Bill Text: FL S1106 | 2024 | Regular Session | Comm Sub
Bill Title: Coverage by Citizens Property Insurance Corporation
Spectrum: Bipartisan Bill
Status: (Failed) 2024-03-08 - Died in Appropriations [S1106 Detail]
Download: Florida-2024-S1106-Comm_Sub.html
Florida Senate - 2024 CS for SB 1106
By the Committee on Banking and Insurance; and Senator Hooper
597-02154-24 20241106c1
1 A bill to be entitled
2 An act relating to coverage by Citizens Property
3 Insurance Corporation; amending s. 627.351, F.S.;
4 revising certain minimum replacement costs as risk
5 amounts ineligible for coverage by Citizens Property
6 Insurance Corporation for personal lines residential
7 structures; providing exceptions to rate increase
8 limitations on single policies issued by the
9 corporation; requiring surcharges for a specified
10 purpose for policies covering certain personal lines
11 residential structures; prohibiting coverage for
12 certain dwelling structures and single condominium
13 units under certain circumstances; providing an
14 effective date.
15
16 Be It Enacted by the Legislature of the State of Florida:
17
18 Section 1. Paragraphs (a) and (n) of subsection (6) of
19 section 627.351, Florida Statutes, are amended to read:
20 627.351 Insurance risk apportionment plans.—
21 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
22 (a) The public purpose of this subsection is to ensure that
23 there is an orderly market for property insurance for residents
24 and businesses of this state.
25 1. The Legislature finds that private insurers are
26 unwilling or unable to provide affordable property insurance
27 coverage in this state to the extent sought and needed. The
28 absence of affordable property insurance threatens the public
29 health, safety, and welfare and likewise threatens the economic
30 health of the state. The state therefore has a compelling public
31 interest and a public purpose to assist in assuring that
32 property in the state is insured and that it is insured at
33 affordable rates so as to facilitate the remediation,
34 reconstruction, and replacement of damaged or destroyed property
35 in order to reduce or avoid the negative effects otherwise
36 resulting to the public health, safety, and welfare, to the
37 economy of the state, and to the revenues of the state and local
38 governments which are needed to provide for the public welfare.
39 It is necessary, therefore, to provide affordable property
40 insurance to applicants who are in good faith entitled to
41 procure insurance through the voluntary market but are unable to
42 do so. The Legislature intends, therefore, that affordable
43 property insurance be provided and that it continue to be
44 provided, as long as necessary, through Citizens Property
45 Insurance Corporation, a government entity that is an integral
46 part of the state, and that is not a private insurance company.
47 To that end, the corporation shall strive to increase the
48 availability of affordable property insurance in this state,
49 while achieving efficiencies and economies, and while providing
50 service to policyholders, applicants, and agents which is no
51 less than the quality generally provided in the voluntary
52 market, for the achievement of the foregoing public purposes.
53 Because it is essential for this government entity to have the
54 maximum financial resources to pay claims following a
55 catastrophic hurricane, it is the intent of the Legislature that
56 the corporation continue to be an integral part of the state and
57 that the income of the corporation be exempt from federal income
58 taxation and that interest on the debt obligations issued by the
59 corporation be exempt from federal income taxation.
60 2. The Residential Property and Casualty Joint Underwriting
61 Association originally created by this statute shall be known as
62 the Citizens Property Insurance Corporation. The corporation
63 shall provide insurance for residential and commercial property,
64 for applicants who are entitled, but, in good faith, are unable
65 to procure insurance through the voluntary market. The
66 corporation shall operate pursuant to a plan of operation
67 approved by order of the Financial Services Commission. The plan
68 is subject to continuous review by the commission. The
69 commission may, by order, withdraw approval of all or part of a
70 plan if the commission determines that conditions have changed
71 since approval was granted and that the purposes of the plan
72 require changes in the plan. For the purposes of this
73 subsection, residential coverage includes both personal lines
74 residential coverage, which consists of the type of coverage
75 provided by homeowner, mobile home owner, dwelling, tenant,
76 condominium unit owner, and similar policies; and commercial
77 lines residential coverage, which consists of the type of
78 coverage provided by condominium association, apartment
79 building, and similar policies.
80 3. With respect to coverage for personal lines residential
81 structures,:
82 a. effective July 1, 2024 January 1, 2014, a structure that
83 has a dwelling replacement cost of $1 million or more, or a
84 single condominium unit that has a combined dwelling and
85 contents replacement cost of $1 million or more, is not eligible
86 for coverage by the corporation. Such dwellings insured by the
87 corporation on December 31, 2013, may continue to be covered by
88 the corporation until the end of the policy term. The office
89 shall approve the method used by the corporation for valuing the
90 dwelling replacement cost for the purposes of this subparagraph.
