Florida Regulations 69O-190.065: Distribution of Surplus Monies by Self-Insurers Funds
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(1) Any surplus monies for a fund year in excess of the amount necessary to fulfill all obligations under the Law for that fund year may be declared refundable to members by the trustees at any time. The amount of such declaration shall be a liability of the fund at the time of the declaration. Date of payment shall be as agreed by the trustees and the Division subject to this section.
(2) Distribution of dividends are subject to the following conditions:
(a) Dividends of surplus premium (i.e., underwriting profit) shall be payable only to employers who paid premium to the fund during the year the underwriting profit occurred.
(b) Dividends of surplus investment or miscellaneous income may be paid to any member who meets the criteria established by the fund pursuant to Fl. Admin. Code R. 69O-190.065(2)(c) Payment of any such dividend shall be subject to a plan filed with and approved in writing by the Division. Any such plan shall comply with Fl. Admin. Code R. 69O-190.072
(c) Eligibility for dividends pursuant to paragraphs (a) and (b), shall be based on criteria which meet the following conditions:
1. The criteria shall be objective and measurable such as an employer’s accident record, the amount of premium paid, or any other criteria which encourages workplace safety or cost containment.
2. The criteria shall only apply to fund membership; and,
3. The amount of dividend otherwise earned shall be prorated based upon the length of membership of the member in the fund.
(d) All dividends from policy years beginning on or after October 1, 1989, whether from premium, investment income or miscellaneous income, shall be payable to employers who were members of the fund at the end of the policy year in question but have since left the fund and are otherwise entitled to receive a dividend according to the criteria established by the trustees.
(e) No fund shall offer to provide a dividend or seek to enlist a new member based upon the promise of payment of a dividend. No fund may promise, or make any representation of, a specific amount of dividend for which a potential member may become eligible. A fund may disclose in its solicitation of new members, the formula which it intends to use to calculate a member’s future dividend pursuant to paragraph (2)(c).
(3) A request to the Division for authorization to disburse a declared refund shall be made in writing to the Office by the fund administrator or trustees. A request for permission to pay a dividend shall be in accordance with Florida Statutes § 440.57(5) Such request shall include a current financial statement and an actuarial report regarding the adequacy of the reserves for all fund years. Such request shall be delivered to the Division in such manner that a signed receipt is provided to the sender.
(4) Before approving any refund distribution request, the Division shall determine that such refund will not impair the financial solvency of the self-insurers fund. In any given fund year, the monies allocated to the loss fund shall not be used for any purpose other than paying claims and authorized expenses until such time as surplus monies are eligible to be refunded. The intent of these rules is to ensure that sufficient monies are retained so that total assets are greater than total liabilities in each fund year.
(5) In the event of a deficit or contingent liability in any fund year, such deficit shall be funded immediately, either from surplus from a fund year other than the current fund year or from trustee‘ funds or by assessment of the membership, if ordered by the Division, or by such alternate method as the Division may approve. An alternate method shall not increase the liability of the fund. Alternate methods may include, but are not limited to, capital contributions by a sponsoring association, capital contributions from a trustee or member, sale of a fixed asset by the fund, or by disallowing or reducing an advance premium discount to members. The Division shall be notified prior to any transfer of surplus funds.
(6) When a dividend is disbursed, it shall be the responsibility of the fund to ensure that dividends are paid to employers eligible for a dividend including those who are no longer members of the fund. The fund shall give each member, upon joining the fund, written notice that dividends may be payable to a member after leaving the fund. Such notice shall also instruct the member to keep the fund informed of any changes in address after leaving the fund.
(7) When disbursing a dividend, the fund shall make a reasonable effort to locate all former members of the fund who are eligible for a dividend. Reasonable effort shall include:
(a) Mailing the dividend payment to the last known address of the member according to the records of the fund;
(b) For dividends in excess of $500, if the member is not located at the last known address, the fund shall make an attempt to locate the former member through the member’s insurance agent, association or through sources of information available to the general public.
