|
|
The 2025 Florida Statutes
|
|
|
|
|
F.S. 440.38440.38 Security for compensation; insurance carriers and self-insurers.—(1) Every employer shall secure the payment of compensation under this chapter:(a) By insuring and keeping insured the payment of such compensation with any stock company or mutual company or association or exchange, authorized to do business in the state; (b) By furnishing satisfactory proof to the Florida Self-Insurers Guaranty Association, Incorporated, created in s. 440.385, that it has the financial strength necessary to ensure timely payment of all current and future claims individually and on behalf of its subsidiary and affiliated companies with employees in this state and receiving an authorization from the department to pay such compensation directly. The association shall review the financial strength of applicants for membership, current members, and former members and make recommendations to the department regarding their qualifications to self-insure in accordance with this section and ss. 440.385 and 440.386. The department shall act in accordance with the recommendations unless it finds by clear and convincing evidence that the recommendations are erroneous.1. As a condition of authorization under paragraph (a), the association may recommend that the department require an employer to deposit with the association a qualifying security deposit. The association shall recommend the type and amount of the qualifying security deposit and shall prescribe conditions for the qualifying security deposit, which shall include authorization for the association to call the qualifying security deposit in the case of default to pay compensation awards and related expenses of the association. As a condition to authorization to self-insure, the employer shall provide proof that the employer has provided for competent personnel with whom to deliver benefits and to provide a safe working environment. The employer shall also provide evidence that it carries reinsurance at levels that will ensure the financial strength and actuarial soundness of such employer in accordance with rules adopted by the department. The department may by rule require that, in the event of an individual self-insurer’s insolvency, such qualifying security deposits and reinsurance policies are payable to the association. Any employer securing compensation in accordance with the provisions of this paragraph shall be known as a self-insurer and shall be classed as a carrier of her or his own insurance. The employer shall, if requested, provide the association an actuarial report signed by a member of the American Academy of Actuaries providing an opinion of the appropriate present value of the reserves, using a 4-percent discount rate, for current and future compensation claims. If any member or former member of the association refuses to timely provide such a report, the association may obtain an order from a circuit court requiring the member to produce such a report and ordering any other relief that the court determines is appropriate. The association may recover all reasonable costs and attorney’s fees in such proceedings. 2. If the employer fails to maintain the foregoing requirements, the association shall recommend to the department that the department revoke the employer’s authority to self-insure, unless the employer provides to the association the certified opinion of an independent actuary who is a member of the American Academy of Actuaries as to the actuarial present value of the employer’s determined and estimated future compensation payments based on cash reserves, using a 4-percent discount rate, and a qualifying security deposit equal to 1.5 times the value so certified. The employer shall thereafter annually provide such a certified opinion until such time as the employer meets the requirements of subparagraph 1. The qualifying security deposit shall be adjusted at the time of each such annual report. Upon the failure of the employer to timely provide such opinion or to timely provide a security deposit in an amount equal to 1.5 times the value certified in the latest opinion, the association shall provide that information to the department along with a recommendation, and the department shall then revoke such employer’s authorization to self-insure. Failure to comply with this subparagraph constitutes an immediate serious danger to the public health, safety, or welfare sufficient to justify the summary suspension of the employer’s authorization to self-insure pursuant to s. 120.68. 3. Upon the suspension or revocation of the employer’s authorization to self-insure, the employer shall provide to the association the certified opinion of an independent actuary who is a member of the American Academy of Actuaries of the actuarial present value of the determined and estimated future compensation payments of the employer for claims incurred while the member exercised the privilege of self-insurance, using a discount rate of 4 percent. The employer shall provide such an opinion at 6-month intervals thereafter until such time as the latest opinion shows no remaining value of claims. With each such opinion, the employer shall deposit with the association a qualifying security deposit in an amount equal to the value certified by the actuary. The association has a cause of action against an employer, and against any successor of the employer, who fails to timely provide such opinion or who fails to timely maintain the required security deposit with the association. The association shall recover a judgment in the amount of the actuarial present value of the determined and estimated future compensation payments of the employer for claims incurred while the employer exercised the privilege of self-insurance, together with attorney’s fees. For purposes of this section, the successor of an employer means any person, business entity, or group of persons or business entities, which holds or acquires legal or beneficial title to the majority of the assets or the majority of the shares of the employer. 4. A qualifying security deposit shall consist, at the option of the employer, of:a. Surety bonds, in a form and containing such terms as prescribed by the association, issued by a corporation surety authorized to transact surety business by the office, and whose policyholders’ and financial ratings, as reported in A.M. Best’s Insurance Reports, Property-Liability, are not less than “A” and “V”, respectively. b. Irrevocable letters of credit in favor of the association issued by financial institutions located within this state, the deposits of which are insured through the Federal Deposit Insurance Corporation. 