STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
UNITED STATES FIDELITY AND ) GUARANTY COMPANY and FIDELITY ) AND GUARANTY INSURANCE COMPANY, )
)
Petitioners, )
)
vs. ) CASE NO. 94-1003RP
)
DEPARTMENT OF INSURANCE, )
)
Respondent. )
) HOLYOKE MUTUAL INSURANCE )
COMPANY IN SALEM, )
)
Petitioner, )
)
vs. ) CASE NO. 94-1004RP
)
DEPARTMENT OF INSURANCE, )
)
Respondent. )
)
FINAL ORDER
Pursuant to notice, the above matters were heard before the Division of Administrative Hearings by its assigned Hearing Officer, Donald R. Alexander, on January 19, 1995, in Tallahassee, Florida.
APPEARANCES
For Petitioners: Brian M. Nugent, Esquire (Case No. 94-1003RP) Post Office Box 1877
Tallahassee, Florida 32302-1877
For Petitioner: Lewis E. Hassett, Esquire (Case No. 94-1004RP) Joan C. Green, Esquire
191 Peachtree Street, Northeast Suite 900
Atlanta, Georgia 30303-1757
For Respondent: David J.Busch, Esquire
Ruth L. Gokel, Esquire Department of Insurance 645A Larson Building
Tallahassee, Florida 32399-0300
STATEMENT OF THE ISSUE
The issue is whether proposed rule 4-141.020 is an invalid exercise of delegated legislative authority.
PRELIMINARY STATEMENT
These cases began on February 25, 1994, when four petitions were filed challenging the validity of proposed rules 4-141.020 and 4-141.021, Florida Administrative Code. These rules were proposed for adoption by respondent, Department of Insurance. The first petition, which challenged only rule 4- 141.021, was filed on behalf of the National Association of Independent Insurers and was assigned Case No. 94-1001RP. The second petition, which contested both rules, was filed by the American Insurance Association and was assigned Case No. 94-1002RP. The third petition was filed on behalf of United States Fidelity and Guaranty Company and Fidelity and Guaranty Insurance Company and was assigned Case No. 94-1003RP. The final petition was filed by Holyoke Mutual Insurance Company in Salem and was assigned Case No. 94-1004RP. Collectively, the petitions raised numerous statutory and constitutional grounds for invalidating the rules. After being reviewed for legal sufficiency, the petitions were assigned to Hearing Officer E. J. Davis on March 1, 1994. By order dated March 9, 1994, the cases were consolidated on the hearing officer's own motion. By agreement of the parties, the requirement that the final hearing be conducted within the statutory time period was waived. On May 18, 1994, the cases were transferred to the undersigned Hearing Officer.
By notice of hearing dated May 19, 1994, the final hearing was scheduled on July 6-8, 1994, in Tallahassee, Florida. At the request of the parties, the final hearing was cancelled pending an appeal by respondent of a discovery order entered by the undersigned. Thereafter, by notice of hearing dated November 17, 1994, the matters were rescheduled for January 19, 20 and 23, 1995, in Tallahassee, Florida.
Just prior to hearing, the parties settled their disputes as to proposed rule 4-141.021, and all petitioners withdrew their challenges to that rule. In addition, petitioners in Case Nos. 94-1001RP and 94-1002RP voluntarily dismissed their petitions.
At final hearing, petitioners in Case No. 94-1003RP presented the testimony of John D. Corse, an attorney with United States Fidelity and Guaranty Company. Also, they offered petitioner's exhibits 2-17. All exhibits were received in evidence except exhibit 14. Also, a ruling was reserved on exhibit 15.
Petitioner in Case No. 94-1004RP presented the testimony of Margaret E. Gil, its vice-president of underwriting, and Robert J. Lundquist, Jr., a property and casualty actuary and accepted as an expert in actuarial science. Also, it offered exhibits 1-3 and 6 which were received in evidence. Respondent presented the testimony of Douglas A. Shropshire, an agency senior attorney.
Finally, joint exhibit 1 was received in evidence.
The transcript of hearing (two volumes) was filed on February 2, 1995.
Proposed findings of fact and conclusions of law were filed by the parties on February 17, 1995. A ruling on each proposed finding has been made in the Appendix attached to this Final Order.
FINDINGS OF FACT
Based upon all of the evidence, the following findings of fact are determined:
Background
These cases arose after respondent, Department of Insurance (DOI), published in the Florida Administrative Weekly its notice of intent to adopt new rules 4-141.020 and 4-141-021, Florida Administrative Code. The first rule prescribes procedures for the withdrawal and surrender of a certificate of authority, or the discontinuance of writing insurance in the state. The second rule specifies procedures for implementing the moratorium phaseout process in Section 627.7013, Florida Statutes. By agreement by the parties, rule 4-141.021 is no longer in dispute.
Contending that rule 4-141.020 is invalid for numerous reasons, petitioners, United States Fidelity and Guaranty Company (USF&G) and Fidelity and Guaranty Insurance Company (FGIC), filed their petition to determine invalidity of proposed rules on February 25, 1994. Generally, the petition alleges that the rule as a whole conflicts with other statutory and constitutional provisions, as well as the authorizing statute. It further alleges that subsections (3), (5), (8), and (9)(b) of the rule conflict with the authorizing statutes, and that paragraph (9)(b) is also arbitrary, capricious and vague.
Petitioner, Holyoke Mutual Insurance Company in Salem (Holyoke), filed its petition to determine invalidity of proposed rules on February 25, 1994. The petition generally alleges that the rule as a whole conflicts with the law being implemented and is arbitrary and capricious. More specifically, the petition alleges that subsections (2)(b), (5), (6)(e)4., (7)(a), (7)(b), (8), (9), (9)(a), and (9)(b) contravene statutory provisions, and that the rule as a whole violates the due process, equal protection, commerce, and impairment of contract clauses of the state and federal constitutions.
The Parties
Respondent is the state agency charged with the responsibility of administering and enforcing the laws of the state governing insurance companies.
Petitioners USF&G and FGIC are foreign insurers authorized to transact insurance in the State of Florida, including personal lines and residential insurance.
USF&G and FGIC filed a notice to withdraw from homeowners multi-peril lines of insurance on July 7, 1993, in accordance with Subsection 624.430(1), Florida Statutes. Under that law, petitioners were required to give ninety days notice to the DOI before discontinuing those lines of insurance. The ninety-day notice period would have expired on October 5, 1993. Due to various emergency rules adopted by DOI and newly enacted legislation, the notice to withdraw never became effective. Because the proposed rule would affect their right to discontinue writing certain lines of insurance, petitioners are substantially affected by rule 4-141.020.
Petitioner Holyoke is a mutual insurance company that writes business in all the New England states, New York and Florida. As of December 31, 1994, Holyoke had 4,027 homeowner policies and 1,541 dwelling fire policies
outstanding in the State of Florida. Some of these property and insurance contracts were entered into prior to the enactment of Section 627.7013, Florida Statutes, which provides for a phaseout of a moratorium imposed by the legislature on the cancellation or nonrenewal of certain policies.
On March 11, 1993, Holyoke filed a notice of withdrawal from all lines and kinds of insurance in the State and of the surrender of its certificate of authority pursuant to Section 624.430, Florida Statutes. Its plan was to withdraw over six months, giving all policyholders six months notice before nonrenewing policies over a twelve month period. Due to various emergency rules and statutes, Holyoke has been unable to cease doing business in the state. Since rule 4-141.020 would regulate Holyoke with regard to withdrawing from the homeowners multi-peril insurance market, it is substantially affected by the proposed rule.
Events Leading to the Adoption of the Rule
Following Hurricane Andrew's landfall in South Florida on August 24, 1992, the insurance industry suffered catastrophic casualty losses which totaled around $15 billion. Many insurance companies announced they were either withdrawing from the state altogether, were withdrawing from the homeowners' line of business, or were cancelling or nonrenewing substantial blocks of policyholders.
Beginning on August 31, 1992, the DOI began to issue a string of emergency rules designed to limit cancellations and nonrenewals of insurance policies. None of these rules, however, purported to regulate the withdrawal of insurers from the state or from particular lines of insurance. During this same time period, the DOI adopted two emergency rules establishing procedures for insurers wishing to withdraw from any property lines in Florida. These emergency rules pertaining to insurer withdrawals expired on May 12, 1993, and no authority to restrict withdrawals retroactively has been authorized by the legislature.
On May 18, 1993, the DOI imposed emergency rule ER 93-18 which represented its response to market stabilization in homeowners insurance lines. The rule imposed a moratorium on the nonrenewal and cancellation of homeowners insurance policies. The rule did not purport to regulate insurer withdrawals under Section 624.430, Florida Statutes, which governs the surrender of certificates of authority or discontinuance of writing certain lines of insurance in the state.
Effective June 8, 1993, the legislature enacted Chapter 93-401, Laws of Florida, which essentially codified a DOI emergency rule and imposed a moratorium on cancellation or nonrenewal of personal lines residential property insurance policies from May 19, 1993, until November 14, 1993. The law was specifically confined to imposing a time-limited moratorium on only the "cancellation and nonrenewal of residential property coverages."
Just prior to the expiration of the moratorium, the legislature enacted Section 627.7013, Florida Statutes, which provided for a "phaseout" of the moratorium imposed in Chapter 93-401. The statute provides for the extension of the moratorium on nonrenewal or cancellation of personal lines property insurance imposed by Chapter 93-401, limits unrestricted nonrenewals to five percent per year, and is to remain in effect until November 14, 1996. The statute makes no reference to withdrawals by insurers. Indeed, its purposes, as stated in subsection (1) of the statute, "are to provide for a phaseout of the
moratorium (on cancellation or nonrenewal of personal lines residential property insurance policies) and to require advance planning and approval for programs of exposure reduction." It is especially noteworthy that during the same legislative special session in which section 627.7013 was enacted, the legislature considered and rejected legislation that would have created a new section 624.431 granting DOI the authority to condition and prevent withdrawals by insurers. Thus, the legislature rejected a statute which would have provided the DOI with the same authority included in the proposed rule.
