Florida Statutes 1983, Volume 3 - Florida State University College of ...

Ch.642 LEGAL EXPENSE INSURANCE F.S.1983
ited to providing legal services or indemnity for legal
expenses and business reasonably related thereto.
History.- s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 3, 20, 21, ch. 83-278.
'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled
for review pursuant to •. 11.61 in advance of that date.
'642.021 Certificate of authority.-
(1) It is unlawful for any person to engage in a legal
expense insurance business in this state without a
valid certificate of authority issued by the department,
pursuant to ss. 642.011-642.049, except that a
domestic, foreign, or alien insurer authorized to
transact life or casualty insurance in this state may
transact legal expense insurance provided it complies
with the applicable provisions of ss. 642.011-642.049.
A certificate of authority under ss. 642.011-642.049
may be issued only to a legal expense insurance corporation.
(2) The corporation shall file with the department
an application for a certificate of authority
upon a form to be furnished by the department,
which shall include or have attached the following:
(a) The names, addresses, and occupations of all
incorporators and proposed directors and officers.
(b) A certified copy of the corporate articles and
bylaws and, for the 3 most recent years, the annual
statements and reports of the corporation.
(c) Each agreement relating to the corporation to
which any incorporator or proposed director or officer
is a party.
(d) A statement of the amount and sources of the
funds available for organization expenses and the
proposed arrangements for reimbursement and compensation
of incorporators or other persons.
(e) A statement of compensation to be provided
directors and officers.
(f) The forms to be used for any proposed contracts
between the corporation and participating attorneys
or between the corporation and corporations
which perform administration, marketing, or management
services and the forms relating to the provision
of services to insureds.
(g) The plan for conducting the insurance business,
which plan shall include all of the following:
1. The geographical area in which business is intended
to be conducted in the first 5 years.
2. The types of insurance intended to be written
in the first 5 years, including specification whether
and to what extent indemnity rather than service
benefits are to be provided.
3. The proposed marketing methods.
(h) A current statement of the assets and liabilities
of the corporate applicant.
(i) Forms of all legal service contracts the applicant
proposes to offer showing the rates to be
charged for each form of contract.
(j) Such other documents and information as the
department may reasonably require.
(3) Copies of the documents filed pursuant to
paragraphs (f) and (i) of subsection (2) shall be filed
with The Florida Bar within 5 days after filing with
the department.
(4) The department shall issue a certificate of authority
only to a legal expense insurance corporation,
provided it is satisfied that:
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(a) All requirements of law have been met;
(b) All natural persons who are incorporators, the
directors and principal officers of corporate incorporators,
and the proposed directors and officers of the
corporation being formed are trustworthy and collectively
have the competence and experience to engage
in the particular insurance business proposed; and
(c) The business plan is consistent with the interests
of potential insureds and of the public.
History.-s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 4, 20, 21, ch. 83-278.
'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled
for review pursuant to s. 11.61 in advance of that date.
'642.023 Required deposit or bond.-
(1) To assure the faithful performance of its obligations
in the event of insolvency, each legal expense
insurance corporation, prior to the issuance of its certificate
of authority, shall deposit and maintain with
the department securities of the type eligible for deposit
by insurers under s. 625.52, which securities
shall be held in trust and shall have at all times a
market value in the amount specified. Whenever the
market value of the securities deposited with the department
is less than 95 percent of the amount of the
deposit required, the insurer shall deposit additional
securities or otherwise increase the deposit to the
amount required. The initial deposit for a corporation
shall be in the amount of $50,000 for at least the
first full year of operation. The amount of the initial
deposit shall be adjusted annually thereafter on October
1 as follows:
(a) Each corporation having in force $300,000 or
less of gross written premiums shall deposit with the
department an amount equal to $30,000.
(b) Each corporation having in force more than
$300,000 of gross written premiums, but less than
$750,000, shall deposit with the department an
amount equal to $75,000.
(c) Each corporation having in force more than
$750,000 of gross written premiums shall deposit
with the department an amount equal to $100,000.
(2) In lieu of any deposit of securities required
under subsection (1) and subject to the approval of
the department, a legal service insurance corporation
may file with the department a surety bond issued by
an authorized surety insurer. The bond shall be for
the same purpose as the deposit in lieu of which it is
filed. The department may not approve any bond under
the terms of which the protection afforded
against insolvency is not equivalent to the protection
afforded by those securities provided for in subsection
(1).
(3) Securities or bonds deposited pursuant to this
section shall be for the benefit of, and subject to, action
thereon by any person sustaining an actionable
injury due to the failure of the corporation to faithfully
perform its obligations to its insureds in the
event of insolvency or impairment of any legal expense
insurance corporation.
(4) The state shall be responsible for the safekeeping
of all securities deposited with the department
under ss. 642.011-642.049. Such securities are
not, on account of being in this state, subject to taxation,
but shall be held exclusively and solely to guarantee
the performance by the legal expense insurance
corporation of its obligations to its insureds.