(1) The rates for all classes of insurance to which the provisions of this part are applicable may not be excessive, inadequate, or unfairly discriminatory.
(2) As to all such classes of insurance:
(a) Insurers or rating organizations shall establish and use rates, rating schedules, or rating manuals that allow the insurer a reasonable rate of return on the classes of insurance written in this state. A copy of rates, rating schedules, rating manuals, premium credits or discount schedules, and surcharge schedules, and changes thereto, must be filed with the office under one of the following procedures:
1. If the filing is made at least 90 days before the proposed effective date and is not implemented during the office’s review of the filing and any proceeding and judicial review, such filing is considered a “file and use” filing. In such case, the office shall finalize its review by issuance of a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing. If the 90-day period ends on a weekend or a holiday under s. 110.117(1)(a)-(i), it must be extended until the conclusion of the next business day. The notice of intent to approve and the notice of intent to disapprove constitute agency action for purposes of the Administrative Procedure Act. Requests for supporting information, requests for mathematical or mechanical corrections, or notification to the insurer by the office of its preliminary findings does not toll the 90-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office does not issue a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing.
2. If the filing is not made in accordance with subparagraph 1., such filing must be made as soon as practicable, but within 30 days after the effective date, and is considered a “use and file” filing. An insurer making a “use and file” filing is potentially subject to an order by the office to return to policyholders those portions of rates found to be excessive, as provided in paragraph (h).
3. For all property insurance filings made or submitted after January 25, 2007, but before May 1, 2012, an insurer seeking a rate that is greater than the rate most recently approved by the office shall make a “file and use” filing. For purposes of this subparagraph, motor vehicle collision and comprehensive coverages are not considered property coverages.
(b) Upon receiving a rate filing, the office shall review the filing to determine if a rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the following factors:
1. Past and prospective loss experience within and without this state.
2. Past and prospective expenses.
3. The degree of competition among insurers for the risk insured.
4. Investment income reasonably expected by the insurer, consistent with the insurer’s investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. The commission may adopt rules using reasonable techniques of actuarial science and economics to specify the manner in which insurers calculate investment income attributable to classes of insurance written in this state and the manner in which investment income is used to calculate insurance rates. Such manner must contemplate allowances for an underwriting profit factor and full consideration of investment income that produces a reasonable rate of return; however, investment income from invested surplus may not be considered.
5. The reasonableness of the judgment reflected in the filing.
6. Dividends, savings, or unabsorbed premium deposits allowed or returned to policyholders, members, or subscribers in this state.
7. The adequacy of loss reserves.
8. The cost of reinsurance. The office may not disapprove a rate as excessive solely due to the insurer having obtained catastrophic reinsurance to cover the insurer’s estimated 250-year probable maximum loss or any lower level of loss.
9. Trend factors, including trends in actual losses per insured unit for the insurer making the filing.
10. Conflagration and catastrophe hazards, if applicable.
11. Projected hurricane losses, if applicable, which must be estimated using a model or method found to be acceptable or reliable by the Florida Commission on Hurricane Loss Projection Methodology, and as further provided in s. 627.0628.
12. Projected flood losses for personal residential property insurance, if applicable, which may be estimated using a model or method, or a straight average of model results or output ranges, independently found to be acceptable or reliable by the Florida Commission on Hurricane Loss Projection Methodology and as further provided in s. 627.0628.
13. A reasonable margin for underwriting profit and contingencies.
14. The cost of medical services, if applicable.
15. Other relevant factors that affect the frequency or severity of claims or expenses.
(c) In the case of fire insurance rates, consideration must be given to the availability of water supplies and 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.
(d) If conflagration or catastrophe hazards are considered by an insurer in its rates or rating plan, including surcharges and discounts, the insurer shall establish a reserve for that portion of the premium allocated to such hazard and maintain the premium in a catastrophe reserve. Removal of such premiums from the reserve for purposes other than paying claims associated with a catastrophe or purchasing reinsurance for catastrophes must be approved by the office. Any ceding commission received by an insurer purchasing reinsurance for catastrophes must be placed in the catastrophe reserve.
(e) After consideration of the rate factors provided in paragraphs (b), (c), and (d), the office may find a rate to be excessive, inadequate, or unfairly discriminatory based upon the following standards:
1. Rates shall be deemed excessive if they are likely to produce a profit from Florida business which 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.
2. 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, if the replenishment is attributable to investment losses.
3. 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.
4. A rating plan, including discounts, credits, or surcharges, shall be deemed unfairly discriminatory if it fails to clearly and equitably reflect consideration of the policyholder’s participation in a risk management program adopted pursuant to s. 627.0625.
5. A rate shall be deemed inadequate as to the premium charged to a risk or group of risks if discounts or credits are allowed which exceed a reasonable reflection of expense savings and reasonably expected loss experience from the risk or group of risks.
6. A rate shall be deemed unfairly discriminatory as to a risk or group of risks if the application of premium discounts, credits, or surcharges among such risks does not bear a reasonable relationship to the expected loss and expense experience among the various risks.
(f) In reviewing a rate filing, the office 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 in this section.
(g) The office may at any time review a rate, rating schedule, rating manual, or rate change; the pertinent records of the insurer; and market conditions. If the office finds on a preliminary basis that a rate may be excessive, inadequate, or unfairly discriminatory, the office shall initiate proceedings to disapprove the rate and shall so notify the insurer. However, the office may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for 1 year after the effective date of the filing unless the office finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being notified, the insurer or rating organization shall, within 60 days, file with the office all information that, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. The office shall issue a notice of intent to approve or a notice of intent to disapprove pursuant to paragraph (a) within 90 days after receipt of the insurer’s initial response. 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 office notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the office withdraws the notification, the insurer may not alter the rate except to conform to the office’s notice until the earlier of 120 days after the date the notification was provided or 180 days after the date of implementing the rate. The office, subject to chapter 120, may 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.
