DEPARTMENT OF FINANCIAL SERVICES
FINAL REPORT
COMPLIANCE ECONOMIC REVIEW OF RULES FOR 2013
“GROUP 2 RULES”
PURSUANT TO SECTION 120.745, FLORIDA STATUTES
Submitted by the Department of Financial Services
Prior to December 1, 2013
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OVERVIEW
By May 1, 2013, section 120.745(5), F.S. required each agency to perform compliance economic
reviews for all rules listed under Group 2 in the Enhanced Biennial Review of Rules. The Department
of Financial Services (“DFS”) completed this task. It identified twelve rules or rule groupings that
required a Compliance Economic Review:
•
Overview of SFM rule review, plus CERs for 69A-2.024(14); 69A-2.024; 69A-36.106
•
69C-4.40045
•
69K-5.0024
•
69K-5.0026
•
69K-5.011
•
69K-7.005
•
69K-21.002 and 69K-21.004
•
69L-6.015
•
69L-56
Subparagraph 120.745(5)(d) requires each agency to publish a final report of its compliance
economic reviews for Group 2 rules by December 1, 2013. The following items are required to be
included in the report:
•
•
•
•
•
•
The text of the rule
The compliance economic review for the rule
All lower regulatory cost alternatives received by the agency
The agency’s written explanation for rejecting those submitted lower regulatory cost
alternatives
The agency’s justification to repeal or amend the rule or to retain the rule without
amendment
The written certification of the agency head to JAPC verifying completion of the review
and reporting required under s. 120.745(5).
The notice of the completion of this report and the written certification of the Chief Financial
Officer will be published on the DFS website.
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DSF received no lower regulatory cost alternatives and therefore has not rejected any of those
alternatives. The twelve rules are being retained without amendment, with the exception of 69C4.40045, which was amended for clarity only. Because the rules are either mandated by statute or
are essential to the agency’s business, no amendments of the other rules have been made.
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Compliance Economic Reviews for the Department of Financial Services
State Fire Marshal - Overview Of Process To Determine Which Rules Needed a Compliance
Economic Review:
The Division of the State Fire Marshal is statutorily directed to adopt the Fire Prevention Code,
inclusive of the provisions of the Life Safety Code, on a triennial basis. These legislatively mandated
directives, accompanied with the authority to adopt implementing rules, are found in the following
sections of law. Note: The CERs for the State Fire Marshal were written prior to the July 1, 2013
effective date of the redrafted and renumbered Chapter 633. References below for the State Fire
Marshal are to the prior edition of Chapter 633.
633.01 State Fire Marshal; powers and duties; rules
(1) The Chief Financial Officer is designated as "State Fire Marshal." The State Fire Marshal has authority
to adopt rules pursuant to ss. 120.536(1) and 120.54 to implement the provisions of this chapter conferring
powers or duties upon the department. Rules shall be in substantial conformity with generally accepted
standards of firesafety; shall take into consideration the direct supervision of children in nonresidential child
care facilities; and shall balance and temper the need of the State Fire Marshal to protect all Floridians from
fire hazards with the social and economic inconveniences that may be caused or created by the rules. The
department shall adopt the Florida Fire Prevention Code and the Life Safety Code.
(2) Subject to the limitations of subsection (1), it is the intent of the Legislature that the State Fire Marshal
shall have the responsibility to minimize the loss of life and property in this state due to fire. The State Fire
Marshal shall enforce all laws and provisions of this chapter, and any rules adopted pursuant thereto,
relating to:
(a) The prevention of fire and explosion through the regulation of conditions which could cause fire or
explosion, the spread of fire, and panic resulting therefrom;
(b) Installation and maintenance of fire alarm systems and fire protection systems, including fire
suppression systems, fire-extinguishing equipment, and fire sprinkler systems;
(c)1. Servicing, repairing, recharging, testing, marking, inspecting, installing, maintaining, and tagging of fire
extinguishers, preengineered systems, and individually designed fire protection systems;
2. The training and licensing of persons engaged in the business of servicing, repairing, recharging, testing,
marking, inspecting, installing, maintaining, and tagging fire extinguishers, preengineered systems, and
individually designed fire protection systems;
(d) The maintenance of fire cause and loss records; and
(e) Suppression of arson and the investigation of the cause, origin, and circumstances of fire.
(3) The State Fire Marshal shall establish by rule guidelines and procedures for triennial renewal of
firesafety inspector requirements for certification.
(4) It is the intent of the Legislature that the rules promulgated by the State Fire Marshal pursuant to this
section be enforced in such a manner as to prohibit the displacement of currently placed mobile homes
unless there is a threat of imminent danger to the health, safety, or welfare of the general public.
(5) It is the intent of the Legislature that there are to be no conflicting requirements between the Florida
Fire Prevention Code and the Life Safety Code authorized by this chapter and the provisions of the Florida
Building Code or conflicts in their enforcement and interpretation. Potential conflicts shall be resolved
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through coordination and cooperation of the State Fire Marshal and the Florida Building Commission as
provided by this chapter and part IV of chapter 553.
(6) Only the State Fire Marshal may issue, and, when requested in writing by any substantially affected
person or a local enforcing agency, the State Fire Marshal shall issue declaratory statements pursuant to s.
120.565 relating to the Florida Fire Prevention Code and the Life Safety Code.
(7) The State Fire Marshal, in consultation with the Department of Education, shall adopt and administer
rules prescribing standards for the safety and health of occupants of educational and ancillary facilities
pursuant to ss. 633.022, 1013.12, 1013.37, and 1013.371. In addition, in any county that does not employ or
appoint a firesafety inspector certified under s. 633.081, the State Fire Marshal shall assume the duties of the
local county, municipality, or independent special fire control district as defined in s. 191.003 with respect to
firesafety inspections of educational property required under s. 1013.12(3)(b), and the State Fire Marshal
may take necessary corrective action as authorized under s. 1013.12(7).
633.0215 Florida Fire Prevention Code.
(1) The State Fire Marshal shall adopt, by rule pursuant to ss. 120.536(1) and 120.54, the Florida Fire
Prevention Code which shall contain or incorporate by reference all firesafety laws and rules that pertain to
and govern the design, construction, erection, alteration, modification, repair, and demolition of public and
private buildings, structures, and facilities and the enforcement of such firesafety laws and rules. The State
Fire Marshal shall adopt a new edition of the Florida Fire Prevention Code every third year.
(2) The State Fire Marshal shall adopt the National Fire Protection Association's Standard 1, Fire
Prevention Code but shall not adopt a building, mechanical, or plumbing code. The State Fire Marshal shall
adopt the Life Safety Code, Pamphlet 101, current editions, by reference. The State Fire Marshal may
modify the selected codes and standards as needed to accommodate the specific needs of the state.
Standards or criteria in the selected codes shall be similarly incorporated by reference. The State Fire Marshal
shall incorporate within sections of the Florida Fire Prevention Code provisions that address uniform
firesafety standards as established in s. 633.022. The State Fire Marshal shall incorporate within sections of
the Florida Fire Prevention Code provisions addressing regional and local concerns and variations.
633.022 Uniform firesafety standards.—The Legislature hereby determines that to protect the public
health, safety, and welfare it is necessary to provide for firesafety standards governing the construction and
utilization of certain buildings and structures. The Legislature further determines that certain buildings or
structures, due to their specialized use or to the special characteristics of the person utilizing or occupying
these buildings or structures, should be subject to firesafety standards reflecting these special needs as may
be appropriate.
(1) The department shall establish uniform firesafety standards that apply to:
(a) All new, existing, and proposed state-owned and state-leased buildings.
(b) All new, existing, and proposed hospitals, nursing homes, assisted living facilities, adult family-care
homes, correctional facilities, public schools, transient public lodging establishments, public food service
establishments, elevators, migrant labor camps, mobile home parks, lodging parks, recreational vehicle parks,
recreational camps, residential and nonresidential child care facilities, facilities for the developmentally
disabled, motion picture and television special effects productions, tunnels, and self-service gasoline stations,
of which standards the State Fire Marshal is the final administrative interpreting authority.
(2)(a) With respect to the uniform firesafety standards, the department shall develop uniform statewide
standards which are reasonably prudent with respect to protecting life, safety, and property and which take
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into consideration the characteristics of the people utilizing the subject buildings and structures and other
hazards associated with the subject buildings and structures throughout the state.
(b) A local authority may not require more stringent uniform firesafety standards with respect to buildings
or structures subject to such standards except as provided in paragraph (c). A local authority may, on a caseby-case basis, in order to meet special situations arising from historic, geographic, or unusual conditions, with
respect to a building or structure which is subject to the uniform firesafety standards, authorize equivalent
alternative standards for such building or structure; however, the alternative requirements shall not result in
a level of protection to life, safety, or property less stringent than the applicable uniform firesafety standards.
All such local authorities shall enforce, within their firesafety jurisdiction, the uniform firesafety standards for
those buildings specified in paragraph (1)(b) and the minimum firesafety standards adopted pursuant to s.
394.879.
(c) A local authority may require more stringent uniform firesafety standards for sprinkler systems in
buildings specified in paragraph (b), for which the construction contract is let after January 1, 1994, if the
following conditions are met:
1. The local authority has adopted, by ordinance, a fire service facilities and operation plan that outlines
goals and objectives for related equipment, personnel, and capital improvement needs of the local authority
for the next 5 years.
2. The local authority has adopted, by ordinance, a provision requiring proportionate reductions in, or
rebate or waivers of, impact or other fees or assessments levied on buildings that are built or modified in
compliance with the more stringent sprinkler standards.
3. The local authority has adopted, by ordinance, a plan that requires buildings specified in paragraph (b) to
be equipped with an automatic sprinkler system installed in compliance with the provisions prescribed in
standards as established by the National Fire Protection Association and adopted by the State Fire Marshal.
In the event there is a dispute between the owners of the buildings specified in paragraph (b) and a local
authority requiring a more stringent uniform firesafety standard for sprinkler systems, the State Fire Marshal
shall be the final administrative interpreting authority and the State Fire Marshal's interpretation regarding
the uniform firesafety standards shall be considered final agency action.
(3) In establishing the uniform firesafety standards and the minimum firesafety standards, as required by s.
394.879, the department shall consider types of construction materials and their flame spread and smoke
characteristics, occupancy levels, means of egress, special hazard protection, smoke barriers, interior finish,
and fire protection systems or equipment and occupancy features necessary to minimize danger to life from
fire, smoke, fumes, or panic. In considering these factors, the department shall develop minimum standards
which are reasonably prudent with respect to protecting life, safety, and property.
(4)(a) Notwithstanding any provision of law to the contrary, each nursing home licensed under part II of
chapter 400 shall be protected throughout by an approved, supervised automatic sprinkler system in
accordance with s. 9 of National Fire Protection Association, Inc., Life Safety Code, no later than December
31, 2010. A nursing home licensee shall submit complete sprinkler construction documents to the Agency for
Health Care Administration for review by December 31, 2008, and the licensee must gain final approval to
start construction from the agency by June 30, 2009. The agency shall grant a 6-month extension to a nursing
home licensee if the completion and submission of the sprinkler construction documents are contingent
upon the approval of the application for the loan guarantee program authorized under s. 633.0245. In such
case, the agency may extend the deadline for final approval to begin construction beyond June 30, 2009, but
the deadline may not be extended beyond December 31, 2009.
(b) The division may grant up to two 1-year extensions of the time limits for compliance in subparagraph
(a)2. if the division determines that the nursing home has been prevented from complying for reasons
beyond its control.
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(c) The division is authorized to adopt any rule necessary for the implementation and enforcement of this
subsection. The division shall enforce this subsection in accordance with the provisions of this chapter, and
any nursing home licensed under part II of chapter 400 that is in violation of this subsection may be subject to
administrative sanctions by the division pursuant to this chapter.
(d) Adjustments shall be made to the provider Medicaid rate to allow reimbursement over a 5-year period
for Medicaid's portion of the costs incurred to meet the requirements of this subsection. Funding for this
adjustment shall come from existing nursing home appropriations.
633.025 Minimum firesafety standards.
(1) The Florida Fire Prevention Code and the Life Safety Code adopted by the State Fire Marshal, which
shall operate in conjunction with the Florida Building Code, shall be deemed adopted by each municipality,
county, and special district with firesafety responsibilities. The minimum firesafety codes shall not apply to
buildings and structures subject to the uniform firesafety standards under s. 633.022 and buildings and
structures subject to the minimum firesafety standards adopted pursuant to s. 394.879.
(2) Pursuant to subsection (1), each municipality, county, and special district with firesafety responsibilities
shall enforce the Florida Fire Prevention Code and the Life Safety Code as the minimum firesafety code
required by this section.
(3) The most current edition of the National Fire Protection Association (NFPA) 101, Life Safety Code,
adopted by the State Fire Marshal, shall be deemed to be adopted by each municipality, county, and
special district with firesafety responsibilities as part of the minimum firesafety code.
(4) Such codes shall be minimum codes and a municipality, county, or special district with firesafety
responsibilities may adopt more stringent firesafety standards, subject to the requirements of this
subsection. Such county, municipality, or special district may establish alternative requirements to those
requirements which are required under the minimum firesafety standards on a case-by-case basis, in order to
meet special situations arising from historic, geographic, or unusual conditions, if the alternative
requirements result in a level of protection to life, safety, or property equal to or greater than the applicable
minimum firesafety standards. For the purpose of this subsection, the term "historic" means that the building
or structure is listed on the National Register of Historic Places of the United States Department of the
Interior.
Since clearly the Florida Legislature, through the Florida Statutes, mandates that the State Fire
Marshal adopt the most recent Florida Prevention Code and the Life Safety Code, it was determined
that the Compliance Economic Reviews were more applicable to the Florida-specific code changes
rather than those that simply adopt the foundation codes.
Accordingly, we have concentrated and focused our review on those administrative rules, or the
subparts therein, which exceed the foundation code and require either an additional or lower NFPA
1 compliance requirement.
1. Group II Rules
Rules included in Group II Review
Chapter Number
Chapter Title
7
69A-2.024
69A-3
69A-36
69A-40
69A-41
69A-44
69A-53
69A-54
69A-55
69A-56
69A-57
69A-60
Construction and Mining Materials
Fire Prevention - General Provisions
Uniform Firesafety Standards for NonResidential Child Care Facilities
Uniform Firesafety Standards for Assisted
Living Facilities
Uniform Firesafety for Residential Child Care
Facilities
Minimum Firesafety Standards for Residential
Alcohol and Drug Abuse Treatment and
Prevention Programs, Mental Health
Residential Treatment Facilities, and Crisis
Stabilization Units
Uniform Safety Standards for Hospitals and
Nursing Homes
Uniform Standards for Correctional Facilities
Uniform Firesafety Standards for Public Food
Service Establishments
Uniform Firesafety Standards for Migrant
Labor Camps
Uniform Standards for Adult Family Care
Homes
Florida Fire Prevention Code
2. Review Process:
Bureau of Fire Prevention staff reviewed all rules section by section as directed by the Legislature to
determine if any had an economic impact on small businesses. Those that were determined to have
some impact were analyzed. Facts and figures were gathered through various resources, including
Internet research and conversations with stakeholders, to determine if the economic impact was
such that required a Compliance Economic Review (CER) to be prepared. Rules adopting the base
code of the NFPA standards adopted in the Florida Fire Prevention Code were determined to have
no economic impact. The rules adopting Uniform Firesafety Standards and the Florida Fire
Prevention Code were also analyzed using the same analysis process that was done with all other
rules. The Florida Fire Prevention Code itself was not analyzed as a whole but all Florida-specific
amendments were reviewed. Those Florida-specific amendments found to exceed the base code
standards were analyzed for economic impact.
3. Group II Rules with No Economic Impact
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Rule
69A-3.009
69A-3.011
69A-3.012(1)
69A-3.012(2)
69A-3.012(3)
69A-3.012(4)
69A-3.012(5)
69A-36.100
69A-36.101
69A-36.102
69A-36.103
69A-36.107
69A-40.22
69A-40.23
69A-40.24
69A-40.027
69A-40.028
69A-40.029
69A-40.031
69A-40.033
69A-40.035
69A-40.036
69A-41.001
69A-41.002
69A-41.003
69A-41.006
69A-41.007
69A-41.011
69A-41.012
69A-41.014
69A-41.019
69A-41.020
69A-41.024
69A-41.025
69A-41.101
69A-41.102
69A-41.104
69A-41.105
69A-41.107
Special Notes (if any)
relating to DCF reqs., less stringent than NFPA
relating to DCF reqs., less stringent than NFPA
statute driven
statute driven
statute driven
positive impact
current staffing
statute driven
positive impact
currently adopted code
statute driven
less restrictive
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69A-44.001
69A-44.002
69A-44.003
69A-44.006
69A-44.009
69A-53.001
69A-53.002
69A-53.003
69A-53.004
69A-53.005
69A-53.0051
69A-53.0052
69A-53.0053
69A-53.0054
69A-54.001
69A-54.003
69A-54.004
69A-54.005
69A-54.007
69A-55.001
69A-55.002
69A-55.003
69A-55.005
69A-56.001
69A-56.002
69A-56.003
69A-56.004
69A-56.005
69A-56.006
69A-57.001
69A-57.002
69A-57.004
69A-57.005
69A-57.006
69A-57.007
69A-57.008
69A-60.001
69A-60.002
Refers to AHCA rule
positive impact
using current personnel
using current personnel
positive impact
69A-60.003
No; With the exception of Florida-specific
amendments which will be addressed separately
69A-60.004
No; With the exception of Florida-specific
amendments which will be addressed separately
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69A-60.005
69A-60.006(1)
69A-60.006(3)
69A-60.006(4)
69A-60.006(5)
69A-60.007
69A-60.012
Data plate is also required by federal DOT
4. Florida Specific Amendments to the National Fire Protection Code Having No Financial
Impact
NFPA 1
Clarify coordination between Florida Building Code and FFPC as required
by statute and eliminates mandatory certificate of fitness and fee
requirement. No cost.
1.1.2.1
This provision states that reference to NFPA 1 or NFPA 101 within the Code
is to the Florida specific version (NFPA 101-1.1.1.2. is consistent).
1.3.3.3
Does not replace anything in NFPA 1; however, it is an additional provision
which addresses the resolution of conflicts between the Florida Fire
Prevention Code and the Florida Building Code. The amendment is
consistent with existing law (NFPA 101-1.7. is consistent).
1.7.4.1
1.12.7
1.13
Adds authorization for an Authority Having Jurisdiction (“AHJ”) to request
assistance from a building, electrical, plumbing, or similar inspector,
without modifying the authority of the AJH. This provision is consistent
with Declaratory Statements issued by the Department (NFPA 101-1.3.1.1 is
consistent)
Replaces the existing provision by authorizing the AHJ to issue permits for
operations and material storage, but not requiring permits
Provision is redacted in its entirety so that the AJH is no longer authorized
to require certificates of fitness and collect fees for individuals or
companies performing activities related to fire or life safety within his or
her jurisdiction. This provision is consistent with Florida Statutes
11
Delete references to publications that are not enforceable by the fire
official. No cost.
2.2
2.4
NFPA Standards 220, 472, 1031, 1141 and 5000 are not adopted by
reference. Standard 5000 is a building code which is adopted by law by the
Building Commission.
NFPA Standards 472, 1031, 1141 and 5000 are not adopted by reference
Clarification of terms used within the FFPC. No cost.
3.1 and 3.1.1
These provisions require that where terms are not defined in NFPA 1, the
definition in the Florida Building Code shall be used before reference to the
dictionary meaning (NFPA 101- 3. 1. and 3.1.1. are consistent).
Sets a minimum size of address numbers for responding fire units. No cost.
10.12.1.2 and 10.12.1.2.1
These provisions set minimum requirements for address numbers, where
they are required by other provisions of the Code, for clarity and uniform
application. Currently, the local authority has discretion to require any size.
Clarifies the applicable standard for crematory services and describes
guidelines for in-building radio enhancement systems to make
requirement uniform throughout the state. The requirement was formerly
in the annex of the Code. Without the amendment, each authority having
jurisdiction can impose a different standard. No cost.
11.6.2.1
Provision does not change the substance of the section but clarifies that
NFPA 86, not NFPA 82, applies to crematory furnaces for humans and
animals.
11.10-11.10.3
These provisions address In-Building Public Safety Radio Enhancement
Systems in new buildings and delete subjective requirements. The phrase
‘In-Building Public Radio Enhancement System’ refers to the system of
communication between the firefighter in the interior of the building and
incident command on the outside of the building.
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Increases the minimum threshold for an occupant threshold of 100 to an
occupant threshold of 300 for fire sprinkler system; to comport with a
statutory change, deletes the requirement for fire sprinkler requirements
for one- and two-family dwelling and inserts a new statutory date for high
rise sprinkler requirements. No cost.
13.3.2.6.1
This provision deletes “bars with live entertainment” from the list of
Entertainment type assembly occupancies required to be protected
throughout by an approved, supervised automatic sprinkler system, and
increases the occupancy load for all entertainment type occupancies from
100 to 300 to comply with NFPA 13 (NFPA 101-13.3.5.1 is consistent).
13.3.2.18.1
Amendment redacts the requirement that new one and two-family
dwellings be protected throughout by an approved automatic sprinkler
system to be consistent with Florida law (NFPA 101-24.3.5.1. is consistent).
13.3.2.24.2.3 and
13.3.2.24.2.4
These amendments change the date within which high-rise buildings must
be protected throughout by an approved automatic sprinkler system to
December 31, 2019 to be consistent with current Florida law, and reference
the opt out provisions of existing high-rise apartment buildings purchased
as condominiums in Sections 718.111 and 718.112, Florida Statutes (NFPA
101 31.3.5.12 is consistent).
Clarifies that unconnected fire alarm notification appliances cannot be used
for other purposes.
13.7.3.1.3
Clarifies provision of Code that prohibits interference with egress, except
in compliance with the Florida Building Code. No cost.
14.4.4
Prohibits storage, such as shelves, above any component of the means of
egress, such as doors and windows, except in accordance with the Florida
Building Code.
Clarifies that the standards for water mains and hydrants apply to
residential developments. No cost.
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16.4.3 and 16.4.3.1.3.1
These Amendments clarify their application to commercial as well as
residential developments, and allows the completion of water mains and
hydrants on an alternate schedule approved by the fire official, instead of
having to be completed for the entire development before any construction
can begin.
Eliminates the need for additional fire department access roads where
current drives and parking lots exist, and increases the space that must be
cleared around a fire hydrant and fire protection appliance without
approval of the AHJ. No cost.
18.2.3.2.1
Allows the AHJ to require roads or parking lots providing access to the main
entrance door to be treated as access roads, thus recognizing the obvious
fact that fire access is sometimes through private roads and parking lots.
18.2.3.4.5 and 18.2.3.4.5.3
These provisions relating to fire access clarify their application to ramps and
elevated roadways as well as bridges.
18.2.3.5.3
Relates to signage identifying fire lanes, and specifies where they must be
located, the size and style of the signage.
18.3.4.1 and 18.3.4.2
These provisions increase the clearance that must surround fire hydrants
and fire protection appliances and provide an exception with the approval
of the AHJ.
Conforms to the language used in the Statute. No cost.
20.3.4 - 20.3.4.2.3.5.3
34.1.1.2
These provisions simply change the reference from “Day-Care Homes” to
“Day-Care Occupancies” to clarify that they apply to places where day-care
is provided regardless of whether the location is in a home.
Removes a redundant requirement. No cost.
Amendment makes Chapter 34 applicable to buildings which are not
protected by sprinklers, which are otherwise exempt.
Clarifies the prospective application of requirements for new UL300
systems. No cost.
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50.4.4.3
Limits the requirement that new automatic fire-extinguishing systems must
comply with UL 300 to new installations; existing installations can remain in
place subject to the approval of the fire official.
Makes mandatory permits optional and raises threshold for storage of
corrosive materials. No cost.
60.1.5.1.1 - 60.1.5.1.3
Table 60.2.5.5
These provisions make permits optional for the storage, dispensing, use or
handling of hazardous material in excess of allowable quantities set forth in
Table 60.2.5.5., where a material is classified as having more than one
hazard category, and to install, or modify a facility that stores hazardous
materials.
Change the maximum allowable quantities of corrosive material to be
consistent with the Florida Building Code and Declaratory Statements
issued by the Department.
Exempts certain requirements for emergency egress and establishes
separation requirements for fireworks. No cost.
65.11.3.14.4.2 -65.11.4.4.1.3
These provisions exempt certain structures that are not generally occupied
from the requirement that egress doors with latching devices be equipped
with a panic bar, and clarifies that fireworks stored in a building used for
other purposes, must be segregated. However, under these circumstances,
there is no need for a two hour fire wall on either side of the entire
building.
NFPA 101
2.2
2.4
3.3.81.1
3.3.254.6
Delete references to publications that are not enforceable by the fire
official. No cost.
NFPA 220 and 1971 are not adopted.
NFPA 5000 and ASCE7 are not adopted.
Clarification of terms used within the FFPC. No cost.
This provision defines the term “fire-blocking” to conform to the definition
in the Building Code.
This provision clarifies the definition of parking structures that can be
treated as “open.”
15
Provides that auxiliary spaces are not required to meet a different set of
construction requirements from the predominant occupancy. No cost.
6.1.14.1.3. and 6.1.14.1.4
7.2.1.3.3
7.2.1.14
These provisions add areas to be considered part of the predominant
occupancy and be subject to that occupancy instead of the most restrictive
occupancy.
Clarify Code provisions when sliding doors are used in the means of
egress. No cost.
This provision adds an exception to the maximum door thresholds for
exterior sliding doorways.
This provision adds the requirement that Horizontal-Sliding Door
Assemblies be power operated and capable of being operated manually in
the event of power failure to be considered an allowable means of egress.
Increases the threshold for the use of spiral Stairs; imposes noncombustible requirements on certain stairs, platforms and landings;
mandates fire-blocking. Unable to determine the cost – provisions would
only apply to an assembly with a working stage or an occupant load of
1000 or more. No cost.
7.2.2.1.2
This provision provides an additional exception to 7.2.2 for stairways, not a
part of the required means of egress, providing access from the outside
grade level to the basement, when the distance does not exceed 8 feet to
the basement level.
7.2.2.2.3.3
This provision raises the occupancy load of permitted spiral stairs from
three to five and provides an exception permitting a single handrail within
dwelling units, guest rooms and guest suites.
7.2.2.3.1.2
7.2.2.3.1.3
This provision requires that stairs, platforms and landings in all assembly
occupancies with a load of 1000 or more, or having a legitimate stage and
an occupant load of 700 or more, be constructed of noncombustible
materials.
This provision requires that stairways located in a required fire resistant
enclosure have closed risers.
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7.2.2.3.1.4
This provision requires that interior stairs constructed of wood be fireblocked at the top and bottom of the run unless they have open risers.
7.2.2.3.1.5
This provision requires the underside of interior stairways, if of combustible
construction, to be 1-hour fire resistance.
7.2.2.3.3.3
This provision decreases the dimension of nose projections allowed for
sloping treads to comply with the Building Code
Clarify the design and installation of new handrails. No cost.
7.2.2.4.3
7.2.2.4.4.1
7.2.2.4.4.5.
This provision clarifies depth of the projection of handrails in stairways that
will keep the stairway clear to no more than 4 ½ inches
This provision clarifies that new handrails on stairs must be uniform.
This provision reduces the clearance that must be provided between the
handrail and the wall to which it is fastened to be consistent with the
Building Code.
Clarifies the design and installation of new guardrails. No cost.
7.2.2.4.5.2
This provision reduces the minimum height of guard rails for individual
guest rooms and residential board and care occupancies.
7.2.2.4.5.3
This provision requires that in areas not accessible to the public in storage
occupancies, the distance between intermediate rails cannot exceed 21
inches.
Expands the use of the space under stairs for storage purposes. No cost.
7.2.2.5.3.2
This provision allows the use of space under stairs as long as the space is
not used for the storage of flammable or otherwise hazardous materials
Clarifies the design of ramps when used in the means of egress. No cost.
7.2.5.2. and Table 7.2.5.2(a)
This provision requires that new ramps that are a part of the required
means of access be not less than 44 inches wide, unless the ramp is an
egress ramp.
17
7.2.5.3.3
7.2.5.4.1., 7.2.5.4.1.1., and
7.2.5.4.1.2
7.2.11.1. and 7.2.11. 2
Table 7.3.1.2.
This provision provides an exception to the Code requirements for curbs
and barriers that are installed in compliance with the Florida Building Code.
These provisions clarify that where any segment of the ramp is steeper than
1 in 20, handrails must be provided along both sides; handrails which are
not continuous must extend at least 18 inches beyond the top and bottom
of the ramp segment, and be parallel with the floor or ground surface. The
floor or ground surface must run an additional 12 inches beyond the
handrail. A curb or barrier must be provided that prevents the passage of a
4 inch diameter sphere, where any portion of the sphere is within 4 inches
of the floor or ground surface
Expand the use of alternating tread devices in the means of egress. No
cost.
These provisions allow an additional occupancy where the devices can be
used as a means of egress from a mezzanine of not more than 250 square
feet in industrial, health care, storage, detention and correctional
occupancies and within dwelling units of residential occupancies. The
required maximum height of the projected riser is reduced from 9 ½ inches
to 8 inches and the projected minimum depth is increased from 9 ½ inches
to 10 ½ inches. A minimum of twelve inches must be provided between the
handrails
Occupant load was changed to comport with Statute. No cost.
As related to day-care use, this provision changes the square foot per
person from 35 to 20 net
Clarifies the size of allowable impediments within the means of egress, by
adding an exception. No cost.
7.3.2.2
This provision provides an exception to the rule that objects between 27
and 80 inches above the floor may not protrude more than 4 inches. Free
standing objects within those parameters which are mounted on posts or
pylons may overhang no more than 12 inches.
18
Operational clarification provides exception for on the use of storm
shutters in an emergency. No cost.
7.3.4.1.1
This provision allows an exception for the temporary installation or closure
of storm shutters on an emergency escape and rescue opening during
threat of a storm
Clarification to comport with the Florida Building Code. No cost.
7.9.2.4
This provision adds article 700 with which emergency generators providing
power to emergency lighting must comply.
Clarifies the statutory requirement for construction classifications to
comport with the Florida Building Code. No Cost.
8.2.1.2
This provision designates the Florida Building Code as the standard to
determine the requirements for the construction classification instead of
NFPA 220.
If fire alarm systems are required by the Florida Building Code, they must
meet the same requirements as systems required by the Florida Fire
Prevention Code. No cost because all fire alarms systems must comply
with the National Fire Alarm Code.
9.6.1.1
9.6.3.5
9.8., 9.8.1., 9.8.2., 9.8.3. and
9.8.4
This provision applies where supervision of a new fire sprinkler system or
fire alarm system is required by the Florida Building Code.
Clarification to comport with Statute. No cost.
This provision redacts the need to comply with ICC/ANSI A117.1., to comply
with state law.
These provisions redact the word “Special” preceding “inspector”, and
require Florida Licensure to conform to State Statute.
Clarification of the applicability of the Florida Building Code for minimum
construction requirements. No cost.
11.1.6
This provision consistently requires that minimum construction
requirements be in accordance with the Florida Building Code.
This provision is required to comport with the Florida Building Code. No
cost.
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12.2.5.7.5
This provision reduces the path of travel along the aisle accessway from 36
feet to 30 feet from any seat to the closest aisle or egress doorway, to be
consistent with the Building Code.
Removes an exemption for certain fire protection requirements for new
construction when smoke detection systems are provided. No cost.
12.3.6
This provision removes an exception for corridor and lobby protection in
new construction from the general construction requirements where
protected throughout by a smoke detection system providing notification
when the project does not meet the four other exemptions provided.
This provision permits the use of alternative detection devices when the
environment is not conducive to smoke detection systems. No cost.
12.4.7.4
This provision provides an exception to the requirement for an automatic
smoke detection system for areas where ambient conditions will cause an
alarm, when an alternative system is approved.
This provision is required to comport with Florida Building Code. No cost.
14.2.5.2
14.2.5.3, 14.2.5.3.1 and
142.4.3.2
16.2.5.2.
16.2.5.3., 16.2.5.3.1., and
16.2.5.3.2
This provision removes the exception to the 20 foot maximum length of a
dead-end corridor to be consistent with the Building Code
These provisions prohibit common paths of travel which exceed 75 feet and
removes the exception for buildings protected throughout by an approved,
supervised automatic sprinkler system.
This provision removes structures protected by sprinklers from the
prohibition against dead-end corridors which exceed 20 feet in length to be
consistent with the Building Code.
These provisions require than no common path of travel exceed 75 feet and
redacts all exceptions to be consistent with the building Code.
This provision clarifies when emergency egress drills are to be conducted.
No cost.
20
17.7.2.2
This Provision sets forth times and conditions for conducting fire emergency
egress and relocation drills.
This provision is required to comport with Florida Building Code. No cost.
18.2.5.2
This provision reduces the maximum length of dead-end corridors from 30
to 20 feet to be consistent with the Building Code.
28.2.5.5. and 28.2.5.6
These provisions reduce the maximum length of dead-end Corridors to 20
feet to be consistent with the Building Code.
28.2.6.2
This provision reduces the maximum travel distance within a guest room to
a corridor door from 125 feet to 75 feet to be consistent with the Building
Code.
This provision is required to comport with Florida Building Code. No cost.
30.2.5.4.1 and 30.2.5.4.2
These provisions reduce the maximum length of dead-end corridors from
35 feet to 20 feet without regard to whether the building is protected by an
automatic sprinkler system to be consistent with the Florida Building Code.
This provision is required to comport with Florida Statute. No cost.
30.3.4.1.1
This provision removes the requirement that apartment buildings with
more than 11 dwellings be provided with a fire alarm system. Only
apartment buildings four or more stories in height must be so equipped,
consistent with recent statutory amendments.
This provision reduces the number of smoke detectors required when
there is no intervening door. No cost.
30.3.4.5
This provision provides an exception to the requirement that smoke alarms
be installed in every sleeping area, outside every sleeping area in the
immediate vicinity of the bedrooms, and on all levels of the dwelling unit,
including basements. The exception is provided for dwelling units with split
levels of no more than one full story without a door between the adjacent
levels, in which case, a smoke alarm need only be installed in the upper
level
21
Reduces the size of the optional sign by 81%. No cost.
31.3.4.3.5.1
This provision provides an exemption to the requirement that these
systems provide fire department notification where the existing apartment
building is four stories or less, a warning sign is provided and a combination
visual and audible notification device is provided at an approved location.
Clarifies the term “engineered life safety system”. No cost.
31.3.5.12.4.1
This provisions provides a definition for the term “engineered life safety
system” to be used in conjunction with 31.3.5.12.
This provision is required to comport with the Florida Building Code. No
cost.
32.3.1.3. and 32.3.2.5.4
These provisions require that construction be in accordance with the
Florida Building Code, and that dead-end corridors not exceed 20 feet to be
consistent with the Florida Building Code.
36.2.5.2.1
This provision reduces the maximum length of dead-end corridors in
buildings protected by a sprinkler system from 50 feet to 20 feet to be
consistent with the Building Code.
36.3.6.1
36.4.4.8., and 37.4.4.8.
38.2.4.6
Table 40.2.5
This provision amends an exception to the minimum 1 hour fire resistance
rating barrier. The exception applies where the space is occupied by a
single tenant. The amendment adds a provision that the occupant load not
be greater than 30 persons to be consistent with the Building Code.
These provisions add the requirement that combustible kiosks, if built of
light-transmitting plastics, comply with the Florida Building Code.
This provision adds a proviso to the general requirement that a single
tenant space, two or fewer stories, need only a single exit. The total
occupancy load must now be 50 persons or less to be consistent with the
Building Code.
This Table changes the dead-end corridor minimum lengths to 20 feet to be
consistent with the Building Code.
Clarification of operational requirements. No cost.
22
42.2.2.2.5
42.2.5. and Table 42.2.5
Table 42.2.6
This provision clarifies that horizontal or vertical security grilles or doors
that are part of the means of egress from a tenant space comply with
7.2.1.4.1., and must be open during business hours.
This provision is required to comport with the Florida Building Code. No
cost.
This provision reduces the maximum length of dead-end corridors for new
storage occupancies to 20 feet to be consistent with the Building Code.
This table changes the maximum travel distance to exits in occupancies
protected by a sprinkler system from “not limited” to 400 feet for low
hazard and ordinary hazard storage occupancy. Maximum travel distance
to exits for unprotected occupancies is changed from “Not limited” to 300
for low hazard, and 200 for ordinary hazard storage occupancy.
5. Group II Rules with an Economic Impact
69A-2.024- submission of application fee- currently there are 127 licensed construction materials mines. The
annual renewal fee is $1,500 per year, equaling $190,500 per year. This is under the threshold of $200,000
per year for impact.
Seismologist- See CER
Bond requirement- See CER
69A-3.012(6) - requirement to mark buildings regarding construction of trusses; Cost is negligible as these
markings are available for free at a number of locations (See sites such as http://www.freefiresigns.com/)
69A-36.105(2) - Requirement that any fire extinguisher installed in a nonresidential child care facility shall not
be less than 2A-10B:C; The average difference between a 1A-10B:C and a 2A-10B:C is approximately $12 and
the average number of fire extinguishers needed by each facility is 1. With 11,910 facilities licensed in the
state, the annual cost would be appx. $142,920.00 which is under the threshold of $200,000 per year for impact.
69A-36.106- See CER
69A-41.017- Requirement that each residential child care facility shall have at least one general purpose Class
A, B, and C portable fire extinguisher for each floor and that all extinguishers shall not be less than 2A-10B:C;
The average price for 2A-10B:C is approximately $30. There are 295 licensed facilities but the licensing agency
23
could not readily ascertain how many had multiple floors. Assuming that each facility has two floors, the
annual cost would be appx. $17,700.00 which is under the threshold of $200,000 per year for impact.
69A-41.026(1)(j)- Requirement that each wilderness program should have a minimum 55 gallon water supply
and means of transporting it to a fire and that the fire rack should include at least 2 shovels (@ appx. $11
each), 2 fire rakes (@ appx. $60 each), 2 fire flaps (@ appx. $50 each), 3 buckets (@ appx. $10 each), and one 55
gallon drum (@ appx. $60 each). Contact with DCF reveals only three known wilderness programs. Even
assuming these prices are low and estimating $1000 costs per wilderness program (allowing for multiple
campsites), the annual cost would be appx. $3,000 which is under the threshold of $200,000 per year for
impact.
69A-54.006- Per Department of Correction, DOC requirements mandate that all prisoners must have a
mattress. DOC PRIDE builds all mattresses and the difference between mattresses as required in NFPA and
mattresses as required in the rule is negligible and only suffered by DOC. Any private prisons obtain their
mattresses through PRIDE as well as their requirements are the same as DOC. Costs are not suffered by small
businesses but a state agency.
69A-60.0081- requirement to mark buildings regarding construction of trusses; Cost is negligible as these
markings are available for free at a number of locations (See sites such as http://www.freefiresigns.com/)
69A-60.011- The fee for an informal interpretation is $110. Since 2003, there have been a total of 20
requests for an informal interpretation. 20 x $110 = $2,200
69A—60.006(2)- Allows manufacturers of manufactured buildings to provide for one or more employee to be
certified under Chapter 69A-39, F.A.C.
Cost of Training:
Five courses are required for certification as a Fire Safety Inspector, the cost per class ranges from $60.00 (at
the Florida State Fire College) to $306.00 (at State and Community Colleges). The total cost of training ranges
from $300.00 to $1530.00.
The Certification application is $30.00
Fingerprint fee is $64.00
Certification examination is $42.00
Triennial recertification fee is $15.00
Total cost for certification (high-end) with one renewal = $1,681.00 (5 year cost for certification of one
employee)
6. NATIONAL FIRE PREVENTION CODE- FLORIDA SPECIFIC AMENDMENTS
Economic Impact
Expands the application to include high hazard storage
occupancies only. Cost will only be incurred if a new storage
occupancy for high hazard material is constructed.
24
7.11.1. and 7.11.2
8.3.2.4
11.7.3.4
11.7.4.3
12.2.2.2.4
28.3.5.2
These provisions make 7.11.1. apply to high hazard storage
occupancies.
Requires signage on fire barriers to reduce incidents of
breaching. Cost is minimal, i.e. less than $1 per sign.
This provision requires that fire barriers that must have
protective openings be permanently signed, and sets forth the
signage requirements.
Expands the fire sprinkler provisions to certain new structures
with an occupant load of 50 or less. Cost will only affect new
structures; unable to determine a cost due the nature of the
occupancy and occupant load.
This provision removes an exception to the sprinkler
requirement for new underground and limited access
structures having an occupant load of 50 or fewer persons.
Previously, the exception applied to occupancy loads of 100 or
fewer persons.
This provision removes an exception for exits from
underground structures more than 30 feet below ground which
must have an outside smoke vent.
The provision reduces the threshold from 500 to 300 for
special locking devices. We are unable to determine the
incremental cost incurred, which is applicable only to a new
building with an occupant load between 300 and 500.
