69O-141.003. Plan of Correction

(1) The plan referred to in section 624.81(4), F.S., shall where applicable include the actions specified in subsection (2), below.

(2) The Office shall if applicable, and upon consent of the supervised insurer:

(a) Disregard any credit or amount receivable resulting from transactions with a reinsurer which is insolvent, impaired or otherwise subject to a delinquency proceeding;

(b) Make appropriate adjustments to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates;

(c) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor;

(d) Increase the insurer’s liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next twelve-month period;

(e) Reduce the total amount of an insurer’s present and potential liability for policy benefits by reinsurance;

(f) Reduce, suspend or limit an insurer’s volume of business being accepted or renewed;

(g) Reduce an insurer’s general insurance and commission expenses by specified methods;

(h) Increase an insurer’s capital and surplus;

(i) Suspend or limit the declaration and payment of dividends by an insurer to its stockholders or to its policyholders;

(j) Require an insurer to file reports clearly and accurately reflecting the market value of the insurer’s assets;

(k) Require an insurer to limit or withdraw from certain investments or to discontinue certain investment practices;

(l) Require an insurer to document the adequacy of premium rates in relation to the risks insured;

(m) Require an insurer to file, in addition to regular annual statements, interim financial reports;

(n) Impose restricted activities pursuant to section 624.83, F.S.; or

(o) Appoint a deputy supervisor to oversee and monitor the operations of the insurer.

(3) The requirements of a corrective plan will vary depending upon the specific circumstances surrounding the troubled situation. Some of the elements necessary for a corrective plan include but are not limited to the following:

(a) An executive summary identifying the objectives to be attained in the plan, with key implementation dates and a projected date for full statutory compliance;

(b) Background and description of the company, describing the insurer’s history, ownership structure, relationships with affiliates, management structure, key employees, and overall operating structure of the organization;

(c) The financial condition of the insurer, summarizing major categories of revenues and expenses, assets and liabilities, and debt and capital structure for the past two years based on actual results, and for the next three years based on forecasted results;

(d) The causes of the unsound or hazardous conditions giving rise to supervision proceedings;

(e) Corrective action required, identifying operational changes, contractual changes, management changes, and changes in internal control systems;

(f) Specific business plans by function, including current marketing plans, company operations such as claims processing, projected monthly financial forecasts for at least a two-year period and quarterly financial forecasts thereafter; and,

(g) Monitoring and reporting systems providing a periodic review of progress and comparisons of actual results with the corrective plan objectives.

(4) Any reports submitted to the Office pursuant to any approved corrective plan shall be electronically filed at http://www.floir.com/iportal unless otherwise indicated through a consent order. All other reports required by statute or rule shall be submitted in the manner required by such statute or rule, regardless of whether the insurer is in administrative supervision.

(5) Any notice, request, or other communication received by an insurer while in administrative supervision from any person acting for the Office, but not responsible for the administrative supervision, shall be reported to the person in the office responsible for the administrative supervision by the insurer within five (5) days of receipt.

Rulemaking Authority 624.308 FS. Law Implemented 624.307(1), 624.424, 624.610, 624.80, 624.81, 625.012, 625.172, 625.302, 625.330, 625.332, 625.338 FS. History–New 1-30-91, Formerly 4-93.003, Amended 5-5-92, Formerly 4-141.003, Amended 7-30-17.