Insurance News

Florida restores surplus lines rate and form exemption

Posted on: June 17, 2009

TALLAHASSEE, Fla.—Florida Gov. Charlie Crist on Thursday signed into law a measure restoring the surplus lines industry’s traditional exemption from rate and form regulation in the state.The Florida Supreme Court put the exemption into question last year when it ruled in Essex Insurance Co. vs. Mercedes Zota, et al , that surplus lines was only exempt from the rating section of Chapter 627 of Florida’s insurance statute but was subject to the chapter’s other provisions.

If allowed to stand, the high court’s ruling could have required surplus lines insurers to get state approval for their policies, similar to admitted insurers.In addition to clarifying regulation of surplus lines, H.B. 853 also adds various consumer protections and customer disclosure requirements. Effective Oct. 1, for example, policies must contain a notice that surplus lines policy rates and forms are not approved by any Florida regulatory agency. The law’s regulatory exemption is retroactive to Oct. 1, 1988, the date the Florida Supreme Court ruled previous legislation initiated the exemption of rate, but not form, regulation.

Copyright © 2009 Crain Communications, Inc.

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