This Provision reduces the use of permitted locking devices in
assembly occupancies from an occupant load of 500 to 300.
This provision is required to comport with Florida Building
Code. Cost will only incur when a new building is constructed.
This provision removes the exceptions from the requirement
that all New Hotel and Dormitory occupancies be protected
throughout by an approved, supervised automatic sprinkler
system, except in one-story buildings.
*********************************************************************************************************************
1. Compliance Economic Review for State Fire Marshal Rule 69A-2.024(14):
A. Rule Text:
(14) FLORIDA CONSTRUCTION MATERIALS MINING ACTIVITIES ADMINISTRATIVE RECOVERY ACT, SECTIONS
552.32-.44, FLORIDA STATUTES; BONDS, LETTERS OF CREDIT.
(a) Any person seeking to obtain a new User of Explosives License or to renew an existing User of
Explosives License pursuant to the provisions of Section 552.091(5)(a), F.S., and who is engaged in or
intends to engage in the use of explosives in connection with construction materials mining activities, or
any person seeking to obtain a new Construction Materials Mining Permit or to renew an existing
Construction Materials Mining Permit issued pursuant to the provisions of Section 552.30, F.S., must post
and maintain a bond, except as set forth in paragraph (d).
25
(b) Each bond shall:
1. Be issued by a surety company or by an insurance company licensed to issue surety bonds or to transact
insurance in the State of Florida;
2. Contain as a condition of the undertaking the following statement in type at least as large as the size of
the type for the remainder of the bond:
THE CONDITIONS OF THIS OBLIGATION ARE SUCH THAT IF THE PRINCIPAL, the above bounded
_____________________________________, shall faithfully comply with and conduct business under its
license or permit in accordance with the provisions of the Chapter 552, F.S., and abide by all applicable
statutes and rules and regulations of the Department of Financial Services (the Department) as
promulgated by the Chief Financial Officer, the obligation shall be null and void; otherwise, it shall remain
in full force and effect. This bond shall be in favor of the Department and shall specifically authorize
recovery by the Department on behalf of a prevailing party in an action for damages sustained under the
Florida Construction Materials Mining Activities Administrative Recovery Act, Sections 552.32-.44, F.S., in
case the Principal is guilty of failing to pay damages awarded within 30 days after a final order is issued by
an administrative law judge of the Division of Administrative Hearings, or within 30 days after the entry of
an appellate mandate affirming a final order awarding damages.
3. Have attached to it a properly certified copy of the agent’s Power of Attorney;
4. Be signed by the principal and have the signature of the principal witnessed;
5. Have typed below each signature the name of the person having affixed his or her signature;
6. Be countersigned by a Florida Resident General Lines Agent of the Surety which must not be a title
insurer;
7. Be bound to the Department of Financial Services of the State of Florida or its successors in office, in the
penal sum of $100,000.00 in the aggregate, lawful money of the United States of America, for payment of
which well and truly to be made;
8. Provide for giving 30 days notice of cancellation in writing to the principal and filed with the Department
of Financial Services by United States registered mail;
9. Contain at the top, centered, in not less than 14 point boldface type lettering the words, “Construction
Materials Mining Company Bond, Section 552.38, F.S.”.
(c) Although not required to be used, a form for a bond can be found at the Division of State Fire Marshal
website located at http://www.fldfs.com/SFM/index.htm which, if used and properly completed, will
comply in all respects with the requirements of this rule.
(d) In lieu of the bond required in paragraph (a), a person referred to in paragraph (a) is permitted to
obtain and maintain a letter of credit, which for purposes of this subsection shall be referred to as “Letter.”
If a Letter is obtained and maintained in place of a bond, the following provisions apply.
1. Except as provided in this subsection, the provisions of Chapter 675, F.S., including, but not limited to,
the definitions contained in Section 675.103, F.S., are applicable to each Letter, each party to a Letter, and
to this subsection.
2. The issuer of the Letter must be a financial institution chartered under the laws of the United States of
America or of the State of Florida.
26
3. The beneficiary of each Letter shall be the Department of Financial Services on behalf of a prevailing
party in an action for damages sustained under the Florida Construction Materials Mining Activities
Administrative Recovery Act, Sections 552.32-.44, F.S., if any person referred to in paragraph (a) fails to pay
damages awarded within 30 days after a final order awarding damages is issued by an administrative law
judge of the Division of Administrative Hearings, or within 30 days after the entry of an appellate mandate
affirming a final order awarding damages.
4. The applicant for the Letter must be a person referred to in paragraph (a).
5.a. Each Letter must contain a condition of the undertaking.
b. The condition of the undertaking of each Letter is that the Letter shall specifically authorize recovery by
the department on behalf of a prevailing party in an action for damages sustained under the Florida
Construction Materials Mining Activities Administrative Recovery Act, Sections 552.32-.44, F.S., in the
event that the applicant for the Letter fails to pay damages awarded within 30 days after a final order
awarding damages is issued by an administrative law judge of the Division of Administrative Hearings, or
within 30 days after entry of an appellate mandate affirming a final order awarding damages.
6. Each Letter must be authenticated by a signature which is on file with the department or in accordance
with the standard practices referred to in Section 675.108(5), F.S.
7. The original of each Letter, once issued, must be maintained in the custody of the department.
8.a. No Letter is permitted to contain a statement that it is revocable.
b. If a Letter contains a statement that it is revocable, such Letter is void and of no effect for purposes of
complying with the Florida Construction Materials Mining Activities Administrative Recovery Act, Sections
552.32-.44, F.S., or these rules.
9.a. Each Letter shall state that it is perpetual.
b. Each Letter shall be perpetual within the meaning of Section 675.106, F.S.
10.a. Each Letter must be replaced not later than 4 years and 6 months after the stated date of issuance or,
if none is stated, after the actual date of issuance.
b. Failure to replace the Letter within the 4 years and 6 months period without providing a bond as
permitted by paragraph (a) constitutes an immediate, serious danger to the public health, safety, and
welfare, and shall result in an immediate final order of revocation of the licensee’s or permittee’s license or
permit, and also constitutes grounds for the imposition of any other applicable penalty provided for in
Chapter 552, F.S.
11.a. Each Letter shall be payable on or before the seventh day after presentation of a document
evidencing satisfaction of the condition of the undertaking.
b. Presentation of a certified copy of a judgment awarding damages from an administrative law judge of
the Division of Administrative Hearings under the Florida Construction Materials Mining Activities
Administrative Recovery Act, Sections 552.32-.44, F.S., or a certified copy of an appellate court mandate
affirming such a judgment, together with an affidavit from an authorized department representative that
such judgment has not been paid, constitutes sufficient evidence to satisfy the condition of the
undertaking for payment under the Letter.
c. Authorized representatives of the department are the Chief Financial Officer acting as the State Fire
Marshal, the department’s Chief of Staff, any Deputy Chief Financial Officer acting on behalf of the Chief
27
Financial Officer acting as the State Fire Marshal, the director of the Division of State Fire Marshal, the
Chief of the Bureau of Fire Prevention, the Safety Program Manager of the Bureau of Fire Prevention, and
any attorney employed by the department.
d. Payment under the Letter shall be made to the “Department of Financial Services.”
e. After receipt of payment of the Letter, the department shall deposit the check and, upon clearance of
such check, the department shall issue a check for the exact same amount as the payment under the Letter
to the owner or holder of the judgment referenced in this subsection.
12.a. Each Letter shall state that it is transferable and assignable from the department to the department’s
transferee or assignee.
b. The department’s transferee or assignee shall be the owner and holder of a judgment from an
administrative law judge of the Division of Administrative Hearings providing for damages under the
Florida Construction Materials Mining Activities Administrative Recovery Act, Sections 552.32-.44, F.S., or a
mandate affirming such a judgment, which the licensee or permittee has failed to pay within the time
allotted in such Act.
13. Each Letter shall be governed by, and shall state that it is governed by, the laws of the State of Florida,
regardless of the country, state, territory, or other location at which the Letter was applied for, requested,
or issued.
14. Each Letter shall state that venue for any cause of action brought under the Letter in state court shall
lie in the circuit court of the Second Judicial Circuit of Florida, in and for Leon County, and, if an action is
brought under the laws of the United States of America, venue shall lie in the United States District Court
for the Northern District of Florida, Tallahassee Division.
15. Each Letter is subject to approval by the department; however, if a Letter meets the criteria in, and
complies with, subparagraphs 2. through 14. of paragraph (d) of this subsection, it shall be approved.
16. Once approved by the department, no Letter may be altered or amended in any manner except with
written approval of the department; however, any Letter which contains any alteration or amendment
which meets the criteria in, and complies with, subparagraphs 2. through 15. of paragraph (d) of this
subsection, shall be approved.
(e)1. Each bond or letter of credit shall provide security for payment of any award against the user or
permit holder in the initial amount of not less than $100,000.00, which amount shall be maintained at all
times the user or permit holder engages in construction materials mining activities. If the user or permit
holder wishes, such bond or letter of credit may be maintained in an amount that exceeds $100,000.00.
2. If an award is made pursuant to Section 552.40(7), F.S., and the respondent which is a user or permit
holder fails to pay the damages within 30 days after the final order is issued or within 30 days after the
entry of an appellate mandate affirming a final order awarding damages, and the award is paid from the
bond or letter of credit provided for in Section 552.38, F.S., and this rule, the respondent shall immediately
secure a replacement bond or letter of credit in the full sum of not less than $100,000.00.
3. The respondent against whom the award was made and the award paid from the bond or letter of credit
shall not engage in construction materials mining activities without having secured an effective
replacement bond or letter of credit.
(f) Each person subject to Section 552.38, F.S., must complete and maintain on file with the Department of
Financial Services form DFS-K3-1598, Rev. 6/04, which is hereby adopted and incorporated by reference.
28
Form DFS-K3-1598 may be obtained by contacting the department at 200 East Gaines Street, Tallahassee,
Florida 32399-0340, or by visiting the Division of State Fire Marshal website located at
http://www.fldfs.com/SFM/index.htm.
B. Compliance Economic Review for Rule 69A-2.024(14):
COMPLIANCE ECONOMIC REVIEW
Pursuant to Section 120.745(5), Florida Statute
RULE 69A-2.024(14) FLORIDA ADMINISTRATIVE CODE
CONSTRUCTION MATERIALS MINING ACTIVITIES
(PERMITTING AND BONDING)
DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF STATE FIRE MARSHAL
April 2013
JUSTIFICATION FOR THE RULE
Florida Administrative Code 69A-2.024 implements Section 552.30, Florida Statutes, which gives the
State Fire Marshal sole and exclusive authority to promulgate standards, limits, and regulations
regarding the use of explosives in conjunction with the extraction of limestone and sand by any
person or company primarily engaged in commercial mining of limestone and sand suitable for
production of construction aggregates, sand, cement, and road base materials. Section 552.211,
F.S., allows the State Fire Marshal to restrict the quantity and use of explosives at any location
within the state where such explosives are likely to cause injury to life or property.
This rule has been adopted to comply with the legislative mandate regarding the bonding or letter
of credit for Construction Mining Companies in the State of Florida.
The benefits of this rule relate directly to the health and safety of the public, as well as the
protection of property. Pursuant to Rule 69A-2.024(14)(b)(2), Construction Mining companies are
required to be bonded and shall faithfully comply with and conduct business under its license or
permit in accordance with the provisions of Chapter 552, F.S., and abide by all applicable statutes,
rules and regulations of the Department of Financial Services (the Department) as promulgated by
the Chief Financial Officer. The bond shall be in favor of the Department and shall specifically
authorize recovery by the Department on behalf of a prevailing party in an action for damages
sustained under the Florida Construction Materials Mining Activities Administrative Recovery Act,
s.s 552.32 to 552.44, F.S., in case the principal is guilty of failing to pay damages awarded within 30
days after a final order is issued by an administrative law judge of the Division of Administrative
Hearings, or within 30 days after the entry of an appellate mandate affirming a final order awarding
damages.
29
STATEMENT OF ESTIMATED REGULATORY COSTS
1. Direct or indirect economic impact
This Rule is applicable to any individual or business entity wishing to obtain a new User of Explosives
License or to renew an existing User of Explosives License pursuant to the provisions of Section
552.091(5)(a), F.S. Pursuant to Section 552.30, F.S., any individual or business entity must post and
maintain a bond or letter of credit and provide security for payment of any award against the user
or permit holder in the initial amount of not less than $100,000.00, which shall be maintained at all
times the user or permit holder engages in construction materials mining activities. If the user or
permit holder wishes, such bond or letter of credit may be maintained in an amount that exceeds
$100,000.00.
This rule directly impacts Construction Mining companies seeking to conduct mining activities in the
State of Florida. This Rule also indirectly impacts other citizens in the State of Florida by ensuring
that all mining explosive activities are within the legal blasting limits to eliminate property damages
to the citizens of the State of Florida.
2. Cost to the Division and other state or local governments to implement the rule and
enforce the rule
Cost to the Division – There is no cost to the Division due to the implementation of this rule as the
inspection is required by statute and the rule merely outlines the requirement of a bond or letter of
credit in order to conduct mining activities.
Cost to Other State or Local Governments– There is no cost to other state agencies or local
governments because the rule does not impose an inspection duty on other state agencies or local
governments.
3. Effect on state or local revenues
As the inspection fee is included within the application fee mandated by statute, there is no effect
on state revenues but there may be local permit fees charged by the county.
4. Transactional costs
There are no transactional costs identified by the Division of State Fire Marshal.
5. Impact on small business
30
Section 288.703 (6), F.S., defines “small business” as “an independently owned and operated
business concern that employs 200 or fewer permanent full-time employees and that, together with
its affiliates, has a net worth of not more than $5 million or any firm based in this state which has a
Small Business Administration 8(a) certification. As applicable to sole proprietorships, the $5 million
net worth requirement shall include both personal and business investments.”
Any person seeking to obtain a new User of Explosives License or to renew an existing User of
Explosives License pursuant to the provisions of Section 552.091(5)(a), F.S., and who is engaged in or
intends to engage in the use of explosives in connection with construction materials mining
activities, or any person seeking to obtain a new Construction Materials Mining Permit, or to renew
an existing Construction Materials Mining Permit issued pursuant to the provisions of Section
552.30, F.S., is required to secure a letter of credit or bond estimated at an average of $4,000.00 per
permit. This cost is estimated as the cost to obtain a bond and is not a cost which will be incurred
by the applicant on a yearly basis. The 5-year cost as estimated by the Department, taking into
account the cost per permit, is $2,540,000.00.
6.
Impact on small counties and small cities
Section 120.52 (18), F.S., defines “small city” as “any municipality that has an unincarcerated
population of 10,000 or less according to the most recent decennial census.”
Section 120.52 (19), F.S., defines “small county” as ”any county that has an unincarcerated
population of 75,000 or less according to the most recent decennial census.”
There is no impact to small cities or counties as all inspections are completed by the Division of
State Fire Marshal and the letter of credit or bond is procured by the applicants themselves.
METHODOLOGY
Below is the methodology used to calculate the cost of the compliance with this rule to a small
business. There are currently one hundred twenty-seven (127) Construction Materials Mines
permitted in the State of Florida. Any person seeking to obtain a new User of Explosives License or
to renew an existing User of Explosives License pursuant to the provisions of Section 552.091(5)(a),
F.S., and who is engaged in or intends to engage in the use of explosives in connection with
construction materials mining activities, or any person seeking to obtain a new Construction
Materials Mining Permit or to renew an existing Construction Materials Mining Permit issued
pursuant to the provisions of Section 552.30, F.S., must post and maintain a bond issued by a surety
company or by an insurance company licensed to issue surety bonds or to transact insurance in the
State of Florida.
31
This calculation is based on a percentage of the Construction Materials Mining Company and
individual credit history. An excellent credit score of 800 would require a bond in the amount of 1%
of the total project cost and a credit score below 700 would be classified as a bad credit score
requiring a bond in the amount of 3% of the project cost (Example; $500,000 x 3% would require a
bond in the amount of $15,000) based on information received from AA Underwriters Insurance
Company.
127 bonds per year x $4,000.00 average per permit = $508,000.00 per year
$508,000.00 per year x 5 years = $2,540,000.00
********************************************************************************
2. Compliance Economic Review for Rule 69A-2.024:
A. Rule Text:
69A-2.024 Construction Materials Mining Activities.
(1) Scope.
(a) This section implements Section 552.30, F.S., which gives the State Fire Marshal sole and exclusive authority to
promulgate standards, limits, and regulations regarding the use of explosives in conjunction with the extraction of
limestone and sand by any person or company primarily engaged in commercial mining of limestone and sand suitable
for production of construction aggregates, sand, cement, and road base materials and Section 552.211, F.S., which
allows the State Fire Marshal to restrict the quantity and use of explosives at any location within the state where such
explosive is likely to cause injury to life or property.
(b) Any person or company not primarily engaged in commercial mining of limestone and sand suitable for
production of construction aggregates, sand, cement, and road base materials remains subject to the provisions of
Section 552.25, F.S.
(c) Nothing in this section is intended to supercede the requirements of Chapter 552, F.S., or other sections in this
rule chapter.
(2) Definitions. As used in this rule:
(a) “Blasting site” is a location within a mining area at which explosive charges are set.
(b) “Independent seismologist” is an individual whose function includes vibration and air overpressure
measurement and the analysis and evaluation of their effects upon structures.
1. A seismologist under this subsection will not be considered “independent” if the seismologist is an employee of:
a. The mining permit holder, blaster, or user; or
b. Any entity subject to regulation under Section 552.30, F.S.
2. A seismologist shall be ineligible to serve as an “independent seismologist” if the seismologist:
32
a. Has within 2 years from the written notice referenced below been retained by or otherwise served as an expert
witness, investigator, or consultant for the mining permit holder, blaster, or user or for an aggrieved party in connection
with any anticipated or threatened claim, legal action, or other proceedings in which the mining permit holder, blaster,
or user is alleged in a written notice to have caused damages or adversely affected personal property allegedly due to
the operation or performance of the activities regulated under this rule chapter; or
b. Does not meet the criteria of paragraph (4)(c) of this rule.
3. The Fire Marshal’s office shall provide a list of qualified independent seismologists approved for use pursuant to
this paragraph. The requirement to use an independent seismologist shall not be effective until the list is compiled.
(c) “Limestone” as used in Section 552.30(1), F.S., means any extracted material composed principally of calcium or
magnesium carbonate. Coquina is a form of limestone composed of shell fragments.
(d) “Mining area” as used in this rule section is the area of land in which construction materials mining activity is to
occur.
(e) “Urban development” is defined as a residential subdivision containing 25 or more occupied residences within
the local urban development boundary.
(3) Mining Permit.
(a) Applicability.
1. Any construction materials mining activity which is in operation upon the effective date of this rule shall be
allowed to continue such mining operations, including blasting, provided that the applicant submits an application in
accordance with this rule within 90 days of the effective date of this rule.
2. All construction materials mines which are not in active operation on the effective date of this rule must have a
blasting permit issued pursuant to these rules prior to commencing blasting activities.
(b) A mining permit shall be issued only after:
1. Payment of a fee established in subsection (10) below or by the county or municipality to cover costs.
2.a. Approval of an application, signed by the applicant showing the applicant’s name and address, on Form DI41498 Rev. 3/02, Construction Mining Activity Application, which is hereby adopted and incorporated by reference and is
available from Safety Program Manager, Bureau of Fire Prevention, Division of State Fire Marshal, 200 East Gaines
Street, Tallahassee, Florida 32399-0342.
b. Within 30 days of receipt of the application, the State Fire Marshal shall request additional information if
necessary to evaluate the application.
c. The State Fire Marshal shall inform the permittee by fax or otherwise in writing when the application is complete.
d. Within 90 days of the completion of the application, the application shall be approved or denied.
(c) The permit holder shall report all complaints to the authority issuing the permit.
(d) Standards for Mining Permit Approval. A mining permit shall be approved unless any item listed on Form DI41498 in paragraph (b) above is not provided.
(e) License period. Each mining permit shall be issued for a period of 10 years.
(f) Annual Report and Annual Permit Fee Procedure.
33
1. The mining activity covered by the mining permit will be reviewed on an annual basis for compliance with
Chapter 552, F.S., including but not limited to compliance with the record keeping requirements.
2. The mining permit holder shall annually pay a permitting fee specified in subsection (10) below.
(g) Transfer of permits.
1. Within 60 days after the sale or legal transfer of a mining operation, the permittee shall inform the State Fire
Marshal or delegatee in writing of the sale or legal transfer, identify the proposed new permittee, and request transfer
of the permit.
2. At the option of the permittee request for transfer may be made prior to the sale or transfer of the mining
operation, with approval being effective upon closing of the sale or transfer of the operation.
3. Requests for transfer shall be accompanied by the fee specified in paragraph (10)(e).
4. The State Fire Marshal or delegatee shall approve the transfer of the permit unless it determines that the
proposed new permittee does not meet the requirements of this rule. The determination shall be limited solely to the
ability of the new permittee to comply with the conditions of the existing permit, and it shall not concern the adequacy
of the permit conditions.
5. Within 30 days of receipt of the request for a transfer, the State Fire Marshal or delegatee shall request
additional information if necessary to evaluate the request. The State Fire Marshal or delegatee shall inform the
permittee by fax or otherwise in writing when the request is complete.
6. Within 90 days of the completion of the request, the request shall be approved or denied subject to Section
120.60, F.S.
7. The transferee is allowed to continue to operate under the existing permit until the request for transfer has been
approved or denied.
(h) Renewal of Permits.
1. At least 60 days prior to the expiration of a mining permit issued pursuant to this rule, the permittee wishing to
continue activities subject to this rule shall apply for renewal of the permit using Form DI4-1498, Construction Mining
Activity Application.
2. If the request is submitted at least 60 days prior to the expiration of the mining permit, the existing permit shall
remain in effect until final agency action, or later as required by Section 120.60, F.S.
(i) Modification of Permits.
1. A permittee may request a modification of the permit by applying to the State Fire Marshal or delegatee. The
request shall identify the proposed modification.
2. Requests for modification shall be accompanied by the fee specified in paragraph (10)(d).
3. Within 30 days of receipt of the request, the State Fire Marshal or delegatee shall request additional information
if necessary to evaluate the request.
4. The State Fire Marshal or delegatee shall inform the permittee by fax or otherwise in writing when the request is
complete.
5. Within 30 days of the completion of the request, the request shall be approved or denied subject to Section
120.60, F.S.
34
(4) Ground Vibration Limits. Ground vibration shall not exceed the limits of particle velocity and frequencies
established by the U.S. Bureau of Mines Report of Investigations, No. 8507 Ground Vibration, Frequency Limits.
(a)1. The maximum, Appendix B – Alternative Blasting Level Criteria (Figure B-1). A blasting operation shall use a
seismograph, as identified in paragraph (c) below, to monitor each blast to ensure compliance with the ground vibration
limits established in Section 552.30, F.S.
2. The U.S. Bureau of Mines Report of Investigations No. 8507, Appendix B – Alternative Blasting Level Criteria
(Figure B-1) and Table 8-1.3, established in Section 8-1 of the National Fire Protection Association Standard 495, 1996
Edition are hereby adopted and incorporated by reference. Copies may be obtained from the Bureau of Fire Prevention,
200 East Gaines Street, Tallahassee, FL 32399-0342.
(b) 1. Ground vibration shall be measured for every blast at the location of the nearest building that is not owned,
leased, or contracted by the blasting or mining operation, or on property for which the owner has not provided a written
waiver to the blasting operations, up to a maximum of one mile.
2. If there are no such buildings within one mile, measurement shall be made at one mile in the direction of the
nearest such building.
3. If there is a building that is not owned, leased, or contracted by the blasting or mining operation, or on property
for which the owner has not provided a written waiver to the blasting operations in a direction 90 to 270 degrees from
the direction of the nearest building specified in subparagraph (b)1. above, and that building is no more than 500 feet
farther than the nearest building, measurement shall also be made at the nearest of those buildings.
4. If a measurement location determined pursuant to subparagraphs (b)1.-3. above is not practicable, such as in a
wet swamp, measurement shall be made at a point nearer to but in the same direction from the blast site.
(c)1. All measurements shall be made by a seismologist meeting the following criteria:
a. Five years continuous experience measuring and evaluating levels of ground vibration and air overpressure
produced by blasting;
b. Demonstrable expertise in the use, location, and operation of seismographic equipment and analysis of
seismographic data; and
c. Prior experience in monitoring side effects produced by blasting used in construction materials mining activity.
d. The State Fire Marshal has not found that the seismologist has engaged in dishonest practices relating to the
collection or analysis of data or information regarding the use of explosives in construction materials mining. Such a
finding will be subject to Section 120.57, F.S.
e. The seismologist is not an employee of the mining permit holder, blaster, or user.
2. Measurements shall be taken and equipment shall meet specifications of and be installed in accordance with the
International Society of Explosives Engineers Blaster’s Handbook, 17th Edition, Copyright 1998.
3. The International Society of Explosives Engineers Blaster’s Handbook, 17th Edition, Copyright 1998, is hereby
adopted and incorporated by reference and may be obtained from the International Society of Explosives Engineers,
29100 AVRA Road, Cleveland, Ohio 44131.
4. When the use of explosives occurs within 2 miles of an urban development, measurements shall be collected and
reported by an independent seismologist.
(d)1. All seismographic equipment used within the boundaries of the State of Florida shall be calibrated according to
35
the manufacturer’s specifications and shall be certified as accurate by the manufacturer on an annual basis or as
needed.
2. If the manufacturer is unavailable for such certification, the certification shall be performed by a person approved
by the State Fire Marshal. Such approval shall be granted if the certifying person is known to be independent and
reliable. “Independent” means not an employee or affiliate of a company engaged in construction materials mining
activity, and “reliable” means never having been found to have willfully or negligently miscalibrated seismographic
equipment.
3. Units not meeting current calibration guidelines shall be removed from service until calibration has been
completed.
4. Calibration records shall be made available to the Division upon request.
(5) Airblast.
(a) Airblast limits shall conform with the limits established in Section 8-2 of National Fire Protection Association
Standard Number 495, 1996 Edition, which is hereby adopted and incorporated by reference.
1. The codes and standards published by the National Fire Protection Association may be obtained by writing to the
NFPA at: 1 Batterymarch Park, Quincy, Massachusetts 02269-9101.
2. All standards adopted and incorporated by reference in this rule are also available for public inspection during
regular business hours at the Bureau of Fire Prevention, Division of State Fire Marshal, Department of Financial Services,
325 John Knox Road, The Atrium, Third Floor, Tallahassee, Florida 32303.
(b)1. Measurements made by a seismologist and any measurements made by an independent seismologist shall be
made using seismographic equipment meeting the specifications of the International Society of Explosives Engineers
Blasters’ Handbook, 17th Edition, Copyright 1998.
2. Measurements shall be taken and equipment shall be installed in accordance with the International Society of
Explosives Engineers Blasters’ Handbook, 17th Edition, Copyright 1998.
(6) Time and Date of Explosives Use.
(a) The use of explosives shall be conducted during daylight hours between 8:00 a.m. and 5:00 p.m. local time,
Monday through Friday.
(b) No explosive blasting shall occur on Saturdays, Sundays, official holidays recognized by the State of Florida
pursuant to Section 110.117, F.S., or hours other than specified in the prior sentence unless consent is granted by the
State Fire Marshal. Such consent shall be granted if the consent is in the interest of public safety.
(7) Blasting Activities Reporting. Each person engaged in construction materials mining activity shall submit to the
Division or its delegatee, upon request, the results of ground vibration and airblast measurements. This report shall be
maintained in accordance with Section 552.112, F.S. The report shall contain, at a minimum, for each blast:
(a) Date and time of blast;
(b) Number of holes;
(c) Depth;
(d) Number of wet holes, water depth;
(e) Hole diameter;
36
(f) Spacing;
(g) Amount of explosives;
(h) Number of primers;
(i) Type of caps (i.e., electric or nonelectric);
(j) Number of caps;
(k) Stemming feet;
(l) Maximum pounds delay;
(m) Maximum hole delay;
(n) Weather;
(o) Wind direction;
(p) Type and make of blasting machine;
(q) Global positioning system direction and distance in feet to the nearest building;
(r) Decking feet;
(s) Location of each seismograph;
(t) Peak particle velocity inches per second;
(u) Sound decibels;
(v) Name, address, and license number of user of explosives; and
(w) Name, address, and permit number of blaster.
(8) Local Government Notice.
(a) Each person permitted to engage in construction materials mining activity shall submit written notification to the
county and or municipality in which construction materials mining activity is to be conducted. The initial and subsequent
notices required by this rule shall advise that a permit has been issued or renewed. The initial notice shall be provided
after the issuance of the permit and give at least 20 days notice prior to the initial blast.
(b) Subsequent notices shall be provided following the annual permit renewal date and give at least five days notice
prior to the first blast following annual permit renewal date. Notice is required to be given no more than once per year.
(c) As soon as practical, but no later than one hour prior to the time when a blast is scheduled to take place, the
person or firm engaged in construction materials mining activity shall, if requested, notify the county or municipality of
any revisions to the notice.
(9) Delegation of Authority.
(a) The delegation by the State Fire Marshal described in Section 552.30(2), F.S., shall be accomplished by written
agreement.
(b) Fees charged by the delegatee for activities specified in the agreement shall not exceed an amount calculated to
37
cover the reasonable costs of the activities performed under the agreement.
(10) Fees. The fees established pursuant to Section 552.30, F.S., shall be used exclusively to fund the monitoring and
enforcement activities pursuant to Section 552.30, F.S., unless otherwise approved by the Florida Legislature, and shall
be as follows:
(a) Initial permit: $4000.
(b) Renewal: $4000 after 10 years.
(c) Annual mining permit fee: $1500.
(d) Permit transfer fee: $100.
(e) Permit modification fee:
1. $1500 for a modification including a change in the boundaries of the blasting site or mining area;
2. $500 for any other modification.
(11) Disciplinary Action; Mining Permit; Grounds for Denial; Nonrenewal, Suspension, or Revocation of a Mining
Permit.
(a) The State Fire Marshal shall investigate any alleged violation of Chapter 552, F.S., or this rule.
(b) The following acts constitute cause for disciplinary action:
1. Violation of any provision of Chapter 552, F.S., or any rule adopted pursuant thereto.
2. Violation of the ground vibration, frequency limits set forth in Section 552.30, F.S.
3. Failing to obtain, retain or maintain one or more of the qualifications for a mining permit as specified in this
chapter.
4. Making a material misstatement, misrepresentation, or committing fraud in obtaining or attempting to obtain a
mining permit.
5. Failing to maintain any record required pursuant to Chapter 552, F.S., and any rule or code adopted pursuant
thereto.
6. Falsifying any record required to be maintained by Chapter 552, F.S., or rules adopted pursuant thereto.
(c) The lapse or suspension of a mining permit by operation of law or by order of the State Fire Marshal or a court or
its voluntary surrender by a mining permit holder does not deprive the State Fire Marshal of jurisdiction to investigate or
act in disciplinary proceedings against the mining permit holder.
(d) In addition, the State Fire Marshal shall not issue a new mining permit if it finds that the circumstance or
circumstances for which the mining permit was previously revoked or suspended still exist or are likely to recur.
(12) Nothing in this rule shall impact a county’s or municipality’s authority to exercise whatever powers are not
prohibited by Section 552.30, F.S.
(13)(a) Notwithstanding the standards in this rule, the Division shall, pursuant to Section 552.211(3), F.S., restrict
the quantity and use of explosives at any location within the state when the Division determines, subject to protections
provided by Chapter 120, F.S., the use of such explosives is likely to cause injury to life or property.
38
(b) Such restrictions shall be to the extent necessary to render the use of such explosives unlikely to cause injury to
life or property.
(c) In determining that the use of explosives is likely to cause injury to life or property in a given location, the
Division shall consider the following factors:
1. Distance of blasting activity to structures;
2. Use and occupancy of structures near blasting activity;
3. Geology of area near blasting activity; and
4. Type of construction use in structures near blasting activity.
5. Any credible evidence relevant to the risk of injury to life or property, not excluding evidence that existing
damage resulted from causes other than the use of explosives.
(14) FLORIDA CONSTRUCTION MATERIALS MINING ACTIVITIES ADMINISTRATIVE RECOVERY ACT, SECTIONS 552.32.44, FLORIDA STATUTES; BONDS, LETTERS OF CREDIT. [See separate CER for this rule subsection.]
(15)(a) Based upon the safe level of blasting vibrations for houses as shown in Figure B-1, United States Bureau of
Mines, Report of Investigations 8507, notwithstanding the limits in subsection (4) above, the use of explosives within
two miles of an urban development, as defined in paragraph (2)(e) above, shall not exceed a peak particle velocity of
more than 0.5 inches per second due to the potential existence of plaster on lath construction.
(b) Measurement of such ground vibration levels shall be made consistent with subparagraph (4)(c)2. Above at the
nearest occupied residential structure within the urban development, which structure is not owned, leased, or
contracted with the blasting or mining operation.
Rulemaking Authority 552.30, 552.38 FS. Law Implemented 552.20, 552.38 FS. History–New 11-25-01, Amended 6-24-02, Formerly 4A2.024, Amended 10-27-04, 5-9-10.
B. Compliance Economic Review for Rule 69A-2.024 (without subsection 14):
COMPLIANCE ECONOMIC REVIEW
Pursuant to Section 120.745(5), Florida Statute
RULE 69A-2.024 FLORIDA ADMINISTRATIVE CODE
Construction Materials Mining Activities
(Seismologist)
DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF STATE FIRE MARSHAL
APRIL 2013
39
JUSTIFICATION FOR THE RULE
69A-2.024 (1)(a) This section implements Section 552.30, Florida Statutes, which gives the State Fire
Marshal sole and exclusive authority to promulgate standards, limits, and regulations regarding the
use of explosives in conjunction with the extraction of limestone and sand by any person or
company primarily engaged in commercial mining of limestone and sand suitable for production of
construction aggregates, sand, cement, and road base materials and Section 552.211, Florida
Statutes, which allows the State Fire Marshal to restrict the quantity and use of explosives at any
location within the state where such explosive is likely to cause injury to life or property.
This rule has been adopted to comply with this legislative mandate regarding construction materials
mining activities.
The benefits of this rule relate directly to the health and safety of the public, as well as the
protection of property. Ground vibration shall be measured for every blast at the location of the
nearest building that is not owned, leased, or contracted by the blasting or mining operation or on
property for which the owner has not provided a written waiver to the blasting operations, up to a
maximum of one mile. Pursuant to 69A-2.024(4)(c), all measurements shall be made by a
seismologist with five (5) continuous years experience measuring and evaluating levels of ground
vibration and air overpressure produced by blasting, demonstrable expertise in the use, location,
and operation of seismographic equipment and analysis of seismographic data, and prior experience
in monitoring side effects produced by blasting used in construction materials mining.
Measurements shall be taken and equipment shall meet specifications of and be installed in
accordance with the International Society of Explosives Engineers Blaster’s Handbook, 17th Edition,
Copyright 1998. All seismographic equipment used within the boundaries of the State of Florida
shall be calibrated according to the manufacturer’s specifications and shall be certified as accurate
by the manufacturer on an annual basis or as needed. Restriction of quantity and use of explosives
and monitoring of such explosives shall be to the extent necessary to render the use of such
explosives unlikely to cause injury to life or property.
STATEMENT OF ESTIMATED REGULATORY COSTS
1. Direct or indirect economic impact.
This Rule is applicable to any individual or business which holds a Construction Materials Mining
License in Florida. It directly impacts these individuals and businesses by requiring them to employ
an Independent Seismologist. The rule also indirectly impacts other people in Florida by requiring
monitoring and enforcing vibrations occurring during blasting in their areas therefore protecting
individuals and their properties from the effects of blasts that are in violation of Florida Statute
Chapter 552.
2. Cost to the Division and other state or local governments to implement the rule and
enforce the rule.
40
Cost to the division – There is no cost to the Division due to the implementation of this rule as the
seismographic monitoring is required by statute.
Cost to other state or local governments– Enforcement of the rule is no cost to other state agencies
or local governments because the rule does not impose a seismographic monitoring duty on other
state agencies or local governments.
3. Effect on state or local revenues
As the seismographic monitoring is neither paid to or by the State of Florida, there is no effect on
state or local revenues.
4. Transactional costs
There are no transactional costs identifiable by the Division of State Fire Marshal.
5. Impact on small business
Section 288.703 (6), Florida Statutes defines “Small business” to mean “an independently owned
and operated business concern that employs 200 or fewer permanent full-time employees and that,
together with its affiliates, has a net worth of not more than $5 million or any firm based in this
state which has a Small Business Administration 8(a) certification. As applicable to sole
proprietorships, the $5 million net worth requirement shall include both personal and business
investments.”
The 5-year cost as estimated by the Department for seismographic monitoring is $288,000 per
facility, or a total of $36,576,000. These are average monitoring costs not including the costs of
installation and taxes.
6. Impact on small counties and small cities
Section 120.52 (18), Florida Statutes defines “Small city” to mean “any municipality that has an
unincarcerated population of 10,000 or less according to the most recent decennial census.”
Section 120.52 (19), Florida Statutes defines “Small county” means “any county that has an
unincarcerated population of 75,000 or less according to the most recent decennial census.”
There is no impact to small cities or counties.
41
METHODOLOGY
Below is the methodology used to calculate the cost of the compliance with this rule to a small
business. As of January 2013, one hundred-twenty seven (127) companies hold construction mining
licenses with the State of Florida’s Office of State Fire Marshal. Depending on the population and
other factors in their area, a facility might utilize between one (1) and ten (10) seismographs to
monitor vibrations from blasting on a continual basis. For an existing seismograph (not newly
installed), a construction materials mining company might pay between $800 and $8,000 per month
for monitoring alone, pre-tax.
127 facilities x $57,600 per facility = $7,315,200 per year
$7,315,200 per year x 5 years = $36,576,000
**NOTE** This calculation does not include installation costs of new seismographs or tax on
installation costs or monitoring services and assumes all companies incur $4,800 in monitoring fees
per month or $57,600 annually.
*********************************************************************************
3. Compliance Economic Review for Rule 69A-36.106:
A. Rule Text:
69A-36.106 Emergency Forces Notification.
(1) New Child Day Care Facilities shall be arranged to transmit the alarm automatically via any of the following
means acceptable to the authority having jurisdiction and shall be in accordance with NFPA 72, National Fire Alarm
Code, the edition as adopted in Rule 69A-3.012, F.A.C.
(a) An auxiliary alarm system.
(b) A central station connection.
(c) A proprietary system.
(d) A remote station connection.
Where the facility is not served by a fire department, notification of appropriate emergency forces shall be transmitted
by the most expedient means available immediately following emergency evacuation of the facility.
(2) Existing child day care facilities may use the notification system now in place providing it conforms to one of the
following requirements:
(a) Direct Alarm transmission to the fire department; or
(b) Notification by remote or central station systems; or
42
(c) Where staff beyond the requirements of the Department of Children and Family Services is present at all times
during which the facility is in operation, notification may be achieved by telephone, provided the facility has at least one
private one-party telephone line serving that facility only, thereby allowing for immediate, unimpeded notification of
emergency forces. If this method of notification is selected, a staff member who is present at all times that the facility is
in operation shall be appointed to be responsible for the immediate notification of emergency forces upon the
activation or initiation of any detection or alarm device or system installed in the facility; or
(d) Where the facility is not served by a fire department, notification of appropriate emergency forces shall be
transmitted by the most expedient means available immediately following emergency evacuation of the facility.
Rulemaking Authority 633.104, 633.206 FS. Law Implemented 633.104(1), 633.206(1)(b) FS. History–New 10-10-91, Amended 7-11-01,
Formerly 4A-36.106.
B. Compliance Economic Review for Rule 69A-36.106:
COMPLIANCE ECONOMIC REVIEW
Pursuant to Section 120.745(5), Florida Statute
RULE 69A-36.106 Emergency Forces Notification for Child Day Care Facilities
DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF STATE FIRE MARSHAL
APRIL 2013
JUSTIFICATION FOR THE RULE
Section 633.01, Florida Statute, mandates that “The Chief Financial Officer is designated as “State
Fire Marshal.” The State Fire Marshal has authority to adopt rules pursuant to ss. 120.536(1) and
120.54 to implement the provisions of this chapter conferring powers or duties upon the
department. Rules shall be in substantial conformity with generally accepted standards of firesafety;
shall take into consideration the direct supervision of children in nonresidential child care facilities;
and shall balance and temper the need of the State Fire Marshal to protect all Floridians from fire
hazards with the social and economic inconveniences that may be caused or created by the rules.
The department shall adopt the Florida Fire Prevention Code and the Life Safety Code.
This rule has been adopted to comply with the Legislative Mandate regarding the protection of NonResidential Child Care Facilities. The rule requires that child day care facilities shall be arranged to
transmit a fire alarm notification in the event of a fire.
43
The benefits of this rule relate directly to the health and well-being of the Public. As these facilities
are inspected, the safety of the public is ascertained and any conditions liable to cause fire,
endanger life from fire, and any violation of the laws, rules, and codes as adopted by the State of
Florida are then corrected.