There is no clear expression in section 627.7013 that the legislature intended the law to operate in a retroactive manner. Because the statute imposes new obligations on insurers, it must be presumed that the legislature intended it to operate prospectively. In contrast, and in response to Hurricane Andrew, when the legislature adopted Chapter 92-345, Laws of Florida, in its December 1992 special session, subsection (2) of section 1 of that law contained specific language that "this section shall take effect upon becoming a law and shall apply retroactively to August 24, 1992."
On February 4, 1994, the DOI published notice of its intent to adopt new rules 4-141.020 and 4-141.021. However, the latter rule is no longer in issue.
Rule 4-141.020, which is sometimes referred to as the "withdrawal rule," generally sets forth the procedures for withdrawal, surrender of certificate of authority, or discontinuance of writing insurance in the state under section 624.430. More specifically, it provides definitions of various terms [paragraph 2)], provides a DOI interpretation of section 624.430 (paragraphs (3) and (5)], prescribes procedures for withdrawals and reduction of insurance (paragraphs (6)-(8)], and sets out DOI policy regarding the relationship of reduction in business to the moratorium phaseout in section 627.7013 [paragraph (9)]. Sections 624.308(1) and 624.6012, Florida Statutes, are cited as the specific authority for adopting the rule while Sections 624.430, 624.6011, 624.6012 and 627.7013, Florida Statutes, are identified as the law implemented.
Prior to Hurricane Andrew, if an insurer wished to (a) discontinue the writing of any one or more multiple kinds of insurance, (b) withdraw from the state, or (c) surrender its certificate of authority, it would simply provide to the DOI notice of its intent to do so as required by section 624.430. As long as the notice complied with the statutory requirements, the withdrawal was self- executing, and DOI did not require specific approval or impose further conditions on the insurer. Thus, before this controversy arose, DOI took the position that the only duty or power granted to it under the section was a ministerial one of altering the certificate of authority to reflect the insurer's withdrawal from certain lines of insurance or, in the case of complete withdrawal from the state, to cancel the insurer's certificate of authority. It has never adopted any permanent rule construing the statute in any other fashion.
Although section 624.430 has not been amended by the legislature since it was enacted in 1963, under the proposed rule, section 627.7013 is interpreted as restricting the right of an insurer to withdraw from the state entirely or from a line of insurance. Indeed, the rule provides that section 627.7013 takes precedence over section 624.430, and unless an insurer had filed its notice of withdrawal prior to August 24, 1992, insurers are severely limited in their ability to discontinue lines of business or withdraw from the state through at least November 14, 1996.
The Petitions, Stipulation and Proposed Final Orders
Because the initial petitions, prehearing stipulation, and proposed final orders sometimes speak to different issues, and some of the allegations are either unclear or not precisely pled, it is necessary to comment on these matters before making findings as to the validity of the rule. Since the initial petitions frame the issues in these cases, and DOI counsel has objected to expanding the issues through stipulation or otherwise, the undersigned has limited the issues to those raised in the initial petitions and deemed all others to be untimely raised. Further, where a party has framed an allegation in its complaint, but failed to argue that issue in its proposed order, that allegation has been deemed to be abandoned. Finally, where allegations are nonspecific and speak to the rule as a whole, and the undersigned is unable to determine the language in the rule being challenged, those allegations have been disregarded.
In their initial petition, USF&G and FGIC first contend that the rule as a whole is invalid because it conflicts with, extends or modifies sections 624.430, 627.7013 and "other existing (but unnamed) statutory authority," and it violates the Florida and U. S. Constitutions by interpreting section 627.7013 as taking precedence over section 624.430. In actuality, only subsection (9), and not the entire rule, speaks to this issue and thus the broad allegation has been narrowed in this respect. They have also alleged that the rule in its entirety is invalid because it conflicts with, extends or modifies the "authorizing statute" in that it purports to require filings and information not authorized by statute. Because these alleged illegal filing requirements are found in paragraph (6)(e), the undersigned has considered only that provision as subject to attack.
USF&G and FGIC also allege that subsections (3), (5), (8) and (9)(b) are invalid because they conflict with, extend or modify the "authorizing statute." Finally, they allege that paragraph (9)(b) is invalid on the additional grounds that the language is arbitrary, capricious, and vague. Since the reference to paragraph (9)(b) appears to have been in error, and petitioners actually intended to challenge paragraph (9)(a), the undersigned will address the latter provision. In summary, then, and notwithstanding the broad allegations in the petition, only parts, and not the whole, of the rule have been placed in question by these petitioners.
Because the proposed final order of USF&G and FGIC fails to address subsections (5) and (6)(e), the undersigned has deemed those allegations to be abandoned. Finally, the proposed order raises for the first time a contention that subsection (4) is invalid. This contention has been disregarded as being untimely raised.
In its initial petition, Holyoke first contends that the rule in its entirety is invalid "because it would enlarge, contravene, and modify the specific provisions of law that it purportedly implements and because it would be arbitrary and capricious." It then goes on to plead that subsections (2)(b), (5), (6)(e)4., (7)(a), (7)(b), (8), (9), (9)(a), and (9)(b) are invalid on the ground they conflict with, extend, or modify other statutory provisions. Since no specific factual allegations have been made regarding the arbitrary and capricious nature of the rule, and there are no statutory allegations regarding the remaining parts of the rule, the undersigned will treat the petition as challenging only these paragraphs for the single ground stated. Finally,
Holyoke alleges that the rule in its entirety violates the due process, equal protection, commerce, and impairment of contract clauses in the State and U. S. Constitutions.
In its proposed order, Holyoke has further contended that the above paragraphs are also invalid on the grounds they are arbitrary and capricous, vague, fail to establish adequate standards and vest unbridled discretion in the agency. Because the latter three grounds were never raised in the initial petition and, as noted above, there are no specific allegations regarding the arbitrary and capricous nature of the cited paragraphs, these grounds have been disregarded as being untimely raised.
Is the Rule Invalid? a. Rule 4-141.020(9)
Petitioners' chief concern is the DOI's interpretation, as expressed in subsection (9) of the rule, that section 627.7013 takes precedence over section 624.430 "as to all attempted or desired reductions" affecting personal lines residential policies. Because "reductions" are broadly defined in paragraph (2)(b) of the rule as including the discontinuance of one or mulitiple lines of business, the withdrawal from the state, and the surrender of a certificate authority, subsection (9) effectively prevents an insurer from exercising its rights under section 624.430 until November 14, 1996, when the phaseout statute expires. Since the vitality of much of the rule turns on the validity of subsection (9), the multiple allegations concerning this provision will be addressed first.
The exact language in subsection (9) is as follows:
(9) Relationship of Reduction to Moratorium Phaseout. The department interprets Section 627.7013(2)(a)4., Florida Statutes, relating to certain applications for reduction filed prior to August 24, 1992, as indicating a legislative intent that as to all attempted or desired reductions affecting "Florida per-
sonal lines residential policies" (hereinafter "residential policies"), other than those in which such reduction notice was filed prior
to August 24, 1992, Section 627.7013 applies and takes precedence over Section 624.430,
and prohibits or limits such reductions affecting residential policies, where there is any relation- ship between the reduction sought, and the risk
of loss from hurricane exposure.
Subparagraph (2)(a)4. of section 627.7013 provides the principal statutory support for the rule and reads as follows:
4. Notwithstanding any provisions of this section to the contrary, this section does
not apply to any insurer that, prior to August 24, 1992, filed notice of its intent to dis- continue its writings in this state under s.
624.430, and for which a finding has been made
by the department, the Division of Administrative
Hearings of the Department of Management Services, or a court that such notice satisfied all re- quirements of s. 624.430.
As explained at hearing by the author of the rule, "by implication" or "negative inference" the DOI construed the above statutory language as manifesting an intent on the part of the legislature to make all types of withdrawals, and not just the cancellation or nonrenewal of personal lines residential property policies, subject to the moratorium phaseout statute. In other words, DOI posits that the legislative exemption from the moratorium phaseout statute of an insurer who filed, prior to August 24, 1992, a notice of its intent to discontinue writings, supports the broad negative inference that section 627.7013 prohibits an insurer not only from "discontinuing its writing" of one or more lines of business after August 24, 1992, but also from withdrawing from the state and surrendering its certificate of authority.
In making this interpretation of section 627.7013 in its rule, the DOI ignored the distinctions between "discontinuance of lines of insurance" versus "withdrawal from the state" versus "surrendering a certificate of authority." Section 627.7013 refers only to "discontinue," as opposed to a total withdrawal coupled with a surrender of a certificate. Whatever negative inference might be drawn from subparagraph (2)(a)4. regarding the discontinuance of a line of insurance before August 24, 1992, as opposed to after that date, it cannot be extended to prohibit an insurer's total withdrawal from Florida and the surrender of its certificate of authority. Such an interpretation is not only contrary to the plain language in sections 624.430 and 627.7013, but also subsection 624.416(1), which recognizes an insurer's right to surrender its certificate of authority. To this extent, then, the rule is an invalid exercise of delegated legislative authority.
Assuming that the statute is a proper source of authority for imposing restrictions on discontinuing lines of insurance by virtue of the words "discontinue its writings" in subparagraph (2)(a)4., petitioners argue further that DOI has used the rule to interpret the statute so as to have it apply in a retroactive manner to insurance contracts in existence prior to the enactment of the statute. It is undisputed that all petitioners had insurance contracts in existence as of the date of the enactment of the law, and that the rule operates in a retroactive manner by applying to all notices of withdrawal filed prior to the enactment of section 627.7013 but after August 24, 1992.
