Florida has introduced a new bill revising the state’s 2012 captive insurance law.
Committee Substitute for House Bill 1191 (CS/HB 1191) makes a number of changes intended to address any unintended consequences that may have resulted from the 2012 law.
In 2012 the Florida legislature passed Committee Substitute for House Bill 1101. The bill—that came into effect on 1 July 2012—made significant changes to captive insurance law in the state.
Current law states that industrial insured captive insurance companies can only insure the risks of the industrial insureds that comprise the industrial insured group and their affiliated companies.
According to the Florida Senate’s website: “[CS/HB 1191] broadens the entities that an industrial insured captive insurance company is allowed to insure to include the industrial insureds’ and affiliates’ stockholders or members, and affiliates thereof, or the stockholders or affiliates of the parent corporation of the captive insurance company.”
Bill CS/HB 1191 also allows an industrial insured captive insurance company with unencumbered capital and surplus of at least $20 million to be licensed to provide workers’ compensation and employer’s liability insurance in excess of $25 million in the annual aggregate.
Furthermore, the bill makes pure captive insurance companies responsible for adopting risk management standards for controlled unaffiliated business. The bill requires such pure captive insurers to submit these standards to the Office of Insurance Regulation for approval.
“This approach provides pure captive insurers with more flexibility than current law, which requires the Financial Services Commission to adopt such risk management standards by rule.”
“Finally, the bill corrects any inconsistency in current insurance law by exempting captive insurance companies from deposit requirements that now exceed the surplus requirements to for a captive,” said a recent analysis by House of Representatives staff.
CS/HB 1191 has been approved by the Senate and House of Representatives and is currently awaiting approval by the governor. If approved the provisions will take effect from 1 July 2013.
