Florida’s legislative session has come to a close without Senate Bill 516, which would have impacted risk retention groups (RRGs) operating in the state, being presented for a final votes.
If passed into law, the Bill would have required an AM Best “A” rating and a minimum financial size of $100mn in capital surplus in order for an RRG to write commercial auto liability in Florida.
Despite the Bill failing to progress further Joseph Deems, executive director at National Risk Retention Association (NRRA), warned against complacency.
“Do not assume, however, that rigor mortis will be setting in anytime soon,” he said in an email to NRRA members and partners.
“This is no time for celebration, because discussion of resurrection of the bill is already underway.”
Deems has previously said the Bill aims to unlawfully regulate RRGs, and unlawfully discriminates against those that do not obtain such ratings from AM Best.
He believes the Bill could impact 96% of the RRGs registered in Florida.
The NRRA is now proceeding into “Phase 2” of its fundraising campaign, as it aims eliminate “discriminatory conduct” directed at RRGS, not just in Florida, but wherever believes it is appearing.
The organisation had previously announced three stages of fundraising to combat Senate Bill 516.
NRRA will now begin a “vigorous” campaign to educate regulators and legislators regarding the suggested financial unreliability of RRGs, which Deems said appears in the ubiquitous “pop-up” that shows every time someone researches a RRG through the Florida Office of Insurance Regulation.
NRRA is also planning to begin immediate discussions with entities and associations which have been detrimentally affected by the pop-up, which Deems said was the original motivation for the Bill.
“This false notion is perpetuated by the common misconception created when the word ‘authorized’ is improperly limited to mean companies which are “licensed and admitted” in the state,” Deems added.
“Of course, risk retention groups remain licensed and admitted in their states of domicile.
““Authorization” is therefore automatic in all states under the federal LRRA, which the majority of state and federal courts have held absolutely preempts the use of state laws to interfere with the ability of RRGs to operate in any non-domiciliary states.”
A small Florida trucking business recently told Captive Intelligence that it may have to shut-up-shop in Florida if the bill had passed.
“If this bill goes through, I might have to either close my doors or I might have to relocate to another state,” Linda Allen, CEO at Hardcore Trucking, said.