or a credit toward the future purchase of insurance. The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the workers' compensation policyholders of record of the insurer group on December 31 of the final compilation year.

(8)(a) Cash refunds to policyholders may be rounded to the nearest dollar.

(b) Data in required reports to the department may be rounded to the nearest dollar.

(c) Rounding, if elected by the insurer, shall be applied consistently.

(9)(a) Refunds shall be completed in one of the following ways:

1. If the insurer group elects to make a cash refund, the refund shall be completed within 60 days of entry of a final order indicating that excessive profits have been realized.

2. If the insurer group elects to make refunds in the form of a credit to renewal policies, such credits shall be applied to policy renewal premium notices which are forwarded to insureds more than 60 calendar days after entry of a final order indicating that excessive profits have been realized. If an insurer group has made this election but an insured thereafter cancels his policy or otherwise allows his policy to terminate, the insurer group shall make a cash refund not later than 60 days after termination of such coverage.

(b) Upon completion of the renewal credits or refund payments, the insurer group shall immediately certify to the department that the refunds have been made.

(10) Any refund or renewal credit made pursuant to this section shall be treated as a policyholder dividend applicable to the year in which it is incurred, for

833


purposes of report ing under this section for subsequent years. His tory.~s. 104, ch. 79·40; ss. 21, 22, ch. 80-236; s. 425, ch. 81-259; s. 2, ch.

81-;!18; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386. ' Note.~Repealed effective October 1, 1987, by s. 806, ch. 82-243, and sched

uled for review pu rsuant to s. 11.61 in advance of that date.

'627.221 Rating organizations; licensing; fee.(1) A person, whether located within or outside

this state, may make application to the department for a license as a rating organization. As to property or inland marine insurance, the application shall be for such kinds of insurance or subdivisions thereof or classes of risk or a part or combination thereof as are specified in the application. As to casualty and surety insurances, the application shall be for such kinds of insurance or subdivisions thereof as are specified in the application. The applicant shall file with its application:

(a) A copy of its constitut ion, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules, and regulations governing the conduct of its business;

(b) A list of its members and subscribers; (c) The name and address of a resident of this

state upon whom notices or orders of the department or process affecting such rating organization may be served; and

(d) A statement of its qualifications as a rating organization.

If the department finds that the applicant is competent, t rustworthy, and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules, and regulations governing the conduct of its business conform to the requirements of law, it shall issue a license specifying (in the case of a casualty or surety rating organizat ion) the kinds of insurance or subdivisions thereof, or (in the case of a property insurance rating organization) the kinds of insurance or subdivisions thereof or classes of risk or a part or combination thereof, for which the applicant is authorized to act as a rating organization.

(2) Licenses issued pursuant to this section shall expire on the September 30 next following date of issuance and shall be subject to annual renewal.

(3) The fee for the license shall be in the amount specified therefor in s. 624.501. This fee, when collected, shall be deposited to the credit of the Insurance Commissioner's Regulatory Trust Fund. History.~s. 432, ch. 59-205; s. 17, ch. 65-269; ss. 13, 35, ch. 69-106; s. 3, ch.

76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 346,357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

' Note .~Expires October I, 1992, pursuant to s. 809(2nd ), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'627.231 Subscribers to rating organizations.(! ) Subject to rules and regulations which have

been approved by the department as reasonable, each rating organization shall permit any insurer, not a member, to subscribe to its rating services. As to property and marine rating organizations, an insurer shall be so permitted to subscribe to rating services for any kind of insurance , subdivision thereof, or class of risk or a part or combination thereof for which the rating organization is authorized so to act.

As to casualty and surety rating organizations, an insurer shall be so permitted to subscribe to rating services for any kind of insurance or subdivision thereof for which the rating organization is authorized so to act. The rating organization shall give notice to subscribers of proposed changes in such rules and regulations.

(2) The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber, shall, at the request of any subscriber or any such insurer, be reviewed by the department. If the department finds that such rule or regulation is unreasonable in its application to subscribers, it shall order that such rule or regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurer's application for subscribership within 30 days after it was made, the insurer may request a review by the department as if the application had been rejected. If the department finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, it shall order the rating organization to admit the insurer as a subscriber. If it finds that the action of the rating organization was justified, it shall make an order affirming its action.

(3) Each rating organization shall furnish its rating services without discrimination to its members and subscribers. History.~s. 433, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I , ch. 77-

457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

' Note .~Repealed effective October I , 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.241 Notice of changes.- Every rating organization shall notify the department promptly of every change in:

(1) Its constitution, its articles of agreement or association, or its certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business;

(2) Its list of members and subscribers; and (3) The name and address of the resident of this

state designated by it upon whom notices or orders of the department or process affecting such rating organization may be served. His tory.~s. 434, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-

457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386. 'Note.~Repea led effective October I , 1992, by s. 809(2nd), ch. 82-243, and


'627.251 Bureau rules not to affect dividends.-No rating organization shall adopt any rule the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers. History.~s. 435, ch. 59-205; s. 3, ch. 76-168; s. I , ch. 77-457; ss. 2, 3, ch. 81-

318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386. 'Note.~Repealed effect ive October I, 1992, by s. 809(2nd), ch. 82-243, and


'627.261 Actuarial and technical services. -Any rating organization may subscribe for or purchase actuarial, technical, or other services; and such services shall be available to all members and subscribers without discrimination. His tory.~s. 436, ch. 59-205; s. 3, ch. 76-168; s. I , ch. 77-457; ss. 2, 3, ch. 81-

318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

834


'Note.-Repealed effective October I , 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

627.271 Stamping bureau.-[Repealed by s. 347, ch. 82-243.]

1627.281 Appeal from rating organization; workers' compensation and employer's liability insurance filings.-

(1) Any member or subscriber to a rating organization may appeal to the department from the action or decision of such rating organization in approving or rejecting any proposed change in or addition to the workers' compensation or employer's liability insurance filings of such rating organization, and the department shall issue an order approving the decision of such rating organization or directing it to give further consideration to such proposal. If such appeal is from the action or decision of the rating organization in rejecting a proposed addition to its filings , the department may, in the event it finds that such action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings, on behalf of its members and subscribers, in a manner consistent with its findings, within a reasonable time after the issuance of such order.

(2) If such appeal is based upon the failure of the rating organization to make a filing on behalf of such member or subscriber which is based on a system of expense provisions which differs, in accordance with the right granted in s. 627.072(2) , from the system of expense provisions included in a filing made by the rating organization, the department shall, if it grants the appeal, order the rating organization to make the requested filing for use by the appellant. In deciding such appeal, the department shall apply the applicable standards set forth in ss. 627.062 and 627.072.

History.-s. 438, ch. 59-205; s. 13, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 77-457; s. 21, ch. 78-95; s. 105, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.

'Note.-Repealed effective October I , 1987, by s. 806, ch. 82-243, and scheduled fo r review pursuant to s. 11.61 in advance of that date.

the action of such rating organization or insurer on such request may, within 30 days after written notice of such action, appeal to the department, which may affirm or reverse such action.

History.-s. 439, ch. 59-205; s. 14, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I , ch. 77-457; s. 21, ch. 78-95; s. 106, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386.

' Note.-Repealed effective October 1, 1987, by s. 806, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1627.301 Advisory organizations.-(!) No advisory organization shall conduct its op

erations in this state unless and until it has filed with the department:

(a) A copy of its constitution, articles of incorporation, articles of agreement or of association, and bylaws or rules and regulations governing its activities, all duly certified by the custodian of the originals thereof;

(b) A list of its members and subscribers; and (c) The name and address of a resident of this

state upon whom notices or orders of the department or process may be served.

(2) Every such advisory organization shall notify the department promptly of every change in:

(a) Its constitution; (b) Its articles of incorporation, agreement, or as

sociation; (c) Its bylaws, rules and regulations governing the

conduct of its business; (d) The list of members and subscribers; and (e) The name and address of the resident of this

state designated by it upon whom notices or orders of the department or process affecting such organization may be served.

(3) No such advisory organization shall engage in any unfair or unreasonable practice with respect to such activities.

History.-s. 440, ch. 59-205; s. 15, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

'Note.- Repealed effective October 1, 1992, by s. 809(2nd) , ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1627.291 Information to be furnished in- 1627.311 Joint underwriters and joint rein-sureds; appeal by insureds; workers' compensa- surers.-tion and employer's liability insurances.- (I) Every group, association, or other organiza-

(1) As to workers' compensation and employer's tion of insurers which engages in joint underwritings liability insurances, every rating organization and ev- or joint reinsurance shall be subject to regulation ery insurer which makes its own rates shall, within a with respect thereto as herein provided, subject, howreasonable time after receiving written request there- ever, with respect to joint underwriting, to all other for and upon payment of such reasonable charge as it provisions of this chapter and, with respect to joint may make, furnish to any insured affected by a rate reinsurance, toss. 624.15 and 627.321. made by it, or to the authorized representative of (2) If the department finds that any activity or such insured, all pertinent information as to such practice of any such group, association, or other orgarate. nization is unfair or unreasonable or otherwise incon-

(2) As to workers' compensation and employer's sistent with the provisions of this chapter, it may isliability insurances, every rating organization and ev- sue a written order specifying in what respects such ery insurer which makes its own rates shall provide activity or practice is unfair or unreasonable or otherwithin this state reasonable means whereby any per- wise inconsistent with the provisions of this chapter, son aggrieved by the application of its rating system and requiring the discontinuance of such activity or may be heard, in person or by his authorized repre- practice. sentative, on his written request to review the man- (3) The department may, after consultation with ner in which such rating system has been applied in insurers licensed to write automobile insurance in connection with the insurance afforded him. If the this state, approve a joint underwriting plan for purrating organization or insurer fails to grant or rejects poses of equitable apportionment or sharing among such request within 30 days after it is made, the ap- insurers of automobile liability insurance and other plicant may proceed in the same manner as if his ap- motor vehicle insurance, as an alternate to the plan plication had been rejected. Any party affected by required in s. 627.351(1). All insurers authorized to

