1 1 2 3 4 5 6 7 8 RULE DEVELOPMENT WORKSHOP 9 PROPOSED RULE CHAPTER 69L-5 10 Wednesday, June 24, 2009 11 Room 104J Hartman Building 12 Tallahassee, Florida 13 14 15 16 17 18 19 20 21 Reported by: 22 CLARA C. ROTRUCK 23 Court Reporter 24 25 FOR THE RECORD REPORTING TALLAHASSEE FLORIDA 850.222.5491 2 1 P R O C E E D I N G S 2 MR. FIJMAN: Good morning. My name is Paul 3 Fizman, I am an attorney with the Department of 4 Financial Services, State of Florida, and I will be 5 presiding at this hearing today, as designated by 6 the Honorable Alex Sink, Chief Financial Officer of 7 the State of Florida. 8 For the record, this hearing is being 9 held at 2012 Capital Circle Southeast, the Hartman 10 Building, Room 104J in Tallahassee, Florida, on 11 Wednesday, June 24th, 2009, pursuant to notice 12 published in the May 29th, 2009 edition of the 13 Florida Administrative Weekly. Notice was also 14 given by mail to all known affected or interested 15 persons or organizations. 16 As you know, the subject of this 17 hearing is proposed rule, Rule Chapter 69L-5 18 entitled, Rules for Self-Insurers Under the 19 Workers' Compensation Act. Copies were available 20 at the door, as well as the agenda. 21 The specific purpose of this hearing is 22 to give affected persons notice and an opportunity 23 to present verbal or written comments on all issues 24 under consideration so as to inform the Department 25 as provided in Section 120.54 subsection (2), FOR THE RECORD REPORTING TALLAHASSEE FLORIDA 850.222.5491 3 1 Florida Statutes. 2 Each of you will be given the 3 opportunity to present verbal or written comments 4 concerning proposed Chapter 69L-5. When 5 recognized, please identify yourself by name and 6 title or capacity in which you speak, and please 7 speak loud enough so everyone can hear. 8 Constructive suggestions and proposed 9 alternative language is strongly encouraged. 10 Please avoid redundant and cumulative comments. 11 These proceedings are being tape recorded and will 12 become part of the record. Therefore, you must 13 identify yourself each time you speak, and only one 14 person at a time shall speak. 15 The record shall otherwise include the 16 notices, the agenda, all written statements and any 17 other documents presented to the Department. 18 We have available Robin Ippolito, 19 Division Director of Monitoring Audits -- 20 MS. IPPOLITO: Bureau Chief. 21 MR. FIJMAN: Bureau Chief, I am sorry. And 22 Brian Gee, Executive Director of FSIGA. Robin, do 23 you have an opening? 24 MS. IPPOLITO: No. 25 MR. FIJMAN: Then we will just be entertaining FOR THE RECORD REPORTING TALLAHASSEE FLORIDA 850.222.5491 4 1 comments and statements from the floor. I would 2 appreciate anyone coming up so we can get a good 3 sound and recording of your statement. Mr. Mang. 4 MR. MANG: My name is Doug Mang, and I am here 5 with my partner, Richard Santurri, and thank you 6 all for coming this morning. 7 It seems that I am apparently the one 8 who requested such a hearing, and therefore, your 9 presence here is directly related to my request. 10 We represent Payroll Management, Inc., 11 PMI, which is a PEO, and an authorized self-insurer 12 and has been ever since 2001. PMI currently 13 maintains $1 million in net worth and has had an 14 adequate security deposit. 15 Under the proposed rule the net worth 16 requirements for self-insureds trust will raise 17 from $1 million to $10 million, and we submit that 18 such a dramatic increase constitutes a hardship, 19 certainly on PMI and other self-insured trusts 20 similarly situated. 