The Florida legislature has approved legislation setting out new insurer solvency requirements while also requiring individuals to disclose information about any affiliated company.
Sponsored by Senator David Simmons (R-Altamonte Springs) and Representative Clay Ingram (R-Pensacola), the bill (SB 1308) closely follows a National Association of Insurance Commissioners (NAIC) model act developed after the 2008 financial crisis.
The bill touches on a number of areas with the goal of streamlining the regulatory oversight. It provides regulators with more information to determine an insurer’s overall financial status.
Florida Insurance Commissioner Kevin McCarty said the bill would help protect policyholders by ensuring that insurers are properly capitalized.
Central to the bill is a provision that requires holding companies to disclose information about their operations. A holding company must annually provide a risk report to regulators. The report must contain detailed information about the firm’s business plan, developments in its risk management programs and any rating agency information.
Insurers also file annual reports with actuarial opinions on reserves and actuarial summaries.
The bill also sets out new reporting requirements related to individuals divesting their financial position in a company or investing in a company.
Among the changes are the revised definition of a controlling person as one having 10 percent of the ownership or interest in an insurer. Previously, an individual needed to have 25 percent ownership or interest of an insurer.
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