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Florida Statute 627.0651 | Lawyer Caselaw & Research
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The 2024 Florida Statutes

Title XXXVII
INSURANCE
Chapter 627
INSURANCE RATES AND CONTRACTS
View Entire Chapter
F.S. 627.0651
627.0651 Making and use of rates for motor vehicle insurance.
(1) Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on motor vehicle insurance written in this state. A copy of rates, rating schedules, and rating manuals, and changes therein, shall be filed with the office under one of the following procedures:
(a) If the filing is made at least 60 days before the proposed effective date and the filing is not implemented during the office’s review of the filing and any proceeding and judicial review, such filing shall be considered a “file and use” filing. In such case, the office shall initiate proceedings to disapprove the rate and so notify the insurer or shall finalize its review within 60 days after receipt of the filing. If the 60-day period ends on a weekend or a holiday under s. 110.117(1)(a)-(i), it must be extended until the conclusion of the next business day. Notification to the insurer by the office of its preliminary findings shall toll the 60-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office does not issue notice to the insurer of its preliminary findings within 60 days after the filing.
(b) If the filing is not made in accordance with the provisions of paragraph (a), such filing shall be made as soon as practicable, but no later than 30 days after the effective date, and shall be considered a “use and file” filing. An insurer making a “use and file” filing is potentially subject to an order by the office to return to policyholders portions of rates found to be excessive, as provided in subsection (11).
(2) Upon receiving notice of a rate filing or rate change, the office shall review the rate or rate change to determine if the rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the office shall in accordance with generally accepted and reasonable actuarial techniques consider the following factors:
(a) Past and prospective loss experience within and outside this state.
(b) The past and prospective expenses.
(c) The degree of competition among insurers for the risk insured.
(d) Investment income reasonably expected by the insurer, consistent with the insurer’s investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. Such investment income shall not include income from invested surplus. The commission may adopt rules utilizing reasonable techniques of actuarial science and economics to specify the manner in which insurers shall calculate investment income attributable to motor vehicle insurance policies written in this state and the manner in which such investment income is used in the calculation of insurance rates. Such manner shall contemplate the use of a positive underwriting profit allowance in the rates that will be compatible with a reasonable rate of return plus provisions for contingencies. The total of the profit and contingency factor as specified in the filing shall be utilized in computing excess profits in conjunction with s. 627.066. In adopting such rules, the commission shall in all instances adhere to and implement the provisions of this paragraph.
(e) The reasonableness of the judgment reflected in the filing.
(f) Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida policyholders, members, or subscribers.
(g) The cost of repairs to motor vehicles.
(h) The cost of medical services, if applicable.
(i) The adequacy of loss reserves.
(j) The cost of reinsurance.
(k) Trend factors, including trends in actual losses per insured unit for the insurer making the filing.
(l) Other relevant factors which impact upon the frequency or severity of claims or upon expenses.
(3) Rates shall be deemed excessive if they are likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered.
(4) Rates shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when such replenishment is attributable to investment losses.
(5)(a) Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.
(b) The office has the responsibility to ensure that rates for private passenger vehicle insurance are adequate. To that end, the commission shall adopt rules establishing standards defining inadequate rates on private passenger vehicle insurance as defined in s. 627.041(8). In the event that the office finds that a rate or rate change is inadequate, the office shall order that a new rate or rate schedule be thereafter filed by the insurer and shall further provide information as to the manner in which noncompliance of the standards may be corrected. When a violation of this provision occurs, the office shall impose an administrative fine pursuant to s. 624.4211.
(6) One rate shall be deemed unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses.
(7) Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as rates reflect the differences with reasonable accuracy.
(8) Rates are not unfairly discriminatory if averaged broadly among members of a group; nor are rates unfairly discriminatory even though they are lower than rates for nonmembers of the group. However, such rates are unfairly discriminatory if they are not actuarially measurable and credible and sufficiently related to actual or expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against. Use of a single United States Postal Service zip code as a rating territory shall be deemed unfairly discriminatory unless filed pursuant to paragraph (1)(a) and the justification for its rate incorporates sufficient actual or expected loss and loss adjustment expense experience so as to be actuarially sound. The office shall require that any rate filing resulting from the use of a single zip code as a rating territory does not contain a rate or rate change that is excessive, inadequate, or unfairly discriminatory.
(9) In reviewing the rate or rate change filed, the office may require the insurer to provide at the insurer’s expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated herein.
