f.s.1983 insurance field representatives and … · d. any individual, isolated, nonrecurring unad...

F.S.1983 INSURANCE FIELD REPRESENTATIVES AND OPERATIONS Ch.626

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.

(h) Rebates.-1. Except as otherwise expressly provided by law,

or in an applicable filing with the department, knowingly:

a. 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;

b. 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;

c. 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.

2. Nothing in paragraph (g) or subparagraph 1. of this paragraph shall be construed as including within the definition of discrimination or rebates:

a. 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.

b. 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.

c. 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.

d. 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.

e. Issuing life or disability insurance policies on a salary savings, bank draft, preauthorized check, payroll deduction, or other similar plan at a reduced rate reasonably related to the savings made by the use of such plan.

3.a. 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.

b. Nothing in this subparagraph 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.

c. No insured named in a policy, or any other person directly or indirectly connected with the transaction involving the issuance of such policy, including, but not limited to, any 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 sub-subparagraph h.

(i) Unfair claim settlement practices.-1. 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;

2. 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

3. Committing or performing with such frequency as to indicate a general business practice any of the following:

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

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

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

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

e. 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

f. 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.

(j) Failure to maintain complaint-handling procedures.-Failure of any person to maintain a com-

501

Ch.626 INSURANCE FIELD REPRESENTATIVES AND OPERATIONS F.S.1983

plete record of all the complaints received since the date of the last examination. For purposes of this paragraph, "complaint" means any written communication primarily expressing a grievance.

(k) Misrepresentation in insurance applications.

1. 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.

2. 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.

(1) 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.

(m) Advertising gifts permitted.-No provision of paragraph (f), paragraph (g), or paragraph (h) 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.

(n) Free insurance prohibited.-1. 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.

2. For the purposes of this paragraph, "free" insurance is:

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

b. 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.

3. Subparagraphs 1. and 2. do not apply to: a. 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.

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

c. Credit life insurance or credit disability insurance.

d. Any individual, isolated, nonrecurring unadvertised transaction not in the regular course of business.

e. Title insurance. f. 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.

4. Using the word "free" to describe life or disability insurance, in connection with the advertising or

offering for sale of any kind of goods, merchandise, or services.

(0) Illegal dealings in premiums; excess or reduced charges for insurance.-

1. 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.

2. 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 VII 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 subparagraph (q)3., in addition to the premium required by the insurer.

3. 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:

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

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

c. 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.

d. Hit by a "hit-and-run" driver, if the accident was reported to the proper authorities within 24 hours after discovering the accident.

e. 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.

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

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

502


4. 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.

5. 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.

6. 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.

7. No insurer shall, with respect to premiums charged for automobile insurance, unfairly discriminate solely on the basis of age, sex, marital status, or scholastic achievement.

8. 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 paragraph does not apply to life insurance or health insurance.

(p) Insurance cost specified in "price packagen•

1. 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.

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

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

(q) Certain insurance transactions through credit card facilities prohibited.-

1. Except as provided in subparagraph 3., no person 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 paragraph 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 subparagraph does not apply as to health insurance or to credit life, credit disability, or credit property insurance.

2. Whenever any person does or performs in this state any of the acts in violation of subparagraph 1. 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.

3. 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:

a. 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;

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

c. 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 sub-subparagraphs a. through c. do not apply to health insurance or to credit life, credit disability, or credit property insurance.

4. 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 does not prohibit a credit card facility from using or disclosing such information in any judicial proceeding or consistent with applicable law on credit reporting.

5. 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, as-

503


sociations, 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.

(r) Interlocking ownership and management.-1. 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.

2. 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.

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

(s) Prohibited arrangements as to funerals.-1. No life insurer shall designate in any life insur

ance 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.

2. 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.

3. 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.

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

(t) Certain life insurance relations with funeral directors prohibited.-

1. 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.

2. No life insurer shall: a. 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.

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

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

3. 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.

(u) False claims; obtaining or retaining money dishonestly.-

1. 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

2. 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.

(v) 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.

(w) Soliciting or accepting new or renewal insurance risks by insolvent insurer prohibited; penalty.

1. 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 insurer, 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.

2. Any such director or officer, upon conviction of a violation of this paragraph, is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(x) 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:

504


1. Race, color, creed, marital status, sex, or national origin;

2. 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;

3. The insured's or applicant's failure to agree to place collateral business with a particular insurer; or

4. 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.

(2) ALTERNATIVE RATES OF PAYMENT.(a) Nothing in this section shall be construed to

prohibit an insurer or insurers from negotiating or entering into contracts with licensed health care providers for alternative rates of payment, or from limiting payments under policies pursuant to agreements with insureds, as long as the insurer offers the benefit of such alternative rates to insureds who select designated providers.

(b) As used in this subsection, the term "licensed health care providers" does not include persons or facilities regulated pursuant to chapter 465.

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; s. 90, ch. 83-216; ss. 1, 2, ch. 83-342.

'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_

1626.9551 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 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.

History.-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.

'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.

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. '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.

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.

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


505


'626.9581 Cease and desist and penalty orders.-After the hearing provided in s. 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 anyone 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.

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


'626.9591 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 s. 120.68.

Hi.tory.-s. 9, ch. 76-260; 8. 807, ch. 82-243; s. 45, ch. 83-215. 'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


'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 anyone 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.

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


'626.9611 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.

Hi.tory.-s. 9, ch. 76-260; s. 1, ch. 77-174; 8.807, 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 enforce any penalties, fines, or forfeitures authorized by law.



'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.-(1) 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) Policyholders 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.-8. 9, ch. 76-260; s. 807, ch. 82-243. 'Note.-Repealed effective October 1, 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.

History.-8. 5, ch. 76-218; s. 807, ch. 82-243. 'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


506


1626.9702 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.



1626.9705 Life or disability insurance; illegal dealings.-

(1) 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 an 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. 1, ch. 77-174; 8. 1, ch. 79-171; s. 807, ch. 82-243.

'Note.-Repealed effective October 1, 1990, by 8. 807, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1626.9706 Life insurance; discrimination on basis of sickle-cell trait prohibited.-

(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 1, 1990, by 8. 807, ch. 82-243, and sched

uled for review pursuant to 8. 11.61 in advance of that date.

1626.9707 Disability insurance; discrimination on basis of sickle-cell trait prohibited.-

(1) 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 policy 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.-8. 1, ch. 78-35; 8. 807, ch. 82-243. 'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


1626.973 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 insurance.

History.-s. 398, ch. 59-205; s. 807, ch. 82-243; s. 91, ch. 83-216. 'Note.-Repealed effective October 1, 1990, by s. 807, ch. 82-243, and sched


1626.988 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 fot:egoing. 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

507


a population of Jess 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 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 with which the agent or solicitor was associated on said date.

History.-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


1626.989 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,

508


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 protect the person investigated from unwarranted injury, or to be in the public interest. Further, such papers, documents, reports, or evidence relative to the

the duties imposed upon them by law or department regulation.

Hi.tory.-8. 9, ch. 76-266; 8. 211, ch. 77-104; 8. 20, ch. 77-468; 8. 2, ch. 78-258; 8.2, ch. 79-81; 8. 237, ch. 79-400; 8. 3, ch. 81·48; 88. 807, 810, ch. 82·243; s. 92, ch. 83·216; 8. 30, ch. 83·283.

'Note.-Repealed effective October 1, 1990, by 8. 807, ch. 82·243, and sched· uled for review pursuant to s. 11.61 in advance of that date.

subject of an investigation under this section shall '626.99 Life insurance solicitation.-not be subject to subpoena until opened for public in- (1) PURPOSE.-The purpose of this section is to spection by the department, unless the department require insurers to deliver to purchasers of life insurconsents, or until, after notice to the department and ance information which will improve the buyer's abila hearing, the court determines the department ity to select the most appropriate plan of life insurwould not be unnecessarily hindered by such subpoe- ance for his needs, improve the buyer's understandna. Division investigators shall not be subject to sub- ing of the basic features of the policy which has been poena in civil actions by any court of this state to tes- purchased or which is under consideration, and imtify concerning any matter of which they have knowl- prove the ability of the buyer to evaluate the relative edge pursuant to a pending insurance fraud investi- costs of similar plans of life insurance. This section gation by the division. does not prohibit an insurer from using additional

(5) Any company which believes that such a material which is not in violation of this chapter or fraudulent claim is being made shall, within 60 days any other statute or regulation. of the receipt of such notice, send to the Division of (2) SCOPE; EXEMPTIONS.-Insurance Fraud, on a form prescribed by the depart- (a) Except as hereafter exempted, this section ment, the information requested and such additional shall apply to any solicitation, negotiation, or proinformation relative to the claim and the parties curement of life insurance occurring within this state. claiming loss or damages because of the accident as This section shall apply to any issuer of life insurance the department may require. The Division of Insur- contracts, including a fraternal benefit society. ance Fraud shall review such reports and select such (b) Unless they are otherwise specifically includ-claims as, in its judgment, may require further inves- ed, this section shall not apply to: tigation. It shall then cause an independent exam ina- 1. Annuities; tion of the facts surrounding such claim to be made 2. Credit life insurance; to determine the extent, if any, to which fraud, de- 3. Group life insurance; ceit, or intentional misrepresentation of any kind ex- 4. Life insurance policies issued in connection ists in the submission of the claim. The Division of with pension and welfare plans as defined by and Insurance Fraud shall report any alleged violations of which are subject to the federal Employee Retirelaw which its investigations disclose to the appropri- ment Income Security Act of 1974 (ERISA); or ate licensing agency and state attorney having juris- 5. Variable life insurance under which the death diction with respect to any such violation, as provid- benefits and cash values vary in accordance with unit ed in s. 624.310. If prosecution by the state attorney values of investments held in a separate account. is not begun within 60 days of the division's report, (3) DEFINITIONS AND FORMULAS.-As the state attorney shall inform the division of the rea- used in this section: sons for the lack of prosecution. (a) "Buyer's guide" means a document which

(6) No insurer, or employees or agents of any in- shall contain all the requirements of, and which is in surer, shall be subject to civil liability for libel or oth- substantial compliance with, subsection (6) . erwise by virtue of the filing of reports or furnishing (b) "Cash dividend" means the current illustrated other information required by this section or re- dividend which can be applied toward payment of quired by the Division of Insurance Fraud as a result the gross premium. of the authority herein granted. (c) "Equivalent level annual dividend" is calculat-

(7) Division investigators shall have the power to ed by applying the following steps: make arrests for criminal violations established as a 1. Accumulate the annual cash dividends at 5 result of investigations only. The general laws appli- percent interest compounded annually to the end of cable to arrests by peace officers of this state shall the 10th and the end of the 20th policy years. also be applicable to such investigators. Such investi- 2. Divide each accumulation of step 1. under this gators shall have the power to execute arrest war- paragraph by an interest factor that converts it into rants and search warrants for the same criminal vio- one, equivalent level annual amount that, if paid at lations, serve subpoenas issued for the examination, the beginning of each year, would accrue to the valinvestigation, and trial of all offenses determined by ues in step 1. under this paragraph over the respectheir investigations, and arrest upon probable cause tive periods stipulated in step 1. under this parawithout warrant any person found in the act of vio- graph. If the period is 10 years, the factor is 13.207; lating any of the provisions of applicable laws. Inves- and if the period is 20 years, the factor is 34.719. tigators empowered to make arrests under this sec- 3. Divide the results of step 2. under this paration shall not be empowered to carry firearms or oth- graph by the number of thousands of the equivalent er weapons in the performance of their duties. level death benefits to arrive at the equivalent level

(8) It is unlawful for any person to resist an arrest annual dividend. authorized by this section or in any manner to inter- (d) "Equivalent level death benefit" of a policy or fere, either by abetting or assisting such resistance or term life insurance rider is an amount calculated by otherwise interfering, with division investigators in applying the following steps:

509


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 10th 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 10th 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: ST A TEMENT OF POLICY COST AND BENEFIT INFORMATION;

2. The name and address of the insurance agent 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 insurance 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 dis-

510


closed 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.