835


write automobile insurance in this state shall subscribe .to the plan and participate therein. The plan shall be subject to continuous review by the department which may at any time disapprove the entire plan or any part thereof if it determines that conditions have changed since prior approval and that in view of the purposes of the plan changes are warranted. Any disapproval by the department shall be subject to the provisions of chapter 120. If adopted, the plan:

(a) Shall be subject to all provisions of s. 627.351(1), except apportionment of applicants;

(b) May provide for one or more designated insurers, able and willing to provide policy and claims service, to act on behalf of all other insurers to provide insurance for applicants who are in good faith entitled to, but unable to, procure insurance through the voluntary insurance market at standard rates;

(c) Shall provide that designated insurers shall issue policies of insurance and provide policyholder and claims service on behalf of all insurers for the joint underwriting association;

(d) Shall provide for the equitable apportionment among insurers of losses and expenses incurred;

(e) Shall provide that the joint underwriting association shall operate subject to the supervision and approval of a board of governors consisting of 11 individuals, including 1 who shall be elected as chairman. Five members of the board shall be appointed by the Insurance Commissioner. Two of the commissioner's appointees shall be chosen from the insurance industry. Any board member appointed by the Insurance Commissioner may be removed and replaced by him at any time without cause. Six members of the board shall be appointed by the participating insurers, two of whom shall be from the insurance agents' associations. All board members, including the chairman, shall be appointed to serve for 2-year terms beginning annually on a date designated by the plan; and

(f) Shall provide that an agent appointed to a servicing carrier shall be a licensed general lines agent of an insurer which is authorized to write automobile liability and physical damage insurance in the state and which is actively writing such coverage in the county in which the agent is located, or the immediately adjoining counties, or an agent who places a volume of other property and casualty insurance in an amount equal to the premium volume placed with the Florida Joint Underwriting Association. The department may, however, determine that an agent may be appointed to a servicing carrier if, after public hearing, the department finds that consumers in the agent's operating area would not have adequate and reasonable access to the purchase of automobile insurance if the agent were not appointed to a servicing carrier.

(4)(a) The department may, after consultation with insurers licensed to write workers' compensation and employer's liability insurances in this state, approve a joint underwriting plan for the purpose of equitable apportionment or sharing of workers' compensation and employer's liability insurances among insurers. The plan shall operate subject to the supervision of a board of governors, to be named by the Insurance Commissioner, the members of which shall

serve for terms of 2 years, consisting of three insurers participating in the plan, three employers, and one producing agent for the plan. The minutes, audits, and procedures of the board of governors shall be subject to chapter 119. The plan of operation of the joint underwriting plan shall be prepared by the board of governors and shall be subject to approval by the Insurance Commissioner. In addition, the Insurance Commissioner shall review the plan of operation on an ongoing basis. The plan shall be subject to revision at the request of the Insurance Commissioner at any time. The board of governors shall designate one or more servicing carriers for the plan from the ranks of those insurers participating in the plan. Any such designation shall be subject to the approval of the Insurance Commissioner, and any such designation may be rescinded for cause by the board subject to the approval of the Insurance Commissioner or by the Insurance Commissioner if deemed appropriate in the exercise of his judgment. The plan shall take such actions as will, in the judgment of the board, encourage safety among its insureds. It shall .annually report to the Department of Insurance and to the Legislature on those actions taken by it in this regard. It shall employ full-time safety consultants or engineers who will be available to advise insureds who may from time to time seek advice regarding safety procedures and to advise such insureds as may demonstrate an unreasonably high frequency of worker accidents. Each designated servicing carrier shall provide as a condition for such designation sufficient personnel to provide support for such safety management subject to coordination by the chief safety manager of the plan. In addition, each designated ·servicing carrier shall provide personnel for claims adjustment so as to avoid undue costs due to unjust or improper claims against the plan. Such personnel shall be responsive to the requirements and policy dictates of the board of governors subject to approval by the Insurance Commissioner. In the event that no insurer is willing or able in the judgment of the Insurance Commissioner to act as a servicing carrier for the plan, then the board shall have the power to designate a manager and such staff as may in its judgment be necessary in addition to the chief safety manager and related staff to operate the plan. Designated servicing carriers shall provide policy and claims service on behalf of all other insurers participating in the plan in order to provide workers' compensation and employer's liability insurances for applicants who are in good faith entitled to but who are unable to purchase workers' compensation and employer's liability insurances through the voluntary insurance market at standard rates. Such plan shall provide that the designated insurers shall issue policies of insurance and provide policyholder and claims service on behalf of all insurers for the Joint Underwriting Association. The plan shall provide for the equitable apportionment among insurers of losses and expenses incurred. The plan is authorized to pay a commission to producing agents not to exceed 5 percent of the total premium. If the plan is adopted, all insurers authorized to write workers' compensation and employer's liability insurances in this state shall subscribe thereto and participate therein. The

836


plan shall be operated as a nonprofit venture. The plan shall be divided into two subplans as follows:

1. Subplan "A" shall provide coverage for insureds who have a demonstrated accident frequency problem, who have a measurably adverse loss ratio over a period of years, or who have demonstrated an attitude of noncompliance with safety requirements.

2. Subplan "B" shall provide coverage for all other insureds of the joint underwriting plan.

The methodology of applying these criteria, which shall be used to determine into which subplan an insured shall be placed, shall be determined by the Insurance Commissioner, and such methodology shall be applied regardless of the number of employees or the amount of payroll of the insured. The board of governors shall establish a system of surcharges applicable to insureds covered under subplan A, subject to approval by the Insurance Commissioner. A system of surcharges applicable to insureds covered under subplan B shall not be established. Retrospective evaluation of premiums and loss and expense experience of insureds within either subplan, as well as retrospective evaluation of premiums, losses, and expense experience of each subplan, shall be performed by the board of governors according to methodology submitted by the board to, and approved by, the Insurance Commissioner. If the board of governors determines by such retrospective evaluation of a subplan that a return of a portion of premiums is in order, then such a return shall be accomplished within such subplan subject to the approval of the Insurance Commissioner.

(b) No later than 45 days prior to the expiration date of an insured's policy year, the insured shall be advised by the insurer that he may be continued in or assigned to the joint underwriting plan and advised that such assignment will require an additional cost or premium. The insured shall be advised that, if he desires, his name will be filed publicly with the Department of Insurance to enable insurance providers the opportunity to offer coverage outside the plan. If the insured agrees, his name, company name, mailing address, telephone number, and the names of his insurer and agent shall be placed on file no later than 25 days prior to the policy expiration date with the Department of Insurance. Any policy subsequently written as a result of the provisions of this paragraph shall be subject to s. 626.752.

(c) Effective July 1, 1981, self-insurers as defined ins. 440.02(7)(b)l. and 3. shall participate in the equitable apportionment among insurers of losses and loss-adjustment expenses incurred by the plan with credit for investment income. Expenses shall be limited to actual expenses incurred by the plan. However, this paragraph shall not apply to governmental entities which are self-insurers under s. 440.38(6) or s. 440.57 or public utilities who are self-insurers under s. 440.38(1)(b). Self-insurers participating in the plan shall be deemed to be insurers for the purposes of this subsection. When the provisions of this paragraph become effective, two individual self-insurers participating in the plan and authorized under s. 440.38(1)(b) and two group self-insurers participating in the plan and authorized under s. 440.57 shall

be added to the board of governors as named by the Insurance Commissioner.

History.-s. 441, ch. 59-205; ss. 13, 35, ch. 69- 106; s. I , ch. 74-51; s. 3, ch. 76-168; s. 16, ch. 77-290; s. I, ch. 77-457; s. 21, ch. 78-95; s. 107, ch. 79-40; ss. I, 2, 4, ch. 79-394; s. 238, ch. 79-400; ss. 1. 2, ch. 80-360; ss. I. 2, ch. 80-362; ss. 2, 3, ch. 81-3 18; ss. 357, 809(2nd) . ch. 82-243; ss. 49, 79, ch. 82-386.

'Note.-Repealed effective October I, 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.314 Concerted action by two or more insurers.-

(1) Subject to and in compliance with the provisions of this part authorizing insurers to be members or subscribers of rating or advisory organizations or to engage in joint underwriting or joint reinsurance, two or more insurers may act in concert with each other and with others with respect to any matters pertaining to:

(a) The making of rates or rating systems except for private passenger automobile insurance rates;

(b) The preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections, and investigations;

(c) The furnishing of loss or expense statistics or other information and data; or

(d) The carrying on of research. (2) With respect to any matters pertaining to the

making of rates or rating systems; the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections, and investigations; the furnishing of loss or expense statistics or other information and data; or the carrying on of research, two or more authorized insurers having a common ownership or operating in the state under common management or control are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer. To the extent that such matters relate to cosurety bonds, two or more authorized insurers executing such bonds are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer.

(3)(a) Members and subscribers of rating or advisory organizations may use the rates, rating systems, underwriting rules, or policy or bond forms of such organizations, either consistently or intermittently; but, except as provided in subsection (2) and ss. 627.311 and 627.351, they shall not agree with each other or rating organizations or others to adhere thereto.

(b) The fact that two or more authorized insurers, whether or not members or subscribers of a rating or advisory organization, use, either consistently or intermittently, the rates or rating systems made or adopted by a rating organization or the underwriting rules or policy or bond forms prepared by a rating or advisory organization shall not be sufficient in itself to support a finding that an agreement to so adhere exists, and may be used only for the purpose of supplementing or explaining direct evidence of the existence of any such agreement.