STATEMENT OF ESTIMATED REGULATORY COSTS
1. Direct or indirect economic impact
This rule chapter applies to both new and existing buildings used as Nonresidential Child Care
Facilities, which are potentially impacted as shown below.
2. Cost to the Division and other state or local governments to implement the rule and
enforce the rule
Cost to the division – None
Cost to other state agencies or local governments – The cost to other state agencies or local
governments is undeterminable as these costs and fees are not regulated by this Division.
3. Effect on state or local revenues
Cost to other state agencies or local governments – None known.
4. Transactional costs
None known.
5. Impact on small business
Section 288.703 (6) defines “Small business” to mean an independently owned and operated
business concern that employs 200 or fewer permanent full-time employees and that, together with
its affiliates, has a net worth of not more than $5 million or any firm based in this state which has a
Small Business Administration 8(a) certification. As applicable to sole proprietorships, the $5 million
net worth requirement shall include both personal and business investments.
Any potential impact would only apply to the facilities that are directly required to comply with this
rule. The average cost per year for fire alarm monitoring as required by this rule is $500 per year.
With 11,910 facilities licensed and requiring this monitoring, the annual cost is approximately
$5,955,000.00. The five year cost as estimated by the Department is $29,775,000.00. It is
important to note, however, that the requirement for alarm monitoring is a requirement for all new
day care occupancies in the base code of the Florida Fire Prevention Code as well.
44
6. Impact on small counties and small cities
Section 120.52 (18) defines “Small city” to mean any municipality that has an unincarcerated
population of 10,000 or less according to the most recent decennial census.
Section 120.52 (19) defines “Small county” means any county that has an unincarcerated population
of 75,000 or less according to the most recent decennial census.
Any potential impact to small cities or counties would only be applicable if these areas have these
type facilities under their jurisdiction.
7. METHODOLOGY
Below is the methodology used to calculate the potential cost impact per year and a projection of
the next 5 years.
Average Cost Per Year for Fire Alarm Monitoring = $500.00
Number of Facilities = 11,910
Annual Cost = $5,955,000.00
**********************************************************************************
4. Compliance Economic Review for Rule 69C-4.40045:
A. Rule Text:
69C-4.0045 Convenience Fees.
(1) A convenience fee may not be imposed if prohibited by state law or the regulations of the specific card
company(s) being used by the state agency or the judical branch.
(2) The convenience fee must be related to convenience to the consumer, such as eliminating a need to make a
payment in person.
(3) The convenience fee should be assigned to payment methods such as telephone, automatic response units, the
Internet, or other non-standard payment processing methods. Similar transactions must be charged the same fee.
Rulemaking Authority 215.322(3) FS. Law Implemented 215.322 FS. History–New 1-27-99, Amended 9-9-01, Formerly 4C-4.0045,
Amended 9-11-11.
B. Compliance Economic Review:
COMPLIANCE ECONOMIC REVIEW
Pursuant to section 120.745(5), Florida Statutes
RULE 69C-4.40045, FLORIDA ADMINISTRATIVE CODE
45
Convenience Fees
DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF TREASURY
April 2013
JUSTIFICATION FOR THE RULE
Section 215, Florida Statutes, was amended in 1983 to authorize acceptance of credit cards by state
agencies for goods and services, under certain circumstances. Currently, section 215.322, Florida
Statutes, allows for the acceptance of credit cards by state agencies, units of local government, and
the judicial branch and requires the State Treasurer to adopt rules to administer the section. Charge
cards, debit cards, and electronic funds transfer are also included as acceptable payment types
under this section. The intent of the Legislature is to encourage state agencies, the judicial branch
and units of local government to make their goods, services, and information more convenient to
the public through the acceptance of payments by credit cards, charge cards, debit cards, or other
means of electronic funds transfers to the maximum extent practicable when the benefits to the
participating agency and the public substantiate the cost of accepting these types of payments.
Under certain conditions, a convenience fee may be imposed on the customer making payment.
Currently, section 215.322(3)(b), Florida Statutes, mandates that the Chief Financial Officer adopt
rules governing the imposition of convenience fees upon the person making the payment.
Department rules associated with convenience fees, Rule 69C-4.0045(1-3), F.A.C., describe when
and under what conditions a convenience fee may be imposed. Section 215.322(3)(b), Florida
Statutes, provides that “the total amount of such convenience fees may not exceed the total cost to
the state agency. A convenience fee is not refundable to the payer. However, this section does not
permit the imposition of surcharges on any other credit card purchase in violation of s. 501.0117.”
Since convenience fees are paid by the customer, state agencies and local governments save on
statewide contract and transaction processing costs in the amount of the convenience fees
imposed.
Over the last five fiscal years, $15.58 million in convenience fees have been imposed on payments
made to state agencies, while $11.70 million have been imposed on payments made to local
governments.
46
STATEMENT OF ESTIMATED REGULATORY COSTS
1.
Direct or indirect economic impact:
Likelihood of the regulatory cost, including transactional costs, of more than $1
million cumulatively over five years.
It is expected that costs will continue to exceed $1 million over the next five fiscal
years.
The convenience fees imposed pursuant to this rule averaged $2.73 million on an
annual basis based on the fees due under the current contract with the state’s
ePayments provider. It is expected the total convenience fee amounts will continue
to rise as more customers pay electronically for goods and services.
For the past five fiscal years, the convenience fees imposed on customers making
payment to state agencies were as follows:
2008
2009
2010
2011
2012
$2.23 million
$2.33 million
$2.45 million
$2.14 million
$6.43 million
For the past five years, the estimated convenience fees imposed on customers
making payment to local governments were as follows:
2008
2009
2010
2011
2012
2.
$1.94 million
$2.28 million
$2.68 million
$3.15 million
$3.63 million
Types and numbers of individuals or entities likely to be required to comply with
this rule:
A convenience fee may be imposed upon any individual or entity making a payment
using a payment card or electronic check. The number of transactions to which
convenience fees were applied for payment to state agencies totaled 45.88 million in
2012; the number of transactions to which convenience fees were applied for
payment to local governments was an estimated 207.26 million in 2012.
3.
Cost to the Division and other state or local governments to implement the rule and
enforce the rule:
47
This rule is implemented and enforced by two positions within the Division of
Treasury at an annual cost totaling approximately $6,000.
4.
Effect on state or local revenues:
Convenience fees are paid by the customer; therefore, the state agencies and local
governments save on contract and transaction processing costs in the amount of the
convenience fees imposed by the ePayments provider, which includes pass through
transaction costs imposed by the credit card industry. The convenience fees imposed
pursuant to this rule averaged $2.73 million on an annual basis.
The convenience fees imposed on customers making payment to state agencies over
the past five fiscal years, identified in section 1 above average $3.116 per year.
However, as section 1 above reveals, there was a sharp increase in 2012 with the
implementation of Chapter 2010-151, Laws of Florida and implementing rules for a
state agency to require electronic payment, when those using the new required
method of payment were subject to the fee. This resulted in an increase in the fees
imposed from 2011 of $2.14 million to $6.43 million in 2012. The increase is
anticipated to gradually increase from the higher 2012 amount.
The estimated convenience fees imposed on customers making payment to local
governments over the past five fiscal years, identified in section 1 above, average
$2.736 million. The increase is anticipated to gradually increase at a rate similar to
the increase from 2011 of $3.15 million to 2012 of $3.63 million.
5.
Transactional costs:
There are no other costs other than those mentioned in 3 and 4 above.
6.
Impact on small business:
Small businesses may be required to comply with this rule when paying by payment
card or electronic check.
7.
Impact on small counties and small cities:
Convenience fees are paid by the customer; therefore, the local governments
including small counties and small cities participating in the ePayments provider
48
contract services save on contract and transaction processing costs in the amount of
the convenience fees imposed by the ePayments provider, which includes pass through
transaction costs imposed by the credit card industry.
METHODOLOGY
The number of and impact on individuals and entities affected by this rule was determined by
identifying the state agencies collecting a convenience fee for payment card collections only and
totaling the transaction volumes based on data from the ePayments provider. For local
governments, the amount was determined using an estimate of the previous year’s transaction
volume based on data from the ePayments provider.
The cost for the personnel was determined by estimating the approximate time spent per year, 5%,
of two positions:
• Government Analyst II – 5% @ $54,600 annual salary
$2,730
• Financial Administrator – 5% @ $64,546 annual salary
$3,227
Total
$5,957
Rounded to $6,000
********************************************************************************
5. Compliance Economic Review for Rule 69A-5.0024:
A. Rule Text:
69K-5.0024 Remittances to the Regulatory Trust Fund.
The amounts required to be remitted by a preneed licensee to the Regulatory Trust Fund, pursuant to the provisions of
Section 497.453(9), F.S., shall be determined in accordance with the following criteria:
(1) A preneed contract or arrangement shall be deemed to be written within the meaning of Section 497.453, F.S.,
when a preneed contract or arrangement is executed by both the purchaser and the preneed licensee or its agent. A
remittance for a preneed contract or arrangement dated within a specific quarter shall be submitted in the report for
such quarter.
(2) Beginning with contracts written July 1, 2009, each preneed licensee shall remit to the Regulatory Trust Fund of
the Department of Financial Services a fee of $6.00 for each preneed contract written; regardless of any payments made
by the purchaser.
(3) Assessments required to be remitted pursuant to Section 497.453, F.S., shall not be payable from funds subject
to the trust provisions of Sections 497.458 and 497.464, F.S. Refund of a regulatory trust fund fee by a licensee to its
customer shall not relieve the licensee of its obligation to remit regarding that contract under Section 497.453(6), F.S.
(4) Contracts canceled within thirty days of execution as provided by Section 497.453, F.S., shall not be counted as a
contract sold for purposes of determining the amount to be remitted to the Regulatory Trust Fund.
(5) If a contract is canceled after thirty days of execution, the preneed licensee shall not be entitled to credit the
49
remittance for that contract against future remittances.
(6) Quarterly preneed remittances shall be made by preneed licensees using Department form DFS-N1-2013,
Quarterly Preneed Remittance Invoice, (Effective 6-7-10), as incorporated by reference in Rule 69K-1.001, F.A.C. The
Department shall provide the form to the preneed licensee each quarter, pre-filled out with data specific to the preneed
licensee.
(7) No preneed licensee is entitled to a refund of its contribution to the Regulatory Trust Fund. A preneed licensee
who overpays the amount due to the Regulatory Trust Fund may make the necessary adjustments in future reports,
provided the adjustment is adequately disclosed and includes a reasonable explanation therefor.
(8) It is the responsibility of the preneed licensee to ensure the correct report and remittance is made.
Rulemaking Authority 497.103, 497.453(1) FS. Law Implemented 497.453(6), (9) FS. History–New 5-13-97, Amended 12-12-00,
Formerly 3F-5.0024, Amended 6-22-09, 6-7-10.
B. Compliance Economic Review for Rule 69K-5.0024:
Compliance Economic Review
Pursuant to section 120.745(5), Florida Statutes
Rule 69K-5.0024, Florida Administrative Code
Remittances to the Regulatory Trust Fund
Department of Financial Services
Board of Funeral, Cemetery, and Consumer Services
April 2013
JUSTIFICATION FOR THE RULE
Chapter 497 of the Florida Statutes requires regulation of sales of preneed funeral contracts. All regulation of
preneed sales under Chapter 497 is funded solely by fees paid by the licensees; no general revenue is used
for regulation under Chapter 497; see 497.140(1)(b): "It is the legislative intent that the costs of regulation
under this chapter be provided for by fees collected under this chapter."
Rule 69K-5.0024 implements s. 497.453(6) and (9), Florida Statutes, and raises revenue for the
implementation of Chapter 497, Florida Statutes. Sections 497.453(6) requires that a rule be adopted
specifying an amount to be remitted to the Department of Financial Services, for each preneed contract sold;
the current amount is set at $6 per preneed contract sold. The statute provides that the amount to be
remitted cannot exceed $10 per preneed contract sold.
50
Section 497.453 is part of Part IV of Chapter 497. Part IV of Chapter 497 regulates the preneed sale of funeral
goods and services in Florida. “Preneed sales” refers to the purchase by a person, before their death, of
services and merchandise to be used after the person dies, for the final disposition of the person's bodily
remains. For example, this might include funeral director services, embalming, viewing of remains, casket,
burial service, headstone or other grave marker, or alternatively, cremation service.
Part IV of Chapter 497 provides a comprehensive regulatory scheme regarding preneed sales and sellers.
Statutory requirements include, among other provisions:
•
•
•
•
•
Preneed sales companies must obtain a license under Chapter 497, and the regulator must
determine if they meet certain net worth requirements, if their principals are of good character,
conduct a criminal background check, etc.
Preneed sales companies must place certain portions of sales proceeds in a trust that is
periodically examined by the regulator.
Complaints by consumers against Preneed sales companies must be investigated by the regulator
and where justified, disciplinary action must be taken by the regulator against the preneed sales
company.
The preneed contract forms used by the preneed sales company must be reviewed and approved
by the regulator.
Each individual sales agent of a preneed sales company must be licensed as a preneed sales agent
under Chapter 497.
Because preneed sales by their nature involve payment now in exchange for a promise by the seller to
perform years later, preneed sales have long been significantly regulated for the public good. See, for
example, the regulation of preneed sales in 1953, at Chapter 639, Florida Statutes (1953). The Division
estimates that approximately 95% of all states regulate preneed sales, including preneed sales agents.
Under s. 497.453(6) and (9), Florida Statutes, as implemented by rule 69K-5.0024, each calendar quarter each
preneed sales company must remit to the Department of Financial Services (DFS) $6 for each preneed
contracts sold in the prior quarter.
STATEMENT OF ESTIMATED REGULATORY COSTS
There are typically in the range of 320-340 licensed preneed sales companies (the number goes up and down
slightly as new companies enter the market and other companies cease operations, are acquired, etc.). Each
of these preneed sales companies that made any sales in the prior calendar quarter must file a report with
DFS and pay a fee of $6 per preneed contract sold in the prior calendar quarter.
The actual remittances paid, by FY, have been as follows:
FY 2010-11
$580,431
FY 2011-12
$595,300
51
The average annual aggregate remittances, over the last three years, are $587,865 per year. Multiplying this
average by five years, the total aggregate remittances were $2,939,327.
All preneed licensees pay the same $6 per contract, but the aggregate paid by each preneed licensee differs
significantly from one preneed licensee to another, because of variation in how many preneed contracts each
preneed licensee sells.
Each quarter, the Division mails each preneed licensee a quarterly reporting invoice form for their use in
making the quarterly remittance. Preneed licensees fill the form out, showing the number of preneed
contracts sold in the prior quarter, multiplied by $6 per contract, and attach a check for the amount due. The
licensee then mails this back to the Department of Financial Services receipts office. The information
needed to fill out this quarterly invoice is typically readily at hand to the preneed licensee, as the preneed
licensees must track sales information for income tax purposes. It is estimated that it takes a typical preneed
licensee 45 minutes per quarter to collect from its accounting records the information needed to fill out the
quarterly remittance form, cut the check for the required remittance, address the envelope to the
Department of Financial Services, insert the quarterly invoice and check, and place the envelope in the mail.
If the value of the time of the preneed licensee's staff doing this work is estimated at $25 per hour, the cost
per quarter is estimated at $18.75 per preneed licensee per quarter. Multiplying this times 330 preneed
licensees equals $6,187 per quarter in aggregate. Multiplying this times four quarters per year equals
$24,750 per year in aggregate for all preneed licensees. For 5 years, this equals $123,750 in estimated
aggregate transactional costs over 5 years.
1. Direct or Indirect Economic Impacts
Is this rule likely to have an adverse impact on economic growth, private sector job creation or employment,
or private sector investment in excess of $1 million in the aggregate within five years after the
implementation of the rule?
The Division answers this question in the negative. The number of preneed contracts sold in Florida has been
rising in recent years:
2009
74,611
2010
94,698
2011
98,307
2012
99,041
52
In addition, the number of new preneed contracts sales agents licensed has been stable over the last several
years:
2010
760
2011
821
2012
795
The growth in the number of preneed contracts sold, and the relative stability in the number of new preneed
sales agents licensed, indicates a healthy preneed industry in Florida, especially considering the severe
Florida and national recession over the last several years.
Is the rule likely to have an adverse impact on business competitiveness, including the ability of persons
doing business in the state to compete with persons doing business in other states or domestic markets,
productivity, or innovation in excess of $1 million in the aggregate within five years after the implementation
of the rule?
The Division answers this question in the negative. Any person coming into Florida to sell preneed must
comply with Florida's preneed licensing laws, including licensing of preneed sales agents. Conversely, if
Florida-based sellers of preneed contracts want to sell preneed contracts in another state, they must comply
with the law in that other state, not Florida law (if the other state does not require use of licensed preneed
sales agents, the Florida-based seller does not need to use a licensed preneed sales agent in the other state).
Market forces tend to make preneed sales a "local" business. Competition is typically limited to
establishments and cemeteries in the buyer's county of residence and contiguous counties. It is simply in the
nature of things that a person arranging their funeral and burial on a preneed basis will usually want to use a
near-by funeral home and cemetery. The funeral home and cemetery need to be fairly convenient to their
loved ones who will be involved in the funeral service and cemetery interment. The idea of having their
remains shipped long distances to some remote and unknown funeral establishment and cemetery, simply
for a price advantage, is not typically attractive to buyers of preneed contracts. If the person already has a
spouse, child, parent, etc., buried in a particular cemetery, that will usually drive the choice of the cemetery.
If a person has had a good experience in a particular funeral home regarding the funeral services of another
person, particularly a family member, that will typically have a very strong influence on the purchase of a
preneed contract. Although cremation tends to be somewhat less of a "local" business, even regarding
preneed contracts for cremation, there is typically significant consumer resistance to having their remains
shipped long distances to unknown facilities for cremation. Thus, generally speaking, preneed sales tend to
be a "local" business.
53
Sales of preneed contracts to Florida residents over the internet by sellers outside Florida has not to date
been a significant component of preneed sales in Florida. Any increase of such internet sales by out-of-state
sellers is expected to be slow, because the preneed sales tend to be a "local" business (see discussion above).
Is the rule likely to increase regulatory costs, including any transactional costs, in excess of $1 million in the
aggregate within five years after the implementation of the rule?
The Division answers this question in the negative. The fees and transactional costs identified in this
Compliance Economic Review have been in place for years, so no additional cost will result. (See economic
analysis, above.)
2. NUMBER AND TYPES OF INDIVIDUALS AFFECTED
There are typically in the range of 320-340 licensed preneed sales companies (the number goes up and down
slightly as new companies enter the market and other companies cease operations, are acquired, etc.).
There is significant variation among the licensed preneed sales companies.
The licensed preneed sales companies are also, per statutory requirement, either a licensed cemetery, a
funeral home, or a direct disposal establishment. In size, the licensed preneed sales companies range from a
few very large multi-state firms, to small funeral homes operated by a family with only 2 to 4 full time staff.
3. COST TO THE AGENCY, AND TO ANY OTHER STATE AND LOCAL GOVERNMENT ENTITIES, OF
IMPLEMENTING AND ENFORCING THE PROPOSED RULE, AND ANY ANTICIPATED EFFECT ON STATE OR
LOCAL REVENUES
There will be no additional costs to the Division to enforce the rule. The rule has been in effect for many
years and all staff and resources needed to implement the rule are in place. The Division estimates that it
takes on average approximately 10 minutes for Division staff to process a quarterly remittance under the
rule. If the value of staff time is estimated at $15 per hour, the cost to the Division to process a single
quarterly remittance is $2.49. Multiplied times 330 remittance invoices per quarter, this equals $824 per
quarter; times four quarters per year, this equals $3,299 per year. Multiplied times 5 years, this equals
$16,499 estimated aggregate 5 year processing cost.
There will no cost to any other state or local government entity for enforcing the rule.
4. TRANSACTIONAL COSTS
Each quarter the FCCS Division mails each preneed licensee a quarterly reporting invoice form for their use in
making the quarterly remittance. Preneed licensees fill the form out, showing the number of preneed
contracts sold in the prior quarter, multiplied by $6 per contract, and attach a check for the amount due. This
is then mailed back to the Department of Financial Services receipts office. The information needed to fill
out this quarterly invoice is typically readily at hand to the preneed licensee, as the preneed licensees must
track sales information for income tax purposes. It is estimated that it takes a typical preneed licensee 45
minutes per quarter to collect from its accounting records the information needed to fill out the quarterly
remittance form, cut the check for the required remittance, address the envelope to the Department of
Financial Services, insert the quarterly invoice, check, and place the envelope in the mail. If the value of the
time of the preneed licensee's staff doing this work is estimated at $25 per hour, the cost per quarter is
estimated at $18.75 per preneed licensee per quarter. Multiplied times 330 preneed licensees, this equals
$6,187 per quarter in aggregate. Multiplied times four quarters per year equals $24,750 per year in
54
aggregate for all preneed licensees. Multiplied times 5 years, this equals $123,750 in estimated aggregate
transactional costs over 5 years.
As noted earlier in this document, preneed licensees are required to deposit a portion of all sales of preneed
contracts into a preneed trust, to assure availability of funds to perform the preneed contract at time of
need. A significant number of preneed licensees, especially small to moderate size preneed licensees, use a
servicing agent to handle for the preneed licensees the trust accounting and trust deposits and withdrawal
records and processes. The servicing agent specializes in providing record-keeping and administrative
services concerning preneed sales and trust data. The servicing agent is typically a firm with a significant size
staff and a robust, high level computer system. The licensees report sales data, including payments received,
to the servicing agent, and the servicing agent has staff that input the data into the servicing agent's
computer systems. These servicing agents typically provide a bundle of services to the licensee, some or
many of which serve licensee business needs not related to regulatory requirements. The servicing agent
thus has all information required to make the quarterly remittance, and in fact the serving agent does make
the quarterly remittances for the preneed licensees, saving the preneed licensee the time and effort. The
servicing agent typically charges a fee to the preneed licensee, related to the dollar amount of preneed trust
assets it services for the preneed licensee. The servicing agent typically does not charge an additional or
separate fee for this service, and the service in included in the basic fee charged.
5. ANALYSIS OF THE IMPACT ON SMALL BUSINESSES
The Division estimates that there are approximately 304 small businesses affected by the rule, statewide.
More specifically, the Division estimates that 304 of the approximately 340 (89%) affected businesses are
small businesses within the definition at section 288.703(6), Florida Statutes. The average net worth of those
304 affected businesses was approximately $438,450 in 2010. The majority of the affected small businesses
were funeral homes.
Sales of preneed contracts are not distributed ratably among the approximately 340 preneed sellers. The
Division estimates that the 20 largest preneed sellers (who are not small businesses) sell approximately 74%
of all preneed contracts sold, and the remaining 320 preneed sellers sell approximately 26% of the preneed
contracts sold.
As noted in a prior section of this document, the Division estimates that the transaction costs per preneed
licensee (to include small businesses) that files its own quarterly remittances, is $18.75 per quarter.
All preneed sellers collect the $6 per preneed contract from the purchaser of the preneed contract.
METHODOLOGY USED TO CONDUCT THE ANALYSIS
Data as to amounts paid as remittances under the rule in issue were taken from Department of Financial
Services receipts accounting records. Data as to numbers of licenses in force and issued are taken from
Department of Financial Services computer systems relating to licenses under Chap. 497. The Division has
staff that has extensive experience in deathcare industry regulation and, to a significant extent, the
economics and empirical characteristics of deathcare industry businesses, particularly deathcare industry
licensees.
55
**********************************************************************************
6. Compliance Economic Review for Rule 5.0026:
A. Rule Text:
69K-5.0026 Preneed License Renewal.
(1) Each active preneed license shall be renewed for the annual period beginning July 1 of each year upon
approval by the Board of Funeral, Cemetery, and Consumer Services. The application for renewal will be
presented to the Board upon receipt and review by the Department of a non-refundable renewal fee as
established by Section 497.453(5), F.S., a financial statement as of the entity’s most recent fiscal year end, and
a completed Annual COA Renewal Statement. Preneed License Renewal, Form DFS-COA-R1, effective 1-18-96,
Annual COA Financial Statement, Form DFS-COA-R2, effective 1-18-96, and Annual COA Renewal Statement,
Form DFS-COA-R3, revised 12-6-01, are hereby incorporated by reference and available by mail or electronically
from the Department of Financial Services, Division of Funeral, Cemetery, and Consumer Services, 200 East
Gaines Street, Tallahassee, Florida 32399-0361.
(2) Failure to submit the statements as required in subsection (1) may result in the levy of a fine by the Board of
Funeral, Cemetery, and Consumer Services in the amount of $50 per day for each day the financial and renewal
statements are not submitted as follows:
(a) Annual COA Financial Statement must be submitted to and received by the Department of Financial
Services, Division of Funeral, Cemetery, and Consumer Services, 200 East Gaines Street, Tallahassee, Florida
32399-0361, within 3 months of the end of the preneed licensee’s fiscal year.
(b) Annual COA Renewal Statement and the required renewal fee must be submitted to and received by the
Department of Financial Services, Division of Funeral, Cemetery, and Consumer Services, 200 East Gaines
Street, Tallahassee, Florida 32399-0361, on or before April 1 of each year.
(3) Financial statements may be prepared either on the form promulgated by this rule or by an independent
certified public accountant on the accrual or income tax basis of accounting in conformity with Rule 69K5.0016, F.A.C. Audited statements are acceptable. The financial statements must document compliance with
the minimum financial responsibility requirements of Rule 69K-5.0016, F.A.C. Failure to comply with said rule
shall result in denial of the renewal application.
(4) In the event the renewal application is denied by the Board, the renewal fee paid is not refundable. If a
hearing is requested on the denial, the certificate shall remain in active status during the pendency of the
hearing.
(5) Any Preneed License not approved or denied by the Board prior to July 1 of each year shall automatically
expire on July 1 and the entity shall be required to cease and desist from all selling of preneed funeral and
cemetery goods and services. All preneed sales agent registrations associated with the preneed license will be
terminated. New applications for certification/registration must be submitted to and approved by the Board in
order to return the certificate and agent registrations to active status. The applicants shall be subject to all
requirements of initial application.
Specific Authority 497.103(1), 497.407 FS. Law Implemented 497.453 FS. History–New 6-24-96, Amended 7-10-02, Formerly
3D-30.041, 69K-100.041.
B. Compliance Economic Review for 69K-5.0026:
56
Compliance Economic Review
Pursuant to section 120.745(5), Florida Statutes
Rule 69K-5.0026, Florida Administrative Code
Preneed License Renewal
Department of Financial Services
Board of Funeral, Cemetery, and Consumer Services
April 2013
JUSTIFICATION FOR THE RULE
Chapter 497 of the Florida Statutes requires regulation of sales of preneed funeral contracts. All regulation of
preneed sales under Chapter 497 is funded solely by fees paid by the licensees; no general revenue is used
for regulation under Chapter 497; see 497.140(1)(b): "It is the legislative intent that the costs of regulation
under this chapter be provided for by fees collected under this chapter."
Rule 69K-5.0026 implements s. 497.453(5), which requires annual renewal of preneed licensees. Rule 69K5.0026 specifies forms and procedures to be used by a preneed licensee in making its annual application for
license renewal. Although rule 69K-5.0026 requires a renewal fee to be attached by the preneed licensee to
the annual renewal application, and thus raises revenue for the implementation of Chapter 497, the amount
of the renewal fees are specified in s. 497.453(5), and vary by the number of preneed contracts sold in the
prior year. The renewal fees are not set by the rule.
Section 497.453 is part of Part IV of Chapter 497. Part IV of Chapter 497 regulates the preneed sale of funeral
goods and services in Florida. Preneed sales refers to the purchase by a person, before their death, of
services and merchandise to be used after the person dies, for the final disposition of the person's bodily
remains. For example, this might include funeral director services, embalming, viewing of remains, casket,
burial service, headstone or other grave marker, or alternatively, cremation service.
Part IV of Chapter 497 provides a comprehensive regulatory scheme regarding preneed sales and sellers.
Statutory requirements include, among other provisions:
•
•
•
•
Preneed sales companies must obtain a license under Chapter 497, and the regulator must
determine if they meet certain net worth requirements, if their principals are of good character,
conduct a criminal background check, etc.
Preneed sales companies must place certain portions of sales proceeds in a trust that is
periodically examined by the regulator.
Complaints by consumers against Preneed sales companies must be investigated by the regulator
and where justified, disciplinary action must be taken by the regulator against the preneed sales
company.
The preneed contract forms used by the preneed sales company must be reviewed and approved
by the regulator.
57
•
Each individual sales agent of a preneed sales company must be licensed as a preneed sales agent
under Chapter 497.
Because preneed sales by their nature involve payment now in exchange for a promise by the seller to
perform years later, preneed sales have long been significantly regulated for the public good. See, for
example, the regulation of preneed sales in 1953, at Chapter 639, Florida Statutes (1953). The Division
estimates that approximately 95% of all states regulate preneed sales, including preneed sales agents.
STATEMENT OF ESTIMATED REGULATORY COSTS
There are typically in the range of 320-340 licensed preneed sales companies (the number goes up and down
slightly as new companies enter the market and other companies cease operations, are acquired, etc.). Each
year all preneed licensees must apply for renewal of the license.
Rule 69K-5.0026 is summarized as requiring the renewal applicant to provide, with the renewal application,
the following items (note that the rule does not use the term "Item A," etc., and same is used herein only for
the sake of explanation):
•
•
•
•
•
Item A. The preneed licensee's balance sheet as of the end of the preneed licensee's most recently
completed fiscal year, and an income and expense statement for the same fiscal year. These financial
statements are used to evaluate net worth and financial viability of the renewal applicant.
A completed renewal application, which includes -Item B. For each different preneed trust, insurance company, and surety bond under which the
preneed licensee has any outstanding preneed contracts secured, a statement of the changes in the
covered preneed contracts (beginning balance, additions, deletions, ending balance).
Item C. A report bringing together and summarizing the individual Item B reports.
Item D. A completed questionnaire providing information for items such as whether the preneed
licensee or its principals have been subjected to criminal proceedings since the prior renewal;
whether there have been any changes in control; etc.
Cost of Preparing Item A.
The required financial statements (Item A) are required to be GAAP-compliant, but are not required to be
prepared by a CPA, nor to be audited.
The cost of preparing the Item A financial statements varies significantly from one preneed licensee to
another. Factors affecting cost to the preneed licensee include but are not limited to: how long the
preneed licensee has been in business; whether the preneed licensee started out as a brand new firm with
no outstanding liabilities, or resulted from an acquisition of an existing preneed licensee's assets and
liabilities; the number of preneed contracts the preneed licensee has outstanding; the size and complexity
of the preneed licensees' business; whether the preneed licensee is a standalone business or part of a group
of affiliated firms under common control; whether the preneed licensee itself wrote all the preneed
contracts it is responsible for, or whether it wrote some itself and acquired others from some other preneed
licensee; the degree to which the preneed licensee or its parent firm routinely prepares annual financial
statements for other purposes (e.g., the parent firm is publicly traded, and/or the preneed licensee or its
58
parent firm have banking or other financial arrangements that require the preparation of annual financial
statements for its creditors).
Accordingly, the Division provides the following matrix of estimated costs for financial statement preparation
costs. The Division uses a preneed licensee staff hourly cost of $30.
a. The Division estimates that 75 firms prepare financial statements for other business purposes, and
the cost of preparing the Item A financial statements is de minimus to these firms, and involves relatively
minor tailoring of material already prepared by the preneed licensee. The Division estimates that it takes 3
hours of staff time (3 x $30 = $90), times 75 preneed licensee = $6,750.
b. The Division estimates that 200 preneed licensee are in a category that they collect for other
business purposes all the information needed for the financial statements, but they do not actually produce
financial statements except for the Item A requirement. These preneed licensees collect the information and
give it to their outside accountant who compiles it for them, into the form of a balance sheet and income
statement. The Division estimates that it takes 10 hours of staff time (10 x $30 = $300), times 200 preneed
licensee = $60,000. The Division estimates that the accountant typically charges 3 hours at $100 per hour,
totaling $300, times 200 preneed licensees, equals $60,000. The aggregate cost to these preneed licensees
is $120,000.
c. The Division estimates that approximately 65 preneed licensees are in a category that they collect
for other business purposes all the information needed for the financial statements, but they do not actually
produce financial statements except for the Item A requirement. These preneed licensees do not use an
accountant, and instead prepare the financial statements by their own staff. The Division estimates that it
takes 12 hours of staff time (12 x $30 = $360), times 65 preneed licensee = $23,400.
The aggregate cost to all 340 preneed licensees, of preparing the Item A financial statements, is thus:
$ 6,750
$120,000
$ 23,400
=
$150,150 Aggregate cost for 340 preneed licensees of preparing the Item A financial statements.
$441 Average cost to individual preneed licensee of preparing Item A financial statements (150,150 /
340 = 441).
Cost Of Preparing Items B&C.
Items B and C are treated together, because Item C simply summarizes Item B.
59
The majority of the preneed licensees use a Servicing Agent to handle the administrative side of their
preneed sales, and the Servicing Agent prepares Items B and C for the preneed licensee, since the Servicing
Agent typically has in its computers detailed information about the preneed licensee's business from which to
prepare Items B and C.
A significant number of preneed licensees, especially small to moderate size preneed licensees, use a
Servicing Agent to handle the preneed licensees for the trust accounting and trust deposits and withdrawal
records and processes. The Servicing Agent specializes in providing record-keeping and administrative
services concerning preneed sales and trust data. The Servicing Agent is typically a firm with a significant size
staff and a robust, high level computer system. The licensees report sales data, contracts sold, payments
received, contracts fulfilled, etc., to the Servicing Agent, and the Servicing Agent has staff that input the data
into the Servicing Agent's computer systems. The Servicing Agent typically provides a bundle of services to
the licensee, some or many of which serve licensee business needs not related to regulatory requirements.
Among those services, the Servicing Agent will typically prepares Items B and C for the preneed licensee,
since the Servicing Agent typically has in its computers detailed information about the preneed licensee's
business from which to prepare Items B and C. The Servicing Agent typically charges, for all its services, a
single fee to the preneed licensee, related to the dollar amount of preneed trust assets it services for the
preneed licensee. The Servicing Agent typically does not charge an additional or separate fee for this service,
and the service is included in the basic fee charged. This approach is highly cost efficient.
The Division estimates that there are 220 preneed licensees that use a Servicing Agent as indicated above.
The Division estimates that this service (preparation of Items B and C by the Servicing Agent for the
preneed licensee), if priced separately by the Servicing Agent, would be in the range of $200 per preneed
licensee per renewal. Thus the total cost to this group of preneed licensees regarding Items B and C, is
estimated at $44,000 (220 x $200 = $ 44,000).
The larger preneed licensees have robust computer systems that track all pertinent data regarding their
preneed business, and the cost to these preneed licensees of preparing Items B and C, is the relatively
modest marginal cost of updating the prior year's submission with data from the most recent completed
year.
The Division estimates that there are 20 preneed licensees in this category. The Division estimates that it
takes approximately 5 hours of preneed licensee staff time to prepare Items B and C. If we estimate the
value of their staff time at $30 per hour, the cost per preneed licensee is estimated at $150, and the
aggregate cost for all 20 preneed licensees is estimated at $3,000 (20 preneed licensees x $150).
60
The Division estimates that the remaining approximately 100 preneed licensees prepare Items B and C
entirely on their own, using primarily manual (non-computer) records. These tend to be the smaller preneed
businesses. However, their work does not start from scratch each year, and instead it typically consists of
updating their submission from the prior year's renewal process.
The Division estimates that it takes these preneed licensees 10 hours to prepare Items B and C. If the
value of their staff time is valued at $25 per hour, the estimated cost per preneed licensee is $250, and in
aggregate for this group, at $25,000.
In aggregate, for all preneed licensees, the Division thus estimates that preparation of Items B and C costs as
follows:
$44,000
$3,000
$25,000
$72,000
The average cost per licensee, to prepare Items B and C, is estimated at $211 ($72,000 / 340 preneed
licensees = $211).
Cost of Preparing Item D
The cost of preparing item D, for all but the largest preneed licensees, is nominal, because the information
requested is of a type typically known to all the preneed licensee's managers and principals without further
inquiry being needed (e.g., was any officer of the preneed licensee convicted of any crime since the last
renewal?).
The Division estimates that there are 320 preneed licensees in this category. The Division estimates that it
takes approximately 0.25 hours of preneed licensee staff time to prepare Item D. If we estimate the value
of their staff time at $30 per hour, the cost per preneed licensee is estimated at $7.50, and the aggregate
cost for all 320 preneed licensees is estimated at $2,400 (320 preneed licensees x $7.50).
The larger preneed licensees have somewhat more work in preparing Item D. Their larger size means they
have to check with multiple people in various locations to get the answers needed.
The Division estimates that there are 20 preneed licensees in this category. The Division estimates that it
takes approximately 2 hours of preneed licensee staff time to prepare Item D. If we estimate the value of
their staff time at $30 per hour, the cost per preneed licensee is estimated at $60, and the aggregate cost
for all 20 preneed licensees is estimated at $1,200 (20 preneed licensees x $60).
The aggregate cost of Item D, for both preneed licensees groups identified above, is $3,600 ($2400 + $1200).
61
Total Aggregate Costs for Items A-D
The aggregate annual estimated costs to preneed licensees of preparing items A-D is as follows:
$150,150
Item A
$ 72,000
Items B and C
$ 3,600
Item D
$225,750
Total per year
Over 5 years the cost is estimated at $1,128,750 ($225,750 x 5)
Renewal Fees.
Although the rule specifies that the renewal fee must be included with the annual renewal application, the
amount of the annual preneed renewal fees are specified in s. 497.453(5), F.S. and vary by the number of
preneed contracts sold in the prior year. The renewal fees are not set by the rule.
The actual remittances paid pursuant to s. 497.453(5), F.S. and rule 69K-5.0026, per fiscal year (FY), have
been as follows for the two most recent years:
FY 2010-11
$580,431
FY 2011-12
$595,300
The average of the above two years is $587,866. Multiplied times 5 years, the aggregate remittances were
$2,939,328 over five years.
1. Direct or Indirect Economic Impacts
Is this rule likely to have an adverse impact on economic growth, private sector job creation or employment,
or private sector investment in excess of $1 million in the aggregate within five years after the
implementation of the rule?
The Division answers this question in the negative. The number of preneed contracts sold in Florida has been
rising in recent years:
2009
74,611
2010
94,698
2011
98,307
2012
99,041
In addition, the number of new preneed contracts sales agents licensed has been stable over the last several
years:
2010
760
62
2011
821
2012
795
The growth in the number of preneed contracts sold, and the relative stability in the number of new preneed
sales agents licensed, indicates a healthy preneed industry in Florida, especially considering the severe
Florida and national recession over the last several years.
Is the rule likely to have an adverse impact on business competitiveness, including the ability of persons
doing business in the state to compete with persons doing business in other states or domestic markets,
productivity, or innovation in excess of $1 million in the aggregate within five years after the implementation
of the rule?
The Division answers this question in the negative. Any person coming into Florida to sell preneed must
comply with Florida's preneed licensing laws, including licensing of preneed sales agents. Conversely, if
Florida based sellers of preneed contracts want to sell preneed contracts in another state, they must comply
with the law in that other state, not Florida law (if the other state does not require use of licensed preneed
sales agents, the Florida based seller does not need to use a licensed preneed sales agent in the other state).
Market forces tend to make preneed sales a "local" business. Competition is typically limited to
establishments and cemeteries in the buyer's county of residence and contiguous counties. It is simply in the
nature of things that a person arranging their funeral and burial on a preneed basis will usually want to use a
near-by funeral home and cemetery. The funeral home and cemetery needs to be fairly convenient to their
loved ones who will be involved in the funeral service and cemetery interment. The idea of having their
remains shipped long distances to some remote and unknown funeral establishment and cemetery, simply
for a price advantage, is not typically attractive to buyers of preneed contracts. If the person already has a
spouse, child, parent, etc., buried in a particular cemetery, that will usually drive the choice of the cemetery.
If a person has had a good experience with a particular funeral home regarding the funeral services of
another person, particularly a family member, that will typically have a very strong influence on the purchase
of a preneed contract. Although cremation tends to be somewhat less of a "local" business, even regarding
preneed contracts for cremation, there is typically significant consumer resistance to having their remains
shipped long distances to unknown facilities for cremation. Thus, generally speaking, preneed sales tend to
be a "local" business.
Sales of preneed contracts to Florida residents over the internet by sellers outside Florida have not to date
been a significant component of preneed sales in Florida. Any increase of such internet sales by out-of-state
sellers is expected to be slow, because the preneed sales tend to be a "local" business (see discussion above).
Is the rule likely to increase regulatory costs, including any transactional costs, in excess of $1 million in the
aggregate within five years after the implementation of the rule?
The Division answers this question in the negative. The fees and transactional costs identified in this
Compliance Economic Review have been in place for years, so no additional cost will result. See economic
analysis, above.
