The Office of Insurance Regulation is updating Chapter 69O-199.

 

DEPARTMENT OF FINANCIAL SERVICES

OIR – Insurance Regulation

RULE NOS.:RULE TITLES:

69O-199.005Financial Requirements Regarding the Funded, Unearned Premium Reserve Account

69O-199.008General Eligibility Requirements

69O-199.012Annual Statement

PURPOSE AND EFFECT: The Office of Insurance Regulation is updating Chapter 69O-199, F.A.C.

SUMMARY: Rule 69O-199.005, F.A.C. is amended to update the financial requirements. Rule 69O-199.008, F.A.C. is amended to combine all application requirements in a single rule. Rule 69O-199.012, F.A.C. is amended to update the annual statement requirements.

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: 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: 634.002 FS.

LAW IMPLEMENTED: 624.307, 624.424, 634.304, 634.306, 624.307, 634.3073, 634.3077, 634.313, 634.315 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: Michael Lawrence, Jr., Chief Legal Counsel, Office of Insurance Regulation, [e-mail], [phone].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69O-199.005 Financial Requirements Regarding the Funded, Unearned Premium Reserve Account.

(1)(a) “Gross premium” means the total amount of premium paid by the consumer, inclusive of commissions.

(b) “Gross Written Premiums” means the total amount of premiums paid by the consumer, inclusive of commissions for which the association is obligated.

(c)(b) “Obligated” means outstanding warranties in force which have not expired or been canceled and a refund made to the consumer.

(2)(a) No change.

(b) The serially numbered contract shall include:

1. through 4. No change.

5. Warranty period; and,

6. No change.

(c) No change.

(3) Each home warranty association shall maintain a warranty register, which shall include at least the following items:

(a) through (f) No change.

(g) Commission to sales representative; and,

(h) No change.

(4) “Gross premium” means the total amount of premium paid by the consumer, inclusive of commissions.

(4)(5) The unearned premium reserve account is calculated as follows: the minimum reserve for all home warranty associations shall be 25 percent of the gross written premium for which the association is obligated on all contracts, issued in this any state.

(5)(6) The unearned premium reserve account shall be totally funded and identified at all times by unencumbered assets. Those prescribed assets funding the unearned premium reserve shall be clearly designated for this purpose and such reserve account must be a separate auditable account for contracts in force in this state.

(6)(7) The ratios required by section 634.3077(2), F.S., are net assets to gross written premiums for which the association is obligated, wherever written, in any state, except that the ratio of net assets to gross written premiums may be less if the association has net assets of not less than $500,000 and maintains a funded, unearned premium reserve account equal to a minimum of 40 percent of the gross written premiums received by it from all warranty contracts in force in this state.

Rulemaking Authority 634.302 FS. Law Implemented 634.3077 FS. History–New 7-16-92, Formerly 4-199.005, Amended _________.

 

69O-199.008 Application for License and License Renewal. General Eligibility Requirements.

Substantial rewording of Rule 69O-199.008, F.A.C. follows.  See Florida Administrative Code for present text.

(1) Application for License as a Home Warranty Association

(a) An application for a person applying for a license as a home warranty association consists of the following:

1. Form OIR-C1-490, “Application for License Home Warranty Association,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

2. Form OIR-A3-455, “Home or Service Warranty Association Surety Bond,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

3. Form OIR-C1-144, “Service of Process Consent & Agreement,” effective 6/04, hereby incorporated by reference and available at www.flrules.org/XXXXX;

4. Form OIR-C1-905, “Instructions for Furnishing Background Investigative Reports,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

5. Form OIR-C1-938, “Fingerprint Payment and Submission Procedures,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

6. Form OIR-C1-969, “Contractual Liability Policy,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

7. Form OIR-C1-995, “List of Proposed Sales Representatives,” effective 10/05, hereby incorporated by reference and available at www.flrules.org/XXXXX;

8. Form OIR-C1-1423, “Biographical Affidavit,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX; and

9. Form OIR-C1-2221, “Management Information Form,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX.

(b) A person applying for a license as a home warranty association shall submit the forms listed in paragraph (1)(a) as directed by the Office electronically at https://www.floir.com/iportal.

(2) Annual License Renewal

(a)1. All home warranty association licenses shall expire on June 1.

2. Failure to submit the application for continuance by June 1 shall result in expiration of the license and will require the filing of a new application for licensure.

(b) A licensee seeking to continue operating as a home warranty association shall submit the following:

1. Form OIR-A3-1073, “Application for Renewal of License Home Warranty Association,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX, filed electronically at https://www.floir.com/iportal and

2. A fee of $200.00 filed annually in conjunction with the June 1 filing of the Annual Statement.

(c) Any licensee who fails to renew a home warranty association license shall immediately cease and desist from engaging in the home warranty business in the state of Florida. The home warranty association shall honor those home warranty contracts in force until the date of expiration or the date of cancellation and a refund is made to the consumer.

Rulemaking Authority 634.302 FS. Law Implemented 624.424, 634.304, 634.306, 624.307, 634.3073, 634.315 FS. History–New 7-16-92, Amended 4-3-94, Formerly 4-199.008, Amended 7-30-17, _________.

 

69O-199.012 Annual Statement.

(1)(a) An Annual Statement Report shall be filed with the Office of Insurance Regulation, on or before March 1 of each year, on Form OIR-A3-491, “Annual Statement for Home Warranty Association,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX.  The filings shall be submitted electronically via the Office’s system at https://www.floir.com/iportal. on the form prescribed by the Office in rule 69O-199.015, F.A.C.

(b) If the Annual Statement statement does not include all information requested in the format provided, it will not be deemed filed until all deficiencies are corrected.

(2) A late filing fee will be assessed in accordance with rule chapter 69O-207, F.A.C., for each company that has not filed a complete Annual Statement annual statement in accordance with this rule.

(3)(a) Any request for an extension of filing the Annual Statement annual report shall be in writing and the reason(s) for the extension explained in detail.

(b) All requests for extension must be filed with the Office fifteen (15) days prior to the deadline date for filing the annual report.

(c) Any request for extension request received less than fifteen (15) days prior to due date will be denied except for unavoidable circumstances, which include for example:

1. through 2. No change.

(4) All filings shall be submitted electronically at http://www.floir.com/iportal.

Rulemaking Authority 634.302 FS. Law Implemented 624.307(1), 624.424, 634.313 FS. History–New 7-16-92, Amended 4-3-94, Formerly 4-199.012, Amended 7-30-17, _________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Michael Lawrence, Jr., Chief Legal Counsel

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

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: February 2, 2021

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: September 29, 2020