The Florida Insurance FACT Book is the result of years of pertinent data accumulated by the Florida Insurance Council. It is a one-of-a-kind, constantly evolving, Florida-specific resource that includes important material compiled from Florida Insurance Council, along with data assembled from other Internet sites, including state agencies, the Florida Legislature and important national sources.

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Medical Loss Ratio: Getting Your Money's Worth on Health Insurance

Thanks to the Affordable Care Act, consumers will receive more value for their premium dollars because insurance companies are required to spend 80-to-85 percent of premium dollars on medical care and health care quality improvement, rather than on overhead costs. If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012 for the 2011 reporting year. This policy is known as the “medical loss ratio” (MLR) provision of the Affordable Care Act.

Medical loss ratio applies to all health insurance plans, including job-based coverage and coverage sold in the individual market. However, insurance plans in the individual market often spend a larger percent of premiums on administrative expenses and non-health related costs, than job-based health plans.

Recognizing the variation in local insurance markets, the Affordable Care Act allows States to request a temporary adjustment in the MLR ratio for up to three years, to avoid disruptions to coverage in the individual market. This flexibility allows consumers to maintain the choices currently available to them in their State while transitioning to a new marketplace where they will have more options for coverage and more affordable health insurance through State-based Affordable Insurance Exchanges. This is one of many ways the Affordable Care Act is building a bridge from today’s often disjointed and dysfunctional markets to a better health care system.

The Department of Health and Human Services (HHS) has set up a transparent process for how States can apply for an MLR adjustment and what criteria will be used to determine whether to grant those requests.  States must provide information to HHS showing that requiring insurers in their individual market to spend at least 80 percent of their premiums on medical care and quality improvement may cause one or more insurers to leave the market, reducing access to coverage for consumers.  States must also show the number of consumers likely to be affected and the potential impact on premiums charged, benefits provided, and cost-sharing.  All application materials are posted on the HHS website.

The Florida MLR Adjustment Application

The Florida Office of Insurance Regulation requested an adjustment of the medical loss ratio standard to 68 percent, 72 percent, and 76 percent for reporting years 2011, 2012, and 2013, respectively.

In general, Florida’s application shows that the State has a competitive individual health insurance market, which should ensure that consumers continue to receive adequate coverage.

Evidence in Florida’s application shows that most issuers in the Florida individual market either:
1.    Already meet the 80 percent MLR standard,
2.    Are sufficiently profitable to provide rebate payments if they fail to meet the 80 percent MLR standard, or
3.    Are adapting their business models in order to provide consumers better value for their premium dollar.  

Insured Floridians will continue to have access to coverage. Florida law requires insurance companies to offer coverage to any individual whose insurance plan leaves the market, and makes it illegal to discriminate against these individuals because of a pre-existing condition.

For these reasons, HHS has determined that no adjustment to the medical loss ratio standard in Florida is necessary.  This determination will ensure consumers receive a better value for their premium dollar.

From the American Council of Life Insurance

State Facts


  • 478 life insurers are licensed to do business in Florida and 12 are domiciled in the state.
  • The life insurance industry employs approximately 46,000 people in Florida.
  • In addition, the life insurance industry supports approximately 56,000 non-insurance jobs in Florida.


  • Florida residents have $1.5 trillion in death benefit coverage.
  • State residents own 8 million individual life insurance policies, with coverage averaging $130,000 per policyholder.
  • Group life insurance coverage amounts to $550 billion.
  • Individual life insurance coverage purchased in 2009 in Florida totaled $100 billion. 
  • $20 billion was paid to Florida residents in the form of death benefits, matured endowments, policy dividends, surrender values, and other payments in 2009.
  • Annuity benefits paid in the state in 2009 totaled $5 billion.


  • Life insurance companies invest approximately $220 billion of their assets in Florida’s economy.
  • About $175 billion of this investment is in stocks and bonds that help finance business development, job creation, and services in the state.
  • Life insurers provide $20 billion in mortgage loans on farm, residential, and commercial properties, and own $2 billion in real property in Florida.
  • In 2009, life insurers purchased over $748 million of Florida-related Build America Bonds, or 20 percent of these bonds issued.
  • These bonds include those issued by Broward County Schools, the Florida Turnpike Commission and the Florida State Board of Education.


  • 75 million American families depend on life insurance industry products to protect their financial and retirement security.
  • The life insurance industry generates approximately 2.5 million jobs in the U.S., including direct employees, those who sell life insurance products, and non-insurance jobs supported by the industry.
  • In 2009, life insurers provided payments in excess of $594 billion, helping families guarantee long-term financial security now and in retirement. 
  • With 91 percent of the industry's $5 trillion assets invested in the U.S. economy, life insurers are one of the largest sources of investment capital in the nation.
  • Life insurers are the largest single source of bond financing for American business, holding 17 percent of all U.S. corporate bonds.  



  • 257 ACLI member companies provide financial and retirement security to families.
  • 92 percent of all life and annuity payments are from ACLI member companies.
  • 92 percent of total life insurance coverage is provided by ACLI members. 

Sources: ACLI calculations based on National Association of Insurance Commissioners (NAIC) 2009 annual statement data; U.S. Bureau of Economic Analysis, 2009 data; U.S. Census Bureau, 2009 data; U.S. Bureau of Labor Statistics, 2009 data; and U.S. Treasury Department, 2009 data.