63
2. NUMBER AND TYPES OF INDIVIDUALS AFFECTED
There are typically in the range of 320-340 licensed preneed sales companies (the number goes up and down
slightly as new companies enter the market and other companies cease operations, are acquired, etc.).
There is significant variation among the licensed preneed sales companies.
The 340 affected businesses are also either a licensed cemetery, a funeral home, or a direct disposal
establishment. In size, the 340 entities range from a few very large multi-state firms, to small funeral homes
operated by a family with only 2 to 4 full time staff. The average net worth of the preneed licensees was
approximately $3.342 million.
3. COST TO THE AGENCY, AND TO ANY OTHER STATE AND LOCAL GOVERNMENT ENTITIES, OF
IMPLEMENTING AND ENFORCING THE PROPOSED RULE, AND ANY ANTICIPATED EFFECT ON STATE OR
LOCAL REVENUES
There will be no additional costs to the Division to enforce the rule. The rule has been in effect for many
years and all staff and resources needed to implement the rule are in place. The Division estimates that it
takes on average approximately 45 minutes for Division staff to process an annual preneed renewal
application. If the value of staff time is estimated at $20 per hour, the cost to the Division to process a single
renewal application is estimated at $15. Multiplied times 340 renewal applications per year, this equals
$5,100 per year.
There will no cost to any other state or local government entity of enforcing the rule.
4. TRANSACTIONAL COSTS
Rule 69K-5.0026 is summarized as requiring the renewal applicant to provide, with the renewal application,
the following items (note that the rule does not use the term "Item A," etc., and same is used herein only for
the sake of explanation):
•
•
•
•
•
Item A. The preneed licensee's balance sheet as of the end of the preneed licensee's most recently
completed fiscal year, and an income and expense statement for the same fiscal year. These financial
statements are used to evaluate net worth and financial viability of the renewal applicant.
A completed renewal application, which includes -Item B. For each different preneed trust, insurance company, and surety bond under which the
preneed licensee has any outstanding preneed contracts secured, a statement of the changes in the
covered preneed contracts (beginning balance, additions, deletions, ending balance).
Item C. A report bringing together and summarizing the individual Item B reports.
Item D. A completed questionnaire providing information for items such as whether the preneed
licensee or its principals have been subjected to criminal proceedings since the prior renewal;
whether there have been any changes in control; etc.
Cost of Preparing Item A.
The required financial statements (Item A) are required to be GAAP-compliant, but are not required to be
prepared by a CPA, nor to be audited.
64
The cost of preparing the Item A financial statements varies significantly from one preneed licensee to
another. Factors affecting cost to the preneed licensee include but are not limited to: how long the
preneed licensee has been in business; whether the preneed licensee started out as a brand new firm with
no outstanding liabilities, or resulted from an acquisition of an existing preneed licensee's assets and
liabilities; the number of preneed contracts the preneed licensee has outstanding; the size and complexity
of the preneed licensees' business; whether the preneed licensee is a standalone business, or part of a group
of affiliated firms under common control; whether the preneed licensee itself wrote all the preneed
contracts it is responsible for, or whether it wrote some itself and acquired others from some other preneed
licensee; the degree to which the preneed licensee or its parent firm routinely prepares annual financial
statements for other purposes (e.g., the parent firm is publicly traded, and/or the preneed licensee or its
parent firm have banking or other financial arrangements that require the preparation of annual financial
statements for its creditors).
Accordingly, the Division provides the following matrix of estimated costs for financial statement preparation
costs. The Division used a preneed licensee staff hourly cost of $30.
a. The Division estimates that 75 firms prepare financial statements for other business purposes, and
the cost of preparing the Item A financial statements is de minimus to these firms, and involves relatively
minor tailoring of material already prepared by the preneed licensee. The Division estimates that it takes 3
hours of staff time (3 x $30 = $90), times 75 preneed licensee = $6,750.
b. The Division estimates that 200 preneed licensee are in a category that they collect for other
business purposes all the information needed for the financial statements, but they do not actually produce
financial statements except for the Item A requirement. These preneed licensees collect the information and
give it to their outside accountant who compiles it for them, into the form of a balance sheet and income
statement. The Division estimates that it takes 10 hours of staff time (10 x $30 = $300), times 200 preneed
licensee = $60,000. The Division estimates that the accountant typically charges 3 hours at $100 per hour,
totaling $300, times 200 preneed licensees, equals $60,000. The aggregate cost to these preneed licensees
is $120,000.
c. The Division estimates that approximately 65 preneed licensees are in a category that they collect
for other business purposes all the information needed for the financial statements, but they do not actually
produce financial statements except for the Item A requirement. These preneed licensees do not use an
accountant, and instead prepare the financial statements with their own staff. The Division estimates that it
takes 12 hours of staff time (12 x $30 = $360), times 65 preneed licensee = $23,400.
The aggregate cost to all 340 preneed licensees, of preparing the Item A financial statements, is thus:
65
$ 6,750
$120,000
$ 23,400
=
$150,150 Aggregate cost for 340 preneed licensees of preparing the Item A financial statements.
$441 = Average cost to preneed licensees of preparing Item A financial statements ($150,150 / 340 =
$441).
Cost Of Preparing Items B & C.
Items B and C are treated together, because Item C simply summarizes Item B.
The majority of the preneed licensees use a Servicing Agent to handle the administrative side of their
preneed sales, and the Servicing Agent prepares Items B and C for the preneed licensee, since the Servicing
Agent typically has in its computers detailed information about the preneed licensee's business from which to
prepare Items B and C.
A significant number of preneed licensees, especially small to moderate size preneed licensees, use a
Servicing Agent to handle the preneed licensees for the trust accounting and trust deposits and withdrawal
records and processes. The Servicing Agent specializes in providing record-keeping and administrative
services concerning preneed sales and trust data. The Servicing Agent is typically a firm with a significant size
staff and a robust, high level computer system. The licensees report sales data, contracts sold, payments
received, contracts fulfilled, etc., to the Servicing Agent, and the Servicing Agent has staff that input the data
into the Servicing Agent's computer systems. The Servicing Agent typically provides a bundle of services to
the licensee, some or many of which serve licensee business needs not related to regulatory requirements.
Among those services, the Servicing Agent will typically prepares Items B and C for the preneed licensee,
since the Servicing Agent typically has in its computers detailed information about the preneed licensee's
business from which to prepare Items B and C. The Servicing Agent typically charges, for all its services, a
single fee to the preneed licensee, related to the dollar amount of preneed trust assets it services for the
preneed licensee. The Servicing Agent typically does not charge an additional or separate fee for this service,
and the service in included in the basic fee charged. This approach is highly cost efficient.
The Division estimates that there are 220 preneed licensees that use a Servicing Agent as indicated above.
The Division estimates that this service (preparation of Items B and C by the Servicing Agent for the
preneed licensee), if priced separately by the Servicing Agent, would be in the range of $200 per preneed
licensee per renewal. Thus the total cost to this group of preneed licensees regarding Items B and C, is
estimated at $44,000 (220 x $200 = $ 44,000).
The larger preneed licensees have robust computer systems that track all pertinent data regarding their
preneed business, and the cost to these preneed licensees of preparing Items B and C, is the relatively
modest marginal cost of updating the prior year's submission with data from the most recent completed
year.
66
The Division estimates that there are 20 preneed licensees in this category. The Division estimates that it
takes approximately 5 hours of preneed licensee staff time to prepare Items B and C. If we estimate the
value of their staff time at $30 per hour, the cost per preneed licensee is estimated at $150, and the
aggregate cost for all 20 preneed licensees is estimated at $3,000 (20 preneed licensees x $150).
The Division estimates that the remaining approximately 100 preneed licensees prepare Items B and C
entirely on their own, using primarily manual (non-computer) records. These tend to be the smaller preneed
businesses. However, their work does not start from scratch each year, and instead it typically consists of
updating their submission from the prior year's renewal process.
The Division estimates that it takes these preneed licensees 10 hours to prepare Items B and C. If the
value of their staff time is valued at $25 per hour, the estimated cost per preneed licensee is $250, and in
aggregate for this group, at $25,000.
In aggregate, for all preneed licensees, the Division thus estimates that preparation of Items B and C costs as
follows:
$44,000
$ 3,000
$25,000
$72,000
The average cost per licensee, to prepare Items B and C, is estimated at $211 ($72,000 / 340 preneed
licensees = $211).
Cost of Preparing Item D
The cost of preparing item D, for all but the largest preneed licensees, is nominal, because the information
requested is of a type typically known to all the preneed licensee's managers and principals without further
inquiry being needed (e.g., was any officer of the preneed licensee convicted of any crime since the last
renewal?).
The Division estimates that there are 320 preneed licensees in this category. The Division estimates that it
takes approximately .25 hours of preneed licensee staff time to prepare Item D. If we estimate the value
of their staff time at $30 per hour, the cost per preneed licensee is estimated at $7.50, and the aggregate
cost for all 320 preneed licensees is estimated at $2,400 (320 preneed licensees x $7.50).
The larger preneed licensees have somewhat more work in preparing Item D. Their larger size means they
have to check with multiple people in various locations to get the answers needed.
The Division estimates that there are 20 preneed licensees in this category. The Division estimates that it
takes approximately 2 hours of preneed licensee staff time to prepare Item D. If we estimate the value of
67
their staff time at $30 per hour, the cost per preneed licensee is estimated at $60, and the aggregate cost
for all 20 preneed licensees is estimated at $1,200 (20 preneed licensees x $60).
The aggregate cost of Item D, for both preneed licensees groups identified above, is $3,600 ($2400 + $1200).
Total Aggregate Costs for Items A-D
The aggregate annual estimated costs to preneed licensees of preparing items A-D is as follows:
$150,150
Item A
$ 72,000
Items B and C
$ 3,600
Item D
$225,750
$664
Total per year
Average cost per preneed licensee, per year, of preparing Items A-D ($225,750 / 340).
Over 5 years the cost is estimated at $1,128,750 (225,750 x 5)
5. ANALYSIS OF THE IMPACT ON SMALL BUSINESSES
The Division estimates that there are approximately 304 small businesses affected by the rule, statewide.
More specifically, the Division estimates that 304 of the approximately 340 (89%) affected businesses are
small businesses within the definition at section 288.703(6), Florida Statutes. The average net worth of those
304 affected businesses was approximately $438,450 in 2010. The majority of the affected small businesses
were funeral homes.
Sales of preneed contracts are not distributed ratably among the approximately 340 preneed sellers. The
Division estimates that the 20 largest preneed sellers (who are not small businesses) sell approximately 74%
of all preneed contracts sold, and the remaining 320 preneed sellers sell approximately 26% of the preneed
contracts sold.
As noted in a prior section of this document, the Division estimates that the transaction costs per preneed
licensee (to include small businesses), to prepare the materials required for preneed license renewal
application, are $664 per year, on average.
METHODOLOGY USED TO CONDUCT THE ANALYSIS
Hourly rates for state personnel were calculated from actual salaries paid to those personnel. The $30 per
hour for staff time of industry personnel is an estimate of the average composite cost of various grades of
staff that must spend some time on the task for the licensee. This composite was calculated from knowledge
of the industry. For example, to prepare a financial statement will require work and review at multiple levels
by staff of increasing responsibility, skill and compensation level. Low level accounting clerks will assemble
the data and prepare rough versions of the statements. These will be passed to a person who is an
accountant with a college degree and possibly professional licensure, who will finalize the statements and
68
endorse them and send them up the chain, where they will get reviewed at one or two additional levels on
the finance side of the firm. Frequently they will then cross over to the firm’s legal staff for review of issues
that may have potential legal/regulatory compliance impacts. Some of these higher levels of staff may be
compensated at $80 to $100 per hour.
Data as to amounts paid as remittances under the rule in issue, were taken from Department of Financial
Services receipts accounting records. Data as to numbers of licenses in force and issued, are taken from
Department of Financial Services computer systems relating to licenses under Chap. 497, F.S. The Division
has staff that has extensive experience in deathcare industry regulation and, to a significant extent, the
economics and empirical characteristics of deathcare industry businesses, particularly deathcare industry
licensees.
****************************************************************************************
7. Compliance Economic Review for 69K-5.011:
A. Rule Text:
69K-5.011 Preneed Sales Agent Renewal.
(1) Each active preneed sales agent registration shall be renewed for the biennial period beginning March 1 of each
even-numbered year upon receipt of the statutory nonrefundable renewal fee required by Section 497.466(4), F.S., and
a completed renewal application. Form DFS-PNSR-1 Preneed Sales Agent Renewal Application, revised 09/00, is hereby
incorporated by reference and available by mail from the Department of Financial Services, Division of Funeral,
Cemetery, and Consumer Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361.
(2) The received date shall be the date stamped on the application when received by the Department’s cashier
office in Tallahassee, Florida.
(3) Renewal filings must be received by the Department on or before the last day of February of each evennumbered year. If the last day of February of the renewal year is on a Saturday, Sunday, or legal holiday pursuant to
Section 110.117, F.S., renewal applications received on the next business day will be considered timely received.
(4) A preneed sales agent registration that is not renewed as required in subsection (1) prior to March 1 of the
renewal year shall automatically expire on the last day of February of the renewal year.
Specific Authority 497.103 FS. Law Implemented 497.466 FS. History–New 3-12-02, Formerly 3D-30.060, 69K-100.060.
B. Compliance Economic Review for Rule 69K-5.011:
Compliance Economic Review
Pursuant to section 120.745(5), Florida Statutes
Rule 69K-5.011, Florida Administrative Code
Preneed Sales Agent Renewal
Department of Financial Services
Board of Funeral, Cemetery, and Consumer Services
69
April 2013
JUSTIFICATION FOR THE RULE
Rule 69K-5.011 implements section 497.466(7), Florida Statutes, regarding the renewal of preneed sales
agent appointments. Preneed sales agents must renew their appointments every 24 months, and in
connection therewith pay the renewal fee.
"Preneed sales" refers to the purchase by a person, before their death, of services and merchandise to be
used after the person dies, for the final disposition of the person's bodily remains. For example, this might
include funeral director services, embalming, viewing of remains, casket, burial service, headstone or other
grave marker, or alternatively, cremation service.
Preneed sales agents are persons (individuals) appointed by a preneed licensee to make sales of preneed
contracts for that preneed licensee.
Because preneed sales by their nature involve payment now in exchange for a promise by the seller to
perform years later, preneed sales have long been significantly regulated for the public good. See for
example the regulation of preneed sales in 1953, at Chapter 639, Florida Statutes (1953). The Division
estimates that approximately 95% of all states regulate preneed sales, including preneed sales agents.
The regulatory scheme regarding preneed sales resembles in some regards the regulatory scheme for
insurance sales, in which insurance companies obtain a license as an insurance company, and individuals
obtain appointment by the insurance company to make sales for the company. Regarding preneed sales,
businesses obtain a license as a preneed company, and individuals obtain an appointment to make sales for
the preneed company.
Licensed funeral directors may act as preneed sales agents without being appointed by the preneed licensee.
However, many preneed companies desire a sales volume in excess of that which can be achieved by relying
solely on funeral directors they employ. These preneed companies employ the preneed sales agents that
obtain appointment under the rule.
As shown in the following Statement of Estimated Regulatory Cost, after analysis, this rule does not reach
the threshold test for a Compliance Economic Review.
STATEMENT OF ESTIMATED REGULATORY COSTS
On average, approximately 381 preneed sales agent appointments are renewed each year. The renewal fee
is $250, plus an $8 "convenience fee" for use of the DFS on-line renewal system. Thus the typical aggregate
annual direct cost to licensees to renew preneed sales agent appointments is $98,298 (381 x 258), and the
estimated 5 year direct cost is $491,490.
Preneed sales agent appointments are renewed on line. The Division estimates that it takes an average of 5
minutes to renew a preneed sales agent appointment on line. If the value of the time of the person renewing
70
the preneed sales agent appointment is valued at $20 per hour, the cost to renew an individual preneed sales
agent appointment is $1.66 times 381 preneed sales agents equals $635 per year; times 5 years equals
$3,175.
Thus the aggregate 5-year direct and indirect cost to preneed sales agents to renew their appointments is
estimated to be $494,665 ($491,490 + 3,175).
1. DIRECT OR INDIRECT ECONOMIC IMPACTS
Is this rule likely to have an adverse impact on economic growth, private sector job creation or employment,
or private sector investment in excess of $1 million in the aggregate within 5 years after the implementation
of the rule?
The Division answers the question in the negative. The aggregate 5-year direct and indirect cost to preneed
sales agents to renew their appointments is estimated to be $494,665 ($491,490 + 3,175).
The number of preneed contracts sold in Florida has been rising in recent years:
2011
92,247
2010
95,986
2011
100,889
The number of preneed sales agents licensed in 2011 (821) was 8% higher than were licensed in 2010 (760).
The growth in the number of preneed contracts sold, and the number of preneed sales agents licensed,
indicates a healthy preneed industry in Florida, especially considering the severe recession over the last three
years.
Is the rule likely to have an adverse impact on business competitiveness, including the ability of persons
doing business in the state to compete with persons doing business in other states or domestic markets,
productivity, or innovation in excess of $1 million in the aggregate within 5 years after the implementation of
the rule?
The Division answers the question in the negative. The aggregate 5-year direct and indirect cost to preneed
sales agents to renew their appointments is estimated to be $494,665 ($491,490 + 3,175).
Any person coming into Florida to sell preneed must comply with Florida's preneed licensing laws, including
licensing of a preneed sales agent. Conversely, if a Florida-based seller of preneed contracts wants to sell
preneed contracts in another state, they must comply with the law in that other state, not Florida law (if the
other state does not require use of licensed preneed sales agents, the Florida-based seller does not need to
use a licensed preneed sales agent in the other state).
Market forces tend to make preneed sales a "local" business. Competition is typically limited to
establishments and cemeteries in the buyer's county of residence and contiguous counties. It is simply in the
nature of things that a person arranging their funeral and burial on a preneed basis will usually want to use a
fairly near-by funeral home and cemetery. The funeral home and cemetery need to be fairly convenient to
71
their loved ones who will be involved in the funeral service and cemetery interment. The idea of having their
remains shipped long distances to some remote and unknown funeral establishment and cemetery, simply
for a price advantage, is not typically attractive to buyers of preneed contracts. If the person already has a
spouse, child, parent, etc., already buried in a particular cemetery, that will usually drive the choice of the
cemetery. If a person has had a good experience in a particular funeral home regarding the funeral services
of another person, particularly a family member, that will typically have a very strong influence on the
purchase of a preneed contract. Although cremation tends to be somewhat less of a "local" business, even
regarding preneed contracts for cremation there is typically significant consumer resistance to having their
remains shipped long distances to unknown facilities for cremation. Thus, generally speaking, preneed sales
tend to be a "local" business.
Sales of preneed contracts to Florida residents over the internet by sellers outside Florida have not to date
been a significant component of preneed sales in Florida. Any increase of such internet sales by out-of-state
sellers is expected to be slow, because the preneed sales tend to be a "local" business (see discussion above).
Is the rule likely to increase regulatory costs, including any transactional costs, in excess of $1 million in the
aggregate within 5 years after the implementation of the rule.
The Division answers this question in the negative. The fees and transactional costs identified in this
Compliance Economic Review have been in place for years, so no additional cost will result.
The aggregate 5-year direct and indirect cost to preneed sales agents to renew their appointments is
estimated at $267,750. (See economic analysis above).
2. NUMBER AND TYPES OF INDIVIDUALS AFFECTED
Preneed sales agents are natural persons (not legal entities). Division data indicates regarding the individuals
issued a preneed sales agent license in calendar year 2011, the median year of birth was 1961 (age 51);
approximately 313 of the preneed sales agent licenses issued were issued to females, 295 were issued to
males, and the remainder of the applicants failed to indicate their gender. The Division considers the 2011
data to be generally typical for recent years.
3. COST TO THE AGENCY, AND TO ANY OTHER STATE AND LOCAL GOVERNMENT ENTITIES, OF
IMPLEMENTING AND ENFORCING THE PROPOSED RULE, AND ANY ANTICIPATED EFFECT ON STATE OR
LOCAL REVENUES
There will be no additional costs to the Division to enforce the rule. The rule has been in effect for many
years and all staff and resources needed to implement the rule are in place. Because the preneed sales
agent renewals are done on line, the cost to the FCCS Division is negligible.
4. TRANSACTIONAL COSTS
Preneed sales agent appointments are renewed on line. The Division estimates that it takes an average of 5
minutes to renew a preneed sales agent appointment on line. If the value of the time of the person renewing
the preneed sales agent appointment is valued at $20 per hour, the cost to renew an individual preneed sales
agent appointment is $1.66 times 381 preneed sales agents equals $635 per year; times 5 years equals
$3,175.
72
5. ANALYSIS OF THE IMPACT ON SMALL BUSINESSES
The aggregate 5-year direct and indirect cost to preneed sales agents to renew their appointments is
estimated at $267,750. (See economic analysis, above).
The applicants for preneed sales agent license under the rule are not small businesses, and are instead
individuals who will typically be employees, not employers. Many of the persons licensed as preneed sales
agents are subsequently employed by a small business, but the small business is not required by the statute
or rule to pay the preneed sales agent application fee or other transactional costs of the individual in
obtaining the preneed sales agent license.
METHODOLOGY USED TO CONDUCT THE ANALYSIS
Hourly rates for state personnel were calculated from actual salaries paid to those personnel. The $20 per
hour for staff time of industry personnel is an estimate of the average composite cost of various grades of
staff that must spend some time on the task for the licensee. This composite was calculated from knowledge
of the industry. For example, to prepare a financial statement will require work and review at multiple levels
by staff of increasing responsibility, skill and compensation level. Low level accounting clerks will assemble
the data and prepare rough versions of the statements. These will be passed to a person who is an
accountant with a college degree and possibly professional licensure, who will finalize the statements and
endorse them and send them up the chain, where they will get reviewed at one or two additional levels on
the finance side of the firm. Frequently they will then cross over to the firm’s legal staff for review of issues
that may have potential legal/regulatory compliance impacts. Some of these higher levels of staff may be
compensated at $80 to $100 per hour.
The Division maintains a database from which it has extracted reliable data as to number of licenses issued or
renewed per year and other pertinent data. The Division has staff that has extensive experience in deathcare
industry regulation and, to a significant extent, the economics and empirical characteristics of deathcare
industry businesses, particularly deathcare industry licensees. The Division has informally queried deathcare
industry members for their input on issues or questions pertinent herein. The Division has diligently collated
and applied all of said data to produce the good faith estimates of regulatory costs presented herein.
*************************************************************************************
8. Compliance Economic Review for rule 69K-7.005:
73
A. Text of the Rule:
69K-7.005 Performance Bond - Mausoleums or Below-Ground Crypts.
(1) As provided by Section 497.272(8), F.S., a cemetery may furnish the Board with a performance bond whenever
such cemetery contemplates the sale of spaces in a section of a mausoleum or bank of below-ground crypts prior to the
construction of such facilities. Such bond shall be in lieu of the payments outlined in Section 497.272(3), F.S. An
approved form of such bond is hereby adopted by the Board and designated as Form DFS-F-43 and titled “Performance
Bond – Mausoleums or Below-ground Crypts.” No sale of such spaces, where a bond is being given the Department in
lieu of the payments provided by Section 497.272(3), F.S., shall take place prior to the delivery of such bond to the
Department and receipt of written acceptance thereof by the cemetery or its agent.
(2) The amount of such bond shall be as determined by the Board. For a Section 497.272(8), F.S., bond
determination, the cost of construction of a mausoleum or bank of below-ground crypts shall be determined by the
Department on the basis of certified estimates of the design architect and two or more bids for such construction from
contractors licensed to do business in the State of Florida.
(3) To be acceptable to the Board, the surety company on such bond shall be licensed to do business in the State of
Florida and shall have been in business in this state with a record of successful operations for a period of at least five
years prior to the execution of the bond and such surety company shall not be exposed on any one risk in an amount
exceeding ten (10) percent of its surplus to policy-holders. Such surety company shall have at least the following
minimum ratings in Best’s Key Rating Guide or other similar such rating service or publication.
Policy
Required
Holder’s
Financial
Bond Amount
Rating
Rating
0 to 100,000
B
Class VII
100,000 to 500,000
A
Class VIII
500,000 to 750,000
A
Class IX
750,000 to 1,000,000
A
Class X
1,000,000 to 1,500,000
A
Class XI
1,500,000 or more
A
Class XII
Specific Authority 497.103 FS. Law Implemented 497.272(8) FS. History–New 12-22-81, Amended 3-24-82, Formerly 3D-30.30, 3D30.030, 3F-7.005.
B. Compliance Economic Review for Rule 69K-7.005
Compliance Economic Review
Pursuant to section 120.745(5), Florida Statutes
74
Rule 69K-7.005, Florida Administrative Code
Performance Bond - Mausoleums or Below-Ground Crypts
Department of Financial Services
Board of Funeral, Cemetery, and Consumer Services
April 2013
JUSTIFICATION FOR THE RULE
Rule 69K-7.005 implements section 497.272(8), Florida Statutes. Section 497.272(8), F.S. provides that a
cemetery that is selling interment space in a mausoleum, prior to the mausoleum being built, must provide
security to assure that the mausoleum will be built as promised to the consumers purchasing space. Section
497.272(8), F.S. allows the cemetery to provide a surety performance bond to assure construction of the
mausoleum.
The pre-construction performance bond is required to be approximately equal to the cost of building the
mausoleum project.
Use of pre-construction performance bonds is unusual. As of Feb. 2013 there is only one pre-construction
performance bond in force, in the approximate amount of $1.7 million. This pre-construction performance
bond is the only such bond in effect in recent years.
The cemetery may sell space in the proposed mausoleum for several years before building the mausoleum.
The Division estimates that mausoleums secured by pre-construction performance bonds are typically built
within 5 years of issuance of the pre-construction performance bond.
Once the mausoleum is built, the cemetery cancels the pre-construction performance bond.
After analysis, it is determined that this rule does not meet the standard required for a Compliance
Economic Review.
STATEMENT OF ESTIMATED REGULATORY COSTS
Use of pre-construction performance bonds is unusual. As of Feb. 2013 there is only one mausoleum preconstruction performance bond in force, in the approximate amount of $1.7 million. The pre-construction
performance bond is the only such bond in effect in recent years.
The cemetery pays an annual premium to the surety company (insurance company) for the pre-construction
performance bond. The annual premium varies based on multiple factors, including the surety company's
75
evaluation of the credit worthiness of the cemetery. The annual premium for a pre-construction
performance bond typically is in the range of one to two percent of the face amount of the bond.
If we estimate the annual premium rate on the above-referenced $1.7 million pre-construction performance
bond to be 2% of the amount of the bond, the premium is $34,000 per year, and over 5 years the cost is
estimated at $170,000.
The Division estimates that it takes approximately 20 hours of staff time of the entity acquiring the preconstruction performance bond to apply for the pre-construction performance bond, providing the surety
with required information and documentation. If the value of the staff time is estimated at $40 per hour on
average, the transaction cost is $800.
The Division estimates that once the pre-construction performance bond is issued, it takes approximately 5
hours of the business' staff time per year to monitor the bond, process the annual premium invoice, get it
paid, etc.; at $40 per hour, this would be a cost of $200 per year.
If the pre-construction performance bond is in effect for 5 years, the aggregate indirect cost would be $1,600
($800+ (4 x $200)).
Thus total direct and transaction costs are estimated at $171,600 over 5 years.
1. DIRECT OR INDIRECT ECONOMIC IMPACTS
Is this rule likely to have an adverse impact on economic growth, private sector job creation or employment,
or private sector investment in excess of $1 million in the aggregate within 5 years after the implementation
of the rule?
The Division answers this question in the negative. Total cost to the private sector is estimated at $171,600
over 5 years. See economic analysis, above.
Is the rule likely to have an adverse impact on business competitiveness, including the ability of persons
doing business in the state to compete with persons doing business in other states or domestic markets,
productivity, or innovation in excess of $1 million in the aggregate within 5 years after the implementation of
the rule?
The Division answers this question in the negative. Total cost to the private sector is estimated at $171,600
over 5 years. See economic analysis, above.
Is the rule likely to increase regulatory costs, including any transactional costs, in excess of $1 million in the
aggregate within 5 years after the implementation of the rule.
The Division answers this question in the negative. Total cost to the private sector is estimated at $171,600
over 5 years. See economic analysis, above.
2. NUMBER AND TYPES OF INDIVIDUALS AFFECTED
Affected persons are typically cemeteries that are part of a large group of deathcare industry businesses
under common control. These larger businesses are probably able to obtain more favorable terms on the
76
cost of a pre-construction performance bond, for a variety of reasons (greater net worth, audited financial
statements, etc.). Small independent cemeteries do not tend to use pre-construction performance bonds.
3. COST TO THE AGENCY, AND TO ANY OTHER STATE AND LOCAL GOVERNMENT ENTITIES, OF
IMPLEMENTING AND ENFORCING THE PROPOSED RULE, AND ANY ANTICIPATED EFFECT ON STATE OR
LOCAL REVENUES
There will be no additional costs to the Division to enforce the rule. The rule has been in effect for many
years and all staff and resources needed to implement the rule are in place.
4. TRANSACTIONAL COSTS
The Division estimates that it takes approximately 20 hours of staff time of the entity acquiring the preconstruction performance bond, in applying for the pre-construction performance bond, providing the surety
with required documentation. If the value of the staff time is estimated at $40 per hour on average, the
transaction cost is $800. The Division estimates that once the pre-construction performance bond is issued,
it takes approximately 5 hours of the business' staff time per year to monitor the bond, process the annual
premium invoice, get it paid, etc.; at $40 per hour, this would be a cost of $200 per year. If the preconstruction performance bond is in effect for 5 years, the aggregate cost would be $1,600 ($800+ (4 x
$200)).
5. ANALYSIS OF THE IMPACT ON SMALL BUSINESSES
The Division does not believe that any small businesses have used mausoleum pre-construction performance
bonds in recent years. The Division believes the rule has no effect on small businesses.
METHODOLOGY USED TO CONDUCT THE ANALYSIS
The $40 per hour for staff time of industry personnel is an estimate of the average composite cost of various
grades of staff that must spend some time on the task for the licensee. This composite was calculated from
knowledge of the industry.
The Division has staff that has extensive experience in deathcare industry regulation and, to a significant
extent, the economics and empirical characteristics of deathcare industry businesses, particularly deathcare
industry licensees. The Division maintains records of pre-construction performance bonds in force. The
Division has diligently collated and applied all of said data to produce the good faith estimates of regulatory
costs presented herein.
******************************************************************************
9.Compliance Economic Review for 69K-21.002 and 69K-21.004:
A. Text of the Rules:
69K-21.002 Inspections.
(1) All funeral establishments shall be subject to inspection by the Department at all times with or without notice.
The inspection shall include, but not be limited to, all offices, closets, rooms, refrigeration room, preparation room,
casket areas, alternate container areas, chapels, vehicles used in the funeral business, grounds contiguous to the funeral
establishment, funeral arrangements agreements and other documents used in the funeral business. Enterprises
77
operating more than one establishment may maintain funeral arrangement agreements and other related documents in
a centralized facility, provided that the Department is previously notified in writing of the name and location of the
centralized facility.
(2) All new funeral establishments shall be inspected and shall receive a satisfactory rating prior to the issuance of
an establishment license and shall comply with the criteria set forth in Rule 69K-21.003, F.A.C.
(3) All existing funeral establishments shall be inspected once every year as provided in Section 497.380, F.S., and
shall comply with the criteria set forth in Rule 69K-21.003, F.A.C.
(4) A funeral establishment shall be inspected by the Department under the following circumstances, and the
Department shall be notified by the owner of the establishment at least 10 days before items (a), (b), or (c) occur:
(a) When a funeral establishment moves to a new location;
(b) When ownership of a funeral establishment is changed or otherwise transferred;
(c) When major alterations or modifications in the physical structure of a funeral establishment are made;
(d) To ensure protection of the public health, safety, and welfare.
(5) The Department may inspect any funeral establishment or other facility when a complaint is made.
Rulemaking Authority 497.103, 497.380 FS. Law Implemented 497.380 FS. History–New 2-13-80, Formerly 21J-21.02, Amended 12-1188, Formerly 21J-21.002, Amended 2-16-98, 8-8-00, Formerly 61G8-21.002.
69K-21.004 Fees.
(1) The application fee for a funeral establishment shall be $300.00 and will include licensure for the remainder of
the biennium during which license application is granted.
(2) The biennial renewal fee for funeral establishments shall be $450.00.
(3) Each funeral establishment shall pay an annual inspection fee of $225.00 payable upon application and upon
each biennial renewal.
(4) The initial annual inspection fee and the initial application fee shall be due at the same time and shall be paid
together and the subsequent annual inspection fee and the biennial renewal fee shall be due at the same time and shall
be paid together.
(5) A delinquent fee of fifty dollars ($50.00) shall be paid. This fee is owed when due.
(6) The fee for each duplicate license shall be $25. To obtain a duplicate license, a licensee must inform the
Department that the licensee needs a duplicate license and pay the duplicate license fee to the Department.
(7) In the event that a licensed establishment changes its licensed name, the Board office shall be notified within 30
days. Such notification shall include documentation of the name change as well as a $25.00 duplicate license fee and the
original license. A duplicate license, reflecting the new business name will be generated, upon receipt of the original
license and completion of these requirements. Documentation submitted will remain in the Department’s possession.
(8) In the event that a licensed individual changes his or her name, legal documentation must be submitted to the
Board office. A fee of $25.00 will be required, in addition to the original license. A duplicate license, reflecting the new
name will be generated, upon receipt of the original license and completion of these requirements. Documentation
78
submitted will remain in the Department’s possession.
Rulemaking Authority 497.103, 497.140, 497.380 FS. Law Implemented 497.140, 497.146, 497.365(7), 497.380 FS. History–New 2-1380, Formerly 21J-21.04, Amended 3-29-90, 12-18-90, Formerly 21J-21.004, Amended 3-30-94, 5-1-96, 9-17-97, 10-29-97, 2-16-98, 1117-99, 12-28-00, Formerly 61G8-21.004, Amended 6-15-09.
B. Compliance Economic Review of Rules 69K-21.002 and 69K-21.004:
Compliance Economic Review
Pursuant to section 120.745(5), Florida Statutes
Related Rules:
Rule 69K-21.002 Florida Administrative Code Inspections
and
Rule 69K-21.004 Florida Administrative Code Fees
Department of Financial Services
Board of Funeral, Cemetery, and Consumer Services
April 2013
JUSTIFICATION FOR THE RULE
Rules 69K-21.002 and 69K-21.004 are related in operation. Rule 69K-21.002 requires inspections of new
funeral establishments, and annual inspections thereafter, and additional inspections upon certain specified
events occurring. Rule 69K-21.004 specifies inspection fees and other fees to be paid by the funeral
establishments. Rule 69K-21.002 implements s. 497.380(10), FS. The inspection fees and other fees in rule
69K-21.004 are required pursuant to s. 497.380(4), (5) and (11).
The funeral industry has been significantly regulated in Florida since at least 1937; see ch. 17950, Laws of
Florida. The licensing and inspection of funeral establishments reflects considerations of public health, safety
and welfare. Funeral establishments routinely receive, store, and process dead human bodies. The human
remains may be infected with contagious diseases, and failure to properly store, process and dispose of
human remains may result in serious public health dangers. In addition, legislation requiring the regulation
of funeral establishments reflects a societal determination that human remains must be processed and
stored with some minimum of dignity and respect.
79
The inspection of a funeral establishment will include, but is not limited to, the following:
•
Inspection of the embalming room for sanitary conditions, and to assure that required supplies and
equipment are present and operational.
Inspection of coolers where remains are stored, to assure they are keeping remains at or below 40
degrees Fahrenheit.
Inspection of human remains present, to assure they are being maintained in acceptable condition,
and that they are properly tagged with identification of the decedent.
Verification that only properly licensed persons are performing embalming, and that there is a
properly licensed funeral director & embalmer in charge of the funeral establishment, who is
available to customers, and is overseeing operation of the funeral establishment.
Inspection of the entire premises, to include storage rooms, utility rooms, etc., to assure that
improperly processed or stored human remains are not being concealed from the inspector.
•
•
•
•
The time it takes to conduct an inspection varies significantly from one funeral establishment to another. The
minimum is 1.5 hours and ranges up to an entire day, with repeat visits required. Factors affecting how long
it takes include but are not limited to:
•
•
•
•
•
The size of the funeral establishment.
The amount of business the funeral establishment is doing.
The number of funeral establishment staff; whether staff with the needed answers is on-site; the
degree to which staff is knowledgeable, cooperative, evasive, etc.
The number and seriousness of any problems noted during the current inspection.
The funeral establishment's history of compliance or problems in past inspections.
STATEMENT OF ESTIMATED REGULATORY COSTS
There are typically 865 licensed funeral establishments in Florida. Each of these funeral establishments is
inspected once per year (annual inspection), and is charged an inspection fee of $225 per inspection. This
represents an estimated aggregate annual cost to licensees of approximately $191,625 per year.
The Division of Funeral, Cemetery, and Consumer Services (herein the "Division") typically issues 50 new
funeral establishment licenses each year. Each of these new funeral establishments must be inspected, at a
fee of $225, before commencing operations. This represents an estimated aggregate annual cost to the
licensees of $11,250 per year.
Typically 30 funeral establishments will be subjected to a change of ownership each year, and an inspection is
required before the new owner may commence operations, at a fee of $225. This represents an estimated
aggregate annual cost to licensees of approximately $6,750 per year.
Typically 10 funeral establishments will change their location each year, and an inspection (at a fee of $225) is
required before operations at the new location may commence. This represents an estimated aggregate
annual cost to licensees of approximately $2,250 per year.
80
Pursuant to rule 69K-21.004, every second year each funeral establishment pays a two year funeral
establishment license renewal fee of $450. This results in an aggregate cost to the approximately 865
licensees, every 2 years, of $389,250 (865 x $450). Since this is paid once every two years, the cost per year is
half that. Thus the aggregate annual renewal fee is $194,625.
Transaction costs, renewal invoice. Approximately 90 days prior to the biennial renewal date for each
funeral establishment, the Division mails each funeral establishment a renewal invoice that includes the
renewal fee and the inspection fee. The funeral establishment answers one question on the invoice,
regarding criminal convictions since the last prior renewal, attaches a check for the required aggregate fees,
and mails the invoice back to the Division. The Division estimates that on average it takes a funeral
establishment 20 minutes of staff time to process the renewal invoice, to include cutting the required check.
If the licensee staff time is valued at $30 per hour, the cost per licensee is $9.90. To this is added $1.25 for
the return envelope and postage, resulting in an aggregate processing cost per licensee of $11.15 ($9.90 +
$1.25). Thus the aggregate biennial administrative cost per year for funeral establishments is $9,644. Since
these costs are incurred only once every second year, the aggregate annual cost to licensees is $4,822.
Transaction costs, inspection. The Division estimates that on average an inspection takes 15 minutes of the
time of the funeral establishment's funeral director in charge (FDIC), and 20 minutes of the establishment's
unlicensed support staff. If we estimate the value of the FDIC's time at $40 per hour, and the value of
support staff time at $20 per hour, the FDIC cost is $10, and the support staff time is $6.60, or a total per
licensee of $16.60. The Division estimates that 970 funeral establishment inspections per year are done (865
+ $65 + 30 + 10). This indicates an aggregate annual cost to the licensees of $16,102 (970 x $16.60).
Summarizing, the above shown estimated annual aggregate costs are:
$191,625
$ 11,250
$ 6,750
$ 2,250
$194,625
$ 4,822
$ 16,102
$427,424 total aggregate annual costs
Over 5 years the costs are an aggregate of $2,137,120 ($427,424 x 5).
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Is this rule likely to have an adverse impact on economic growth, private sector job creation or employment,
or private sector investment in excess of $1 million in the aggregate within 5 years after the implementation
of the rule?
The Division answers this question in the negative. The number of licensed funeral establishments has been
increasing recently. In 2008 there were 42 new funeral establishment licenses issued, while in 2011 a total of
58 new funeral establishments were issued. In addition, the number of funeral establishments renewing
their license has been relatively constant over recent years.
Is the rule likely to have an adverse impact on business competitiveness, including the ability of persons
doing business in the state to compete with persons doing business in other states or domestic markets,
productivity, or innovation in excess of $1 million in the aggregate within 5 years after the implementation of
the rule?
The Division answers this question in the negative. Due to the nature of the funeral business there is
relatively little interstate competition among funeral establishments. It is simply in the nature of things that
a person or family arranging a funeral and burial will usually want to use a fairly near-by funeral home and
cemetery. The funeral home needs to be fairly convenient to their loved ones who will be involved in the
funeral service and cemetery interment. The idea of having their loved one's remains shipped long distances
to some remote and unknown funeral establishment and cemetery, simply for a price advantage, is not
typically practical or attractive to families arranging funeral services. If the person already has a spouse,
child, parent, etc., buried in a particular cemetery, that will usually drive the choice of a funeral
establishment, as the family will use a funeral establishment relatively near the cemetery. If a person has
had a good experience in a particular funeral home regarding the funeral services of another person,
particularly a family member, that will typically have a very strong influence on the selection of a funeral
home. Although cremation tends to be somewhat less of a "local" business, even regarding cremation there
is typically significant consumer resistance to having their remains shipped long distances to unknown
facilities for cremation.