(h) If the office finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the office shall issue an order of disapproval specifying that a new rate or rate schedule, which responds to the findings of the office, be filed by the insurer. The office shall further order, for any “use and file” filing made in accordance with subparagraph (a)2., that premiums charged each policyholder constituting the portion of the rate above that which was actuarially justified be returned to the policyholder in the form of a credit or refund. If the office finds that an insurer’s rate or rate change is inadequate, the new rate or rate schedule filed with the office in response to such a finding is applicable only to new or renewal business of the insurer written on or after the effective date of the responsive filing.
(i) Except as otherwise specifically provided in this chapter, for property and casualty insurance the office may not directly or indirectly:
1. Prohibit any insurer, including any residual market plan or joint underwriting association, from paying acquisition costs based on the full amount of premium, as defined in s. 627.403, applicable to any policy, or prohibit any such insurer from including the full amount of acquisition costs in a rate filing; or
2. Impede, abridge, or otherwise compromise an insurer’s right to acquire policyholders, advertise, or appoint agents, including the calculation, manner, or amount of such agent commissions, if any.
(j) With respect to residential property insurance rate filings, the rate filing:
1. Must account for mitigation measures undertaken by policyholders to reduce hurricane losses and windstorm losses.
2. May use a modeling indication that is the weighted or straight average of two or more hurricane loss projection models found by the Florida Commission on Hurricane Loss Projection Methodology to be accurate or reliable pursuant to s. 627.0628. If an averaged model is used under this section, the same averaged model must be used throughout this state. If a weighted average is used, the insurer must provide the office with an actuarial justification for using the weighted average which shows that the weighted average results in a rate that is reasonable, adequate, and fair.
(k)1. A residential property insurer may make a separate filing limited solely to an adjustment of its rates for reinsurance, the cost of financing products used as a replacement for reinsurance, financing costs incurred in the purchase of reinsurance, and the actual cost paid due to the application of the cash build-up factor pursuant to s. 215.555(5)(b) if the insurer:
a. Elects to purchase financing products such as a liquidity instrument or line of credit, in which case the cost included in filing for the liquidity instrument or line of credit may not result in a premium increase exceeding 3 percent for any individual policyholder. All costs contained in the filing may not result in an overall premium increase of more than 15 percent for any individual policyholder.
b. Includes in the filing a copy of all of its reinsurance, liquidity instrument, or line of credit contracts; proof of the billing or payment for the contracts; and the calculation upon which the proposed rate change is based demonstrating that the costs meet the criteria of this section.
2. An insurer that purchases reinsurance or financing products from an affiliated company may make a separate filing only if the costs for such reinsurance or financing products are charged at or below charges made for comparable coverage by nonaffiliated reinsurers or financial entities making such coverage or financing products available in this state.
3. An insurer may make only one filing per 12-month period under this paragraph.
4. An insurer that elects to implement a rate change under this paragraph must file its rate filing with the office at least 45 days before the effective date of the rate change. After an insurer submits a complete filing that meets all of the requirements of this paragraph, the office has 45 days after the date of the filing to review the rate filing and determine if the rate is excessive, inadequate, or unfairly discriminatory.
The provisions of this subsection do not apply to workers’ compensation, employer’s liability insurance, and motor vehicle insurance.
(3)(a) For individual risks that are not rated in accordance with the insurer’s rates, rating schedules, rating manuals, and underwriting rules filed with the office and that have been submitted to the insurer for individual rating, the insurer must maintain documentation on each risk subject to individual risk rating. The documentation must identify the named insured and specify the characteristics and classification of the risk supporting the reason for the risk being individually risk rated, including any modifications to existing approved forms to be used on the risk. The insurer must maintain these records for at least 5 years after the effective date of the policy.
(c) This subsection does not apply to private passenger motor vehicle insurance.
(d)1. The following categories or kinds of insurance and types of commercial lines risks are not subject to paragraph (2)(a) or paragraph (2)(f):
a. Excess or umbrella.
b. Surety and fidelity.
c. Boiler and machinery and leakage and fire extinguishing equipment.
d. Errors and omissions.
e. Directors and officers, employment practices, fiduciary liability, and management liability.
f. Intellectual property and patent infringement liability.
g. Advertising injury and Internet liability insurance.
h. Property risks rated under a highly protected risks rating plan.
i. General liability.
j. Nonresidential property, except for collateral protection insurance as defined in s. 624.6085.
k. Nonresidential multiperil.
l. Excess property.
m. Burglary and theft.
n. Travel insurance, if issued as a master group policy with a situs in another state where each certificateholder pays less than $30 in premium for each covered trip and where the insurer has written less than $1 million in annual written premiums in the travel insurance product in this state during the most recent calendar year.
o. Medical malpractice for a facility that is not a hospital licensed under chapter 395, a nursing home licensed under part II of chapter 400, or an assisted living facility licensed under part I of chapter 429.
p. Medical malpractice for a health care practitioner who is not a dentist licensed under chapter 466, a physician licensed under chapter 458, an osteopathic physician licensed under chapter 459, a chiropractic physician licensed under chapter 460, a podiatric physician licensed under chapter 461, a pharmacist licensed under chapter 465, or a pharmacy technician registered under chapter 465.
q. Any other commercial lines categories or kinds of insurance or types of commercial lines risks that the office determines should not be subject to paragraph (2)(a) or paragraph (2)(f) because of the existence of a competitive market for such insurance or similarity of such insurance to other categories or kinds of insurance not subject to paragraph (2)(a) or paragraph (2)(f), or to improve the general operational efficiency of the office.
2. Insurers or rating organizations shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on insurance and risks described in subparagraph 1. which are written in this state.
