This rulemaking will implement the changes made to section 440.381, F.S., by chapter 2022-138, L.O.F., requiring annual physical onsite audits when the workers compensation policy premium for employers with construction ....

 

DEPARTMENT OF FINANCIAL SERVICES

OIR – Insurance Regulation

RULE NO.:RULE TITLE:

69O-189.003Workers' Compensation: Application and Audit Procedures

PURPOSE AND EFFECT: This rulemaking will implement the changes made to section 440.381, F.S., by chapter 2022-138, L.O.F., requiring annual physical onsite audits when the workers compensation policy premium for employers with construction classes exceeds $10,000. In addition, the draft fixes references to the “National Council on Compensation Insurance’s (NCCI) Basic Manual, Florida State Special Audit Rules,” and adds language regarding the copyright on that document, as well as directions on how to access forms via web addresses.

SUMMARY: The proposed amendments will implement the changes made to section 440.381, F.S., by chapter 2022-138, L.O.F., requiring annual physical onsite audits when the workers compensation policy premium for employers with construction classes exceeds $10,000. The proposal also clarifies that the wording “voluntary market minimum audit requirements” to mean the “National Council on Compensation Insurance’s (NCCI) Basic Manual, Florida State Special Audit Rules,” which is the industry standard. The proposal adds references to where that manual may be found, and includes language required when referencing documents protected by federal copyright. All references to forms have been updated to include web addresses for quick access. Finally, the proposal removes wording requiring all employers and carriers to comply with the FWCJUA minimum audit requirements “as applicable” from (4)(a). These requirements are only applicable to the entities listed in (4)(c) and are more properly referenced there.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: Agency personnel familiar with the subject matter of the rule amendment have performed an economic analysis of the rule amendment that shows that the rule amendment is unlikely to have an adverse impact on the State economy in excess of the criteria established in Section 120.541(2)(a), Florida Statutes.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 440.381, 624.308(1) FS.

LAW IMPLEMENTED: 440.105(4)(b)5., 440.381, 624.307, 624.424(1)(c) FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Kama Monroe, Assistant General Counsel, Office of Insurance Regulation, [e-mail], [phone].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69O-189.003 Workers’ Compensation: Application and Audit Procedures.

(1)(a) Each employer applying to a carrier in the voluntary market for workers’ compensation coverage required by Section 440.38, F.S., shall use Form ACORD 130 FL (rev. 2019/07), “Florida Workers Compensation Application,” which is hereby adopted and incorporated by reference. The form shall be completed and submitted to the carrier with which the employer wishes to contract for coverage.

(b) A carrier wishing to use its own application form shall submit the form electronically to the Florida Office of Insurance Regulation (Office) at http://www.floir.com/iportal, and receive approval prior to its use.

1. through 2. No Change.

3. The application shall contain a sworn statement by the employer that which complies with Section 92.525, F.S., attesting to the accuracy of the information submitted.

4. The application shall contain a sworn statement by the agent attesting that which complies with Section 92.525, F.S., that the agent explained to the employer or officer the classification codes that are used for premium calculations.

(c) Each employer applying for workers’ compensation coverage in the Florida Workers’ Compensation Joint Underwriting Association (FWCJUA) shall use Form ACORD 130 FL (2019/07) unless the FWCJUA files and receives approval by the Office of Insurance Regulation to use a different application form in accordance with paragraph (1)(b). The FWCJUA shall submit any addendum to the application to the Office and receive approval prior to using. The completed application and all addenda shall be submitted to the FWCJUA at the address on the form.

(d) The Office has determined that posting the incorporated materials would be a violation of federal copyright law. Form ACORD 130 FL (rev. 2019/07), “Florida Workers Compensation Application,” is available:

1. from From ACORD at https://www.acord.org/home.; and,

2.For Form ACORD 130 FL is available for inspection during regular business hours at the Office of Insurance Regulation, Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0300.

(2)(a) An application complying with this rule is required for all policies having covered Florida exposure. For new business effective after the implementation of this rule, a carrier shall use an application that which complies with this rule. When this new business policy is renewed, the carrier is not required to obtain another application. These requirements also apply to policies written in other states where there is covered Florida exposure other than incidental Florida exposure.

(b) through (c) No Change.