Is the rule likely to increase regulatory costs, including any transactional costs, in excess of $1 million in the
aggregate within 5 years after the implementation of the rule.
The Division answers this question in the negative. The transactional costs identified in this Compliance
Economic Review have been in place for years, so no additional cost will result.
1. NUMBER AND TYPES OF INDIVIDUALS AFFECTED
There are approximately 865 funeral establishments subject to inspection and renewal under the rules. Each
of these funeral establishments is typically a corporation or LLC. Funeral establishments range in size from
as large as staffs of 50 or more persons, to establishments having only 4 to 6 employees. Their size depends
on numerous factors, such as where they are located (urban, suburban, or rural), amount of competition
nearby, whether they are part of an affiliated group that feeds each business, etc.
2. COST TO THE AGENCY, AND TO ANY OTHER STATE AND LOCAL GOVERNMENT ENTITIES, OF
IMPLEMENTING AND ENFORCING THE PROPOSED RULE, AND ANY ANTICIPATED EFFECT ON STATE OR
LOCAL REVENUES
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The rules will not result in any increase in costs to the agency. The Division has been implementing the
inspections and renewals for many years, and all required resources are in place.
The Division estimates that the inspection of funeral establishments consumes the equivalent of 4 full time
field staff. If each of the 4 staff is estimated to cost the Division $55,000 in salaries and benefits per year, the
total is $220,000 per year. In addition, the Division estimates that transportation (car/driving) costs per each
of the 4 field staff average 200 miles per week at $.55 per mile equals $110, times 48 weeks per year equals
$5,280 per year per staffer, times 4 staffers equals $21,120 per year in aggregate. The Division estimates that
each of the 4 staffers causes $5,000 in other costs (office space, utilities, equipment, and Division overhead),
or $20,000 in aggregate for all 4 staffers, per year. The sum of the Division costs is thus $246,120 per year.
3. TRANSACTIONAL COSTS
Transaction costs, renewal invoice. Approximately 90 days prior to the biennial renewal date for each
funeral establishment, the Division mails each funeral establishment a renewal invoice, which includes the
renewal fee and the inspection fees. The funeral establishment answers one question on the invoice,
regarding criminal convictions since the prior renewal, attaches a check for the required aggregate fees, and
mails the invoice and check back to the Division. The Division estimates that on average it takes a funeral
establishment 20 minutes of staff time to process the renewal invoice, to include cutting the required check.
If the licensee staff time is valued at $30 per hour, the cost per licensee is $9.90. To this is added $1.25 for
the return envelope and postage, resulting in an aggregate processing cost per licensee of $11.15 ($9.90 +
$1.25). Thus the aggregate biennial administrative cost per year, for funeral establishments, is $9,644 (865 x
$11.15). Since these costs are incurred only once every second year, the aggregate annual cost to licensees is
$4,822.
Transaction costs, inspection. The Division estimates that on average an inspection takes 15 minutes of the
time of the funeral establishment's funeral director in charge (FDIC), and 20 minutes of the establishment's
unlicensed support staff. If we estimate the value of the FDIC's time at $40 per hour, and the value of
support staff time at $20 per hour, the FDIC cost is $10, and the support staff time is $6.60, or a total per
licensee of $16.60. The Division estimates that 970 funeral establishment inspections per year are done (865
+ 65 + 30 + 10). This indicates an aggregate annual cost to the licensees of $16,102 (970 x $16.60).
4. ANALYSIS OF THE IMPACT ON SMALL BUSINESSES
The Division estimates that approximately 550 of the 865 affected funeral establishments are small
businesses.
The estimated cost per each small business follows (see economic analysis, above, for details):
$225 annual inspection costs
$225 annual license renewal cost ($450 paid every two years)
$11.15 annual transaction cost to small business to process annual renewal invoice
$16.60 annual transaction costs of facilitating annual inspection
83
$477 aggregate estimated annual cost per affected small business funeral establishment
METHODOLOGY USED TO CONDUCT THE ANALYSIS
Hourly rates for state personnel were calculated from actual salaries paid to those personnel. The $30 per
hour for staff time of industry personnel is an estimate of the average composite cost of various grades of
staff that must spend some time on the task for the licensee. This composite was calculated from knowledge
of the industry. For example, to prepare a financial statement will require work and review at multiple levels
by staff of increasing responsibility, skill and compensation level. Low level accounting clerks will assemble
the data and prepare rough versions of the statements. These will be passed to a person who is an
accountant with a college degree and possibly professional licensure, who will finalize the statements and
endorse them and send them up the chain, where they will get reviewed at one or two additional levels on
the finance side of the firm. Frequently they will then cross over to the firm’s legal staff for review of issues
that may have potential legal/regulatory compliance impacts. Some of these higher levels of staff may be
compensated at $80 to $100 per hour.
The Division maintains a database from which it has extracted reliable data as to the number of licenses
issued per year and other pertinent data. The Division has staff that has extensive experience in deathcare
industry regulation and, to a significant extent, the economics and empirical characteristics of deathcare
industry businesses, particularly deathcare industry licensees. The Division has diligently collated and applied
all of said data to produce the good faith estimates of regulatory costs presented herein.
****************************************************************************************
11.Compliance Economic Review for Rule 69L-6.015:
A. Text of the Rule:
69L-6.015 Record Maintenance and Production Requirements for Employers.
(1) Employers must at all times maintain the records required by this rule and must produce the records when
requested by the division pursuant to Section 440.107, F.S.
(2) Identity, organizational, and occupational records. Every employer shall maintain the notice that assigns to the
employer its Federal Employer Identification Number (IRS Form 575A); records that identify its business name, such as
fictitious name registration; records that identify its business form, such as corporation, limited liability company, or
partnership; and a copy of its articles of incorporation or organization, occupational licenses, trade licenses or
certifications, and competency cards.
(3) Employment records. Every employer shall maintain employment records pertaining to every person to whom
the employer paid or owes remuneration for the performance of any work or service in connection with any
employment under any appointment or contract for hire or apprenticeship.
(a) The employment records required by this subsection shall indicate with regard to every such person:
1. Name of the person.
2. Social Security Number, Federal Employer Identification Number, or IRS Tax Identification Number of the person.
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3. Each day, month, and year or pay period when the employer engaged the person in employment.
4. Amount of remuneration paid or owed by the employer for work or service performed by the person. Where
remuneration is paid or owed on an hourly basis, the record shall indicate the day, month, and year of work or service
and the number of hours worked by the person during each pay period. Where remuneration is paid or owed on any
basis other than hourly, the record shall specify the basis, such as competitive bid, piece rate, or task, and indicate the
day, month, and year, when remuneration was earned.
(b) In addition, every employer shall maintain the following records for each such person:
1. All checks or other records provided to the person for salary, wage, or earned income.
2. All Form 1099 Miscellaneous Income and Form W-2 Wage and Tax Statements issued to the person.
3. All written contracts or agreements between the employer and the person that describe the terms of
employment.
4. All employment and unemployment reports filed pursuant to Florida law.
(4) Tax records. Every employer shall maintain all forms, together with supporting records and schedules, filed with
the Internal Revenue Service.
(5) Account records. Every employer shall maintain monthly, quarterly, or annual statements for all open or closed
business accounts established by the employer or on its behalf with any credit card company or any financial institution,
such as bank, savings bank, savings and loan association, credit union, or trust company.
(6) Disbursements. Every employer shall maintain a journal of its check and cash disbursements as well as a copy of
each cashier’s check, bank check, and money order, indicating chronologically the disbursement date, to whom the
money was paid, the payment amount, and the purpose.
(7) Employee leasing company, labor pool, and temporary labor service records.
(a) Every employee leasing company licensed under Chapter 468, F.S., including a professional employer
organization, shall maintain:
1. Records that indicate the Federal Employer Identification Number of each client company.
2. The application of each client company and contract between the employee leasing company and the client
company whereby the employee leasing company assigned its employees to a client company.
3. Records that indicate the name, gross pay, deductions from gross pay, net pay, and rate of pay for every
employee assigned to each client company.
(b) Every labor pool under Chapter 448, F.S., shall maintain:
1. The written itemized statement showing in detail the wages and each deduction made from wages paid to each
day laborer.
2. The annual earnings summary provided to each day laborer.
(c) Every temporary labor service shall maintain records that identify the name, Social Security Number or IRS Tax
Identification Number of each employee who the temporary labor service provided to a client, and the payments to and
the pay period, type of service, and location of service performed by each such employee. In addition, the temporary
labor service shall maintain records of payments that it received from the client.
85
(8) Subcontractor invoices. Every employer shall maintain all invoices received from a subcontractor for work or
service performed by the subcontractor for the employer.
(9) Workers’ compensation insurance and certificates of election to be exempt.
(a) Every employer shall maintain all workers’ compensation insurance policies obtained by the employer or on the
employer’s behalf and all endorsements, declaration pages, certificates of workers’ compensation insurance, notices of
cancellation, notices of non-renewal, or notices of reinstatement of such policies.
(b) Every employer shall maintain all premium audit documents provided by the workers’ compensation carrier to
the employer and all premium self-audits, together with supporting documentation and correspondence provided by
the employer to its workers’ compensation carrier.
(c) Every contractor shall maintain evidence of workers’ compensation insurance of every subcontractor and for
every subcontractor that is a corporation or limited liability company that has an officer or a member who elects to be
exempt from the coverage requirements of the workers’ compensation law the contractor shall maintain a valid
certificate of election to be exempt issued to the officer or member under Section 440.05, F.S.
(d) Every corporation that is actively engaged in the construction industry and has officers who possess valid
certificates of election to be exempt issued under Section 440.05, F.S., shall maintain written statements of those
exempt officers affirmatively acknowledging each such officer’s exempt status. A written statement may be in the form
of a copy of a completed DWC 250 (rev. 9/01) Notice of Election to be Exempt as adopted in paragraph 69L-6.009(1)(a),
F.A.C.
(e) Every employer who claims that an employee or officer of a corporation is exempt from the coverage
requirements of the workers’ compensation law shall maintain a valid certificate of election to be exempt issued under
Section 440.05, F.S., for that employee or officer of a corporation.
(10) Contracts. Each employer shall maintain:
(a) All complete executed written contracts between it and a general contractor, subcontractor, independent
contractor, or employee leasing company licensed under Chapter 468, F.S., that specify the terms of reimbursement and
performance of any work or service while engaged in any employment under any appointment or contract for hire or
apprenticeship.
(b) Any records that establish the statutory elements of independent contractor prescribed in Section 440.02(15)(d),
F.S., for each worker who claims to be or who the employer claims to be an independent contractor and not an
employee under the workers’ compensation law.
(11) Records retention. An employer under the workers’ compensation law shall maintain the records specified in
this rule for the current calendar year to date and for the preceding three calendar years, in original form, whether
paper, film, machine readable electronic material, or other media. A legible copy of the original record is an acceptable
substitute for the original.
(12) Records location. An employer shall maintain the records specified in this rule at the corporate registered
office, principal place of business, or job site in Florida.
Rulemaking Authority 440.05(10), 440.107(5), 440.591 FS. Law Implemented 440.05(10), 440.107(3), (5) FS. History–New 2-2-00,
Formerly 38F-6.015, Amended 3-26-03, Formerly 4L-6.015, Amended 1-17-05, 1-17-05.
B. Compliance Economic Review of Rule 69L-6.015:
COMPLIANCE ECONOMIC REVIEW
86
Pursuant to section 120.745(5), Florida Statutes
RULE 69L-6.015, FLORIDA ADMINISTRATIVE CODE
RECORD MAINTENANCE AND PRODUCTION REQUIREMENTS FOR EMPLOYERS
DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF WORKERS’ COMPENSATION
April 2013
JUSTIFICATION FOR THE RULE
Subsection 440.107(5), F.S., states the Department shall specify by rule the business records that employers
must maintain and produce to comply with section 440.107, F.S., Department Powers to Enforce Employer
Compliance with Coverage Requirements. The Division adopted Rule 69L-6.015, F.A.C., which identifies the
specific records an employer must maintain to comply with this statutory provision.
After further calculation, this rule does not meet the minimum requirements for development of a
Compliance Economic Review.
STATEMENT OF ESTIMATED REGULATORY COSTS
Direct or indirect economic impact:
a. Adverse impact on economic growth, private sector job creation or employment, or private sector
investment, which is more than $1 million over five years;
b. Adverse impact on business competitiveness, including the ability of persons doing business in
Florida to compete with persons in other states or domestic markets, which is cumulatively more
than $1 million over five years;
c. Likelihood of the regulatory cost, including transactional costs, of more than $1 million cumulatively
over five years.
BACKGROUND:
Section 440.107 F.S., establishes the Department’s enforcement powers in ensuring that employers comply
with their statutory obligations to obtain appropriate workers’ compensation insurance coverage for their
employees. The Division conducts investigations to determine employer compliance and assesses penalties
against employers who fail to meet their statutory obligations. This section requires that the department
shall assess against any employer who has failed to secure the payment of compensation as required by this
chapter a penalty equal to 1.5 times the amount the employer would have paid in premium when applying
approved manual rates to the employer’s payroll during periods for which it failed to secure the payment of
workers’ compensation required by this chapter within the preceding 3-year period or $1,000, whichever is
greater. The Department must utilize the employer’s business records for the preceding three year period to
calculate the penalty. Section 440.107(5), F.S., states the Department shall specify the business records to be
87
maintained. Rule 69L-6.015, F.A.C., specifies the records which must be maintained and produced for the
Division to determine whether an employer is in compliance with the workers’ compensation coverage
requirements and to calculate the non-compliance penalty. The Division wrote the rule so that the business
records that must be maintained by an employer are consistent with the records maintenance requirements
of other federal and state requirements.
Economic Analysis: The records required to be maintained for three prior years by the Division include
employment records, tax records, account records, disbursements, employee leasing company records,
subcontractor invoices, workers compensation insurance and certificates of election to be exempt, and job
contracts. These are the same records as required to be maintained by employers for the IRS, U.S.
Department of Labor, and Florida Unemployment Compensation.
The filing requirements for the IRS require record retention of at least four years, U.S. Department of Labor
for at least three years, and Florida Unemployment records for at least five years. Therefore, the
Department’s record retention requirements do not exceed the requirements of other federal and state
agencies and do not provide any additional cost to maintain records for purposes of this rule.
The remaining information required to be maintained is the workers’ compensation exemption and policy
records. This information is available to the employer directly through the Division’s databases.
There are costs to produce records for the calculation of a penalty for the employer found in violation of
workers’ compensation laws. These costs include the time for someone to assimilate and copy the records.
The average record count is 225 pages. It takes an average employer four hours to gather the records at $15
per hour/labor = $60. The copying cost is estimated at .08 pages = $18.00. We issue approximately 2,500
enforcement actions per year. 2,500 x $78 = $195,000.
For this reason, it is highly unlikely that the rule will have an adverse impact on economic growth, private
sector job creation or employment, or private sector investment, which is more than $1 million over five
years; have an adverse impact on business competitiveness, including the ability of persons doing business in
Florida to compete with persons in other states or domestic markets, which is cumulatively more than $1
million over five years; or likely that the regulatory cost, including transactional costs, will equal more than $1
million cumulatively over five years.
Types and numbers of individuals or entities likely to be required to comply with these rules: All Florida
employers meeting the minimum requirements to maintain workers’ compensation insurance are required to
comply with the recordkeeping requirements of these rules and statutes. There are, on an annual basis,
approximately 2,500 employers that must produce these records to the division.
Cost to the Division and other state or local governments to implement and enforce the rule: The Division’s
Bureau of Compliance employs 134 staff members who implement and enforce the Compliance rules.
However, there are no direct Division costs related to this specific rule requirement.
Effect on state or local revenues: This rule has no known impact on state or local revenues.
88
Impact on small businesses: There is no impact to small businesses due to the minimal costs in copying and
providing business records to the Department.
Impact on small counties and small cities: There is no impact on small counties and small cities.
METHODOLOGY
The average costs to produce records for the calculation of a penalty for an employer who has been out of
compliance equals the average number of pages of records submitted for review multiplied by the average
charge for making a copy of a record at a copy store.
*******************************************************************************
12.Compliance Economic Review of Rule 69L-56:
A. Text of the Rule:
CHAPTER 69L-56
Electronic Data Interchange (EDI) Requirements for Proof of Coverage and Claims (Non-Medical)
69L-56.001
Forms and Instructions
69L-56.002
Definitions
69L-56.100
Proof of Coverage (POC) Electronic Reporting Requirements
69L-56.110
Technical Requirements for POC EDI Transmissions
69L-56.200
Policy Cancellation or Non-Renewal Requirements
69L-56.205
Policy Reporting Requirements for Employee Leasing Companies
69L-56.210
Time Periods for Filing Electronic Policy Information
69L-56.300
Claims EDI Reporting Requirements and Implementation Schedules
69L-56.301
Electronic First Report of Injury or Illness
69L-56.3012
Electronic Notice of Denial and Rescinded Denial
69L-56.3013
Electronic Periodic Claim Cost Reports
69L-56.304
Electronic Notice of Action or Change, Including Change in Claims Administration, Required by
the Insurer's Primary Implementation Schedule
69L-56.3045
Electronic Notice of Action or Change, Suspensions, and Reinstatement of Indemnity Benefits
Required by Insurer's Secondary Implementation Guide
69L-56.307
Electronic Cancellation of Claim
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69L-56.310
Technical Requirements for Claims EDI Transmissions
69L-56.320
Claims EDI Test and Production Status Requirements
69L-56.330
69L-56.500
Electronic Formats for Reporting the Employee's 8th Day of Disability and the Claim
Administrator's Knowledge of 8th Day of Disability (Repealed)
Insurer Responsibilities Where Third Party Services Are Utilized
69L-56.001 Forms and Instructions.
The following forms are incorporated herein by reference and adopted for use in filing Proof of Coverage (POC) and
Claims (non-medical) Electronic Data Interchange (EDI) transactions to the Division. All of the forms may be obtained
from the Division of Workers’ Compensation at its website, http://www.myfloridacfo.com/WC/edi_clms.html.
(1) DFS-F5-DWC-EDI-1, “EDI Trading Partner Profile” (1/01/2008).
(2) DFS-F5-DWC-EDI-2, “EDI Trading Partner Insurer/Claim Administrator ID List” (10/01/2006).
(3) DFS-F5-DWC-EDI-2A, “EDI Trading Partner Claim Administrator Address List” (10/01/2006).
(4) DFS-F5-DWC-EDI-3, “EDI Transmission Profile-Sender’s Specifications” (10/01/2006).
(5) DFS-F5-DWC-EDI-4, “Secure Socket Layer (SSL)/File Transfer Protocol (FTP) Instructions” (1/01/2008).
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 3-5-02, Formerly 38F-56.001, 4L-56.001,
Amended 5-29-05, 1-7-07, 5-17-09.
69L-56.002 Definitions.
Unless otherwise defined in this section, definitions of data elements and terms used in this rule are defined in the Data
Dictionary located in Section 6 of the “IAIABC Implementation Guide for Claims: First, Subsequent, Header, Trailer &
Acknowledgement Detail Records, Release 3, January 1, 2009 Edition”, and in the Data Dictionary located in Section 6 of
the “IAIABC Implementation Guide for Proof of Coverage: Insured, Employer, Header, Trailer & Acknowledgement
Records, Release 2.1, 6/01/07 Edition”, and in the IAIABC “Glossary”, October 2008, and in the IAIABC Claims EDI R3
“Supplement” January 2009 and the IAIABC POC EDI R2.1 “Supplement”, June 2007, all of which are incorporated
herein by reference. Copies of the IAIABC guides, supplements, and glossary may be obtained from the IAIABC’s
website at, http://www.iaiabc.org, under “EDI” link, then “Implementation Guides” link.
When used in this chapter, the following terms have the following meanings:
(1) “Acknowledge” or “acknowledgement” means a response provided by the Division to communicate the
acceptance or rejection of an electronic transaction sent to the Division. An acknowledgement returned by the Division
will reflect the assignment of an Application Acknowledgment Code of “TA” (Transaction Accepted) if the transaction
was accepted by the Division, or “TR” (Transaction Rejected) if the transaction was rejected by the Division. If a
transaction was assigned an Application Acknowledgement Code of “TA” (Transaction Accepted) the date the transaction
was received by the Division will be used in determining whether an electronic form was timely filed with the Division.
(2) “Award/Order Date” means the date an award, stipulated agreement, advance, lump sum settlement order, or
order approving attorney fees for a lump sum settlement was signed by a Judge of Compensation Claims.
(3) “Average Wage” means the employee’s average weekly wage as determined in Section 440.14, FS.
(4) “Batch” means a set of records containing one header record, one or more detailed transactions, and one trailer
record.
(5) “Became Medical Only Case” means a work-related injury or illness that was initially reported to the Division in
error as a “Lost Time/Indemnity Case” or “Medical Only to Lost Time Case” and subsequently determined to be a
“Medical Only Case” where FROI MTC 01 is being filed to cancel the claim. A “Became Medical Only Case” is
represented by Claim Type Code “B” (Became Medical Only) and is only allowed for FROI MTC 01 (Cancel) filings.
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(6) “Benefit Payment Issue Date” reported for MTC “IP” (Initial Payment), “AP” (Acquired Payment), “PY”
(Payment), and “RB” (Reinstatement of Benefits) means the date payment of a specific indemnity benefit corresponding
to the MTC being reported left the control of the claim administrator (or the claim administrator’s legal representative if
delivery is made by the legal representative) for delivery to the employee or the employee’s representative, whether by
U.S. Postal Service or other delivery service, hand delivery, or transfer of electronic funds. “Benefit Payment Issue Date”
for MTC “S1-8” (Suspension reasons) means the date the last indemnity check prior to the suspension of benefits left the
control of the claim administrator (or the claim administrator’s legal representative if delivery is made by the legal
representative) for the delivery to the employee or the employee’s representative, whether by U.S. Postal Service or other
delivery service, hand delivery, or transfer of electronic funds. The Benefit Payment Issue Date shall not be sent as the
date the check is requested, created, or issued in the claim administrator’s system unless the check leaves the control of
the claim administrator the same day it is requested, created, or issued for delivery to the employee or the employee’s
representative.
(7) “Business day” means a day on which normal business is conducted by the State of Florida and excludes observed
holidays
as
set
out
in
Section
110.117(1),
F.S.
(see
also
State
Holidays
under
http://dms.myflorida.com/human_resource_support/human_re source_management/for_state_hr_practitioners).
(8) “Calculated Weekly Compensation Amount” means 66 2/3 % of the employee’s average weekly wage pursuant to
Section 440.14, F.S., subject to the minimum and maximum amounts set out in Section 440.12, F.S., (a/k/a, the statutory
compensation rate).
(9) “Cancellation/Non-Renewal Effective Date” means the Transaction Set Type Effective Date as defined in the
IAIABC EDI Implementation Guide for Proof of Coverage: Insured, Employer, Header, Trailer & Acknowledgement
Records, Release 2.1, 6/01/07, for a cancellation or non-renewal of any workers’ compensation insurance policy, contract
of insurance or renewal; and shall be effective at 12:01 a.m. on the Transaction Set Type Effective Date reported to the
Division, or the Cancellation/Non-Renewal Effective Date derived by the Division as determined in Rule 69L-56.200,
F.A.C.
(10) “Catastrophic Event” means the occurrence of an event outside the control of an insurer, claim administrator, or
third party vendor, such as a telecommunications failure due to a natural disaster or act of terrorism (including but not
limited to cyber terrorism), in which recovery time will prevent an insurer, claim administrator, or third party vendor from
meeting the filing requirements of Chapter 440, F.S., and this rule. Programming errors, systems malfunctions, or
electronic data interchange failures that are not the direct result of a catastrophic event are not considered to be a
catastrophic event as defined in this rule.
(11) “Claim Administrator” means any insurer, service company/third party administrator, self-serviced self-insured
employer or fund, or managing general agent, responsible for adjusting workers’ compensation claims, that is
electronically sending its data directly to the Division.
(12) “Claim Administrator Primary Address”, “Claim Administrator Secondary Address”, “Claim Administrator City”,
“Claim Administrator State Code”, and “Claim Administrator Postal Code” comprise the address associated with the
physical location of the claims office at which a workers’ compensation claim is being adjusted.
(13) “Claim Administrator Alternate Postal Code” means the zip code associated with the Claim Administrator’s
mailing address established for receiving mail on behalf of the claims office at which a workers’ compensation claim is
being adjusted.
(14) “Claim Type Code” means a code representing the current classification of the claim as either a “Lost Time
/Indemnity Case” (Claim Type Code “I”), “Medical Only to Lost Time Case” (Claim Type Code “L”), “Became Medical Only
Case” (Claim Type Code “B”) or “Medical Only Case” (Claim Type Code “M”).
(15) “Client company” is as defined in Section 468.520(6), F.S.
(16) “Date of Maximum Medical Improvement” (MMI) means the date on which maximum medical improvement
has been achieved with respect to all compensable medical or psychiatric conditions caused by a compensable injury or
disease (i.e., overall MMI).
91
(17) “Date Claim Administrator Had Knowledge of Lost Time” means the date the claim administrator was notified
or became aware that the employee was disabled for eight (8) or more days and was entitled to indemnity benefits. If
the claim administrator acquires a claim from another claim administrator and is filing the Electronic First Report of
Injury or Illness with the Division, the “Date Claim Administrator Had Knowledge of Lost Time” shall be the date the
acquiring claim administrator had knowledge of the employee’s 8th day of disability.
(18) “Days” means calendar days, unless otherwise noted.
(19) “Denied Case” means a “Full Denial” or “Partial Denial” case for which all indemnity benefits are initially denied
by the claim administrator.
(20) “Department” means the Department of Financial Services.
(21) “Division” means the Division of Workers’ Compensation.
(22) “Electronic Data Interchange” (EDI) means a computer-to-computer exchange of business transactions in a
standardized electronic format.
(23) “Electronic Form Equivalent” means information sent in Division-approved electronic formats as specified in
this rule, instead of otherwise required paper documents. Electronic form equivalents do not include information sent by
facsimile, file data attached to electronic mail, or computer-generated paper forms.
(24) “Employee leasing” is as defined in Section 468.520(4), F.S.
(25) “Employee leasing company” is as defined in Section 468.520(5), F.S.
(26) “Employee Leasing Policy Identification Code” is a code which identifies a policy written as an employee
leasing policy, and the type of leasing operation.
(27) “Employer Paid Salary in Lieu of Compensation” means the employer paid the employee salary, wages, or other
remuneration for a period of disability for which the insurer would have otherwise been obligated to pay indemnity
benefits. This does not include the waiting week if the employee was not disabled for 22 or more days.
(28) “File” or “Filed” means a transaction has been received by the Division and passes quality and structural edits
and is assigned an Application Acknowledgement Code of “TA” (Transaction Accepted).
(29) “FROI” means the First Report of Injury Record Layout adopted by the IAIABC as a Claims EDI Release 3
standard, and is comprised of the First Report of Injury Record identified by Transaction Set ID “148” paired with the
First Report of Injury Companion Record identified by Transaction Set ID “R21”. The “FROI” record layout (148/R21) is
located in the Technical Documentation, Section 2, in the IAIABC EDI Implementation Guide for First, Subsequent,
Acknowledgement Detail, Header, & Trailer Records, Release 3, January 1, 2009, which is incorporated herein by
reference. A copy of the guide may be obtained from the IAIABC’s website at http://www.iaiabc.org, under “EDI” link,
then “Implementation Guides” link.
(30) “Full Denial” means any case for which the claim administrator has denied liability for all workers’
compensation benefits (i.e., both indemnity and medical benefits). A “Full Denial” is represented by a FROI or SROI
MTC 04 (Denial).
(31) “Gross Weekly Amount” means the weekly amount payable for a specific Benefit Type and excludes the
application of any Benefit Adjustments or Benefit Credits. The Gross Weekly Amount is usually equal to the Calculated
Weekly Compensation Amount (a/k/a/ statutory compensation rate) except when the weekly rate for a Benefit Type is
paid as a percentage of either the Calculated Weekly Compensation Amount (Comp Rate), Average Wage, or average
temporary total disability benefits, such as for Permanent Total Supplemental Benefits, Death Benefits, and Impairment
Income Benefits.
(32) “Header Record” means the first record of a batch. The header record shall uniquely identify a sender, as well as
the date and time a batch is prepared, and the transaction set within the batch.
(33) “IAIABC” means the International Association of Industrial Accident Boards and Commissions (www.iaiabc.org),
which is a professional trade association comprised of state workers’ compensation regulators and insurance
representatives.
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(34) “Industry Code” means the 5 or 6-digit code that represents the nature of the employer’s business as published
in the North American Industry Classification System (NAICS) 2007 Edition, hereby incorporated by reference. NAICS
code information may be obtained by contacting the NAICS Association, 341 East James Circle, Sandy, Utah, 84070, or
from the NAICS website at www.naics.com.
(35) “Initial Date of Lost Time” means the employee’s eighth (8th) day of disability, i.e., the first day on which the
employee sustains disability as defined in Section 440.02, F.S., after fulfilling the seven (7) day waiting week requirement
in Section 440.12, F.S. The Initial Date of Lost Time does not mean the “Initial Date Disability Began”.
(36) “Initial Disposition” means the first action taken by the claim administrator following its knowledge of an injury
to accept or deny compensability of the claim and pay or deny benefits, including payment or denial of both indemnity
and medical benefits, or denial of indemnity benefits only.
(37) “Insurer” means an insurer as defined in Section 440.02, F.S.
(38) “Insurer Code #” means the Division-assigned number for the insurer bearing the financial risk of the claim.
(39) “Jurisdiction Designee Received Date” means the date on which a third party vendor received Proof of
Coverage data from an insurer that is not submitting their electronic Proof of Coverage data directly with the Division.
This date shall be used in place of the date the Division received electronic Proof of Coverage data for purposes of
calculating the effective date of the cancellation or non-renewal, and timely filings of electronic Proof of Coverage data.
(40) “Knowledge” or “Notification” means an entity’s earliest receipt of information, including by mail, telephone,
facsimile, direct personal contact, or electronic submission.
(41) “Lost Time/Indemnity Case” means a work-related injury or illness which causes the employee to be disabled
for more than 7 calendar days, or for which indemnity benefits have been paid. A Lost Time/Indemnity Case shall also
include: A case involving a compensable volunteer pursuant to Section 440.02(15)(d)6., F.S., where no indemnity benefits
will be paid, but where the employee is disabled for more than 7 calendar days; a compensable death case pursuant to
Section 440.16, F.S., for which there are no known or confirmed dependents; a case where a compensable injury results in
disability of more than 7 calendar days where the “Employer Paid Salary in Lieu of Compensation” as defined in this
section; a case for which indemnity benefits were paid prior to the date the claim administrator learned of a change in
jurisdiction and filed SROI MTC S8 (Suspension, Jurisdiction Change); and a case where indemnity benefits were paid
but subsequently suspended because the employee could not be located and the claim administrator filed SROI MTC S6
(Suspension, Claimant’s Whereabouts Unknown). The first 7 calendar days of disability do not have to occur
consecutively, but are determined on a cumulative basis and can occur over a period of time. A “Lost Time/Indemnity
Case” is represented by Claim Type Code “I” (Indemnity).
(42) “Maintenance Type Code” (MTC) defines the specific purpose of individual claims transactions within the batch
being sent, i.e., a code that represents the type of filing being sent electronically (For example: MTC IP = initial payment,
MTC 04 = Total or Full Denial). MTC’s and data elements required by this rule may not exactly match paper claim forms
and associated data reporting requirements set out in Rule Chapter 69L-3, F.A.C.
(43) “Manual Classification Code” means the 4-digit code assigned by the National Council on Compensation
Insurance (NCCI) for the particular occupation of the injured employee as documented in the NCCI Scopes™ Manual
2009 Edition, which is hereby incorporated by reference. A listing of Manual Classification Codes may be obtained by
contacting NCCI’s Customer Service Center at 1(800)622-4123.
(44) “Medical Only Case” means a work-related injury or illness which requires medical treatment for which charges
will be incurred, but which does not cause the employee to be disabled for more than 7 calendar days. A “Medical Only
Case” is represented by Claim Type “M” (Medical Only) and is limited to being reported on MTC 04 and PD filings where
the claim was initially accepted as a Medical Only Case prior to the denial of indemnity benefits.
(45) “Medical Only to Lost Time Case” means a work-related injury or illness which initially does not result in
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disability of more than 7 calendar days, but later results in disability of more than 7 days, where disability is either
delayed and does not immediately follow the accident, or where one or more broken periods of disability occur within the
first 7 days after disability has commenced and the combined disability periods eventually total more than 7 days. A
“Medical Only to Lost Time Case” includes a case for which Impairment Income Benefits are the first and only indemnity
benefits paid, or for which the initial payment of indemnity benefits is made in a lump sum for an award, advance,
stipulated agreement or settlement. A “Medical Only to Lost Time Case” is represented by Claim Type Code “L”
(Became Lost Time/Indemnity).
(46) “Net Weekly Amount” means the weekly amount paid for an indemnity benefit such as temporary total benefits,
impairment income benefits, etc., inclusive of any Benefit Adjustments or Benefit Credits being applied to the benefit
type. The Net Weekly Amount equals the “Gross Weekly Amount” where no adjustments or credits are applied.
(47) “Partial Denial” means a case where compensability is accepted but the claim administrator initially denies all
indemnity benefits and only medical benefits will be paid; Partial Denial also means a case where a specific indemnity
benefit(s) was previously paid but subsequently denied, either in whole or in part. A “Partial Denial” is represented by a
SROI MTC “PD”.
(48) “Payment Issue Date” for MTC “IP”(Initial Payment), and “PY” (Payment) means the date payment of a specific
indemnity benefit corresponding to the MTC being reported left the control of the claim administrator (or the claim
administrator’s legal representative if delivery is made by the legal representative) for delivery to the employee or the
employee’s representative, whether by U.S. Postal Service or other delivery service, hand delivery, or transfer of
electronic funds. The Payment Issue Date shall not be sent as the date the check is requested, created, or issued in the
claim administrator’s system unless the check leaves the control of the claim administrator the same day it is requested,
created, or issued for delivery to the employee or the employee’s representative.
(49) “Permanent Impairment Percentage” means “Permanent Impairment” as defined in Section 440.02, F.S.
(50) “Sender” means one of the following entities sending electronic filings to the Division:
(a) Claim Administrator,
(b) Insurer, or
(c) Third Party Vendor (Proof of Coverage only).
For Claims EDI filing purposes, “sender” does not include an entity acting as an intermediary for sending transmissions to
the Division on behalf of an insurer or claim administrator where the sender is not the insurer or claim administrator
handling the claim.
(51) “SROI” means the Subsequent Report of Injury Record Layout adopted by the IAIABC as a Claims EDI Release 3
standard, and includes the Subsequent Report Record identified by Transaction Set “A49” paired with the Subsequent
Report Companion Record identified with Transaction Set ID “R22”. The “SROI” record layout (A49/R22) is located in the
Technical Documentation, Section 2, in the IAIABC EDI Implementation Guide for First, Subsequent, Acknowledgement
Detail, Header, & Trailer Records, Release 3, January 1, 2009, and Supplement, which is incorporated herein by
reference. A copy of the guide may be obtained from the IAIABC’s website at http://www.iaiabc.org, under the “EDI”
link, then “Implementation Guides” link.
(52) “Third Party Vendor” means an entity acting as a submission agent or vendor on behalf of an insurer, service
company or third party administrator, which has been authorized to electronically send required data to the Division.
(53) “Trading Partner” means an entity approved by the Division in accordance with Rules 69L-56.110, 69L-56.310
and 69L-56.320, F.A.C., to exchange data electronically with the Division.
(54) “Trailer Record” means the last record that designates the end of a batch of transactions. It shall provide a count
of transactions contained within the batch, not including the header and trailer transactions.
(55) “Transaction” is one or more records within a batch which communicates information representing an electronic
form equivalent.
(56) “Transaction Accepted Code TA” means an Application Acknowledgement Code returned by the Division on
the acknowledgement transaction to represent that a transaction was received by the Division and passed required edits.
(57) “Transaction Rejected Code TR” means an Application Acknowledgement Code returned by the Division on the
acknowledgement transaction to represent that a transaction was received by the Division and did not pass required
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edits.
(58) “Transmission” consists of one or more batches sent to or received by the Division or a trading partner.
(59) “Triplicate Code” is a series of three two-digit numeric codes that define the specific purpose of individual
records in a Proof of Coverage transmission, i.e., new policy, renewal, endorsement, cancellation or non-renewal. It is a
combination of the Transaction Set Purpose Code, Transaction Set Type Code and Transaction Set Reason Code as
defined in the Data Dictionary, Section 6 of the IAIABC EDI Implementation Guide for Proof of Coverage: Insured,
Employer, Header, Trailer & Acknowledgement Records, Release 2.1, 6/01/2007 Edition, which is incorporated herein by
reference. A copy of the guide may be found at http://www.iaiabc.org, under “EDI” link, then “Implementation Guides”
link.
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 3-5-02, Formerly 38F-56.002, 4L-56.002,
Amended 5-29-05, 1-7-07, 5-17-09.
69L-56.100 Proof of Coverage (POC) Electronic Reporting Requirements.
(1) Effective March 1, 2002, every insurer authorized to insure employers in the State of Florida, except for
individual self-insurers approved under Section 440.38, F.S., shall file policy information electronically to the Division
rather than by filing on paper forms previously required.
Every insurer shall send to the Division by electronic data interchange electronic policy information for Certificates of
Insurance, Endorsements, Reinstatements, Cancellations and Non-Renewals pursuant to the filing time periods in Rule
69L-56.210, F.A.C., of this chapter. Such policy information shall be sent in accordance with the “EDI Trading Partner
Requirements” set forth in Sections 2 through 6 of the Florida Division of Workers’ Compensation Proof of Coverage
Electronic Data Interchange (EDI) Implementation Manual, 1/01/2009, which is incorporated herein by reference. A copy
of the manual may be obtained from the Division of Workers’ Compensation at its website,
http://www.myfloridacfo.com/WC/edi_poc.html, or by sending a request to the Division of Workers’ Compensation,
Bureau of Data Quality and Collection, 200 East Gaines Street, Tallahassee, Florida 32399-4226. The Division will not
accept an electronic transaction that fails to comply with the “EDI Trading Partner Requirements” in Sections 2 through
6 in this manual. The insurer shall send electronic transmissions either directly to the Division or through a third party
vendor.
(2) On or before April 2, 2007, all electronic form equivalents of Proof of Coverage data shall be sent in the Proof of
Coverage formats adopted by the IAIABC and located in Section 2 of the IAIABC EDI Implementation Guide for Proof of
Coverage: Insured, Employer, Header, Trailer & Acknowledgement Records, Release 2.1, 6/01/2007 Edition.
(3)(a) At least one (1) business day before the insurer or third party vendor sends its first transmission to the
Division, the insurer or third party vendor shall send to the Division in an email addressed to poc.edi@myfloridacfo.com,
their profile information using the following forms adopted in Rule 69L-56.001, F.A.C.:
1. “EDI Trading Partner Profile,” DFS-F5-DWC-EDI-1 (1/01/2008), and
2. “EDI Trading Partner Insurer/Claim Administrator ID List”, DFS-F5-DWC-EDI-2 (10/01/2006), and
3. “EDI Transmission Profile – Sender’s Specifications,” DFS-F5-DWC-EDI-3 (10/01/2006).
(b) The insurer or third party vendor shall report changes to its profile information to the Division at least one (1)
business day before sending transactions containing new profile-related information. The insurer or third party vendor
shall report the new profile information by emailing a revised “EDI Trading Partner Profile”, DFS-F5-DWC-EDI-1
(1/01/2008), and if applicable, the “EDI Trading Partner Insurer/Claim Administrator ID List”, DFS-F5-DWC-EDI-2
(10/01/2006), and if applicable, the “EDI Transmission Profile – Sender’s Specifications”, DFS-F5-DWC-EDI-3
(10/01/2006) to the Division at poc.edi@myfloridacfo.com.
(c) If the insurer suspends the use of a third party vendor and begins sending its electronic Proof of Coverage data
directly to the Division, the insurer shall, at least one (1) business day prior to the effective date of this change, email a
revised “EDI Transmission Profile – Sender’s Specifications,” DFS-F5-DWC-EDI-3 (10/01/2006), to the Division at
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poc.edi@myfloridacfo.com.
(d) If the insurer changes third party vendors, the insurer shall, at least one (1) business day prior to the effective date
of the change, send an email to the Division at poc.edi@myfloridacfo.com to report the name of the new vendor and
effective date on which POC transactions will be sent by the new vendor.