(c) This subsection does not apply as to workers' compensation and employer's liability insurances.

(4) Licensed rating organizations and authorized insurers are authorized to exchange information and experience data with rating organizations and insurers in this and other states and may consult with them with respect to ratemaking and the application of rating systems.

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(5) Upon compliance with the provisions of this part applicable thereto, any rating organization or advisory organization, and any group, association, or other organization of authorized insurers which engages in joint underwriting or joint reinsurance through such organization or by standing agreement among the members thereof, may conduct operations in this state. As respects insurance risks or operations in this state, no insurer shall be a member or subscriber of any such organization, group, or association that has not complied with the provisions of this part applicable to it.

(6) Notwithstanding any other provisions of this part, insurers shall not participate directly or indirectly in the deliberations or decisions of rating organizations on private passenger automobile insurance. However, such rating organizations shall, upon request of individual insurers, be required to furnish at reasonable cost the rate indications resulting from the loss and expense statistics gathered by them. Individual insurers may modify the indications to reflect their individual experience in determining their own rates. Such rates shall be filed with the department for public inspection whenever requested and shall be available for public announcement only by the press, department, or insurer.

History.-s. 16, ch. 67-9; s. 1, ch. 70-320; s. 1, ch. 71-6(8); s. 3, ch. 76-168; s. 1, ch. 77-457; s. 108, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.


'627.318 Records.-Every insurer, rating organization, and advisory organization and every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance shall maintain reasonable records, of the type and kind reasonably adapted to its method of operation, of its experience or the experience of its members and of the data, statistics, or information collected or used by it in connection with the rates, rating plans, rating systems, underwriting rules, policy or bond forms, surveys, or inspections made or used by it, so that such records will be available at all reasonable times to enable the department to determine whether such organization, insurer, group, or association, and, in the case of an insurer or rating organization, every rate, rating plan, and rating system made or used by it, complies with the provisions of this part applicable to it. The maintenance of such records in the office of a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this section for any such insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating plans, rating systems, or underwriting rules of such organization. Such records shall be maintained in an office within this state or shall be made available for examination or inspection within this state by the department at any time upon reasonable notice.

History.-s. 17, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 348, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

'Note.-Expires October 1, 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'627.321 Examinations.-(!) As often as it deems necessary, and not less

frequently than each 3 years, the department shall examine each licensed rating organization, each advisory organization, each group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance, and each authorized insurer transacting in this state any class of insurance to which the provisions of this part are applicable. The examination shall be for the purpose of ascertaining compliance by the person examined with the applicable provisions of this part. As to insurers, no such examination requirement shall be satisfied by the periodic examination of the insurer's general affairs.

(2) In lieu of any such examination, the department may accept the report of a similar examination made by the insurance supervisory official of another state.

(3) The reasonable cost of the examination shall be paid by the person examined, and such person shall be subject, as though an insurer, to the provisions of s. 624.320.

(4) Such examinations shall also be subject to the applicable provisions of ss. 624.318, 624.319, 624.321, and 624.322.

History.-s. 442, ch. 59-205; s. 18, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 27, ch. 77-468; ss. 2, 3, ch. 81 -318; ss. 349, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.


'627.331 Recording and reporting of loss, expense, and claims experience; rating information.-

(1) The department may promulgate rules and statistical plans which shall thereafter be used by each insurer in the recording and reporting of its loss, expense, and claims experience, in order that the experience of all insurers may be made available at least annually in such form and detail as may be necessary to aid the department in determining whether the insurer's activities comply with the applicable standards of this code.

(2) In promulgating such rules and plans, the department shall give due consideration to the rating systems in use in this state and, in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states. No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system used by it, except for motor vehicle insurance as otherwise provided by law.

(3) The department may designate one or more rating organizations or other agencies to assist it in gathering such experience and making compilations thereof; and such compilations shall be made available, subject to teasonable rules promulgated by the department, to insurers and rating organizations.

(4) The department shall require insurers and rating organizations to furnish it with copies of their rates, rating schedules, rating manuals, and underwriting rules which are in effect, and copies of any changes thereto, as soon as practicable following their effective dates, but in no event later than 30 days thereafter. The submission of rates, rating schedules, and rating manuals to the department by a licensed

838


rating organization of which an insurer is a member or subscriber will be sufficient compliance with this subsection for any insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating schedules, and rating manuals of such organization. All such information shall be available for public inspection, upon receipt by the department, during usual business hours.

History.-s. 443, ch. 59-205; s. 19, ch. 67-9; ss. 13, 35, ch. 69-106; s. 1, ch. 70-75; s. 1, ch. 70-321; s. 1, ch. 70-439; s. 1, ch. 73- 153; s. 1, ch. 74-320; s. 3, ch. 76-168; s. I, ch. 77-457; s. 27, ch. 77-468; ss. 2, 3, ch. 81-318; ss. 350,357, 809(2nd ), ch. 82-243; ss. 49, 79, ch. 82-386.

' Note.- Expires October 1, 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

627.343 Uniform risk classification reporting system for motor vehicle insurance. -[Transferred by s. 623, ch. 82-243, and renumbered ass. 627.917; the repeal of this section by s. 2, ch. 81-318, was nullified by s. 357, ch. 82-243.]

'627.351 Insurance risk apportionment plans.-

(1) MOTOR VEHICLE INSURANCE RISK APPORTIONMENT.-Agreements may be made among casualty and surety insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but are unable to, procure such insurance through ordinary methods; and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the approval of the department. The department shall, after consultation with the insurers licensed to write automobile liability insurance in this state, adopt a reasonable plan or plans for the equitable apportionment among such insurers of applicants for such insurance who are in good faith entitled to, but are unable to, procure such insurance through ordinary methods; and, when such plan has been adopted, all such insurers shall subscribe thereto and shall participate therein. Such plan or plans shall include rules for classification of risks and rates therefor. Any insured placed with the plan shall be notified of the fact that insurance coverage is being afforded through the plan and not through the private market, and such notification shall be given in writing within 10 days of such placement. To assure that plan rates are made adequate to pay claims and expenses, insurers shall develop a means of obtaining loss and expense experience on at least an annual basis; and the plan shall file such experience, when available, with the department in sufficient detail to make a determination of rate adequacy. Such experience shall be filed with the department not more than 9 months following the end of the annual statistical period under review. Within 60 days thereafter, the department shall approve such rate revisions as are supported by the filing. In addition to provisions for claims and expenses, the ratemaking formula shall include a factor for projected claims trending and 5 percent for contingencies. Trend factors shall not be found to be inappropriate if not in excess of trend factors normally used in the development of residual ~ark.et rates by the appropriate licensed rating orgamzatwn.

(2) WINDSTORM INSURANCE RISK APPORTIONMENT.-

(a) Agreements may be made among property insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but are unable to procure, such insurance through ordinary methods; and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the applicable provisions of this chapter.

(b) It is the finding of the Legislature that: 1. Due to the lack of windstorm insurance cover

age in certain areas, economic growth and development is being deterred or otherwise stifled in such areas, mortgages are in default, and financial institutions are unable to make loans.

2. Other areas of the state may be similarly affected in the future.

(c) The department shall require all insurers licensed to transact property insurance on a direct basis in this state to provide windstorm coverage to applicants from areas determined to be eligible pursuant to paragraph (d) who in good faith are entitled to, but are unable to procure, such coverage through ordinary means; or it shall adopt a reasonable plan or plans for the equitable apportionment or sharing among such insurers of windstorm coverage. The commissioner shall promulgate rules which provide a formula for the recovery and repayment of any deferred assessments.

1. For the purpose of this section, properties eligible for such windstorm coverage are defined as dwellings, buildings, and other structures, including mobile homes which are used as dweliings and which are tied down in compliance with mobile home tiedown requirements prescribed by the Department of Highway Safety and Motor Vehicles pursuant to s. 320.8325, and the contents of all such properties.

2. All insurers required to be members of such plan shall participate in its writings, expenses, profits, and losses. Such gross participation shall be in the proportion that the net direct premiums of each member written on property in this state during the preceding calendar year bears to the aggregate net direct premiums of all members of the plan written on property in this state during the preceding calendar year. The commissioner, after review of annual statements, other reports, and any other statistics which he deems necessary, shall certify to the plan the aggregate net direct premiums written on property in this state by all members. The plan of operation shall provide that one additional domestic member of the board of directors be elected by the domestic companies of this state on the basis of cumulative weighted voting based on the net written premiums of domestic companies in this state. Any such plan shall provide a formula whereby a company voluntarily providing windstorm coverage in affected areas will be relieved wholly or partially from apportionment. A company which is a member of a group of companies under common management may elect to have its credits applied on a group basis, and any company or group may elect to have its credits applied to any other company or group.

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3. The plan shall also provide that any member with a surplus as to policyholders of $5,000,000 or less writing 25 percent of its total countrywide property insurance premiums in this state may petition the department, within 90 days of the effective date of chapter 76-96, Laws of Florida, and thereafter within the first 90 days of each calendar year, to qualify as a limited apportionment company. The apportionment of such a company in any calendar year for which it is qualified shall not exceed its gross participation, which shall not be affected by the formula for voluntary writings. In no event shall a limited apportionment company be required to participate in any apportionment of losses in the aggregate which exceeds $50,000,000 after payment of available plan funds in any calendar year. The plan shall provide that, if the department determines that any assessment will result in an impairment of the surplus of a limited apportionment company, the department may direct that all or part of such assessment be deferred.