(10) The office may, at any time, review a rate or rate change, the pertinent records of the insurer, and market conditions; and, if the office finds on a preliminary basis that the rate or rate change may be excessive, inadequate, or unfairly discriminatory, the office shall so notify the insurer. However, the office may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for a period of 1 year after the effective date of the filing unless the office finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being so notified, the insurer or rating organization shall, within 60 days, file with the office all information which, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. In such instances and in any administrative proceeding relating to the legality of the rate, the insurer or rating organization shall carry the burden of proof by a preponderance of the evidence to show that the rate is not excessive, inadequate, or unfairly discriminatory. After the office notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the office withdraws the notification, the insurer shall not increase the rate until the earlier of 120 days after the date the notification was provided or 180 days after the date of the implementation of the rate. The office may, subject to chapter 120, disapprove without the 60-day notification any rate increase filed by an insurer within the prohibited time period or during the time that the legality of the increased rate is being contested.
(11) In the event the office finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the office shall issue an order of disapproval specifying that a new rate or rate schedule which responds to the findings of the office be filed by the insurer. The office shall further order for any “use and file” filing made in accordance with paragraph (1)(b), that premiums charged each policyholder constituting the portion of the rate above that which was actuarially justified be returned to such policyholder in the form of a credit or refund. If the office finds that an insurer’s rate or rate change is inadequate, the new rate or rate schedule filed with the office in response to such a finding shall be applicable only to new or renewal business of the insurer written on or after the effective date of the responsive filing.
(12) Any portion of a judgment entered as a result of a statutory or common-law bad faith action and any portion of a judgment entered which awards punitive damages against an insurer shall not be included in the insurer’s rate base, and shall not be used to justify a rate or rate change. Any portion of a settlement entered as a result of a statutory or common-law bad faith action identified as such and any portion of a settlement wherein an insurer agrees to pay specific punitive damages shall not be used to justify a rate or rate change. The portion of the taxable costs and attorney’s fees which is identified as being related to the bad faith and punitive damages in these judgments and settlements shall not be included in the insurer’s rate base and shall not be utilized to justify a rate or rate change.
(13)(a) Underwriting rules not contained in rating manuals shall be filed for private passenger automobile insurance and homeowners insurance.
(b) The submission of rates, rating schedules, and rating manuals to the office by a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this subsection for any insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating schedules, and rating manuals of such organization. All such information shall be available for public inspection, upon receipt by the office, during usual business hours.
(14)(a) Commercial motor vehicle insurance is not subject to subsection (1), subsection (2), or subsection (9) or s. 627.0645.
(b) The rates for insurance described in this subsection may not be excessive, inadequate, or unfairly discriminatory.
(c) Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on commercial motor vehicle insurance written in this state.
(d) An insurer must notify the office of any changes to rates for type of insurance described in this subsection no later than 30 days after the effective date of the change. The notice shall include the name of the insurer, the type or kind of insurance subject to rate change, and the average statewide percentage change in rates. Actuarial data with regard to rates for risks described in this subsection shall be maintained by the insurer for 2 years after the effective date of changes to those rates and are subject to examination by the office. The office may require the insurer to incur the costs associated with an examination. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the factors in paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
(e) A rating organization must notify the office of any changes to loss cost for the type of insurance described in this subsection no later than 30 days after the effective date of the change. The notice shall include the name of the rating organization, the type or kind of insurance subject to a loss cost change, loss costs during the immediately preceding year for the type or kind of insurance subject to the loss cost change, and the average statewide percentage change in loss cost. Actuarial data with regard to changes to loss cost for risks not subject to subsection (1), subsection (2), or subsection (9) shall be maintained by the rating organization for 2 years after the effective date of the change and are subject to examination by the office. The office may require the rating organization to incur the costs associated with an examination. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the rate factors in paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine if the rate is excessive, inadequate, or unfairly discriminatory.
History.s. 22, ch. 77-468; s. 8, ch. 78-374; s. 2, ch. 81-318; ss. 343, 357, 809(2nd), ch. 82-243; ss. 46, 47, 49, 79, ch. 82-386; s. 94, ch. 83-216; s. 16, ch. 85-245; s. 34, ch. 90-119; s. 114, ch. 92-318; s. 2, ch. 98-173; s. 1070, ch. 2003-261; s. 5, ch. 2010-175; s. 2, ch. 2011-160; s. 1, ch. 2016-133; s. 10, ch. 2020-63.