(e) Insurers or third party vendors that experience a catastrophic event resulting in the insurer’s failure to meet the
filing requirements of this rule, shall submit a written or electronic request to the Division for approval to submit required
electronic form equivalents in an alternative filing timeline. The request shall be sent to the Division within 15 business
days after the catastrophic event. The request shall contain a detailed explanation of the nature of the event, date of
occurrence, and measures being taken to resume electronic submission. The insurer or third party vendor shall also
provide an estimated date by which electronic submission of affected EDI filings will be resumed. Approval to submit in
an alternative filing timeline shall be granted by the Division if a catastrophic event prevents electronic submission. The
approval must be obtained from the Division’s Bureau of Data Quality and Collection, 200 E. Gaines Street, Tallahassee,
Florida 32399-4226, or via email at poc.edi@myfloridacfo.com.
Rulemaking Authority 440.185(7), 440.591, 440.593(5) FS. Law Implemented 440.185(7), 440.593 FS. History–New 3-5-02, Formerly
38F-56.100, 4L-56.100, Amended 5-29-05, 1-7-07, 5-17-09.
69L-56.110 Technical Requirements for POC EDI Transmissions.
(1) In order to send Proof of Coverage data electronically to the Division, the insurer or third party vendor shall
complete the testing requirements set forth in Section 1 of the Florida Division of Workers’ Compensation Proof of
Coverage Electronic Data Interchange (EDI) Implementation Manual, 1/01/09. Each transmission for Test or Production
purposes shall be in the PC1-Insured Record format and PC2-Employer Record format located in Section 2 of the
IAIABC EDI Implementation Guide for Proof of Coverage: Insured, Employer, Header, Trailer & Acknowledgement
Records, Release 2.1, 6/01/07 Edition and Supplement.
(2) Each transmission shall contain the following as set forth in Section 2 of the IAIABC EDI Implementation Guide
for Proof of Coverage: Insured, Employer, Header, Trailer & Acknowledgement Records, Release 2.1, 6/01/07 Edition:
(a) Header Record.
(b) One or more records – PC1, PC2 (See “Transaction Overview, Sub Type Code” column located in Section 4 of
the guide).
(c) Trailer Record.
(3) Header records shall include the following information:
(a) Receiver FEIN for the State of Florida: 59-6001874.
(b) “Receiver Postal Code” for the State of Florida: 323994226
(c) Sender Identifier. The Sender Identifier (Sender ID) shall consist of the insurer’s or third party vendor’s FEIN and
Postal Code as reported on Form DFS-F5-DWC-EDI-3 (10/01/2006), EDI Transmission Profile-Sender’s Specifications.
(d) “Sender Postal Code” as indicated on DWC Form EDI-3 “EDI Transmission Profile-Sender’s Specifications.”
(4) POC EDI transmissions may be sent on a daily basis, and shall be sent via secured File Transfer Protocol (FTP).
Effective June 1, 2005, electronic transmissions of Proof of Coverage data required pursuant to this rule, shall be sent to
the Division using Secure Socket Layer/File Transfer Protocol (SSL/FTP) in accordance with instructions on Form DFS-F5DWC-EDI-4 (1/01/2008).
(5) Transmissions received on or before 9:00 p.m., Eastern Standard Time, shall be processed by the Division the
same day the transmission was sent to the Division and acknowledged by the Division the next business day.
Transmissions received after 9:00 p.m. through 11:59 p.m., Eastern Standard Time, shall be processed by the Division
the following day and acknowledged by the Division the next day after the transmission is processed.
(6) Transmissions shall be sent using the flat file PC1 and PC2 formats located in Section 2 of the IAIABC EDI
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Implementation Guide for Proof of Coverage: Insured, Employer, Header, Trailer & Acknowledgement Records, Release
2.1, 6/01/07 Edition and Supplement.
(7) For test transmissions, the “Test-Production Indicator” in the Header record shall be set to “T.” Beginning with
authorized production transmissions, the “Test-Production Indicator” shall be set to “P.”
(8) All insurers or third party vendors shall have the capability to receive and process the Division’s POC EDI
Acknowledgement Transaction (AKP), described in Section 2 of the IAIABC EDI Implementation Guide for Proof of
Coverage: Insured, Employer, Header, Trailer & Acknowledgement Records, Release 2.1, 6/01/07 Edition and
Supplement. The Division will also send, when applicable, a re-acknowledgment transaction (ACR) to identify an EDI
filing previously acknowledged with Application Acknowledgement Code “TR” (Transaction Rejected) due to improper
processing, that was subsequently re-processed by the Division and re-assigned an Application Acknowledgement Code
of “TA” (Transaction Accepted). The claim administrator shall have the option of processing re-acknowledgement
transactions.
(9) The definitions established in Section 6 of the IAIABC EDI Implementation Guide for Proof of Coverage: Insured,
Employer, Header, Trailer & Acknowledgement Records, Release 2.1, 6/01/07 Edition and Supplement, shall be utilized
when reporting data elements to the Division.
(10) The insurer or third party vendor shall send the PC1 and PC2 transactions required in Rule 69L-56.210, F.A.C., in
accordance with the information appearing in the “Sub Type Code” column in the “Proof of Coverage Transaction
Overview” document, located in Section 4 of the IAIABC EDI Implementation Guide for Proof of Coverage: Insured,
Employer, Header, Trailer & Acknowledgement Records, Release 2.1, 6/01/07 Edition. If the PC2 record is required and
is rejected by the Division, both the PC1 and PC2 records shall be re-sent together in the same transmission. The Division
will not “hold” a PC1 record in anticipation of the return of a corrected corresponding PC2 record.
(11) The insurer or third party vendor’s business and technical contacts shall have e-mail system capabilities that
support Word, Excel, or PDF attachments from the Division of at least 2 Megabytes.
(12) The insurer or third party vendor shall utilize anti-virus software to screen out and clean any viruses on all
electronic transmissions prior to sending transmissions to the Division. The insurer or third party vendor shall maintain
the anti-virus software with the most recent anti-virus update files from the software provider. If the insurer or third
party vendor sends a transmission that contains a virus which prevents the Division from processing the transmission,
the transmission will not be considered as having been received by the Division.
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 3-5-02, Formerly 38F-56.110, 4L-56.110,
Amended 5-29-05, 1-7-07, 5-17-09.
69L-56.200 Policy Cancellation or Non-Renewal Requirements.
(1) Except for cancellation for nonpayment of premium or failure to pay deductible, or cancellation or non-renewal
at the request of the insured, an insurer shall not cancel or non-renew any workers’ compensation insurance policy,
contract of insurance, or renewal until at least 30 days have elapsed after the insurer has electronically filed a
cancellation or non-renewal with the Division, either directly or through a third party vendor. When an insurer files an
electronic cancellation or non-renewal directly with the Division for any reason other than non-payment of premium or
failure to pay deductible or when cancellation or non-renewal is requested by the insured, the 30-day notice period
(Cancellation/Non-Renewal Effective Date) shall be calculated from the first day following the date on which the
electronic cancellation or non-renewal was filed with the Division. If the insurer files an electronic cancellation or nonrenewal through a third party vendor for any reason other than non-payment of premium or failure to pay deductible,
or when cancellation or non-renewal is requested by the insured, the 30-day notice period (Cancellation/Non-Renewal
Effective Date) shall be calculated from the first day following the “Jurisdiction Designee Received Date”.
(2)(a) For any workers’ compensation insurance policy, contract of insurance, or renewal with a policy effective date
prior to October 1, 2003, an insurer shall not cancel or non-renew the policy for non-payment of premium or failure to pay
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deductible until and unless 30 days have elapsed after the insurer has electronically filed a cancellation or non-renewal
with the Division, either directly or through a third party vendor. When an insurer files an electronic cancellation or nonrenewal directly with the Division, the 30-day notice period (Cancellation/Non-Renewal Effective Date) shall be
calculated from the first day following the date on which the electronic cancellation or non-renewal was filed with the
Division. If the insurer files an electronic cancellation or non-renewal through a third party vendor, the 30-day notice
period (Cancellation/Non-Renewal Effective Date) shall be calculated from the first day following the “Jurisdiction
Designee Received Date”.
(b) For any workers’ compensation insurance policy, contract of insurance, or renewal with a policy effective date on
or after October 1, 2003, an insurer shall not cancel or non-renew the policy for non-payment of premium or failure to pay
deductible until and unless the insurer has mailed notification of the cancellation or non-renewal to the employer at least
10 days prior to the effective date of the cancellation or non-renewal. Notification to the Division is not required to cancel
or non-renew a workers' compensation insurance policy, contract of insurance, or renewal for non-payment of premium or
failure to pay deductible. However, the insurer shall advise the Division of the cancellation or non-renewal due to nonpayment of premium or failure to pay deductible in accordance with the electronic filing time periods for policy
information set out in subsections 69L-56.210(5) and (6), F.A.C.
(3) If an insured requests cancellation or non-renewal of any workers’ compensation insurance policy, contract of
insurance or renewal, the cancellation or non-renewal shall be effective on the date the insurer sends the cancellation
or non-renewal to the insured. Notification to the Division is not required to cancel or non-renew a workers’
compensation insurance policy, contract of insurance, or renewal when cancellation or non-renewal is requested by the
insured. However, the insurer shall advise the Division of the Cancellation/Non-Renewal Effective Date requested by the
insured in accordance with the electronic filing time periods for policy information set out in subsection 69L-56.210(7),
F.A.C.
(4) If a policy has been re-written by the same insurer for the same employer with the same effective date and has
been electronically filed with the Division, the earlier policy may be cancelled by the insurer the same day the earlier
policy became effective. The insurer shall electronically file a cancellation or non-renewal directly with the Division or
through a third party vendor, and serve a copy of the notice of cancellation or non-renewal upon the employer in person
or by mail, stating therein the reason for such cancellation or non-renewal.
Rulemaking Authority 440.185(7), 440.42(3), 440.591, 440.593(5), 627.4133(4) FS. Law Implemented 440.185(7), 440.42(3), 440.593,
627.4133(4), FS. History–New 5-29-05, Amended 1-7-07, 5-17-09.
69L-56.205 Policy Reporting Requirements for Employee Leasing Companies.
For any workers’ compensation insurance policy, contract of insurance or renewal written for an employee leasing
company or clients of an employee leasing company, with a policy effective date on or after October 1, 2009, the insurer
shall electronically file any workers’ compensation insurance policy, contract of insurance, or renewal pursuant to the
requirements set forth in Rule 69L-56.210, F.A.C., and report one of the Employee Leasing Policy Idenitification Codes
shown below from Section 6 of the IAIABC EDI Implementation Guide for Proof of Coverage: Insured, Employer, Header,
Trailer & Acknowledgement Records, Release 2.1, 6/01/07 Edition and Supplement:
(1) Employee Leasing Policy Identification Code (2) – identifies an Employee leasing policy for leased workers of
multiple client companies. The non-leased workers of the employee leasing company may also be covered under this
policy. The insured name reported shall be the name of the employee leasing company and shall be reported on the
IAIABC POC Release 2.1 Insured Record (PC1). The client names reported shall be the legal business name of each client
company, and shall not be preceded with the name of the Employee leasing company and shall be reported on the
IAIABC POC Release 2.1 Employer Record(s) (PC2).
(a) If an employee leasing company policy is reported with the Employee Leasing Policy Identification Code (2), an
employee leasing policy for leased workers of multiple client companies, the Insurer shall report the addition of client
companies to the policy in accordance with subsection 69L-56.210(2), F.A.C., using Triplicate Codes 00-31-54, 00-31-87
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or 00-31-86.
(b) If an Employee leasing company policy is reported with Employee Leasing Policy Identification Code (2), an
employee leasing policy for leased workers of multiple client companies, the Insurer shall report the deletion of client
companies from the policy in accordance with subsection 69L-56.210(2), F.A.C., using Triplicate Codes 00-33-56 or 0033-87.
(c) Cancellation or non-renewal of the entire policy for Employee Leasing Policy Identification Code (2) shall be
reported in accordance with Rule 69L-56.200, F.A.C.
(2) Employee Leasing Policy Identification Code (3) – identifies an employee leasing policy for non-leased workers of
the Employee leasing company. The insured name reported shall be the legal business name of the Employee leasing
company and shall be reported on the IAIABC POC Release 2.1 Insured Record (PC1).
Cancellation or non-renewal of a policy for Employee Leasing Policy Identification Code (3) shall be reported in
accordance with Rule 69L-56.200, F.A.C.
(3) Employee Leasing Policy Identification Code (4) – identifies a client company policy for leased workers of the
client company. The insured name reported shall be the name of the Client company and shall not be preceded with the
name of the Employee leasing company and shall be reported on the IAIABC POC Release 2.1 Insured Record (PC1).
Cancellation or non-renewal of a policy for the Employee Leasing Policy Identification Code (4) shall be reported in
accordance with Rule 69L-56.200, F.A.C.
(4) Employee Leasing Policy Identification Code (5) – identifies an Employee leasing policy for leased workers of a
single client company. The insured name reported shall be the name of the Employee leasing company and shall be
reported on the IAIABC POC Release 2.1 Insured Record (PC1). The client name reported shall be the legal business
name of the client company, and shall not be preceded with the name of the Employee leasing company, and shall be
reported on the IAIABC POC Release 2.1 Employer Record(s) (PC2).
Cancellation or non-renewal of a policy for Employee Leasing Policy Identification Code (5) shall be reported in
accordance with Rule 69L-56.200, F.A.C.
Rulemaking Authority 440.185(7), 440.42(3), 440.591, 440.593(5) FS. Law Implemented 440.185(7), 440.42(3), 440.593 FS. History–
New 5-17-09.
69L-56.210 Time Periods for Filing Electronic Policy Information.
Pursuant to Section 440.593(1), F.S., the Division may establish different deadlines for filing required reports
electronically than are otherwise required when reporting information by other means. Accordingly, notwithstanding
the deadlines for filing policy information by other means as set forth in Section 440.185(7), F.S., an insurer, other than
an individual self-insurer approved under Section 440.38, F.S., must electronically file the following information in
accordance with the provisions of this rule, and shall have received an Application Acknowledgement Code of “TA”
(Transaction Accepted) by the Division within the following deadlines:
(1) No later than thirty days after the effective date of any workers’ compensation insurance policy, contract of
insurance, or renewal, every insurer shall send the electronic Certificate of Insurance.
(2) No later than thirty days after the issue date of each endorsement to any workers’ compensation insurance
policy, contract of insurance, or renewal, every insurer shall send the electronic Notice of Endorsement.
(3) No later than thirty days after the effective date of each reinstatement of a cancelled workers’ compensation
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insurance policy, contract of insurance, or renewal, every insurer shall send the electronic Notice of Reinstatement.
(4) No later than thirty days prior to the cancellation or non-renewal of any workers’ compensation insurance
policy, contract of insurance, or renewal, other than a cancellation for non-payment of premium or failure to pay
deductible or when cancellation or non-renewal is requested by the insured, every insurer shall send the electronic
cancellation or non-renewal.
(5) No later than thirty days prior to the cancellation of any workers’ compensation insurance policy, contract of
insurance, or renewal with a policy effective date prior to October 1, 2003, that is being cancelled for non-payment of
premium or failure to pay deductible, every insurer shall send the electronic cancellation represented by Triplicate Codes
“00-41-59”, “00-41-69” and “00-60-59”.
(6) No later than ten days prior to the cancellation of any workers’ compensation insurance policy, contract of
insurance, or renewal with a policy effective date on or after October 1, 2003, that is being cancelled for non-payment of
premium or failure to pay deductible, every insurer shall send the electronic cancellation represented by Triplicate Codes
“00-41-59”, “00-41-69” and “00-60-59”.
(7) No later than ten days after the cancellation or non-renewal of any workers' compensation insurance policy,
contract of insurance, or renewal for which an insured has requested cancellation or non-renewal, the insurer shall send
the electronic cancellation or non-renewal to the Division. The electronic cancellation or non-renewal shall be
represented by Triplicate Codes containing Transaction Set Type Codes “42” & “60”, with the exception of Triplicate
Code “00-60-64”, pursuant to the “Transaction Overview” document, located in Section 4 of the IAIABC EDI
Implementation Guide for Proof of Coverage: Insured, Employer, Header, Trailer & Acknowledgement Records, Release
2.1, 6/01/07 Edition and Supplement.
(8) An insurer shall not cancel or non-renew a workers’ compensation insurance policy, contract of insurance, or
renewal for underwriting reasons represented by Triplicate Code “00-60-64” until and unless 30 days have elapsed after
the insurer has electronically sent a cancellation or non-renewal to the Division directly or through a third party vendor.
Rulemaking Authority 440.185(7), 440.42(3), 440.591, 440.593(5), 627.4133(4) FS. Law Implemented 440.185(7), (9), 440.42(3),
440.593, 627.4133(4) FS. History–New 5-29-05, Amended 1-7-07, 5-17-09.
69L-56.300 CLAIMS EDI REPORTING REQUIREMENTS AND IMPLEMENTATION SCHEDULES.
(1)(a) On or before the implementation schedules set out in paragraphs (3)(a) and (b) of this section, every insurer
shall file claims information for all “Lost Time/Indemnity,” “Medical Only to Lost Time,” and “Denied” cases via
electronic data interchange (EDI) pursuant to paragraph (d) of this section, rather than by submitting paper forms
otherwise required in Rules 69L-3.0045, 69L-3.0091, 69L-3.012, 69L-3.016, 69L-3.0213 and 69L-3.025, F.A.C. The insurer
shall file the electronic form equivalent of the First Report of Injury or Illness, Notice of Denial, Claim Cost Report, Notice
of Action/Change, and Aggregate Claims Administration Change Report adopted in Rule 69L-3.025, F.A.C., pursuant to
the requirements and timeframes set out in Rules 69L-56.301, 69L-56.3012, 69L-56.3013, 69L-56.304 and 69L-56.3045,
F.A.C., and in accordance with the “FL Claims EDI R3 Trading Partner Filing Specifications” contained in Section 1 of the
“Florida Division of Workers’ Compensation Claims Electronic Data Interchange (EDI) R3 Implementation Manual,
September 2006” and “Supplement,” incorporated herein by reference, and hereafter referred to as the “FL Claims EDI
Implementation Manual.” A copy of the FL Claims EDI Implementation Manual may be obtained from the Division of
Workers’ Compensation at its website, http://www.myfloridacfo.com/WC/edi_clms.html.
(b) The insurer or its claim administrator shall electronically report all First Reports of Injury or Illness for which the
claim administrator’s knowledge of the injury is on or after the date the claim administrator is authorized by the Division
to send Electronic First Reports of Injury or Illness in production status (i.e., actual production implementation date). All
other electronic form equivalents for denials, periodic claim cost information, changes, suspensions, reinstatements,
and cancellations required by this rule shall be electronically reported to the Division, regardless of date of injury, once
the claim administrator is approved by the Division to send these electronic filings in production status (i.e., actual
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production implementation date).
(c) Electronic form equivalents, hereafter also referred to as “Claims EDI Filings” required under this rule do not
correspond exactly to, and may require additional information not currently contained on claims forms promulgated
under Rules 69L-3.0045, 69L-3.0091, 69L-3.012, 69L-3.016, 69L-3.0213 and 69L-3.025, F.A.C. The term, “insurer,” as
defined in this rule chapter, refers to the entity responsible for filing electronic form equivalents on or before the
compliance dates established in the insurer’s Primary and Secondary Implementation Schedules set out in paragraphs
69L-56.300(3)(a) and (b), F.A.C. The term, “claim administrator,” as defined in this rule chapter, refers to the trading
partner that is sending electronic transactions to the Division, which can be either an insurer filing directly with the
Division on its own behalf, or a servicing company/third party administrator filing on the behalf of the insurer. For
purposes of this rule, the terms “Claim Administrator” and “Trading Partner” do not mean a third party vendor.
(d) The claim administrator shall report the Claims EDI filings required in Rules 69L-56.301, 69L-56.3012, 69L56.3013, 69L-56.304, 69L-56.3045 and 69L-56.307, F.A.C., using the First Report of Injury (FROI) and Subsequent Report
of Injury (SROI) electronic record layouts adopted by the International Association of Industrial Accident Boards and
Commissions (IAIABC). A sample of the FROI, which consists of the 148 and companion R21 records, and a sample of the
SROI, which consists of the A49 and companion R22 records, are located in Section 2, “Technical Documentation” of the
“IAIABC EDI Implementation Guide for Claims: First, Subsequent, Header, Trailer & Acknowledgement Detail Records,
Release 3, January 1, 2009 Edition” and “Supplement,” incorporated herein by reference, and hereafter referred to as
the IAIABC Claims EDI Release 3 Implementation Guide. A copy of this guide may be obtained from the IAIABC at its
website, http://www.iaiabc.org, under “EDI” link, then “Implementation Guides” link.
The claim administrator shall send the FROI (148/R21), SROI (A49/R22), and combination FROI and SROI records with the
Maintenance Type Code (MTC) or MTC combinations specified in Rules 69L-56.301, 69L-56.3012, 69L-56.3013, 69L56.304, 69L-56.3045 and 69L-56.307, F.A.C., to represent the Claims EDI Filing being sent to the Division (Example: FROI
MTC 04 = Total Denial of an Electronic First Report of Injury or Illness; SROI MTC FN = Electronic Final Claim Cost Report;
FROI MTC 00 with SROI MTC IP = Electronic First Report of Injury or Illness where the Initial Payment is made by claim
administrator.)
(e) In addition to the Technical Documentation and Business/Technical Process Rules located in Sections 2 and 4,
respectively, of the IAIABC Claims EDI Release 3 Implementation Guide, the claim administrator shall comply with
information contained in the below documents located in the Claims EDI Trading Partner Filing Specifications of the FL
Claims EDI Implementation Manual:
1. “FL Claims EDI R3 Event Table” – Identifies the FROI MTC or SROI MTC, and FROI/SROI MTC combinations
required to be sent for an electronic form equivalent required by this rule, and the associated filing time periods by
which the FROI and SROI MTC’s shall be received by the Division in order to be considered timely filed;
2. “FL Claims EDI R3 Element Requirement Table” – Specifies the data elements required to be sent for each FROI
and SROI MTC; and
3. “FL Claims EDI R3 Edit Matrix” – Identifies Division editing that will be applied to data elements and transactions,
including transaction sequencing and duplicate processing rules.
(f) The claim administrator shall collect and report all data elements designated with the following codes on the FL
Claims EDI R3 Element Requirement Table: “F” (Fatal Technical) – Required to be reported; “M” (Mandatory) – Required
to be reported; “MC” (Mandatory/Conditional) – Required to be reported if the condition(s) set out in the table’s FROI
or SROI Conditional Requirements or Event Benefits Conditions worksheets are met; “IA” (If Applicable/Available) –
Required to be reported if the data element is applicable to the claim (e.g., If the claim administrator has knowledge
that the employee’s Last Name Suffix is “Jr”, the claim administrator shall report the Last Name Suffix of “Jr”).
(g) Claims EDI filings that comply with data element reporting requirements and pass edits specified in the “FL
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Claims EDI R3 Element Requirement Table” and the “FL Claims EDI R3 Edit Matrix” shall be accepted and acknowledged
by the Division with Application Acknowledgement Code “TA” (Transaction Accepted). Claims EDI filings that receive an
Application Acknowledgement Code of “TA” shall be assigned a “Received by Division Date” for purposes of determining
whether an EDI filing was timely filed with the Division in accordance with the timeframes identified in the “FL Claims
EDI R3 Event Table” and as required in Rules 69L-56.301, 69L-56.3012, 69L-56.3013, 69L-56.304, 69L-56.3045 and 69L56.307, F.A.C. The date assigned as the “Received by Division Date” is the date the transmission containing the accepted
Claims EDI filing was sent to and received by the Division based on the technical transmission requirements set out in
subsection 69L-56.310(4), F.A.C. An electronic First Report of Injury or Illness that receives an Application
Acknowledgement Code of “TA” shall also be assigned a “Jurisdiction Claim Number” by the Division which the claim
administrator shall report on every subsequent Claims EDI filing for that claim. Electronic transactions that do not
satisfy data element requirements and edits specified in the “FL Claims EDI R3 Element Requirement Table” and the “FL
Claims EDI R3 Edit Matrix” shall be rejected and acknowledged by the Division with Application Acknowledgement Code
“TR” (Transaction Rejected). The claim administrator shall correct the error(s) identified in the acknowledgement
returned by the Division and re-send the Claims EDI filing to the Division as appropriate (e.g., a transaction receiving
fatal error # 0002-057 because it was an extra MTC in the transmission or already on file with the Division is not
expected to be re-filed with the Division.)
(h) The claim administrator shall receive and process each acknowledgement transaction (AKC) returned by the
Division. The Division will also send, when applicable, a re-acknowledgment transaction (ACR) to identify a Claims EDI
filing that was previously acknowledged with Application Acknowledgement code “TR” due to improper processing by
the Division, and which was subsequently re-processed and re-assigned an Application Acknowledgement Code of “TA.”
The claim administrator has the option to either process or not process re-acknowledgement transactions sent by the
Division.
(i) Claims EDI filings acknowledged with Application Acknowledgement Code “TA” (Transaction Accepted) that
invoke one or more non-rejectable (non-fatal) edits depicted as “FL” in the “DN-Error Message Table” of the FL Claims
EDI R3 Edits Matrix, shall result in an error message that will be communicated by the Division to the claim administrator
in a proprietary report, separate from the acknowledgement transaction (AKC). Non-fatal error reports will be posted to
the Division’s website in a password-protected file, which the claim administrator shall retrieve via the “Claims EDI” link
on the Division’s web site. The Division will send an email notification to the claim administrator regarding the posting of
all non-fatal error reports that require a response from the claim administrator. The claim administrator shall respond to
the Division on or before 21 days after the date the report was posted to the Division’s web site. The email notification
will be sent to the “EDI Business Contact(s)” identified in the claim administrator’s “EDI Trading Partner Profile,” Form
DFS-F5-DWC-EDI-1. The claim administrator shall notify the Division regarding any additions or deletions of “EDI
Business Contacts” for this purpose. The claim administrator shall respond to all other inquiries from the Division,
including by telephone, concerning written or electronic requests for information, on or before 21 days after the claim
administrator’s receipt of the request from the Division.
(j) Unless an explanatory letter is alternatively permitted by this rule chapter, paper copies of Forms DFS-F2-DWC-1,
DFS-F2-DWC-4 and DFS-F2-DWC-12 shall continue to be provided by the claim administrator to the employee and
employer as required by Rules 69L-3.0045, 69L-3.0091, 69L-3.012, 69L-3.025, F.A.C., and as specified in Rules 69L56.301, 69L-56.3012, 69L-56.304 and 69L-56.3045, F.A.C., and the FL Claims EDI R3 Event Table (“Paper Form” and
“Receiver” columns).
(k) The claim administrator shall produce and mail to the employee and employer the informational brochures
required in Rules 69L-3.0035 and 69L-3.0036, F.A.C.
(l) Claim administrators who, directly or through its third party vendor, experience a catastrophic event resulting in
the insurer’s failure to meet the filing requirements of this rule, shall submit a written or electronic request to the
Division for approval to submit required electronic form equivalents in an alternative filing timeline. The request shall be
sent to the Division within 15 business days after the catastrophic event. The request shall contain a detailed
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explanation of the nature of the event, date of occurrence, and measures being taken to resume electronic submission.
The claim administrator shall also provide an estimated date by which electronic submission of affected EDI filings will
be resumed. Approval to submit in an alternative filing timeline shall be granted by the Division if a catastrophic event
prevents electronic submission. The approval must be obtained from the Division’s Bureau of Data Quality and
Collection, 200 E. Gaines Street, Tallahassee, Florida 32399-4226, or via email at claims.edi@myfloridacfo.com. If
approved, the electronic form equivalents that were due to be filed during the time the claim administrator was unable
to file due to a catastrophic event, shall be sent with Late Reason Code “LB” (Late notification/payment due to a Natural
Disaster) or “LC” (Late notification/payment due to an act of Terrorism).
(m) Non-compliance by the claim administrator with the electronic reporting requirements in this Rule shall result in
referral to the Division’s Bureau of Monitoring and Audit, and may constitute a violation of Section 440.525, F.S.
(2) Trading Partner Profile Documents:
(a) At least two (2) business days prior to sending its first test transmission to the Division, the claim administrator
shall send to the Division in an email addressed to claims.edi@myfloridacfo.com, the claim administrator’s current
profile information using the following forms adopted in Rule 69L-56.001, F.A.C.:
1. “EDI Trading Partner Profile,” DFS-F5-DWC-EDI-1 (1/01/2008), and
2. “EDI Trading Partner Insurer/Claim Administrator ID List,” DFS-F5-DWC-EDI-2 (10/01/2006), and
3. “EDI Trading Partner Claim Administrator Address List,” DFS-F5-DWC-EDI-2A (10/01/2006), and
4. “EDI Transmission Profile – Sender’s Specifications, DFS-F5-DWC-EDI-3 (10/01/2006).
Claim administrators filing Electronic First Reports of Injury or Illness or Electronic Claim Cost Reports on a voluntary
basis using the IAIABC Release 1 standard formats shall re-file their profile information with the Division using the forms
in subparagraphs (2)(a)1.-4. above, even if the claim administrator’s profile information has not changed since
previously reported to the Division.
(b) The claim administrator shall report changes to its profile information required on the forms listed in
subparagraphs (2)(a)1.-4. above, at least two (2) business days prior to sending transactions containing revised profilerelated information to the Division. The insurer or its claim administrator shall report revisions to its profile information
by emailing to the Division at claims.edi@myfloridacfo.com, a revised “EDI Trading Partner Profile,” DFS-F5-DWC-EDI-1
(1/01/2008), and if applicable, a revised “EDI Trading Partner Insurer/Claim Administrator ID List”, DFS-F5-DWC-EDI-2
(10/01/2006), and if applicable, a revised “EDI Trading Partner Claim Administrator Address List”, DFS-F5-DWC-EDI-2A
(10/01/2006), and if applicable, a revised “EDI Transmission Profile – Sender’s Specifications”, DFS-F5-DWC-EDI-3
(10/01/2006). Failure by the claim administrator to report changes to its trading partner profile information using the
forms adopted in this rule, including changes to the Submitter ID (i.e., Trading Partner FEIN/Postal Code on the Header
Record), shall result in the rejection of an entire transmission or individual transaction(s) containing profile information
that is different from that reported on profile documents previously filed with the Division by the claim administrator.
(c) If the insurer or its claim administrator contracts with a new third party vendor, the insurer or its claim
administrator shall, at least two (2) business days prior to the effective date of the change in vendors, send an email to
the Division at claims.edi@myfloridacfo.com to report the name of the new vendor and effective date on which Claims
EDI transactions will be sent via the new vendor.
(3) Claims EDI Implementation Schedules:
(a) Primary Implementation Schedule: The insurer shall comply with the following implementation schedule for
reporting Electronic First Reports of Injury or Illness specified in Rule 69L-56.301, F.A.C., Electronic Notices of Denial and
Rescinded Denial specified in Rule 69L-56.3012, F.A.C., Electronic Periodic Claim Cost Reports specified in Rule 69L-
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56.3013, F.A.C., Electronic Notices of Actions or Changes, including Changes in Claims Administration specified in Rule
69L-56.304, F.A.C., and Electronic Cancellations Specified in Rule 69L-56.307, F.A.C. The insurer’s Primary
Implementation Schedule shall consist of three “test to production” periods as described in subparagraphs (3)(a)1.-3., of
this subsection. Each insurer shall be assigned to either the first, second, or third “test to production” period based on
the insurer’s Division-assigned Insurer Code #. If there are multiple or subsidiary insurer entities within an insurer’s
corporate structure or organization, the insurer’s “test to production” period in the Primary Implementation Schedule
will be based on the lowest numeric value assigned to any of the insurer’s subsidiary companies. Insurers that write
large deductible policies for insureds adjusting their own claims are responsible for ensuring those insureds meet the
insurer’s required “test to production” timelines and implementation schedules, even if the insured is not using the
insurer’s computer system to file its Claims EDI Filings with the Division. Claim administrators voluntarily submitting
Claims EDI Filings in production status using the IAIABC Release 1 national standard shall convert to Release 3 and be in
production status by the same date as that required for the first group of insurers specified in subparagraph (3)(a)1.
below, regardless of Insurer Code #. Each “test to production period” shall consist of three calendar months. The
insurer’s compliance date for the Primary Implementation Schedule shall be the last day of the third month of the
insurer’s assigned “test to production” period.
1. The first “test to production” period shall commence November 1, 2007, and shall include insurers with Divisionassigned Insurer Code #’s 102 through # 199. The compliance date for the Insurer’s Primary Implementation Schedule
shall be January 31, 2008.
2. The second “test to production” period shall commence February 1, 2008, and shall include insurers with
Division-assigned Insurer Code #’s 200 through 599. The compliance date for the insurer’s Primary Implementation
Schedule shall be April 30, 2008.
3. The third “test to production” period shall commence May 1, 2008 and shall include insurers with Divisionassigned Insurer Code #’s 600 through 1122, future Insurer Code #’s 1123 through 4999 and 8000 through #9999. The
compliance date for the insurer’s Primary Implementation Schedule shall be July 31, 2008.
(b) Secondary Implementation Schedule: The insurer shall comply with the Secondary Implementation Schedule for
reporting the additional Electronic Notices of Action or Change, Suspensions, and Reinstatement of indemnity benefits
specified in Rule 69L-56.3045, F.A.C., as follows:
No later than 9 months after the compliance date established in the insurer’s Primary Implementation Schedule, the
insurer shall commence testing its Electronic Notice of Action or Change, Suspension, and Reinstatement of Indemnity
benefits required in Rule 69L-56.3045, F.A.C. The insurer shall be in production status within three months after the
commencement of testing, i.e., within one year after the compliance date established in the insurer’s Primary
Implementation Schedule.
(c) Beginning August 1, 2007, a claim administrator may voluntarily commence testing any electronic form
equivalent/MTC with the Division using the IAIABC EDI Release 3 standard for Claims, contingent upon the availability of
Division resources.
(d) After a claim administrator has been approved for production status for filing electronic form equivalents
required in the Primary Implementation Schedule or Secondary Implementation Schedule, if the claim administrator is
unable to receive an Application Acknowledgement Code of “TA” from the Division for an electronic form equivalent
required by this rule chapter, the claim administrator may alternatively file the formerly required DWC form adopted in
Rule 69L-3.025, F.A.C., for a period not to exceed three months after each of the claim administrator’s production
implementation dates for the Primary and Secondary Implementation Schedules.
(e) After the conclusion of the three month time period specified in paragraph 69L-56.300(3)(d), F.A.C., above, if the
claim administrator is unable to receive an Application Acknowledgement Code of “TA” from the Division for an
electronic form equivalent required by this rule chapter, and the claim administrator needs to meet the reporting
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requirements of this rule, the claim administrator shall submit an e-mail to the Division at claims.edi@myfloridacfo.com
to request approval to alternatively file a DWC form pursuant to Rules 69L-3.0045, 69L-3.0091, 69L-3.012, 69L-3.016,
69L-3.0213 and 69L-3.025, F.A.C., in lieu of the electronic form equivalent. The request shall include the following
information: Claim Administrator Name and FEIN, Employee Name, Employee ID Number (Social Security Number or
Division Assigned Number), Date of Injury, Claim Administrator File Number, Maintenance Type Code (MTC), Date
Transmission Sent for the MTC(s) attempted unsuccessfully, the DWC form requesting to be filed (i.e., DWC-13), and an
explanation of the reasons electronic submission failed. If the Division approves the claim administrator’s request to
send a DWC form in lieu of the electronic form equivalent, all subsequent filings due for the claim shall be sent via EDI;
the claim administrator shall not file additional DWC forms for the claim unless the claim administrator has received
advance approval from the Division.
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 1-7-07, Amended 5-17-09.
69L-56.301 Electronic First Report of Injury or Illness.
On or before the compliance date established in the insurer’s Primary Implementation Schedule set forth in paragraph
69L-56.300(3)(a), F.A.C., the insurer shall file the electronic form equivalent for claims information otherwise reported
on Form DFS-F2-DWC-1 adopted in Rules 69L-3.0045 and 69L-3.025, F.A.C. Pursuant to Section 440.593(1) F.S., the
Division may establish different deadlines for filing required reports electronically than are otherwise required when
reporting information by other means. Accordingly, notwithstanding the deadlines for filing the injury report by other
means as set forth in Section 440.185(2), FS., the insurer or its claim administrator shall send to the Division the
electronic form equivalent of the First Report of Injury or Illness for the following cases, and by the following filing time
periods:
(1) Initial Payment for “Lost Time Case” or “Medical Only to Lost Time Case”
(FROI MTC 00 with SROI MTC IP, EP, CD, VE, or PY as found in the IAIABC Implementation Guide for Claims: First,
Subsequent, Header, Trailer & Acknowledgement Detail Records, Release 3, January 1, 2009 Edition):
(a) Where the initial payment of indemnity benefits, excluding Temporary Partial benefits, Impairment Income
benefits, and Lump Sum Payment/Settlement, is made by the claim administrator, or where the employer is paying salary
in lieu of compensation, or for a compensable death with no known dependents, or a compensable volunteer:
1. If disability is immediate and continuous for 8 or more calendar days after the workers’ compensation injury, an
Electronic First Report of Injury or Illness will be considered timely filed with the Division when it is received by the
Division and is assigned an Application Acknowledgement Code of “TA” (Transaction Accepted) on or before 21 days
after the claim administrator’s knowledge of the injury. The claim administrator shall report Claim Type “I” (Lost
Time/Indemnity).
2. If the first 7 days of disability are nonconsecutive or delayed, an Electronic First Report of Injury or Illness will be
considered timely filed with the Division when it is received by the Division and is assigned an Application
Acknowledgement Code of “TA” (Transaction Accepted) on or before 13 days after the claim administrator’s knowledge
of the employee’s 8th day of disability. The claim administrator shall report the “Initial Date of Lost Time” (i.e., the
employee’s 8th day of disability) and the “Date Claim Administrator Had Knowledge of Lost Time”. The claim
administrator shall also report Claim Type “L” (Became Lost Time/Indemnity).
3. The Electronic First Report of Injury or Illness shall be represented by sending the FROI and SROI records as
follows:
a. Initial Payment by Claim Administrator: FROI MTC 00 (Original) with SROI MTC IP (Initial Payment);
b. Employer Paid Salary in Lieu of Compensation: FROI MTC 00 (Original) with SROI MTC EP (Employer Paid);
c. Compensable Death, No Dependents/Payees: FROI MTC 00 (Original) with SROI MTC CD (Compensable
Death);
d. Compensable Volunteer: FROI with MTC 00 (Original) with SROI MTC VE (Volunteer);
(b) Where the initial payment of indemnity benefits is for Temporary Partial benefits, Impairment Income benefits,
or results from a Lump Sum Payment/Settlement, an Electronic First Report of Injury or Illness will be considered timely
filed with the Division when it is received by the Division and is assigned an Application Acknowledgement Code of “TA”
(Transaction Accepted) on or before 14 days after the date the initial payment of benefits was mailed to the employee
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or to the employee’s legal representative.
1. The Electronic First Report of Injury or Illness shall be represented by sending the FROI and SROI records as
follows:
a. Initial Payment of Temporary Partial Benefits (TP): FROI MTC 00 (Original) with SROI MTC IP (Initial Payment) and
Benefit Type Code “070” (Temporary Partial);
b. Initial Payment of Impairment Income Benefits (IB): FROI MTC 00 (Original) with SROI MTC IP (Initial Payment)
and Benefit Type Code “030” (Permanent Partial Scheduled);
c. Initial Payment of Lump Sum Payment/Settlement: FROI MTC 00 (Original) with SROI MTC PY (Payment Report)
and Benefit Type Code that applies to the specific benefit(s) covered by the lump sum payment/settlement.
(2) “Denied Case”:
(FROI MTC 04, or SROI MTC PD with applicable FROI MTC as found in the IAIABC Implementation Guide for Claims: First,
Subsequent, Header, Trailer & Acknowledgement Detail Records, Release 3, January 1, 2009 Edition).
(a) Full/Total Denial – If, by the 14th day after the claim administrator’s knowledge of the injury, the employee
sustains disability as defined in Section 440.02, F.S., and the claim administrator’s initial disposition is to deny the case in
its entirety (i.e., both medical and indemnity benefits are denied), an Electronic First Report of Injury or Illness will be
considered timely filed with the Division when it is received by the Division and is assigned an Application
Acknowledgement Code of “TA” (Transaction Accepted) on or before 21 days after the claim administrator’s knowledge
of the injury. The claim administrator shall report Claim Type Code “L” (to represent the full denial of a “Medical Only to
Lost Time Case”) or Claim Type Code “I” (to represent the full denial of a “Lost Time/Indemnity Case”).
1. The Electronic First Report of Injury or Illness reporting a “Full/Total Denial” shall be represented by sending FROI
MTC 04 (Denial).
2. The electronic form equivalent of Form DFS-F2-DWC-12 adopted in Rules 69L-3.012 and 69L-3.025, F.A.C.,
required in Rule 69L-56.3012, F.A.C., to be filed with the Division to explain the reason(s) for the denial, shall be
accomplished by reporting the applicable Full Denial Reason Code(s), Full Denial Effective Date, and Denial Reason
Narrative on the same FROI MTC 04 (Denial).
