A move to deregulate a number of commercial lines of property/casualty insurance is making quiet progress in Florida.
The legislation, which has already passed the House by a unanimous vote, would exempt insurance pricing for motor vehicle fleets with less than 20 vehicles from state approval. It would also exempt errors and omission professional liability insurance, fiduciary and management liability, general liability, non-residential property and multi-peril coverage and excess property coverage.
The bill (HB 99) that would let insurers sell these coverages without obtaining prior Office of Insurance Regulation (OIR) is now in the Senate, where it is expected to be approved and then sent to the Gov. Rick Scott to be signed into law.
Last year, lawmakers passed a bill that allowed insures to sell commercial motor vehicle insurance on fleets of 20 or more vehicles without obtaining prior OIR approval. The rationale behind the change was that a market was available for the product and that the buyers would consist of large employers sophisticated enough to understand and negotiate for the coverage.
Under the bill, commercial insurers would still have to give notice to regulators of any rate change within 30 days. The OIR would still have the authority to sign-off on forms and conduct market exams to determine whether a company has the resources to pay claims.
The bill also changes what type of data insurers and rating organizations must retain to support the rates charged. Insurers would be required to retain actuarial data about the commercial risk, but no longer underwriting files, premiums, losses and expense statistics. The actuarial data would have to be retained for two years.
American Insurance Association Southeast regional Vice President Ray Farmer said this bill extending the rate deregulation to additional coverages and lines is the association’s top priority in Florida this year. “Florida’s businesses require and deserve a strong and vibrant property and casualty insurance market,” he said. “This bill will enable insurers to better and more quickly respond to the commercial needs of Florida’s businesses.”
Topics Florida Legislation Commercial Lines Business Insurance
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