3. An insurer shall notify the office of any changes to rates for insurance and risks described in subparagraph 1. within 30 days after the effective date of the change. The notice must include the name of the insurer, the type or kind of insurance subject to rate change, and the average statewide percentage change in rates. Actuarial data with regard to rates for such risks must be maintained by the insurer for 2 years after the effective date of changes to those rates and are subject to examination by the office. The office may require the insurer to incur the costs associated with an examination. Upon examination, the office, in accordance with generally accepted and reasonable actuarial techniques, shall consider the rate factors in paragraphs (2)(b), (c), and (d) and the standards in paragraph (2)(e) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
4. A rating organization shall notify the office of any changes to loss cost for insurance and risks described in subparagraph 1. within 30 days after the effective date of the change. The notice must include the name of the rating organization, the type or kind of insurance subject to a loss cost change, loss costs during the immediately preceding year for the type or kind of insurance subject to the loss cost change, and the average statewide percentage change in loss cost. Actuarial data with regard to changes to loss cost for risks not subject to paragraph (2)(a) or paragraph (2)(f) must be maintained by the rating organization for 2 years after the effective date of the change and are subject to examination by the office. The office may require the rating organization to incur the costs associated with an examination. Upon examination, the office, in accordance with generally accepted and reasonable actuarial techniques, shall consider the rate factors in paragraphs (2)(b)-(d) and the standards in paragraph (2)(e) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
(4) The establishment of any rate, rating classification, rating plan or schedule, or variation thereof in violation of part IX of chapter 626 is also in violation of this section.
(5) With respect to a rate filing involving coverage of the type for which the insurer is required to pay a reimbursement premium to the Florida Hurricane Catastrophe Fund, the insurer may fully recoup in its property insurance premiums any reimbursement premiums paid to the fund, together with reasonable costs of other reinsurance; however, except as otherwise provided in this section, the insurer may not recoup reinsurance costs that duplicate coverage provided by the fund. An insurer may not recoup more than 1 year of reimbursement premium at a time. Any under-recoupment from the prior year may be added to the following year’s reimbursement premium, and any over-recoupment must be subtracted from the following year’s reimbursement premium.
(6)(a) If an insurer requests an administrative hearing pursuant to s. 120.57 related to a rate filing under this section, the director of the Division of Administrative Hearings shall expedite the hearing and assign an administrative law judge who shall commence the hearing within 30 days after the receipt of the formal request and enter a recommended order within 30 days after the hearing or within 30 days after receipt of the hearing transcript by the administrative law judge, whichever is later. Each party shall have 10 days in which to submit written exceptions to the recommended order. The office shall enter a final order within 30 days after the entry of the recommended order. The provisions of this paragraph may be waived upon stipulation of all parties.
(b) Upon entry of a final order, the insurer may request an expedited appellate review pursuant to the Florida Rules of Appellate Procedure. It is the intent of the Legislature that the First District Court of Appeal grant an insurer’s request for an expedited appellate review.
(7) The provisions of this subsection apply only to rates for medical malpractice insurance and control to the extent of any conflict with other provisions of this section.
(a) Any portion of a judgment entered or settlement paid as a result of a statutory or common-law bad faith action and any portion of a judgment entered which awards punitive damages against an insurer may not be included in the insurer’s rate base and used to justify a rate or rate change. Any common-law bad faith action identified as such, any portion of a settlement entered as a result of a statutory or common-law action, or any portion of a settlement wherein an insurer agrees to pay specific punitive damages may not be used to justify a rate or rate change. The portion of the taxable costs and attorney’s fees which is identified as being related to the bad faith and punitive damages may not be included in the insurer’s rate base and used to justify a rate or rate change.
(b) Upon reviewing a rate filing and determining whether the rate is excessive, inadequate, or unfairly discriminatory, the office shall consider, in accordance with generally accepted and reasonable actuarial techniques, past and present prospective loss experience, using loss experience solely for this state or giving greater credibility to this state’s loss data after applying actuarially sound methods of assigning credibility to such data.
(c) Rates shall be deemed excessive if, among other standards established by this section, the rate structure provides for replenishment of reserves or surpluses from premiums when the replenishment is attributable to investment losses.
(d) The insurer must apply a discount or surcharge based on the health care provider’s loss experience or establish an alternative method giving due consideration to the provider’s loss experience. The insurer must include in the filing a copy of the surcharge or discount schedule or a description of the alternative method used, and provide a copy, as approved by the office, to policyholders at the time of renewal and to prospective policyholders at the time of application for coverage.
(e) For medical malpractice rates subject to paragraph (2)(a), the medical malpractice insurer shall make an annual base rate filing in accordance with s. 627.0645, sworn to by at least two executive officers of the insurer.
(8)(a) The chief executive officer or chief financial officer of a property insurer and the chief actuary of a property insurer must certify under oath and subject to the penalty of perjury, on a form approved by the commission, the following information, which must accompany a property rate filing subject to paragraph (2)(a):
1. The signing officer and actuary have reviewed the rate filing;
2. Based on the signing officer’s and actuary’s knowledge, the rate filing does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading;
3. Based on the signing officer’s and actuary’s knowledge, the information and other factors described in paragraph (2)(b), including, but not limited to, investment income, fairly present in all material respects the basis of the rate filing for the periods presented in the filing; and
4. Based on the signing officer’s and actuary’s knowledge, the rate filing reflects all premium savings that are reasonably expected to result from legislative enactments and are in accordance with generally accepted and reasonable actuarial techniques.
(b) A signing officer or actuary who knowingly makes a false certification under this subsection commits a violation of s. 626.9541(1)(e) and is subject to the penalties under s. 626.9521.
(c) Failure to provide such certification by the officer and actuary shall result in the rate filing being disapproved without prejudice to be refiled.
(d) The certification made pursuant to paragraph (a) is not rendered false if, after making the subject rate filing, the insurer provides the office with additional or supplementary information pursuant to a formal or informal request from the office. However, the actuary who is primarily responsible for preparing and submitting such information must certify the information in accordance with the certification required under paragraph (a) and the penalties in paragraph (b), except that the chief executive officer, chief financial officer, or chief actuary need not certify the additional or supplementary information.
(e) The commission may adopt rules and forms to administer this subsection.
(9) The burden is on the office to establish that rates are excessive for personal lines residential coverage with a dwelling replacement cost of $1 million or more or for a single condominium unit with a combined dwelling and contents replacement cost of $1 million or more. Upon request of the office, the insurer shall provide such loss and expense information as the office reasonably needs to meet this burden.
(10) Any interest paid pursuant to s. 627.70131(7) may not be included in the insurer’s rate base and may not be used to justify a rate or rate change.
