Florida § 642.023 - Required deposit or bond.

§ 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 office, a legal service insurance corporation may file with the office 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 office 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. (5) Such deposit or bond shall be maintained unimpaired as long as the legal expense insurance corporation continues to do business in this state. Whenever the corporation ceases to do business in this state and furnishes proof satisfactory to the office that it has discharged or otherwise adequately provided for all its obligations to its insureds in this state, the office and department shall release the deposited securities to the parties entitled thereto, on presentation of the receipts of the department for such securities, or shall release the bond filed with it in lieu of such deposit. (6) The office, upon written request of the legal expense insurance corporation, may reduce the amount of deposit or bond required under subsection (1) if it finds that the policyholders and certificateholders of the corporation are adequately protected by: (a) The terms and number of existing contracts with subscribers; (b) Financial guarantees of financially sound public or private organizations or agencies; (c) Other reliable financial guarantees; or (d) Plan attorney agreements that provide for full plan benefits to subscribers without additional payments by the subscribers if the plan terminates. (7) The office may at any time enter an order modifying the amount of the deposit or bond specified under subsection (1) or subsection (2) if it finds that there has been a substantial change in the facts on which the determination was based.