In resolving this issue, the undersigned cannot find, and respondent has not credibly reported, any clear expression in the statute that the legislature intended to apply the statute retroactively. At the same time, the statute affects petitioners' substantive rights by imposing new obligations or duties in connection with their right to withdraw under section 624.430, and thus it is deemed to be substantive in nature. Because the rule has the effect of imposing retroactive obligations and duties on petitioners in contravention of section 627.7013, subsection (9) is found to be an invalid exercise of delegated legislative authority.
b. Rule 4-141.020(2)(b)
Proposed rule 4-141.020(2)(b) defines the terms "reduce presence in Florida," "reduce," and "reduction" as follows:
(b) "Reduce presence in Florida," "Reduce," and "Reduction," as used in this rule are
inclusive terms meant to collectively refer to any and all of the following actions as may be desired or taken by an insurer: to
surrender its Florida certificate of authority; to withdraw from Florida; or to discontinue the writing of any one or multiple lines or kinds of insurance in Florida.
Holyoke contends that the foregoing language is invalid because the term "reduction" is defined as including a total withdrawal from all lines of insurance in Florida and the surrender of a certificate of authority, and thus it contravenes sections 624.430, 624.415, 624.416 and 627.7013.
34. Sections 624.430, 624.6011, 624.6012 and 627.7013 are cited by DOI as the source of authority for the definition. There is nothing in section 624.6011, which classifies insurance into seven "kinds of insurance," nor section 624.6012, which defines the term "lines of insurance," authorizing the broad and sweeping definition of the word "reduction." Similarly, section 627.7013(2)(b) authorizes the DOI to "adopt rules to implement this subsection," but subsection (2) deals only with "the cancellation or nonrenewal of personal lines residential property insurance policies that were in force on November 14, 1993, and were subject to the moratorium." Section 624.430 does speak in general terms to "(a)ny insurer desiring to surrender its certificate of authority, withdraw from this state, or discontinue the writing of any one or multiple kinds of insurance in this state," but in the context of this rule, which seeks to prevent all types of withdrawals under the authority of section 627.7013, the rule clearly contravenes the law being implemented. Therefore, paragraph (2)(b) constitutes an invalid exercise of delegated legislative authority.
c. Rule 4-141.020(3)
Proposed rule 4-141.020(3) reads as follows:
(3) Actions Having the Substantial Effect of a Withdrawal or Discontinuance of Writing Insurance in this State. Reductions subject
to Section 624.430, Florida Statutes, include any action or actions the reasonably forseeable substantial effect of which is, or will be
when the action is completed, to have discon- tinued the writing of a kind or line of insurance or to have withdrawn from Florida. "Substantial effect" means that, for example, the continuance of a token amount of writing in Florida will not prevent a conclusion that a reduction subject to Section 624.430 has or will occur. Furthermore, it is not determinative of the existence of a reduction requiring notice under Section 624.430, that the action is taken in a single step, or by a series of steps over time, if the reasonably forseeable effect of the action or actions is or will to be to (sic) have substantially effected a reduction. The application of Section 624.430 does not depend upon the insurer's subjective statement of desire or intent as to the effect of its actions.
In their petition, USF&G and FGIC contended this part of the rule impermissibly "conflicts with, modifies or extends the authorizing statutes in that the rule adopts a 'reasonably forseeable substantial effect' test for determining whether a proposed action is subject to Section 624.430, Florida Statutes."
While petitioners have addressed other somewhat similar provisions in paragraph (9)(a), no argument has been made in their proposed order as to subsection (3), and the undersigned has accordingly assumed the issue to be abandoned.
d. Rule 4-141.020(5)
Proposed rule 4-141.020(5) prescribes the following time limitations in which an insurer can take no action after filing a notice of reduction with DOI:
(5) Notice to Precede Action to Reduce Presence in Florida. An insurer shall take no action in furtherance of a reduction, prior to the expir- ation of 90 days after the receipt by the depart- ment of the notice required by Section 624.430. Prohibited actions include sending any notice of cancellation or termination, or notice of intent
to cancel or terminate, to any policyholder, agent, managing general agent, reinsurer, or other person or entity.
In their petition, USF&G and FGIC have alleged that the proposed rule conflicts with, modifies or extends "the authorizing statute in that it prohibits an insurer from taking action in furtherance of the proposed reduction prior to the expiration of the 90-day period under section 624.430, Florida Statutes." Holyoke makes the same allegation and contends the rule contravenes sections 624.430, 624.415 and 624.416.
The record is not clear on the exact manner in which section 624.430 operates. It may be reasonably inferred, however, that once a notice of withdrawal is filed, the insurer may then begin notifying customers and other interested persons that it will withdraw at the end of the ninety-day statutory time period. By restricting insurers from taking this action in contravention of the terms of section 624.430, and there being no other valid source of authority, subsection (5) is found to be an invalid exercise of delegated legislative authority.
e. Rule 4-141.020(6)(e)4.
Paragraph (6)(e) describes the content of the notice to be given to DOI when providing a notice of reduction. Subparagraph 4. therein requires the following information to be provided in the notice of reduction:
4. Insurers shall also provide the department with the following information in the notice:
A listing of all lines of insurance the insurer than has in force in Florida which will be affected by the reduction, and for each line, a statement of the approximate number of policies and dollars of premium then in force in Florida
and which will be affected by the desired reduction.
A description of what notice and treatment
will be given by the insurer to its affected Florida policyholders concerning the reduction; and what steps will be taken by the insurer regarding processing of any outstanding covered claims of
such policyholders while and after the insurer accomplishes its reduction.
A description of projected impact of the reduction upon the insurer's Florida agent and agency force, if any. In addition to any other information related to the impact on agents, the insurer shall state the number of affected agents and give a brief description of what they are being told.
Holyoke claims that this portion of the rule is invalid because it requires an insurer "to provide excessive information" in contravention of sections 624.430, 624.415 and 624.416.
Since the proposed rule is based upon the premise that the DOI has the authority under section 627.7013 to restrict the ability of insurers to withdraw in any fashion, and such statutory authority has been found to be lacking in the laws being implemented, the rule is deemed to be an invalid exercise of delegated legislative authority on the ground it modifies or extends sections 624.430 and 627.7013.
f. Rule 4-141.020(7)(a) and (b)
These paragraphs describe the DOI's responsibilities once an insurer files a notice of reduction. They read as follows:
(7) Department Action Upon Receipt of Notice.
Subsequent to receiving the initial filing the department will request the insurer to provide further information, or will conduct such other investigation as is necessary to determine whether the initial information provided is accurate and whether the proposed action will have the effects projected by the insurer.
Reduction Tolled During Certain Investi- gations. The department shall inform the insurer by (sic) that the proposed reduction would be in
violation of, or cause a violation of, any provision of the Insurance Code or rule of the department, and thereafter the insurer shall not effect the reduction and shall terminate any action then under way towards accomplishment of the reduction, until such time as the department's allegation is determined under Section 120.57, Florida Statutes, and such appeals
as may be taken by either party are concluded.
Like so many other parts of the rule, Holyoke contends here that the foregoing language is invalid because it contravenes sections 624.430, 624.415, and 624.416.
Since the proposed rule purports to place new restrictions on insurers seeking to withdraw, and it has no source of statutory authority, the above language is found to be an invalid exercise of delegated legislative authority on the ground it extends or modifies sections 624.430 and 624.7013.
g. Rule 4-141.020(8)
This provision provides that no surrender of a certificate is effective until approved by DOI. The specific language in the subsection reads as follows:
(8) Certificate of Authority Surrender Effected by Department Order. No surrender or attempted surrender of a certificate of
authority is effective until accepted by order of the department.
USF&G and FGIC contend the rule conflicts with, modifies or extends section 624.430 since that statute requires an insurer to provide notice that it intends to surrend a certificate of authority, but does not require it to obtain DOI approval to do so. In its petition, Holyoke has alleged that the foregoing language contravenes not only section 624.430, but also sections 624.415 and 624.416.
As noted in finding of fact 17, until the enactment of section 627.7013, DOI has always taken the position that a notice of withdrawal did not require specific agency approval. Rather, DOI has said that the only power or duty granted it under section 624.430 was a ministerial one of altering the certificate of authority to reflect the insurer's withdrawal from certain lines of insurance or, in the case of complete withdrawal from the state, to cancel the insurer's certificate of authority. Since section 624.430 has not been amended, and section 627.7013 does not enlarge DOI's rights with regard to a notice of withdrawal filed by an insurer, the paragraph is found to in conflict with both sections 624.430 and 627.7013. Therefore, it is deemed to be an invalid exercise of delegated legislative authority.
h. Rule 4-141.020(9)(a)
This paragraph generally provides that any reductions in residential policies proposed by an insurer must be unrelated, directly or indirectly, to a reduction of risk of loss from hurricane exposure. The rather lengthy rule reads as follows:
Reduction Must be Unrelated to Risk of Loss From Hurricane Exposure. Pursuant to Section 627.7013, where the reduction affects residential policies, the proposed reduction must be unrelated to the risk of loss from hurricane exposure. The department notes that Section 627.7013 does not in any way qualify or limit the requirement that the reduction be unrelated to the risk of loss from hurricane exposure. The department interprets the word "unrelated," as used in Section 627.7013, in the context of the exigent circumstances motivating the enactment of the statute, and
the remedial nature of the statute, as requiring
a liberal, wide-reaching definition, so that the reduction must be completely unrelated, directly and indirectly, to reduction of risk of loss
from hurricane exposure. As stated in subsection (3), above, the department is not bound by the reason facially asserted for the reduction. If the reduction is related in part to reduction of
risk of loss from hurricane exposure, the reduction is prohibited unless authorized as type one, two, or three relief, under Rule 4-141.021, notwith- standing that some other reason is in good faith also part of the reason for seeking the reduction. The objective effect of the propose (sic) reduction in reducing hurricane exposure is given more weight than the insurer's subjective motivations, in determining whether the reduction is unrelated to risk of hurricane exposure. Subjective motivation is relevant primarily only where the objective effect is equivocal. Factors which will be given great weight in evaluating whether a desired reduction is related to risk of hurricane loss are:
Would the reduction in Florida be accompanied by reduction action by the insurer in other states?
If so, would a disproportionate amount of the impact be in areas of the country especially subject to risk of loss from hurricane?
