Bill Text: FL S1330 | 2011 | Regular Session | Introduced


Bill Title: Residential Property Insurance

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [S1330 Detail]

Download: Florida-2011-S1330-Introduced.html
       Florida Senate - 2011                                    SB 1330
       
       
       
       By Senator Hays
       
       
       
       
       20-00863A-11                                          20111330__
    1                        A bill to be entitled                      
    2         An act relating to residential property insurance;
    3         amending s. 627.062, F.S.; authorizing an insurer to
    4         use a rate for residential property insurance that
    5         differs from its otherwise filed rate after a
    6         specified date under certain circumstances; requiring
    7         such rates to be filed with the Office of Insurance
    8         Regulation; specifying the maximum difference between
    9         rates; limiting the percentage rate increase as to any
   10         individual policyholder; preserving the authority of
   11         the office to disapprove a rate for inadequacy or
   12         discrimination; providing a future revision that
   13         requires the inclusion of a statement in certain rate
   14         filings relating to the insurer’s current or future
   15         ability to cover a specified probable maximum loss,
   16         requires certification by an insurer relating to the
   17         insurer’s ability to actually cover a specified
   18         probable maximum loss, voids certain rates if an
   19         insurer fails to maintain sufficient funds or
   20         coverages to cover a specified probable maximum loss,
   21         and requires refunds and credits to insureds if an
   22         insurer fails to maintain sufficient funds or
   23         coverages to cover a specified probable maximum loss;
   24         amending s. 627.351, F.S.; requiring insurance agents
   25         to obtain a signed acknowledgment from an applicant
   26         for coverage and certain policyholders relating to
   27         surcharges and assessments potentially being imposed
   28         under a Citizens Property Insurance Corporation
   29         policy; requiring Citizens Property Insurance
   30         Corporation to maintain signed acknowledgments for a
   31         specified time; specifying that a signed
   32         acknowledgment creates an evidentiary presumption
   33         relating to an insured’s liability for surcharges and
   34         assessments; creating s. 627.7031, F.S.; specifying
   35         circumstances under which an insurer may offer or
   36         renew residential property insurance policies subject
   37         to the amendments to s. 627.062, F.S., contained in
   38         this act; prohibiting such insurers from procuring
   39         coverage under the temporary increase in coverage
   40         limits option; requiring specific notices to applicant
   41         or insured; requiring Citizens Property Insurance
   42         Corporation premium estimates and signed
   43         acknowledgments; specifying ineligible types of
   44         policies; providing a future revision requiring an
   45         insurer to have certain resources to cover a specified
   46         probable maximum loss in order to offer or renew
   47         policies at certain rates; providing effective dates.
   48  
   49  Be It Enacted by the Legislature of the State of Florida:
   50  
   51         Section 1. Paragraph (l) is added to subsection (2) of
   52  section 627.062, Florida Statutes, to read:
   53         627.062 Rate standards.—
   54         (2) As to all such classes of insurance:
   55         (l)1. On or after January 1, 2012, an insurer complying
   56  with the requirements of s. 627.7031 may use a rate for
   57  residential property insurance when providing residential
   58  coverage, as described in s. 627.4025, different from the
   59  otherwise applicable filed rate as provided in this paragraph.
   60         2. Policies subject to this paragraph may not be counted in
   61  the calculation under s. 627.171(2).
   62         3. Such rates shall be filed with the office as a separate
   63  filing. The initial rates used by an insurer under this
   64  paragraph may not provide for rates that represent more than a
   65  15-percent statewide average rate increase over the most
   66  recently filed and approved rate. A rate filing under this
   67  paragraph submitted in any year after the implementation of such
   68  initial rates may not provide for rates that represent more than
   69  a 15-percent statewide average rate increase in a year over the
   70  rates in effect under this paragraph at the time of the filing.
   71  A rate filing under this paragraph may not provide for a
   72  percentage rate increase as to any individual policyholder that
   73  exceeds 2 times the statewide average rate increase provided for
   74  in the filing.
   75         4. This paragraph does not affect the authority of the
   76  office to disapprove a rate as inadequate or to disapprove a
   77  rate filing for charging any insured or applicant a higher
   78  premium solely because of the insured’s or applicant’s race,
   79  color, creed, marital status, sex, or national origin. Upon
   80  finding that an insurer has used any such factor in charging an
   81  insured or applicant a higher premium, the office may direct the
   82  insurer to make a new filing for a new rate that does not use
   83  such factor.
   84  
   85  The provisions of this subsection shall not apply to workers’
   86  compensation and employer’s liability insurance and to motor
   87  vehicle insurance.
   88         Section 2. Effective January 1, 2015, paragraph (l) of
   89  subsection (2) of section 627.062, Florida Statutes, as created
   90  by this act, is amended to read:
   91         627.062 Rate standards.—
   92         (2) As to all such classes of insurance:
   93         (l)1. On or after January 1, 2012, an insurer complying
   94  with the requirements of s. 627.7031 may use a rate for
   95  residential property insurance when providing residential
   96  coverage, as described in s. 627.4025, different from the
   97  otherwise applicable filed rate as provided in this paragraph.
   98         2. Policies subject to this paragraph may not be counted in
   99  the calculation under s. 627.171(2).
  100         3. Such rates shall be filed with the office as a separate
