Florida Administrative Code › 69 - DEPARTMENT OF FINANCIAL SERVICES › 69O - OIR - Insurance Regulation › Chapter 69O-190 - RULES FOR SELF-INSURERS UNDER THE WORKERS' COMPENSATION ACT › Section 69O-190.066 - Premium Billing and Collection

Current through Reg. 50, No. 138; July 16, 2024
(1) The
				trustees shall not allow a premium discount to any member for the period
				beginning on September 1, 1990 and ending on December 31, 1991. Beginning on
				January 1, 1992, if a self-insurer's fund allows premium discounts to its
				members, the trustees shall allow a premium discount to each member as follows:
First
$5,000 of standard premium
0%
Next
95,000 of standard premium
10.9%
Next
400,000 of standard premium
12.6%
Over
500,000 of standard premium
14.4%
It is the intention of the Office that these discounts be
				  identical to the rates approved by the Office of Insurance for voluntary stock
				  premium discounts. The trustees may not authorize a discount in excess of that
				  allowed by the fund's excess insurer in determining the excess policies'
				  premium and retention.
(2)
				In no event shall a fund using a dividend to offset billed premium make any
				representation to a member or a potential member that this dividend constitutes
				an additional advance discount. Premium reported to the Office shall be normal
				premium.
(3) If in any given fund
				year, the self-insurers fund will have an unfunded contingent liability, then
				no advance discount to members shall be allowed that year until the liability
				is funded.
(4) In determining "net
				premiums" on which Administrative and Special Disability Assessments are
				computed pursuant to Sections
				440.49(2)(h)
				and 440.51, F.S., self-insurers
				funds shall use amounts collected after both advance discounts and refunds. In
				no event shall the fund be allowed to deduct more than 15 percent from standard
				premium when calculating net premium.
(5) The trustees shall make all reasonable
				efforts to collect delinquent premiums. The trustees shall establish premium
				payment schedules which provide for premium payment dates, corresponding
				amounts due, and a basis for determining when unpaid premiums are to be
				considered delinquent. Copies of all payment schedules shall be filed with the
				Office within 30 days after implementation.
(6) The trustees at their discretion may
				establish any payment schedule that adequately provides for sufficient cash
				flow and that gives proper consideration for the potential adverse effects of
				delinquent premium on fund solvency. Payment schedules, other than preferred
				payment plans, shall require that a member's annual pro-rata normal premium is
				payable in full upon presentation of the final annual billing. Such billings
				shall include credits for amounts already paid and may include credits for any
				dividend or administrative savings allowed. The Office reserves the right to
				order modification of any payment schedule contrary to these rules or which it
				determines will adversely affect the fund's liquidity or solvency.
(7) The trustees may establish preferred
				payment plans for certain members which allow these members to pay a premium
				other than normal premium. Each member participating in a preferred payment
				plan shall enter into a contract or agreement which sets forth the terms and
				conditions of the plan. Such payment plans shall be subject to the following
				conditions:
(a) All proposed plans including
				the proposed contract or agreement shall be submitted to and approved by the
				Office prior to implementation. In approving or disapproving a plan, the Office
				shall determine if the plan complies with this rule. Additionally, all
				revisions to the approved plan, contract, or agreement shall be submitted to
				the Office and approved prior to implementation.
(b) The plan shall establish a minimum normal
				premium that a member must pay to qualify for participation in the
				plan.
(c) The fund shall conduct a
				reasonable financial review of any employer desiring to participate in the plan
				for the purpose of determining that the member is financially sound. A
				description of the financial review shall be part of the plan. Only financially
				sound employers may participate in these plans.
(d) The plan and contract or agreement shall
				require that each participant shall pay to the fund a portion of the total
				fixed expenses for the fund. At the beginning of each policy year in which the
				plan is offered, the fixed expenses associated with the fund's operation shall
				be calculated.
1. The minimum fixed expense
				shall be based upon the portion of the fund's estimated annual normal premium
				in excess of the aggregate retention or loss fund. The percentage of the
				estimated annual normal premium determined by the fixed expenses of the fund
				shall be applied to the estimated annual normal premium of each member in the
				plan to determine the minimum pro-rata fixed expenses to be paid to the fund by
				each participant.
2. The fixed
				expenses owed by each participant may be greater than the minimum but shall be
				fixed at policy inception and adjusted on final audit only to reflect changes
				in the member's audited normal premium. Expenses which are allowable charges to
				the aggregate excess contract loss fund may be deducted from the member's
				claims deposit.
3. Each fund shall
				adopt a fixed expense charge which it shall apply to all members of the
				preferred payment plan during a given fund year. The fund may elect to apply an
				expense charge which is greater than the actual expense factor of the fund but
				this charge shall be uniformly applied to all preferred payment plan members in
				a given year.