Cited 18 times | Published | Florida 1st District Court of Appeal
...), which provides that it is the purpose of the Insurance Code to "... promote the public welfare by regulating insurance rates ... to the end that they shall not be ... unfairly discriminatory... ." The Department also maintains that it implemented Section 627.062(1), Florida Statutes (1979), which provides: "The rates for all classes of insurance to which the provisions of this part are applicable shall not be ......
...This rule was not challenged in this proceeding and therefore will not be addressed. [4] Rule 4-43.03 refers to rulemaking authority of the Department under Sections 624.308(1) and 626.9611, Florida Statutes (1979); and as the laws being implemented Sections 626.9541(15)(h), 627.031(1)(a), 627.062(1), and 627.0651, Florida Statutes (1979)....
...been kept, and this is an attack on the business of insurance.
B. Regulated by State Law
The State of Florida8 heavily regulates the insurance industry. Slagle, 102
F.3d at 497-98 (“[T]he conduct is also regulated by the State of Florida.” Fla. Stat.
§ 627.062 (1993)); Uniforce, 87 F.3d at 1299 n....
...terms is an integral part of the policy relationship between the insurer and the insured, and that activity is limited to entities in the insurance industry." Id. Consequently, because the conduct is also regulated by the State of Florida, Fla.Stat. § 627.062 (1993), the McCarran-Ferguson Act exemption is applicable....
Cited 10 times | Published | Supreme Court of Florida
...land, Hunter and Williams, supra note 1. [4] Id. at 164-66. [5] Id. at 193-96. [6] Id. at 150-53. [1] Section 21 of chapter 77-468 removed motor vehicle insurance from the scope of the general excessive rates provision contained in subsection (2) of section 627.062, Florida Statutes, and created new provisions dealing with excessive motor vehicle insurance rates by a new section 627.0651, Florida Statutes....
...The concurring opinion took note of the plurality opinion’s discussion of subdivision (8) of the statute that "appear[ed] to compel medical malpractice insurance companies to reduce their rates in response to the 2013 legislation[.]” McCall, 134 So.3d at 911 (discussing § 627.062(8), Fla....
...Redner, Department of Insurance, Tallahassee, for Appellee. SMITH, Senior Judge. Fortune Insurance Company (hereafter "Fortune") appeals from a final order of the Department of Insurance (hereafter "Department"). The Department ruled that it has the authority, under Section 627.062(2)(g), Florida Statutes, to review and disapprove an insurer's rate as excessive at any time after the expiration of a period of one year following final approval by the Department, without necessity for a finding that a material misrepresentation or material error was made by the insurer in its rate filing....
...In January of 1986, the Department approved Fortune's homeowners rates in all four zones. Fortune requested no rate modification between January, 1986 and June 11, 1993, on which date Fortune filed a request for approval of an increase in rates within Zones I, II, and III, pursuant to section 627.062(2)(a)1, Florida Statutes....
...I were inadequate, and that a final order should be entered accordingly. The hearing officer further found that the rate in Zone IV was excessive. However, the hearing officer concluded, as a matter of law, that the Department had no authority under Section 627.062(2)(g) to require a decrease based upon "excessiveness." The Department filed exceptions to the recommended order with respect to certain of the hearing officer's conclusions of law....
...te, issued a final order in which it approved the hearing officer's findings of fact, but rejected the hearing officer's conclusion of law with respect to disapproval of Fortune's rates in Zone IV as excessive. Instead, the Department concluded that Section 627.062(2)(g), properly construed, authorized the Department to review and disapprove a rate as excessive where the rate had been approved either by "final approval," or after the rate had been "deemed approved." Section 627.062(2)(g) provides in pertinent part as follows: The department may at any time review a rate, rating schedule, rating manual, or *314 rate change; the pertinent records of the insurer; and market conditions....
...misrepresentation or error in the insurer's filing, if the rate has been given "final approval" by the Department. However, as to the Department's authority to find excessive any rate "deemed approved," the hearing officer found that the language of Section 627.062(2)(g) precluded such disapproval by the Department only for a period of one year from the effective date of filing, after which the Department could disapprove a rate as excessive....
...agreed, however, with the hearing officer's conclusion as to the Department's authority to disapprove as excessive a rate given "final approval." The Department concluded that under a proper interpretation, taking into account the entire language of Section 627.062(2)(g), as well as related statutory provisions, the Department had authority to also disapprove rates as excessive even though approved under the "final approval" provision, the only limitation on such authority being the same as for...
...tute its own conclusions of law for those of the hearing officer. Harloff v. City of Sarasota, 575 So.2d 1324 *315 (Fla. 2d DCA 1991); Bustillo v. Dep't of Prof. Reg., 561 So.2d 610 (Fla. 3rd DCA 1990). As above noted, the Department has interpreted section 627.062(2)(g) as authorizing its review and disapproval of an insurer's rate as excessive at any time, subject only to the limitation that after a rate has been given final approval or a rate has been deemed approved, a rate cannot be disappr...
...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. Consistent with the purposes expressed above, the first sentence of section 627.062(2)(g) provides that the Department may "at any time" review a rate....
...iling," is as much applicable to rates given "final approval" as to rates "deemed approved." [2] In this connection it is noteworthy that the statutory provision placing a time limit upon the Department within which it must "finalize" its review, subsection 627.062(2)(a)1 (known as the "file and use" provision), is the same provision containing the "deemed approved" language. By contrast, subsection 627.062(2)(a)2 (the "use and file" provision), contains no time limit for the Department's review and approval or disapproval of rates, and does not contain a "deemed approved" provision....
...oses of the rating law and the provision for review for excessiveness "at any time," but is also inconsistent with statutory directives enumerating factors that the Department shall consider in the reviewing process. These factors, under subsections 627.062(2)(b), 1-13, (c), (d) and (e), include among other things the insurer's loss experience; expenses; income from invested premiums; the cost of reinsurance; trend factors, including trends in actual losses; profits received in relation to the r...