4. The plan shall provide for the deferment, in whole or in part, of the assessment of a member insurer if, in the opinion of the commissioner, payment of the assessment would endanger or impair the solvency of the member insurer. In the event an assessment against a member insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in subparagraph 2.

5. The plan may include deductibles and rules for classification of risks and rate modifications consistent with the objective of providing and maintaining funds sufficient to pay catastrophe losses.

6. The plan may authorize the formation of a private nonprofit corporation, a private nonprofit unincorporated association, or a nonprofit mutual company which may be empowered, among other things, to borrow money and to accumulate reserves or funds to be used for the payment of insured catastrophe losses. The plan shall incorporate and continue the plan of operation and articles of agreement in effect on the effective date of chapter 76-96, Laws of Florida, to the extent that it is not inconsistent with chapter 76-96, Laws of Florida, and as subsequently modified consistent with chapter 76-96, Laws of Florida. The board. of directors and officers currently serving shall continue to serve until their successors are duly qualified as provided under the plan. The assets and obligations of the plan in effect immediately prior to the effective date of chapter 76-96, Laws of Florida, shall be construed to be the assets and obligations of the successor plan created herein.

7. On such coverage, an agent's remuneration shall be that amount of money payable to him by the terms of his contract with the company with which the business is placed. However, no commission will be paid on that portion of the premium which is in excess of the standard premium of that company.

(d) The provisions of paragraph (c) shall be applicable only with respect to any county or area which the department has heretofore designated or as to which the department, after public hearing, finds that the following criteria exist:

1. Due to the lack of windstorm insurance cover-

age in the county or area so affected, economic growth and development is being deterred or otherwise stifled in such county or area, mortgages are in default, and financial institutions are unable to make loans; and

2. The county or area so affected has adopted and is enforcing the structural requirements of the Southern Standard Building Code, or its equivalent, for new construction and has included adequate minimum floor elevation requirements for structures in areas subject to inundation.

Any time after the department has determined that the criteria referred to in this section do not exist with respect to any county or area of the state, it may, after a subsequent public hearing, declare that such county or area is no longer eligible for windstorm coverage through the plan.

(3) POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK APPORTIONMENT.-

(a) The department shall, after consultation with the casualty insurers licensed in this state, adopt a plan or plans for the equitable apportionment among them of casualty insurance coverage which may be afforded political subdivisions which are in good faith entitled to, but are unable to, procure such coverage through the voluntary market at standard rates or through a statutorily approved plan authorized by the department. The department may adopt a joint underwriting plan which shall provide for one or more designated insurers able and willing to provide policyholder and claims service, including the issuance of insurance policies, to act on behalf of all other insurers required to participate in the joint underwriting plan. Any joint underwriting plan adopted shall pr.ovide for the equitable apportionment of any profits realized, or of losses and expenses incurred, among participating insurers. The plan shall include, but shall not be limited to:

1. Rules for the classification of risks and rates which reflect the past loss experience and prospective loss experience in different geographic areas.

2. A rating plan which reasonably reflects the prior claims experience of the insureds.

3. Excess coverage by insurers if the Insurance Commissioner, in his discretion, requires such coverage by insurers participating in the joint underwriting plan.

(b) In the event an underwriting deficit exists at the end of any year the plan is in effect, each policyholder shall pay to the joint underwriting plan a premium contingency assessment not to exceed onethird of the premium payment paid by such policyholder for that year. The joint underwriting plan shall pay no further claims on any policy for which the policyholder fails to pay the premium contingency assessment.

(c) Any deficit sustained under the plan shall first be recovered through a premium contingency assessment. Concurrently, the rates for insureds shall be adjusted for the next year so as to be actuarially sound in conformance with rules of the department.

(d) If there is any remaining deficit under the plan after maximum collection of the premium contingency assessment, such deficit shall be recovered from the companies participating in the plan in the

840


proportion that the net direct premiums of each such member written during the preceding calendar year bears to the aggregate net direct premiums written in this state by all members of the joint underwriting plan.

(e) Upon adoption of a plan, all casualty insurers licensed in the state shall subscribe thereto and participate therein.

(4) MEDICAL MALPRACTICE RISK APPORTIONMENT.-

(a) The department shall, after consultation with insurers as set forth in paragraph (b), adopt a joint underwriting plan as set forth in paragraph (d).

(b) Entities licensed to issue casualty insurance as defined in s. 624.605(1)(b), (k), and (q) and selfinsurers authorized to issue medical malpractice insurance under s. 627.357 shall participate in the plan and shall be members of the Joint Underwriting Association.

(c) The Joint Underwriting Association shall operate subject to the supervision and approval of a board of governors consisting of representatives of five of the insurers participating in the Joint Underwriting Association, an attorney to be named by The Florida Bar, a physician to be named by the Florida Medical Association, and a hospital representative to be named by the Florida Hospital Association. The board of governors shall choose, during the first meeting of the board after June 30 of each year, one of its members to serve as chairman of the board and another member to serve as vice chairman of the board.

(d) The plan shall provide coverage for claims arising out of the rendering of, or failure to render, medical care or services and, in the case of health care facilities, coverage for bodily injury or property damage to the person or property of any patient arising out of the insured's activities, in appropriate policy forms for all health care providers as defined in paragraph (h). The plan shall include, but shall not be limited to:

1. Classifications of risks and rates which reflect past and prospective loss and expense experience in different areas of practice and in different geographical areas.

2. A rating plan which reasonably recognizes the prior claims experience -of insureds.

3. Provisions as to rates for: a. Insureds who are retired or semiretired. b. The estates of deceased insureds. c. Part-time professionals. 4. Protection in an amount to be determined by

the Insurance Commissioner. 5. Protection to members of the Florida Patient's

Compensation Fund established under s. 768.54, which will cover the full amount of any or all deficit assessments issued by the fund against a member for the 1982-1983 fiscal year. The premium contingency assessment against policyholders authorized in paragraph (e) does not apply to policies issued pursuant to this paragraph. The rate charged for such protection shall not exceed one-third of the membership fee charged the member by the fund. This protection shall only be available to fund members as defined in s. 768.54(1)(b)2., 3., 4., and 8. A request for this protection must be made in writing to an agent. Such

841

coverage shall be made available no later than the first day of the fiscal year being covered and shall be purchased, if at all, no later than the last day of such fiscal year. This subparagraph shall stand repealed July 1, 1983.

The Insurance Commissioner may, in his discretion, require that insurers participating in the Joint Underwriting Association offer excess coverage.

(e) In the event an underwriting deficit exists for any policy year the plan is in effect, each policyholder shall pay to the association a premium contingency assessment not to exceed one-third of the premium payment paid by such policyholder to the association for that policy year. The association shall pay no further claims on any policy for the policyholder who fails to pay the premium contingency assessment.

1. Any deficit sustained under the plan shall first be recovered through the premium contingency assessment.

2. If there is any remaining deficit under the plan after maximum collection of the premium contingency assessment, such deficit shall be recovered from the companies participating in the plan in the proportion that the net direct premiums of each such member written during the calendar year immediately preceding the end of the policy year for which there is a deficit assessment bears to the aggregate net direct premiums written in this state by all members of the association. 2The term "premiums" as used herein means premiums for the lines of insurance defined in s. 624.605(1)(b), (k), and (q) , including premiums for such coverage issued under package policies.

(f) The plan shall provide for one or more insurers able and willing to provide policy service through licensed resident agents and claims service on behalf of all other insurers participating in the plan. In the event no insurer is able and willing to provide such services, the Joint Underwriting Association is authorized to perform any and all such services.

(g) All books, records, documents, or audits relating to the Joint Underwriting Association or its operation shall be open to public inspection, except that a claim file in the possession of the Joint Underwriting Association shall not be available for review during the processing of that claim.

(h) As used in this subsection: 1. "Health care provider" means hospitals li

censed under chapter 395; physicians licensed under chapter 458; osteopaths licensed under chapter 459; podiatrists licensed under chapter 461; dentists licensed under chapter 466; chiropractors licensed under chapter 460; naturopaths licensed under chapter 462; nurses licensed under chapter 464; clinical laboratories registered under chapter 483; physicians' assistants certified under chapter 458; physical therapists and physical therapist assistants licensed under chapter 486; health maintenance organizations certificated under part II of chapter 641; ambulatory surgical centers licensed under chapter 395; other medical facilities as defined in subparagraph 2. ; blood banks, plasma centers, industrial clinics, and renal dialysis facilities; or professional associations, partnerships, corporations, joint ventures, or other associations for professional activity by health care providers.


2. "Other medical facility" means a facility t he primary purpose of which is to provide human medical diagnostic services or a facility providing nonsurgical human medical treatment, to which facility the patient is admitted and from which facility the patient is discharged within the same working day, and which facility is not part of a hospital. However, a facility existing for the primary purpose of performing terminations of pregnancy or an office maintained by a physician or dentist for the practice of medicine shall not be construed to be an "other medical facility."

3. "Health care facility" means any hospital licensed under chapter 395, health maintenance organization certificated under part II of chapter 641, ambulatory surgical center licensed under chapter 395, or other medical facility as defined in subparagraph 2.

(i) The manager of the plan or his assistant is the agent for service of process for the plan.

His tory.-s. 445, ch. 59-205; ss. 13, 35, ch. 69-106; s. I, ch. 69-199; ss. I , 2, ch. 70-234; s. I , ch. 72-22; s. I, ch. 73-259; s. I, ch. 74-216; s. 14, ch. 75-9; s. 3, ch. 75-279; s. I , ch. 76-96; s. 3, ch. 76-168; s. 5, ch. 76-260; s. 3, ch. 77-64; s. 1, ch. 77-93; s. I, ch. 77- 174; s. 1, ch. 77-380; s. I, ch. 77-457; s. 28, ch. 77-468; s. I, ch. 78-47; s. 164, ch. 79- 164; ss. 1, 2, ch. 79-185; ss. 1, 2, ch. 80-94; ss. 1, 2, ch. 81-4; ss. 2, 3, ch. 81-3 18; ss. 351, 357, 809(2nd), 810, ch. 82-243; ss. 48, 49, 79, ch. 82-386; ss. I, 5, ch. 82-391.