(e) If the
				plan allows the member to pay less than the earned normal premium upon final
				audit, then the plan shall require, at a minimum, that the member provide
				security to the fund for the difference between the premium actually paid and
				the member's annual normal premium. After the end of the policy year, the
				security may be reduced to the amount of the member's outstanding claims
				reserves. Such security may be surety bonds, cash security, letters of credit,
				or other methods approved by the Office. This security shall be adjusted
				annually to reflect current incurred loss, claims payments, and lump sum
				settlements. The fund shall establish a reserve for the amount of the
				outstanding claims reserves.
(f)
				The plan shall establish a minimum and maximum premium that each member shall
				be subject to for each policy period in the plan.
1. The minimum premium shall be greater than
				or equal to the sum of the fixed expenses established pursuant to paragraph
				69O-190.066(8)(d),
				F.A.C., and the cost of all claims incurred net of excess recoveries.
2. The maximum premium shall not be less than
				115% of the member's standard premium. The maximum premium established by the
				fund shall be the most any member shall be required to pay the fund for
				coverage except for assessments made pursuant to the fund's indemnity
				agreement.
3. The fund shall
				collect a deposit premium which shall be at least equal to the amount of the
				claims deposit plus a pro-rata portion of the expense charge. This deposit
				premium shall be paid prior to the beginning of the member's participation in
				the plan in a given year.
(g) The plan shall require that the member
				forfeit any dividends paid by the fund for the period the member participated
				in the plan.
(h) The participation
				in the plan by a member shall be terminated by the fund if the member's
				financial condition deteriorates to the point where its ability to meet future
				financial obligations is in doubt. The fund shall maintain a file for each
				participant, and such file shall be made available to Office personnel upon
				request. Each file shall contain, but shall not be limited to, financial
				statements or audited financial statements for each member's three (3) most
				recent fiscal years.
(i) The plan
				shall provide that the member provide a cash deposit out of which the fund will
				pay the member's claims. Such deposit shall be reviewed by the fund at least
				quarterly and increased or decreased to reflect the actual claims paid by the
				fund on behalf of the member.
1. Each member
				shall be billed monthly for any claims paid by the fund during the previous
				month. It is the intent of this rule that funds should use only the preferred
				payment plan claims deposits or collateral to pay preferred payment plan
				claims.
2. Cash claims deposits
				shall be treated as a liability for accounting purposes and payments made from
				cash deposits shall be accounted for separately by fund year.
3. A fund may elect to use a loss conversion
				factor or factors when billing members for reimbursement of the cash claims
				deposit. These factors will require that the members reimburse the fund for the
				actual amount of claims paid plus an additional fixed percentage of the amount
				paid. The loss conversion factors shall be a part of the plan and shall be
				fixed for any given policy year. If more than one factor is to be used by the
				fund, the plan shall explicitly state the criteria for applying a specific
				factor to an individual member.
4.
				The fund may limit the liability of a member to reimburse the fund for actual
				claims payments by capping the cost associated with a given claim at the fund's
				specific excess retention. No other limit shall be used to cap the members'
				liability to reimburse the fund on individual claims. If the contract period
				for a member's participation in the preferred payment plan includes two or more
				specific retentions, then the contract shall be amended to reflect the actual
				specific retentions in effect during the preferred payment plan contract
				period. The loss limits specified in this paragraph shall not affect or amend
				the maximum premium required in paragraph (f).
(j) The plan shall provide that any claims
				reserves, less specific excess recoveries, outstanding when a member leaves the
				fund, shall be paid in full by the member or shall be guaranteed by security
				acceptable to the Office.
(k) The
				fund's aggregate excess policy shall provide that the retention be determined
				by using the premium paid or if normal premium is used, then the fund shall
				establish a reserve funded from surplus in the amount of the difference between
				normal premium and premium paid.
(l) The fund shall limit the participation in
				the plan to insure that it has adequate liquidity. In no event shall the fund
				allow more than 25 percent of its premium in these plans. Such percentage shall
				be determined by calculating the participating members' normal premium and
				expressing this amount as a percentage of the fund's total normal
				premium.
(m) The fund shall report
				to the Office, as part of its Quarterly Status Reports or annual financial
				statement, the number of employers participating in the plan, their equivalent
				normal fund premium, the amount of premium paid in, the amount of claims paid,
				the amount of reserves outstanding and the amount of any delinquent premium.
				The Preferred Payment Plan Quarterly Status Reports shall be filed on OIR Form
				BSI-30.
(n) The fund shall pay its
				assessments on the basis of normal premium for any employers participating in
				the plan.
(o) The Office reserves
				the right to order the preferred payment plans terminated if it determines that
				the continuation of the plan would adversely affect the solvency of the fund or
				if the fund fails to comply with the provisions of this rule. All approvals for
				preferred payment plans shall be for a single fund year only. Plans or any
				amendments to previously filed plans shall be filed annually and be subject to
				approval of the Office in the same manner as and according to the same criteria
				used for approving new plans. If a fund wishes to continue a plan with no
				changes from the previous year, then the fund may advise the Office in writing
				and the fund need not make any additional filing for that year.
(p) Any claims remaining open two years after
				the end of the policy period in which they were incurred may be commuted into a
				lump sum payment by the employer at the request of the fund or at the request
				of the employer and with the concurrence of the fund.