21 These trusts are operating in the state 22 of Florida. They are properly licensed and in good 23 standing. We believe that there are probably only 24 a few who would be similarly affected by this 25 increase in surplus, and as a consequence it is a FOR THE RECORD REPORTING TALLAHASSEE FLORIDA 850.222.5491 5 1 hardship on them and only them. 2 As a result of this we would suggest 3 the Division consider alternatives for those 4 self-insurers similarly situated. The proposed 5 rule contains no grandfather provision for 6 currently licensed self-insurers and we would 7 recommend such a provision and stand for questions. 8 MR. FIJMAN: Any questions? 9 MS. IPPOLITO: I would like to make a comment. 10 I would just like to make sure you are aware of the 11 provision under 440.38(1)(b)(2) which allows a 12 self-insurer if they are terminated or revoked, 13 they can continue to self-insure by posting an 14 actuarial, a security deposit equal to the 15 actuarially determined loss reserves, a deposit of 16 one and-a-half times that amount. So they can 17 continue to self-insure. 18 MR. MANG: Yes, we are aware of that 19 provision, but we are looking at the specific 20 provision concerning surplus. I believe that 21 enough standards are in place that should allow a 22 self-insurer to maintain that license that are 23 currently licensed, despite the alternative that 24 you suggest, which is the security deposit. 25 That can, of course, change and they FOR THE RECORD REPORTING TALLAHASSEE FLORIDA 850.222.5491 6 1 currently qualify. Our client currently qualifies 2 under the security provisions that you have 3 announced, but we are directing our comments to the 4 surplus requirements, themselves. 5 MR. FIJMAN: Thank you. 6 MR. MANG: You are welcome. Is there anyone 7 else present who would like to make a statement or 8 a comment? 9 MR. MANG: Can we ask a question? How many 10 self-insured trusts today would currently be 11 affected by the increase in the surplus 12 requirements? 13 MR. GEE: It is a handful. 14 MS. IPPOLITO: When you say surplus, do you 15 mean the change in net worth from $1`to $10 16 million? 17 MR. MANG: Yes, ma'am, yes, I am sorry, the 18 concept is net worth. 19 MR. GEE: Less than five. 20 MR. MANG: How many of them are PEOs? 21 MS. IPPOLITO: Just one. 22 MR. MANG: Just one. 23 MS. IPPOLITO: Yes. 24 MR. FIJMAN: Any other questions or comments? 25 The presentations made here today will be given FOR THE RECORD REPORTING TALLAHASSEE FLORIDA 850.222.5491 7 1 careful consideration. How long are we going to 2 keep the record open here? Andrew, how long would 3 you like to keep the record open? 4 MS. IPPOLITO: Fourteen. 5 MR. FIJMAN: Fourteen days. The presentations 6 made here today will be given careful 7 consideration. The record of today's hearing will 8 be left open for 14 days, I believe that is July 8, 9 2009 for submission of any further written 10 comments. 11 Any written comments may be addressed 12 to me or Robin at the Department of Financial 13 Services, Division of Legal Services, 200 East 14 Gaines Street, Tallahassee Florida, 32399. 15 We intend to move forward towards 16 adoption of the proposed rule under consideration, 17 and unless there are any further comments, I hereby 18 declare this hearing adjourned. 19 (Whereupon, the proceedings were 20 adjourned at 10:10 a.m.) 21 22 23 24 25 FOR THE RECORD REPORTING TALLAHASSEE FLORIDA 850.222.5491 8 1 CERTIFICATE OF REPORTER 2 3 4 5 I, CLARA C. ROTRUCK, do hereby certify that I 6 was authorized to and did report the foregoing 7 proceedings, and that the transcript, pages 1 through 7, 8 is a true and correct record of my stenographic notes. 9 10 Dated this 15th day of July, 2009 at 11 Tallahassee, Leon County, Florida. 12 13 ____________________________ 14 CLARA C. ROTRUCK 15 Court Reporter 16 17 18 19 20 21 22 23 24 25 FOR THE RECORD REPORTING TALLAHASSEE FLORIDA 850.222.5491