'Note.- Expires October 1, 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

1N ote.-T he words "The term" were inserted by the editors.

1627.356 Professional malpractice selfinsurance.-

(1) A group or association of attorneys licensed to practice law in this state, composed of any number of members, is authorized to self-insure against claims of professional malpractice, upon compliance by the group or association with the following conditions:

(a) Establishment of a Professional Malpractice Risk Management Trust Fund to provide coverage against professional malpractice liability.

(b) Employment of professional consultants for loss prevention and claims management coordination under a risk management program.

Any such group or association shall be subject to regulation and investigation by the department. The group or association shall be subject to such rules as the department adopts, and shall also be subject to part VII of chapter 626, relating to trade practices and frauds.

(2) The trust fund is authorized to purchase professional malpractice insurance up to determined limits, specific excess insurance, and aggregate excess insurance as necessary to provide the insurance coverages authorized by this section, consistent with the market availability. The trust fund is further authorized to purchase such risk management services as may be required and pay claims as may arise under any deductible provisions.

(3) The department shall adopt rules to implement the provisions of this section. Such rules shall guarantee the maintenance of a sufficient reserve in the event of the dissolution of any trust fund authorized hereunder so as to cover contingent liabilities.

History.-s. 2, ch. 77-297; s. 426, ch. 81-259; s. 2, ch. 81-318; ss. 352, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

' Note.-Expires October 1, 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

1627.357 Medical malpractice self-insurance.-(1) A group or association of health care provid

ers as defined in s. 768.54(1)(b), composed of any number of members , is authorized to self-insure against claims arising out of the rendering of, or failure to render, medical care or services and coverage for bodily injury or property damage, including all patient injuries arising out of the insured's activities, upon obtaining approval from the department and upon complying with the following conditions:

(a) Establishment of a Medical Malpractice Risk Management Trust Fund to provide coverage against professional medical malpractice liability.

(b) Employment of professional consultants for loss prevention and claims management coordination under a risk management program.

Any such group or association shall be subject to regulation and investigation by the department. The group or association shall be subject to such rules as the department adopts, and shall also be subject to part VII of chapter 626, relating to trade practices and frauds.

(2) The trust fund is authorized to purchase medical malpractice insurance up to determined limits, specific excess insurance, and aggregate excess insurance as necessary to provide the insurance coverages authorized by this section, consistent with market availability. The trust fund is further authorized to purchase such risk management services as may be required and pay claims as may arise under any deductible provisions.

(3) The department shall promulgate rules and regulations to implement the provisions of this section. Such rules and regulations shall guarantee the maintenance of a sufficient reserve in the event of the dissolution of any trust fund authorized hereunder so as to cover contingent liabilities.

History .-ss. I, 2, 3, ch. 72-265; s. 162, ch. 73-333; s. 4, ch. 75-9; s. 3, ch. 76-168; s. 8, ch. 76-260; s. 5, ch. 77-64; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 353, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

' Note.-Expires October I , 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

Note.-Former s. 627.355; s. 768.52, 1976 Supplement.

1627.361 False or misleading information. -No person shall willfully withhold information from or knowingly give false or misleading information to the department, any statistical agency designated by the department, any rating organization, or any insurer, which will affect the rates or premiums chargeable under this part.

History.-s. 446, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168;s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 354, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.


1627.371 Hearings.-(1) Any person aggrieved by any rate charged,

rating plan, rating system, or underwriting rule followed or adopted by an insurer, and any person aggrieved by any rating plan, rating system, or underwriting rule followed or adopted by a rating organization, may himself or by his authorized representative make written request of the insurer or rating organization to review the manrier in which the rate, plan, system, or rule has been applied with respect to insurance afforded him. If the request is not granted within 30 days after it is made, the requester may

842


treat it as rejected. Any person aggrieved by the refusal of an insurer or rating organization to grant the review requested, or by the failure or refusal to grant all or part of the relief requested, may file a written complaint with the department, specifying the grounds relied upon. If the department has already disposed of the issue as raised by a similar complaint or believes that probable cause for the complaint does not exist or that the complaint is not made in good faith, it shall so notify the complainant. Otherwise, and if it also finds that the complaint charges a violation of this chapter and that the complainant would be aggrieved if the violation is proven, it shall proceed as provided in subsection (2).

(2) If after examination of an insurer, rating organization, advisory organization, or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance, upon the basis of other information, or upon sufficient complaint as provided in subsection (1), the department has good cause to believe that such insurer, organization, group, or association, or any rate, rating plan, or rating system made or used by any such insurer or rating organization, does not comply with the requirements and standards of this part applicable to it, it shall, unless it has good cause to believe such noncompliance is willful, give notice in writing to such insurer, organization, group, or association stating therein in what manner and to what extent noncompliance is alleged to exist and specifying ·therein a reasonable time, not less than 10 days thereafter, in which the noncompliance may be corrected, including any premium adjustment. Notices under this subsection shall be confidential as between the department and the parties unless proceedings are held under subsection (3).

(3) If the department has good cause to believe that such noncompliance is willful or if, within the period prescribed by the department in the notice required by subsection (2), the insurer, organization, group, or association does not make such changes as may be necessary to correct the noncompliance specified by the department or establish to the satisfaction of the department that such specified noncompliance does not exist, then the department is required to proceed to further determine the matter. If no notice has been given as provided in subsection (2), the notice shall state in what manner and to what extent noncompliance is alleged to exist. The proceedings shall not consider any subject not specified in the notice required by subsections (2) and (3).

His tory .-s. 447, ch. 59-205; s. 20, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 355,357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.


'627.381 Penalty for violation.-(!) The department may, if it finds that any per

son or organization has violated any provision of this part, impose an administrative fine pursuant to s. 624.4211.

(2) The department may suspend the license or authority of any rating organization or insurer which fails to comply with an order of the department within the time limited by such order, or any extension thereof which the department may grant. The de-

partment shall not suspend the license or authority of any rating organization or insurer for failure to comply with an order until the time prescribed for an appeal therefrom has expired or, if an appeal has been taken, until such order has been affirmed. The department may determine when a suspension of license or authority shall become effective and it shall remain in effect for the period fixed by it, unless it modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded, or reversed.

History.-s. 448, ch. 59-205; ss. 13, 35, ch. 69- 106; s. 3. ch. 76- 168; s. I , ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 356, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.

'Note.- Expires October I, 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

627.401 627.402 627.403 627.4035 627.404 627.405 627.406

627.407 627.408 627.409

627.410 627.4105

627.411 627.412 627.413

627.4132 627.414 627.4145 627.415 627.416 627.417 627.418 627.419 627.420 627.421 627.422 627.423 627.4235 627.424 627.425 627.426 627.427

627.428

PART II

THE INSURANCE CONTRACT

Scope of this part. "Policy" defined. "Premium" defined. Cash payment of premiums. Insurable interest; personal insurance. Insurable interest; property. Power to contract; purchase of insurance

by or for minor. Alteration of application. Application as evidence. Representations in applications; warran

ties. Filing, approval of forms . Life and health insurance; reduced premi

ums upon rigorous physical examination.

Grounds for disapproval. Standard provisions, in general. Contents of policies, in general; identifi-

cation. Stacking of coverages prohibited. Additional policy contents. Readable language in insurance policies. Charter, bylaw provisions. Execution of policies. Underwriters' and combination policies. Validity of noncomplying contracts. Construction of policies. Binders. Delivery of policy. Assignment of policies. Payment discharges insurer. Coordination of benefits. Minor may give acquittance. Forms for proof of loss to be furnished. Claims administration. Payment of judgment by insurer; penalty

for failure. Attorney's fee.

'627.401 Scope of this part.-No provision of this part of this chapter applies to:

(1) Reinsurance. (2) Policies or contracts not issued for delivery in

this state nor delivered in this state, except as otherwise provided in this code.

843


(3) Wet marine and transportation insurance, except ss. 627.409, 627.420, and 627.428.

(4) Title insurance, except ss. 627.406, 627.415, 627.416, 627.419, 627.427, and 627.428.

(5) Credit life or credit disability insurance, except ss. 627.419(5) and 627.428.

History.-s. 450, ch. 59-205; s. 1, ch. 70-322; s. 1, ch. 70-371; s. 1, ch. 71-45; s. 163, ch. 73-333; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 358, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


1627.402 "Policy" defined.-(1) "Policy" means a written contract of or writ

ten agreement for or effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements, and papers which are a part thereof.

(2) The word "certificate" as used in this section does not include certificates as to group life or health insurance or as to group annuities issued to individu-al insureds. '

History.-s. 451, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 359, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


1627.403 "Premium" defined.-"Premium" is the consideration for insurance, by whatever name called. Any "assessment," or any "membership," '~policy," "survey," "inspection," "service" or similar fee or charge in consideration for an insurance contract is deemed part of the premium.

History.-s. 452, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


1627.4035 Cash payment of premiums.-(1) The premiums for insurance contracts issued

in this state or covering risk located in this state shall be paid in cash consisting of coins, currency, checks, or money orders.