F.S. 627.0651 on Google Scholar

F.S. 627.0651 on Casetext

Amendments to 627.0651


Arrestable Offenses / Crimes under Fla. Stat. 627.0651
Level: Degree
Misdemeanor/Felony: First/Second/Third

Current data shows no reason an arrest or criminal charge should have occurred directly under Florida Statute 627.0651.



Annotations, Discussions, Cases:

Cases Citing Statute 627.0651

Total Results: 16

City of Jacksonville v. Smith

Court: Fla. Dist. Ct. App. | Date Filed: 2015-02-26T00:00:00-08:00

Citation: 159 So. 3d 888, 2015 Fla. App. LEXIS 2703, 2015 WL 798154

Snippet: fairness and due process.”). . See, e.g., § 627.0651(10), Fla. Stat. (insurer or rating organization

Swan v. State Farm Mutual Automobile Insurance Co.

Court: Fla. Dist. Ct. App. | Date Filed: 2011-04-27T00:00:00-07:00

Citation: 60 So. 3d 514, 2011 Fla. App. LEXIS 5970, 2011 WL 1563934

Snippet: change in uninsured motorist rates pursuant to s. 627.0651. No. 3D10-107 District Court of Appeal

Rando v. Government Employees Insurance Co.

Court: Fla. | Date Filed: 2010-04-08T00:00:00-07:00

Citation: 39 So. 3d 244, 35 Fla. L. Weekly Supp. 201, 2010 Fla. LEXIS 475, 2010 WL 1372697

Snippet: change in uninsured motorist rates pursuant to s. 627.0651. § 627.727(9), Fla. Stat. (2005) (emphasis added

Progressive Express Ins. Co. v. Reaume

Court: Fla. Dist. Ct. App. | Date Filed: 2006-07-28T00:53:00-07:00

Citation: 937 So. 2d 1120

Snippet: unfairly discriminatory" pursuant to section 627.0651(2), Florida Statutes (2002). Therefore, Progressive…State Farm alleging that it had violated section 627.0651(12), Florida Statutes (2002), which prohibits …claim based on a purported violation of section 627.0651, is to seek administrative review pursuant to

State Farm Mut. Auto. v. Gibbons

Court: Fla. Dist. Ct. App. | Date Filed: 2003-12-04T23:53:00-08:00

Citation: 860 So. 2d 1050

Snippet: that State Farm had not complied with section 627.0651(12), Florida Statutes (2002), which prohibits …claim based on a purported violation of section 627.0651, is to seek administrative review pursuant to

Ago

Court: Fla. Att'y Gen. | Date Filed: 2001-05-30T00:53:00-07:00

Snippet: provisions of section 627.651(1), Florida Statutes pursuant to section 627.651(4), Florida Statutes. …provisions of section 627.651(1), Florida Statutes, pursuant to section 627.651(4), Florida Statutes. …though it is not subject to the act, does section 627.651(4), Florida Statutes, exempt the Fund from complying…complying with the provisions of section 627.651(1), Florida Statutes? In sum: The operation of the Palm…governmental plan, it is not subject to ERISA.2 Section 627.651(1), Florida Statutes, provides: "Except as

State, Dept. of Ins. v. Great Northern Insured

Court: Fla. Dist. Ct. App. | Date Filed: 1995-08-21T00:53:00-07:00

Citation: 667 So. 2d 796

Snippet: meaning elsewhere. See §§ 624.031, 627.551, and 627.651, Fla. Stat. (1991). With respect to such funds