91 If a policyholder is insured by the corporation before being
92 determined to be ineligible pursuant to this subparagraph and
93 such policyholder files a lawsuit challenging the determination,
94 the policyholder may remain insured by the corporation until the
95 conclusion of the litigation.
96 b. Effective January 1, 2015, a structure that has a
97 dwelling replacement cost of $900,000 or more, or a single
98 condominium unit that has a combined dwelling and contents
99 replacement cost of $900,000 or more, is not eligible for
100 coverage by the corporation. Such dwellings insured by the
101 corporation on December 31, 2014, may continue to be covered by
102 the corporation only until the end of the policy term.
103 c. Effective January 1, 2016, a structure that has a
104 dwelling replacement cost of $800,000 or more, or a single
105 condominium unit that has a combined dwelling and contents
106 replacement cost of $800,000 or more, is not eligible for
107 coverage by the corporation. Such dwellings insured by the
108 corporation on December 31, 2015, may continue to be covered by
109 the corporation until the end of the policy term.
110 d. Effective January 1, 2017, a structure that has a
111 dwelling replacement cost of $700,000 or more, or a single
112 condominium unit that has a combined dwelling and contents
113 replacement cost of $700,000 or more, is not eligible for
114 coverage by the corporation. Such dwellings insured by the
115 corporation on December 31, 2016, may continue to be covered by
116 the corporation until the end of the policy term.
117
118 The requirements of sub-subparagraphs b.-d. do not apply in
119 counties where the office determines there is not a reasonable
120 degree of competition. In such counties a personal lines
121 residential structure that has a dwelling replacement cost of
122 less than $1 million, or a single condominium unit that has a
123 combined dwelling and contents replacement cost of less than $1
124 million, is eligible for coverage by the corporation.
125 4. It is the intent of the Legislature that policyholders,
126 applicants, and agents of the corporation receive service and
127 treatment of the highest possible level but never less than that
128 generally provided in the voluntary market. It is also intended
129 that the corporation be held to service standards no less than
130 those applied to insurers in the voluntary market by the office
131 with respect to responsiveness, timeliness, customer courtesy,
132 and overall dealings with policyholders, applicants, or agents
133 of the corporation.
134 5.a. Effective January 1, 2009, a personal lines
135 residential structure that is located in the “wind-borne debris
136 region,” as defined in s. 1609.2, International Building Code
137 (2006), and that has an insured value on the structure of
138 $750,000 or more is not eligible for coverage by the corporation
139 unless the structure has opening protections as required under
140 the Florida Building Code for a newly constructed residential
141 structure in that area. A residential structure is deemed to
142 comply with this sub-subparagraph if it has shutters or opening
143 protections on all openings and if such opening protections
144 complied with the Florida Building Code at the time they were
145 installed.
146 b. Any major structure, as defined in s. 161.54(6)(a), that
147 is newly constructed, or rebuilt, repaired, restored, or
148 remodeled to increase the total square footage of finished area
149 by more than 25 percent, pursuant to a permit applied for after
150 July 1, 2015, is not eligible for coverage by the corporation if
151 the structure is seaward of the coastal construction control
152 line established pursuant to s. 161.053 or is within the Coastal
153 Barrier Resources System as designated by 16 U.S.C. ss. 3501
154 3510.
155 6. With respect to wind-only coverage for commercial lines
156 residential condominiums, effective July 1, 2014, a condominium
157 shall be deemed ineligible for coverage if 50 percent or more of
158 the units are rented more than eight times in a calendar year
159 for a rental agreement period of less than 30 days.
160 (n)1. Rates for coverage provided by the corporation must
161 be actuarially sound pursuant to s. 627.062 and not competitive
162 with approved rates charged in the admitted voluntary market so
163 that the corporation functions as a residual market mechanism to
164 provide insurance only when insurance cannot be procured in the
165 voluntary market, except as otherwise provided in this
166 paragraph. The office shall provide the corporation such
167 information as would be necessary to determine whether rates are
168 competitive. The corporation shall file its recommended rates
169 with the office at least annually. The corporation shall provide
170 any additional information regarding the rates which the office
171 requires. The office shall consider the recommendations of the
172 board and issue a final order establishing the rates for the
173 corporation within 45 days after the recommended rates are
174 filed. The corporation may not pursue an administrative
175 challenge or judicial review of the final order of the office.