How much of the reduction in Florida would be in residential policy exposures as compared to exposures in other lines of insurance in Florida?
If the insurer is discontinuing writing only some lines of insurance are the lines being discontinued especially subject to risk of loss from hurricane, as compared to the lines not being discontinued?
Does the insurer have a significant con- centration of residential policies and exposure to risk of loss from hurricane exposure under residential policies in Florida?
Would the desired reduction significantly reduce the insurer's exposure to risk of loss
from hurricane exposure under residential policies in Florida?
Holyoke argues that the paragraph contravenes sections 624.430,
624.416 and 627.7013 by stating that any "reduction" must be "unrelated to risk of loss from hurricane exposure" and that "unrelated" means "completely unrelated, directly and indirectly, to reduction of risk of loss from hurricane exposure." At the same time, USF&G and FGIC contend the rule is invalid since it "improperly" defines the term "unrelated" to permit the DOI to apply a subjective "effects" test "using illegal, arbitrary, capricious, and vague factors which fail to establish adequate standards for agency action and which exceed the agency's delegated authority."
Although several statutes are cited as being the law implemented, section 627.7013 is the principal source of authority for the rule. Subparagraph (2)(a)1. of the statute provides in relevant part that
(t)his subparagraph does not prohibit any cancellations or nonrenewals of such policies for any other lawful reason unrelated to the risk of loss from hurricane exposure.
The statutory language unequivocally reserves to insurers the right to cancel or nonrenew policies "for any other lawful reason unrelated to the risk of loss from hurricane exposure." To the extent the rule authorizes DOI to prohibit nonrenewals or cancellations if they are related in part to reduction of hurricane exposure, even if other reasons are in good faith and are part of the reason for seeking the cancellations or nonrenewals, the language contravenes the statute.
The rule further provides that if the effect of a reduction in exposure is to avoid hurricane exposure, the nonrenewal or cancellation can be denied even if the insurer has given a lawful reason unrelated to the risk of loss from hurricane exposure. Since it can be reasonably inferred that the ultimate effect of every withdrawal is to reduce to zero the insurer's risk of loss from hurricane exposure, the "effects" test strips the statute of its clear mandate that insurers maintain the right to cancel or nonrenew policies "for any other lawful reason unrelated to the risk of loss from hurricane exposure." For this additional reason, the rule contravenes the statute.
Next, while there is some evidential support as to DOI's theory in adopting the rule as a whole, there is no factual basis in the record to support the rationale for the language in paragraph (9)(a). As such, it is deemed to be arbitrary and capricious.
Finally, in applying the six factors that would be given "great weight" in evaluating whether a desired reduction is related to risk of hurricane loss, the DOI acknowledges that there are no criteria or guidelines to follow in weighing these objective effects. Indeed, the DOI author admitted he had insufficient experience to fashion more specific guidelines. Even so, the language is not so vague as to confuse a person of reasonable knowledge, nor can it be said that the rule fails to establish adequate standards for agency action which exceed the agency's delegated authority.
i. Rule 4-141.020(9)(b)
The final provision under challenge is found in paragraph (9)(b) which reads as follows:
(b) If the department determines that any proposed reduction violates Section 627.7013, the insurer shall not proceed with the reduction as it affects residential policies, and shall file an application under Rule 4-141.021 which implements Section 627.7013. The reduction
in residential policies shall be limited to the extent of relief granted the insurer by the department under Section 627.7013 and Rule 4-141.021.
Holyoke contends that this language is invalid because it contravenes sections 624.430, 624.415 and 624.416. Although the allegation is imprecise, it is assumed that petitioner contends the rule impermissibly broadens the
definition of the word "reduction" to include an insurer's withdrawal from the state or the surrender of a certificate of authority.
Because the undersigned has previously found that the DOI clearly lacks statutory authority under section 627.7013 to limit withdrawals from the state or the surrender of a certificate of authority, and the broad definition of "reduction" in paragraph (2)(b) has been deemed to be invalid, it is found that the language in the rule conflicts with sections 624.430 and 627.7013 and is an invalid exercise of delegated legislative authority.
D. Constitutional Claims
Even if the rule is a valid exercise of delegated legislative authority, Holyoke nonetheless contends the rule is invalid because it violates the Florida and United States Constitutions in several respects. USF&G and FGIC join in this claim.
Due process and takings clause
Article I, section 9 of the Florida Constitution provides that "(n)o person shall be deprived of life, liberty or property without due process of law
. . ." USF&G, FGIC and Holyoke contend the proposed rule violates this provision and its federal counterpart, the 14th Amendment of the United States Constitution.
Holyoke's presence in the state may be characterized as small. Therefore, the absence of economies of scale assures continuing operating losses for the company. Indeed, in 1993 and 1994, Holyoke suffered operational losses in the state of $822,071 and $736,000, respectively, without the landfall of a hurricane.
The rule bars Holyoke from withdrawing totally from Florida and surrendering its certificate of authority as it wishes to do. In Holyoke's case, every dollar of risk required to be underwritten in Florida requires that it forego writing business in another state, or increase its surplus-to-writings ratio, thereby increasing the financial risk assumed.
The prospect of continuing losses in Florida impacts Holyoke in two ways. First, it suffers a drain on its surplus to the extent of the forced losses. Second, given the relationship between surplus and writing capacity, the loss of surplus caused by the operating losses results in its inability to write business in another state upon the lost surplus.
USF&G is now in the process of downsizing its firm. In 1991, it was on the verge of insolvency having suffered losses of $600 million in that year alone. Based on marketing studies performed after 1991, the company has reshaped its corporate strategy and has subsequently withdrawn entirely from two states (Texas and Louisiana), and has withdrawn all personal lines from nine states. In addition, USF&G has made selected withdrawals for particular lines in many other states, and has pared its total employees from 12,500 to 6,000. The proposed rule prevents it from meeting its corporate objective of filing with DOI a notice of withdrawal for personal homeowners multiperil insurance.
Equal protection clause
Section 2 of Article I of the Florida Constitution provides in part that "(a)ll natural persons are equal before the law." Under the proposed rule,
Holyoke must continue to do business in the personal lines market of the state indefinitely, or at least until November 1996. Holyoke contends this is to the detriment of residents of other states in which it writes business, and that the rule favors Florida residents over residents of other states for an illegitimate purpose.
Commerce clause
The federal commerce clause limits the power of the states to interfere with interstate commerce. Holyoke contends that the interstate allocation of capital and surplus constitutes interstate commerce, and because the proposed rule seeks to regulate its decision as to how to allocate capital and surplus, it violates the commerce clause.
Impairment of contracts
Article I, section 10 of the Florida Constitution provides that "(n)o
. . . law impairing the obligation of contracts shall be passed." All three petitioners contend that section 627.7013, as interpreted by the proposed rule, violates the impairment of contract clauses of both the Florida and United States Constitutions.
All petitioners had insurance contracts in existence at the time section 627.7013 was enacted and the rule proposed. Prior to that time, petitioners' rights with respect to those contracts were set forth in section
624.430. The DOI's interpretation of section 627.7013, as expressed in its rule, prohibits the insurers from exercising these pre-existing contractual rights, including the right to withdraw. To this extent, an impairment has occurred. By prohibiting an insurer from withdrawing from the state, DOI's impairment of those rights can be deemed to be substantial.
Petitioners operate in a heavily regulated industry. At the same time, according to the findings and purposes of section 627.7013, that legislation was prompted by Hurricane Andrew's "enormous monetary impact to insurers," proposals by insurers to make "substantial cancellation or nonrenewal of their homeowner's insurance policyholders," and the legislature's "compelling state interest in maintaining an orderly market for personal lines residential property insurance."
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsections 120.54(4) and 120.57(1), Florida Statutes.
As the parties challenging the proposed rules, petitioners have the burden of proving by a preponderance of the evidence that the challenged rules are an invalid exercise of delegated legislative authority. Agrico Chemical Company v. Department of Environmental Regulation, 365 So.2d 759, 763 (Fla. 1st DCA 1978).
Subsection 120.52(9), Florida Statutes, defines an invalid exercise of authority as follows:
Invalid exercise of delegated legislative authority means action which goes beyond the powers, functions, and duties delegated by
the legislature.
The same statute goes on to provide that a proposed rule is invalid if:
The agency has materially failed to follow the applicable rulemaking procedures set forth in s. 120.54;
The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(7);
The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7);
The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or
The rule is arbitrary or capricious.
As statutory grounds, petitioners first contend that the proposed rule, or parts thereof, are in conflict with the law implemented. In this regard, it is well-established that an agency rule cannot enlarge, modify or contravene the provisions of a statute through rulemaking, and a rule which purports to do so constitutes an invalid exercise of delegated legislative authority. See, e. g., Cataract Surgery Center v. Health Care Cost Containment Board, 581 So.2d 1359 (Fla. 1st DCA 1991). USF&G and FGIC also contend that paragraph (9)(a) of the rule is arbitrary and capricious. Case law instructs us that a proposed rule is arbitrary only if it is not supported by facts and logic. On the other hand, a proposed rule is capricious if it is taken without thought and reason. Agrico, at 763. They further contend that the same paragraph is vague and fails to establish adequate standards for agency decisions. As to the former ground, the test for vagueness is whether men of common understanding must guess at the rule's meaning. State, Dept. of Health and Rehab. Services v. Health Care & Retirement Corp., 593 So.2d 539, 541 (Fla. 1st DCA 1992). As to the latter ground, a rule vests unbridled discretion in an agency when it fails to establish adequate standards and reserves to the agency the arbitrary power to determine private rights. Barrow v. Holland, 125 So.2d 749 (Fla. 1960). Finally, a Hearing Officer cannot adjudicate claims on matters not timely raised by the parties. Compare Agency for Health Care Administration
v. Principal Nursing Services, Inc., 20 F. L. W. D492 (Fla. 1st DCA, February 24, 1995)(improper for Hearing Officer to determine the validity of a rule not specifically alleged to be invalid in the initial petition).
