Florida Laws: FL Statutes - Title XXXVII Insurance Section 625.01115 Definitions.
625.012 "Assets" defined.In any determination of the financial condition of an insurer, there shall be allowed as "assets" only such assets as are owned by the insurer and which consist of:
(1) Cash or cash equivalents, in the possession of the insurer, or in transit under its control, and including the true balance of any deposit in a solvent bank, savings and loan association, or trust company. Cash equivalents are short-term, highly liquid investments, with original maturities of 3 months or less, which are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
(2) Investments, securities, properties, and loans acquired or held in accordance with this code, and in connection therewith the following items:
(a) Interest due or accrued on any bond or evidence of indebtedness which is not in default and which is not valued on a basis including accrued interest.
(b) Declared and unpaid dividends on stock and shares, unless such amount has otherwise been allowed as an asset.
(c) Interest due or accrued upon a collateral loan in an amount not to exceed 1 year's interest thereon.
(d) Interest due or accrued on deposits in solvent banks, savings and loan associations, and trust companies, and interest due or accrued on other assets, if such interest is in the judgment of the office a collectible asset.
(e) Interest due or accrued on a current mortgage loan, in an amount not exceeding in any event the amount, if any, of the excess of the value of the property less delinquent taxes thereon over the unpaid principal; but in no event shall interest accrued for a period in excess of 90 days be allowed as an asset.
(f) Rent due or accrued on real property if such rent is not in arrears for more than 3 months, and rent more than 3 months in arrears if the payment of such rent is adequately secured by property held in the name of the tenant and conveyed to the insurer as collateral.
(g) The unaccrued portion of taxes paid prior to the due date on real property.
(3) Premium notes, policy loans, and other policy assets and liens on policies and certificates of life insurance and annuity contracts and accrued interest thereon, in an amount not exceeding the legal reserve and other policy liabilities carried on each individual policy.
(4) The net amount of uncollected and deferred premiums and annuity considerations in the case of a life insurer.
(5)(a) Premiums in the course of collection, other than for life insurance, not more than 3 months past due, less commissions payable thereon. The foregoing limitation shall not apply to premiums payable directly or indirectly by the United States Government or by any of its instrumentalities. All premiums, excluding commissions payable thereon, due from a controlling or controlled person shall not be allowed as an asset to the extent that:
1. The premiums collected by the controlling or controlled person and not remitted to the insurer are not held in a trust account with a bank or other depository approved by the office. Such funds shall be held as trust funds and may not be commingled with any other funds of the controlling or controlled person. Disbursements from the trust account may be made only to the insurer, the insured, or, for the purpose of returning premiums, an entity who is entitled to returned premiums on behalf of the insured. A written copy of the trust agreement must be filed with and approved by the office prior to its becoming effective. However, the investment income derived from the trust may be allocated as the parties deem proper. A controlling or controlled person shall deposit premiums collected into the trust account within 15 working days after collection;
2. The controlling or controlled person has not provided to the insurer and the insurer has not maintained in its possession an unexpired, clean irrevocable letter of credit, payable to the insurer, issued for a term of not less than 1 year and in conformity with the requirements set forth in this subparagraph, the amount of which equals or exceeds the liability of the controlling or controlled person to the insurer, at all times during the period which the letter of credit is in effect, for premiums collected by the controlling or controlled person. The requirements are that such letter of credit be issued under arrangements satisfactory to the office and that the letter be issued by a banking institution which is a member of the Federal Reserve System and which has a financial standing satisfactory to the office;
3. The controlling or controlled person has not provided to the insurer and the insurer maintained in its possession evidence that the controlling or controlled person has purchased and has currently in effect a financial guaranty bond, payable to the insurer, issued for a term of not less than 1 year and which is in conformity with the requirements set forth in this subparagraph, the amount of which equals or exceeds the liability of the controlling or controlled person to the insurer, at all times during which the financial guaranty bond is in effect, for the premiums collected by the controlling or controlled person. The requirements are that such a financial guaranty bond shall be issued under an arrangement satisfactory to the office and that the financial guaranty bond be issued by an insurer authorized to transact such business in Florida and which has a financial standing satisfactory to the office and which is neither controlled nor controlling in relation to either the insurer or the person for whom the bond is purchased; or
4. A financial evaluation indicates that the controlling or controlled person is unlikely to have the ability to pay such premiums as they become due. The financial evaluation shall be based on a review of the books and records of the controlling or controlled person.
(b) For the purpose of this subsection:
1. "Controlling person" means any person owning, directly or indirectly, 25 percent or more of the voting securities of the insurer.
2. "Controlled person" means any person that is, directly or indirectly, owned or controlled by a controlling person.
3. "Controlling" or "controlled person" means any person that individually or in combination with other such persons owes to the insurer an amount that exceeds 50 percent of the insurer's total premiums in course of collection as stated on the insurer's financial statement.
(c) The office shall disapprove any trust agreement filed pursuant to paragraph (a) which does not assure the safety of the premiums collected.
(6) Installment premiums other than life insurance premiums to the extent of the unearned premium reserve carried on the policy to which such premiums apply.
(7) Notes and like written obligations not past due, taken for premiums other than life insurance premiums, on policies permitted to be issued on such basis, to the extent of the unearned premium reserves carried thereon.
(8) The full amount of reinsurance recoverable by a ceding insurer from a solvent reinsurer and which reinsurance is authorized under s. 624.610.
(9) Amounts receivable by an assuming insurer representing funds withheld by a solvent ceding insurer under a reinsurance treaty.
(10) Deposits or equities recoverable from underwriting associations, syndicates, and reinsurance funds, or from any suspended banking institution, to the extent deemed by the office available for the payment of losses and claims and at values to be determined by it.
(11) Electronic and mechanical machines, including computer-operating software equipment and system software constituting a data processing and accounting system, the cost of which is at least $25,000, which cost shall be amortized in full over a period not to exceed 3 calendar years. The aggregate amount admitted under this subsection shall be limited to 3 percent of the insurer's capital and surplus, adjusted to exclude any electronic data processing equipment and operating software, net deferred tax assets, and net positive goodwill, as reported on the insurer's most recently filed annual statement.
(12) Goodwill arising from acquisitions and mergers occurring after January 1, 2001.
(13) Loans or advances by an insurer to its parent or principal owner if approved by the office.
(14) Current income tax recoverables.
(15) Capitalized interest.
(16) Other assets, not inconsistent with the provisions of this section, deemed by the office to be available for the payment of losses and claims, at values to be determined by it.
History.--s. 109, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 87, 98, 809(1st), ch. 82-243; s. 28, ch. 83-288; s. 11, ch. 85-245; ss. 184, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 15, ch. 2001-213; s. 865, ch. 2003-261.
Last modified: March 26, 2010