Florida Statutes 641.409 – Insolvency protection
Current as of: 2023 | Check for updates
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(1) Every prepaid health clinic shall comply with one of the following paragraphs:
(a) The prepaid health clinic shall secure insurance to the satisfaction of the office to protect subscribers in the event the prepaid health clinic is unable to meet its obligations to subscribers under the terms of any prepaid health clinic contract issued to a subscriber.
Terms Used In Florida Statutes 641.409
- Basic services: includes any of the following: emergency care, physician care other than hospital inpatient physician services, ambulatory diagnostic treatment, and preventive health care services. See Florida Statutes 641.402
- Contract: A legal written agreement that becomes binding when signed.
- insolvency: means the inability of a prepaid health clinic to discharge its liabilities as they become due in the normal course of business. See Florida Statutes 641.402
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Prepaid health clinic: means any organization authorized under this part which provides, either directly or through arrangements with other persons, basic services to persons enrolled with such organization, on a prepaid per capita or prepaid aggregate fixed-sum basis, including those basic services which subscribers might reasonably require to maintain good health. See Florida Statutes 641.402
- Prepaid health clinic contract: means any contract entered into by a prepaid health clinic with a subscriber or group of subscribers to provide any of the basic services in exchange for a prepaid per capita or prepaid aggregate fixed sum. See Florida Statutes 641.402
- Subscriber: means an individual who has contracted, or on whose behalf a contract has been entered into, with a prepaid health clinic for health care services. See Florida Statutes 641.402
- writing: includes handwriting, printing, typewriting, and all other methods and means of forming letters and characters upon paper, stone, wood, or other materials. See Florida Statutes 1.01
(b) The prepaid health clinic shall file with the office a surety bond issued by an authorized surety insurer. The bond shall be for the same purpose as the insurance in lieu of which the bond is filed. The office shall not approve any bond under the terms of which the protection afforded against insolvency is not equivalent to the protection afforded by such insurance. The bond shall guarantee that the prepaid health clinic will faithfully and truly perform all the conditions of any prepaid health clinic contract. No such bond shall be canceled or subject to cancellation unless at least 60 days’ notice of the cancellation, in writing, is filed with the office. In the event that the notice of termination of the bond is filed with the office, the prepaid health clinic insured under the bond shall, within 30 days of the filing of the notice of termination, provide the office with a replacement bond meeting the requirements of this part or secure insurance as required by paragraph (a). The cancellation of a bond does not relieve the obligation of the issuer of the bond for claims arising out of contracts issued prior to the cancellation of the bond unless a replacement bond or insurance is secured. In no event shall the issuer’s aggregate liability under the bond exceed the face amount of the bond. If, within 30 days of filing the notice of termination, a replacement bond or insurance has not been secured and filed with the office, the office shall suspend the certificate of the prepaid health clinic until the deposit requirements are satisfied. Whenever the prepaid health clinic ceases to do business in this state and furnishes to the office satisfactory proof that it has discharged or otherwise adequately provided for all of its obligations to its subscribers, the office shall release any bond filed by the prepaid health clinic.
(2) In determining the sufficiency of the insurance required under paragraph (1)(a) or the surety bond required under paragraph (1)(b), the office may consider the number of subscribers, the basic services included in subscriber contracts, and the cost of providing such basic services to subscribers in the geographic area served.
(3) Every prepaid health clinic shall deposit with the department a cash deposit in the amount of $30,000 to guarantee that the obligations to the subscribers will be performed.