(2) This section is not applicable to: (a) Reinsurance agreements; (b) Pension plans; (c) Premium loans, whether or not subject to an

automatic provision; (d) Dividends, whether to purchase additional

paid-up insurance or to shorten the dividend payment period;

(e) Salary deduction plans; (f) Preauthorized check plans; (g) Waivers of premiums on disability; (h) Nonforfeiture provisions affording benefits

under supplementary contracts; or (i) Such other methods of paying for life insur-

ance as may be permitted by the department pursuant to rule or regulation.

History.-s. 1, ch. 70-69; s. I , ch. 70-439; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


set forth in the policy, by virtue of any untrue statements, declarations, or representations so relied upon in good faith by the insurer.

Hist9ry.-s. 453, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.-Repealed effective October 1, 1992, by s. 809(2nd), ch. 82-243, and · scheduled for review pursuant to s. 11.61 in advance of that date.

1627.405 Insurable interest; property.-(1) No contract of insurance of property or of any

interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss.

(2) "Insurable interest" as used in this section means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.

(3) The measure of an insurable interest in property is the extent to which the insured might be damnified by loss, injury, or impairment thereof.



1627.406 Power to contract; purchase of insurance by or for minor.-

(1) Any person of competent legal capacity may contract for insurance.

(2) Any minor of the age of 15 years or more, as determined by the nearest birthday, may, notwithstanding his minority, contract for annuities or for insurance on his own life; body; health, property, liabilities, or other interests or on the person of another in whom the minor has an insurable interest. Such a minor shall, notwithstanding such minority, be dee·med competent to exercise all rights and powers with respect to or under any contract for annuity or for insurance upon his own life, body, or health or any contract such minor effected on his own property, liabilities, or other interests or on the person of another, as might be exercised by a person of full legal age. Such minor may at any time surrender his interest in apy such ·contracts and give a valid discharge for any benefits accruing or money payable thereunder. Such a minor shall not, by reason of his minority, be entitled to rescind, avoid, or repudiate the contract, nor to rescind, avoid, or repudiate any exercise of a right or privilege thereunder, except that such a minor, not otherwise emancipated, shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on any such annuity or insurance contract.

(3) If any minor mentioned in subsection (2) is possessed of an estate that is being administered by a guardian or curator, no such contract shall be binding upon such estate as to payment of premiums, except as and when consented to by the guardian or curator and approved by the probate court of the coun-

1627.404 Insurable interest; personal insur- ty in which the administration of the estate is pendance.-An insurer shall be entitled to rely upon all ing; and such consent and approval shall be required statements, declarations, and representations made as to each premium payment. by an applicant for insurance relative to the insur- ( 4) Any annuity contract or policy of life or able interest which such applicant has in the insured; health insurance procured by or for a minor under and no insurer shall incur any legal liability except as subsection (2) shall be made payable either to the mi-

844


nor or his estate or to a person having an insurable interest in the life of such minor.

History.~s. 455, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 360, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386. 'Note.~ Expires October 1, 1992, pursuant to s. 809(2nd), ch. 82-243, and is

scheduled for review pursuant to s. 11.61 in advance of that date. cf.~s . 1.01 Minor defined.

'627.407 Alteration of application.-No alteration of any written application for any life or health insurance policy shall be made by any person other than the applicant without his written consent, except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant. History.~s. 456, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-

318; ss. 361, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386. 'Note.~Expires October I, 1992, pursuant to s. 809(2nd), ch. 82-243, and is


'627.408 Application as evidence.-(!) No application for the issuance of any life or

health insurance policy or annuity contract shall be admissible in evidence in any action relative to such policy or contract, unless a true copy of the application was attached to or otherwise made .a part of the policy or contract when issued.

(2) If any policy of life or health insurance delivered or issued for delivery in this state is reinstated or renewed, and the insured or the beneficiary or assignee of the policy makes written request to the insurer for a copy of the application, if any, for such reinstatement or renewal, the insurer shall, within 30 days after receipt of such request at its home office or at any of its branch offices, deliver or mail to the person making such request a copy of such application, reproduced by any legible means. In the case of such a request from the beneficiary, the time within which the insurer is required to furnish a copy of such application shall not begin to run until after receipt of evidence satisfactory to the insurer of the beneficiary's vested interest in the policy or contract.

History.~s. 457, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 362, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386. 'Note.~Expires October I, 1992, pursuant to s. 809(2nd), ch. 82-243, and is


'627 .409 Representations in applications; warranties.-

(!) All statements and descriptions in any application for an insurance policy or annuity contract, or in negotiations therefor, by or in behalf of the insured or annuitant, shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealment of facts, and incorrect statements shall not prevent a recovery under the policy or contract unless:

(a) They are fraudulent; (b) They are material either to the acceptance of

the risk or to the hazard assumed by the insurer; or (c) The insurer in good faith would either not

have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.

(2) A breach or violation by the insured of any warranty, condition, or provision of any wet marine or transportation insurance policy, contract of insurance, endorsement, or application therefor shall not render void the policy or contract, or constitute a defense to a loss thereon, unless such breach or violation increased the hazard by any means within the control of the insured. History.~s. 458, ch. 59-205; s. 2, ch. 71-45; s. 3, ch. 76-168; s. 1, ch. 77-457;

ss. 2, 3, ch. 81-318; ss. 363, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386. 'Note.~Expires October 1, 1992, pursuant to s. 809(2nd), ch. 82-243, and is


'627.410 Filing, approval of forms.-(1) No basic insurance policy or annuity contract

form, or application form where written application is required and is to be made a part of the policy or contract, or group certificates issued under master contracts delivered in this state, or printed rider or endorsement form or form of renewal certificate, shall be delivered or issued for delivery in this state, unless the form has been filed with the department at its offices in Tallahassee by or in behalf of the insurer which proposes to use such form and has been approved by the department. This provision does not apply to surety bonds or to specially rated inland marine risks, nor to policies, riders, endorsements, or forms of unique character which are designed for and used with relation to insurance upon a particular subject (other than as to health insurance), or which relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or health insurance policies and are used at the request of the individual policyholder, contract holder, or certificateholder. As to group insurance policies effectuated and delivered outside this state but covering persons resident in this state, the group certificates to be delivered or issued for delivery in this state shall be filed with the department for information purposes only.

(2) Every such filing shall be made not less than 30 days in advance of any such use or delivery. At the expiration of such 30 days, the form so filed shall be deemed approved unless prior thereto it has been affirmatively approved or disapproved by order of the department. Approval of any such form by the department shall constitute a waiver of any unexpired portion of such waiting period. The department may extend by not more than an additional 15 days the period within which it may so affirmatively approve or disapprove any such form, by giving notice of such extension before expiration of the initial 30-day period. At the expiration of any such period as so extended, and in the absence of such prior affirmative approval or disapproval, any such form shall be deemed approved.

(3) The department may, for cause, withdraw a previous approval. No insurer shall issue or use any form disapproved by the department, or as to which the department has withdrawn approval, after the effective date of the order of the department.

(4) The department may, by order, exempt from the requirements of this section for so long as it deems proper any insurance document or form or type thereof as specified in such order, to which, in its opinion, this section may not practicably be applied, or the filing and approval of which are, in its

845


opinion, not desirable or necessary for the protection of the public.

(5) This section shall apply also to any such form used by domestic insurers for delivery in a jurisdiction outside this state, if the insurance supervisory official of such jurisdiction informs the department that such form is not subject to approval or disapproval by such official, and upon the order of the department requiring the form to be submitted to it for the purpose. The applicable same standards shall apply to such forms as apply to forms for domestic use.

History.-s. 459, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 71- 17; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 364,377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


1627.4105 Life and health insurance; reduced premiums upon rigorous physical examination. ~Upon request, the department may approve special life and health insurance policy forms providing for reduced premiums for each applicant passing a rigorous physical examination.

History.-s. 1, ch. 78-248; s. 2, ch. 81-318; ss. 365, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


1627.411 Grounds for disapproval.-(!) The department shall disapprove any form

filed under s. 627.410, or withdraw any previous approval thereof, only if the form:

(a) Is in any respect in violation of, or does not comply with, this code.

(b) Contains or incorporates by reference, where such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses, or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract.

(c) Has any title, heading, or other indication of its provisions which is misleading.

(d) Is printed or otherwise reproduced in such manner as to render any material provision of the form substantially illegible.

(e) If for health insurance, provides benefits which are unreasonable in relation to the premium charged or contains provisions which are unfair or inequitable or contrary to the public policy of this state or which encourage misrepresentation.

(2) In determining whether the benefits are reasonable in relation to the premium charged, the department, in accordance with reasonable actuarial techniques, shall consider:

(a) Past loss experience and prospective loss experience within and without this state.

(b) Allocation of expenses. (c) Risk and contingency margins, along with jus

tification of such margins. (d) Acquisition costs.

History.-s. 460, ch. 59-205; ss. 13, 35, 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 366, 377, 809(2nd) , ch. 82-243; s. 79, ch. 82-386.


1627.412 Standard provisions, in general.(1) Insurance contracts shall contain such stan

dard or uniform provisions as are required by the applicable provisions of this code pertaining to con-

tracts of particular kinds of insurance. The department may waive the required use of a particular provision in a particular insurance policy form if:

(a) It finds such provision unnecessary for the protection of the insured and inconsistent with the purposes of the policy; and

(b) The policy is otherwise approved by it. (2) No policy shall contain any provision incon

sistent with or contradictory to any standard or uniform provision used or required to be used, but the department may approve any substitute provision which is, in its opinion, not less favorable in any particular to the insured or beneficiary than the provisions otherwise required.

(3) In lieu of the provisions required by this code for contracts for particular kinds of insurance, substantially similar provisions required by the law of the domicile of a foreign or alien insurer may be used when approved by the department.

