Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Florida Law and EthicsMedium
A Florida 2-20 General Lines Agent is advising a commercial client on their workers' compensation coverage. The client operates a high-risk business and has struggled to obtain coverage in the standard market. The agent explains that the Florida Workers' Compensation Joint Underwriting Association (FWCJUA) can provide coverage. Which of the following is a primary eligibility requirement for an employer to obtain coverage through FWCJUA?
- AThe employer must agree to implement all safety recommendations made by FWCJUA within 30 days.
- BThe employer must be a non-profit organization or a small business with fewer than 10 employees.
- CThe employer must have a clean safety record with no workers' compensation claims in the past three years.
- DThe employer must have been declined coverage by at least two authorized workers' compensation insurers in the voluntary market.
Show answer & explanationAnswer & explanation
Correct answer: D. The employer must have been declined coverage by at least two authorized workers' compensation insurers in the voluntary market.
The Florida Workers' Compensation Joint Underwriting Association (FWCJUA) serves as the residual market for workers' compensation. A primary eligibility requirement is that an employer must have been declined coverage by a specified number of authorized insurers (typically two) in the voluntary market before seeking coverage through FWCJUA.
Why the other options are wrong
- A. While safety is important, this is not a pre-condition for obtaining coverage through FWCJUA; it may be a condition for continued coverage or premium adjustments.
- B. Eligibility is based on inability to find coverage in the voluntary market, not business type or size.
- C. FWCJUA is designed for high-risk employers who may have a poor safety record and cannot get voluntary coverage.
Florida Workers' Compensation Joint Underwriting Association (FWCJUA) Eligibility
Criteria an employer must meet to obtain workers' compensation coverage through FWCJUA, the residual market for such insurance.
- Declined by voluntary market insurers
- Employer must be unable to procure coverage
- Ensures availability of workers' comp
Memory trick: FWCJUA: For When Carriers Can't Cover.