Based on the established facts previously recited, it is concluded that subsections (2)(b), (5), (6)(e)4., (7)(a) and (b), (8), (9), (9)(a) and (9)(b) of proposed rule 4-141.020 either enlarge, modify or contravene the specific provisions of law implemented and are thus an invalid exercise of delegated legislative authority. It is further concluded that based on the findings in paragraph 54 of this order, paragraph (9)(a) is invalid on the additional ground that it is arbitrary and capricious. The remaining statutory contentions are either deemed to have been withdrawn, were not raised in a timely manner, or are without evidentiary support.
In reaching these conclusions, the undersigned has considered DOI's contention that section 627.7013 is a remedial statute, and does not affect substantive rights, and thus there is no impediment to applying it in a retroactive fashion. Remedial statutes have been defined as statutes "relating to remedies or modes of procedure, which do not create new or take away vested
rights, but only operate in furtherance of the remedy or confirmation of rights already existing." City of Lakeland v. Catinella, 129 So.2d 133, 136 (Fla.
1961). If the statute affects substantive rights, however, it can only be applied prospectively unless the legislature makes a clear and explicit statement to the contrary. See, e. g., Young v. Altenhaus, 472 So.2d 1152 (Fla. 1985). In this case, the statute affects the vested rights of the insurers and creates new obligations with respect to their right to discontinue lines of business, withdraw or surrender a certificate of authority. Therefore, absent a clear expression by the legislature that it was intended to be applied retroactively, section 627.7013 must operate in a prospective manner. Since there is no language in the statute to indicate otherwise, the DOI has erred by placing in its rule a retroactive interpretation. This conclusion is further supported and reinforced by Section 624.21, Florida Statutes, which reads as follows:
Each amendment to this code shall be construed to operate prospectively, unless a contrary legislative intent is specified.
In view of these conclusions, which effectively nullify the rule's vitality, it is unnecessary to reach the parties' well-briefed issues of whether the rule passes constitutional muster.
Exhibit 15 offered in evidence by USF&G and FGIC is hereby received.
Based on the foregoing findings of fact and conclusions of law, it is ORDERED that subsections (2)(b), (5), (6)(e)4., (7)(a) and (b), (8)(9),
(9)(a) and (9)(b) of proposed rule 4-141.020 are determined to be an invalid exercise of delegated legislative authority on the ground they enlarge, modify or contravene the statutes being implemented. Further, paragraph (9)(a) is invalid on the additional ground that it is arbitrary and capricious.
DONE AND ORDERED this 7th day of April, 1995, in Tallahassee, Florida.
DONALD R. ALEXANDER
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 7th day of April, 1995.
APPENDIX TO FINAL ORDER
Petitioners (Case No. 94-1003RP):
Partially accepted in finding of fact 5.
Partially accepted in finding of fact 6.
3-8. Partially accepted in findings of fact 9-13. 9-10. Partially accepted in finding of fact 6.
11. | Partially accepted in finding | of | fact | 69. |
12. | Partially accepted in finding | of | fact | 6. |
13-15. | Partially accepted in finding | of | fact | 17. |
16. | Partially accepted in finding | of | fact | 16. |
17. | Partially accepted in finding | of | fact | 17. |
18-21. | Partially accepted in finding | of | fact | 13. |
22-23. | Rejected as being unnecessary. | |||
24. | Partially accepted in finding | of | fact | 14. |
25-26. | Partially accepted in finding | of | fact | 17. |
27. | Partially accepted in finding | of | fact | 55. |
Petitioner (Case No. 94-1004RP):
1-5. Partially accepted in findings of fact 7 and 8. 6-17. Partially accepted in findings of fact 9-18.
18. Partially accepted in finding of fact 8.
Respondent:
Partially accepted in findings of fact 5 and 6.
Partially accepted in finding of fact 6.
Partially accepted in finding of fact 8.
Partially accepted in finding of fact 13.
NOTE: Where a proposed finding has been partially accepted, the remainder has been rejected as being unnecessary for a resolution of the issues, irrelevant, cumulative, subordinate, not supported by the evidence, or a conclusion of law.
COPIES FURNISHED:
Brian M. Nugent, Esquire
P. O. Box 1877
Tallahassee, Florida 32302-1877
Lewis E. Hassett, Esquire
191 Peachtree Street, N. E. Suite 900
Atlanta, Georgia 30303-1757
Austin B. Neal, Esquire
101 North Monroe Street
Monroe Street Tower, Suite 900 Tallahassee, Florida 32302
David J. Busch, Esquire Department of Insurance 645A Larson Building
Tallahassee, Florida 32399-0300
V. Carroll Webb, Director
Joint Administrative Procedures Committee Holland Building, Room 120
Tallahassee, Florida 32399-1300
Liz Cloud, Chief
Bureau of Laws and Administrative Code The Capitol, Room 1802
Tallahassee, Florida 32399-0250
NOTICE OF RIGHT TO JUDICIAL REVIEW
A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the agency clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the district court of appeal in the appellate district where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.
=================================================================
DISTRICT COURT REMAND ORDER
=================================================================
DISTRICT COURT OF APPEAL, FIRST DISTRICT
Tallahassee, Florida 32399-1850
Telephone (904) 488-6151
DATE: August 24, 1995
CASE NO. 95-1299
L. T. CASE NO. 94-1003RP
STATE, DEPT OF INSURANCE UNITED STATE FIDELITY & GUARANTY
vs. / appellant/petitioner, appellee/respondent
BY ORDER OF THE COURT
It appearing that the parties have reached a settlement of this cause to be implemented by entry of the consent order filed with parties' joint motion for remand, the appeal order entered by the hearing officer on April 7, 1995, is hereby vacated and this cause if remanded to the Division of Administrative Hearings for entry of any order consistent with the terms of the settlement and consent order. No motion for rehearing will be entertained, and the Clerk is directed to close this file.
I HEREBY CERTIFY that the foregoing is a true copy of the original court order.
JON S. WHEELER, CLERK
by: Judy Tehan
Deputy Clerk
(SEAL)
Copies:
Davis J. Busch Brian M. Nugent
Lewis E. Hassett Austin B. Neal
Joan C. Green Daniel C. Brown
David Yon Ann Cole
=================================================================
DOAH ORDER REGARDING REMAND
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
UNITED STATES FIDELITY AND ) GUARANTY COMPANY and FIDELITY ) AND GUARANTY INSURANCE COMPANY, ) AND HOLYOKE MUTUAL INSURANCE ) COMPANY IN SALEM, )
)
Petitioners, )
)
vs. ) CASE NO. 94-1003RP
) 94-1004RP
DEPARTMENT OF INSURANCE, )
)
Respondent. )
)
ORDER
This matter having been remanded to the undersigned for the "entry of an Order," the parties shall, within fifteen days from the date of this order, file a copy of the settlement and consent order, together with a draft of a seggested order which complies with the court's mandate.
DONE AND ORDERED this 6th day of September, 1995, in Leon County, Florida.
DONALD R. ALEXANDER
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 6th day of September, 1995.
================================================================= JOINT MOTION FOR ENTRY OF PROPOSED ORDER ON REMAND
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
UNITED STATES FIDELITY AND ) GUARANTY COMPANY, AND FIDELITY ) AND GUARANTY INSURANCE COMPANY, )
)
Petitioner, )
)
v. ) CASE NO. 94-1003RP
) STATE OF FLORIDA, DEPARTMENT ) OF INSURANCE, )
)
Respondent. )
) HOLYOKE MUTUAL INSURANCE COMPANY ) IN SALEM, )
)
Petitioner, )
)
) CASE NO. 94-1004RP
) STATE OF FLORIDA, DEPARTMENT ) OF INSURANCE, )
)
Respondent. )
)
JOINT MOTION FOR ENTRY OF PROPOSED ORDER ON REMAND
The parties hereby jointly move that the Hearing Officer enter the attached proposed Order On Remand, which has been reviewed and approved by all parties.
In support thereof, the parties show:
This Division rendered its final order in case nos. 94-1003RP and 94- 1004RP on April 7, 1995.
Respondent appealed that order to the District Court of Appeal, First District, State of Florida on April 14, 1995, that appeal being assigned case no. 95-1299 by District Court of Appeal. While that appeal was pending, Respondent and Petitioners in case nos. 94-1003RP and 94-1004RP entered into settlement stipulations and Respondent entered Consent orders in Department of Insurance case no. 11086-94-C-DSS and in DOAH case no. 95-1004RP.
The District Court of Appeal, First District, thereupon entered its order of August 24, 1995 in case no. 95-1299 vacating the final order in case nos. 94-1003RP and 94-1004RP and remanding the case to this Division for "entry of an order consistent with the terms of the settlement[s] and consent order [s]."
By order of September 6, 1995 this Division directed the parties to file copies of the settlement agreements and consent orders in this case. The parties have done so.
The parties were preparing a proposed joint order on remand. In the interim this Division entered its order of September 18, 1995.
The September 18 order returned "jurisdiction over the matters raised" in the consent orders and settlement agreements to the Department of Insurance "for implementation and enforcement." However, the September 18 order does not by its terms dispose of these proceedings.
The parties therefore jointly move that the attached Order On Remand be entered, to insure that these proceedings are entirely disposed of.
Respectfully submitted,
HOLYOKE MUTUAL INSURANCE COMPANY STATE OF FLORIDA
DEPARTMENT OF INSURANCE
BY: BY:
LEWIS E. HASSETT DAVID J. BUSCH
Morris, Manning & Martin Fla. Bar No. 140945 3343 Peachtree Road, N.E. 200 East Gaines St. 1600 Atlanta Financial Center 645A Larson Building Atlanta, GA 30326 Tallahassee, Fl 32399
(404) 233-7000 (904) 922-3110 ext. 4146
UNITES STATES FIDELITY & GUARANTY INSURANCE COMPANY and FIDELITY AND GUARANTY INSURANCE UNDERWRITERS, INC.