511

(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, 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.-8. 1, ch. SO-156; 8. 423, ch. 81-259; 8. S07, ch. 82-243_ 'Note.-RepeaJed effective October 1, 1990, by 8. S07, ch. 82-243, and sched


Ch.627 INSURANCE RATES AND CONTRACTS

CHAPTER 627

INSURANCE RATES AND CONTRACTS

PART I RATES AND RATING ORGANIZATIONS (ss. 627.011-627.381)

PART II THE INSURANCE CONTRACT (ss. 627.401-627.428)

PART III LIFE INSURANCE AND ANNUITY CONTRACTS (ss. 627.451-627.481)

PART IV INDUSTRIAL LIFE INSURANCE POLICIES (ss. 627.501-627.521)

PART V GROUP LIFE INSURANCE POLICIES (ss. 627.551-627.575)

PART VI HEALTH INSURANCE POLICIES (ss. 627.601-627.6498)

F.S.1983

PART VII GROUP, BLANKET, AND FRANCHISE HEALTH INSURANCE POLICIES (ss. 627.651-627.6695)

PART VIII MEDICARE SUPPLEMENT POLICIES (ss. 627.671-627.675)

PART IX CREDIT LIFE AND DISABILITY INSURANCES (ss. 627.676-627.684)

PART X PROPERTY INSURANCE CONTRACTS (ss. 627.701-627.706)

PART XI MOTOR VEHICLE AND CASUALTY INSURANCE CONTRACTS (ss.627.726-627.743)

PART XII SURETY INSURANCE CONTRACTS (ss. 627.751-627.759)

PART XIII TITLE INSURANCE CONTRACTS (ss. 627.7711-627.7865)

PART XIV VARIABLE OR INDETERMINATE VALUE CONTRACTS (ss. 627.801-627.807)

PART XV PREMIUM FINANCE COMPANIES AND AGREEMENTS (ss. 627.826-627.849)

PART XVI PREMIUM FINANCING (ss. 627.901-627.904)

PART XVII INSURER REPORTING (ss. 627.911-627.919)

PART I 627.101

RATES AND RATING ORGANIZATIONS 627.111

627.011 Short title. 627.141 627.021 Scope of this part. 627.031 Purposes of this part; interpretation. 627.151 627.041 Definitions. 627.062 Rate standards. 627.0651 Making and use of rates for motor vehicle

insurance. 627.171 627.066 Excessive profits for motor vehicle insur- 627.191

ance prohibited. 627.211 627.072 Making and use of rates.

627.091 Rate filings; workers' compensation and 627.215 employer's liability insurances.

627.092 Workers' Compensation Administrator. 627.093 Application of s. 286.011 to workers' com- 627.221

pensation and employer's liability in- 627.231 surances. 627.241

627.096 Workers' Compensation Rating Bureau. 627.251

512

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

Effective date of filing. Subsequent disapproval of filinl?; 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.

Excess rates. Adherence to filings; workers' compensa

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

employer's liability insurances. Excessive profits for workers' compensa

tion and employer's liability insurances prohibited.

Rating organizations; licensing; fee. Subscribers to rating organizations. Notice of changes. Bureau rules not to affect dividends.

F.S.1983 INSURANCE RATES AND CONTRACTS Ch.627

627.261 627.281

627.291

627.301 627.311 627.314 627.318 627.321 627.331

627.351 627.356 627.357 627.361 627.371 627.381

Actuarial and technical services. 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.

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 in s. 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, as 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. History.-s. 413, ch. 59·205; s. 3, ch. 76·168; s. 1, 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 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.

'627.031 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 VIII of chapter 626, relating to unfair trade practices.

History.-s. 411, ch. 59·205; s. 1, ch. 67·9; ss. 13, 35, ch. 69·106; s. 1, ch. 71·3(8); s. 3, ch. 76·168; s. 1, 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 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.

'627.041 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 rate making, capacity.

(5) "Member" means an insurer who participates 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 spe-

513

Ch.627 INSURANCE RATES AND CONTRACTS F.S.1983

cific 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.

Hi.tory.-8. 414, ch. 59-205; 8.2, ch. 67-9; s. 3, ch. 76-168; 8. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 340, 357, 809(2nd), ch. 82-243; 88. 49, 79, ch. 82-386.

'Note.-Expires October 1, 1992, pursuant to s_ 809(2nd), ch. 82-243, and i8 8cheduled for review pursuant to 8. 11.61 in advance of that date.

thereof established in violation of said sections shall, in addition to the consequences stated in said sections or elsewhere, be deemed a violation of this section.

Hi8tory.-8. 3, ch. 67-9; 8. 3, ch. 71-3(B); 8. 3, ch. 76-168; 8_ 21, ch. 77-468; 8. 1, ch. 77-457; 8. 93, ch. 79-40; 88. 2, 3, ch. 81-318; 88. 341, 357, 809(2nd), ch. 82-243; 88. 45, 49, 79, ch. 82-386; 8. 93, ch. 83-216.

'Note.-Expires October 1, 1992, pursuant to 8. 809(2nd), ch. 82-243, and i8 8cheduled for review pursuant to 8. 11.61 in advance of that date.

1627.0651 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:

1627.062 Rate standards.- (a) Past and prospective loss experience within (1) The rates for all classes of insurance to which and outside this state.

the provisions of this part are applicable shall not be (b) The past and prospective expenses. excessive, inadequate, or unfairly discriminatory. (c) The degree of competition among insurers for

(2) As to all such classes of insurance, other than the risk insured. workers' compensation, employer's liability insur- (d) Investment income reasonably expected by ance, and motor vehicle insurance: the insurer, consistent with the insurer's investment

(a) No rate shall be held to be excessive unless: practices, from investable premiums anticipated in 1. Such rate is unreasonably high for the insur- the filing, plus any other expected income from cur-

ance provided; and rently invested assets representing the amount ex-2. A reasonable degree of competition does not pected on unearned premium reserves and loss re

exist in the area with respect to the classification to serves. Such investment income shall not include inwhich the rate is applicable. The department may come from invested surplus. The department may promulgate rules utilizing generally accepted actuari- promulgate rules utilizing reasonable techniques of al and economic principles to describe the factors actuarial science and economics to specify the manthat will be utilized in determining when price com- ner in which insurers shall calculate investment inpetition and other elements of competition are suffi- come attributable to motor vehicle insurance policies cient to assure that rates are not excessive in relation written in this state and the manner in which such to the benefits provided. investment income is used in the calculation of insur-

(b) No rate shall be held to be inadequate unless: ance rates. Such manner shall contemplate the use of 1. The rate is unreasonably low for the insurance a positive underwriting profit allowance in the rates

provided, and the continued use of the rate endan- that will be compatible with a reasonable rate of regers the solvency of the insurer using the same; or turn plus provisions for contingencies. The total of

2. The rate is unreasonably low for the insurance the profit and contingency factor as specified in the provided, and the use of the rate by the insurer using filing shall be utilized in computing excess profits in the same has, or if continued will have, the effect of conjunction with s. 627.066. In promulgating such destroying competition or of creating a monopoly. rules, the department shall in all instances adhere to

(c) A rate shall be deemed excessive if, among and implement the provisions of this paragraph. other things, the rate structure established by a stock (e) The reasonableness of the judgment reflected insurance company provides for replenishment of in the filing. surpluses from premiums, when such replenishment (f) Dividends, savings, or unabsorbed premium is attributable to investment losses. deposits allowed or returned to Florida policyholders,

(d) This subsection does not apply to motor vehi- members, or subscribers. cle insurance as defined in s. 627.041. (g) The cost of repairs to motor vehicles.

(3) Nothing contained in this section or elsewhere (h) The cost of medical services, if applicable. in this part shall be construed to repeal or modify the (i) The adequacy of loss reserves. provisions of ss. 626.951 and 626.973, relating to un- (j) The cost of reinsurance. fair insurance trade practices; and any rate, rating (k) Trend factors, including trends in actual loss-classification, rating plan or schedule, or variation es per insured unit for the insurer making the filing.

514


(1) 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, adequacy, 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 discriminatory, unless the department withdraws the notification, the insurer shall not increase the rate until the earlier of 120 days after the 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.

Hi.tory.-8. 22, ch. 77-468; 8. 8, ch. 78-374; 8. 2, ch. 81-318; 88. 343, 357, 809(2nd), ch. 82-243; S8. 46, 47, 49, 79, ch. 82-386; 8. 94, ch. 83-216.

'Note.-Expires October 1, 1992, pursuant to 8. 809(2nd), ch. 82-243, and i8 scheduled for review pursuant to 8. 11.61 in advance of that date.

'627.066 Excessive profits for motor vehicle insurance prohibited.-

(1) 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 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.

(4) Each insurer group shall also file a schedule of

515


Florida private passenger automobile 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 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.

(10)(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.

(l1)(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.

(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.

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

'Note.-RepeaJed 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.

1627.072 Making and use of rates.-(l)(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:

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, consider-

516


ation 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 accident-year basis and in accordance with subparagraphs (b)1., 2., and 3., for at least 21/2 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]

Standard Premium Size

$300-999 1,000-4,999

5,000-49,999

Total:

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. 1, ch. 70-179; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 24, ch. 77-468; s. 94, ch. 79-40; 88.2,3, ch. 81-318; 88. 344,357, 809(2nd), ch. 82-243; 88. 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.

'627.091 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 in s. 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

(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 in s. 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.

517


(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.

History.-s. 419, ch. 59-205; s. 5, ch. 67-9; ... 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; ... 20,22, ch. 80-236; ... 2,3, ch. 81-318; 88. 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.

1627.092 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.-<I. 21, ch. 78-300; 8. 96, ch. 79-40; s. 2, ch. 81-318; 88. 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.

1627.093 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; ... 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.

1627.096 Workers' Compensation Rating Bureau.-

(1) There is created within the department a Workers' Compensation Rating Bureau, which shall make an investigation and study of all insurance companies authorized to issue workers' compensation and employer's liability coverage in this state. Such bureau shall study the data, statistics, schedules, or other information as it may deem necessary to assist and advise the department in its review of filings made by or on behalf of workers' compensation and employer's liability insurers. The department shall 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.

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

'Note.-Expires October I , 1987, pursuant to s. 806, ch. 82-243, and is scheduled for review pursuant to s. 11.61 in advance of that date.

1627.101 When filing becomes effective; workers' compensation and employer's liability insurances.-

(1) The department shall review filings as to 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 information, 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 in s. 627.111. If after the 15-day public inspection period the department specifically disapproves the filing, the provisions of subsection (5) shall apply.

(4) An insurer or rating organization may, at the time it makes a filing with the department, request a public hearing thereon. In such event, the department shall forthwith place the filing on file in its office for public inspection and shall give notice of the hearing.

(5) If the department disapproves a filing, it shall promptly give notice of such disapproval to the insurer or rating organization that made the filing, stating the respects in which it finds that the filing does not 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.-<I. 420, ch. 59-205; 8. 6, ch. 67-9; 88. 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; ... 2,3, ch. 81-318; ... 357, 806, ch. 82-243; s. 49, ch. 82-386.

'N ote.-Repealed effective October I, 1987, hy s. 806, ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

518


1627.111 Effective date of filing.-(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.

History.-8. 421, ch. 59-205; 88. 13,35, ch. 69-106; 8. 3, ch. 76-166; 8. I, ch. ~~:~~: 8. 21, ch. 78-95; 88. 2, 3, ch. 81-318; 88. 357, 806, ch. 82-243; 8. 49, ch.

'Note.-Repealed effective October I, 1987, by 8. 806, ch. 82·243, and scheduled for review pursuant to 8. 11.61 in advance of that date.

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.

Hi.tory.-s. 424, ch. 59-205; s. 7, ch. 67-9; 88. 13, 35, ch. 69-106; 8. 3, ch. 76-168; 8. I, ch. 77-457; s. 21, ch. 78-95; 8. 100, ch. 79-40; 88.2,3, ch. 81-318; 88. 357,806, ch. 82-243; 8. 49, ch. 82-386.

'Note.-Repealed effective October I, 1987, by 8. 806, ch. 82-243, and scheduled for review pursuant to 8. 11.61 in advance of that date.

1627.151 Basis of approval or disapproval of workers' compensation or employer's liability insurance filing; scope of disapproval power.-

(1) In determining at any time whether to approve or disapprove a filing as to workers' compensation 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 627.072.

(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.

Hi.tory.-s. 425, ch. 59-205; 8. 8, ch. 67-9; 88. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 77-457; s. 101, ch. 79-40; 88. 2,3, ch. 81-318; 88. 357, 806, ch. 82-243; s. 49, ch. 82-386.

'Note.-Repealed effective October I, 1987, by 8. 806, ch. 82-243, and scheduled for reVIew pursuant to 8. 11.61 in 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.

