p. 1, §631.914(1)(a)
Assessments may be levied against all workers’ compensation insurers and self-insurance funds to secure payment of covered claims resulting from an insurer insolvency, under the provisions of the Florida Workers’ Compensation Insurance Guaranty Association (FWCIGA). The ability to levy those assessments and to require reporting relating to financial condition is transferred from the Department of Financial Services (DFS) to the Office of Insurance Regulation (OIR). Additionally, the amount of the assessment must be computed and levied on the basis of the full policy premium value on the net direct written premium amount without consideration of any applicable discount or credit for deductibles. Finally, it provides that the initial assessment cap for self-insurance funds is increased from the current 1.5 percent to 2 percent, the same as it is for insurers.
This method of calculating the assessment base removes any distortion that could be caused by “jumbo” deductibles.
p. 2, §631.914(1)(b)
Revises the insurer’s premium subject to an assessment from being based on the prior year’s net direct written premium to the net direct written premium for the calendar year of the assessment. It also allows for recoupment of the assessment as a separate surcharge against policyholders
Currently, the assessment amounts are included in the overall rate making process.
Provides criteria for the FWCIGA to require the insurer either to use an installment method to remit the assessment as premium written or to remit the assessment to the FWCIGA before actually collecting the policyholder surcharge. See the bill for details.
Provides that assessments levied are not premium and are not subject to any premium tax, fees, or commissions. Failure of an insured to pay the surcharge or recoupment of the assessment is considered nonpayment of premium, which could result in the cancellation of a policy. Finally, an insurer is not liable for any uncollectable assessment-related surcharges.
Provides that only insurers are subject to assessments by the FWCIGA and the provisions to not give a policyholder a cause of action regarding the FWCIGA assessments.
Effective date: July 1, 2016
Chapter No. 2016-170, LOF