BY: BRIAN M. NUGENT
Fla. Bar No. 0449639
Katz, Kutter, Haigler, Alderman, Marks, Bryant & Yon
Post Office Box 1877 Tallahassee, Florida 32302
(904) 224-9634
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by to DAVID J. BUSCH, ESQ., Department of Insurance, 645-A Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0300 and LEWIS E. HASSETT, Morris, Manning & Martin, 3343 Peachtree Road, N.E. 1600 Atlanta Financial Center, Atlanta, Georgia 30326, this 29th day of September, 1995.
DAVID A. YON (315052) DANIEL C. BROWN (191049) BRIAN M. NUGENT (0449660)
Katz, Kutter, Haigler, Alderman, Marks & Bryant, P.A.
Highpoint Center, Suite 1200
106 East College Avenue Tallahassee, Florida 32301 (904) 224-9634
ATTORNEYS FOR UNITED STATES FIDELITY AND GUARANTY COMPANY AND FIDELITY AND GUARANTY INSURANCE COMPANY
================================================================= DOAH ORDER ON REMAND
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
UNITED STATES FIDELITY AND ) GUARANTY COMPANY AND FIDELITY ) AND GUARANTY INSURANCE COMPANY, )
)
Petitioners, )
)
vs. ) CASE NO. 94-1003RP
)
DEPARTMENT OF INSURANCE, )
)
Respondent. )
) HOLYOKE MUTUAL INSURANCE COMPANY ) IN SALEM, )
)
Petitioner, )
)
vs. ) CASE NO. 94-1004RP
)
DEPARTMENT OF INSURANCE, )
)
Respondent. )
)
ORDER ON REMAND
On April 7, 1995, the undersigned rendered his final order in these cases. On April 14, 1995, respondent appealed that order to the First District Court of Appeal. The appeal was assigned Case No. 95-1299 by the court. While the appeal was pending, the parties entered into settlement stipulations, and respondent entered consent orders in Department of Insurance Case No. 11086-94- C-DSS and in DOAH Case No. 95-1004RP. True copies of the settlement stipulations are attached hereto as Exhibits 1 and 2. True copies of the consent orders are attached hereto as Exhibits 3 and 4.
The court entered its order on August 24, 1995, vacating the final order in Case Nos. 94-1003RP and 94-1004RP and remanding the case to the undersigned for "entry of an order consistent with the terms of the settlement[s] and consent order[s]." By order dated September 6, 1995, the undersigned directed the parties to file copies of the settlement agreements and consent orders in these cases. The parties have done so.
Having reviewed the settlement agreements, the consent orders, and the court's order of August 24, 1995, and being fully advised in the premises, it is hereby ORDERED:
That the terms and conditions of the settlement agreements and the consent orders attached hereto as Exhibits 1-4, having been entered into knowingly and voluntarily, being within the authority of all entities affected thereby, and being supported by mutual consideration, are binding upon the entities named in the settlement agreements and consent orders. Accordingly, the terms and conditions of Exhibits 1-4 are made a part of this order.
That in view of the terms and conditions of the settlement agreements and the consent orders, petitioners no longer have substantial interests which will be affected by the adoption of the proposed rule challenged in Case Nos.
94-1003RP and 94-1004RP. It is, therefore, consistent with the court's order of August 24, 1995, to dismiss the petitions in Case Nos. 94-1003RP and 94-1004RP as being moot.
That the petitions in Case Nos. 94-1003RP and 94-1004RP are hereby DISMISSED, and the parties to Exhibits 1-4 shall comply with the terms thereof.
DONE AND ENTERED this 11th day of October, 1995, at Tallahassee, Leon County, Florida.
DONALD R. ALEXANDER, Hearing Officer Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 11th day of October, 1995.
COPIES FURNISHED:
Brian M. Nugent, Esquire
O. Box 1877
Tallahassee, FL 32302-1877
Lewis E. Hassett, Esquire 1600 Atlanta Financial Center 3343 Peachtree Road, N.E. Atlanta, GA 30326
David J. Busch, Esquire Department of Insurance 645-A Larson Building
Tallahassee, FL 32399-0300
Exhibit 1
THE TREASURER OF THE STATE OF FLORIDA DEPARTMENT OF INSURANCE
BILL NELSON
IN THE MATTER OF: DOAH CASE NO. 94-1004RP HOLYOKE MUTUAL INSURANCE COMPANY 1ST DCA CASE NO. 95-1299
/
JOINT SETTLEMENT STIPULATION FOR CONSENT ORDER
IT IS HEREBY STIPULATED AND AGREED by and between Holyoke Mutual Insurance Company (hereinafter referred to as "Holyoke") and the State of Florida Department of Insurance (hereinafter referred to as the "DEPARTMENT") that:
The Treasurer and Insurance Commissioner as head of the Departent of Insurance has jurisdiction over the subject matter of this case and the parties herein.
Holyoke is a licensed foreign Insurer domiciled in the State of Massachusetts.
This matter came on to be heard pursuant to Holyoke's reauest to cancel its Florida book of business, to withdraw from all lines of insurance in the State of Florida and to surrender its Certificate of Authority. In view of the existence of unique factual circumstances which are applicable only to this insurer and only in this matter and the unique nature of the bulk assumption agreement described herein, and in light of the pending litigation, the request by Holyoke is approved.
Holyoke's purpose for withdrawing is unrelated to reducing its exposure or risk with respect to hurricane claims.
The DEPARTMENT and Holyoke expressly waive hearing in this matter, the making of Findings of Fact and Conclusions of Law by the DEPARTMENT, except with respect to the finding set forth in paragraph 4 of this stipulation, and all further and other proceedings herein to which the parties may be entitled by law or the rules of the department. Holyoke and the Department agree not to appeal or otherwise contest the Consent Order resulting from this stipulation.
Further, any and all pending controversies except Department of Insurance v. Holyoke, Case No. 95-1299, will be deemed to be resolved upon issuance of a Consent Order in this matter and the parties will immediately dispose of all pending controversies in whatever forum. The terms and conditions of this agreement and the subsequent Consent Order shall be binding regardless of the outcome in Case No. 95-1299. Holyoke further agrees not to participate in any adversarial role in Case No. 95-1299, except to the express extent required by the District Court, upon the execution of the Consent Order and agrees to join the DEPARTMENT in a request for remand of this case, in light of this settlement and based upon the statutory clarification contained in West's Florida Session Law Service, Chapter 95-276, Section 14, Page 2035, which confirms that Section 627.7013, Florida Statutes was always intended to supersede Section 624.430, Florida Statutes.
This stipulation is subject to approval of the Treasurer and Insurance Commissioner, and this stipulation is not binding on either party until execution of the Consent Order. Upon his approval, and without further notice, the Treasurer and Insurance Commissioner shall issue an Order providing for the following:
Holyoke may cancel its Florida insurance business effective midnight, December 31, 1995. Holyoke shall notify its policyholders of this cancellation and of USF&G's offer to assume their business, on a form approved by the DEPARTMENT. This business will be reinsured with USF&G using a "cut- through" agreement which assures that if USF&G Specialty cannot pay these policyholders' claims, the claims will be paid by USF&G. Thus, this assumption should result in Holyoke policyholders receiving substantially the same benefits, potential rates and solvency protections these policyholders had prior to the assumption.
Within 30 days after execution of this agreement, Holyoke shall surrender its certificate of authority and the Department shall accept such surrender, and Holyoke shall not write or renew any policy of insurance unless and until Holyoke requests and receives approval to do so from the DEPARTMENT. For those policies that come up for renewal from the date of the surrender of Holyoke's Certificate of Authority until December 30, 1995, Holyoke shall offer to extend each policy, on a form approved by the Department, until midnight, December 31, 1995, conditioned upon the policyholder paying a prorated premium for such extended period.
Holyoke shall resolve all lawful claims pursuant to its policies and shall submit to the lawful jurisdiction of the Department, regardless of the status of Holyoke's Certificate of Authority, for the enforcement of any necessary action to compel a lawful resolution relating to Holyoke's insurance policies and the lawfully asserted claims based thereon. Further, the Department shall retain jurisdiction for purposes of enforcement of all applicable Florida Insurance Code requirements, Except as provided in this Consent Order and the Joint Settlement Stipulation for Consent Order.
Each party shall bear its own costs and attorney's fees with respect to this matter.
DATED and SIGNED this 24th day of August, 1995. HOLYOKE MUTUAL INSURANCE STATE OF FLORIDA
COMPANY DEPARTMENT OF INSURANCE
By: By:
Exhibit 2
THE TREASURER OF THE STATE OF FLORIDA DEPARTMENT OF INSURANCE
BILL NELSON
IN THE MATTER OF:
UNITED STATES FIDELITY & GUARANTY DOAH CASE NO. 94-1003RP INSURANCE COMPANY and FIDELITY AND 1ST DCA CASE NO. 95-1299 GUARANTY INSURANCE COMPANY
/
JOINT SETTLEMENT STIPULATION FOR CONSENT ORDER
IT IS HEREBY STIPULATED AND AGREED by and between United States Fidelity and Guaranty Insurance Company, Fidelity and Guaranty Insurance Company, and Fidelity and Guaranty Insurance Underwriters, Inc. (hereinafter referred to collectively as "USF&G") and the State of Florida Department of Insurance (hereinafter referred to as the "DEPARTMENT") that:
The Treasurer and Insurance Commissioner as head of the Department of Insurance has jurisdiction over the subject matter of this case and the parties herein.
USF&G is a licensed foreign insurer domiciled in the State of Maryland.
This matter came on to be heard pursuant to USF&G's July 7, 1993 request to withdraw from the State of Florida and surrender of its authority as a foreign insurer to write multi-peril homeowners policies in this State. In view of the existence of unique factual circumstances which are applicable only to this insurer and only in this matter and the unique nature of the bulk assumption described herein, the request by Petitioner is approved.
