Florida Administrative Code › 69 - DEPARTMENT OF FINANCIAL SERVICES › 69O - OIR - Insurance Regulation › Chapter 69O-143 - DOMESTIC INSURERS › Section 69O-143.047 - Standards

Current through Reg. 50, No. 138; July 16, 2024
(1) Material transactions by registered
				insurers with their affiliates shall be subject to the following standards:
(a) The terms shall be fair and
				reasonable;
(b) Charges or fees for
				services performed shall be reasonable;
(c) Expenses incurred and payment received
				shall be allocated to the insurer in conformity with customary insurance
				accounting practices consistently applied;
(d) The books, accounts and records of each
				party to all such transactions shall be so maintained as to clearly and
				accurately disclose the precise nature and details of the transactions
				including such accounting information as is necessary to support the
				reasonableness of the charges or fees to the respective parties;
(e) The insurer's surplus as regards
				policyholders following any dividends or distributions to shareholder
				affiliates shall be reasonable in relation to the insurer's outstanding
				liabilities and adequate to its financial needs; and,
(f) For cost sharing services and management
				services, such agreements shall, as applicable:
1. Identify the person providing services and
				the nature of such services;
2. Set
				forth the methods to allocate costs;
3. Require timely settlement, not less
				frequently than on a quarterly basis, and compliance with the requirements in
				the National Association of Insurance Commissioner's Accounting Practices and
				Procedures Manual as adopted in subsection
				69O-137.001(4),
				F.A.C.;
4. Prohibit advancement of
				funds by the insurer to the affiliate except to pay for services defined in the
				agreement;
5. State that the
				insurer will maintain oversight for functions provided to the insurer by the
				affiliate and that the insurer will monitor services annually for quality
				assurance;
6. Define books and
				records of the insurer to include all books and records developed or maintained
				under or related to the agreement;
7. Specify that all books and records of the
				insurer are and remain the property of the insurer and are subject to control
				of the insurer;
8. State that all
				funds and invested assets of the insurer are the exclusive property of the
				insurer, held for the benefit of the insurer and are subject to the control of
				the insurer;
9. Include standards
				for termination of the agreement with and without cause;
10. Include provisions for indemnification of
				the insurer in the event of gross negligence or willful misconduct on the part
				of the affiliate providing services;
11. Specify that, if the insurer is placed in
				receivership or seized by the commissioner:
a.
				All of the rights of the insurer under the agreement extend to the receiver or
				commissioner; and,
b. All books and
				records will immediately be made available to the receiver or the commissioner,
				and shall be turned over to the receiver or commissioner immediately upon the
				receiver or the commissioner's request;
12. Specify that the affiliate has no
				automatic right to terminate the agreement if the insurer is placed in
				receivership; and,
13. Specify that
				the affiliate will continue to maintain any systems, programs, or other
				infrastructure notwithstanding the initiation of receivership proceedings
				pursuant to chapter 631, F.S., and will make them available to the receiver,
				for so long as the affiliate continues to be contractually and legally
				obligated to receive timely payment for the cost of services
				rendered.