176 2. In addition to the rates otherwise determined pursuant
177 to this paragraph, the corporation shall impose and collect an
178 amount equal to the premium tax provided in s. 624.509 to
179 augment the financial resources of the corporation.
180 3. After the public hurricane loss-projection model under
181 s. 627.06281 has been found to be accurate and reliable by the
182 Florida Commission on Hurricane Loss Projection Methodology, the
183 model shall be considered when establishing the windstorm
184 portion of the corporation’s rates. The corporation may use the
185 public model results in combination with the results of private
186 models to calculate rates for the windstorm portion of the
187 corporation’s rates. This subparagraph does not require or allow
188 the corporation to adopt rates lower than the rates otherwise
189 required or allowed by this paragraph.
190 4. The corporation must make a recommended actuarially
191 sound rate filing for each personal and commercial line of
192 business it writes.
193 5. Notwithstanding the board’s recommended rates and the
194 office’s final order regarding the corporation’s filed rates
195 under subparagraph 1., the corporation shall annually implement
196 a rate increase which, except for sinkhole coverage, does not
197 exceed the following for any single policy issued by the
198 corporation, excluding coverage changes and surcharges:
199 a. Twelve percent for 2023.
200 b. Thirteen percent for 2024.
201 c. Fourteen percent for 2025.
202 d. Fifteen percent for 2026 and all subsequent years.
203
204 Beginning with the implementation of the corporation’s next
205 annual rate change on or after August 1, 2024, this subparagraph
206 does not apply to a personal lines residential structure that
207 has a dwelling replacement cost of $700,000 or more or a single
208 condominium unit that has a combined dwelling and contents
209 replacement cost of $700,000 or more.
210 6. The corporation may also implement an increase to
211 reflect the effect on the corporation of the cash buildup factor
212 pursuant to s. 215.555(5)(b).
213 7. The corporation’s implementation of rates as prescribed
214 in subparagraphs 5. and 9. 8. shall cease for any line of
215 business written by the corporation upon the corporation’s
216 implementation of actuarially sound rates. Thereafter, the
217 corporation shall annually make a recommended actuarially sound
218 rate filing that is not competitive with approved rates in the
219 admitted voluntary market for each commercial and personal line
220 of business the corporation writes.
221 8. Effective upon implementation of the corporation’s next
222 annual rate change on or after August 1, 2024, for the purpose
223 of ensuring that the corporation’s rates are not competitive
224 with approved rates charged in the admitted voluntary market as
225 required by subparagraph 1., a surcharge equal to the lesser of
226 $2,500 or 25 percent of the uncapped premium calculated using
227 the corporation’s approved rates applies to each personal lines
228 residential policy insuring a structure that has a dwelling
229 replacement cost of $700,000 or more and to each policy insuring
230 a single condominium unit that has a combined dwelling and
231 contents replacement cost of $700,000 or more. Notwithstanding
232 this subsection, effective August 1, 2024, a personal lines
233 residential structure that has a dwelling replacement cost of
234 $700,000 or more and a single condominium unit that has a
235 combined dwelling and contents replacement cost of $700,000 or
236 more are not eligible for coverage by the corporation if the
237 risk is offered comparable coverage from an authorized insurer
238 at the insurer’s approved rate under a standard policy including
239 wind coverage.
240 9.8. The following new or renewal personal lines policies
241 written on or after November 1, 2023, are not subject to the
242 rate increase limitations in subparagraph 5., but may not be
243 charged more than 50 percent above, nor less than, the prior
244 year’s established rate for the corporation:
245 a. Policies that do not cover a primary residence;
246 b. New policies under which the coverage for the insured
247 risk, before the date of application with the corporation, was
248 last provided by an insurer determined by the office to be
249 unsound or an insurer placed in receivership under chapter 631;
250 or
251 c. Subsequent renewals of those policies, including the new
252 policies in sub-subparagraph b., under which the coverage for
253 the insured risk, before the date of application with the
254 corporation, was last provided by an insurer determined by the
255 office to be unsound or an insurer placed in receivership under
256 chapter 631.
257 10.9. As used in this paragraph, the term “primary
258 residence” means the dwelling that is the policyholder’s primary
259 home or is a rental property that is the primary home of the
260 tenant, and which the policyholder or tenant occupies for more
261 than 9 months of each year.
262 Section 2. This act shall take effect August 1, 2024.