The DEPARTMENT and USF&G expressly waive hearing in this matter, the making of Findings of Fact and Conclusions of Law by the DEPARTMENT, and all further and other proceedings herein to which the parties may be entitled by law or the rules of the DEPARTMENT. USF&G agrees not to appeal or otherwise contest the Consent Order resulting from this stipulation. Further, any and all pending controversies except Department of Insurance v. USF&G, Case No. 95-1299 will be deemed to be resolved upon issuance of a Consent Order in this matter and the parties will immediately dispose of all pending controversies in whatever forum. The terms and conditions of this agreement and the subsequent Consent Order shall be binding regardless of the outcome in Case No. 95-1299. USF&G further agrees not to participate in any adversarial role in Case No. 95-1299 upon the execution of the Consent Order and agrees to join the DEPARTMENT in a request for remand of this case, in light of negotiations and particularly based upon the statutory clarification, contained in West's Florida Session Law Service, Chapter 95-276, Section 14, Page 2035, which confirms that Section 627.7013, Florida Statutes was always intended to supersede Section 624.430, Florida Statutes.
This stipulation is subject to approval of the Treasurer and Insurance Commissioner. Upon his approval, and without further notice, the Treasurer and Insurance Commissioner may issue an Order providing for the following:
USF&G shall transfer, by a bulk assumption agreement, its homeowners multi-peril to USF&G Specialty Insurance Company (hereinafter USF&G specialty). USF&G shall notify its policyholders of this in a form approved by the DEPARTMENT and substantially similar to the one attached as Exhibit A to this Consent Order. This business will be reinsured with USF&G using a "cut- through" agreement which assures that if USF&G Specialty cannot pay these policyholders' claims, the claims will be paid by USF&G. Thus, this assumption will result in present USF&G customers receiving the same benefits, potential rates and solvency protections these customers had prior to the assumption.
Additionally, USF&G Specialty shall make offers of coverage to all those residential property policyholders of Holyoke Insurance Company (hereinafter Holyoke) who are cancel led by Holyoke pursuant to its Consent Order, Case No. 94-I004RP, with the State of Florida Department of Insurance ("Holyoke Consent Order"). This offer to Holyoke policyholders, which shall be made on or before September 15, 1995, shall be in a form approved by the DEPARTMENT and substantially similar to the one attached as Exhibit B to this Consent Order. The policy offered to these Holyoke policyholders shall be at the same rates and on the same forms as approved for USF&G. This business will be reinsured with USF&G using a "cut-through" agreement which assures that if USF&G Specialty cannot pay these policyholders' claims, the claims will be paid by USF&G.
USF&G Specialty will file an application meeting the requirements for an eligible surplus lines carrier in Florida and the DEPARTMENT will act expeditiously to approve such application if it meets said requirements. Further, USF&G and USF&G Specialty shall act expeditiously to correct any deficiencies necessary in order to qualify for licensure.
The policies written by USF&G Specialty pursuant to paragraphs 5(a) and (b) shall be surplus lines insurance placed under Sections 626.913 through 626.937, Florida Statutes and shall not be policies subject to the provisions of Chapter 93-401, Laws of Florida or section 627.7013, Florida Statutes.
Effective November 1, 1996, USF&G Specialty may nonrenew the policies written pursuant to paragraphs 5(a) and (b). This Agreement imposes no new obligations or rights on USF&G Specialty not existing as of that date.
Notwithstanding paragraph (5)(d) USF&G Specialty shall not prior to November 1, 1996 nonrenew or cancel any policies written pursuant to paragraph 5(a) and (b) USF&G in excess of the numbers allowed under section 627.7013, Florida Statutes, except that cancellations or nonrenewals of policies for failure to pay premium, fraud, or material misrepresentation shall not count against this limit. USF&G Specialty shall continue until November 1, 1996 to insure such policyholders at the same rates and on the same forms as approved for USF&G. Any deviation from those rates or forms prior to November 1, 1996 shall be approved by the DEPARTMENT before becoming effective. It is presumed that USF&G Specialty will request approval for any changes necessary to comply with Florida law and, prior to November 1, 1996, may request approval for any additional rate or form change that an authorized carrier could seek and that approval for such changes will not be unreasonably withheld. Any rate increase approved for USF&G, but not yet implemented, may be implemented by USF&G Specialty without specific approval.
Within 30 days after execution of this agreement, the DEPARTMENT, pursuant to Chapter 624, Florida Statutes, shall remove the multi-peril
homeowners line of insurance from USF&G's certificate of authority and USF&G shall not write or renew any policy of insurance in that line unless and until USF&G receives approval to do so from the DEPARTMENT.
The Immediate Final Order, Case No. 11086-94-C-DSS is vacated and superseded by the Order issued pursuant to this agreement.
Each party shall bear its own costs and attorney's fees with respect to this matter.
DATED and SIGNED this 21st day of August, 1995.
UNITED STATES FIDELITY & GUARANTY INSURANCE COMPANY and FIDELITY
AND GUARANTY INSURANCE COMPANY and
FIDELITY AND GUARANTY INSURANCE STATE OF FLORIDA UNDERWRITE DEPARTMENT OF INSURANCE
By: By: UNITED STATES FIDELITY & GUARANTY
SPECIALTY COMPANY
By:
Exhibit 3
THE TREASURER OF THE STATE OF FLORIDA DEPARTMENT OF INSURANCE
BILL NELSON
IN THE MATTER OF: DOAH CASE NO.: 94-10O4RP 1ST DCA CASE NO.: 95-1299
HOLYOKE MUTUAL INSURANCE COMPANY
/
CONSENT ORDER
THIS CAUSE came on for consideration upon the Joint Settlement stipulation for Consent Order of the parties, which provides for the entry of a Consent Order, and the Treasurer and Insurance Commissioner, having read and considered same, and having reviewed the file and being otherwise fully advised in the premises, hereby finds:
The Treasurer and Insurance Commissioner as head of the Department of Insurance has jurisdiction over the subject matter of this case and the parties thereto.
The entry of this Consent Order shall finally resolve all matters pertaining to Holyoke Mutual Insurance Company's ("hereinafter, "Holyoke") withdrawal from writing all lines of insurance in the State of Florida and to
the surrender of its Certificate of Authority. The terms and conditions of this Consent Order shall be binding on the parties irrespective of the results of any outstanding litigation between the parties, including Case No. 95-1299, presently pending before the State of Florida, First District Court of Appeal.
IT IS THEREFORE ORDERED:
The Department hereby approves Holyoke's withdrawal from the writing of all lines of insurance in Florida based upon USF&G's agreement to offer Holyoke's policyholders coverage pursuant to the USF&G Consent Order of this date. Holyoke shall timely notify its policyholders of the cancellation of their policies and of USF&G'S offer to assume their business in a form approved by the Department and shall cooperate with USF&G in the transfer of this business. This business will be reinsured with USF&G using a "cut-through" agreement which assures that if USF&G Specialty cannot pay these policyholders' claims, the claims will be paid by USF&G. Thus, this assumption should result in Holyoke policyholders receiving substantially the same benefits, potential rates and solvency protections these policyholders had prior to the assumption. However, nothing contained herein shall render Holyoke's rights or obligations conditioned upon, or otherwise affected by, USF&G's and USF&G Specialty's performance of their obligations under USF&G'S Consent Order or under the assumed policies, when assumed.
Effective midnight, December 31, 1995, Holyoke may cancel its Florida book of business.
Within 30 days after execution of this Consent Order, the Department pursuant to Chapter 624, Florida Statutes, shall remove all lines of insurance from Holyoke's Certificate of Authority and accept the surrender of Holyoke's Certificate of Authority and Holyoke shall not write or renew any policy of insurance, unless and until Holyoke applies for and receives approval to do so from the Department. For those policies that come up for renewal from the date of the surrender of Holyoke's Certificate of Authority until December 30, 1995, Holyoke shall offer to extend each policy, on a form approved by the Department, until midnight, December 31, 1995, conditioned upon the policyholder paying a prorated premium for such extended period.
Further, any and all pending controversies, except Case No. 95- 1299 pending before the State of Florida, First District Court of Appeal, are deemed resolved. Notwithstanding this, a terms and conditions of this Consent Order are binding regardless of the outcome in Case No. 95-1299.
The Joint Settlement stipulation for Consent Order between the Department and Holyoke is hereby adopted in its entirety and is binding on the parties and is hereby made a part of this Consent Order.
This Consent Order shall supersede all prior orders of the Department with respect to Holyoke's notice to withdraw from the State of Florida and to surrender its Certificate of Authority.
Holyoke shall resolve all lawful claims pursuant to its policies and shall submit to the lawful jurisdiction of the Department, regardless of the status of Holyokes Certificate of Authority, for the enforcement of any necessary action to compel a lawful resolution relating to Holyoke's insurance policies and the lawfully asserted claims based thereon. Further, the Department shall retain jurisdiction for purposes of enforcement of all
applicable Florida Insurance Code requirements, except as provided in this Consent Order and the Joint Settlement Stipulation for Consent Order.
Each party shall bear its own costs and attorney's fees with respect to this matter.
DONE and ORDERED this * day of August, 1995.
*Note: Exhibit 3 was filed with DOAH undated.
BILL NELSON
Insurance Commissioner and Treasurer
Exhibit 4
THE TREASURER OF THE STATE OF FLORIDA DEPARTMENT OF INSURANCE
BILL NELSON
IN THE MATTER OF:
UNITED STATES FIDELITY & GUARANTY DOAH CASE NO. 94-1004RP INSURANCE COMPANY and FIDELITY AND CASE NO. 11086-94-C-DSS GUARANTY INSURANCE COMPANY
/
CONSENT ORDER
THIS CAUSE came on for consideration upon the Settlement Stipulation of the parties for the entry of an Order, and the Treasurer and Insurance Commissioner, having read and considered same, and having reviewed the file and being otherwise fully advised in the premises, hereby finds:
The Treasurer and Insurance Commissioner as head of the Department of Insurance has jurisdiction over the subject matter of this case and the parties thereto.