Rulemaking Authority 440.591, 624.4621 FS. Law Implemented Florida Statutes § 624.4621. History-New 10-1-82, Amended 12-25-84, Formerly 38F-5.65, Amended 3-11-90, 6-12-91, 8-28-91, 12-19-93, Formerly 38F-5.065, 4-190.065.
Terms Used In Florida Regulations 69O-190.065
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Trustee: A person or institution holding and administering property in trust.
(a) Dividends of surplus premium (i.e., underwriting profit) shall be payable only to employers who paid premium to the fund during the year the underwriting profit occurred.
(b) Dividends of surplus investment or miscellaneous income may be paid to any member who meets the criteria established by the fund pursuant to Fl. Admin. Code R. 69O-190.065(2)(c) Payment of any such dividend shall be subject to a plan filed with and approved in writing by the Division. Any such plan shall comply with Fl. Admin. Code R. 69O-190.072
(c) Eligibility for dividends pursuant to paragraphs (a) and (b), shall be based on criteria which meet the following conditions:
1. The criteria shall be objective and measurable such as an employer’s accident record, the amount of premium paid, or any other criteria which encourages workplace safety or cost containment.
2. The criteria shall only apply to fund membership; and,
3. The amount of dividend otherwise earned shall be prorated based upon the length of membership of the member in the fund.
(d) All dividends from policy years beginning on or after October 1, 1989, whether from premium, investment income or miscellaneous income, shall be payable to employers who were members of the fund at the end of the policy year in question but have since left the fund and are otherwise entitled to receive a dividend according to the criteria established by the trustees.
(e) No fund shall offer to provide a dividend or seek to enlist a new member based upon the promise of payment of a dividend. No fund may promise, or make any representation of, a specific amount of dividend for which a potential member may become eligible. A fund may disclose in its solicitation of new members, the formula which it intends to use to calculate a member’s future dividend pursuant to paragraph (2)(c).
(3) A request to the Division for authorization to disburse a declared refund shall be made in writing to the Office by the fund administrator or trustees. A request for permission to pay a dividend shall be in accordance with Florida Statutes § 440.57(5) Such request shall include a current financial statement and an actuarial report regarding the adequacy of the reserves for all fund years. Such request shall be delivered to the Division in such manner that a signed receipt is provided to the sender.
(4) Before approving any refund distribution request, the Division shall determine that such refund will not impair the financial solvency of the self-insurers fund. In any given fund year, the monies allocated to the loss fund shall not be used for any purpose other than paying claims and authorized expenses until such time as surplus monies are eligible to be refunded. The intent of these rules is to ensure that sufficient monies are retained so that total assets are greater than total liabilities in each fund year.
(5) In the event of a deficit or contingent liability in any fund year, such deficit shall be funded immediately, either from surplus from a fund year other than the current fund year or from trustee‘ funds or by assessment of the membership, if ordered by the Division, or by such alternate method as the Division may approve. An alternate method shall not increase the liability of the fund. Alternate methods may include, but are not limited to, capital contributions by a sponsoring association, capital contributions from a trustee or member, sale of a fixed asset by the fund, or by disallowing or reducing an advance premium discount to members. The Division shall be notified prior to any transfer of surplus funds.
(6) When a dividend is disbursed, it shall be the responsibility of the fund to ensure that dividends are paid to employers eligible for a dividend including those who are no longer members of the fund. The fund shall give each member, upon joining the fund, written notice that dividends may be payable to a member after leaving the fund. Such notice shall also instruct the member to keep the fund informed of any changes in address after leaving the fund.
(7) When disbursing a dividend, the fund shall make a reasonable effort to locate all former members of the fund who are eligible for a dividend. Reasonable effort shall include:
(a) Mailing the dividend payment to the last known address of the member according to the records of the fund;
(b) For dividends in excess of $500, if the member is not located at the last known address, the fund shall make an attempt to locate the former member through the member’s insurance agent, association or through sources of information available to the general public.
Rulemaking Authority 440.591, 624.4621 FS. Law Implemented Florida Statutes § 624.4621. History-New 10-1-82, Amended 12-25-84, Formerly 38F-5.65, Amended 3-11-90, 6-12-91, 8-28-91, 12-19-93, Formerly 38F-5.065, 4-190.065.