Bill Text: FL S0420 | 2017 | Regular Session | Comm Sub
Bill Title: Flood Insurance
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2017-05-02 - Laid on Table, companion bill(s) passed, see CS/CS/HB 813 (Ch. 2017-142) [S0420 Detail]
Download: Florida-2017-S0420-Comm_Sub.html
Florida Senate - 2017 CS for CS for SB 420
By the Committees on Community Affairs; and Banking and
Insurance; and Senator Brandes
578-03388-17 2017420c2
1 A bill to be entitled
2 An act relating to flood insurance; amending s.
3 627.0628, F.S.; revising the intervals at which
4 specified standards and guidelines for projecting
5 certain rate filings must be revised by the Florida
6 Commission on Hurricane Loss Projection Methodology;
7 amending s. 627.715, F.S.; authorizing certain
8 insurers to issue insurance policies, contracts, or
9 endorsements providing certain excess coverage for the
10 peril of flood; revising applicability; authorizing an
11 insurer to issue flood insurance policies on a
12 flexible basis; extending the last date of filing with
13 the Office of Insurance Regulation of certain flood
14 coverage rates that may be established and used by an
15 insurer; specifying a condition for an eligible
16 surplus lines insurer before a surplus lines agent may
17 be excepted from a diligent-effort requirement when
18 exporting flood insurance contracts or endorsements to
19 the insurer; extending the expiration date of the
20 exception; revising applicability of certain
21 notification and filing requirements; revising a
22 provision relating to a specified notice required
23 before the procurement of a private flood insurance
24 policy for property currently insured under the
25 National Flood Insurance Program; providing an
26 expiration date for the provision; providing an
27 effective date.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
31 Section 1. Paragraph (f) of subsection (3) of section
32 627.0628, Florida Statutes, is amended to read:
33 627.0628 Florida Commission on Hurricane Loss Projection
34 Methodology; public records exemption; public meetings
35 exemption.—
36 (3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.—
37 (f) The commission shall revise previously adopted
38 actuarial methods, principles, standards, models, or output
39 ranges every odd-numbered year for hurricane loss projections.
40 The commission shall revise previously adopted actuarial
41 methods, principles, standards, models, or output ranges no less
42 than every 4 years for flood loss projections.
43 Section 2. Section 627.715, Florida Statutes, is amended to
44 read:
45 627.715 Flood insurance.—An authorized insurer may issue an
46 insurance policy, contract, or endorsement providing personal
47 lines residential coverage for the peril of flood or excess
48 coverage for the peril of flood on any structure or the contents
49 of personal property contained therein, subject to this section.
50 This section does not apply to commercial lines residential or
51 commercial lines nonresidential coverage for the peril of flood.
52 This section also does not apply to coverage for the peril of
53 flood that is excess coverage over any other insurance covering
54 the peril of flood. An insurer may issue flood insurance
55 policies, contracts, or endorsements on a standard, preferred,
56 customized, flexible, or supplemental basis.
57 (1)(a) Except for excess flood insurance policies, policies
58 issued under this section include:
59 1. Standard flood insurance, which must cover only losses
60 from the peril of flood, as defined in paragraph (b), equivalent
61 to that provided under a standard flood insurance policy under
62 the National Flood Insurance Program. Standard flood insurance
63 issued under this section must provide the same coverage,
64 including deductibles and adjustment of losses, as that provided
65 under a standard flood insurance policy under the National Flood
66 Insurance Program.
67 2. Preferred flood insurance, which must include the same
68 coverage as standard flood insurance but:
69 a. Include, within the definition of “flood,” losses from
70 water intrusion originating from outside the structure that are
71 not otherwise covered under the definition of “flood” provided
72 in paragraph (b).
73 b. Include coverage for additional living expenses.
74 c. Require that any loss under personal property or
75 contents coverage that is repaired or replaced be adjusted only
76 on the basis of replacement costs up to the policy limits.
77 3. Customized flood insurance, which must include coverage
78 that is broader than the coverage provided under standard flood
79 insurance.
80 4. Flexible flood insurance, which must cover losses from
81 the peril of flood, as defined in paragraph (b), and may also
82 include coverage for losses from water intrusion originating
83 from outside the structure which is not otherwise covered by the
84 definition of flood. Flexible flood insurance must include one
85 or more of the following provisions:
86 a. An agreement between the insurer and the insured that
87 the flood coverage is in a specified amount, such as coverage
88 that is limited to the total amount of each outstanding mortgage
89 applicable to the covered property.
90 b. A requirement for a deductible in an amount authorized
91 under s. 627.701, including a deductible in an amount authorized
92 for hurricanes.
93 c. A requirement that flood loss to a dwelling be adjusted
94 in accordance with s. 627.7011(3) or adjusted only on the basis
95 of the actual cash value of the property.
96 d. A restriction limiting flood coverage to the principal
97 building defined in the policy.
98 e. A provision including or excluding coverage for
99 additional living expenses.
100 f. A provision excluding coverage for personal property or
101 contents as to the peril of flood.
102 5. Supplemental flood insurance, which may provide coverage
103 designed to supplement a flood policy obtained from the National
104 Flood Insurance Program or from an insurer issuing standard or
105 preferred flood insurance pursuant to this section. Supplemental
106 flood insurance may provide, but need not be limited to,
107 coverage for jewelry, art, deductibles, and additional living
108 expenses.
109 (b) “Flood” means a general and temporary condition of
110 partial or complete inundation of two or more acres of normally
111 dry land area or of two or more properties, at least one of
112 which is the policyholder’s property, from:
113 1. Overflow of inland or tidal waters;
114 2. Unusual and rapid accumulation or runoff of surface
115 waters from any source;
116 3. Mudflow; or
117 4. Collapse or subsidence of land along the shore of a lake
118 or similar body of water as a result of erosion or undermining
119 caused by waves or currents of water exceeding anticipated
120 cyclical levels that result in a flood as defined in this
121 paragraph.