History.-s. 461, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I , ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.-Repealed effective October I, 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1627.413 Contents of policies, in general; identification.-

( I) Every policy shall specify: (a) The names of the parties to the contract. (b) The subject of the insurance. (c) The risks insured against. (d) The time when the insurance thereunder

takes effect and the period during which the insurance is to continue.

(e) The premium. (f) The conditions pertaining to the insurance. (g) The form numbers and edition dates or

numeric code indicating edition dates, when such code has been supplied to the department, of all endorsements attached to a policy. This requirement applies to life insurance policies and health insurance policies only at the time of original issue.

(2) If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included.

(3) Subsections (1) and (2) do not apply to surety contracts or to group insurance policies.

(4) All policies and annuity contracts issued by insurers, and the forms thereof filed with the department, shall have printed thereon an appropriate designating letter or figure, or combination of letters or figures or terms identifying the respective forms of policies or contracts. Whenever any change is made in any such form, the designating letters, figures, or terms thereon shall be correspondingly changed.

History.-s. 462, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77- . 457; ss. 2, 3, ch. 81-318; ss. 367, 377, 809(2nd), ch. 82-243; ss. 50, 79, ch. 82-386.


1627.4132 Stacking of coverages prohibited. -If an insured or named insured is protected by any type of motor vehicle insurance policy for liability, personal injury protection, or other coverage, the policy shall provide that the insured or named insured is protected only to the extent of the coverage he has on the vehicle involved in the accident. However, if none

846


of the insured's or named insured's vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with applicable coverage. Coverage on any other vehicles shall not be added to or stacked upon that coverage. This section does not apply:

(1) To uninsured motorist coverage. (2) To reduce the coverage available by reason of

insurance policies insuring different named insureds. History.-s. 10, ch. 76-266; s. 1, ch. 80-364; s. 2, ch. 81-318; ss. 377, 809(2nd) ,

ch. 82-243; s. 79, ch. 82-386. 'Note.- Repealed effective October 1, 1992, by s. 809(2nd), ch. 82-243, and


'627.414 Additional policy contents.-A policy may contain additional provisions not inconsistent with this code and which are:

(1) Required to be inserted by the laws of the insurer's domicile;

(2) Necessary, on account of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties to the contract; or

(3) Desired by the insurer and neither prohibited by law nor in conflict with any provisions required to be included therein.


'Note.- Repealed effective October 1, 1992, by s. 809(2nd) , ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.4145 Readable language in insurance policies.-

(!) Every policy shall be readable as required by this section. A policy is deemed readable if:

(a) The text achieves a minimum score of 45 on the Flesch reading ease test as computed in subsection (5) or an equivalent score on any other test comparable in result and approved by the department;

(b) It is printed, except for specification pages, schedules, and tables, in not less than 8-point type, 1 point leaded;

(c) It uses layout and spacing which separate the paragraphs from each other and from the border of the paper;

(d) It has section titles that are captioned in boldfaced type or that otherwise stand out significantly from the text;

(e) It avoids the use of unnecessarily long, complicated, or obscure words, sentences, paragraphs, or constructions;

(f) The style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text of the policy or to any endorsements or riders; and

(g) It contains a table of contents or an index of the principal sections of the policy, if the policy has more than 3,000 words or if the policy has more than three pages.

(2) The department may authorize a lower score than the Flesch reading ease test score required in subsection (1) whenever it finds that a lower score will provide a more accurate reflection of the readability of a policy form, is warranted by the nature of a particular policy form or type or class of policy forms , or is the result of language which is used to conform to the requirements of any law.

(3) A filing subject to this section shall be accom-

panied by a certification signed by an officer of the insurer stating that 2the policy meets the requirements of subsection (1) . Such certification shall state that the policy meets the minimum reading ease test score on the test used or that the score is lower than the minimum required but should be approved in accordance with subsection (2). The department may require the submission of further information to verify any certification.

(4) Any non-English language policy shall be deemed to be in compliance with this section if the insurer certifies that such policy is translated from an English language policy which complies with this section.

(5) A Flesch reading ease test score shall be measured by the following method:

(a) For policy forms containing 10,000 words or fewer of text, the entire form shall be analyzed. For policy forms containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least 20 printed lines.

(b) The total number of words in the text shall be counted and divided by the total number of sentences, and the figure obtained shall be multiplied by a factor of 1.015.

(c) The total number of syllables shall be counted and divided by the total number of words, and the figure obtained shall be multiplied by a factor of 84.6.

(d) The sum of the figures computed under paragraph (b) and paragraph (c) subtracted from 206.835 equals the Flesch reading ease test score for the policy form.

(e) For purposes of this subsection: 1. A contraction, hyphenated word, or numerals

and letters, when separated by spaces, shall be counted as one word; and

2. A unit of words ending with a period, semicolon, or colon, excluding headings and captions, shall be counted as one sentence.

(f) The term "text" as used in this subsection includes all printed matter except:

1. The name and address of the insurer; the name, number, or title of the policy; the table of contents or index; captions and subcaptions; specification pages; schedules; or tables;

2. Policy language required by any collectively bargained agreement;

3. Any medical terminology; 4. Words which are defined in the policy; and 5. Any policy language required by law, if the in

surer identifies the language or terminology excepted by this paragraph and certifies to the department, in writing, that the language or terminology is entitled to be excepted under this paragraph.

(g) At the option of the insurer, riders, endorsements, applications, and other forms made a part of the policy may be scored as separate forms or as part of the policy with which they are to be used.

(6) This section does not apply to: (a) Any policy which is a security subject to fed

eral jurisdiction; (b) Any group policy covering a group of 1,000 or

more lives at date of issue, other than a group credit life insurance policy or a group credit health insurance policy; however, this paragraph shall not ex-

847


empt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;

(c) Any group annuity contract which serves as a funding vehicle for pension, profit-sharing, or deferred compensation plans;

(d) Any form used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates such forms must be approved under this section; or

(e) Any policy or form, or renewal thereof, which policy or form is filed prior to October 1, 1983.

(7) This section applies to forms filed on or after October 1, 1983.

History.-ss. 368, 809(2nd), ch. 82-243; ss. 51, 79, ch. 82-386. 'Note.-Expires October 1, 1992, pursuant to s. 809(2nd), ch. 82-243, and is

scheduled for review pursuant ti) s. 11.61 in advance of that date. aNote.- T he words .. the policy" were substituted by the editors for the word

.. it."

1627.415 Charter, bylaw provisions.-No policy shall contain any provision purporting to make any portion of the charter, bylaws, or other constituent document of the insurer (other than the subscribers' agreement or power of attorney of a reciprocal insurer) a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section is invalid.

History.-s. 464, ch. 59-205; s. 3, ch. 76- 168; s. I , ch. 77-457; ss. 2, 3, ch. 81-~18; ss. ~77. 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.- Repealed effect ive October I, 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1627.416 Execution of policies.-(1) Every insurance policy shall be executed in

the name of and on behalf of the insurer by its officer, attorney in fact, employee, or representative duly authorized by the insurer. ·

(2) A facsimile signature of any such executing individual may be used in lieu of an original signature.

(3) No insurance contract which is otherwise valid shall be rendered invalid by reason of the apparent execution thereof on behalf of the insurer by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the policy.

History.-s. 465, ch. 59-205; s. 3, ch. 76- 168; s. I , ch. 77-457; ss. 2, 3, ch. 81-~ 18; ss. 369, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.-Expires October 1, 1992, pursuant to s. 809(2nd) , ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

1627.417 Underwriters' and combination policies.-

(1) Two or more authorized insurers may jointly issue, and shall be jointly and severally liable on, an underwriters' policy bearing their names. Any one insurer may issue a policy in the name of an underwriter's department, and such policy shall plainly show the true name of the insurer.

(2) Two or more authorized insurers may, with the approval of the department, issue a combination policy which shall contain provisions substantially as follows:

(a) That the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregat-

ing the full amount of insurance under the policy; and

(b) That service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers.

(3) This section does not apply to cosurety obligations.

History.- s. 466, ch. 59-205; ss. 13, 35, ch. 69- 106; s. 3, ch. 76-168; s. I, ch. 77 -457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.- Repealed effective October I , 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1627.418 Validity of noncomplying contracts.-(1) Any insurance policy, rider, or endorsement

otherwise valid which contains any condition or provision not in compliance with the requirements of this code shall· not be thereby rendered invalid, except as provided ins. 627.415, but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this code. In the event an insurer issues or delivers any policy for an amount which exceeds any limitations otherwise provided in this code, such insurer shall be liable to the insured or his beneficiary for the full amount stated in the policy in addition to any other penalties that may be imposed under this code.

(2) Any insurance contract delivered or issued for delivery in this state covering a subject or subjects of insurance resident, located, or to be performed in this state, which subjects, pursuant to the provisions of this code, the insurer may not lawfully insure under such a contract, shall be cancellable at any time by the insurer, any provision of the contract to the contrary notwithstanding; and the insurer shall promptly cancel the contract in accordance with the request of the department therefor. No such illegality or cancellation shall be deemed to relieve the insurer of any liability incurred by it under the contract while in force, or to prohibit the insurer from retaining the pro rata earned premium thereon. This provision does not relieve the insurer from any penalty otherwise incurred by the insurer ·under this code on account of any such violation.

History.-s. 467, ch. 59-205; ss. 13, 35, ch. 69-106; s. I , ch. 72-23; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 370, 377, 809(2nd ), ch. 82-243; s. 79, ch. 82-386.

'Note.- Expires October I , 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

Note.- Former s. 627.0117.

1627.419 Construction of policies.-(1) Every insurance contract shall be construed

according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any application therefor or any rider or endorsement thereto.