(b) Medical Only Case that becomes a Total Denial – If the claim administrator is making the decision to deny the
case in its entirety (i.e., both medical and indemnity benefits are denied) after the claim administrator’s initial
disposition to accept compensability of a “Medical Only Case,” an Electronic First Report of Injury or Illness will be
considered timely filed with the Division when it is received by the Division and is assigned an Application
Acknowledgement Code of “TA” (Transaction Accepted) on or before 14 days after the claim administrator’s decision to
deny the entire claim. The claim administrator shall report Claim Type Code “M” (to represent a “Medical Only Case”
that is being totally denied).
1. The Electronic First Report of Injury or Illness to report the denial of both indemnity and medical benefits on a
case initially determined to be a Medical Only case, shall be represented by sending a FROI MTC 04 (Total Denial).
2. The electronic form equivalent of Form DFS-F2-DWC-12 adopted in Rules 69L-3.012 and 69L-3.025, F.A.C.,
required in Rule 69L-56.3012, F.A.C., to be filed with the Division to explain the reason(s) for the denial, shall be
accomplished by reporting the applicable Full Denial Reason Code(s), Full Denial Reason Effective Date, and Denial
Reason Narrative on the same FROI MTC 04 (Denial).
(c) Partial (Indemnity Only) Denial or Medical Only Case that becomes a Partial Denial – If the claim administrator’s
initial disposition of a claim is the acceptance of compensability but denial of indemnity benefits only, an Electronic First
106
Report of Injury or Illness will be considered timely filed with the Division when it is received by the Division and is
assigned an Application Acknowledgement Code of “TA” (Transaction Accepted) on or before 14 days after the claim
administrator’s decision to deny indemnity benefits.
1. The Electronic First Report of Injury or Illness reporting a Partial (Indemnity Only) Denial shall be represented by
sending FROI MTC 00 (Original) with SROI MTC PD (Partial Denial).
2. The electronic form equivalent of the DFS-F2-DWC-12 adopted in Rules 69L-3.012 and 69L-3.025, F.A.C., required
in Rule 69L-56.3012, F.A.C., to be filed with the Division to explain the reason(s) for the denial, shall be accomplished by
reporting the applicable Partial Denial Code (“A” or “E”) and Denial Reason Narrative on the same SROI MTC PD (Partial
Denial).
(3) If the claim administrator receives notification of an injury from the employer via telephone or electronic data
interchange where no Form DFS-F2-DWC-1, First Report of Injury or Illness adopted in Rules 69L-3.0045 and 69L-3.025,
F.A.C., has been completed and provided to the employee and employer, the claims administrator shall produce and
send to the employee and employer within three (3) business days of the claims administrator’s knowledge of the injury,
either Form DFS-F2-DWC-1 or Form IA-1 adopted in Rules 69L-3.0045 and 69L-3.025, F.A.C. The claim administrator shall
not send Form IA-1 to the Division to report the First Report of Injury or Illness.
(4) Any insurer failing to timely file the Electronic First Report of Injury or Illness required under this section is
subject to administrative penalties assessable by the Division according to the provisions of Rule 69L-24.0231, F.A.C.,
and as allowed for in Section 440.185(9), F.S. If the initial payment is not timely issued in accordance with the time
period prescribed in Section 440.20, F.S., or the Electronic First Report of Injury or Illness is not timely filed with the
Division in accordance with this section, the claim administrator shall report the appropriate Late Reason Code(s) when
sending the Electronic First Report of Injury or Illness. If the initial payment and Electronic First Report of Injury or
Illness were originally reported to another jurisdiction and the claim was subsequently transferred to Florida, the claim
administrator shall include Late Reason Code “L4” (late notification, jurisdiction transfer) on the Electronic First Report
of Injury or Illness that is being re-filed in Florida.
(5) An Electronic First Report of Injury or Illness for a “Medical Only Case” shall not be sent to the Division unless the
claim administrator has received a written or electronic request from the Division, or if the claim began as a Medical
Only Case and is being reported to the Division as a Full or Partial Denial of indemnity benefits.
(6) When both FROI and SROI transactions are sent to report the Electronic First Report of Injury or Illness, the claim
administrator shall ensure the values sent on the FROI and SROI records for data elements identified in the “FROI to
SROI” column of the Match Data Table contained in the FL Claims EDI R3 Edit Matrix are the same value.
(7) An Electronic First Report of Injury or Illness filed in accordance with Rule 69L-56.301, F.A.C., or a paper First
Report of Injury or Illness must have been received and accepted by the Division before any subsequent electronic filings
will be accepted.
(8) Only 2002 NAICS Codes shall be reported for the Industry Code and must be sent as a minimum of 5 digits. If the
insured is a Professional Employment Organization (PEO), the Industry/NAICS Code should represent the nature of the
client’s/employer’s business.
(9) If the employee does not have or wish to provide a Social Security Number, the claim administrator shall contact
the
Division
by
following
the
instructions
provided
on
the
Division’s
website:
http://www.myfloridacfo.com/WC/organization/ odqc.html (under Records Management – Division-Assigned Numbers)
and obtain a Division-assigned number. Upon receipt of the employee’s Social Security Number, the claim administrator
shall file MTC 02 (Change) and provide the employee and employer with Form DFS-F2-DWC-4, pursuant to Rule 69L3.025, F.A.C.
107
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 1-7-07, Amended 5-17-09.
69L-56.3012 Electronic Notice of Denial and Rescinded Denial.
(FROI/SROI MTC 04, SROI MTC PD as found in the IAIABC Implementation Guide for Claims: First, Subsequent, Header,
Trailer & Acknowledgement Detail Records, Release 3, January 1, 2009 Edition)
On or before the compliance date established in the insurer’s Primary Implementation Schedule set forth in paragraph
69L-56.301(3)(a), F.A.C., the insurer shall file the electronic form equivalent for the denial information otherwise
reported on Form DFS-F2-DWC-12, adopted in Rules 69L-3.012 and 69L-3.025, F.A.C. The claim administrator shall
send to the Division an Electronic Notice of Denial to report the reason for the denial of indemnity benefits for the
following types of denial notices, and by the following time periods:
(1) Electronic Notice of Denial – Full (Both Indemnity and Medical Benefits Denied):
(a) If the entire compensability of the claim is initially denied and both indemnity and medical benefits will not be
paid by the claim administrator, the claim administrator shall file the Electronic Notice of Denial by reporting the
applicable Full Denial Reason Code(s) and Full Denial Effective Date on the same FROI MTC 04 (Denial) the claim
administrator sends to the Division to report the Electronic First Report of Injury or Illness, in accordance with filing time
periods in subsection 69L-56.301(2), F.A.C. The Denial Reason Narrative shall also be sent on the FROI MTC 04 (Denial)
to supplement the Full Denial Reason Code(s).
(b) If the claim administrator initially accepts compensability but subsequently denies liability for the entire claim
after having previously paid indemnity benefits and the Electronic First Report of Injury or Illness has already been filed
with the Division, the claim administrator shall file the Electronic Notice of Denial by sending a SROI MTC 04 (Denial).
The Electronic Notice of Denial will be considered timely filed with the Division if it is received by the Division and is
assigned an Application Acknowledgement Code of “TA” (Transaction Accepted) on or before 14 days after the date the
claim administrator decided to deny benefits. The claim administrator shall report the applicable Full Denial Reason
Code(s) and Full Denial Effective Date on the SROI MTC 04 (Denial). The Denial Reason Narrative shall also be sent on
the SROI MTC 04 (Denial) to supplement the Denial Reason Code(s).
(c) In addition to filing the Electronic Notice of Denial with the Division, the claim administrator shall produce and
mail a paper copy of Form DFS-F2-DWC-12, Notice of Denial, adopted in Rules 69L-3.012 and 69L-3.025, F.A.C., to the
employer and employee, in accordance with the filing time period set out for Form DFS-F2-DWC-12 in Rule 69L-3.012,
F.A.C.
(2) Electronic Notice of Denial – Partial (Indemnity Only Benefits Denied):
(a) If all indemnity benefits are initially denied but some or all medical benefits will be provided, the claim
administrator shall file the Electronic Notice of Denial by reporting Partial Denial Code “A” (Denying Indemnity in whole,
but not Medical) or partial Denial Code “E” (Denying Indemnity in whole and Medical in part) on the same SROI MTC PD
(Partial Denial) the claim administrator sends with FROI MTC 00 (Original) to report the Electronic First Report of Injury
or Illness in accordance with the filing time periods in subsection 69L-56.301(2), F.A.C. The claim administrator shall also
report the “Denial Reason Narrative” on the SROI MTC PD to explain the reason for the denial of indemnity benefits.
(b) If payment of a specific indemnity benefit(s) is denied in whole or part subsequent to the claim administrator’s
initial disposition of the claim and the Electronic First Report of Injury or Illness has already been filed with the Division,
the claim administrator shall file the Electronic Notice of Denial by sending a SROI MTC PD (Partial Denial). The
Electronic Notice of Denial will be considered timely filed with the Division if it is received by the Division and is assigned
an Application Acknowledgement Code of “TA” (Transaction Accepted) on or before 14 days after the date the claim
administrator decided to deny benefits. The claim administrator shall report the applicable Partial Denial Code as
follows: “A” (Denying Indemnity in Whole, but not Medical); “B” (Denying Indemnity in part, but not Medical); “E”
(Denying Indemnity in whole and Medical in part); or “G” (Denying both Indemnity and Medical in part). The claim
108
administrator shall also report the “Denial Reason Narrative” on the SROI MTC PD to explain the reason for the denial of
indemnity benefits.
(c) In addition to filing the Electronic Notice of Denial with the Division, the claim administrator shall produce and
mail a paper copy of Form DFS-F2-DWC-12, Notice of Denial, adopted in Rules 69L-3.012 and 69L-3.025,F.A.C., to the
employer and employee, in accordance with the filing time period set out for Form DFS-F2-DWC-12 in Rule 69L-3.012,
F.A.C.
(3) Electronic Notice of Denial - Medical Only Case that becomes a Total or Partial (Indemnity Only) Denial:
(a) If a case is initially determined to be a compensable Medical Only Case and the claim administrator subsequent
to its initial disposition denies both medical and indemnity benefits, i.e., Full/Total Denial, the claim administrator shall
file an Electronic Notice of Denial with the Division by reporting the applicable Full Denial Reason Code(s), Full Denial
Effective Date, and Denial Reason Narrative on the same FROI MTC 04 (Total Denial) the claim administrator sends to
report the Electronic First Report of Injury or Illness, in accordance with the filing time period in subsection 69L56.301(2), F.A.C.
(b) If a case is initially determined to be a compensable Medical Only Case and the claim administrator subsequent
to its initial disposition denies indemnity benefits in whole but some or all medical benefits will be provided, i.e., Partial
(Indemnity Only) Denial, the claim administrator shall file an Electronic Notice of Denial with the Division by reporting
the applicable Partial Denial Reason Code(s) and Denial Reason Narrative on the same SROI MTC PD (Partial Denial) the
claim administrator sends with the FROI MTC 00 (Original) to report the Electronic First Report of Injury or Illness, in
accordance with the filing time periods in subsection 69L-56.301(2), F.A.C.
(c) In addition to filing the Electronic Notice of Denial with the Division, the claim administrator shall produce and
mail a paper copy of Form DFS-F2-DWC-12, Notice of Denial, adopted in Rules 69L-3.012 and 69L-3.025, F.A.C., to the
employer and employee, in accordance with the filing time period set out for Form DFS-F2-DWC-12 in Rule 69L-3.012,
F.A.C.
(4) If the claim administrator is invoking the “120 day rule” allowed in Section 440.192(8), F.S., when initiating
payment without prejudice to its right to subsequently deny benefits, it may send the Agreement to Compensate Code
“W” (Without Liability) on the same SROI MTC IP (Initial Payment) being sent to report the Electronic First Report of
Injury or Illness.
(5) The claim administrator shall not file an Electronic Notice of Denial with the Division if it is denying payment of a
medical benefit only. However, the claim administrator shall provide Form DFS-F2-DWC-12, Notice of Denial, adopted in
Rules 69L-3.012 and 69L-3.025, F.A.C., to the employee, employer, and the party(s) requesting payment or authorization
of a medical benefit.
(6) Electronic Notice of Rescinded Denial(a) Rescission of a Full Denial. If the claim administrator denied the claim in its entirety, either initially by sending an
Electronic First Report of Injury or Illness FROI MTC 04 (Denial) or subsequent to its initial disposition by sending an
Electronic Notice of Denial SROI MTC 04 (Denial), or if the claim administrator acquired a denied claim for which a First
Report of Injury or Illness is already on file with the Division but subsequently accepts compensability of the claim, the
claim administrator shall file an Electronic Notice of Rescinded Denial with the Division to report the change in
disposition of the claim. The Electronic Notice of Rescinded Denial will be considered timely filed if it is received by the
Division and is assigned an Application Acknowledgement Code of “TA” (Transaction Accepted) on or before the 14 days
after the date the denial was rescinded. The claim administrator shall also notify the employee and employer about the
decision to rescind the full denial by sending to the employee and employer, Form DFS-F2-DWC-12, Notice of Denial,
pursuant to Rules 69L-3.012 and 69L-3.025, F.A.C., or an explanatory letter. The Electronic Notice of Rescinded Denial
109
shall be represented by sending a SROI MTC as follows:
1. The Electronic Notice of Rescinded Denial reporting payment of indemnity benefits shall be represented by
sending SROI MTC IP (Initial Payment); SROI MTC AP (Acquired/Payment) for an acquired claim; SROI MTC PY (Payment
Report) reporting a lump sum payment or settlement of indemnity benefits; SROI MTC RB (Reinstatement of Benefits) to
report reinstatement of indemnity benefits that were paid by the claim administrator prior to the denial. The claim
administrator shall report the “Denial Rescission Date”, the date payment of indemnity benefits was mailed, and the
type of indemnity benefits paid on the SROI MTC IP, AP, PY, or RB.
2. The Electronic Notice of Rescinded Denial reporting acceptance of a compensable death case where there are no
known dependants shall be represented by sending SROI MTC CD (Compensable Death, No Dependents/Payees). The
claim administrator shall report the “Denial Rescission Date” on the SROI MTC CD.
3. The Electronic Notice of Rescinded Denial reporting acceptance of a compensable volunteer shall be represented
by sending SROI MTC VE (Volunteer). The claim administrator shall report the “Denial Rescission Date” on the SROI MTC
VE.
4. The Electronic Notice of Rescinded Denial reporting reinstatement of indemnity benefits by the employer
following a denial of indemnity benefits previously paid by the employer shall be represented by sending SROI MTC ER
(Employer Reinstatement). The claim administrator shall report the “Denial Rescission Date” on the SROI MTC ER.
5. The Electronic Notice of Rescinded Denial reporting acceptance of compensability where indemnity or medical
benefits will be denied in whole or in part, shall be represented by sending SROI MTC PD (Partial (Indemnity Only)
Denial). The claim administrator shall report the “Denial Rescission Date” on the SROI MTC PD.
(b) Rescission of a Partial (Indemnity Only) Denial. If the claim administrator initially denied payment of indemnity
benefits only and filed an Electronic First Report of Injury or Illness FROI 00 (Original) and SROI MTC PD (Partial Denial)
with the Division, or the claim administrator acquired a Partial Denial claim for which a First Report of Injury or Illness is
already on file with the Division and the claim administrator subsequently pays indemnity benefits, the claim
administrator shall file an Electronic Notice of Rescinded Denial with the Division to report a change in disposition of the
claim. The Electronic Notice of Rescinded Denial will be considered timely filed if it is received by the Division and is
assigned an Application Acknowledgement Code of “TA” (Transaction Accepted) on or before the 14 days after the date
the denial was rescinded. The claim administrator shall also notify the employee and employer about the decision to
rescind the Partial (Indemnity Only) Denial by sending to the employee and employer, Form DFS-F2-DWC-12, Notice of
Denial, pursuant to Rules 69L-3.012 and 69L-3.025, F.A.C., or explanatory letter. The Electronic Notice of Rescinded
Denial shall be represented by sending a SROI MTC as follows:
1. The Electronic Notice of Rescinded Denial reporting payment of indemnity benefits shall be represented by
sending SROI MTC IP (Initial Payment), or SROI MTC AP (Acquired/Payment) for an acquired claim. The Electronic Notice
of Rescinded Denial reporting a lump sum payment or settlement of indemnity benefits shall be represented by sending
SROI MTC PY (Payment Report). The claim administrator shall include the “Denial Rescission Date,” the date the initial
payment of indemnity benefits was mailed, and the type of indemnity benefits paid on the SROI MTC IP, AP, or PY.
2. The Electronic Notice of Rescinded Denial reporting acceptance of a compensable death case where there are no
known dependants shall be represented by sending SROI MTC CD (Compensable Death, No Dependents/Payees). The
claim administrator shall report the “Denial Rescission Date” on the SROI MTC CD
3. The Electronic Notice of Rescinded Denial reporting acceptance of a compensable volunteer shall be represented
by sending SROI MTC VE (Volunteer). The claim administrator shall report the “Denial Rescission Date” on the SROI MTC
VE.
4. The Electronic Notice of Rescinded Denial reporting reinstatement of indemnity benefits by the employer
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following a denial of indemnity benefits previously paid by the employer, shall be represented by sending SROI MTC ER
(Employer Reinstatement). The claim administrator shall report the “Denial Rescission Date” on the SROI MTC ER.
(c) Rescission of Partial (Indemnity Only) Denial After Payment. If the claim administrator initially paid indemnity
benefits and subsequently denied payment of indemnity benefits only and filed an Electronic Notice of Denial SROI MTC
PD (Partial Denial) with the Division and elects to pay indemnity benefits again, or if the claim administrator acquired a
claim for which indemnity benefits were previously paid and subsequently denied and the acquiring claim administrator
subsequently pays indemnity benefits, the claim administrator shall file an Electronic Notice of Rescinded Denial with
the Division to report a change in disposition of the claim. The Electronic Notice of Rescinded Denial will be considered
timely filed if it is received by the Division and is assigned an Application Acknowledgement Code of “TA” (Transaction
Accepted) on or before the 14 days after the date the denial was rescinded. The claim administrator shall also notify the
employee and employer about the decision to rescind the partial denial by sending to the employee and employer,
Form DFS-F2-DWC-12, Notice of Denial, pursuant to Rules 69L-3.012 and 69L-3.025, F.A.C., or explanatory letter. The
Electronic Notice of Rescinded Denial reporting reinstatement of indemnity benefits following a denial of indemnity
benefits shall be represented by sending SROI MTC RB (Reinstatement of Benefits). The Electronic Notice of Rescinded
Denial shall report the “Denial Rescission Date” and the type of indemnity benefits paid, on the SROI MTC RB.
(7) Any insurer failing to timely send the Electronic Notice of Denial in accordance with the filing time periods
prescribed in this subsection shall be subject to administrative penalties assessable by the Division in accordance with
the provisions of Rule 69L-24.021, F.A.C., and Section 440.525(4), F.S.
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 1-7-07, Amended 5-17-09.
69L-56.3013 Electronic Periodic Claim Cost Reports.
(SROI MTC SA, FN as found in the IAIABC Implementation Guide for Claims: First, Subsequent, Header, Trailer &
Acknowledgement Detail Records, Release 3, January 1, 2009 Edition).
On or before the compliance date established in the insurer’s Primary Implementation Schedule set forth in paragraph
69L-56.300(3)(a), F.A.C., the insurer shall file the electronic form equivalent for claim cost information otherwise
reported on Form DFS-F2-DWC-13 adopted in Rules 69L-3.016 and 69L-3.025, F.A.C. If payment has been made for
any of the Benefit Type (BT) Codes or Other Benefit Type (OBT) Codes listed in subsections (1) and (2) of this section,
the claim administrator shall report on the Electronic Claim Cost Report, the cumulative amount paid (i.e., Benefit Type
Amount Paid, Other Benefit Type Amount) in dollars and cents for each applicable BT Code, with the exception of BT
Codes reporting employer payment, and OBT Code. The claim administrator shall also report the amount of weeks (i.e.,
Benefit Type Claim Weeks) and/or days (i.e., Benefit Type Claim Days), the effective date of each indemnity benefit (i.e.,
Benefit Period Start Date), and the date through which indemnity benefits were paid at the time of reporting (i.e., Benefit
Period Through Date), unless otherwise indicated below. For purposes of the Electronic Claim Cost Report, the Benefit
Period Start Date shall be reported as the earliest date benefits were paid for a Benefit Type Code, regardless of whether
multiple disability periods were paid for the Benefit Type Code.
(1) BENEFIT TYPE (BT) CODES:
(a) BT Code 010: Fatal/Death
(b) BT Code 020: Permanent Total (PT)
(c) BT Code 021: Permanent Total Supplemental (PT Supp)
(d) BT Code 030: Permanent Partial Scheduled/Impairment Income Benefits (IB) (Dates of Injury on or after 1/1/94).
The claim administrator shall not report BT Code 030 (IB) or BT Code 530 (Lump Sum Payment/Settlement of IB) if one
or more of the following BT Codes have been paid: BT Code 020 (PT), 021 (PT Supp), 520 (Lump Sum
Payment/Settlement of PT), or 521 (Lump Sum Payment/Settlement of PT Supp).
(e) BT Code 030: Permanent Partial Scheduled/Wage Loss Benefits (Dates of Injury prior to 1/1/94).
1. Benefit Type Claim Weeks, Benefit Type Claim Days, Benefit Period Start Date and Benefit Period Through Date
are not required to be reported.
111
(f) BT Code 040: Permanent Partial Unscheduled/Supplemental Income Benefits (SB) (Dates of Injury 1/194 through
9/30/2003).
1. BT Code 040 (SB) or 540 (Lump Sum Payment/Settlement of SB) shall not be sent as the earliest/only indemnity
benefit paid.
(g) BT Code 050: Temporary Total (TT)
(h) BT Code 051: Temporary Total Catastrophic (TT @ 80%).
(i) BT Code 070: Temporary Partial (TP)
For Dates of Injury prior to 1/1/94, Benefit Type Claim Weeks, Benefit Type Claim Days, Benefit Period Start Date and
Benefit Period Through Date are not required to be reported.
(j) BT Code 090: Permanent Partial Disfigurement/Permanent Impairment Benefits (PI) (Dates of Injury 8/1/79
through 12/31/1993).
1. The claim administrator shall not report BT Code 090 (PI) or BT Code 590 (Lump Sum Payment/Settlement of PI)
if one or more of the following BT Codes have been paid: BT Code 020 (PT), 021 (PT Supp), 520 (Lump Sum
Payment/Settlement of PT), or 521 (Lump Sum Payment/Settlement of PT Supp).
2. Benefit Type Claim Weeks, Benefit Type Claim Days, Benefit Period Start Date and Benefit Period Through Date
are not required to be reported.
(k) BT Code 240: Employer Paid Unspecified/Salary in Lieu of Compensation
1. The claim administrator may alternatively report BT Code 242: Employer Paid Vocational Rehab
Maintenance/specifically for Salary in Lieu of Comp for TT – Training and Education; BT Code 250: Employer Paid
Temporary Total/specifically for Salary in Lieu of Comp for TT; BT Code 251: Employer Paid Temporary Total
Catastrophic/specifically for Salary in Lieu of Comp for TT @ 80%; and/or BT Code 270: Employer Paid Temporary
Partial/specifically for Salary in lieu of Comp for TP Payable; however, if the claim administrator’s knowledge of the
injury is on or after its production implementation date for reporting the Electronic Claim Cost Report, BT Codes 242,
250, 251, and 270 shall not be reported with BT Code 240.
2. Benefit Type Amount Paid is not required to be reported for BT Codes 240, 242, 250, 251, and 270.
(l) BT Code 410: Vocational Rehab Maintenance/TT Training and Education.
(m) BT Code 500: Unspecified Lump Sum Payment/Settlement of indemnity benefits
Benefit Type Claim Weeks, Benefit Type Claim Days, Benefit Period Start Date and Benefit Period Through Date are not
required to be reported.
(n) BT Code 501: Medical Lump Sum Payment/Settlement. The claim administrator is not required to report BT
Code 501: Medical Lump Sum Payment/Settlement, unless it is accompanied or preceded by BT Code 500 Unspecified
Lump Sum Payment/Settlement.
1. If BT Code 501 is the only payment reported, the Electronic Claim Cost Report will be rejected.
2. Benefit Type Claim Weeks, Benefit Type Claim Days, Benefit Period Start Date and Benefit Period Through Date
are not required to be reported.
(o) BT Codes 5xx: Lump Sum Payment/Settlement of a specific BT Code in paragraphs (1)(a) through (l) of this
subsection.
Benefit Type Claim Weeks, Benefit Type Claim Days, Benefit Period Start Date and Benefit Period Through Date are not
required to be reported.
(2) OTHER BENEFIT TYPE (OBT) CODES:
(a) OBT Code 300: Funeral Expenses
(b) OBT Code 310: Total Penalties
The claim administrator shall not report OBT Code 310 for cases where the Date Claim Administrator Had Knowledge of
the Injury is prior to the claim administrator’s production implementation date for Electronic Claim Cost Reports (MTC’s
SA and FN).
(c) OBT Code 311 – Total Employee Penalties
The claim administrator shall file OBT Code 311(versus OBT Code 310) for cases where the Date Claim Administrator
Had Knowledge of the Injury is on or after the claim administrator’s production implementation date for Electronic Claim
Cost Reports (MTC’s SA and FN).
(d) OBT Code 320 – Total Interest
112
The claim administrator shall not report OBT Code 310 for cases where the Date Claim Administrator Had Knowledge of
the Injury is prior to the claim administrator’s production implementation date for Electronic Claim Cost Reports (MTC’s
SA and FN).
(e) OBT Code 321 – Total Employee Interest
The claim administrator shall file OBT Code 321(versus OBT Code 320) for cases where the Date Claim Administrator
Had Knowledge of the Injury is on or after the Claim Administrator’s production implementation date for Electronic
Claim Cost Reports (MTC’s SA and FN).
(f) OBT Code 370: Total Other Medical
OBT Code 370 includes medical expenses (e.g., expenses to build a ramp for a wheelchair-bound employee) not
otherwise required to be reported to the Division pursuant to Rule 69L-7.602, F.A.C., (i.e., physician, dental, hospital,
pharmacy or durable medical expenses).
(g) OBT Code 380: Total Vocational Rehabilitation Evaluation
(h) OBT Code 390: Total Vocational Rehabilitation Education
(i) OBT Code 400: Total Other Vocational Rehabilitation
(j) OBT Code 430: Total Unallocated Prior Indemnity Benefits
(k) OBT Code 475: Total Medical Travel Expenses
(3) The claim administrator shall send Electronic Periodic Claim Cost Reports to the Division for the following cases
and by the filing time periods in subsection (3) of this section:
(a) “Lost Time/Indemnity Case”;
(b) “Medical Only to Lost Time Case;
(c) “Denied Case” for which any indemnity benefit was paid prior to or after the denial.
(4)(a) Electronic Sub-Annual Claim Cost Report: The claim administrator shall report the Electronic Sub-Annual
Claim Cost Report by sending SROI MTC SA (Sub-Annual) every 6 months after the date of injury until the claim is
closed. The first Electronic Sub-Annual Claim Cost Report will be considered timely filed with the Division if it is
received by the Division and is assigned an Application Acknowledgement Code of “TA” (Transaction Accepted) within
30 days after six (6) months from the date of injury. All subsequent Electronic Sub-Annual Claim Cost Reports shall be
sent to the Division every six (6) months thereafter. A subsequent Electronic Sub-Annual Claim Cost Report will be
considered timely filed with the Division if it is received by the Division and is assigned an Application
Acknowledgement Code of “TA” (Transaction Accepted) within 30 days of the due date as determined by the following:
A subsequent MTC SA due date will be determined by adding six month intervals to the month of injury (e.g. Date of
Injury (DOI) = 3/15/06, MTC SA due 9/15/06, next MTC SA due 3/15/07). If the resulting MTC SA due date is not a
valid calendar date, the due date for that MTC SA will default to last day of the calculated month (e.g. DOI = 8/30/06,
MTC SA due 2/28/07, next MTC SA due 8/30/07).
1. The first Electronic Sub-Annual Claim Cost Report shall not be sent to the Division earlier than six months after
the date of injury. However, if the claim administrator closed the case prior to 6 months after the date of injury, the first
Electronic Claim Cost Report may be sent prior to six (6) months after the date of injury if it is sent as an Electronic Final
Claim Cost Report (MTC FN). If the claim did not become a “Lost Time/Indemnity Case” until more than six (6) months
after the date of injury, the first Electronic Sub-Annual Claim Cost Report shall be filed when the next “6 month” SROI
MTC SA becomes due (e.g., disability began 9 months after the DOI, 1st MTC SA due 12 months after DOI; disability
began 13 months after DOI, 1st MTC SA due 18 months after DOI).
2. Subsequent Electronic Sub-Annual Claim Cost Reports sent more than 7 days prior to the required six (6) month
filing interval will be processed as an amendment to the previous Electronic Sub-Annual Claim Cost Report and will not
fulfill the filing requirement for the next required Electronic Sub-Annual Claim Cost Report.
(b) Electronic Final Claim Cost Report: The claim administrator shall report the Electronic Final Claim Cost Report by
sending SROI MTC FN (Final) for all cases closed since the last required filing of a periodic report. The Electronic Final
Claim Cost Report will be considered timely filed with the Division if it is received by the Division and is assigned an
Application Acknowledgement Code of “TA” (Transaction Accepted) on or before 30 days after the due date of the subannual.
1. The Electronic Final Claim Cost Report may be sent prior to the due date of the sub-annual if the claim
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administrator closes the case and will not be paying any further medical or indemnity benefits.
2. If the claim administrator issues payment or changes the amount paid for any Benefit Type Code or Other Benefit
Code identified in subsections 69L-56.3013(1) and (2), F.A.C., since the filing of the previous Final Claim Cost Report, the
claim administrator shall send an Electronic Final Claim Cost Report on or before 30 days after the due date of the subannual to summarize benefits paid since the last Final Claim Cost Report filed with the Division.
3. If the claim administrator is re-opening the claim to pay on-going indemnity benefits, the Electronic Periodic
Claim Cost Report should be sent as an Electronic Sub-Annual (SA) Claim Cost Report on or before 30 days after the due
date of the Sub-Annual.
4. The claim administrator shall file another Electronic Final (FN) Claim Cost Report if it has paid additional amounts
for one or more of the following Other Benefit Type Codes: OBT Code 370 (Total Other Medical), OBT Code 380 (Total
Vocational Rehabilitation Evaluation), OBT Code 390 (Total Vocational Rehabilitation Education), OBT Code 400 (Total
Other Vocational Rehabilitation), or OBT Code 475 (Total Medical Travel Expenses).
(5) Any insurer failing to timely send an Electronic Periodic Claim Cost Report in accordance with the filing time
periods prescribed in this subsection shall be subject to administrative penalties assessable by the Division in accordance
with the provisions of Rule 69L-24.021, F.A.C. and Section 440.525(4), F.S.
(6) In the event claims are acquired from another claim administrator, the insurer shall ensure that its former claim
administrator provides the acquiring claim administrator with the total amounts paid for indemnity benefits paid prior
to the acquisition of the claim by the new claim administrator. Notwithstanding the provision of specific claim costs
amounts paid by the former claim administrator(s) for each indemnity benefit type, the acquiring claim administrator
shall report on the next required Electronic Periodic Claim Cost Report, cumulative totals for all indemnity benefits paid
by the former claim administrator(s) on a transferred case as follows: Cumulative totals for indemnity costs paid by the
former claim administrator(s) shall be reported under Other Benefit Type Code 430 (Total Unallocated Prior Indemnity
Benefits). The acquiring claim administrator shall report any specific costs paid by the acquiring claim administrator for
each applicable Benefit Type Code (indemnity benefits) and Other Benefit Type Code, in addition to the unallocated
indemnity amount paid by the former claim administrator(s).
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 1-7-07, Amended 5-17-09.
69L-56.304 Electronic Notice of Action or Change, Including Change in Claims Administration, Required by the
Insurer's Primary Implementation Schedule.
(FROI/SROI MTC 02, FROI MTC AQ, AU, SROI IP, PY, EP as found in the IAIABC Implementation Guide for Claims: First,
Subsequent, Header, Trailer & Acknowledgement Detail Records, Release 3, January 1, 2009 Edition)
(1) Electronic Notice of Action or Change (MTC 02). On or before the compliance date established in the insurer’s
Primary Implementation Schedule set forth in paragraph 69L-56.300(3)(a), F.A.C., the insurer shall file an Electronic
Notice of Action or Change for reporting changes to the information specified in paragraphs (1)(a) and (b) of this section.
The claim administrator shall file the FROI or SROI MTC 02 (Change) on or before 14 days after the claim administrator
has knowledge of the new or changed information. However, MTC 02 shall not be sent if a data element changes as a
result of an event that requires the reporting of another MTC in accordance with the definition of Maintenance Type Code
(MTC) in the Data Dictionary located in Section 6 of the IAIABC Claims EDI Release 3 Implementation Guide. If there
is a change in Insurer FEIN or Claims Administrator FEIN, Claim Administrator Postal Code, and Claim Administrator
Claim Number due to the acquisition of a claim, the claim administrator shall file MTC AQ or AU with applicable SROI
pursuant to subsection (2) of this section.
(a) The claim administrator shall file a FROI or SROI MTC 02 (Change) as noted below, and provide Form DFS-F2DWC-4 to the employee and employer pursuant to Rules 69L-3.0091 and 69L-3.025, F.A.C., if any of the following data
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elements are changed or reported for the first time:
1. Insurer FEIN not due to change in claims administration (FROI or SROI MTC 02);
2. Claim Administrator FEIN not due to change in claims administration (FROI or SROI MTC 02);
3. Claim Administrator Postal Code not due to change in claims administration (FROI or SROI MTC 02);
4. Claim Administrator Claim Number not due to change in claims administration (FROI or SROI MTC 02);
5. Industry Code (FROI MTC 02 only);
6. Manual Classification Code (FROI MTC 02 only);
7. Employee SSN (FROI or SROI MTC 02);
8. Employee ID Assigned by Jurisdiction (FROI or SROI MTC 02);
9. Employee First/Last Name, Last Name Suffix, Middle Name/Initial (FROI or SROI MTC 02);
10. Date of Injury (FROI or SROI MTC 02);
11. Employee Date of Death (FROI or SROI MTC 02).
(b) The claim administrator shall file MTC 02 (Change) to report a change in any other data element designated with
1
2”
3”
4
the requirement code of “Y”, “Y ”, “Y , “Y , “Y ” or “FY” in the FROI or SROI MTC 02 column of the FL Claims EDI R3
Element Requirement Table contained in the FL Claims EDI Implementation Manual (e.g., Initial Date Disability Began,
Benefit Payment Issue Date, etc.). The provision of Form DFS-F2-DWC-4 to the employee and employer is not required
since these data elements are not contained on Form DFS-F2-DWC-4 adopted in Rules 69L-3.0091 and 69L-3.025, F.A.C.
(2) Electronic Notice of Action or Change in Claims Administration (MTC AQ, or MTC AU with applicable SROI MTC).
If the responsibility for adjusting a “Lost Time/Indemnity Case”, “Medical Only to Lost Time Case” or “Denied Case” has
changed due to acquisition of the claim from another claim administrator or due to the employer transferring a large
deductible claim to the claim administrator because the claim met the contracted deductible threshold, the new claim
administrator shall send FROI MTC AQ (Acquired Claim), to report the change in claims administration, on or before 21
days after the effective date of the new claim administrator’s acquisition of the claim. In place of filing FROI MTC AQ, the
claim administrator may file FROI MTC AU (Acquired/Unallocated) with SROI MTC AP, EP, CD, VE, PY, or PD to report the
change in claims administration. The claim administrator shall file FROI MTC AQ (Acquired Claim) or FROI MTC AU with
applicable SROI MTC prior to sending any subsequent transactions (e.g., subsequent electronic suspension notices,
electronic periodic claim cost reports, etc.).
(a) The acquiring claim administrator shall also provide to the employee and employer, Form DFS-F2-DWC-4
adopted in Rules 69L-3.0091 and 69L-3.025, F.A.C., or an explanatory letter, on or before 21 days from the date of
acquisition, to advise the parties about the change in claims administration, except when sending Claims EDI filings
identified in subparagraphs 69L-56.304(2)(c)6.-7., below.
(b) A batch of FROI MTC AQ (Acquired Claim) filings or FROI AU with applicable SROI MTC filings to report a change
in claims administration for multiple claims shall replace the former option of the claim administrator to otherwise file
with the Division Form DFS-F2-DWC-49, Aggregate Claims Administration Change Report adopted in Rules 69L-3.0231
and 69L-3.025, F.A.C., in place of Form DFS-F2-DWC-4, Notice of Action/Change, for each affected claim.
(c) If the FROI MTC AQ (Acquired Claim) rejects because a First Report of Injury or Illness was not previously filed
with the Division by the former claim administrator, the acquiring claim administrator shall file FROI MTC AU
(Acquired/Unallocated) with the appropriate SROI MTC AP, EP, CD, VE, PY, PD, or 04 on or before 14 days after the FROI
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MTC AQ (Acquired Claim) was assigned an Application Acknowledgement Code “TR” (Transaction Rejected) as follows:
1. If the claim administrator is reporting its initial payment of indemnity benefits other than a lump sum
payment/settlement for an acquired claim, the Electronic Notice of a Change in Claims Administration shall be
represented by sending FROI MTC “AU” (Acquired/Unallocated) with SROI MTC “AP” (Acquired/Payment).
2. If the claim administrator is reporting its initial payment of indemnity benefits for a lump sum payment or
settlement for an acquired claim, the Electronic Notice of a Change in Claims Administration shall be represented by
sending FROI MTC AU (Acquired/Unallocated) with SROI MTC “PY” (Payment Report).
3. If the claim administrator is reporting the initial payment of indemnity benefits by the employer on an acquired
claim (i.e., salary in lieu of compensation), the Electronic Notice of a Change in Claims Administration shall be
represented by sending FROI MTC AU (Acquired/Unallocated) with SROI EP (Employer Paid).
4. If the claim administrator is reporting a Compensable Death, No Dependents/Payees on an acquired claim, the
Electronic Notice of a Change in Claims Administration shall be represented by sending FROI MTC AU
(Acquired/Unallocated) with SROI MTC CD (Compensable Death, No Dependents/Payees).
5. If the claim administrator is reporting a compensable Volunteer on an acquired claim, the Electronic Notice of a
Change in Claims Administration shall be represented by sending FROI MTC AU (Acquired/Unallocated) with SROI
MTC VE (Compensable Volunteer).
6. If the claim administrator is reporting a Partial (Indemnity Only) Denial on an acquired claim, the Electronic
Notice of a Change in Claims Administration shall be represented by sending FROI MTC AU (Acquired/Unallocated)
with SROI MTC PD (Partial Denial).
a. The claim administrator shall file an Electronic Notice of Denial with the Division by reporting the applicable
Partial Denial Reason Code and Denial Reason Narrative on the same SROI MTC PD (Partial Denial).
b. In addition to filing the Electronic Notice of Denial with the Division, the claim administrator shall provide a paper
copy of Form DFS-F2-DWC-12, Notice of Denial, adopted in Rules 69L-3.012 and 69L-3.025, F.A.C., to the employer and
employee, in accordance with the filing time period set out for Form DFS-F2-DWC-12 in Rule 69L-3.012, F.A.C.
7. If the claim administrator is reporting a Full Denial on an acquired claim where indemnity payments were
previously paid prior to the full denial, the Electronic Notice of a Change in Claims Administration shall be represented
by sending FROI MTC AU (Acquired/Unallocated) with SROI MTC 04 (Denial).
a. The claim administrator shall file an Electronic Notice of Denial with the Division by reporting the applicable Full
Denial Reason Code(s) and Full Denial Effective Date on the SROI MTC 04 (Denial). The Denial Reason Narrative shall
also be sent on the SROI MTC 04 (Denial) to supplement the Denial Reason Code(s).
b. In addition to filing the Electronic Notice of Denial with the Division, the claim administrator shall provide a paper
copy of Form DFS-F2-DWC-12, Notice of Denial, adopted in Rules 69L-3.012 and 69L-3.025, F.A.C., to the employer
and employee, in accordance with the filing time period set out for Form DFS-F2-DWC-12 in Rule 69L-3.012, F.A.C.
(d) If MTC AQ (Acquired Claim) rejects because a First Report of Injury or Illness was not previously filed with the
Division by the former claim administrator, and the acquiring claim administrator is denying the entire claim where no
indemnity payments have been made, the acquiring claim administrator shall file FROI MTC 04 (Denial) on or before 14
days after the FROI MTC AQ (Acquired Claim) was assigned an Application Acknowledgement Code “TR” (Transaction
Rejected) as follows:
1. The claim administrator shall file an Electronic Notice of Denial with the Division by reporting the applicable Full
Denial Reason Code(s) and Full Denial Effective Date on the FROI MTC 04 (Denial). The Denial Reason Narrative shall also
be sent on the FROI MTC 04 (Denial) to supplement the Denial Reason Code(s).