5. The qualifying security deposit shall be held by the association exclusively for the benefit of workers’ compensation claimants. The security shall not be subject to assignment, execution, attachment, or any legal process whatsoever, except as necessary to guarantee the payment of compensation under this chapter. No surety bond may be terminated, and no letter of credit may be allowed to expire, without 90 days’ prior written notice to the association and deposit by the self-insuring employer of some other qualifying security deposit of equal value within 10 business days after such notice. Failure to provide such written notice or failure to timely provide qualifying replacement security after such notice shall constitute grounds for the association to call or sue upon the surety bond or to exercise its rights under a letter of credit. Current self-insured employers must comply with this section on or before December 31, 2001, or upon the maturity of existing security deposits, whichever occurs later. The department may specify by rule the amount of the qualifying security deposit required prior to authorizing an employer to self-insure and the amount of net worth required for an employer to qualify for authorization to self-insure; (c) By entering into a contract with a public utility under an approved utility-provided self-insurance program as set forth in s. 624.46225 in effect as of July 1, 1983. The department shall adopt rules to implement this paragraph; (d) By entering into an interlocal agreement with other local governmental entities to create a local government pool pursuant to s. 624.4622; or (e) By entering into a contract with an individual self-insurer under an approved individual self-insurer-provided self-insurance program as set forth in s. 624.46225. The department may adopt rules to administer this subsection. (2)(a) The department shall adopt rules by which businesses may become qualified to provide underwriting claims-adjusting, loss control, and safety engineering services to self-insurers. (b) The department shall adopt rules requiring self-insurers to file any reports necessary to fulfill the requirements of this chapter. Any self-insurer who fails to file any report as prescribed by the rules adopted by the department shall be subject to a civil penalty. (3)(a) The license of any stock company or mutual company or association or exchange authorized to do insurance business in the state shall for good cause, upon recommendation of the department, be suspended or revoked by the office. No suspension or revocation shall affect the liability of any carrier already incurred. (b) The department shall suspend or revoke any authorization to a self-insurer for failure to comply with this section or for good cause, as defined by rule of the department. No suspension or revocation shall affect the liability of any self-insurer already incurred. (c) Violation of s. 440.381 by a self-insurance fund shall result in the imposition of a fine not to exceed $1,000 per audit if the self-insurance fund fails to act on said audits by correcting errors in employee classification or accepted applications for coverage where it knew employee classifications were incorrect. Such fines shall be levied by the department and deposited into the Workers’ Compensation Administration Trust Fund. (4)(a) A carrier of insurance, including the parties to any mutual, reciprocal, or other association, may not write any compensation insurance under this chapter without a certificate of authority from the office. Such certificate of authority shall be given, upon application therefor, to any insurance or mutual or reciprocal insurance association upon the office’s being satisfied of the solvency of such corporation or association and its ability to perform all its undertakings. The office may revoke any certificate of authority so issued for violation of any provision of this chapter. (b) A carrier of insurance, including the parties to any mutual, reciprocal, or other association, may not write any compensation insurance under this chapter unless such carrier has a claims adjuster, either in-house or under contract, situated within this state. Self-insurers whose compensation payments are administered through a third party and carriers of insurance shall maintain a claims adjuster within this state during any period for which there are any open claims against such self-insurer or carrier arising under the compensation insurance written by the self-insurer or carrier. Individual self-insurers whose compensation payments are administered by employees of the self-insurer shall not be required to have their claims adjuster situated within this state. Individual self-insurers shall not be required to have their claims adjusters situated within this state. (5) All insurance carriers authorized to write workers’ compensation insurance in this state shall make available, at the written request of the employer, an insurance policy containing deductibles in the amount of $500, $1,000, $1,500, $2,000, and $2,500 per claim and a coinsurance provision per claim. Any amount of coinsurance shall bind the carrier to pay 80 percent, and the employer to pay 20 percent, of the benefits due to an employee for an injury compensable under this chapter of the amount of benefits above the deductible, up to the limit of $21,000. One hundred percent of the benefits above the amount of any deductible and coinsurance, as the case may be, due to an employee for one injury shall be paid solely by the carrier. Regardless of any coinsurance or deductible amount, the claim shall be paid by the applicable carrier, which shall then be reimbursed by the employer for any coinsurance or deductible amounts paid by the carrier. No insurance carrier shall be required to offer a deductible or coinsurance to any employer if, as a result of a credit investigation, the carrier determines that the employer is not sufficiently financially stable to be responsible for payment of such deductible or coinsurance amounts. (6) The state and its boards, bureaus, departments, and agencies and all of its political subdivisions which employ labor, and the state universities, shall be deemed self-insurers under the terms of this chapter, unless they elect to procure and maintain insurance to secure the benefits of this chapter to their employees; and they are hereby authorized to pay the premiums for such insurance. (7) Any employer who meets the requirements of subsection (1) through a policy of insurance issued outside of this state must at all times, with respect to all employees working in this state, maintain the required coverage under a Florida endorsement using Florida rates and rules pursuant to payroll reporting that accurately reflects the work performed in this state by such employees. History.—s. 38, ch. 17481, 1935; CGL 1936 Supp. 5966(37), 7476(7), 8135(13); s. 13, ch. 22637, 1945; ss. 13, 17, 35, ch. 69-106; s. 367, ch. 71-136; s. 11, ch. 78-95; ss. 12, 23, ch. 78-300; ss. 29, 124, ch. 79-40; ss. 16, 21, ch. 79-312; s. 1, ch. 80-324; s. 2, ch. 82-65; s. 2, ch. 83-303; ss. 13, 14, ch. 83-305; s. 3, ch. 84-267; s. 67, ch. 85-81; s. 7, ch. 87-330; s. 43, ch. 89-289; ss. 31, 56, ch. 90-201; ss. 29, 52, ch. 91-1; s. 36, ch. 93-415; s. 121, ch. 97-103; s. 9, ch. 2000-150; s. 96, ch. 2000-153; s. 1, ch. 2000-368; s. 23, ch. 2001-91; s. 2, ch. 2002-262; s. 483, ch. 2003-261; ss. 11, 12, ch. 2003-399; s. 27, ch. 2003-412; s. 11, ch. 2004-41.
