Section 625.091 - Losses and loss adjustment expense reserves; liability insurance and workers' compensation insuranceThe reserve liabilities recorded in the insurer's annual statement and financial statements for unpaid losses and loss adjustment expenses shall be the estimated value of its claims when ultimately settled and shall be computed as follows:
(1) For all liability and workers' compensation claims, the statement and statutory reserves and loss adjustment expenses shall be in accordance with the form of the annual statement as required in s. 624.424, and shall include the computed, determined, or estimated value of the unpaid reported claims and loss adjustment expenses, allocated and unallocated, and a provision for loss and loss adjustment expenses, allocated and unallocated, that are incurred but not reported. For claims under liability policies, the reserve for reported claims shall not be less than $1,000 for each outstanding liability suit.(2)(a) Workers' compensation tabular reserves and long-term disability claims including death claims may be reserved at the present value at 4 percent interest of the determined and the estimated future payments.(b) If workers' compensation reserves are discounted in accordance with paragraph (a), discounted loss and loss expense reserves shall be used in the computation of excess statutory reserves over statement reserves.(3) Structured settlements may be used to reduce reserves if: (a) There is the purchase of an annuity by the insurer to fund future payments that are fixed or determined by settlement provisions or statutes wherein the claimant is the payee, the transaction may be treated as a paid claim and the reserve taken down accordingly. The appropriate disclosure of the contingent liability for such amount must be disclosed in notes to the financial statements of the annual statement; or(b) The insurer assigns the obligation to make periodic payments to a third party and obtains a full and complete release from the claimant, the claim may be treated as a paid claim without additional disclosure.(4)(a) Accounting credit for anticipated recoveries from the Special Disability Trust Fund may only be taken in the determination of loss reserves and may not be reflected on the financial statements in any manner other than that allowed pursuant to this subsection.(b) An insurer may only take accounting credit for anticipated recoveries from the Special Disability Trust Fund for each proof of claim which the fund has reviewed, determined to be a valid claim and so notified the carrier, and extended a payment offer; or a reimbursement request audited and approved for payment or paid by the fund.(c)1. Each insurer shall separately identify anticipated recoveries from the Special Disability Trust Fund on the annual statement required to be filed pursuant to s. 624.424.2. For all financial statements filed with the office, each insurer shall disclose in the notes to the financial statements of any financial statement required to be filed pursuant to s. 624.424 any credit in loss reserves taken for anticipated recoveries from the Special Disability Trust Fund. That disclosure shall include: a. The amount of credit taken by the insurer in the determination of its loss reserves for the prior calendar year and the current reporting period on a year-to-date basis.b. The amount of payments received by the insurer from the Special Disability Trust Fund during the prior calendar year and the year-to-date recoveries for the current year.c. The amount the insurer was assessed by the Special Disability Trust Fund during the prior calendar year and during the current calendar year.s. 117, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 86, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 92, 98, 809(1st), ch. 82-243; ss. 47, 187, 188, ch. 91-108; s. 4, ch. 91-429; s.2, ch. 97-262; s.871, ch. 2003-261; s.141, ch. 2020-2; s.45, ch. 2021-51.Amended by 2021 Fla. Laws, ch. 51, s 45, eff. 6/29/2021.Amended by 2020 Fla. Laws, ch. 2, s 141, eff. 5/12/2020.