Current through Reg. 50, No. 187; September 24, 2024
(1)
Licensing procedures pursuant to Section
120.60, F.S., and in accordance
with the model rules of procedure shall apply to this application.
(2) All applications for a self-insurers fund
shall be made in writing on OIR Form BSI-2.
(3) All applications shall be accompanied by:
(a) A properly completed indemnity agreement
in accordance with Rule
69O-190.068, F.A.C.
(b) A properly executed Self-Insurer's Surety
Bond on OIR Form BSI-4, pursuant to Rule 69O-190.032 and subsection
69O-190.060(4),
F.A.C., or proof of cash securities pursuant to Rule 69O-190.033, F.A.C., and
in amounts pursuant to Rule
69O-190.060, F.A.C.
(c) Copies of acceptable excess insurance
policies pursuant to Rule 69O-190.035, F.A.C., with limits and retentions
pursuant to Rule 69O-190.061, F.A.C., and
endorsements pursuant to Rule 69O-190.036, F.A.C.
(d) A fidelity bond or insurance policy
pursuant to subsection
69O-190.064(5),
F.A.C.
(e) A fidelity bond or
insurance policy covering the service company pursuant to subsection
69O-190.064(7),
F.A.C.
(f) A certification from a
designated depository attesting to sufficient monies on hand in order for the
fund to meet initial obligations pursuant to paragraph
69O-190.056(5)(c),
F.A.C.
(g) Proof of servicing
pursuant to Rule 69O-190.031, F.A.C.
(h) Copies of the fund by-laws or trust
agreement and written policies pursuant to subsections
69O-190.064(2), (3) and
(4), F.A.C.
(i) Membership applications executed on OIR
Form BSI-3 or its equivalent complete with declarations and financial
statements pursuant to Rule
69O-190.059, F.A.C. Funds must
use the BSI-3 unless prior approval of the Office has been granted for use of
an alternate form. Such alternate form must contain all information contained
on the BSI-3, but may ask for additional information or use a different format.
Approval will be granted if the alternate form contains all required
information. OIR Form BSI-3, or its equivalent, shall be used for all new
business. OIR Form BSI-3, or its equivalent, shall be used for all renewal
business for twelve consecutive months. The use of this form for new and
renewal business must commence within sixty (60) days of the date of this rule.
A copy of this form may be obtained from the Bureau of P & L Insurer
Solvency, Tallahassee, Florida.
(j)
Proof that the initial membership of the fund have the combined financial
conditions and combined premiums as specified in paragraph (m) of this
section.
(k) The name of the
attorney, certified public accountant, and actuary representing the
fund.
(l) A completed Estimated
Breakdown of Policy Year Expenses on OIR Form BSI-21.
(m) Each self-insurers fund shall submit a
current financial statement on each member at the inception of the
self-insurers fund showing the combined net worth of all members applying for
coverage to be not less than $1,000,000, each member shall have a current ratio
which is the median for the self-insureds standard industry code as published
in the 1992 edition of the Robert Morris Associates Annual Statement Studies.
An audited financial statement or a financial statement properly certified by
an officer, owner or partner for all members joining the self-insurers fund
after the inception date shall be submitted to the Office with the application
for membership until such time as an audited financial statement is available
for the self-insurers fund as a whole. In no event shall the cumulative net
worth or current ratio of the combined assets and liabilities of all members be
less than the minimum amounts currently required for a fund to
qualify.
(n) Each applicant shall
submit a feasibility study, prepared by an independent qualified actuary and an
independent certified public accountant to satisfactorily address market
potential, market penetration, market competition, operating expenses, gross
revenues, net income total assets and liabilities, cash flow, and such other
items as the division may require. The study shall be for the greater of 3
years or until the arrangement has been projected to be profitable for 12
consecutive months. The feasibility study must reflect and support all premium,
reserve, and other financial requirements with which the fund must
comply.
(4) Upon receipt
of the application and other required materials, the Office will investigate
the application and will request any additional information which is required
in a letter to the applicant.
(5)
The financial condition of the proposed fund shall be determined in light of
the following:
(a) In considering the
financial strength and liquidity of the group as evidence of ability to pay
normal compensation claims promptly, the Office will take into consideration
contracts or policies of aggregate excess liability insurance secured in
accordance with Rule 69O-190.061, F.A.C.
(b) The trustees shall satisfy the Office
that the normal premiums of the self-insurers fund will be at least $500,000
for the first and succeeding years of operation.
(c) The trustees shall submit at least ten
(10) days prior to the proposed effective date, positive proof that the members
have paid into a common claims fund in a designated depository, cash premiums
in an amount of not less than $125,000 or twenty-five percent (25%) of the
estimated annual standard premium of the members at inception, whichever amount
is greater. The remainder of the deposit premiums shall be collected based on
the schedule adopted by the trustees.
(6) If the initial contract for aggregate
excess insurance contains a minimum loss fund or retention provision in excess
of $70,000 then the trustees must submit with their initial filing, in addition
to those of the members at inception, signed member agreements evidencing
additional earned normal premium for the first year of operation sufficient to
meet the minimum loss fund. These additional agreements may have varying
effective dates.
(7) No applicant
shall have an aggregate excess contract which provides for a minimum loss fund
or retention greater than the product of the aggregate retention percentage and
the normal premium of the members submitting signed agreements.
(8) Prior to making a final determination on
the approval or denial of the application, the Office may schedule an informal
conference in Tallahassee. In the event a meeting is scheduled, the board of
trustees of the prospective fund, its administrator, a representative of the
service company, its attorney, and its CPA shall meet with the representative
of the Office to discuss any matters relevant to the qualification of the fund.
A time and date that is mutually agreeable will be selected within the
statutory time frame established by Chapter 120, F.S., for the approval and
denial of the application.
Rulemaking Authority 440.38(2)(b), 440.591, 624.4621(3) FS.
Law Implemented 440.38(1)(b),
(2)(b),
624.4621
FS.
New 10-1-82, Amended 12-25-84, Formerly 38F-5.56, Amended
6-12-91, 12-19-93, Formerly 38F-5.056,
4-190.056.