Government Employees Ins. Co. v. Douglas

Court: Fla. | Date Filed: 1995-03-08T23:53:00-08:00

Citation: 654 So. 2d 118

Snippet: change in uninsured motorist rates pursuant to s. 627.0651, F.S. (Making and use of rates for motor vehicle

Coy v. FLORIDA BIRTH-RELATED INJURY COMP. PLAN

Court: Fla. | Date Filed: 1992-02-12T23:53:00-08:00

Citation: 595 So. 2d 943

Snippet: in other statutes. §§ 627.062(2)(a) & 627.0651(2), Fla. Stat. (Supp. 1982). There is simply no

FLORIDA AUTO. DEALERS INDUSTRY v. Small

Court: Fla. Dist. Ct. App. | Date Filed: 1992-01-14T23:53:00-08:00

Citation: 592 So. 2d 1179

Snippet: insurance policy to its insureds. We note that section 627.651(5), which is placed under Part VII, while providing

GLENDALE FED. S & L v. State, Dept. of Ins.

Court: Fla. Dist. Ct. App. | Date Filed: 1986-03-12T23:53:00-08:00

Citation: 485 So. 2d 1321

Snippet: injunctive relief as well as a declaration that section 627.0651, under which the department acted, was facially…did not address the constitutionality of section 627.0651 except peripherally, directing its attention instead… jurisdiction to proceed once it found section 627.0651 to be facially constitutional. This case arrives…Criterion's constitutional attack on section 627.0651 centered around the department's alleged unconstitutional… unconstitutional application of section 627.0651. Under established judicial precedent, a suit in circuit

Criterion Ins. Co. v. ST. DEPT. OF INS

Court: Fla. Dist. Ct. App. | Date Filed: 1984-10-11T00:53:00-07:00

Citation: 458 So. 2d 22

Snippet: misconstrues and misapplies section 627.0651(10); Count IV — section 627.0651(10) constitutes an unlawful delegation…section 627.0651(10)," and then ruled: This Court determines that facially Section 627.0651(10), Florida…upholding the facial constitutionality of Section 627.0651(10), Florida Statutes (1982), and dismissing with…of Insurance (Department), pursuant to section 627.0651, Florida's rate filing statute, a rate filing… 22, 1983, the Department, pursuant to section 627.0651(10), notified Criterion by its "Notice of

Dept. of Ins. v. Southeast Volusia Hosp. Dist.

Court: Fla. | Date Filed: 1983-09-15T00:53:00-07:00

Citation: 438 So. 2d 815

Snippet: in other statutes. §§ 627.062(2)(a) & 627.0651(2), Fla. Stat. (Supp. 1982). There is simply no

State, Dept. of Ins. v. Ins. Services Office

Court: Fla. Dist. Ct. App. | Date Filed: 1983-05-03T00:53:00-07:00

Citation: 434 So. 2d 908

Snippet: Reading Section 627.0651(6) in pari materia with the other standards contained in Section 627.0651(3) through…Section 627.0651(6), Florida Statutes. See also, particularly, the language of Section 627.0651(7), (8)…; is not defined in the Code. However, Section 627.0651, Florida Statutes (1979) (also implemented, according…unfairly discriminatory. In particular, Section 627.0651(6) provides: (6) One rate shall be deemed unfairly…the word "equitably" (used in Section 627.0651(6)), means "accurately" in the actuarial

DEPT. OF INS., ETC. v. Teachers Ins. Co.

Court: Fla. | Date Filed: 1981-07-23T00:53:00-07:00

Citation: 404 So. 2d 735

Snippet: motor vehicle insurance rates by a new section 627.0651, Florida Statutes. The relationship, if any, between

Department of Insurance v. Teachers Insurance

Court: Fla. | Date Filed: 1981-07-23T00:00:00-07:00

Citation: 404 So. 2d 735

Snippet: motor vehicle insurance rates by a new section 627.0651, Florida Statutes. The relationship, if any, between