Fla. Admin. Code Ann. R. 69O-187.005 - Solvency of the Self-Insurance Trust Fund and Trustees' Responsibilities

The Trustees of the Fund shall be responsible for all operations of the Fund and shall assure the financial stability of the operations of the Fund by taking all necessary precautions to safeguard the assets of the Fund, including:

(1) Providing for adequate methods of funding to meet anticipated and incurred losses. The method of funding shall be based upon a pre-determined plan which may include underwriting classifications, geographic territories, and experience modifications.

(2) Exercising active efforts to collect delinquent accounts resulting from any unpaid premiums, charges, and assessments by members. Any member of the Fund who fails to pay the required premiums, charges, and assessments after due notice shall be ineligible for membership until such past due account, including cost of collection, if any, has been paid.

(3) Prohibiting the Trustees or the Service Agent of the Fund from utilizing any of the monies collected for any purpose other than the payment of claims, claims expenses and Fund expenses. Further, the Trustees and the Service Agent of the Fund shall be prohibited from borrowing any monies from the Fund.

(4) Investing any funds not held in cash accounts, but such investments shall be limited to the following:

(a) Securities issued by the U.S. Government or U.S. Government agencies, including bonds, bills, and notes which are guaranteed by the U.S. Government.

(b) Investment share accounts, money market accounts, certificates of deposit, and similar instruments or accounts in or issued by any savings and loan association or duly chartered bank whose deposits are insured by a federal agency. Such investments shall not exceed the federally insured amount.

(c) Securities issued by any state, any county, district, or incorporated district therein, including bonds, notes, and tax exempt securities which are the direct obligations of such state, county, district, or city and for payment of the principal and interest of which the state, county, district, or city has lawful authority to levy taxes or make assessments and revenue securities insured by a recognized insurance association. Such securities with the exception of revenue securities shall be of investment grade meaning of the top three generic letter rating classifications by a securities rating agency. Revenue securities shall be of the top investment grade. "Securities rating agency" means Moody's Investors Service, Standard and Poor's Corporation, Duff and Phelps, Inc., or any successor organization of the aforementioned companies. Further limitations on such securities shall be as follows:

1. At any time a Fund may invest up to one-hundred (100) percent of the Fund's invested assets in the highest rated investment grade.

2. At any time no more than fifty (50) percent of the Fund's invested assets may be invested in the second or third highest investment grade.

3. At any time no more than twenty-five (25) percent of the Fund's invested assets may be invested in the third highest investment grade.

4. No more than five (5) percent of the Fund's assets shall be invested in any one issuer.

(d) Other investment alternatives, subject to Office approval, if such alternative investments provide the same or similar degree of security as the investments permitted under paragraphs (a), (b) and (c), above.

(e) Other investment alternatives may be considered for Funds with assets exceeding on hundred million dollars on a special consent basis and only with Office approval.

(5) Obtaining and maintaining a fidelity bond covering each individual Trustee, employees of the Fund, and any other person who handles funds, naming the Fund as obligee, in an amount sufficient to protect the Fund against the misappropriation or misuse of any monies or securities. Evidence of such bond acceptable to the Office shall be furnished to the Office. The Trustees must require its Service Agent to obtain a bond which provides coverage of its Service Agent.

(6) Obtaining a professional consultant's services for loss prevention and claims coordination under a risk management program or employing a licensed Risk Manager. The risk management program and professional consultant shall be acceptable to the Office prior to the granting of approval for the proposed Fund. These services may be provided by a Service Agent or employee(s) who is not a licensed Risk Manager(s) who demonstrates to the Office adequate experience and expertise in the areas of loss prevention and claims coordination under a medical malpractice risk management program.

(7) Obtaining the services of a Service Agent approved under Rule 69O-187.003, F.A.C., or employing qualified individuals to carry out those management responsibilities and duties of the Fund as defined in this rule.

(8) Annually reviewing the financial needs of the Fund for the coming fund year and revising members premiums to provide adequate funds.

(9) Dispersing to all members of the Fund a copy of pages one (1) through six (6) and Schedule G of Form OIR-342 entitled "Medical Malpractice Self-Insurance Trust Fund Annual Audit" for the latest fund year. As an option, the Fund may upon approval from the Office, provide a summary of this information. Such information shall be mailed to the member within one hundred twenty (120) days of the close of the fund year.

Notes

Fla. Admin. Code Ann. R. 69O-187.005

Rulemaking Authority 627.357(6), 624.308(1) FS. Law Implemented 624.307(1), 627.357 FS.

New 10-7-75, Formerly 4-39.04, Amended 5-10-89, Formerly 4-39.004, 4-187.005.

New 10-7-75, Formerly 4-39.04, Amended 5-10-89, Formerly 4-39.004, 4-187.005.