Law Changes to Bring Insurance Rules
The Florida Legislature increased regulatory oversight over the insurance industry in its insurer accountability bill (SB 7052) as summarized separately in this report. The law changes will require the Office of Insurance Regulation to adopt a series of administrative rules. In several cases, the rulemaking process should result in rule workshops this summer as the OIR seeks to meet October 1, 2023, deadline for presenting proposed rules to the state’s Financial Services Commission.
Examination Scheduling— SB 7052 will require the OIR to adopt a rule related to its risk-based approach for scheduling insurer examinations. High-risk insurers will be examined at least once every three years, whereas other insurers will be examined every five years. The OIR must propose a rule and a plan for implementing the new examination schedule by October 1, 2023.
NAIC Financial Analysis Handbook— The OIR is authorized the NAIC Financial Analysis Handbook to the extent not inconsistent with the new examination requirements of SB 7052.
Market Conduct Examinations— The OIR is charged with adopting a rule related to scheduling market conduct examinations. The rule must prioritize examinations for insurers subject to certain regulatory actions in another state and insurers that have adverse ratios for certain types of complaints. The OIR must present its proposed rule to the Financial Services Commission by October 1, 2023.
Claims Manual Filing Requirement— The new bill grants emergency rulemaking authority for implementing the requirement for authorized residential property insurers to file their claims manuals by August 1, 2023, and annually thereafter by May 1. The emergency rules may be renewed during the pendency of subsequent rulemaking by the OIR to adopt permanent rules.
Temporary Suspensions of New Business Writings— SB 7052 envisions that the OIR will adopt a form by which authorized insurers must notify it before temporarily suspending writing new residential insurance policies in Florida. There is no defined time period for proposing the form or associated rule.
Determinations of Hazardous Financial Condition— The OIR is authorized, but not required, to adopt rules related to statutes governing administrative supervision and hazardous financial condition.
Mitigation Discounts— SB 7052 requires OIR to reevaluate mitigation discounts by January 1, 2025, and every five years thereafter. It is granted rulemaking authority to adopt rules and forms necessitated by the reevaluation.