Florida Regulations 69O-201.005: Financial Requirements Regarding the Unearned Premium Reserve Liability Account and the Deposit or Bond
Current as of: 2024 | Check for updates
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(1) “”Gross Written Premiums”” means the total amount of premiums paid by the consumer for the entire period of the legal expense insurance contract, including commission.
(2) “”Obligated”” means outstanding contracts in force which have not expired or been canceled and a refund made to the consumer.
(3) The unearned premium reserve account is calculated as follows:
(a) For all one year policies, the minimum reserve for all legal expense insurance corporations shall be 50% of the gross written premium for which the corporation is obligated on all policies issued in any state.
(b) A legal expense insurance corporation may count as one-month policies those policies which are paid by the month and can be cancelled by either party with 30 days notice. The reserve amount required on monthly policies is one-half of the total monthly gross written premium. The legal expense insurance corporation must specify if the reserve is calculated on a monthly basis.
(c)1. For all multiyear policies issued in any state the reserve shall initially be calculated at 50% of the gross written premium for the first year premium, and 100% for each subsequent year’s premium, for all gross written premiums for which the legal expense insurance corporation is obligated.
2. As each subsequent year becomes current, 50 percent of that current year’s premium is earned and shall be subtracted from the reserve.
3. The reserve is maintained until the expiration of the multiyear policy.
(4) For purposes of determining the amount of the required deposit under Florida Statutes § 642.023, the amount of gross written premium in force is the total gross written premium for one full year.
Rulemaking Authority Florida Statutes § 624.308(1). Law Implemented 624.307(1), 625.051, 642.023, 642.032 FS. History-New 6-23-92, Formerly 4-201.005, Amended 5-25-21.
Terms Used In Florida Regulations 69O-201.005
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
(3) The unearned premium reserve account is calculated as follows:
(a) For all one year policies, the minimum reserve for all legal expense insurance corporations shall be 50% of the gross written premium for which the corporation is obligated on all policies issued in any state.
(b) A legal expense insurance corporation may count as one-month policies those policies which are paid by the month and can be cancelled by either party with 30 days notice. The reserve amount required on monthly policies is one-half of the total monthly gross written premium. The legal expense insurance corporation must specify if the reserve is calculated on a monthly basis.
(c)1. For all multiyear policies issued in any state the reserve shall initially be calculated at 50% of the gross written premium for the first year premium, and 100% for each subsequent year’s premium, for all gross written premiums for which the legal expense insurance corporation is obligated.
2. As each subsequent year becomes current, 50 percent of that current year’s premium is earned and shall be subtracted from the reserve.
3. The reserve is maintained until the expiration of the multiyear policy.
(4) For purposes of determining the amount of the required deposit under Florida Statutes § 642.023, the amount of gross written premium in force is the total gross written premium for one full year.
Rulemaking Authority Florida Statutes § 624.308(1). Law Implemented 624.307(1), 625.051, 642.023, 642.032 FS. History-New 6-23-92, Formerly 4-201.005, Amended 5-25-21.