The controversial Florida 516 Bill on motor vehicle liability policies is continuing to progress in the Florida State Senate, despite criticism from the National Risk Retention Association (NRRA).
On 26 April, the bill was approved by the Florida Senate by an 84-30 vote.
The legislation would change the definition of the term “motor vehicle liability policy” and also define the term “risk retention group (RRG)”.
It would also require RRGs writing commercial auto liability in Florida to carry a Financial Strength Rating of “A” or higher and be of a financial size category (FSC) of VIII, or above, from ratings company AM Best.
In recent weeks, the National Risk Retention Association (NRRA) has said the bill will have a “devastating impact” on every RRG writing commercial liability, including auto, if passed in its current form.
The association made the statement on 5 April in which it also predicted that the bill could see “hundreds, if not thousands of RRG owner-insureds lose their coverage.”
According to the NRRA, the proposed bill could halt the business of, or negatively impact, 96 per cent of the 140 RRGs registered in Florida.
“If history is any example, regulatory intervention calculated in response to the bill could actually disqualify or interfere in a number of ways with RRG commercial liability insurance,” it says.
If passed into law, the bill would go into effect on 1 July 2023. The National Council of Insurance Legislators has also opposed the bill as it stands.