Hi.tory.-8. 427, ch. 59-205; 8. 9, ch. 67-9; s. 3, ch. 76-166; s. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 357, 806, ch. 82-243; s. 49, ch. 82-386.

'Note.-Repealed effective October I , 1987, by 8.806, ch. 82-243, and scheduled for review pursuant to 8. 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.-8. 429, ch. 59-205; 8. 11, ch. 67-9; s. 3, ch. 76-166; 8. I, ch. 77-457; 8. 102, ch. 79-40; 88. 2, 3, ch. 81-318; 88. 357, 806, ch. 82-243; 8. 49, ch. 82-386.


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 modification and shall be accompanied by the data upon which the applicant relies. A copy of the application and data shall be sent simultaneously to the rating organization.

(2) In considering the application for permission to file the deviation, the department shall give consideration to the applicable principles for ratemaking 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.

Hi.tory.-s. 431, ch. 59-205; 8. 12, ch. 67-9; 88. 13, 35, ch. 69-106; s. 3, ch. 76-166; 8. I, ch. 77-457; 8. 21, ch. 78-95; 8. 103, ch. 79-40; 88. 2, 3, ch. 81-318; 88. 357, 806, ch. 82-243; 8. 49, ch. 82-386.

'Note.-Repealed effective October I, 1987, by 8.806, ch. 82-243, and 8cheduled for review pursuant to 8. 11.61 in advance of that date.

519


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

(1) 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 purposes of reporting under this section for subsequent years.

History.-s. 104, ch. 79-40; SS. 21, 22, ch. 80-236; s. 425, ch. 81-259; s. 2, ch. 81-318; 88. 357, 806, ch. 82-243; s. 49, ch. 82-386.


'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

520


the application. The applicant shall file with its application:

(a) A copy of its constitution, 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, trustworthy, 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 organization) 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. I, 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.-

(1) 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

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.

History.-s. 434, ch. 59-205; ss. 13,35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 77-457; 88. 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.

'627.251 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; ... 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.

'627.261 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.

History.-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; 88. 49, 79, ch. 82-386.


for which the rating organization is authorized so to '627.281 Appeal from rating organization; act. The rating organization shall give notice to sub- workers' compensation and employer's liability scribers of proposed changes in such rules and regula- insurance filings.-tions. (1) Any member or subscriber to a rating organi-

(2) The reasonableness of any rule or regulation zation may appeal to the department from the action in its application to subscribers, or the refusal of any or decision of such rating organization in approving rating organization to admit an insurer as a subscrib- or rejecting any proposed change in or addition to the er, shall, at the request of any subscriber or any such workers' compensation or employer's liability insurinsurer, be reviewed by the department. If the de- ance filings of such rating organization, and the department finds that such rule or regulation is unrea- partment shall issue an order approving the decision sonable in its application to subscribers, it shall order of such rating organization or directing it to give furthat such rule or regulation shall not be applicable to ther consideration to such proposal. If such appeal is

521


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.

Hi8tory.-s. 438, ch. 59-205; s. 13, ch. 67-9; ss. 13,35, ch. 69-106; 8. 3, ch. 76-168; 8. I, ch. 77-457; 8. 21, ch. 78-95; 8. 105, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; 8. 49, ch. 82-386.

'Note.-Repealed effeetive October I, 1987, by 8. 806, ch. 82-243, and scheduled for review pursuant to 8. 11.61 in advance of that date.

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

(1) As to workers' compensation and employer's liability insurances, every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate.

(2) As to workers' compensation and employer's liability insurances, every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his authorized representative, on his written request to review the manner in which such rating system has been applied in connection with the insurance afforded him. If the rating organization or insurer fails to grant or rejects such request within 30 days after it is made, the applicant may proceed in the same manner as if his application had been rejected. Any party affected by 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.

Hi8tory.-8. 439, ch. 59-205; 8. 14, ch. 67-9; ss. 13, 35, ch. 69-106; 8. 3, ch. 76-168; s. I , ch. 77-457; s. 21, ch. 78-95; 8. 106, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; 8. 49, ch. 82-386.

'Note.-Repealed effective October I, 1987, by 8. 806, ch. 82-243, and 8cheduled for review pursuant to 8. 11.61 in advance of that date.

'627.301 Advisory organizations.-(1) 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 activi-

ties, 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.

HI8tory.-s. 440, ch. 59-205; 8. 15, ch. 67-9; ss. 13, 35, ch. 69-106; 8. 3, ch. 76-168; 8. 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 effective October I, 1992, by 8. 809(2nd), ch. 82-243, and scheduled for review pursuant to 8. 11.61 in advance of that date.

'627.311 Joint underwriters and joint reinsurers.-

(1) Every group, association, or other organization of insurers which engages in joint underwritings or joint reinsurance shall be subject to regulation with respect thereto as herein provided, subject, however, with respect to joint underwriting, to all other provisions of this chapter and, with respect to joint reinsurance, to ss. 624.15 and 627.321.

(2) If the department finds that any activity or practice of any such group, association, or other organization is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, it may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, and requiring the discontinuance of such activity or practice.

(3) The department may, after consultation with insurers licensed to write automobile insurance in this state, approve a joint underwriting plan for purposes of equitable apportionment or sharing among insurers of automobile liability insurance and other motor vehicle insurance, as an alternate to the plan required in s. 627.351(1). All insurers authorized to 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 pro-

522


vide 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 commis-' sioner'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.

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 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.

(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 !jubject 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 The methodology of applying these criteria, which revision at the request of the Insurance Commission- shall be used to determine into which subplan an iner at any time. The board of governors shall desig- sured shall be placed, shall be determined by the Innate one or more servicing carriers for the plan from surance Commissioner, and such methodology shall the ranks of those insurers participating in the plan. be applied regardless of the number of employees or Any such designation shall be subject to the approval the amount of payroll of the insured. The board of

523


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 in s. 440.02(18)(a) and (c) 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(I)(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(I)(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.-8. 441, ch. 59-205; 88. 13, 35, ch. 69-106; 8. 1, ch. 74-51; 8. 3, ch. 76-168; 8. 16, ch. 77-290; 8. 1, ch. 77-457; 8. 21, ch. 78-95; 8.107, ch. 79-40; 88.1, 2, 4, ch. 79-394; 8. 238, ch. 79-400; 88. 1, 2, ch. 80-360; 88. 1, 2, ch. 80-362; 88. 2, 3, ch. 81-318; 88. 357, 809(2nd), ch. 82-243; 88. 49, 79, ch. 82-386.

'Note.-RepeaJed effective October 1, 1992, by 8. 809(2nd), ch. 82-243, and 8cheduled for review pursuant to 8. 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.

(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.

524


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; B. I, ch. 70·320; s. I, ch. 71·6(B); s. 3, ch. 76·168; s. I, ch. 77·457; s. 108, ch. 79·40; 88. 2, 3, ch. 81·318; 88. 357, 809(2nd), ch. 82·243; 88. 49, 79, ch. 82·386.

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

'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.-B. 17, ch. 67·9; 88. 13,35, ch. 69·106; B. 3, ch. 76·168; B. I, ch. 77·457; 88. 2, 3, ch. 81·318; 88. 348, 357, 809(2nd), ch. 82·243; 88. 49, 79, ch. 82·386.

'Note.-ExpireB October I, 1992, pursuant to B. 809(2nd), ch. 82·243, and iB Bcheduled for review pursuant to B. 11.61 in advance of that date.

'627.321 Examinations.-(1) 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 depart-

ment 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.-B. 442, ch. 59·205; B. 18, ch. 67·9; 88. 13, 35, ch. 69·106; B. 3, ch. 76·168; s. I, ch. 77·457; B. 27, ch. 77.468; BB. 2, 3, ch. 81·318; BB. 349, 357, 809(2nd), ch. 82·243; 88. 49, 79, ch. 82·386.

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

'627.331 Recording and reporting of loss, expense, and claims experience; rating inform ation.-

(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 reasonable rules promulgated by the department, to insurers and rating organizations.

(4)(a) The department shall require insurers and rating organizations to furnish it with copies of their rates, rating schedules, and rating manuals 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. Underwriting rules not contained in rating manuals shall be filed for private passenger automobile insurance and homeowners' insurance.

(b) For individual risks that are not rated in accordance with the insurer's rates, rating schedules, rating manuals, and underwriting rules filed with the department and which have been submitted to the insurer for individual rating, the insurer is required to file rates with the department for each such risk as soon as practicable following the effective date of the policy but in no event later than 90 days thereafter.

(c) The submission of rates, rating schedules, and rating manuals to the department by a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this subsection for any insurer maintaining membership

525


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; 8. 19, ch. 67-9; 88. 13, 35, ch. 69-106; 8. I, ch. 70-75; s. I, ch. 70-321; s. I , cb. 70-439; 8. I, ch. 73-153; s. I, ch. 74-320; s. 3, ch. 76-168; 8. I, ch. 77-457; 8. 27, ch. 77-468; 88. 2, 3, ch. 81-318; 88. 350, 357, 809(2nd), ch. 82-243; 88. 49, 79, cb. 82-386; 8. 10, cb. 83-288.

'Note.-Expire8 October I , 1992, pursuant to 8. 809(2nd), cb. 82-243, and i8 8cheduled for review pursuant to 8. 11.61 in advance of that date.

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 li-1627.351 Insurance risk apportionment censed to transact property insurance on a direct ba-

plans.- sis in this state to provide windstorm coverage to ap-(1) MOTOR VEHICLE INSURANCE RISK AP- plicants from areas determined to be eligible pursu

PORTIONMENT .-Agreements may be made ant to paragraph (d) who in good faith are entitled to, among casualty and surety insurers with respect to but are unable to procure, such coverage through orthe equitable apportionment among them of insur- dinary means; or it shall adopt a reasonable plan or ance which may be afforded applicants who are in plans for the equitable apportionment or sharing good faith entitled to, but are unable to, procure such among such insurers of windstorm coverage. The insurance through ordinary methods; and such insur- commissioner shall promulgate rules which provide a ers may agree among themselves on the use of rea- formula for the recovery and repayment of any desonable rate modifications for such insurance. Such ferred assessments. agreements and rate modifications shall be subject to 1. For the purpose of this section, properties elithe approval of the department. The department gible for such windstorm coverage are defined as shall, after consultation with the insurers licensed to dwellings, buildings, and other structures, including write automobile liability insurance in this state, mobile homes which are used as dwellings and which adopt a reasonable plan or plans for the equitable ap- are tied down in compliance with mobile home portionment among such insurers of applicants for tie-down requirements prescribed by the Department such insurance who are in good faith entitled to, but of Highway Safety and Motor Vehicles pursuant to s. are unable to, procure such insurance through ordi- 320.8325, and the contents of all such properties. nary methods; and, when such plan has been adopt- 2. All insurers required to be members of such ed, all such insurers shall subscribe thereto and shall plan shall participate in its writings, expenses, profparticipate therein. Such plan or plans shall include its, and losses. Such gross participation shall be in rules for classification of risks and rates therefor. Any the proportion that the net direct premiums of each insured placed with the plan shall be notified of the member written on property in this state during the fact that insurance coverage is being afforded preceding calendar year bears to the aggregate net dithrough the plan and not through the private market, reet premiums of all members of the plan written on and such notification shall be given in writing within property in this state during the preceding calendar 10 days of such placement. To assure that plan rates year. The commissioner, after review of annual stateare made adequate to pay claims and expenses, insur- ments, other reports, and any other statistics which ers shall develop a means of obtaining loss and ex- he deems necessary, shall certify to the plan the agpense experience at least annually; and the plan shall gregate net direct premiums written on property in file such experience, when available, with the depart- this state by all members. The plan of operation shall ment in sufficient detail to make a determination of provide that one additional domestic member of the rate adequacy. Such experience shall be filed with board of directors be elected by the domestic compathe department not more than 9 months following nies of this state on the basis of cumulative weighted the end of the annual statistical period under review. voting based on the net written premiums of domesWithin 60 days thereafter, the department shall ap- tic companies in this state. Any such plan shall proprove such rate revisions as are supported by the fil- vide a formula whereby a company voluntarily proing. In addition to provisions for claims and ex- viding windstorm coverage in affected areas will be penses, the ratemaking formula shall include a factor relieved wholly or partially from apportionment. A for projected claims trending and 5 percent for con- company which is a member of a group of companies tingencies. Trend factors shall not be found to be in- under common management may elect to have its appropriate if not in excess of trend factors normally credits applied on a group basis, and any company or used in the development of residual market rates by group may elect to have its credits applied to any the appropriate licensed rating organization. other company or group. ,

(2) WINDSTORM INSURANCE RISK AP- 3. The plan shall also provide that any member PORTIONMENT.- with a surplus as to policyholders of $10,000,000 or

(a) Agreements may be made among property in- less writing 25 percent of its total countrywide propsurers with respect to the equitable apportionment erty insurance premiums in this state may petition among them of insurance which may be afforded ap- the department, within 90 days of the effective date plicants who are in good faith entitled to, but are un- of chapter 76-96, Laws of Florida, and thereafter able to procure, such insurance through ordinary within the first 90 days of each calendar year, to methods; and such insurers may agree among them- qualify as a limited apportionment company. The apselves on the use of reasonable rate modifications for portionment of such a company in any calendar year

526


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 aggre~ate 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) are 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 coverage 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 provide 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 underwrit-ing 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 one-third 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 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

527


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 self-insurers 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. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, self-insurer, or its agents or employees, the Joint Underwriting Association or its agents or employees, members of the board of governors, or the department or its representatives for any action taken by them in the performance of their powers and duties under this subsection.

