OIR Creates Review Exemption for Commercial Forms
The Florida Office of Insurance Regulation (OIR) has created a process for insurers writing many lines of commercial insurance to use new or revised forms without having to obtain the OIR’s prior approval. The OIR has adopted an Order dated April 9, 2012 describing the exemption from the forms review process. The process is optional, and any insurer wanting to avail itself of the review and approval process may continue to do so. By its terms, the Order is in effect for one year.
Over the last two legislative sessions, the Florida legislature has exempted many lines of commercial insurance from prior rate approval. The OIR has continued to review forms in these lines but recognizes that purchasers of commercial insurance tend to be sophisticated parties capable of reviewing the terms and conditions of their insurance coverage. With limited resources in the product review section, the OIR has capitalized on an opportunity to reduce its workload by exempting the same lines of insurance from forms review as the legislature has targeted for reduced rate review. Those lines of insurance are:
Surety and fidelity;
Boiler and machinery and leakage and fire extinguishing equipment;
Errors and omissions;
Directors and officers, employment practices, fiduciary liability, and management liability;
Intellectual property and patent infringement liability;
Advertising injury and Internet liability insurance;
Property risks rated under a highly protected risks rating plan;
General liability;
Nonresidential property, except for collateral protection insurance as defined in section 624.4085;
Nonresidential multiperil;
Excess property; and
Burglary and theft.
To avail itself of the exemption, an insurer must submit its forms to the Office of Insurance Regulation thirty (30) days prior to ussing the form. The filing must include a certification from the company president, chief executive officer, general counsel, or chief compliance analyst stating that the company has diligently reviewed the form for compliance with applicable laws. The OIR has adopted a format for this certification and has specified that insurers cannot deviate from it. If the forms in a filing will revise forms already in place, the insurer also must provide a fully completed Notice of Change in Policy Terms with the filing. This is the new notice adopted by the 2011 legislature allowing insurers to make changes to renewal policies, without having to technically nonrenew them, as long as all of the changes are specified in the notice. The OIR may preclude a company from availing itself of the exemption if it does not provide a proper certification, and the OIR may take regulatory action against an insurer whose forms do not comply with Florida law.