Cited 2 times | Published | Florida 1st District Court of Appeal | 2001 WL 1436287
...Bryant & Yon, P.A., Tallahassee, for Appellees. BENTON, J. The Florida Department of Insurance (the Department) appeals dismissal of its amended complaint and motion to vacate arbitration award. It sought to overturn an *773 arbitration award under section 627.062(6), Florida Statutes (1999), which approved rate increases for homeowners' insurance policies that appellees issue....
...ners' insurance rates, averaging fifteen percent state-wide. In due course, the Department gave notice of its intent to disapprove these rate filings, which notice "constitute[d] agency action for purposes of the Administrative Procedure Act [APA]," § 627.062(2)(a)(1.), Fla. Stat. (1999), and also gave the insurance companies the statutory option "in lieu of demanding a hearing under s. 120.57, [to] require arbitration of the rate filing." § 627.062(6)(a), Fla....
...action of the department under the Administrative Procedure Act or any other provision of law; however, such rights are restored to the insurer if the arbitrators fail to render a decision within 90 days after initiation of the arbitration process. § 627.062(6), Fla....
...the parties or specified by law, no later than thirty days from the date of closing the hearing...."). III. Unhappy with the arbitrators' decision, [1] the Department "appl[ied] to the circuit court to vacate ... the decision pursuant to s. 682.13." § 627.062(6)(b), Fla....
...The Supreme Court of Florida had definitively construed section 682.13(1)(c) to require highly deferential judicial review of arbitration awards, long before the Legislature incorporated the chapter 682 arbitration and judicial review provisions in the insurance rating law, by enacting section 627.062(6), Florida Statutes (Supp....
...3d DCA 1986); McDonald v. Hardee County School Bd., 448 So.2d 593 (Fla. 2d DCA), review denied, 456 So.2d 1181 (Fla.1984); Newport Motel, Inc. v. Cobin Restaurant, Inc., 281 So.2d 234 (Fla. 3d DCA 1973). Among district court opinions articulating similar views before section 627.062(6) was enacted are Tallahassee Memorial Regional Medical Center, Inc....
...Jones, 326 So.2d 425, 435 (Fla.1975). From this presumption, of which the Legislature itself is well aware, it follows that the Legislature intended to adopt the deferential standard of review articulated in section 682.13 and explicated in the cases extant at the time section 627.062(6) was enacted....
...1st DCA 1983), and "cannot be set aside for mere errors of judgment either as to the law or as to the facts." Schnurmacher Holding, 542 So.2d at 1328 (quoting Cassara, 55 So.2d at 105). We do not decide the merits of the Department's belated contention that so construing section 627.062(6) renders it unconstitutional....
...e over objection in a civil action"; (b) by admitting evidence concerning certain mathematical models and output ranges that the Florida Commission on Hurricane Loss Projection Methodology had not found to be accurate and reliable in accordance with section 627.0628(3)(c), Florida Statutes (1999); and (c) by rendering their award after expiration of a ninety-day period supposedly mandated by section 627.062(6)(c), Florida Statutes (1999), and Florida Administrative Code Rules 4-170.127(2) and 4-170.135(1)....
...s exceeded their authority by the use they made of hearsay, and by admitting evidence of models and output ranges that had not been determined to be accurate and reliable by the Florida Commission on Hurricane Loss Projection Methodology pursuant to section 627.0628(3)(c), Florida Statutes (1999). The Department's contention that section 627.0628(3)(c) forbids arbitrators' consideration of models or output ranges not found accurate or reliable by the Florida Commission on Hurricane Loss Projection Methodology (the Commission) has no basis in the statutory language. Section 627.0628(3)(c) does not exclude evidence of any kind from rate filing arbitration proceedings....
...Kumble, 578 So.2d at 836; Tallahassee Mem'l Regional Med. Ctr., 655 So.2d at 1198; Bankers & Shippers Ins. Co. v. Gonzalez, 234 So.2d 693, 695 (Fla. 3d DCA 1970). To reiterate, the relief the Department sought was available, if at all, only under section 682.13. See § 627.062(6)(b), Fla....
...truing section 682.13(1)) (citations omitted)). If construed to authorize judicial review of a kind different from the judicial review provided by section 682.13, Florida Administrative Code Rule 4-170.131(6) would not conform to the requirements of section 627.062(6)(b)....
...Finally, the Department posits a requirement that arbitration must conclude within ninety days of the demand therefor, and contends that the case should be returned to the trial court so the Department *778 can prove that the arbitrators' award was made outside this period. But the Department misreads section 627.062(6)(c) as limiting the time for arbitration to ninety days from the date of the arbitration demand....
...t they forgo their rights under the APA (at least temporarily) if they do so. But it also provides that APA "rights are restored to the insurer if the arbitrators fail to render a decision within 90 days after initiation of the arbitration process." § 627.062(6)(c), Fla. Stat. (1999) (emphasis supplied). Once ninety days have elapsed, the insurer has the option of abandoning arbitration and requesting an administrative hearing instead. Section 627.062(6)(c) does not impose any absolute deadline for concluding arbitration....
...To construe Rule 4-170.127(2) as denying arbitrators the ability, for good cause shown, to schedule hearings more than sixty days after the demand for arbitration, would render Rule 4-170.127(2) at odds not only with section 682.13(1)(d), but also with section 627.062(6)(b), which requires that the Department's rules "not be inconsistent with the arbitration rules of the American Arbitration Association as of January 1, 1996." Under the American Arbitration Association's Rule 21, arbitrators have the authority to "set the date, time, and place for each hearing." See also Am....
...in In re Florida Windstorm Underwriting Ass'n, No. 43145-01-CO (Dep't of Ins. Sept. 5, 2001), or whether the Department has instituted proceedings to reduce the rates the insurers may charge for homeowners' policies under the arbitrators' award. See § 627.062(2)(g), Fla....