(3)(a) Each employer in the voluntary market or the FWCJUA may be required by their carrier to submit Form ACORD 175-FL (rev. 3/97), “Florida Workers’ Compensation Monthly Change Sheet,” which is hereby adopted and incorporated by reference. Carriers may use their own monthly change sheet containing the same information shown on the adopted form. This form is used to reflect any change in the required application. The monthly change sheet is applicable to new and renewal policies that which have been issued with an application that complies with this rule. It is not necessary for an employer to submit a monthly change sheet if there are no changes to report.

(b) The Office has determined that posting the incorporated materials would be a violation of federal copyright law. Form ACORD 175-FL (rev. 3/97), “Florida Workers’ Compensation Monthly Change Sheet,” is available: from the Association for Cooperative Operations Research and Development (ACORD), 150 Clove Road, Little Falls, New Jersey 07424, at https://www.acord.org/home.  Form ACORD 175-FL is available for inspection during regular business hours at the Office of Insurance Regulation, Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0300.

(4)(a) In order to ensure that the appropriate premium is charged for workers’ compensation coverage, each employer and carrier shall comply with:

1. No Change.

2. The current As applicable, the voluntary market minimum audit requirements and FWCJUA minimum audit requirements as set forth in the” NCCI Basic Manual (pages 120-125), Florida State Special Audit Rules”, approved for use by the Office effective 1/24, and hereby incorporated by reference. The Office has determined that posting these incorporated materials would be a violation of federal copyright law. The “NCCI Basic Manual (pages 120-125), Florida State Special Audit Rules” is available from the National Council on Compensation Insurance (NCCI) 901 Peninsula Corporate Circle, Boca Raton, Florida 33487-1362 at https://www.ncci.com/pages/default.aspx, and for inspection during regular business hours at the Office of Insurance Regulation, Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0300. paragraphs (4)(b) and (4)(c), below.

(b) Each voluntary market carrier and each employer covered by a voluntary market carrier shall comply with the following minimum audit requirements at the expiration of each policy:

1. Final audits shall be conducted for both new and renewal policies as follows:

a. No Change.

b. For policies with an estimated annual premium of $1 to $9,999 to $1, a final mail or physical audit shall be completed annually on all risks regardless of governing classification;

c. No Change.

d. For all renewal business policies having construction classifications, a final physical onsite audit shall be conducted annually if the estimated annual premium is $10,000 $5,000 and over; and,

e. No Change.

2. through 5. No Change.

(c) through (f) No Change.

(g) Signatures.

1.a. A carrier, in order to comply with the signature requirements as provided in Section 440.381(3), F.S., shall use, as applicable:

(I) Form OIR-B1-1562 (rev. 7/03), “Partner’s, Sole Proprietor’s or Corporate Officer’s Statement,” hereby incorporated by reference and available at https://www.flrules.org/Gateway/reference.asp?No=Ref-16780. The form may be obtained from https://www.floir.com/iportal;

(II) Form OIR-B1-1561 (rev. 7/03), “Statement of Individual Providing Audit Information (other than Partner, Sole Proprietor or Corporate Officer)” hereby incorporated by reference and available at https://www.flrules.org/Gateway/reference.asp?No=Ref-16781. The form may be obtained from https://www.floir.com/iportal; and,

(III) Form OIR-B1-1560 (rev. 7/03), “Auditor’s Statement,.” hereby incorporated by reference and available at https://www.flrules.org/Gateway/reference.asp?No=Ref-16782. The form may be obtained from https://www.floir.com/iportal.

b. through c. No Change

2.a. A carrier wishing to use its own signature forms shall submit the forms electronically to Property and Casualty Product Review at https://iportal.fldfs.com, and receive approval prior to use.

b. At a minimum the forms shall contain all text as it appears on:

(I) Form OIR-B1-1562 (rev. 7/03), “Partner’s, Sole Proprietor’s or Corporate Officer’s Statement”

(II) Form OIR-B1-1561 (rev. 7/03), “Statement of Individual Providing Audit Information (other than Partner, Sole Proprietor or Corporate Officer)”; and,

(III) Form OIR-B1-1560 (rev. 7/03), “Auditor’s Statement.”

3. No Change

Rulemaking Authority 440.381, 624.308(1) FS. Law Implemented 440.105(4)(b)5., 440.381, 624.307, 624.424(1)(c) FS. History–New 8-1-91, Formerly 4-28.007, Amended 10-3-95, 10-10-96, 1-15-98, 11-21-00, 11-5-02, 9-22-03, Formerly 4-189.003, Amended 3-29-05, 3-10-10, 12-26-19, ___________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Kama Monroe, Assistant General Counsel

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: December 17, 2024

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: October 31, 2024