(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. To assure that plan rates are adequate to pay claims and expenses, the Joint Underwriting Association shall develop a means of obtaining loss and expense experience; and the plan shall file such experience, when available, with the department in sufficient detail to make a determination of rate adequacy. Within 60 days after a rate filing, the department shall approve such rates or rate revisions as are fully supported by the filing. In addition to provisions for claims and expenses, the ratemaking formula may include a factor for projected claims trending and a margin for contingencies. The use of trend factors shall not be found to be inappropriate.

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 not to exceed

$250,000 per claim, $750,000 annual aggregate for health-care providers other than hospitals and in an amount not to exceed $10,000 per bed per claim, $2.5 million annual aggregate for hospitals. Such coverage for health care providers other than hospitals shall be available as primary coverage and as excess coverage

for the layer of coverage between the primary coverage and the total limits of $250,000 per claim, $750,000 annual aggregate.

2(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. The 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.

2(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.

2(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.

2(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; clinicallaboratories 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 the 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

528


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.

History.-s. 445, ch. 59-205; ss. 13,35, ch. 69-106; s. 1, ch. 69-199; ss. 1, 2, ch. 70-234; s. 1, ch. 72-22; s. I, ch. 73-259; s. I, ch. 74-216; 8. 14, ch. 75-9; s. 3, ch. 75-279; s. 1, 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. 1, ch. 77-457; s. 28, ch. 77-468; s. 1, ch. 78-47; s. 164, ch. 79-164; ss. I, 2, ch. 79-185; ss. 1, 2, ch. 80-94; ss. 1,2, ch. 81-4; ss. 2, 3, ch. 81-318; ss. 351, 357, 809(2nd), 810, ch. 82-243; ss. 48, 49, 79, ch. 82-386; ss. 1,5, ch. 82-391; s. 1, ch. 83-124; s. I, ch. 83-206; s. 95, ch. 83-216.

'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.

'Note.-Section 1, ch. 83-206, purported to amend all of subsection (4) but did not republish paragraphs (e)-(i). Paragraphs (e)-(i) are republi8hed here, however, for the omission appears to have occurred through inadvertence father than an intent to repeal.

1627.356 Professional malpractice self-insurance.-

(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 VIII 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.-8. 2, ch. 77-297; s. 426, ch. 81-259; s. 2, ch. 81-318; 88. 352, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.


1627.357 Medical malpractice self-insurance.-

(1) A group or association of health care providers 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 VIII 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.-88. 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; 8. I, 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; 8. 1, ch. 77-457; 88. 2, 3, ch. 81-318; ss. 354, 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 8cheduled for review pursuant to s. 11.61 in advance of that date.

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 manner 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

529


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).

History.-s. 447, ch. 59·205; s. 20, ch. 67·9; ... 13,35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 77-457; s. 21, ch. 78-95; ... 2,3, ch. 81-318; ... 355,357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386.


1627.381 Penalty for violation.-

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.

Hi.tory.-s. 448, ch. 59-205; ... 13, 35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 77-457; •. 21, ch. 78-95; ... 2, 3, ch. 81-318; ... 356, 357, 809(2nd), ch. 82-243; ... 49, 79, ch. 82-386.


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 627.424 627.425 627.426 627.4265 627.427

PART II

THE INSURANCE CONTRACT

Scope of this part. "Policy" defined. "Premium" defined. Cash payment of premiums; claims. 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 settlement. Payment of judgment by insurer; penalty

for failure.

(1) The department may, if it finds that any person or organization has violated any provision of this part, impose an administrative fine pursuant to s. 624.4211. 627.428 Attorney's fee.

(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-

1627.401 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

530


this state nor delivered in this state, except as otherwise provided in this code.

(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; 88. 2, 3, ch. 81-318; 88. 358, 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.

1627.402 "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 individual insureds.

History.-s. 451, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 359, 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.

1627.403 "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; 88. 2, 3, ch. 81-318; 88. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

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

the sorting, routing, and mechanized processing of such items.

History.-s. 1, ch. 70-69; s. 1, ch. 70-439; s. 3, ch. 76-168; s. 1, ch. 77-457; 88.

2, 3, ch. 81-318; 88. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 11, ch. 83-268. '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.

1627.404 Insurable interest; personal insurance.-An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest which such applicant has in the insured; and no insurer shall incur any legal liability except as set forth in the policy, by virtue of any untrue statements, declarations, or representations so relied upon in good faith by the insurer.

History.-s. 453, cb. 59-205; s. 3, cb. 76-168; s. 1, cb. 77.457; 88. 2, 3, ch. 81-318; 88. 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.

History.-s. 454, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch_ 81-318; 88. 377, 809(2nd) , ch. 82-243; s. 79, ch. 82-386.


1627.4035 Cash payment of premiums; 1627.406 Power to contract; purchase of in-claims.- surance by or for minor.-

(1) The premiums for insurance contracts issued (1) Any person of competent legal capacity may in this state or covering risk located in this state shall contract for insurance. be paid in cash consisting of coins, currency, checks, (2) Any minor of the age of 15 years or more, as or money orders. determined by the nearest birthday, may, notwith-

(2) Subsection (1) is not applicable to: standing his minority, contract for annuities or for (a) Reinsurance agreements; insurance on his own life, body, health, property, lia-(b) Pension plans; bilities, or other interests or on the person of another (c) Premium loans, whether or not subject to an in whom the minor has an insurable interest. Such a

automatic provision; minor shall, notwithstanding such minority, be (d) Dividends, whether to purchase additional deemed competent to exercise all rights and powers

paid-up insurance or to shorten the dividend pay- with respect to or under any contract for annuity or ment period; for insurance upon his own life, body, or health or

(e) Salary deduction plans; any contract such minor effected on his own proper-(f) Preauthorized check plans; ty, liabilities, or other interests or on the person of (g) Waivers of premiums on disability; another, as might be exercised by a person of full le-(h) Nonforfeiture provisions affording benefits gal age. Such minor may at any time surrender his in-

under supplementary contracts; or terest in any such contracts and give a valid dis-(i) Such other methods of paying for life insur- charge for any benefits accruing or money payable

ance as may be permitted by the department pursu- thereunder. Such a minor shall not, by reason of his ant to rule or regulation. minority, be entitled to rescind, avoid, or repudiate

(3) All payments of claims made in this state un- the contract, nor to rescind, avoid, or repudiate any der any contract of insurance shall be paid in cash exercise of a right or privilege thereunder, except consisting of coins, currency, checks, drafts, or money that such a minor, not otherwise emancipated, shall orders and, if by check or draft, shall be in such form not be bound by any unperformed agreement to pay, as will comply with the standards for cash items by promissory note or otherwise, any premium on adopted by the Federal Reserve System to facilitate any such annuity or insurance contract.

531


(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 county in which the administration of the estate is pending; and such consent and approval shall be required as to each premium payment.

(4) Any annuity contract or policy of life or health insurance procured by or for a minor under subsection (2) shall be made payable either to the minor or his estate or to a person having an insurable interest in the life of such minor.

Hi.tory.-s. 455, ch. 59·205; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 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.

Hi.tory.- s. 456, ch. 59-205; s. 3, ch. 76-168; s. I, ch. 77-457; 88. 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 scheduled for review pursuant to s. 11.61 in advance of that date.

'627.408 Application as evidence.-(1) 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.

Hi.tory.-s. 457, ch. 59-205; s. 3, ch. 76-168; B. I, ch. 77-457; SB. 2, 3, ch. 81 -318; BS. 362, 377, 809(2nd), ch. 82-243; B. 79, ch. 82-386.

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

'627.409 Representations in applications; warranties.-

(1) 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.

Hi.tory.-B. 458, ch. 59-205; B. 2, ch. 71-45; B. 3, ch. 76-168; B. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 363, 377, 809(2nd), ch. 82-243; B. 79, ch. 82-386.

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

'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 ap-

532


proval 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 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.

Hi8tory.-s. 459, ch. 59-205; os. 13, 35, ch. 69-106; 8. I, ch. 71-17; 8. 3, ch. 76-168; 8. I , ch. 77-457; 8. 21, ch. 78-95; os. 2, 3, ch. 81-318; os. 364, 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expire8 October I, 1992, pursuant to s. 809(2nd), ch. 82-243, and i8 scheduled for review pursuant to 8. U .61 in advance of that date.

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.-8. I , ch. 78-248; 8. 2, ch. 81-318; os. 365, 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.- Expires October I, 1992, pursuant to s. 809(2nd), ch. 82-243, and is 8cheduled for review pursuant to 8. U .61 in advance of that date.

'627.411 Grounds for disapproval.-(1) 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.

Hi8tory.-8. 460, ch. 59-205; os. 13, 35, 69-106; 8. 3, ch. 76-168; 8. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 386, 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expire8 October I , 1992, pur8uant to 8. 809(2nd), ch. 82-243, and is scheduled for review pur8uant to 8. U.61 in advance of that date.

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 contracts 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.

Hi8tory.-s. 461, ch. 59-205; 8S. 13, 35, ch. 69-106; 8. 3, ch. 76-168; 8. 1, ch. 77-457; os. 2, 3, ch. 81-318; os. 377, 809(2nd), ch. 82-243; 8.79, ch. 82-386.

'Note.-Repealed effective October 1, 1992, by 8. 809(2nd), ch. 82-243, and 8cheduled for review pursuant to 8. 11.61 in advance of that date.

1627.413 Contents of policies, in general; identification.-

(1) 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

533


in any such form, the designating letters, figures, or terms thereon shall be correspondingly changed.

History.-8. 462, ch. 59-205; ... 13, 35, ch. 69-106; 8. 3, ch. 76-168; 8. I, ch. 77-457; ... 2, 3, ch. 81-318; ... 367, 377, 809(2nd), ch. 82-243; ... 50, 79, ch. 82-386.

'Note.-Expire8 October I, 1992, pursuant to 8. 809(2nd), ch. 82-243, and is 8cheduled for review pursuant to 8. 11.61 in advance of that date.

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 of the insured's or named insured's vehicles is involved in the accident, coverage is available only to the extent of coverage on anyone 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.-8. 10, ch. 76-266; 8. I, ch. SO-364; 8.2, ch. 81-318; ... 377, 809(2nd),

ch. 82-243; 8. 79, ch. 82-386. 'Note.-Repealed effective October I , 1992, by 8. 809(2nd), ch. 82-243, and

scheduled for review pursuant to 8. 11.61 in advance of that date.

1627.414 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.

Hi.tory.-8. 463, ch. 59-205; 8. 3, ch. 76-168; 8. I, ch. 77-457; ... 2, 3, ch. 81-318; ... 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Repealed effective October I, 1992, by 8. 809(2nd), cb. 82-243, and scheduled for review pursuant to 8. 11.61 in advance of that date.

1627.4145 Readable language in insurance policies.-

(1) Every policy shall be readable as required by this section. For purposes of this section, the term "policy" means a policy form or endorsement. 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 uses layout and spacing which separate the paragraphs from each other and from the border of the paper;

(c) It has section titles that are captioned in boldfaced type or that otherwise stand out significantly from the text;

(d) It avoids the use of unnecessarily long, complicated, or obscure words, sentences, paragraphs, or constructions;

(e) 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

(0 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 accompanied by a certification signed by an officer of the insurer stating that the 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.