...If the department finds on a preliminary basis that a rate may be excessive, inadequate, or unfairly discriminatory, the department shall initiate proceedings to disapprove the rate...."). [2] Policy holders have filed suit in circuit court asserting that section 627.062 is unconstitutional insofar as it permits private arbitrators in effect to exercise governmental regulatory authority without providing for meaningful administrative or judicial review. They seek a declaratory judgment that section 627.062(6), Florida Statutes, violates the Florida Constitution because it provides that a rate filing arbitration decision is entitled to the same finality as all other private arbitration decisions and may only be set aside on the very limited procedural grounds provided in the Florida Arbitration Code.... [A] majority decision of the arbitrators approving an insurer's rate filing is unreviewable by the Department or the Courts. As a result, private arbitrators are empowered by § 627.062(6) to issue a decision usurping the Department's regulatory authority to determine premium rates and coverage limitations....
...We express no opinion on the merits of the policy holders' lawsuit or on the issue the policy holders raise there, because the Department failed to raise the issue at any time before filing the reply brief. [3] The language of the section is permissive. Section 627.0628(1)(c) permits an insurer to use models and output ranges adopted by the Commission without proving their accuracy or reliability, unless an objecting party shows by a preponderance of the evidence that "the way in which such standards and guidelines were applied by the insurer was erroneous." Sections 627.0628(1)(c) and (3)(c) presume the validity of actuarial methods, principles, standards, models and output ranges that the Commission adopts. Section 627.0628(3)(c), Florida Statutes (1999), provides: With respect to a rate filing under s. 627.062, an insurer may employ actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable to determine hurricane loss factors for use in a rate filing under s. 627.062, which findings and factors are admissible and relevant in consideration of a rate filing by the department or in any arbitration or administrative or judicial review. But the rebuttable presumption this provision creates does not prevent an insurer or any other party from adducing other actuarial methods, principles, standards, models and output ranges. See § 627.0628(1)(c) ("It is the further intent of the Legislature that such standards and guidelines must be used by the State Board of Administration in developing reimbursement premium rates for the Florida Hurricane Catastrophe Fund, and may be used by insurers in rate filings under s. 627.062 unless the way in which such standards and guidelines were applied by the insurer was erroneous, as shown by a preponderance of the evidence." (Emphasis supplied.)). [4] Section 627.062(6)(b), Florida Statutes (1999) grants the Department authority to promulgate rules for rate arbitration as long as those rules are not "inconsistent with the arbitration rules of the American Arbitration Association as of January 1, 1...
Cited 2 times | Published | Florida 4th District Court of Appeal
...On July 16, 1999, the Department issued a Notice of Intent to disapprove of the rate increase in its entirety. The Department advised FWUA of its right to request a formal hearing pursuant to section 120.57(1), Florida Statutes, or alternatively, to demand arbitration under section 627.062(6), Florida Statutes. On July 29, 1999, FWUA filed its demand for arbitration of the premium rate filing under sections 627.062(6) and 627.351(2)(b)5.b. At the arbitration, the Department agreed that FWUA was in need of a rate increase, but claimed that FWUA failed to justify the increase through "generally accepted and reasonable actuarial techniques," as required by section 627.062(2)....
...ment withdrew the IFO on April 10, 2001. *1165 On September 5, 2001, the Department issued an Order to Show Cause against FWUA for implementing the new rate increases before judicial review proceedings concluded, claiming that FWUA's action violated section 627.062....
...reach. Zimmerman v. FWUA, 873 So.2d 411, 412 (Fla. 1st DCA 2004). The First District found it unnecessary to reach Appellants' arguments that: (1) the rate increase was invalid because no public hearing was held on the proposed increase pursuant to section 627.0629(7), Florida Statutes, and Rule 4-166.051, Florida Administrative Code, and (2) that statutes allowing arbitration of proposed rate increases were unconstitutional....
...Based on the foregoing, we are closing our file without further investigation or action. Appellants assert two main arguments in this appeal from OIR's finding of no probable cause. First, they argue that the July 1, 2000 rate increase was invalid because a public hearing was not held on FWUA's rate filing, as provided by section 627.0629(7), Florida Statutes (1999), and Rule 4-166.051(3), Florida Administrative Code (1999)....
...tment approval, and "the Department has never given its approval of the rate hike [at issue], and that FWUA's resort to arbitration as a means of raising rates was a `material error . . . made by the insurer.'" Zimmerman, 873 So.2d at 413-14 (citing § 627.062(2)(g), Fla....
...The court noted that "the Department of Insurance, not the circuit court, has responsibility for reviewing insurance rates and rate increases and determining whether `a rate or rate change is excessive, . . . or unfairly discriminatory.'" Id. (citing § 627.062(2), Fla....
...setting or changing insurance rates by filing a rate proposal. OIR reviews filings
seeking a rate change to determine if the proposed rate is “excessive, inadequate, or
unfairly discriminatory . . . in accordance with generally accepted and reasonable
actuarial techniques.” § 627.062(3)(b), Fla....
...malpractice insurance premiums for physicians, and the argument and reliance by
the Respondent on rate reduction statutes is misplaced. When the statutory cap on
noneconomic damages was first enacted, the legislation contained a provision,
codified at section 627.062(8)(a)1., Florida Statutes (2003), that simply required
the Florida Office of Insurance Regulation (FLOIR) to calculate a “presumed
factor that reflects the impact that the changes contained in such legislation will
have on rates...
...factor, all medical malpractice
insurance companies that offered coverage in Florida were directed to submit a rate
filing for medical malpractice insurance that reflected “an overall rate reduction at
least as great as the presumed factor.” § 627.062(8)(a)2., Fla....
...highest state as far as premiums go in all but one of the scenarios.” 2013 FLOIR
Annual Report (Oct. 1, 2013) at 57-58, available at
http://www.floir.com/Office/DataReports.aspx#rec (CY2012). Therefore, despite
assertions that the presumed factor created in section 627.062(8)(a) caused massive
rate reductions by medical malpractice insurers to pass savings onto their
customers, the data suggests otherwise. Subdivision (8) was even repealed from
section 627.062 in 2011, having been designated “obsolete” by the Legislature.
Ch....
...quire the prior approval of the Department of Insurance, see § 627.091, the policy forms must also be approved by the Department, see § 627.410, and excessive, inadequate, or unfairly discriminatory rates must be disapproved by the Department, see § 627.062....
