Governor Scott Signs Bill Reducing Commercial Rate Regulation
Governor Rick Scott has signed HB 99 into law, reducing Florida’s regulation of commercial insurance rates. In 2010, the legislature amended section 627.062 to provide that limited types of commercial insurance rates are not subject to prior regulatory approval. Instead, insurers writing the listed types of products can implement rate changes subject to a notice requirement and to the Office of Insurance Regulation’s ability to follow up regarding the actuarial support. The legislature also made a corresponding change to the commercial auto insurance ratemaking requirements at section 627.0651.
This year, the legislature expanded the list of commercial insurance products that are exempt from prior rate approval. These products include general liability, nonresidential property (except collateral protection), nonresidential multi-peril, excess property, and burglary and theft. In the auto ratemaking statute, the legislature eliminated a requirement that limited the prior law’s exemption to fleets of 20 or more vehicles.
An insurer implementing rate changes in the exempted lines must notify the Office of Insurance Regulation within 30 days of the effective date of the change. The insurer also must maintain the underlying actuarial support for two years from the effective date, and the OIR may choose to examine the rates to confirm that the rates are not excessive, inadequate, or unfairly discriminatory.
The new law is effective October 1, 2011.