(2) The word "physician" or "medical doctor," when used in any health insurance policy, health care services plan, or other contract providing for the payment of surgical procedures which are specified in the policy or contract or are performed in an accredited hospital in consultation with a licensed physician and are within the scope of a dentist's professional license, shall be construed to include a dentist who performs such specified procedures.

(3) Notwithstanding any other provision of law, when any health insurance policy, health care ser-

848


vices plan, or other contract provides for the payment for procedures specified in the policy or contract which are within the scope of an optometrist's or podiatrist's professional license, such policy shall be construed to include payment to an optometrist or podiatrist who performs such procedures. In the case of podiatry services, such payments shall be made in accordance with the coverage now provided for medical and surgical benefits.

( 4) If the insurer offers a policy containing a provision for medical expense benefits that does not provide payment for chiropractic services, it shall offer as a part thereof an optional rider or endorsement, if specifically requested by the insured or subscriber under an individual policy or a certificate holder or subscriber under a master policy, which defines such benefits as including payment to a chiropractor for procedures specified in the policy which are within the scope of the practice of chiropractic as now defined in chapter 460. Any additional cost to the insured or certificate holder must be reasonably related to benefits provided.

(5) For purposes of coverage under a policy of disability income or credit disability insurance, no determination of disability shall be rejected solely on the basis of the chapter under which the physician is licensed; however, such determination may be rejected on the basis that the determination is outside the scope of the physician's authorized practice. However, the insurance carrier shall have the option after 30 days of disability to seek a second physician's opinion prior to paying additional benefits.

His tor y.-s. 468, ch. 59-205; s. I , ch. 69-245; ss. I, 2, ch .. 72-11; s. 163A, ch. 73-333; s. I , ch. 74-34; s. I, ch. 74-87; s. I, ch. 76-167; s. 3, ch. 76-168; s. I , ch. 77-457; ss. 2, 3, ch. 81-318; ss. 371, 377, 809{2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.- Expires October I , 1992, pursuant to s. 809{2nd), ch. 82-243, and is scheduled for review pursuant to s. 11 .61 in advance of that date.

Note.- Former s. 627.0118.

'627 .420 Binders.- Binders or other contracts for temporary property, marine, casualty, or surety insurance may be made orally or in writing, and shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder.

His t or y.- s. 469, ch. 59-205; s. 3, ch. 76-1 68; s. I , ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

' Note.- Repealed effective October I, 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.421 Delivery of policy.-(1) Subject to the insurer's requirement as to

payment of premium, every policy shall be mailed or delivered to the insured or to the person entitled thereto within a reasonable period of time after its issuance, except when a condition required by the insurer has not been met by the applicant or insured.

(2) In the event the original policy is delivered or is so required to be delivered to or for deposit with any vendor, mortgagee, or pledgee of any motor vehicle, and in which policy any interest of the vendee, mortgagor, or pledgor in or with reference to such vehicle is insured, a duplicate of such policy setting forth the name and address of the insurer, insurance classification of vehicle, type of coverage, limits of liability, premiums for the respective coverages, and duration of the policy, or memorandum thereof con-

taining the same such information, shall be delivered by the vendor, mortgagee, or pledgee to each such vendee, mortgagor, or pledgor named in the policy or coming within the group of persons designated in the policy to be so included. If the policy does not provide coverage of legal liability for injury to persons or damage to the property of third parties, a statement of such fact shall be printed, written, or stamped conspicuously on the face of such duplicate policy or memorandum. This subsection does not apply to inland marine floater policies.

(3) Any automobile liability or physical damage policy shall contain on the front page a summary of major coverages, conditions, exclusions, and limitations contained in that policy. Any such summary shall state that the issued policy should be referred to for the actual contractual governing provisions. The company may, in lieu of the summary, provide a readable policy.

His tory.- s. 470, ch. 59-205; s. I , ch. 75-218; s. 3, ch. 76-168; s. I , ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

' Note.- Repealed effective October I, 1992, by s. 809(2nd) , ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.422 Assignment of policies.-A policy may be assignable, or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or health insurance policy under the terms of which the beneficiary may be changed upon the sole request of the policy owner may be assigned either by pledge or transfer of title, by an assignment executed by the policy owner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any such assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment, until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.

History.-s. 471, ch. 59-205; s. 3, ch. 76-168; s. I , ch. 77-457; ss. 2, 3, ch. 81-318; ss. 372, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.-Expires October I , 1992, pursuant to s. 809{2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

'627.423 Payment discharges insurer. ~Whenever the proceeds of or payments under a life or health insurance policy or annuity contract become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, and the insurer makes payment thereof in accordance with the terms of the policy or contract or in accordance with any written assignment thereof, the person then designated in the policy or contract or by such assignment as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor; and such payments shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy· or contract.

History.-s. 472, ch. 59-205; s. 3, ch. 76-168; s. I , ch. 77-457; ss. 2, 3, ch. 81-318; ss. 373, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note .- Expires October I , 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

849


'627.4235 Coordination of benefits.-(!) No group hospital, medical, or surgical ex

pense policy, group health care services plan, or group-type self-insurance plan providing protection, insurance, or indemnity against hospital, medical, or surgical expenses shall be issued, or issued for delivery, in this state which shall contain any provision whereby the insurer may reduce or refuse to pay benefits otherwise payable thereunder solely on account of the existence of similar benefits provided under any individual health insurance policy which is issued by the same or another insurer and which is subject to any of the provisions of part VI.

(2) No group hospital, medical, or surgical expense policy, group health care services plan, or group-type self-insurance plan providing protection, insurance, or indemnity against hospital, medical, or surgical expenses shall be issued, or issued for delivery, in this state after October 1, 1974, which shall contain any provision whereby the insurer may reduce or refuse to pay benefits otherwise payable thereunder solely on account of the existence of similar benefits provided under group insurance policies issued by the same or another insurer, group hospital, medical, or surgical expense plans, or group-type selfinsurance plans providing protection, insurance, or indemnity against hospital, medical, or surgical expenses, unless, as a condition of coordinating benefits with another insurer, the insurers together pay 100 percent of the total reasonable expenses actually incurred of the type of expense within the benefits described in the policy and presented to the insurer for payment.

(3) The standards provided in subsection (2) shall be applicable in coordinating benefits payable under Medicare, Title XVIII of the Social Security Act.

(4) When a claim is submitted in accordance with any group hospital, medical, or surgical expense policy, group health care service plan, or group-type selfinsurance plan providing protection, insurance, or indemnity against hospital, medical, or surgical expenses; and the policy or any other document providing coverage includes a coordination-of-benefits provision; and such claim involves another policy or plan which has a coordination-of-benefits provision, the following rules shall be used to determine the order in which benefits under the respective health policies or plans shall be determined:

(a) The benefits of a policy or plan which covers the person on whose expenses the claim is based shall be determined before the benefits of any other policy or plan which covers such person as a dependent.

(b) The benefits of such a policy or plan which covers the person on whose expenses the claim is based, as a dependent of a male person, shall be determined before the benefits of a policy or plan which covers such person as a dependent of a female person.

(c) In the event a claim is made for expenses incurred by a dependent child whose parents are separated or divorced, the following rules shall determine in which order benefits are payable:

1. When the parents are separated or divorced and the parent with custody of the child has not remarried, the benefits of a policy or plan which covers the child as a dependent of the parent with custody

of the child will be determined before the benefits of a policy or plan which covers the child as a dependent of the parent without custody.

2. When the parents are divorced and the parent with custody of the child has remarried, the benefits of a policy or plan which covers the child as a dependent of the parent with custody shall be determined before the benefits of a policy or plan which covers that child as a dependent of the stepparent; and the benefits of a policy or plan which covers the child as a dependent of the stepparent will be determined before the benefits of the parent without custody.

3. Notwithstanding subparagraphs 1. and 2., if there is a court decree which would otherwise establish financial responsibility for the health care expenses with respect to the child, the benefits of a policy or plan which covers the child as a dependent of the parent with such financial responsibility shall be determined before the benefits of any other policy or plan which covers the child as a dependent child.

(d) When the rules in paragraphs (a), (b) , and (c) do not establish an order of benefit determination, the benefits of a policy or plan which has covered the person on whose expenses a claim is based for the longer period of time shall be determined before the benefits of a policy or plan which has covered such person for the shorter period of time.

History.- s. 1, ch. 74-367; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 374, 377, 809(2nd), ch. 82-243; ss. 52, 79, ch. 82-386.


'627.424 Minor may give acquittance.-(!) Any minor domiciled in this state who has at

tained the age of 16 years shall be deemed competent to receive and to give full acquittance and discharge for a payment or payments in aggregate amount not exceeding $3,000 in any one year made by a life insurer under the maturity, death, or settlement agreement provisions in effect or elected by such minor under a life insurance policy or annuity contract, if such policy, contract, or agreement provides for the payment to such minor. No such minor shall be deemed competent to alienate the right to or to anticipate or commute such payments. This section shall not be deemed to restrict the rights of minors set forth in s. 627.406.

(2) If a guardian of the property of any such minor is duly appointed and written notice thereof is given to the insurer at its home office, any such payment thereafter falling due shall be paid to the guardian for the account of the minor, unless the policy or contract under which the payment is made expressly provides otherwise.

(3) This section shall not be deemed to require any insurer making any such payment to determine whether any other insurer may be effecting a similar payment to the same minor.

History.- s. 473, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd) , ch. 82-243; s. 79, ch. 82-386.

' Note.- Repealed effective October 1, 1992, by s. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.425 Forms for proof of loss to be furnished.-An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such person, but such

850

Documents

Florida Statutes 1981, 1982 Supplement Volume€¦ · 626.874 1982 SUPPLEMENT TO FLORIDA STATUTES 1981 s. ... The records of the adjuster relating to a par ticular claim or loss shall