Cited 1 times | Published | Florida 1st District Court of Appeal | 2004 WL 832790
...created to act as an insurer against windstorm damage for owners of residential property in Florida who cannot obtain such coverage otherwise. When, in antecedent proceedings, a panel of three arbitrators made a decision regarding FWUA's rates under section 627.062(6), Florida Statutes (1999), the panel's decision was "treated as the final approval of a rate filing," [1] subject only to limited review in circuit court under sections 682.13 and 14, Florida Statutes (1999). In pertinent part, section 627.062(6) provides: *413 (a) After any action with respect to a rate filing that constitutes agency action for purposes of the Administrative Procedure Act, an insurer may, in lieu of demanding a hearing under s....
...ed. They share with the Department the view, which we today embrace, that the Department has never given its approval of the rate hike, and that FWUA's resort to arbitration as a means of raising rates was a "material error ... made by the insurer." § 627.062(2)(g), Fla....
...The appellants contend not only that arbitration of proposed rate increases did *414 not comply with FWUA's Plan of Operation; but also that the rate increase was invalid because no public hearing was held on the proposed increase, as allegedly required by section 627.0629(7), Florida Statutes, and Rule 4-166.051, Florida Administrative Code; and that the statutes allowing arbitration of proposed rate increases were unconstitutional because they impermissibly delegated regulatory and legislative author...
...It is necessary to address the first theory only. Under FWUA's Plan of Operation, insurance rate increases proposed by FWUA require approval by the Department of Insurance. Even after the Legislature amended the Insurance Code to provide that FWUA "may require arbitration of a rate filing under s. 627.062(6)," ch....
...(1997)), [3] the Department of Insurance, while revising FWUA's Plan of Operation in other respects, left intact provisions calling for rates "approved by the Department" and for rate increases only "upon approval of the Department." Fla. Admin.Code Ann. r. 4J-1.001 (2001). FWUA's resort to section 627.062(6), Florida Statutes (1997), after the Department of Insurance disapproved the request for rate increases FWUA filed on April 30, 1999, was not authorized, therefore, because FWUA's Plan of Operation required departmental approval or assent, not an arbitration award....
...in the form of a credit or refund," the Department of Insurance, not the circuit court, has responsibility for reviewing insurance rates and rate increases and determining whether "a rate or rate change is excessive, ... or unfairly discriminatory." § 627.062(2), Fla....
...Accordingly, we affirm the trial court's refusal to order refunds and denial of injunctive relief, but reverse the judgment and declaration insofar as it declares that "the arbitration resulted in Department approval as a matter of law," and vacate the judgment and declaration insofar as it construes section 627.0629(7), Florida Statutes, and Rule 4-166.051, Florida Administrative Code, and insofar as it adjudicates the constitutionality of certain provisions of the Florida Insurance Code....
...City of Plant City, 354 So.2d 878, 881 (Fla.1978) ("[W]e find it unnecessary to reach the constitutional question on which the trial judge ruled."). ERVIN, J., concurs; WOLF, C.J., concurs with opinion. WOLF, C.J., Concurring. I cannot agree with the reasoning of the majority. Section 627.062(6)(a), Florida Statutes (1999), requires that "[t]he department and insurer must treat the decision of the arbitrators as the final approval of a rate filing." The majority determines that the statute may not be enforced as written be...
...be enforced). The majority's determination that the plan overrides the statute is erroneous. I concur with the majority's decision, however, that the arbiter does not have final authority in the matter. I would find section 627.351(2)(b)(5)(b), and section 627.062(6), Florida Statutes, unconstitutional....
...delegation of the sovereign legislative power of the state. NOTES [1] FWUA's Plan of Operation required departmental approval, not an arbitration award. By requiring that the arbitration decision be "treated as" the final approval of a rate filing, section 627.062(6)(a) distinguished between departmental approval and an arbitration decision, and necessarily recognized them as two different things....
...The Insurance Code provides that insurers “must” file “cop[ies] of rates, rating schedules, rating manuals, premium credits or discount schedules, and surcharge sched *1339 ules, and changes thereto” with the Office of Insurance Regulation. Fla. Stat. § 627.062 (2)(a). “Upon receiving a rate filing, the [OIR] shall 'review the filing to determine if a rate is excessive...,” in light of accepted and reasonable actual .techniques and considering 14 specified factors. Fla. Stat. § 627.062 (2)(b). If the OIR finds the rate excessive, “the office shall initiate proceedings to disapprove the rate and shall so notify the insurer.” Fla. Stat. § 627.062 (2)(g)....
Published | District Court, N.D. Florida | 1995 WL 678616
...he insurance industry. Ail of the conduct is also regulated by comprehensive statutes enacted by the State of Florida. The statute which regulates the rates set by the FWUA has been discussed above. Chapter 627, Fla.Stat., and particularly Fla.Stat. § 627.062 (1993) and such regulations as may have been adopted by the Florida Department of Insurance, regulate all other activities of Defendants with respect to the rates and terms of windstorm insurance on the open market in Florida....
...s enabling statute before Service Insurance Company, Appellee, initiated its rule challenge. We agree. For this reason, we reverse the ALJ's final order without reaching the remaining issues raised on appeal. In 1996, the Florida Legislature amended section 627.062, Florida Statutes, to *638 create an option for insurers to choose arbitration in lieu of a hearing pursuant to section 120.57, Florida Statutes, for the resolution of issues that arose when the then-existing Department of Insurance ("DOI") took agency action with respect to a rate filing. Ch. 96-194, § 4, Laws of Fla. This option, which was codified at section 627.062(6), became effective January 1, 1997. Ch. 96-194, § 4, Laws of Fla. In addition to granting insurers the right to arbitrate, the Legislature directed DOI to adopt rules for arbitration. § 627.062(6)(b), Fla....
...DOI did so, and these rules were later transferred to the Financial Services Commission and the Office of Insurance Regulation pursuant to a government reorganization statute. Ch. 2002-404, § 2, Laws of Fla.; § 20.121, Fla. Stat. (2002). In 2008, the Legislature amended section 627.062(6) to remove the arbitration option. Nevertheless, in June 2009, Appellee sought a determination from an ALJ that one of the rules adopted under the directive of the former version of section 627.062(b) was an invalid exercise of delegated legislative authority....
