Bill Text: FL S0594 | 2023 | Regular Session | Comm Sub
Bill Title: Property Insurance
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2023-05-01 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 799 (Ch. 2023-175), CS/CS/SB 154 (Ch. 2023-203), SB 2502 (Ch. 2023-240) [S0594 Detail]
Download: Florida-2023-S0594-Comm_Sub.html
Florida Senate - 2023 CS for CS for SB 594
By the Committees on Fiscal Policy; and Community Affairs; and
Senator Martin
594-03815-23 2023594c2
1 A bill to be entitled
2 An act relating to property insurance; amending s.
3 627.0629, F.S.; adding wind uplift prevention to a
4 list of fixtures or construction techniques for which
5 a residential property insurance rate filing must
6 include actuarially reasonable rate differentials or
7 appropriate deductible reductions; amending s.
8 627.351, F.S.; revising rate change limitations for
9 specified policies written by the Citizens Property
10 Insurance Corporation; revising the applicability of
11 flood coverage requirements for personal lines
12 residential policyholders of the corporation;
13 authorizing the corporation to adopt policy forms that
14 provide for the resolution of certain disputes in
15 proceedings before the Division of Administrative
16 Hearings; providing that such policies are not subject
17 to mandatory binding arbitration provisions;
18 authorizing the corporation to contract with the
19 division to conduct proceedings; providing an
20 appropriation; requiring the Office of Insurance
21 Regulation to conduct a wind-loss mitigation study in
22 consultation with the Department of Business and
23 Professional Regulation and the Florida Building
24 Commission or competitively procure the study;
25 specifying requirements for the study; requiring that
26 study findings be reported to certain entities by a
27 specified date; authorizing the office to use a
28 portion of appropriated funds to contract separately
29 with building code experts for certain purposes;
30 providing effective dates.
31
32 Be It Enacted by the Legislature of the State of Florida:
33
34 Section 1. Effective July 1, 2023, subsection (1) of
35 section 627.0629, Florida Statutes, is amended to read:
36 627.0629 Residential property insurance; rate filings.—
37 (1) It is the intent of the Legislature that insurers
38 provide savings to consumers who install or implement windstorm
39 damage mitigation techniques, alterations, or solutions to their
40 properties to prevent windstorm losses. A rate filing for
41 residential property insurance must include actuarially
42 reasonable discounts, credits, or other rate differentials, or
43 appropriate reductions in deductibles, for properties on which
44 fixtures or construction techniques demonstrated to reduce the
45 amount of loss in a windstorm have been installed or
46 implemented. The fixtures or construction techniques must
47 include, but are not limited to, fixtures or construction
48 techniques that enhance wind uplift prevention, roof strength,
49 roof covering performance, roof-to-wall strength, wall-to-floor
50 to-foundation strength, opening protection, and window, door,
51 and skylight strength. Credits, discounts, or other rate
52 differentials, or appropriate reductions in deductibles, for
53 fixtures and construction techniques that meet the minimum
54 requirements of the Florida Building Code must be included in
55 the rate filing. The office shall determine the discounts,
56 credits, other rate differentials, and appropriate reductions in
57 deductibles that reflect the full actuarial value of such
58 revaluation, which may be used by insurers in rate filings.
59 Section 2. Paragraphs (n) and (aa) of subsection (6) of
60 section 627.351, Florida Statutes, are amended, and paragraph
61 (ll) is added to that subsection, to read:
62 627.351 Insurance risk apportionment plans.—
63 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
64 (n)1. Rates for coverage provided by the corporation must
65 be actuarially sound pursuant to s. 627.062 and not competitive
66 with approved rates charged in the admitted voluntary market so
67 that the corporation functions as a residual market mechanism to
68 provide insurance only when insurance cannot be procured in the
69 voluntary market, except as otherwise provided in this
70 paragraph. The office shall provide the corporation such
71 information as would be necessary to determine whether rates are
72 competitive. The corporation shall file its recommended rates
73 with the office at least annually. The corporation shall provide
74 any additional information regarding the rates which the office
75 requires. The office shall consider the recommendations of the
76 board and issue a final order establishing the rates for the
77 corporation within 45 days after the recommended rates are
78 filed. The corporation may not pursue an administrative
79 challenge or judicial review of the final order of the office.
80 2. In addition to the rates otherwise determined pursuant
81 to this paragraph, the corporation shall impose and collect an
82 amount equal to the premium tax provided in s. 624.509 to
83 augment the financial resources of the corporation.
84 3. After the public hurricane loss-projection model under
85 s. 627.06281 has been found to be accurate and reliable by the
86 Florida Commission on Hurricane Loss Projection Methodology, the
87 model shall be considered when establishing the windstorm
88 portion of the corporation’s rates. The corporation may use the
89 public model results in combination with the results of private
90 models to calculate rates for the windstorm portion of the
91 corporation’s rates. This subparagraph does not require or allow
92 the corporation to adopt rates lower than the rates otherwise
93 required or allowed by this paragraph.
94 4. The corporation must make a recommended actuarially
95 sound rate filing for each personal and commercial line of
96 business it writes.
97 5. Notwithstanding the board’s recommended rates and the
98 office’s final order regarding the corporation’s filed rates
99 under subparagraph 1., the corporation shall annually implement
100 a rate increase which, except for sinkhole coverage, does not
101 exceed the following for any single policy issued by the
102 corporation, excluding coverage changes and surcharges:
103 a. Twelve percent for 2023.
104 b. Thirteen percent for 2024.
105 c. Fourteen percent for 2025.
106 d. Fifteen percent for 2026 and all subsequent years.