The entry of this Order and compliance therewith by United States Fidelity and Guaranty Insurance Company, Fidelity and Guaranty Insurance Company, and Fidelity and Guaranty Insurance Underwriters, Inc. (hereinafter referred to collectively as "USF&G") shall finally resolve all matters pertaining to USF&G's letter of July , 1993, and notice of its intent to withdraw from writing multi-peril homeowners insurance. The Immediate Final Order, Case No. 11086-94-C-DSS is hereby vacated and superseded by this Order. The terms and conditions of this Order shall be binding on the parties irrespective of the results of any outstanding litigation between the parties, including Case No. 95-1299, presently pending before the State of Florida, First District Court of Appeal.
IT IS THEREFORE ORDERED:
The Department hereby approves USF&G's agreement to transfer by a bulk assumption agreement its homeowners multi-peril policies to USF&G Specialty Insurance Company (hereinafter USF&G Specialty). USF&G shall notify its policyholders of this in a form approved by the Department and substantially similar to the one attached as Exhibit A to this Consent Order. This business will be reinsured with USF&G using a 1,cut-through" agreement which assures that if USF&G Specialty cannot pay these policyholders' claims, the claims will be paid by USF&G. Thus, this assumption will result in present USF&G customers receiving the same benefits, potential rates and solvency protections these customers had prior to the assumption.
Additionally, USF&G Specialty shall make offers of coverage to all those residential property policyholders of Holyoke Insurance Company (hereinafter Holyoke) who are cancelled by Holyoke pursuant to its Consent Order, Case No. 94-1004R3, with the State of Florida Department of Insurance ("Holyoke Consent Order"). This offer to Holyoke policyholders, which shall be made on or before September 15, 1995, shall be in a form approved by the Department and substantially similar to the one attached as Exhibit B to this Consent Order. The policy offered to these Holyoke policyholders shall be at the same rates and on the same forms as approved for USF&G. This business will be reinsured with USF&G using a "cut-through" agreement which assures that if USF&G Specialty cannot pay these policyholders' claims, the claims will be paid by USF&G.
USF&G Specialty will file an application meeting the requirements for an eligible surplus lines carrier in Florida and the DEPARTMENT will act expeditiously to approve such application if it meets said requirements. Further, USF&G and USF&G Specialty shall act expeditiously to correct any deficiencies necessary in order to qualify for licensure.
The policies written by USF&G Specialty pursuant to paragraphs 2(b) and (c) shall be surplus lines insurance placed under the provisions of sections 626.913 through 626.937, Florida Statutes and shall not be policies subject to the provisions of Chapter 93- 401, Laws of Florida or section 627.7013, Florida Statutes.
Effective November 1, 1996, USF&G Specialty may nonrenew the policies written pursuant to paragraphs 5(a) and (b). This provision imposes no new obligations or rights on USF&G Specialty not existing as of November 1, 1996.
Notwithstanding paragraph (2)(e), USF&G Specialty shall not prior to November 1, 1996, nonrenew or cancel any policies written pursuant to paragraphs 2(b) and (c) in excess of the numbers allowed under section 627.7013, Florida Statutes, except that cancellations or nonrenewals of policies for failure to pay premium, fraud, or material misrepresentation shall not count against this limit. USF&G Specialty shall continue until November 1, 1996 to insure such policyholders at the same rates and on the same forms as approved for use by USF&G. Any deviation from those rates or forms prior to November 1, 1996 shall be approved by the Department before becoming effective. It is presumed that USF&G Specialty will request approval for any rate and form changes necessary to comply with Florida law and, prior to November 1, 1996, may request approval for any additional rate or form change that an authorized carrier could seek, and that approval for such changes will not be unreasonably withheld. Any rate increase approved for USF&G prior to the date of this
Consent Order, but not yet implemented, may be implemented by USF&G Specialty without specific approval.
Within 30 days after execution of this agreement, the Department pursuant to Chapter 624, Florida Statutes, shall remove the multi-peril homeowners line of insurance from USF&G's certificate of authority and USF&G shall not write or renew any policy of insurance in that line, unless and until USF&G applies for approval to do so with the Department.
The Immediate Final Order, Case No. 11086-94-DSS is hereby VACATED and SUPERSEDED by this Order. Further, any and all pending controversies, except Case No. 95-1299 pending before the State of Florida, First District Court of Appeal, are deemed resolved. Notwithstanding this, all terms and conditions of this Consent Order are binding regardless of the outcome in Case No. 95-1299.
The Joint Settlement Stipulation for Consent Order is hereby adopted in its entirety and is binding on the parties.
Each party shall bear its own costs and attorney's fees with respect to this matte
DATED and SIGNED this 21st day of August, 1995.
BILL NELSON
Insurance Commissioner and Treasurer
SUPPLEMENTAL AGREEMENT
This agreement supplements that certain agreement entered into between United States Fidelity and Guaranty Insurance Company and Fidelity and Guaranty insurance Company and the State of Florida, Department of Insurance for a Consent Order, dated August 21, 1995.
In the event that Holyoke Mutual Insurance Company does not enter into a consent order as contemplated by that agreement, USF&G and F&GIC will offer coverage to Holyoke homeowners' multiperil insured if Holyoke succeeds in the appeal in case no. 95-1299 and non-renews such policies under the same terms and conditions offered to insured of USF&G and F&DIC under the agreement referenced above. In the event that Holyoke Insurance Company does not enter into a consent order as contemplated by that agreement, and further Holyoke does not prevail in case no. 95-1299, USF&G and F&DIC will then have no obligation to offer coverage to Holyoke insured.
Dated this 21st day of August, 1995.
For USF&G and F&GIC For State of Florida, Department of Insurance
| Issue Date | Proceedings |
|---|---|
| Feb. 07, 1996 | Record returned from First DCA filed. |
| Oct. 11, 1995 | Order on Remand sent out. |
| Sep. 29, 1995 | Joint Motion for Entry of Proposed Order On Remand; Order On Remand (for HO signature); Cover Letter filed. |
| Sep. 18, 1995 | Order sent out. (jurisdiction lies with agency) |
| Sep. 13, 1995 | (Respondent) Notice of Filing; Consent Order; Joint Settlement Stipulation for Consent Order filed. |
| Sep. 06, 1995 | Order sent out. (parties shall file a copy of the settlement and consent order within 15 days from the date of this order) |
| Aug. 25, 1995 | BY ORDER OF THE COURT (Parties have reached a settlement) filed. |
| Jun. 29, 1995 | (Mark Delegal) Notice of Change of Address filed. |
| May 30, 1995 | BY ORDER OF THE COURT (initial brief to be filed within 20 days) filed. |
| May 24, 1995 | Index, Record, Certificate of Record sent out. |
| May 15, 1995 | Index & Statement of Service sent out. |
| Apr. 21, 1995 | Letter to DOAH from DCA filed. DCA Case No. 1-95-1299. |
| Apr. 20, 1995 | Letter to M. Lockard from K. Morton (& enclosed (CK# 1831) $17.50 & |
| Apr. 14, 1995 | Certificate of Notice of Administrative Appeal sent out. |
| Apr. 14, 1995 | Notice of Administrative Appeal filed. |
| Apr. 07, 1995 | CASE CLOSED. Final Order sent out. Hearing held 01/19/95. |
| Feb. 17, 1995 | Petitioner's Proposed Final Order filed. (filed by Nugent) |
| Feb. 17, 1995 | Proposed Order Relating to Rule Challenge of Holyoke Mutual Insurance Company in Salem; Petitioner Holyoke Mutual Insurance Company in Salem`s Brief in Opposition to Proposed Rule filed. |
| Feb. 17, 1995 | Respondent's Proposed Final Order (For HO Signature) filed. |
| Feb. 06, 1995 | Letter to HO from Brian M. Nugent re: Clarifying the position of Petitioners with respect to their position and the dismissal filed to the challenge to Proposed Rule 4-141.021; Letter to B. Nugent and L. Hassett from David J. Busch (cc: HO) re: Request |
| Feb. 02, 1995 | Transcripts (Volumes I, II, tagged) filed. |
| Jan. 30, 1995 | (Respondent) Motion for Clarification of Order Closing Cases filed. |
| Jan. 20, 1995 | Order sent out. (DOAH Case Nos. 94-1001RP and 94-1002RP ONLY CLOSED;Stipulation of Dismissal filed.) DOAH Case No. 94-1003RP is the newest lowest consolidated case. |
| Jan. 19, 1995 | CASE STATUS: Hearing Held. |
| Jul. 20, 1994 | Department reply to USF&G response to order to show cause filed. |
| Jun. 10, 1994 | Petitioners Motion to Expedite Discovery Responses filed. |
| Mar. 09, 1994 | Order sent out. (Consolidated cases are: 94-1001RP, 94-1002RP, 94-1003RP, 94-1004RP) |
| Mar. 08, 1994 | (Respondent) Notice of Appearance filed. |
| Mar. 02, 1994 | (joint) Notice of Waiver of Rights to Expedited Hearing filed. |
| Mar. 01, 1994 | Order of Assignment sent out. |
| Feb. 28, 1994 | Ltr. to Liz Cloud from Marguerite Lockard w/cc: Carroll Webb and Agency General Counsel sent out. |
| Feb. 25, 1994 | Petition to Determine Invalidity of Proposed Rules filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Sep. 29, 1995 | Remanded from the Agency | |
| Apr. 07, 1995 | DOAH Final Order | Agency rule conflicted with law implemented and was therefore invalid. |
HIGHLANDS INSURANCE COMPANY vs DEPARTMENT OF INSURANCE AND TREASURER, 94-001003RP (1994)
DEPARTMENT OF INSURANCE AND TREASURER vs. MICHAEL QUINTANA, 94-001003RP (1994)
DEPARTMENT OF INSURANCE vs DANIEL DWIGHT MANOFF, 94-001003RP (1994)
LIBERTY NATIONAL FIRE INSURANCE COMPANY vs DEPARTMENT OF INSURANCE AND TREASURER, 94-001003RP (1994)