(0 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

534


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 does not exempt 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;

(e) Any policy or form, or partial revision thereof, or renewal thereof, which policy or form is filed prior to October 1, 1983; or

(f) Endorsements filed on or after October 1, 1983, which modify policy forms 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; s. 96, ch. 83·216; s. 13, ch. 83·286.

'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.

'627.415 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. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


'627.416 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. 81-318; 88. 369, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


'627.417 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. Anyone 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, aggregating 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.

Hi8tory.-s. 468. ch. 59-205; 88. 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.

'627.418 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 in s. 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; 88. 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.-Former s. 627.0117.

535


'627.419 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 professionallicense, 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 services 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 certificateholder 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 certificateholder 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.

History.-s. 468, ch. 59-205; 8. I, ch. 69-245; 88. I, 2, ch. 72-11; 8. 163A, ch. 73-333; s. I , ch. 74-34; s. I, ch. 74-87; s. I, ch. 76-167; 8. 3, ch. 76-168; 8. I , ch. 77-457; ss. 2, 3, ch. 81-318; 88. 371, 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.- Expire8 October I, 1992, pursuant to 8. 809(2nd), ch. 82-243, and i8 8cheduled 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.

Bistory.-s. 469, ch. 59-205; 8. 3, ch. 76-168; 8. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Repealed effective October I, 1992, hy 8. 809(2nd), ch. 82-243, and scheduled for review pursuant to 8. 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 containing 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.

Hi.tory.-8. 470, ch. 59-205; 8. I, ch. 75-218; 8. 3, ch. 76-168; 8. I, ch. 77-457; 88.2,3, ch. 81-318; 88. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.-Repealed effective October I, 1992, hy 8. 809(2nd), ch. 82-243, and 8cheduled for review pursuant to 8. 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.

Hi.tory.-8. 471, ch. 59-205; 8. 3, ch. 76-168; 8. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 372, 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expire8 October I, 1992, pursuant to 8. 809(2nd), ch. 82-243, and i8 8cheduled for review pur8uant to 8. 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 priv-

536


ilege 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.-B. 472, ch. 59-205; B. 3. ch. 76-168; B. 1, ch. 77-457; BB. 2, 3, cb. 81-318; BS. 373, 377, 809(2nd), ch. 82-243; B. 79, ch. 82-386.

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

1627.4235 Coordination of benefits.-(1) 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 self-insurance 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 self-insurance 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.-B. 1, ch. 74-367; s. 3, ch. 76-168; B. 1, ch. 77-457; BS. 2, 3, cb. 81-318; BB. 374, 377, 809(2nd), ch. 82-243; SS. 52, 79, ch. 82-386.

'Note.-Expires October 1, 1992, pursuant to 8. 809(2nd), ch. 82-243, and is Bcheduled for review pur8uant to 8. 11.61 in advance of that date.

1627.424 Minor may give acquittance.-(1) 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 anyone 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.

537


(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. 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, hy 8. 809(2nd), ch. 82-243, and 8cheduled for review pursuant to 8. 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 insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of such proof or the manner of any such completion or attempted completion.

History.-s. 474, ch. 59-205; s. 3, ch. 76-168; 8. I , ch. 77-457; ss. 2, 3, ch. 81-318; S8. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


'627.426 Claims administration.-(1) Without limitation of any right or defense of

an insurer otherwise, none of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder:

(a) Acknowledgment of the receipt of notice of loss or claim under the policy.

(b) Furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss, or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted.

(c) Investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.

(2) A liability insurer shall not be permitted to deny coverage based on a particular coverage defense unless:

(a) Within 30 days after the liability insurer knew or should have known of the coverage defense, written notice of reservation of rights to assert a coverage defense is given to the named insured by registered or certified mail sent to the last known address of the insured or by hand delivery; and

(b) Within 60 days of compliance with paragraph (a) or receipt of a summons and complaint naming the insured as a defendant, whichever is later, but in no case later than 30 days before trial, the insurer:

1. Gives written notice to the named insured by registered or certified mail of its refusal to defend the insured;

2. Obtains from the insured a nonwaiver agreement following full disclosure of the specific facts and policy provisions upon which the coverage defense is asserted and the duties, obligations, and liabilities of the insurer during and following the pendency of the subject litigation; or

3. Retains independent counsel which is mutually agreeable to the parties. Reasonable fees for the counsel may be agreed upon between the parties or, if no agreement is reached, shall be set by the court.

Hiotory.-s. 475, ch. 59-205; 8. 3, ch. 76-168; 8. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 375(18t), 377, 809(2nd), ch. 82-243; ss. 53, 79, ch. 82-386; 8. 97, ch. 83-216. .

'Note.-Expires October I, 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pursuant to 8. 11.61 in advance of that date.

627.4265 Payment of settlement.-In any case in which a person and an insurer have agreed in writing to the settlement of a claim, the insurer shall tender payment according to the terms of the agreement no later than 20 days after such settlement is reached. The tender of payment may be conditioned upon execution by such person of a release mutually agreeable to the insurer and the claimant, but if the payment is not tendered within 20 days, or such other date as the agreement may provide, it shall bear interest at a rate of 12 percent per year from the date of the agreement; however, if the tender of payment is conditioned upon the execution of a release, the interest shall not begin to accrue until the executed release is tendered to the insurer.

Hiotory.-8. 12, ch. 83-288.

'627.427 Payment of judgment by insurer; penalty for failure.-

(1) Every judgment or decree for the recovery of money entered in any of the courts of this state against any authorized insurer shall be fully satisfied within 60 days from and after the entry thereof or, in the case of an appeal from such judgment or decree, within 60 days from and after the affirmance of the same by the appellate court.

(2) If the judgment or decree is not satisfied as required under subsection (I), and proof of such failure to satisfy is made by filing with the department a certified transcript of the docket of Jihe judgment or decree together with a certificate by the clerk of the court wherein the judgment or decree was entered that the judgment or decree remains unsatisfied, in whole or in part, after the time aforesaid, the department shall forthwith revoke the insurer's certificate of authority. The department shall not issue to such insurer any new certificate of authority until the judgment or decree is wholly paid and satisfied and proof thereof filed with the department under the official certificate of the clerk of the court wherein the judgment was recovered, showing that the same is satisfied of record, and until the expenses and fees incurred in the case are also paid by the insurer.

Hiotory.-s. 476, ch. 59-205; ss. 13, 35, ch. 69-106; 8. 3, ch. 76-168; s. I, ch. 77-457; 88. 2, 3, ch. 81-318; ss. 375(2nd), 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expire8 October I , 1992, pursuant to s. 809(2nd), ch. 82-243, and is scheduled for review pur8uant to 8. 11.61 in advance of that date.

'627.428 Attorney's fee.-(1) Upon the rendition of a judgment or decree

by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary

538


a reasonable sum as fees or compensation for the insured's or beneficiary's attorney prosecuting the suit in which the recovery is had.

(2) As to suits based on claims arising under life insurance policies or annuity contracts, no such attorney's fee shall be allowed if such suit was commenced prior to expiration of 60 days after proof of the claim was duly filed with the insurer.

(3) When so awarded, compensation or fees of the attorney shall be included in the judgment or decree rendered in the case.

History.-8. 477, ch. 59-205; 8. I, ch. 67-400; 8.3, ch. 76-168; 8_ I, ch. 77-457; 88. 2, 3, ch. 81 -318; ... 376, 377, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expires October I , 1992, pursuant to 8. 809(2nd), ch. 82-243, and is scheduled for review pursuant to 8. 11.61 in advance of that date.

PART III

LIFE INSURANCE AND ANNUITY CONTRACTS

627.451 627.452 627.453 627.454

627.455 627.456 627.457 627.458 627.4585 627.459 627.460 627.461 627.4615

627.462 627.463 627.464

627.465

627.466

627.467

627.468

627.469

627.470

627.471

627.472 627.473 627.474 627.475

627.476

627.479 627.480

627.481

Scope of this part. Standard provisions required. Grace period. Entire contract; statements in applica-

tion. Incontestability. Misstatement of age or sex. Dividends. Policy loan. Maximum rate of interest on policy loans. Reinstatement. Authority to alter contract. Settlement on proof of death. Interest payable on death claim pay-

ments. Table of installments. Excluded or restricted coverage. Annuity contracts, pure endowment con

tracts; standard provisions. Annuity contracts, pure endowment con

tracts; grace period. Annuity contracts, pure endowment con

tracts; incontestability. Annuity contracts, pure endowment con

tracts; entire contract. Annuity contracts, pure endowment con

tracts; misstatement of age or sex. Annuity contracts, pure endowment con

tracts; dividends. Annuity contracts, pure endowment con

tracts; reinstatement. Reversionary annuities; standard provi-

sions. Incontestability after reinstatement. Policy settlements. Policy must contain entire contract. Nonforfeiture benefits; certain interim

policies. Standard Nonforfeiture Law for Life In

surance. Prohibited policy plans. Cash payments of single-premium life

policies. Special permit for certain annuity agree

ments.

'627.451 Scope of this part.-This part applies to life insurance and annuity contracts, other than reinsurance, group life insurance, group annuities, and industrial life insurance; except that ss. 627.463, 627.472,627.476, and 627.479 also apply to industrial life insurance. This part does not apply to credit life insurance except as provided in part IX of chapter 627.

History.-8. 478, ch. 59-205; 8. 3, ch. 76-168; 8. I, ch. 77-457; ... 2, 3, ch. 81-318; ... 378, 404, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expire8 October I, 1992, pursuant to 8. 809(2nd), ch. 82-243, and i8 8cheduled for review pursuant to 8. 11.61 in advance of that date.

'627.452 Standard provisions required.-(1) No policy of life insurance, except as stated in

subsection (3), shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions as required by ss. 627.453-627.462 inclusive and ss. 627.475 and 627.476, or provisions which in the opinion of the department are more favorable to the policyholder.

(2) Any of such provisions or portions thereof not applicable to single-premium or term policies shall to that extent not be incorporated therein.

(3) This section does not apply to annuity contracts, or to any provision of a life insurance policy or contract supplemental thereto relating to health benefits or to additional benefits in the event of death by accident or accidental means.

History.-8. 479, ch. 59-205; ... 13, 35, ch. 69-106; 8. 3, ch. 76-168; 8. I , ch. 77-457; ... 2,3, ch. 81-318; ... 379,404, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expire8 October I, 1992, pursuant to 8. 809(2nd), ch_ 82-243, and is 8cheduled for review pursuant to 8. 11.61 in advance of that date.

'627.453 Grace period.-Every insurance contract shall provide that the insured is entitled to a grace period of not less than 30 days within which payment of any premium after the first may be made. The payment may, at the option of the insurer, be subject to an interest charge not in excess of 8 percent per year for the number of days of grace elapsing before the payment of the premium, during which period of grace the policy shall continue in force. If the policy becomes a claim during the grace period before the overdue premium is paid, or the deferred premiums of the current policy year, if any, are paid, the amount of such premium or premiums with interest not in excess of 8 percent per year thereon may be deducted in any settlement under the policy.


'Note.-Expire8 October I , 1992, pursuant to 8. 809(2nd), ch. 82-243, and is 8cheduled for review pursuant to s. 11.61 in advance of that date.

'627.454 Entire contract; statements in application.-Every insurance contract shall provide that the policy, or the policy and the application therefor if a copy of such application is endorsed upon or attached to the policy when issued, shall constitute the entire contract between the parties, and that all statements contained in the application shall, in the absence of fraud, be deemed representations and not warranties.


'Note.-Expires October I, 1992, pursuant to s. 809(2nd), ch. 82-243, and is 8cheduled for review pursuant to 8. 11.61 in advance of that date.

'627.455 Incontestability.-Every insurance

539


contract shall provide that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of 2 years from its date of issue except for nonpayment of premiums and except, at the option of the insurer, as to provisions relative to benefits in event of disability and as to provisions which grant additional insurance specifically against death by accident or accidental means.

Hi8tory.-s. 482, cb. 59-205; s. 3, cb. 76-168; s. 1, cb. 77-457; 88. 2, 3, ch. 81-318; ss. 382, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


'627.456 Misstatement of age or sex.-Every insurance contract shall provide that if it is found that the age or sex of the insured, or of any other individual considered in determining the premium or benefit, has been misstated, the amount payable or benefit accruing under the policy shall be such as the premium would have purchased according to the correct age or sex. Such calculations shall be in accordance with the insurer's rate at date of issue, and at the option of the insurer this may be so specified in the policy.