107 6. The corporation may also implement an increase to
108 reflect the effect on the corporation of the cash buildup factor
109 pursuant to s. 215.555(5)(b).
110 7. The corporation’s implementation of rates as prescribed
111 in subparagraphs 5. and 8. shall cease for any line of business
112 written by the corporation upon the corporation’s implementation
113 of actuarially sound rates. Thereafter, the corporation shall
114 annually make a recommended actuarially sound rate filing that
115 is not competitive with approved rates in the admitted voluntary
116 market for each commercial and personal line of business the
117 corporation writes.
118 8. The following For any new or renewal personal lines
119 policies policy written on or after November 1, 2023, are which
120 does not cover a primary residence, the rate to be applied in
121 calculating premium is not subject to the rate increase
122 limitations in subparagraph 5., but However, the policyholder
123 may not be charged more than 50 percent above, and may not be
124 charged less than, the established rate for the corporation
125 which was in effect 1 year before the date of the application:
126 a. Policies that do not cover a primary residence; or
127 b. Policies where coverage for the insured risk, prior to
128 the date of application with the corporation, was last provided
129 by an insurer determined by the office to be unsound or an
130 insurer placed in receivership under chapter 631.
131 9. As used in this paragraph, the term “primary residence”
132 means the dwelling that is the policyholder’s primary home or is
133 a rental property that is the primary home of the tenant, and
134 which the policyholder or tenant occupies for more than 9 months
135 of each year.
136 (aa) Except as otherwise provided in this paragraph, the
137 corporation shall require the securing and maintaining of flood
138 insurance as a condition of coverage of a personal lines
139 residential risk. The insured or applicant must execute a form
140 approved by the office affirming that flood insurance is not
141 provided by the corporation and that if flood insurance is not
142 secured by the applicant or insured from an insurer other than
143 the corporation and in addition to coverage by the corporation,
144 the risk will not be eligible for coverage by the corporation.
145 The corporation may deny coverage of a personal lines
146 residential risk to an applicant or insured who refuses to
147 secure and maintain flood insurance. The requirement to purchase
148 flood insurance shall be implemented as follows:
149 1. Except as provided in subparagraphs 2. and 3., all
150 personal lines residential policyholders must have flood
151 coverage in place for policies effective on or after:
152 a. January 1, 2024, for a structure that has a dwelling
153 replacement cost of property valued at $600,000 or more.
154 b. January 1, 2025, for a structure that has a dwelling
155 replacement cost of property valued at $500,000 or more.
156 c. January 1, 2026, for a structure that has a dwelling
157 replacement cost of property valued at $400,000 or more.
158 d. January 1, 2027, for all other personal lines
159 residential property insured by the corporation.
160 2. All personal lines residential policyholders whose
161 property insured by the corporation is located within the
162 special flood hazard area defined by the Federal Emergency
163 Management Agency must have flood coverage in place:
164 a. At the time of initial policy issuance for all new
165 personal lines residential policies issued by the corporation on
166 or after April 1, 2023.
167 b. By the time of the policy renewal for all personal lines
168 residential policies renewing on or after July 1, 2023.
169 3. Policyholders whose policies issued by the corporation
170 do not provide coverage for the peril of wind are not required
171 to purchase flood insurance as a condition for maintaining the
172 following their policies issued by with the corporation:
173 a. Policies that do not provide coverage for the peril of
174 wind.
175 b. Policies that provide coverage under a condominium unit
176 owners form.
177
178 The flood insurance required under this paragraph must meet, at
179 a minimum, the coverage available from the National Flood
180 Insurance Program or the requirements of subparagraphs s.
181 627.715(1)(a)1., 2., and 3.
182 (ll)1. In addition to any other method of alternative
183 dispute resolution authorized by state law, the corporation may
184 adopt policy forms that provide for the resolution of disputes
185 regarding its claim determinations, including disputes regarding
186 coverage for, or the scope and value of, a claim, in a
187 proceeding before the Division of Administrative Hearings. Any
188 such policies are not subject to s. 627.70154.
189 2. The corporation may contract with the Division of
190 Administrative Hearings to conduct proceedings to resolve
191 disputes regarding its claim determinations as may be provided
192 for in the applicable policies of insurance.
193 Section 3. (1) For the 2023-2024 fiscal year, the sum of
194 $750,000 in nonrecurring funds is appropriated from the
195 Insurance Regulatory Trust Fund to the Office of Insurance
196 Regulation for a wind-loss mitigation study. The office shall
197 either conduct the study in consultation with the Department of
198 Business and Professional Regulation and the Florida Building
199 Commission or competitively procure the study.
200 (2) The study must:
201 (a) Evaluate windstorm loss relativities for construction
202 features, including, but not limited to, wind uplift prevention
203 and those which enhance roof strength, roof covering
204 performance, roof-to-wall strength, wall-to-floor-to-foundation
205 strength, opening protections, and window, door, and skylight
206 strength;
207 (b) Include single-family and multifamily homes, mobile
208 homes, and manufactured housing; and
209 (c) Include, but need not be limited to, an analysis of
210 developed hurricane loss data for hurricanes since June 1, 2018.
211 (3) By July 1, 2024, the findings of the study must be
212 reported to the Governor, the President of the Senate, the
213 Speaker of the House of Representatives, the Chief Financial
214 Officer, and the Commissioner of Insurance Regulation.
215 (4) The office may use a portion of the funds appropriated
216 to contract separately with building code experts in order to
217 effectuate this act and develop rules to be adopted by the
218 Financial Services Commission.
219 Section 4. Except as otherwise expressly provided in this
220 act, this act shall take effect upon becoming a law.