| |
Annotations, Discussions, Cases:
Cases Citing Statute 440.38
Total Results: 28
304 So. 2d 507
District Court of Appeal of Florida | Filed: Dec 13, 1974 | Docket: 1437907
Cited 26 times | Published
Zinke-Smith, a self-insured employer as defined in Section 440.38(1)(b), F.S., brought this action against Florida
28 So. 2d 325, 158 Fla. 357, 1946 Fla. LEXIS 587
Supreme Court of Florida | Filed: Dec 17, 1946 | Docket: 3262933
Cited 19 times | Published
employer, the liability attaches to the carrier.
Section 440.38 Fla. Statutes 1941 (same F.S.A.), inter alia
396 So. 2d 774
District Court of Appeal of Florida | Filed: Mar 25, 1981 | Docket: 2512049
Cited 12 times | Published
International Patrol, is an employer required by § 440.38, Florida Statutes (1977), to maintain workers'
413 So. 2d 1200
District Court of Appeal of Florida | Filed: Mar 25, 1982 | Docket: 1344091
Cited 10 times | Published
self-insurors pursuant to Florida Statutes, Section 440.38." The amended petition further alleged that
559 So. 2d 587, 1989 WL 104000
District Court of Appeal of Florida | Filed: Sep 6, 1989 | Docket: 1517147
Cited 8 times | Published
facially apply to self-insurers. As described by section 440.38(1)(b), a "self-insurer" is an employer who
124 So. 2d 3
Supreme Court of Florida | Filed: Oct 21, 1960 | Docket: 1415967
Cited 4 times | Published
compensation under this chapter in compliance with § 440.38 shall, as a condition of filing such application
24 So. 2d 42, 156 Fla. 662, 1945 Fla. LEXIS 961
Supreme Court of Florida | Filed: Dec 11, 1945 | Docket: 3270707
Cited 4 times | Published
employer.
Under the workmen's Compensation Law (Section 440.38, Florida Statutes, 1941, and F.S.A.) an employer
79 So. 3d 219, 2012 WL 469838, 2012 Fla. App. LEXIS 2281
District Court of Appeal of Florida | Filed: Feb 15, 2012 | Docket: 60305267
Cited 3 times | Published
exchange, authorized to do business in the state." § 440.38(l)(a), Fla. Stat. (2004); Limerock Indus., Inc
889 So. 2d 961, 2004 WL 2921808
District Court of Appeal of Florida | Filed: Dec 20, 2004 | Docket: 1742655
Cited 3 times | Published
secured workers' compensation coverage for Orr. Section 440.38, Florida Statutes (2002), sets out a number
39 So. 2d 791, 1949 Fla. LEXIS 1321
Supreme Court of Florida | Filed: Feb 25, 1949 | Docket: 3259657
Cited 3 times | Published
and that his employers failed to comply with Section 440.38 of that act. The part of it relevant here requires
154 F. Supp. 3d 1310, 2016 U.S. Dist. LEXIS 172, 2016 WL 25943
District Court, M.D. Florida | Filed: Jan 4, 2016 | Docket: 64306206
Cited 2 times | Published
440.11(l)(a) is inapplicable. Florida Statute § 440.38 lists the permitted Ways an employer can secure
99 So. 3d 1, 2012 Fla. App. LEXIS 4352, 2012 WL 934028
District Court of Appeal of Florida | Filed: Mar 21, 2012 | Docket: 60312871
Cited 2 times | Published
current and future claims for workplace injury. § 440.38(1), Fla. Stat. (2006). As is familiarly known
468 So. 2d 904, 10 Fla. L. Weekly 157
Supreme Court of Florida | Filed: Mar 7, 1985 | Docket: 1725506
Cited 2 times | Published
government body is the self-insured employer. See § 440.38(1). Wage loss benefits, which are at issue here
147 So. 3d 1071, 2014 Fla. App. LEXIS 14961, 2014 WL 4723565
District Court of Appeal of Florida | Filed: Sep 24, 2014 | Docket: 1330439
Cited 1 times | Published
department to pay such compensation directly....
