Commercial insurers in Florida will no longer have to seek prior approval from state regulators before changing some of the rates they charge under a new law that took effect October 1.
Earlier this year, Florida lawmakers enacted a law deregulating rates for a number of commercial lines of insurance. Lawmakers supported the change at the request of the industry, which said the market is highly competitive and that employers are sophisticated enough to understand and negotiate for the coverage.
The new law extends to rates for motor vehicle fleets with less than 20 vehicles. It also deregulates rates on fiduciary and general liability, non-residential property and non-residential multi-peril, excess property and burglary and theft policies.
Commercial insurers still have to give notice to regulators of any rate change within 30 days and regulators 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 law also changes the documentation commercial insurers must maintain to support any rate change. Insurers are required to retain actuarial data about the commercial risk, but no longer underwriting files, premiums, losses and expense statistics. The actuarial data must be retained for two years and insures must bear the cost of an examination of the data by regulators.
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