122 (2) Flood coverage deductibles and policy limits pursuant
123 to this section must be prominently noted on the policy
124 declarations page or face page.
125 (3)(a) An insurer may establish and use flood coverage
126 rates in accordance with the rate standards provided in s.
127 627.062.
128 (b) For flood coverage rates filed with the office before
129 October 1, 2025 2019, the insurer may also establish and use
130 such rates in accordance with the rates, rating schedules, or
131 rating manuals filed by the insurer with the office which allow
132 the insurer a reasonable rate of return on flood coverage
133 written in this state. Flood coverage rates established pursuant
134 to this paragraph are not subject to s. 627.062(2)(a) and (f).
135 An insurer shall notify the office of any change to such rates
136 within 30 days after the effective date of the change. The
137 notice must include the name of the insurer and the average
138 statewide percentage change in rates. Actuarial data with regard
139 to such rates for flood coverage must be maintained by the
140 insurer for 2 years after the effective date of such rate change
141 and is subject to examination by the office. The office may
142 require the insurer to incur the costs associated with an
143 examination. Upon examination, the office, in accordance with
144 generally accepted and reasonable actuarial techniques, shall
145 consider the rate factors in s. 627.062(2)(b), (c), and (d), and
146 the standards in s. 627.062(2)(e), to determine if the rate is
147 excessive, inadequate, or unfairly discriminatory. If the office
148 determines that a rate is excessive or unfairly discriminatory,
149 the office shall require the insurer to provide appropriate
150 credit to affected insureds or an appropriate refund to affected
151 insureds who no longer receive coverage from the insurer.
152 (4) A surplus lines agent may export a contract or
153 endorsement providing flood coverage to an eligible surplus
154 lines insurer without making a diligent effort to seek such
155 coverage from three or more authorized insurers under s.
156 626.916(1) if the surplus lines insurer maintains a superior,
157 excellent, exceptional, or equivalent financial strength rating
158 by a rating agency acceptable to the office s. 626.916(1)(a).
159 This subsection expires July 1, 2022 2017.
160 (5) In addition to any other applicable requirements, an
161 insurer providing flood coverage that is not excess coverage in
162 this state must:
163 (a) Notify the office at least 30 days before writing flood
164 insurance in this state; and
165 (b) File a plan of operation and financial projections or
166 revisions to such plan, as applicable, with the office.
167 (6) Citizens Property Insurance Corporation may not provide
168 insurance for the peril of flood.
169 (7) The Florida Hurricane Catastrophe Fund may not provide
170 reimbursement for losses proximately caused by the peril of
171 flood, including losses that occur during a covered event as
172 defined in s. 215.555(2)(b).
173 (8) When procuring a private flood insurance policy from an
174 authorized insurer or a surplus lines insurer for a property
175 currently insured under the National Flood Insurance Program, an
176 agent must, at the time of expiration of the current policy,
177 provide a written notice to be signed by the applicant,
178 informing the applicant that the National Flood Insurance
179 Program could apply the full risk rate to the property if flood
180 insurance is later obtained under the National Flood Insurance
181 Program. The agent must receive the signed notice from the
182 applicant within 21 days after expiration of the policy under
183 the National Flood Insurance Program; otherwise, the private
184 flood insurance policy must be canceled and the National Flood
185 Insurance Program policy renewed. This subsection expires
186 January 1, 2020 An agent must, upon receiving an application for
187 flood coverage from an authorized or surplus lines insurer for a
188 property receiving flood insurance under the National Flood
189 Insurance Program, obtain an acknowledgment signed by the
190 applicant before placing the coverage with the authorized or
191 surplus lines insurer. The acknowledgment must notify the
192 applicant that, if the applicant discontinues coverage under the
193 National Flood Insurance Program which is provided at a
194 subsidized rate, the full risk rate for flood insurance may
195 apply to the property if the applicant later seeks to reinstate
196 coverage under the program.
197 (9) With respect to the regulation of flood coverage
198 written in this state by authorized insurers, this section
199 supersedes any other provision in the Florida Insurance Code in
200 the event of a conflict.
201 (10) If federal law or rule requires a certification by a
202 state insurance regulatory official as a condition of qualifying
203 for private flood insurance or disaster assistance, the
204 Commissioner of Insurance Regulation may provide the
205 certification, and such certification is not subject to review
206 under chapter 120.
207 (11)(a) An authorized insurer offering flood insurance may
208 request the office to certify that a policy, contract, or
209 endorsement provides coverage for the peril of flood which
210 equals or exceeds the flood coverage offered by the National
211 Flood Insurance Program. To be eligible for certification, such
212 policy, contract, or endorsement must contain a provision
213 stating that it meets the private flood insurance requirements
214 specified in 42 U.S.C. s. 4012a(b) and may not contain any
215 provision that is not in compliance with 42 U.S.C. s. 4012a(b).
216 (b) The authorized insurer or its agent may reference or
217 include a certification under paragraph (a) in advertising or
218 communications with an agent, a lending institution, an insured,
219 or a potential insured only for a policy, contract, or
220 endorsement that is certified under this subsection. The
221 authorized insurer may include a statement that notifies an
222 insured of the certification on the declarations page or other
223 policy documentation related to flood coverage certified under
224 this subsection.
225 (c) An insurer or agent who knowingly misrepresents that a
226 flood policy, contract, or endorsement is certified under this
227 subsection commits an unfair or deceptive act under s. 626.9541.
228 Section 3. This act shall take effect July 1, 2017.