Hi8tory.-s. 483, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 383, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


'627.457 Dividends.-(1) Every participating policy shall provide that,

beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy provided the policy is in force and all premiums to that date are paid.

(2) Except as provided in this section, any dividend so apportioned shall, at the option of the party entitled to elect such option, be either payable in cash or applied to anyone of such other dividend options as may be provided by the policy. If any such other dividend options are provided, the policy shall further state which option shall be automatically effective if such party has not elected some other option. If the policy specifies a period within which such other option may be elected, such period shall be not less than 30 days following the date on which such dividend is due and payable.

(3) The annually apportioned dividend shall be deemed to be payable in cash within the meaning of subsection (2) even though the policy provides that payment of such dividend is to be deferred for a specified period, provided such period does not exceed 6 years from the date of apportionment and that interest will be added to such dividend at a specified rate.

(4) If a participating policy provides that the benefit under any paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus apportioned while the insurance is in force under such nonforfeiture provision be applied in the manner set forth in the policy.

Hi8tory.-s. 484, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 384, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386.


'627.458 Policy loan.(1) There shall be a provision that after the poli-

cy has a cash surrender value and while no premium is in default, the insurer will advance, on proper assignment or pledge of the policy and on the sole security thereof, at a rate of interest not exceeding 10 percent per year, for policies issued prior to October 1,1981, payable in advance, an amount equal to or, at the option of the party entitled thereto, less than the loan value of the policy. The loan value of the policy shall be at least equal to the cash surrender value at the end of the then current policy year, except that the insurer may deduct, either from such loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining such cash surrender value, including any interest then accrued but not due, any unpaid balance of the premium for the current policy year, and interest on the loan to the end of the current policy year. However, as a condition for approval of a policy loan interest rate in excess of 6 percent per year, the department shall require the insurer to furnish such assurances as the department deems necessary that the interest rate on such loans will bear a reasonable relationship to other interest rates and that the holders of such policies will benefit through higher dividends or lower premiums, or both.

(2) The policy may also provide that, if interest on any indebtedness is not paid when due, such interest shall then be added to the existing indebtedness and shall bear interest at the same rate and that, if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of loan value thereof, then the policy shall terminate and become void, but not until at least 30 days' notice has been mailed by the insurer to the last known address of the insured or policy owner and of any assignee of record at the home office of the insurer.

(3) The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for 6 months after application therefor.

(4) This section does not apply to term policies or to term insurance benefits provided by riders or supplemental policy provisions.

Hi.tory.-s. 485, ch. 59-205; s. 3, ch. 76-168; 88. 1, 3, ch. 77-324; s. 1, ch. 77-457; 88. 2, 6, ch. 81-289; ss. 2, 3, ch. 81-318; 88. 385, 404, 809(2nd), 810, ch. 82-243; s. 79, ch. 82-386.

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

'627.4585 Maximum rate of interest on policy loans.-

(1) For the purposes of this section, the "published monthly average" means the value of the interest rate index, as defined in s. 625.121(5)(e).

(2) Policies issued on or after October 1, 1981, shall provide for policy loan interest rates through:

(a) A provision permitting a maximum interest rate of not more than 10 percent a year; or

(b) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.

(3) The rate of interest charged on a policy loan made under paragraph (2)(b) shall not exceed the higher of the following:

(a) The published monthly average for the calen-

540


dar month ending 2 months before the date on which the rate is determined; or

(b) The rate used to compute the cash surrender values under the policy during the applicable period plus 1 percent a year.

(4) If the maximum rate of interest is determined pursuant to paragraph (2)(b), the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.

(5) The maximum rate for each policy must be determined at regular intervals at least once every 12 months, but not more frequently than once in any 3-month period. At the intervals specified in the policy:

(a) The rate being charged may be increased whenever such increase as determined under subsection (3) would increase that rate by 50 basis points or more a year.

(b) The rate being charged must be reduced whenever such reduction as determined under subsection (3) would decrease that rate by 50 basis points or more a year.

(6) The life insurer shall: (a) Notify the policyholder at the time a cash

loan is made of the initial rate of interest on the loan. (b) Notify the policyholder with respect to premi

um loans of the initial rate of interest on the loan as soon as it is reasonably practicable to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in paragraph (c).

(c) Send to policyholders with loans reasonable advance notice of any increase or decrease in the rate.

(d) Include in the notices required in this section the substance of the pertinent provisions of subsections (2) and (4).

(7) No policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.

(8) The substance of the pertinent provisions of subsections (2) and (4) shall be set forth in the policies to which they apply.

(9) For purposes of this section: (a) The rate of interest on policy loans permitted

under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy.

(b) The term "policy loan" includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due.

(c) The term "policyholder" includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer.

(d) The term "policy" includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans.

(10) No other provision of law shall apply to policy loan interest rates unless made specifically applicable to such rates.

History.-BB. 3, 6, ch. 81-289; ss. 386, 809(2nd), 810, ch. 82-243; B. 79, ch. 82-386.

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

1627.459 Reinstatement.-Every contract shall provide that the policy may be reinstated upon written application therefor at any time within 3 years after the date of default in the payment of any premiums, unless the policy has been surrendered for its cash value or unless the paid-up term insurance, if any, has expired, upon evidence of insurability satisfactory to the insurer and the payment of all overdue premiums and payment (or, within the limits permitted by the then cash value of the policy, reinstatement) of any other indebtedness to the insurer upon the policy with interest as to both premiums and indebtedness at a rate not exceeding 6 percent per year compounded annually or, as to indebtedness for a policy issued on or after October 1, 1981, at an interest rate as provided for in s. 627.4585.

History.-B. 486, ch. 59-205; B. 3, ch. 76-168; B. I, ch. 77-457; BB. 4, 6, ch. 81-289; ... 2, 3, ch. 81-318; ... 387, 404, 809(2nd), 810, ch. 82-243; B. 79, ch. 82-386.

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

1627.460 Authority to alter contract.-Every contract shall provide, at the option of the insurer, that no agent shall have the power or authority to waive, change, or alter any of the terms or conditions of any policy; except that, at the option of the insurer, the terms or conditions may be changed by an endorsement or rider signed by a duly authorized officer of the insurer.

History.-B. 487, ch. 59-205; B. 3, ch. 76-168; B. I, ch. 77-457; BB. 2, 3, ch. 81-318; ... 388, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

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

1627.461 Settlement on proof of death.-Every contract shall provide that, when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and surrender of the policy.

History.-B. 488, ch. 59-205; B. 3, ch. 76-168; B. I, ch. 77-457; BB. 2, 3, ch. 81-318; BB. 389, 404, 809(2nd), ch. 82-243; B. 79, ch. 82-386; B. 14, ch. 83-288.

'Note.-ExpireB October I, 1992, pursuant to B. 809(2nd), ch. 82-243, and iB Bcheduled for review pursuant to B. 11.61 in advance of that date.

627.4615 Interest payable on death claim payments.-When a policy provides for payment of its proceeds in a lump sum upon the death of the insured, such payment shall include interest at the rate of 11 percent per year from the date the insurer receives written due proof of death of the insured. This section applies to all policies or contracts delivered or issued for delivery in this state on or after October 1, 1983.

History.-B. 15, ch. 83-288.

1627.462 Table of installments.-If a policy provides for payment of its proceeds in installments, a table showing the amount and period of such installments shall be included in the policy; except that certain tables may be omitted from the policy if in the judgment of the department it is not practical to include them.

History.-B. 489, ch. 59-205; BB. 13, 35, ch. 69-106; B. 3, ch. 76-168; B. I, ch. 77-457; ... 2,3, ch. 81-318; BB. 404, 809(2nd), ch. 82-243; B. 79, ch. 82-386.

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

1627.463 Excluded or restricted coverage.

541


-A clause in any policy of life insurance providing that such policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy and shall not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not such restrictions or exclusions are excepted in such clause.

History.-s. 490, ch. 59-205; s. 3, ch. 76-168; s. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 404, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Repealed effective October I, 1992, by 8. 809(2nd), ch. 82-243, and 8cheduled for review pursuant to 8. 11.61 in advance of that date.

'627.464 Annuity contracts, pure endowment contracts; standard provisions.-

(1) No fixed-dollar annuity, variable annuity, or pure endowment contract, other than a reversionary annuity, survivorship annuity, or group annuity, shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions set forth in ss. 627.465-627.470, inclusive, or provisions which in the opinion of the department are more favorable to the policyholder. Any of such provisions not applicable to single-premium annuities or single-premium pure endowment contracts shall not to that extent be incorporated therein.

(2) This section does not apply to contracts for annuities included in or upon the lives of beneficiaries under life insurance policies.

History.-8. 491, ch. 59-205; 8. 10, ch. 61-441; 88. 13, 35, ch. 69-106; s. 3, ch. 76-168; 8. I , ch. 77-457; 88. 2, 3, ch. 81-318; 88. 404, 809(2nd), ch. 82-243; 8.79, ch. 82-386.

'Note.-Repealed effective October 1, 1992, by 8. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

'627.465 Annuity contracts, pure endowment contracts; grace period.-In a fixed-dollar annuity, variable annuity, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that there shall be a period of grace of 1 month but not less than 30 days, within which any stipulated payment to the insurer falling due after the first may be made, subject, at the option of the insurer, to an interest charge thereon at a rate to be specified in the contract but not exceeding 6 percent per year for the number of days of grace elapsing before such payment, during which period of grace the contract shall continue in full force. If a claim arises under the contract on account of death prior to expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are paid, the amount of such payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement.

History.-8. 492, ch. 59-205; s. 11, ch. 61-441; 8. 3, ch. 76-168; 8. I , ch. 77-457; 88. 2, 3, ch. 81-318; 88. 390, 404, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.


1627.466 Annuity contracts, pure endowment contracts; incontestability.-H any statements, other than those relating to age, sex, and identity, are required as a condition to issuing a fixed-dollar annuity contract, variable annuity con

shall be incontestable after it has been in force during the lifetime of the person, or of each of the persons as to whom such statements are required, for a period of 2 years from its date of issue except for nonpayment of stipulated payments to the insurer; and, at the option of the insurer, the contract may also except any provisions relative to benefits in the event of disability and any provisions which grant insurance specifically against death by accident or accidental means.

History.-s. 493, ch. 59-205; 8.12, ch. 61-441; 8. 3, ch. 76-168; 8. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 391,404, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expires October I, 1992, pursuant to 8. 809(2nd), ch. 82-243, and i8 scheduled for review pursuant to 8. 11.61 in advance of that date.

'627.467 Annuity contracts, pure endowment contracts; entire contract.-In a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that it shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the contract when issued, that the contract and the application therefor shall constitute the entire contract between the parties.

HistorY_-8. 494, ch. 59-205; 8. 13, ch. 61-441; 8. 3, ch. 76-168; s. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 392,404, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expires October 1, 1992, pursuant to 8. 809(2nd), ch. 82-243, and is scheduled for review pursuant to 8. 11.61 in advance of that date.

'627.468 Annuity contracts, pure endowment contracts; misstatement of age or sex.-In a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that if the age or sex of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age or sex; and that if the insurer shall make or has made any overpayment or overpayments on account of any such misstatement, the amount thereof, with interest at the rate to be specified in the contract but not exceeding 6 percent per year, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.

History.-8. 495, ch. 59-205; 8. 14, ch. 61-441; 8. 3, ch. 76-168; 8. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 393,404, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.


'627.469 Annuity contracts, pure endowment contracts; dividends.-If a fixed-dollar annuity contract, variable annuity contract, or pure endowment contract is participating, the contract shall contain a provision that, beginning not later than the end of the third contract year, the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.

Hi.tory.-8. 496, ch. 59-205; 8.15, ch. 61-441; 8. 3, ch. 76-168; 8. I, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 394, 404, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'Note.-Expire8 October I, 1992, pursuant to 8. 809(2nd), ch. 82-243, and i8 8cheduled for review pursuant to 8. 11.61 in advance of that date.

tract, or pure endowment contract, other than a re- 1627.470 Annuity contracts, pure endowversionary, survivorship, or group annuity, and sub- ment contracts; reinstatement.-In a fixed-dollar ject to s. 627.468, the contract shall provide that it annuity contract, variable annuity contract, or pure

542


endowment contract, other than a reversionary, survivorship, or group annuity, the contract shall provide that it may be reinstated upon written application therefor at any time within 1 year from the date of default in making stipulated payments to the insurer, unless the cash surrender value has been paid, but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated, with interest thereon at a rate to be specified in the contract but not exceeding 6 percent per year payable annually; and, when applicable, the insurer may also include a requirement of evidence of insurability satisfactory to the insurer.