2. In addition to filing the Electronic Notice of Denial with the Division, the claim administrator shall provide a paper
copy of Form DFS-F2-DWC-12, Notice of Denial, adopted in Rules 69L-3.012 and 69L-3.025, F.A.C., to the employer and
employee, in accordance with the filing time period set out for Form DFS-F2-DWC-12 in Rule 69L-3.012, F.A.C.
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(3) Electronic Notice to Report Initial Payment (MTC IP) Following Prior Employer Paid benefits, Compensable Death
with no Known Dependants/Payees, or Compensable Volunteer Filing. If the claim administrator makes its initial
payment following the prior initial payment of salary in lieu of compensation (SROI MTC EP), or after the prior filing of a
SROI MTC CD (Compensable Death), or after the prior filing of a SROI MTC VE (Compensable Volunteer), the claim
administrator shall file a SROI MTC IP (Initial Payment) on or before 14 days after the date the claim administrator’s
initial payment was mailed to the employee. The claim administrator shall provide Form DFS-F2-DWC-4 adopted in Rules
69L-3.0091 and 69L-3.025, F.A.C., or explanatory letter to the employee and employer regarding the commencement of
indemnity benefits by the claim administrator.
(4) Electronic Notice of Lump Sum Payment/Settlement (MTC PY). If an order is signed for a lump sum payment or
settlement of indemnity benefits subsequent to the initial payment of indemnity benefits, i.e., an award, advance,
stipulated agreement, or final settlement of indemnity benefits, the claim administrator shall file SROI MTC PY (Payment
Report), on or before 14 days after the date the award/order was signed. The claim administrator shall report the
applicable Lump Sum Payment/Settlement Code as defined in Section 6, Data Dictionary, of the IAIABC Claims EDI R3
Implementation Guide as follows: “SF” (Settlement Full) if both indemnity and medical benefits are settled; “SP”
(Settlement Partial) if only indemnity but not medical benefits are settled; “AS” (Agreement Stipulated) if the lump sum
payment is for a non-adjudicated amount; “AW” (Award) if the lump sum payment is for an adjudicated amount; or “AD”
(Advance) if the lump sum payment is for benefits in advance of when they were due. If all Impairment Income benefits
due are paid in one lump sum amount, regardless of the amount, the claim administrator shall file SROI MTC PY with
Benefit Type Code 030 or 530, and report Lump Sum Payment/Settlement Code “AD” (Advance). The claim
administrator is not required to file an Electronic Notice of Suspension SROI MTC S7 (Suspension, Benefits Exhausted)
to report the conclusion of the payment of Impairment Income benefits when Impairment Income benefits are paid in one
lump sum.
(a) The claim administrator shall also report the “Payment Issue Date” on the SROI MTC PY. The Payment Issue
Date shall represent the date payment for the lump sum payment/settlement leaves the control of the claim administrator
for delivery to the employee or the employee’s representative, and shall not be sent as the date the check is requested,
created, or issued in the claim administrator’s system unless the check leaves the control of the claim administrator the
same day it is requested, created, or issued for delivery to the employee or the employee’s representative.
(b) The claim administrator shall provide Form DFS-F2-DWC-4, Notice of Action/Change, adopted in Rules 69L3.0091 and 69L-3.025, F.A.C., to the employee and employer.
(5) Electronic Notice to Report Employer Payment of Indemnity Benefits that is not the Initial Payment (MTC EP).
If the employer pays an indemnity benefit(s) for the first time following payment of and suspension of all indemnity
benefits by the claim administrator (e.g., when the employer elects to pay Impairment Income Benefits), the claim
administrator shall file SROI MTC EP (Employer Paid) on or before 14 days after the date the claim administrator had
knowledge of the payment of indemnity benefits by the employer. The provision of Form DFS-F2-DWC-4 to the
employee and employer is not required.
(6) The filing of a FROI or SROI MTC 02 to report a change in Insurer FEIN, Claim Administrator FEIN, or Claim
Administrator Postal Code and Claim Administrator Claim Number due to the establishment of a new or elimination of a
claims office location or subsidiary entity within the insurer’s organization does not negate the obligation of the trading
partner (insurer or claim administrator) to file a revised “EDI Trading Partner Profile, DFS-F5-DWC-EDI-1 (1/01/2008),
and if applicable, a revised “EDI Trading Partner Insurer/Claim Administrator ID List”, DFS-F5-DWC-EDI-2 (10/01/2006),
and if applicable, a revised “EDI Trading Partner Claim Administrator Address List”, DFS-F5-DWC-EDI-2A (10/01/2006),
pursuant to subsection 69L-56.300(2), F.A.C.
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 1-7-07, Amended 5-17-09.
69L-56.3045 Electronic Notice of Action or Change, Suspensions, and Reinstatement of Indemnity Benefits
Required by Insurer's Secondary Implementation Schedule.
(SROI MTC 02, CA, CB, AB, S1-S8, P7, RB, ER as found in the IAIABC Implementation Guide for Claims: First, Subsequent,
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Header, Trailer & Acknowledgement Detail Records, Release 3, January 1, 2009 Edition)
(1) Electronic Notice of Action or Change (SROI MTC 02). On or before the compliance date established in the
insurer’s Secondary Implementation Schedule set forth in paragraph 69L-56.300(3)(b), F.A.C., the insurer shall file an
Electronic Notice of Action or Change for the reporting of changes to the information in paragraphs (1)(a) and (b) of this
section. The claim administrator shall file the SROI MTC 02 (Change) on or before 14 days after the claim administrator
has knowledge of the new or changed information. However, MTC 02 shall not be sent if a data element changes as a
result of an event that requires the reporting of another MTC pursuant to the definition of Maintenance Type Code
(MTC) in the Data Dictionary located in Section 6 of the IAIABC Claims EDI Release 3 Implementation Guide.
(a) The claim administrator shall file SROI MTC 02 (Change) and provide Form DFS-F2-DWC-4 unless otherwise
noted in subparagraph 1.-10. below, to the employee and employer, pursuant to Rules 69L-3.0091 and 69L-3.025, F.A.C.,
if any of the following data elements are changed:
1. Date of Maximum Medical Improvement.
2. Permanent Impairment Percentage.
3. Initial Return to Work Date.
4. Current Return to Work Date.
5. Return to Work Type Code.
6. Physical Restrictions Indicator.
7. Permanent Impairment Minimum Payment Indicator – No DFS-F2-DWC-4 required.
8. Return to Work with Same Employer Indicator – No DFS-F2-DWC-4 required.
9. Suspension Effective Date.
10. Suspension Narrative – No DFS-F2-DWC-4 required.
(b) The claim administrator shall file SROI MTC 02 and provide Form DFS-F2-DWC-4 unless otherwise noted in
subparagraph 1.-15. below, to the employee and employer, pursuant to Rules 69L-3.0091 and 69L-3.025, F.A.C., if any of
the following data elements are changed and there is no resulting change to the Net Weekly Amount because the
benefit type being paid will continue to be paid at the same statutory maximum weekly rate, or because the claim
administrator is correcting a code, date or amount previously reported in error and the Net Weekly Amount is
unchanged:
1. Average Wage.
2. Wage Effective Date.
3. Calculated Weekly Compensation Amount.
4. Gross Weekly Amount – No DFS-F2-DWC-4 required.
5. Gross Weekly Amount Effective Date – No DFS-F2-DWC-4 required.
6. Net Weekly Amount Effective Date – No DFS-F2-DWC-4 required.
7. Benefit Adjustment Code.
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8. Benefit Adjustment Start Date.
9. Benefit Adjustment End Date.
10. Benefit Credit Code.
11. Benefit Credit Start Date.
12. Benefit Credit End Date.
13. Benefit Redistribution Code.
14. Benefit Redistribution Amount.
15. Benefit Redistribution Start Date.
16. Benefit Redistribution End Date.
When the claim administrator is commencing or suspending redirection of a portion of the Net Weekly Amount to
another party on the behalf of the employee or the employee’s beneficiary due to a court ordered lien for child support,
the claim administrator shall report Benefit Redistribution Code “H” that is being applied to a specific indemnity benefit
type, and file SROI MTC 02 on or before 14 days after the date the claim administrator has knowledge that a portion of
the net weekly amount should be redistributed to another party due to an income deduction order pursuant to Section
61.1301, F.S., or when the redistribution has ended.
(2) Electronic Change in Amount (MTC CA): If the Net Weekly Amount changes from the amount previously
reported due to a revised Average Wage (e.g., wage statement, discontinuation of fringe benefits), or due to the
application of a Benefit Adjustment Code or Benefit Credit Code specified in paragraph (2)(a) of this section, the claim
administrator shall file a SROI MTC CA (Change in Benefit Amount) on or before 14 days after the date the claim
administrator has knowledge that the Net Weekly Amount should be amended.
(a) When the claim administrator applies an adjustment or credit which reduces the Net Weekly Amount for a
specific indemnity benefit type, the claim administrator shall report the Benefit Adjustment Code or Benefit Credit Code
being applied to the specific indemnity benefit type, and file SROI MTC CA (Change in Amount) to report the change as
follows:
1. Benefit Adjustment Codes –
a. “A” = Apportionment/Contribution. The weekly payment amount is reduced for shared or partial liability with
another party.
b. “B” = Subrogation (Third Party Offset). The weekly payment amount is reduced for recovery from third party tortfeasor pursuant to Section 440.39(2), F.S.
c. “N” = Non-cooperation: Rehabilitation, Training, Education, and Medical. The weekly payment amount is reduced
because the employee failed to accept training and education pursuant to Section 440.491(6)(b), F.S., for dates of
accident prior to October 1, 2003, or the employee failed to timely cancel an independent medical examination
pursuant to Section 440.13(5)(d), F.S.
d. “R” = Social Security Retirement. The weekly payment amount is reduced for retirement benefits paid under the
Federal Old Age, Survivors, and Disability Insurance Act, pursuant to Section 440.15(9), F.S.
e. “S” = Social Security Disability. The weekly payment amount is reduced for disability benefits paid under the
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Federal Old Age, Survivors, and Disability Insurance Act, pursuant to Section 440.15(9), F.S.
f. “U” = Unemployment Compensation. The weekly payment amount is reduced for payment of unemployment
compensation insurance benefits, pursuant to Section 440.15(10), F.S.
g. “V” = Safety Violation. The weekly payment amount is reduced for safety violation(s) pursuant to Section
440.09(5), F.S.
h. “X” = Death Benefit Reduction (Dependent Change). The weekly payment amount is reduced because of a change
in number or kind of dependents entitled to death benefits pursuant to Section 440.16, F.S.
2. Benefit Credit Codes –
a. “C” = Overpayment. The weekly payment amount is reduced for recoupment of benefits paid but not due.
b. “P” = Advance. The weekly payment amount is reduced for reimbursement of benefit payments advanced
pursuant to Section 440.20(13), F.S.
(b) In addition to filing MTC CA with the Division, the claim administrator shall provide Form DFS-F2-DWC-4 to the
employee and employer as required by Rules 69L-3.0091 and 69L-3.025, F.A.C.
(c) If the Net Weekly Amount is adjusted due to the application of a Social Security Offset, the claim administrator
shall also send to the Division a completed Form DFS-F2-DWC-14, Request for Social Security Disability Benefit
Information, adopted in Rules 69L-3.021 and 69L-3.025, F.A.C., at the same time the claim administrator sends the SROI
MTC CA to report the change in the Net Weekly Amount.
(d) If the Net Weekly Amount changes due to a change in the type of indemnity benefits that are being paid, the
claim administrator shall file MTC CB (Change in Benefits) required by subsection 69L-56.3045(3), F.A.C., to report a
change in the Benefit Type Code (BTC) that results in a change in the Net Weekly Amount payable (e.g., when indemnity
benefits change from BTC 050 (Temporary Total) to BTC 070 (Temporary Partial) or BTC 030 (Impairment Income) – The
claim administrator shall not file MTC CA (Change in Amount) for this occurrence.
(e) MTC CA is not required to report subsequent changes in the Net Weekly Amount payable for BTC 070
(Temporary Partial) for interim or ongoing fluctuations in the weekly rate due to variations in the employee’s weekly
earnings, or to report subsequent changes to the Net Weekly Amount payable for BTC 030 (Impairment Income
Benefits) due to changes in the employee’s weekly work status.
(f) MTC CA is also not required to be filed if the Net Weekly Amount changes due to subsequent applications of
varying weekly adjustment or credit amounts against BTC 070 (Temporary Partial) or BTC 030 (Impairment Income)
benefits. MTC CA, however, shall be filed to report a change in the Net Weekly Amount due to the ending of an
adjustment or credit against BTC 070 (Temporary Partial) or BTC 030 (Impairment Income) benefits.
(3) Electronic Change in Benefit Type (MTC CB): When an indemnity benefit type being paid changes and payments
are being continued under a different indemnity benefit type without a break in continuity of payments, the claim
administrator shall file a SROI MTC CB (Change in Benefit Type) on or before 14 days after the date the claim
administrator has knowledge that the indemnity benefit type being paid should be changed.
(4)(a) Adding Concurrent Benefit (MTC AB): When Permanent Total Benefits (Benefit Type 020) are being paid, and
Permanent Total Supplemental Benefits (Benefit Type Code 021) are initiated subsequent to the prior commencement
of Permanent Total Benefits (Benefit Type Code 020), the claim administrator shall file SROI MTC AB (Add Concurrent
Benefit Type) on or before 14 days after the date the claim administrator has knowledge that Permanent Total
Supplemental Benefits (Benefit Type Code 021) should be commenced.
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(b) In addition to filing MTC AB with the Division, the claim administrator shall provide Form DFS-F2-DWC-4 to the
employee and employer as required by Rules 69L-3.0091 and 69L-3.025, F.A.C.
(5)(a) Electronic Suspension of all indemnity benefits (MTC S1-S8): When all indemnity benefits are suspended
because the employee returned to work, or was medically released to return to work and the claim administrator does
not anticipate paying further indemnity benefits of any kind, the claim administrator shall file with the Division SROI
MTC S1 (Suspension, RTW, or Medically Determined/Qualified RTW) on or before 14 days after the date the claim
administrator decided to suspend all indemnity benefits.
(b) When all indemnity benefits are suspended because the employee failed to report for an independent medical
examination pursuant to Section 440.13(5)(d), F.S., or failed to report for an evaluation by an expert medical advisor
appointed by a Judge of Compensation Claims pursuant to Section 440.13(9)(c), F.S., the claim administrator shall file
with the Division SROI MTC S2 (Suspension, Medical Non-compliance) on or before 14 days after the date the claim
administrator decided to suspend all indemnity benefits.
(c) When all indemnity benefits are suspended because the employee failed to comply with one or more of the
following statutory sections and rules, the claim administrator shall file with the Division SROI MTC S3 (Suspension,
Administrative Non-compliance) on or before 14 days after the date the claim administrator decided to suspend all
indemnity benefits:
1. Section 440.15(1)(e)3, F.S. (1994), which is incorporated herein by reference – Employee in Permanent Total
status failed to attend vocational evaluation or testing.
2. Section 440.15(1)(f)2b, F.S. (1994), which is incorporated herein by reference – Employee in Permanent Total
status failed to report or apply for Social Security benefits.
3. Section 440.15(2)(d), F.S. (1994), which is incorporated herein by reference – Employee in Temporary Total status
failed or refused to complete and return the Form DFS-F2-DWC-19 adopted in Rules 69L-3.021 and 69L-3.025, F.A.C.
4. Section 440.15(7), F.S. (1994), which is incorporated herein by reference – Employee in Temporary Partial status
failed or refused to complete and return the Form DFS-F2-DWC-19 adopted in Rules 69L-3.021 and 69L-3.025, F.A.C.
5. Section 440.15(6), F.S. (2003), which is incorporated herein by reference – Employee refused suitable
employment.
6. Section 440.15(9), F.S. (2003), which is incorporated herein by reference – Employee failed or refused to sign and
return the release for Social Security benefits earnings on Form DFS-F2-DWC-14, or unemployment compensation
earnings on Form DFS-F2-DWC-30 adopted in Rule 69L-3.025, F.A.C.
7. Section 440.491(6)(b), F.S. (2003), which is incorporated herein by reference – Employee failed or refused to
accept vocational training or education.
8. Section 440.15(4)(d), F.S. (2003), which is incorporated herein by reference – Employee in Temporary Partial
status failed to notify the claims-handling entity of the establishment of earnings capacity within 5 business days of
returning to work.
9. Section 440.15(4)(e), F.S. (2003), which is incorporated herein by reference – Employee in Temporary Partial
status terminated from post-injury employment due to the employee’s misconduct.
10. Section 440.105(7), F.S. (2003), which is incorporated herein by reference – Employee refused to sign and return
the fraud statement.
(d) When all indemnity benefits are suspended because the employee died and there are no known or confirmed
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dependents to whom death benefits must be paid, or if the death was not compensable, the claim administrator shall
file with the Division SROI MTC S4 (Suspension, Claimant Death) on or before 14 days after the date the claim
administrator decided to suspend all indemnity benefits.
(e) When all indemnity benefits are suspended because the employee became an inmate of a public institution and
there are no known or confirmed dependents to whom indemnity benefits must be paid, the claim administrator shall
file with the Division SROI MTC S5 (Suspension, Incarceration) on or before 14 days from the date the claim
administrator decided to suspend all indemnity benefits.
(f) When all indemnity benefits are suspended because the claim administrator’s good faith repeated attempts to
locate and send indemnity benefits to the employee have been unsuccessful; or the employee has no known address,
representative or guardian to whom the claim administrator can send indemnity benefits; or indemnity benefits have
been returned to the claim administrator indicating that the employee has moved and the current or forwarding
address is unknown, or the employee no longer resides at the last known address, the claim administrator shall file with
the Division SROI MTC S6 (Suspension, Claimant’s Whereabouts Unknown) on or before 14 days after the date the claim
administrator decided to suspend all indemnity benefits.
(g) When all indemnity benefits are suspended because the employee is no longer eligible for or entitled to any
indemnity benefits because the limits of or entitlement to indemnity benefits have been exhausted, the claim
administrator shall file with the Division SROI MTC S7 (Suspension, Benefits Exhausted) on or before 14 days after the
date the claim administrator decided to suspend all indemnity benefits.
(h) When all indemnity benefits are suspended because the employee elects to receive workers’ compensation
benefits under another state’s law, or the claim administrator determines the claim is compensable under another
compensation act, such as the Federal Employers’ Liability Act, the Federal Employees’ Compensation Act, the U.S.
Longshoremen’s and Harbor Workers’ Compensation Act, or the Jones Act, the claim administrator shall file with the
Division SROI MTC S8 (Suspension, Jurisdiction Change) on or before 14 days after the date the claim administrator
decided to suspend all indemnity benefits. Until the claim administrator implements the electronic reporting of
suspension information as required in Rules 69L-56.304 and 69L-56.3045, F.A.C., the claim administrator shall file Form
DFS-F2-DWC-4, Notice of Action/Change adopted in Rules 69L-3.0091 and 69L-3.025, F.A.C., and report Suspension
Reason Code “S8” when there is a change in jurisdiction; however, once the claim administrator is in production status
with filing electronic suspension notices, the claim administrator shall report a change in jurisdiction by filing SROI MTC
S8 (Suspension, Jurisdiction Change).
(i) In addition to filing MTC SROI S1-S8 with the Division, the claim administrator shall provide Form DFS-F2-DWC-4
to the employee and employer as required by Rules 69L-3.0091 and 69L-3.025, F.A.C.
(j) When Permanent Total Supplemental Benefits (Benefit Type 021) are suspended but Permanent Total Benefits
(Benefit Type 020) will continue to be paid, the claim administrator shall file with the Division SROI MTC P7 (Partial
Suspension, Benefits Exhausted) on or before 14 days after the date Permanent Total Supplemental Benefits were
suspended. In addition to filing MTC P7 with the Division, the claim administrator shall provide Form DFS-F2-DWC-4 to
the employee and employer as required by Rules 69L-3.0091 and 69L-3.025, F.A.C.
(6) Electronic Reinstatement of Indemnity Benefits (MTC RB, ER):
(a) When payment of indemnity benefits are resumed by the claim administrator after having been previously
suspended, the claim administrator shall file with the Division a SROI MTC RB (Reinstatement of Benefits) on or before
14 days after the date the claim administrator had knowledge of the need to reinstate indemnity benefits. In addition to
filing SROI MTC RB with the Division, the claim administrator shall provide Form DFS-F2-DWC-4 to the employee and
employer as required by Rules 69L-3.0091 and 69L-3.025, F.A.C.
(b) When the employer reinstates payment of salary in lieu of compensation following a prior suspension of all
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indemnity benefits paid by the employer, the claim administrator shall file with the Division SROI MTC ER (Employer
Reinstatement) on or before 14 days after the date the claim administrator received notification about the reinstatement of
salary in lieu of compensation. Form DFS-F2-DWC-4 is not required to be sent to the employee or employer.
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 1-7-07, Amended 5-17-09.
69L-56.307 Electronic Cancellation of Claim.
(FROI MTC 01 as found in the IAIABC Implementation Guide for Claims: First, Subsequent, Header, Trailer and
Acknowledgement Detail Records, Release 3, January 1, 2009 Edition)
(1) The claim administrator shall send FROI MTC 01 (Cancel) immediately upon the claim administrator’s knowledge
of the need to cancel if any of the following occur:
(a) An Electronic First Report of Injury or Illness was accepted by the Division and the claim administrator
subsequently determined the claim was filed in error because it was actually a Medical Only Case. The FROI MTC 01 shall
reflect the Claim Type as “B” (Became Medical Only).
(b) An Electronic First Report of Injury or Illness was accepted by the Division and the claim administrator
subsequently determined the claim was filed with inaccurate identifying information and was a duplicate of another
accepted claim.
(2) If a claim has been cancelled via FROI MTC 01 (Cancel) after an Electronic First Report of Injury or Illness was
previously filed with the Division and the claim administrator determines the claim should not be cancelled after all, the
claim administrator shall re-file a subsequent Electronic First Report of Injury or Illness using the applicable MTC(s)
specified in this rule for reporting an Electronic First Report of Injury or Illness. The original Electronic First Report of
Injury or Illness sent to the Division shall be disregarded and considered not filed with the Division. The due date for
filing the subsequent Electronic First Report of Injury or Illness shall correspond to the filing timeframes specified in this
rule for the applicable MTC(s) required for an Electronic First Report of Injury. If un-canceling a claim to file a full or
partial denial of indemnity benefits, the claim administrator shall provide to the employee and employer, Form DFS-F2DWC-12 adopted in Rules 69L-3.012 and 69L-3.025, F.A.C.
Rulemaking Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 1-7-07, Amended 5-17-09.
69L-56.310 Technical Requirements for Claims EDI Transmissions.
(1) Insurers shall send Claims EDI Filings required in Rules 69L-56.301, 69L-56.3012, 69L-56.3013, 69L-56.304, 69L56.3045, 69L-56.307 and 69L-56.330, F.A.C., to the Division using only the following transmission methods:
(a) Advantis Value Added Network (VAN), or
(b) Secure Socket Layer/File Transfer Protocol (SSL/FTP) in accordance with instructions on Form DFS-F5-DWC-EDI-4
(1/01/2008).
(2) Electronic transmissions of Claims EDI Filings shall be sent to the Division using the First Report of Injury
(FROI)/148 flat file transaction set, including the R21 companion record, and the Subsequent Report (SROI)/A49 flat file
transaction set, including the R22 companion record, described in Section 2, “Technical Documentation”, of the IAIABC
Claims EDI Release 3 Implementation Guide. The claim administrator shall not send transmissions containing files in the
ANSI 148 format to the Division.
(3)(a) Each FROI transmission shall contain at least one batch in the FROI format, a sample of which is located in
Section 2, Technical Documentation, in the IAIABC Claims EDI Release 3 Implementation Guide. Each SROI
transmission shall contain at least one batch in the SROI format located in Section 2, Technical Documentation, Record
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Layouts, in the IAIABC Claims EDI Release 3 Implementation Guide.
(b) Each batch shall contain only one of the following transaction types:
1. First Report of Injury (FROI/148 transaction with R21 companion record), or
2. Subsequent Report of Injury (SROI/A49 transaction with R22 companion record).
(c) A batch shall contain the following as set forth in Section 2, Technical Documentation, in the IAIABC Claims EDI
Release 3 Implementation Guide:
1. Header Record,
2. One or more transactions – FROI 148 with R21, or SROI A49 with R22,
3. Trailer Record.
(d) Header records shall include the following information:
1. Receiver FEIN for the State of Florida: 596001874,
2. Receiver Postal Code for the State of Florida: 323994226,
3. Sender Identifier. The Sender Identifier (Sender ID) shall consist of the claim administrator’s FEIN and Postal Code
as reported on Form DFS-F5-DWC-EDI-3 (10/01/2006), EDI Transmission Profile – Sender’s Specifications.
(4) To report the electronic equivalent of the First Report of Injury or Illness (Form DFS-F2-DWC-1 adopted in
Rules 69L-3.0045 and 69L-3.025, F.A.C.), where total compensability of the claim has not been denied, the claim
administrator shall send to the Division both the FROI and SROI within the processing times set out in subsection (5) of
this section. If either the FROI or SROI contains an error that results in the rejection of one of the transactions, both the
FROI and SROI shall be rejected and the claim administrator shall re-send both the corrected FROI and SROI to the
Division within the processing times set out in subsection (5) of this rule section, in order for the two transactions to be
processed together. The Division will only pair for processing purposes, FROI’s and SROI’s that are received by the
Division on the same day, as set out in subsection (5) of this rule section.
(5) Transmissions received on or before 9:00 p.m., Eastern Standard Time, shall be processed by the Division the
same day the transmission was sent to the Division and acknowledged by the Division the next day. Transmissions
received after 9:00 p.m. through 11:59 p.m., Eastern Standard Time, shall be processed by the Division the following day
and acknowledged by the Division the next day after the transmission is processed.
(6) During the test phases, the “Test-Production Code” in the Header record shall be set to “T”. After the claim
administrator has been approved by the Division to send transmissions in production status, the “Test-Production Code”
shall be set to “P”.
(7) The claim administrator shall have the capability to receive and process the Division’s Claims EDI AKC
Acknowledgement transaction described in Section 2, Technical Documentation, of the IAIABC Claims EDI Release 3
Implementation Guide. The claim administrator shall update its database with the Jurisdiction Claim Number (JCN)
provided by the Division on the EDI AKC Acknowledgement transaction for each successfully filed transaction.
(8) Formats and meaning of data elements reported via EDI to the Division pursuant to this rule shall match format
specifications and data element definitions established in Sections 2, 4 and 6 of the IAIABC Claims EDI Release 3
Implementation Guide, unless otherwise defined in Rule 69L-56.002, F.A.C.
(9) The claim administrator’s business and technical contacts shall have e-mail system capabilities that support
Word, Excel, or PDF attachments from the Division of at least 2 Megabytes.
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(10) The claim administrator or other third party vendor shall utilize anti-virus software to screen out and clean any
viruses on all electronic transmissions prior to sending transmissions to the Division. The claim administrator or other
third party vendor shall maintain anti-virus software with the most recent anti-virus update files from the software
provider. If the claim administrator or third party vendor sends a transmission that contains a virus which prevents the
Division from processing the transmission, the transmission will not be considered as having been received by the
Division.
(11) If a vendor is submitting files on behalf of more than one insurer or claim administrator, the vendor shall send
separate header and trailer records for each claim administrator. The Sender ID on the Header Record shall represent
the insurer’s or claim administrator’s FEIN and Postal Code, not that of the vendor.
Rulemaking Authority 440.591, 440.593 FS. Law Implemented 440.593 FS. History–New 5-29-05, Amended 1-7-07, 5-17-09.
69L-56.320 CLAIMS EDI TEST AND PRODUCTION STATUS REQUIREMENTS.
(1) Prior to sending an initial test transmission, the claim administrator shall file the EDI Trading Partner forms
required in subsection 69L-56.300(2), F.A.C. If a form is incomplete and does not contain responses to all of the required
fields in accordance with the form instructions, testing with the Division will not commence until the corrected form(s) is
re-filed with the Division.
(2) If the claim administrator has contracted with a vendor to send Claims EDI filings on its behalf to the Division,
the claim administrator shall comply with the testing requirements in this section before being approved for production
status, even if the vendor has been previously approved by the Division for production status with another client.
(3) During the Claims EDI testing period and until the claim administrator is approved for production status for
sending the required electronic form equivalents required by this rule, the claim administrator shall continue to file
Forms DFS-F2-DWC-1, DFS-F2-DWC-12, DFS-F2-DWC-13 and DFS-F2-DWC-4 and DFS-F2-DWC-49 in accordance with
Rules 69L-3.0045, 69L-3.0091, 69L-3.012, 69L-3.016, 69L-3.0213 and 69L-3.025, F.A.C.
(4) The claim administrator shall send test files in the correct IAIABC Release 3 formats specified in Section 2,
Technical Documentation, of the IAIABC Claims EDI Release 3 Implementation Guide, and comply with transmission
requirements set out in Rule 69L-56.310, F.AC.
(5) The insurer or claim administrator shall indicate the Maintenance Type Codes (MTC’s) it will be sending, if not all
MTC’s will be initially tested at the same time (e.g., MTC’s not required until the insurer’s Secondary Implementation
Schedule). The claim administrator shall file a revised Form DFS-F5-DWC-EDI-3, EDI Transmission Profile – Sender
Specifications, to report any new MTC’s that will be added during the test to production periods.
(6) The claim administrator shall also indicate on its Form DFS-F5-DWC-EDI-3, Transmission Profile – Sender
Specifications, the frequency with which files will be sent to the Division, i.e., daily, weekly. Test files shall consist of
Claims EDI Filings that correspond with Forms DFS-F2-DWC-1, DFS-F2-DWC-12, DFS-F2-DWC-13, and DFS-F2-DWC-4
adopted in Rules 69L-3.025, F.A.C., that were previously mailed to the Division at least one week prior to the date the
test transmission containing the corresponding Electronic First Report of Injury or Illness, Electronic Notice of Denial,
Electronic Periodic Claim Cost Report, and Electronic Notice of Action or Change, Suspension, and Reinstatement of
Indemnity Benefits information is sent to the Division. If the claim administrator is unable to transmit test files on a
daily or weekly basis due to a low volume of actual claim filings being mailed to the Division during the specified testing
frequency, the claim administrator may create and send “mock” paper and electronic filings for Claims EDI testing
purposes. The claim administrator shall clearly mark any mock paper filings as an “EDI Test Filing” and fax the mock
paper filings to the Division’s Claims EDI Team at (850) 488-3453.
(7) Data element values sent on the test Claims EDI filings shall match values reported on the corresponding paper
form filing. If differences are detected and cited in a written parallel analysis report issued to the claim administrator by
the Division, the claim administrator shall confirm if the electronic version contained the accurate data, or otherwise
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provide an explanation for the discrepancy. The claim administrator shall investigate and reconcile its database as
necessary in conjunction with data errors identified during the test period(s).
(8) The claim administrator shall send the following minimum number of Claims EDI filings during the test period(s),
of which 90% of each of the required categories specified in paragraphs (5)(a) through (f) of this section shall receive an
Application Acknowledgement Code of “TA”:
(a) Ten (10) Electronic First Report of Injury or Illness filings utilizing at least two of each of the following required
FROI/SROI MTC combinations: 00/IP, 00/EP, and 00/PY. MTC’s 00/CD, 00/VE, and AU/AP may be optionally included in
the testing period. The claim administrator shall send one of the two required MTC 00/IP filings with Claim Type “I” and
the other required MTC 00/IP filing with Claim Type “L”.
(b) Five (5) Electronic Denied First Report of Injury or Illness filings utilizing at least one FROI MTC 04 (Full Denial)
and one FROI MTC 00 with SROI PD (Partial Denial). The Electronic First Report of Injury or Illness shall include the
applicable Full Denial Reason Code(s) and Partial Denial Code with Denial Reason Narrative, to report the Electronic
Notice of Denial information.
(c) Ten (10) Electronic Periodic Claim Cost filings utilizing at least two each of the following SROI MTC’s: SA or FN. A
corresponding paper or Electronic First Report of Injury or Illness must have been previously accepted in test or
production status before testing MTC SA or FN.
(d) Five (5) Electronic Notice of Denial filings (post-EDI DWC-1) utilizing at least one each of the following SROI
MTC’s: MTC 04 and PD (Electronic First Report of Injury or Illness must have been previously accepted in test or
production status before testing these EDI filings.)
(e) Five (5) Electronic Notice of Action or Change transactions based on electronic filings required in the insurer’s
Primary Implementation Schedule for the initial testing period if not all MTC’s will be implemented by the insurer during
its Primary Implementation Schedule, utilizing either FROI or SROI MTC 02 (Change). A corresponding paper or Electronic
First Report of Injury or Illness must have been previously accepted in test or production status before testing these EDI
filings with the Division.
(f) Five (5) of the following Electronic Notice of Action or Changes, Suspension and Reinstatement of Indemnity
Benefits filings required in the insurer’s Secondary Implementation Schedule utilizing at least two MTC 02 filings, one of
which shall report a change in the Average Wage with no change to the Net Weekly Amount and one MTC 02 that
reports a Benefit Redistribution. The claim administrator shall also send at least one each of the following MTC’s: S1-S8
(Suspensions); RB (Reinstatement); CA (Change in Amount), CB (Change in Benefit Type).
(9) To be approved for production status:
(a) The claim administrator shall achieve a 90% acceptance rate for Claims EDI Filings sent during the test period(s),
i.e., 90% of all test Claims EDI Filings shall be accepted and assigned an Application Acknowledgement Code “TA”
(Transaction Accepted), and 10% or less of all Claims EDI filings shall be assigned an Application Acknowledgement Code
“TR” (Transaction Rejected); and,
(b) The claim administrator must achieve a 95% accuracy rate for correctly reporting the following data elements:
1. Benefit Payment Issue Date and Payment Issue Date (represents the date payment was mailed to the employee);
and
2. Employee SSN and Date of Injury (unless Form DFS-FS-DWC-4, Notice of Action/Change adopted in Rules 69L3.0091 and 69L-3.025, F.A.C., was filed to report a change in Employee SSN and Date of Injury that explains the different
value sent on the test EDI filing compared to the value sent on the prior paper or EDI filing); and
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3. Benefit Type reported on the Division paper form promulgated under Rules 69L-3.0045, 69L-3.0091, 69L-3.012,
69L-3.016 and 69L-3.025, F.A.C., compared to the test Electronic First Report of Injury or Illness filing; and
4. Initial Date of Lost Time; and
5. Date Claim Administrator Had Knowledge of Lost Time; and
6. Any penalties and/or Interest reported on the prior paper filing compared to the test Electronic First Report of
Injury or Illness, and
(c) The claim administrator has responded to all parallel pilot analysis reports issued during the test period(s).
(10) The claim administrator shall send a minimum of two transmissions containing the test MTC’s pursuant to
subsection (8) of this section for evaluation by the Division before the claim administrator will be approved for
production status.
Specific Authority 440.591, 440.593(5) FS. Law Implemented 440.593 FS. History–New 1-7-07.
69L-56.330 Electronic Formats for Reporting the Employee's 8th Day of Disability and the Claim Administrator's
Knowledge of 8th Day of Disability.
Rulemaking Authority 440.591, 440.593 FS. Law Implemented 440.593 FS. History–New 5-29-05, Amended 1-7-07, Repealed 5-17-09.
69L-56.500 Insurer Responsibilities Where Third Party Services Are Utilized.
If an insurer contracts with a claim administrator or third party vendor to electronically send transactions to the Division
on the insurer’s behalf, or uses a claim administrator or third party vendor’s software product for electronically sending
transactions to the Division, the insurer shall remain responsible for the timely filing of transactions required by this
rule, processing of acknowledgements, and any penalties and fines that may result from untimely electronic filings.
Specific Authority 440.591, 440.593(5) FS. Law Implemented 440.20(8)(b), 440.593 FS. History–New 5-29-05, Amended 1-7-07.
B. Compliance Economic Review for Chapter 69L-56:
COMPLIANCE ECONOMIC REVIEW
Pursuant to section 120.745(5), Florida Statutes
Rule Chapter 69L-56, F.A.C., Electronic Data Interchange (EDI) Requirements for Proof of Coverage and
Claims (Non-Medical)
DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF WORKERS’ COMPENSATION
April 2013
JUSTIFICATION FOR THE RULE
Section 440.593, F.S., allows the department to establish an electronic reporting system. The section states:
(1) The department may establish an electronic reporting system requiring or authorizing an
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employer or carrier to submit required forms, reports, or other information electronically rather than
by other means. The department may establish different deadlines for submitting forms, reports, or
information to the department, or to its authorized agent, via the electronic reporting system than
are otherwise required when reporting information by other means.
(2) The department may require any carrier to submit data electronically, either directly or through a
third-party vendor, and may require any carrier or vendor submitting data to the department
electronically to be certified by the department. The department may specify performance
requirements for any carrier or vendor submitting data electronically.
(3) The department may revoke the certification of any carrier or vendor determined by the
department to be in noncompliance with performance standards prescribed by rule for electronic
submissions.
(4) The department may assess a civil penalty, not to exceed $500 for each violation, as prescribed
by rule.
(5) The department may adopt rules to administer this section.
The Legislature, through the enactment of this statute, clearly foresaw the need for the department to
transition from a labor intensive, paper reporting process to an electronic data reporting platform in order to
more effectively and efficiently administer Florida’s workers’ compensation system. Without the electronic
data reporting system, the department would be required to hire many more employees to handle the paper
forms, be limited in enforcing employer compliance with the coverage requirements, and be limited in
ensuring carriers were meeting their statutory performance standards for providing timely and accurate
benefits to injured workers and payments to health care providers.
This rule was originally created to require Insurers and Claim Administrators to file required paper forms via an
electronic method with the Division of Workers’ Compensation for Proof of Coverage and Claims, in accordance
with 440.593, F.S. All proof of coverage data, claims data and medical bills were originally collected on paper
forms. If the data now submitted electronically were submitted on paper, the annual stack of documents would
be almost six times the height of Florida’s 22-story Capitol building.
The electronic formats mandated by this rule are national standard Electronic Data Interchange (EDI)
transactions developed by the International Association of Industrial Accident Boards and Commission (IAIABC).
The IAIABC EDI development committees created and implemented these standards. The committees consist of
representatives from national workers’ compensation insurers and third party administrators, as well as other
state jurisdictions and vendors. The Division has been an active participant in the development and maintenance
of these national standards. Every existing and new requirement in the standard has been extensively vetted
with all the national participants, including the Insurers and Claim Administrators. After the initial programming
investment, implementing a national standard for the electronic reporting of workers’ compensation data saves
the claim administrators money because each state that adopts the national standard will be accepting the same
electronic format.
In the Executive Summary of its 2012 Workers’ Compensation Annual Report, the Office of Insurance
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Regulation made the following findings regarding the workers’ compensation marketplace:
Based on a comparative analysis across a variety of economic measures, the workers’ compensation market
is competitive.
a.
The workers’ compensation market in Florida is served by a large number of independent insurers
and none of the insurers has sufficient market share to exercise any meaningful control over the
price of workers’ compensation insurance.
b. The Herfindahl-Hirschman Index (a measure of market concentration) indicates that the market is not
overly concentrated.
c. There are no significant barriers for the entry and existence of insurers into the Florida workers’
compensation market and based on the record of new entrants and voluntary withdrawals with no
market disruptions, the Florida workers’ compensation market is competitive, well capitalized and
robust.
In addition, despite three rate increases after seven years of decreases, workers’ compensation rates are still,
on average, 56% below what they were in 2003.
The rule incorporates and adopts national and uniform claim and policy information electronic reporting
standards. Therefore, insurance carriers do not have to develop multiple data reporting platforms. Since all
rule subparts were adopted in May, 2005 or earlier, carriers would experience significant data reporting costs
should the Department transition back to paper reporting and/or develop a Florida-specific electronic
reporting system.
Section 120.745(5)(b), F.S. states:
Any agency rule, including subparts, reviewed pursuant to Executive Order 2011-01 are exempt from
the compliance economic review if the review found that the rule:
1. Does not unnecessarily restrict entry into a profession or occupation;
2. Does not adversely affect the availability of professional or occupational services to the public;
3. Does not unreasonably affect job creation or job retention;
4. Does not place unreasonable restrictions on individuals attempting to find employment;
5. Does not impose burdensome costs on businesses; or
6. Is justifiable when the overall cost-effectiveness and economic impact of the regulation, including
indirect costs to consumers, is considered.
Rule Chapter 69L-56, F.A.C., meets the criteria to be exempt from a compliance economic review because it
is justifiable when the overall cost-effectiveness and economic impact of the regulation is considered.
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