§ 440.38, Fla. Stat. (2013);
Mena v. J.I.L. Constr
901 So. 2d 150, 2005 Fla. App. LEXIS 1407, 2005 WL 320704
District Court of Appeal of Florida | Filed: Feb 11, 2005 | Docket: 1666375
Cited 1 times | Published
"carrier" as any person or fund authorized under section 440.38, Florida Statutes (2000), to insure under the
248 So. 2d 494, 1971 Fla. App. LEXIS 6524
District Court of Appeal of Florida | Filed: May 26, 1971 | Docket: 64520563
Cited 1 times | Published
coverage or by becoming a self insurer (F.S. section 440.38, F.S.A.). The provisions of Chapter 440, as
District Court of Appeal of Florida | Filed: Dec 23, 2024 | Docket: 69491845
Published
performed in the course and the scope of employment”);
§ 440.38(1), Fla. Stat. (requiring the employer to “secure
214 F. Supp. 3d 1265, 2016 WL 5791240, 2016 U.S. Dist. LEXIS 137550
District Court, M.D. Florida | Filed: Oct 4, 2016 | Docket: 64310852
Published
spite of its Indiana coverage. See Fla. Stat. § 440.38(a) (“Every employer shall secure the payment of
952 So. 2d 583, 2007 WL 703561
District Court of Appeal of Florida | Filed: Mar 9, 2007 | Docket: 1703101
Published
payment of workers' compensation benefits. See § 440.38(1)(a), Fla. Stat. (1997). In 1997, the Trust began
795 So. 2d 863, 25 Fla. L. Weekly Supp. 866, 2000 Fla. LEXIS 2275, 2000 WL 1508551
Supreme Court of Florida | Filed: Oct 12, 2000 | Docket: 64808988
Published
imposed or punitive actions authorized under section 440.38, Florida Statutes, may be instigated.
DONE
743 So. 2d 176, 1999 Fla. App. LEXIS 14010, 1999 WL 965599
District Court of Appeal of Florida | Filed: Oct 25, 1999 | Docket: 64791680
Published
chapter.”
The issue before us is resolved by section 440.38(1), which provides that “every employer shall
750 So. 2d 616, 24 Fla. L. Weekly Supp. 489, 1999 Fla. LEXIS 1818, 1999 WL 965679
Supreme Court of Florida | Filed: Oct 21, 1999 | Docket: 64794710
Published
subcontractors.1
Under our plain reading of section 440.38(l)(c), Florida Statutes (1991), and section
713 So. 2d 1075, 1998 Fla. App. LEXIS 8166, 1998 WL 380516
District Court of Appeal of Florida | Filed: Jul 10, 1998 | Docket: 64781767
Published
a self-insured public utility authorized by section 440.38(l)(c).
FP & L entered into a contract with
504 So. 2d 444, 12 Fla. L. Weekly 665, 1987 Fla. App. LEXIS 7118
District Court of Appeal of Florida | Filed: Mar 3, 1987 | Docket: 64625992
Published
enforcement to the amount of the state’s insurance. § 440.38, Fla.Stat. (1985); cf. Avallone v. Board of County
504 So. 2d 444, 12 Fla. L. Weekly 665, 1987 Fla. App. LEXIS 7118
District Court of Appeal of Florida | Filed: Mar 3, 1987 | Docket: 64625992
Published
enforcement to the amount of the state’s insurance. § 440.38, Fla.Stat. (1985); cf. Avallone v. Board of County
132 So. 2d 414
Supreme Court of Florida | Filed: Jul 19, 1961 | Docket: 60198192
Published
insurance in Florida. Self insurers are governed by § 440.38(1) (b), Florida Statutes, F.S.A. More than 20%
116 So. 2d 245
Supreme Court of Florida | Filed: Dec 4, 1959 | Docket: 60193790
Published
payment of compensation in compliance with Section 440.38, Florida Statutes, F.S.A. The employer’s application
97 So. 2d 691
Supreme Court of Florida | Filed: Oct 23, 1957 | Docket: 64489696
Published
compensation under this chapter in compliance with § 440.38 shall, as a condition of filing such application