...Because Appellee did not file its challenge during the rule's eleven [1] years of existence, the challenge was too late, and the ALJ should have declined to review it. Consequently, we reverse. REVERSED. KAHN, LEWIS, and CLARK, JJ., concur. NOTES [1] The rule was adopted on August 31, 1997, and the amendments to section 627.062(6) eliminating the arbitration option became effective July 1, 2008.
...The Insurance Code provides that insurers “must” file “cop[ies] of rates, rating schedules, rating manuals, premium credits or discount schedules, and surcharge schedules, and changes thereto” with the Office of Insurance Regulation. Fla. Stat. § 627.062 (2)(a). “Upon receiving a rate filing, the [OIR] shall review the filing to determine if a rate is excessive ..in light of accepted and reasonable actual techniques and considering 14 specified factors. Fla. Stat. § 627.062 (2)(b). If the OIR finds the rate excessive, “the office shall initiate proceedings to disapprove the rate and shall so notify the insurer.” Fla. Stat. § 627.062 (2)(g)....
...1987)).
2 The concurring opinion took note of the plurality opinion’s discussion of
subdivision (8) of the statute that “appear[ed] to compel medical malpractice
insurance companies to reduce their rates in response to the 2013 legislation[.]”
McCall, 134 So. 3d at 911 (discussing § 627.062(8), Fla....
Published | Court of Appeals for the Eleventh Circuit
...t of the
policy relationship between the insurer and the insured, and that
activity is limited to entities in the insurance industry." Id.
Consequently, because the conduct is also regulated by the State of
Florida, Fla.Stat. § 627.062 (1993), the McCarran-Ferguson Act
exemption is applicable....
...On July 16,1999, the Department issued a Notice of Intent to disapprove of the rate increase in its entirety. The Department advised FWUA of its right to request a formal hearing pursuant to section 120.57(1), Florida Statutes, or alternatively, to demand arbitration under section 627.062(6), Florida Statutes. On July 29, 1999, FWUA filed its demand for arbitration of the premium rate filing under sections 627.062(6) and 627.351(2)(b)5.b. At the arbitration, the Department agreed that FWUA was in need of a rate increase, but claimed that FWUA failed to justify the increase through “generally accepted and reasonable actuarial techniques,” as required by section 627.062(2)....
...nt withdrew the IFO on April 10, 2001. *1165 On September 5, 2001, the Department issued an Order to Show Cause against FWUA for implementing the new rate increases before judicial review proceedings concluded, claiming that FWUA’s action violated section 627.062....
...each. Zimmerman v. FWUA, 873 So.2d 411, 412 (Fla. 1st DCA 2004). The First District found it unnecessary to reach Appellants’ arguments that: (1) the rate increase was invalid because no public hearing was held on the proposed increase pursuant to section 627.0629(7), Florida Statutes, and Rule 4-166.051, Florida Administrative Code, and (2) that statutes allowing arbitration of proposed rate increases were unconstitutional....
...or action. Appellants assert two main arguments in this appeal from OIR’s finding of no probable cause. First, they argue that the July 1, 2000 rate increase was invalid because a public hearing was not held on FWUA’s rate filing, as provided by section 627.0629(7), Florida Statutes (1999), and Rule 4-166.051(3), Florida Administrative Code (1999)....
...oval, and “the Department has never given its approval of the rate hike [at issue], and that FWUA’s resort to arbitration as a means of raising rates was a ‘material error ... made by the insurer.’ ” Zimmerman, 873 So.2d at 413 -14 (citing § 627.062(2)(g), Fla....
...The court noted that “the Department of Insurance, not the circuit court, has responsibility for reviewing insurance rates and rate increases and determining whether ‘a rate or rate change is excessive, ... or unfairly discriminatory.’ ” Id. (citing § 627.062(2), Fla....
...We conclude that section
627.351(6)(n)1. does not provide a point of entry for Citizens’
policyholders to seek review of final rate orders issued by OIR.
Section 627.351(6)(n)1., provides:
Rates for coverage provided by [Citizens] must be
actuarially sound and subject to s. 627.062, except as
otherwise provided in this paragraph....
...proceedings, triggering judicial review under section 120.68(1).
See Sowell v. State, 136 So. 3d 1285, 1288 (Fla. 1st DCA 2014)
(“Final agency action is that which brings the administrative
adjudicatory process to a close.”).
7
§ 627.062(6)(a), Fla....
...If OIR determines a private
insurer’s proposed or charged rate 3 is excessive, inadequate, or
unfairly discriminatory, OIR must notify the insurer of its intent
to disapprove the rate, which constitutes “agency action” subject
to administrative challenge by the insurer. 4 § 627.062(2). Under
section 627.062(6)(a), when the insurer seeks administrative
review of this “agency action,” the entirety of the proceeding is
expedited, from the formal administrative hearing, to the
administrative law judge’s recommended order, to the agency’s
final order, and finally to judicial review with the appellate court.
§ 627.062(6)(a).
Notably, Citizens’ rates were formerly established in the
same manner as private insurers, but the process was amended
in 2007 to omit the step whereby OIR provided notice of its intent
to approve or disapprove the proposed rates....
...See
3 Private insurers may either file proposed rates for OIR’s
approval before they take effect (“file and use”), or begin using
the rates and make its filing for OIR’s approval within 30 days
after the effective date (“use and file”). § 627.062(2)(a).
4 While we do not face the question of whether a policyholder
could administratively challenge OIR’s notice of intent to approve
or disapprove a private insurer’s proposed rates, we find no
reported case in which this has occurred....
This Florida statute resource is curated by Graham W. Syfert, Esq., a Jacksonville, Florida personal injury and workers' compensation attorney. Attorney Syfert regularly works with Chapter 627 in the context of insurance coverage law and represents clients throughout Northeast Florida. For legal consultation, call 904-383-7448.