History.-•. 497, cb. 59-205; •. 16, cb. 61-441;._ 3, cb. 76-168; •. 1, cb. 77-457; ... 2, 3, cb. 81-318; ... 395, 404, 809(2nd), cb. 82-243; •. 79, cb. 82-386.

'Note.-Expires October 1, 1992, pursuant to •. 809(2nd), cb. 82-243, and is • cheduled for review pursuant to •. 11.61 in advance of that date.

1627.471 Reversionary annuities; standard provisions.-

(1) Except as stated in this section, no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance:

(a) Those provisions specified in ss. 627.465 through 627.469, except that under s. 627.465 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue or deferred payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract; and

(b) A provision that the contract may be reinstated at any time within 3 years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract are paid (or, within the limits permitted by the then cash value of the contract, reinstated) with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding 8 percent per year compounded annually.

(2) This section does not apply to group annuities or to annuities included in life insurance policies, and any of such provisions not applicable to single-premium annuities shall not to that extent be incorporated therein.

History.-•. 498, ch. 59-205; •. 3, ch. 76-168; •. 1, ch. 77-457; ... 2, 3, ch. 81-318; ... 396, 404, 809(2nd), ch. 82-243; B. 79, ch. 82-386.

'Note.-Expire. October 1, 1992, pursuant to •. 809(2nd), ch. 82-243, and iB Bcheduled for review pursuant to B. 11.61 in advance of that date.

1627.472 Incontestability after reinstatement.-A reinstated policy of life insurance, fixed-dollar annuity contract, or variable annuity contract may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance.

History.-8. 499, ch. 59-205; s. 17, ch. 61-441; B. 3, ch. 76-168; B. 1, ch. 77-457; ... 2, 3, ch. 81-318; ... 404, 809(2nd), ch. 82-243; • . 79, ch. 82-386.

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

shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets .

History.-8. 500, ch. 59-205; B. 3, ch. 76-168; B. 1, ch. 77-457; ... 2, 3, ch . 81-318; BB. 404, 809(2nd), ch. 82-243; B. 79, ch. 82-386.

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

1627.474 Policy must contain entire contract. -No life insurer or its agent shall make any contract of insurance or agreement as to such contract other than as plainly expressed in the policy.

History.-8. 501, ch. 59-205; B. 3, ch. 76-168; B. 1, ch. 77-457; ... 2, 3, ch. 81-318; .B. 397, 404, 809(2nd), ch. 82-243; B. 79, ch. 82-386.

'Note.-ExpireB October 1, 1992, pursuant to B. 809(2nd), ch. 82-243, and is Bcbeduled for review pursuant to B. 11.61 in advance of that date.

1627.475 Nonforfeiture benefits; certain interim policies.-Each life insurance policy issued between the effective date of this code and the operative date of s. 627.476 shall provide:

(1) That, in the event of default in any premium, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy.

(2) That, upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least 3 full years, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value at least equal to the minimum cash surrender value hereinafter specified. The minimum cash surrender value shall be equal to:

(a) The reserve on the date of default of the premium less a sum of not more than 2.5 percent of the face amount; or

(b) An amount as defined in s. 627.476 but on the basis of the Commissioners' 1941 Standard Ordinary Mortality Table in lieu of the Commissioners' 1958 Standard Ordinary Mortality Table therein specified. The policy shall reserve to the insurer the right to defer the granting of any cash surrender value for 6 months after demand therefor with surrender of the policy.

(3) That a specified paid-up nonforfeiture benefit, the present value of which shall be at least equal to the cash surrender value, shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default; however, when the mortality table used is the Commissioners' 1941 Standard Ordinary Mortality Table, the rates of mortality to be assumed in calculating any extended term insurance with ac-

1627.473 Policy settlements.-Any life insurer companying pure endowment, if any, may be not

543


more than 130 percent of the rates of mortality according to such table.

(4) A statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter.

This section does not apply to term policies of uniform amount of 15 years' duration or less, to increasing term policies of 15 years' duration or less, or to decreasing term policies.

History.-s. 502, ch. 59·205; s. 3, ch. 76·168; s. 1. ch. 77·457; 88. 2, 3, ch. 81-318; 88. 404, 809(2nd) , ch. 82-243; s. 79, ch. 82-386.


1627.476 Standard Nonforfeiture Law for Life Insurance.-

(1) SHORT TITLE.-This section shall be known as the "Standard Nonforfeiture Law for Life Insurance. "

(2) NONFORFEITURE PROVISIONS.-In the case of policies issued on or after the operative date of this section as defined in subsection (14), no policy of life insurance, except as set forth in subsection (13), shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the department are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements hereinafter specified and are essentially in compliance with subsection (12):

(a) That in the event of default in any premium payment, after premiums have been paid for at least 1 full year in the case of ordinary insurance or 3 full years in the case of industrial insurance, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified. In lieu of such stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits.

(b) That upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least 3 full years in the case of ordinary insurance or 5 full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified.

(c) That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default.

(d) That if the policy becomes paid up by completion of all premium payments, or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified.

(e) In the case of a policy which causes on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of any other policy, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy.

(f) A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of this state; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy.

(3) OMITTED PROVISIONS.-Any of the provisions or portions thereof set forth in paragraphs (a) through (f) of subsection (2) which are not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of any cash surrender value for a period of 6 months after demand therefor with surrender of the policy.

(4) CASH SURRENDER VALUE.-(a) Any cash surrender value available under the

policy in the event of default in the premium payment due on any policy anniversary, whether or not required by subsection (2), shall be an amount not less than the excess, if any, of the present value on such anniversary of the future guaranteed benefits which would have been provided for by the policy, in-

544


eluding any existing paid-up additions, if there had been no default, over the sum of:

1. The then present value of the adjusted premiums as defined in subsections (6) and (9), corresponding to premiums which would have fallen due on and after such anniversary, and

2. The amount of any indebtedness to the insurer on account of or secured by the policy.

(b) For any policy issued on or after the operative date of subsection (9), as defined therein, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in paragraph (a) shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defmed in such paragraph for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision. For any family policy issued on or after the operative date of subsection (9), as defined therein, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse reaches age 71, the cash surrender value referred to in paragraph (a) shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse.

(c) Any cash surrender value available within 30 days after any policy anniversary under any policy paid up by completion of all premium payments, or any policy continued under any paid-up nonforfeiture benefits, whether or not required by subsection (2), shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy.

(5) PAID-UP NONFORFEITURE BENEFITS. -Any paid-up nonforfeiture benefit available under the policy in the event of default in the premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy, or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the condition that premiums shall have been paid for at least a specified period.

(6) THE ADJUSTED PREMIUM.-This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. The adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy, that the present

value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:

(a) The then present value of the future guaranteed benefits provided for by the policy;

(b) Two percent of the amount of the insurance if the insurance is uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with the duration of the policy;

(c) Forty percent of the adjusted premium for the first policy year; and

(d) Twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.

However, in applying the percentages specified in paragraphs (c) and (d), no adjusted premium shall be deemed to exceed 4 percent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.

(7) EQUIVALENT UNIFORM AMOUNT.-This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. In the case of a policy providing an amount of ' insurance varying with the duration of the policy, the equivalent uniform amount thereof for the purpose of subsection (6) shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy, except that, in the case of a policy for a varying amount of insurance issued on the life of a child under age 10, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age 10 were the amount provided by such policy at age 10.

(8) MORTALITY TABLES; INTEREST.-This subsection shall not apply to policies issued on or after the operative date of subsection (9), as defined therein. All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners' 1958 Standard Ordinary Mortality Table, except that, for any category of such policies issued on female risks, adjusted premiums and present values may be calculated according to an age not more than 6 years younger than the actual age of the insured. Such calculations for all policies of industrial insurance shall be made on the basis of the following tables:

(a) For policies issued on and after the operative date of this section but before January I, 1968, the 1941 Standard Industrial Mortality Table, unless the Commissioners' 1961 Standard Industrial Mortality Table is applicable according to subsection (14);

(b) For policies issued on and after January I,

545


1968, the Commissioners' 1961 Standard Industrial Mortality Table.

All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; however, such rate of interest shall not exceed 3.5 percent per year, except that a rate of interest not exceeding 4 percent per year may be used for policies issued on or after July I, 1973, and prior to October I, 1979, and a rate of interest not exceeding 4.5 percent per year may be used for policies issued on or after October I, 1979, and a rate of interest not exceeding 5.5 percent per year may be used for policies issued on or after October I, 1980. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1958 Extended Term Insurance Table, for ordinary policies. In the case of industrial policies:

(c) For policies issued on and after the operative date of this section but before January I, 1968, not more than 130 percent of the rates of mortality according to the 1941 Standard Industrial Mortality Table, unless the Commissioners' 1961 Industrial Extended Term Insurance Table is applicable according to subsection (14), in which case not more than those of the latter table;

(d) For policies issued on and after January I, 1968, not more than those of the Commissioners' 1961 Industrial Extended Term Insurance Table.

For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the department.

(9) CALCULATION OF ADJUSTED PREMIUMS AND PRESENT VALUES FOR POLICIES ISSUED AFTER OPERATIVE DATE OF THIS SUBSECTION.-

(a) This subsection shall apply to all policies issued on or after the operative date of this subsection, as defined herein. Except as provided in paragraph (g), the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of:

1. The then present value of the future guaranteed benefits provided for by the policy;

2. One percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and

3. One hundred and twenty-five percent of the nonforfeiture net-level premium as hereinafter defined.

However, in applying the percentage specified in subparagraph 3., no nonforfeiture net-level premium shall be deemed to exceed 4 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.

(b) The nonforfeiture net-level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due.

(c) In the case of a policy which causes on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums, the future adjusted premiums, nonforfeiture net-level premiums, and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.

(d) Except as otherwise provided in paragraph (g), the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of the sum of the then present value of the then future guaranteed benefits provided for by the policy and the additional expense allowance, if any, over the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.

(e) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of 1 percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first 10 policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and 125 percent of the increase, if positive, in the nonforfeiture net-level premium.

(0 The recalculated nonforfeiture net-level premium shall be equal to the result obtained by dividing (A) and (B) where:

1. (A) equals the sum of:

546


a. The nonforfeiture net-level premium applicable prior to the change times the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and

b. The present value of the increase in future guaranteed benefits provided for by the policy; and

2. (B) equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.

(g) Notwithstanding any other provisions of this subsection to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis.

(h) All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners' 1980 Standard Ordinary Mortality Table or, at the election of the insurer for anyone or more specified plans of life insurance, the Commissioners' 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners' 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year. However:

1. At the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year.

2. Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by subsection (2), shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any.

3. An insurer may calculate the amount of any guaranteed paid-up nonforfeiture benefit, including any paid-up additions under the policy, on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values.

4. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners' 1961 Industrial Extended Term Insurance Table for policies of industrial insurance.

5. For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables.

(i) The nonforfeiture interest rate per year for any policy issued in a particular calendar year shall be equal to 125 percent of the calendar year statutory valuation interest rate for such policy as defined in the Standard Valuation Law, rounded to the nearest one-fourth of 1 percent.

(j) Notwithstanding any other provision in this code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.

(k) After October 1, 1981, any insurer may file with the department a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1989, which shall be the operative date of this subsection for that insurer. If an insurer makes no such election, the operative date of this subsection for the insurer shall be January 1, 1989.

(10) INDETERMINATE PREMIUMS OR MINIMUM VALUES.-In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in subsections (2)-(9):

(a) The department must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by subsections (2)-(9);

(b) The department must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; and

(c) The cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by rules promulgated by the department.

