Current through Reg. 50, No. 187; September 24, 2024
(1) The purpose of
this rule is to clarify what types of risks may be individually rated under
Section 627.062(3),
F.S., and the reporting requirements for those individually rated
risks.
(2) This rule applies to all
lines of property, casualty, and surety insurance except private passenger
automobile, homeowners, and workers compensation.
(3) Within the context of this rule:
(a) The term "individual risk" shall mean the
insurable interests of a single entity, i.e., a natural person, partnership,
corporation, or unincorporated association;
(b) The term "individually rated risk" shall
mean an individual risk for which an insurer provides coverage and which has
not been rated in accordance with the insurer's rates, rating schedules, rating
manuals, underwriting rules, and rating plans filed with the Office;
(c) The terms "refer to company," "(a)-rate,"
and "a-rate" shall all mean the act of individually rating a risk by an insurer
in a manner not in accordance with the insurer's rates, rating schedules,
rating manuals, underwriting rules, and rating plans filed with the Office;
and
(d) The term "large commercial
risk" shall mean a risk which meets any two or more of the following
conditions:
1. Employs at least 500 full-time
employees or their equivalent.
2.
Generates net revenue of at least $100 million in the latest fiscal year as
reported in audited financial statements.
3. Has a net worth of at least $50 million in
the latest fiscal year as reported in audited financial statements.
4. Pays annual property/casualty insurance
premiums of at least $500,000 in total for the following types of insurance:
a. Commercial property including allied
lines,
b. Commercial
auto,
c. Commercial general
liability.
5. Procures
insurance through a certified risk manager who shall have at least one of the
following credentials: ARM, CPCU, CRM, FRM, BA or higher degree in risk
management, or has at least seven years of experience in risk financing, claims
administration, loss prevention, or risk and insurance coverage
analysis.
6. Is a public entity
with a population in excess of 50,000.
7. Is a nonprofit organization or a public
entity with minimum annual budget of $45 million.
(4) For individually rated risks, that are
not large commercial risks as defined in paragraph (3)(d) of this rule, an
insurer shall:
(a) Maintain documentation
which identifies the named insured, the policy number, the annual statement
line, the classification of the risk, any special characteristics of the risk,
the reasons why the risk is being individually rated, and justification for the
individual rate, including any modifications to existing approved policy forms
used on the risk; the insurer shall maintain these records for a period of at
least five years after the effective date of the policy; and
(b) Complete quarterly reports in accordance
with Rule 69O-137.008,
F.A.C.
(5) The
characteristics of a large commercial risk shall be deemed sufficient for it to
be eligible for individual risk rating. For large commercial risks which are
individually rated, the insurer shall:
(a)
Maintain documentation to show that the risk meets the definition of a large
commercial risk as defined in paragraph (2)(d) of this rule. This documentation
must be maintained for a period of at least five years from the effective date
of the policy and is in lieu of the documentation required in paragraph (4)(a)
of this rule; and
(b) Complete
quarterly reports in accordance with Rule
69O-137.008,
F.A.C.
(6) The number of
employees, net revenue, net worth, annual property/casualty premiums,
population, or budget of a group of individual risks shall not be combined for
the purposes of meeting the definition of a large commercial
risk.
Rulemaking Authority 624.308(1) FS. Law Implemented
624.307(1), 624.418(2), 624.4211, 627.062(3)
FS.
New 8-2-00, Formerly
4-170.019.