(11) CALCULATION OF VALUES.-Any cash surrender value and any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections (4)-(9) may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. If term insurance benefits are provided by a rider or by a supplemental policy provision to which, if issued as a separate policy, this section would apply, additional

547


cash surrender values and additional paid-up nonforfeiture benefits, if any, at least equal to those required if issued as a separate policy, may be provided by the insurer and shall be deemed to be in compliance with this section. Notwithstanding the provisions of subsection (4), additional benefits payable:

(a) In the event of death or dismemberment by accident or accidental means,

(b) In the event of total and permanent disability,

(c) As reversionary annuity or deferred reversionary annuity benefits,

(d) As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply,

(e) As term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child's age is 26, is uniform in amount after the child's age is 1, and has not become paid up by reason of the death of a parent of the child, and

(f) As other policy benefits additional to life insurance by endowment benefits,

and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section; and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits.

(12) CALCULATION OF VALUES FOR POLICIES ISSUED AFTER 1984.-This subsection, in addition to all other applicable subsections of this section, shall apply to all policies issued on or after January 1, 1985. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than 0.2 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years, from the sum of the greater of zero and the basic cash value hereinafter specified and the present value of any existing paid-up additions less the amount of any indebtedness to the insurer under the policy. The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer, if there had been no default, less the then present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary. However, the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection (4), shall be the same as are the effects specified in subsection (4) on the cash surrender values defined in that subsection. The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection (6) or subsection (9), whichever is applicable. Except as is required by the next succeeding sentence of this paragraph, such percentage:

(a) Must be the same percentage for each policy year between the second policy anniversary and the later of the fifth policy anniversary and the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least 0.2 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and

(b) Must be such that no percentage after the later of the two policy anniversaries specified in paragraph (a) may apply to fewer than 5 consecutive policy years.

However, no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in subsection (6) or subsection (9), whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value. All adjusted premiums and present values referred to in this subsection shall be calculated for a particular policy on the same mortality and interest bases as are used in demonstrating the compliance of the policy with the other subsections of this law. The cash surrender values referred to in this subsection shall include any endowment benefits provided for by the policy. Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment, shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in subsections (2), (3), (4), (5), (9), and (11). The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed in paragraphs (l1)(a)-(f) shall conform with the _principles of this subsection.

(13) EXCEPTIONS.-This section does not apply to any:

(a) Reinsurance; (b) Group insurance; (c) Pure endowment contract; (d) Annuity or reversionary annuity contract; (e) Term policy of uniform amount which pro

vides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of, 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy;

(f) Term policy of decreasing amount which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium calculated as specified in subsections (6)-(9) is less than the adjusted premium so calculated on a policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, issued at the same age and for the same initial amount of insurance for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy; or

(g) Policy which provides no guaranteed nonforfeiture or endowment benefits for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any J?olicy year, calculated as specified in subsections (4)-(9) exceeds 2.5 percent of the amount of insurance at the beginning of the same policy year.

548


For purposes of determining the applicability of this section, the age at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.

(14) OPERATIVE DATE.-After the effective date of this code, any insurer may file with the department a written notice or notices of its election to comply with the provisions of this section on and after a specified date or dates before January 1, 1966, as to either or both of its policies of ordinary and industrial insurance, in which case such specified date or dates shall be the operative date of this section with respect to such policies. The operative date of this section for policies of both ordinary and industrial insurance shall be the earlier of January 1, 1966, and any prior operative date or dates resulting from such previously filed written notices. With respect to policies of industrial insurance issued on and after the operative date of this section for such policies but before January 1, 1968, any insurer may file with the department written notice of its election to have the Commissioners' 1961 Standard Industrial Mortality Table and the Commissioners' 1961 Industrial Extended Term Insurance Table applicable with respect to subsection (8) for policies issued on and after the date specified in such election.

History.-B. 503, ch. 59-205; B. 3, ch. 61-106; ... 2,3, ch. 65-11; ... 13,35, ch. 69-106; B. 3, ch. 73-324; B. 3, ch. 76-168; B. 2, ch. 77-324; B. I, ch. 77-457; ... 2,3, ch. 79-356; BB. I, 2, ch. 80-137; BB. 5, 6, ch. 81-289; ... 2,3, ch. 81-318; ... 398,404, 809(2nd), 810, ch. 82-243; ... 54, 79, ch. 82-386.


1627.479 Prohibited policy plans.-(1) No insurer shall issue policies, certificates, or

contracts to policyholders or members providing for the grouping of its policyholders or members into groups and divisions, classified according to age, and providing for payment of contingent endowment benefits, by whatever name called, from special funds created for such purpose to the oldest member in seniority of the group or division, or under any other similar plan.

(2) No insurer shall issue policies containing annual endowments or other specialty-type policies such as founder's policies or coupon-bearing policies. The department shall, by rule, define such prohibited policies.

(3) The department shall revoke the certificate of authority of any insurer which violates this section.

History.-B. 506, ch. 59-205; 88. 13, 35, ch. 69-106; B. I, ch. 74-50; B. 3, ch. 76-168; B. I, ch. 77-457; ... 2,3, ch. 81-318; ... 401, 404, 809(2nd), ch. 82-243; B. 79, ch. 82-386.


1627.480 Cash payments of single-premium life policies.-Premiums for single-premium life insurance policies shall be paid in cash. This section is not applicable to the use of dividends to purchase paid-up additional insurance or to such other usual and customary methods of paying for life insurance as may be permitted by rule of the department.

Hi8tory.-B. I, ch. 70-68; s. I, ch. 70-439; B. 3, ch. 76-168; B. I, ch. 77-457; ... 2, 3, ch. 81-318; BB. 402, 404, 809(2nd), ch. 82-243; B. 79, ch. 82-386.

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

1627.481 Special permit for certain annuity agreements.-

(1) The department may, in its discretion, issue a special permit to make annuity agreements with donors to any duly organized domestic or foreign nonstock corporation, or to any unincorporated charitable trust, if such corporation or trust has been in active operation for at least 10 years prior thereto and has qualified as an exempt organization under the Internal Revenue Code, 26 U.S.C. s. 501(c)(3). Such permit shall authorize such corporation or trust to receive gifts conditioned upon, or in return for, its agreement to pay an annuity to the donor or other designated beneficiary or beneficiaries and to make and carry out such annuity agreement. Every such corporation or trust shall, before making any such agreement, file with the department copies of its forms of agreements with annuitants and a schedule of its maximum annuity rates, which shall be so computed, on the basis of the annuity standard adopted by it for the calculation of its reserves, as to return to such corporation or trust upon the death of the annuitant a residue at least equal to one-half the original gift or other consideration for such annuity.

(2) Every such domestic corporation or such domestic or foreign trust shall have and maintain admitted assets at least equal to the sum of the reserves on its outstanding agreements, calculated in accordance with the United States Internal Revenue Code Revenue Ruling 72-438, and a surplus of 25 percent of such reserves. In determining the reserves of any such corporation or trust, a deduction shall be made for all or any portion of an annuity risk which is reinsured by a life insurance company authorized to do business in this state. The assets of such corporation or trust in an amount at least equal to the sum of such reserves and surplus shall be invested only in securities permitted under part II of chapter 625 for the investment of the reserves of authorized life insurance companies; and such assets shall be segregated as separate and distinct funds, independent of all other funds of such corporation or trust, and shall not be applied for the payment of the debts and obligations of the corporation or trust or for any purpose other than the annuity benefits specified in this section.

(3) No such foreign corporation shall be permitted to make these annuity agreements in this state unless it complies with all the requirements of this section imposed upon like domestic corporations, except that the corporation may invest its reserve and surplus funds in the kind of securities permitted by the laws of the state in which it was incorporated or organized.

(4) If the department finds that any such corporation or trust having such a special permit has failed to comply with the requirements of this section, it may revoke or suspend such permit or it may order such corporation or trust to cease making any new annuity contracts until such requirements have been satisfied. The department may, in its discretion, require annual statements by such corporation or trust and may accept in lieu thereof a sworn statement by two or more of the principal officers thereof, in such form as will satisfy the department that the requirements of this section are being complied with.

(5) Except as provided in this section, every such

549


corporation or trust shall be exempt from the provisions of this code in making annuity agreements pursuant to a special permit issued under this section.

(6) Any annuity agreement entered into by a corporation or trust the sole purpose of which is to support a state institution of higher learning shall contain the following clause:

"This agreement is the entire contract between the parties, with rights and responsibilities of each party to the other as set forth herein. The donor or annuitant shall not have recourse against any assets of the state other than any funds or assets donated by, or funds derived from any assets donated by, the donor as set forth herein."

Hi.tory.-s. 1, ch. 74·149; s. 3, cb. 76-168; s. 1, cb. 77-457; s. 21, cb. 78-95; ... 2, 3, ch. 81-318; 88. 403, 404, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.-Expire8 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.

627.501 627.502

627.503 627.504 627.505 627.506 627.507 627.508 627.509 627.510 627.511 627.512 627.513 627.514

627.515 627.516 627.517 627.521

PART IV

INDUSTRIAL LIFE INSURANCE POLICIES

Scope of this part. "Industrial life insurance" defined; report-

ing. Required provisions. Grace period. Entire contract; statements in application. Incontestability. Misstatement of age or sex. Dividends. Reinstatement. Settlement on proof of death. Authority to alter contract. Beneficiary. Facility of payment. Nonforfeiture benefits; certain interim pol-

icies. Title of industrial life insurance policy. Advance payment of premiums. Conversion. Disclosure statements.

1627.501 Scope of this part.-The provisions of this part apply only to industrial life insurance policies. Sections 627.463, 627.472, 627.476, and 627.479 also apply to industrial life insurance policies.

Hi.tory.-s. 507, ch. 59-205; 8. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.-Repealed effective October 1, 1992, by 8. 809(2nd), ch. 82-243, and scheduled for review pursuant to s. 11.61 in advance of that date.

1627.502 "Industrial life insurance" defined; reporting.-

(1) For the purposes of this code, "industrial life insurance" is that form of life insurance written under policies under which premiums are payable monthly or more often, bearing the words "industrial policy" or "weekly premium policy" or words of similar import imprinted upon the policies as part of the descriptive matter, and issued by an insurer which, as to such industrial life insurance, is operating under a system of collecting a debit by its agent.

(2) Every life insurer transacting industrial life insurance shall report to the department all annual statement data regarding the exhibit of life insurance, including relevant information for industrial life insurance.

Hi.tory.-1l. 508, cb. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 405, 420, 809(2nd), ch. 82-243; s. 79, cb. 82-386.


1627.503 Required provisions.-(1) No policy of industrial life insurance shall be

delivered or issued for delivery in this state unless it contains in substance each of the provisions as required in s. 627.476 and ss. 627.504-627.521, or provisions which in the opinion of the department are more favorable to the policyholder.

(2) Any such provisions or portions not applicable to single-premium or term policies shall to that extent not be incorporated therein.

Bi.tory.-s. 509, ch. 59-205; 88. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 406, 420, 809(2nd), ch. 82-243; s. 79, ch. 82-386.

'Note.-Expire8 October 1, 1992, pursuant to s. 809(2nd), cb. 82-243, and is scheduled for review pursuant to 8. 11.61 in advance of that date.

1627.504 Grace period.-The policy shall provide that the insured is entitled to a grace period of 4 weeks within which the payment of any premiums due after the first premium payment may be made, except that in policies the premiums for which are payable monthly, the grace period shall be 1 month, but not less than 30 days; and that during the grace period the policy shall continue in full force, but if during the grace period there is a claim under the policy, then any premiums due and unpaid may be deducted from any settlement under the policy.

Bi.tory.-s. 510, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 88. 407, 420, 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 tbat date.

1627.505 Entire contract; statements in application.-The policy shall provide that the policy shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the policy when issued, that the policy and the application therefor shall constitute the entire contract. If the application is so made a part of the contract, the policy shall also provide that all statements made by the applicant in such application shall, in the absence of fraud, be deemed to be representations and not warranties.

Bi.tory.-s. 511, ch. 59-205; s. 3, ch. 76-168; s. 1, cb. 77-457; ... 2, 3, ch. 81-318; 88. 408, 420, 809(2nd), ch. 82-243; 8. 79, ch. 82-386.

'N ote.-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.

1627.506 Incontestability.-The policy shall provide that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of 2 years from its date of issue except for nonpayment of premiums and except, at the option of the insurer, as to provisions providing benefits for disability or specifically for death by accident or accidental means.

Bi.tory.-s. 512, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; ... 409, 420, 809(2nd), ch. 82-243; s. 79, cb. 82-386.


1627.507 Misstatement of age or sex.-The

550

f.s.1983 insurance field representatives and … · d. any individual, isolated, nonrecurring unad...

Documents