  101  filing. The initial rates used by an insurer under this
  102  paragraph may not provide for rates that represent more than a
  103  15-percent statewide average rate increase over the most
  104  recently filed and approved rate. A rate filing under this
  105  paragraph submitted in any year after the implementation of such
  106  initial rates may not provide for rates that represent more than
  107  a 15-percent statewide average rate increase in a year over the
  108  rates in effect under this paragraph at the time of the filing.
  109  A rate filing under this paragraph may not provide for a
  110  percentage rate increase as to any individual policyholder that
  111  exceeds 2 times the statewide average rate increase provided for
  112  in the filing.
  113         4.a. A filing under this paragraph must include a statement
  114  that the insurer has in place, or intends to have in place as of
  115  the effective date of the rates, a combination of surplus,
  116  Florida Hurricane Catastrophe Fund coverage, reinsurance, and
  117  reinsurance equivalents sufficient to cover the insurer’s 100
  118  year probable maximum seasonal hurricane loss as described in s.
  119  627.7031.
  120         b. No later than the last day of July of a year in which
  121  the rates are in effect, the insurer must provide its
  122  certification to the office demonstrating that it in fact has in
  123  place a combination of surplus, Florida Hurricane Catastrophe
  124  Fund Coverage, reinsurance, and reinsurance equivalents
  125  sufficient to cover the insurer’s 100-year probable maximum
  126  seasonal hurricane loss as described in s. 627.7031.
  127         c. If the insurer fails to maintain the required
  128  combination of surplus, Florida Hurricane Catastrophe Fund
  129  Coverage, reinsurance, and reinsurance equivalents, the subject
  130  rate filing under this paragraph is void and shall be replaced
  131  by the insurer’s rates in effect under this paragraph at the
  132  time of the filing, retroactive to the effective date of the
  133  subject rate filing under this paragraph. In such circumstances,
  134  the office shall order the insurer to return to each insured the
  135  difference between the premium calculated according to the rate
  136  filing under this paragraph and the premium under the rates in
  137  effect under this paragraph at the time of the subject filing,
  138  which may, in the discretion of the insurer, be in the form of
  139  either a refund or a credit. Nothing in this sub-subparagraph
  140  precludes the insurer from making another filing under this
  141  paragraph, but such filing may not take effect before June 1 of
  142  the following year.
  143         5.4. This paragraph does not affect the authority of the
  144  office to disapprove a rate as inadequate or to disapprove a
  145  rate filing for charging any insured or applicant a higher
  146  premium solely because of the insured’s or applicant’s race,
  147  color, creed, marital status, sex, or national origin. Upon
  148  finding that an insurer has used any such factor in charging an
  149  insured or applicant a higher premium, the office may direct the
  150  insurer to make a new filing for a new rate that does not use
  151  such factor.
  152  
  153  The provisions of this subsection shall not apply to workers’
  154  compensation and employer’s liability insurance and to motor
  155  vehicle insurance.
  156         Section 3. Paragraph (c) of subsection (6) of section
  157  627.351, Florida Statutes, is amended to read:
  158         627.351 Insurance risk apportionment plans.—
  159         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
  160         (c) The plan of operation of the corporation:
  161         1. Must provide for adoption of residential property and
  162  casualty insurance policy forms and commercial residential and
  163  nonresidential property insurance forms, which forms must be
  164  approved by the office prior to use. The corporation shall adopt
  165  the following policy forms:
  166         a. Standard personal lines policy forms that are
  167  comprehensive multiperil policies providing full coverage of a
  168  residential property equivalent to the coverage provided in the
  169  private insurance market under an HO-3, HO-4, or HO-6 policy.
  170         b. Basic personal lines policy forms that are policies
  171  similar to an HO-8 policy or a dwelling fire policy that provide
  172  coverage meeting the requirements of the secondary mortgage
  173  market, but which coverage is more limited than the coverage
  174  under a standard policy.
  175         c. Commercial lines residential and nonresidential policy
  176  forms that are generally similar to the basic perils of full
  177  coverage obtainable for commercial residential structures and
  178  commercial nonresidential structures in the admitted voluntary
  179  market.
  180         d. Personal lines and commercial lines residential property
  181  insurance forms that cover the peril of wind only. The forms are
  182  applicable only to residential properties located in areas
  183  eligible for coverage under the high-risk account referred to in
  184  sub-subparagraph (b)2.a.
  185         e. Commercial lines nonresidential property insurance forms
  186  that cover the peril of wind only. The forms are applicable only
  187  to nonresidential properties located in areas eligible for
  188  coverage under the high-risk account referred to in sub
  189  subparagraph (b)2.a.
  190         f. The corporation may adopt variations of the policy forms
  191  listed in sub-subparagraphs a.-e. that contain more restrictive
  192  coverage.
  193         2.a. Must provide that the corporation adopt a program in
  194  which the corporation and authorized insurers enter into quota
  195  share primary insurance agreements for hurricane coverage, as
  196  defined in s. 627.4025(2)(a), for eligible risks, and adopt
  197  property insurance forms for eligible risks which cover the
  198  peril of wind only. As used in this subsection, the term:
  199         (I) “Quota share primary insurance” means an arrangement in
  200  which the primary hurricane coverage of an eligible risk is
  201  provided in specified percentages by the corporation and an
  202  authorized insurer. The corporation and authorized insurer are
  203  each solely responsible for a specified percentage of hurricane
  204  coverage of an eligible risk as set forth in a quota share
  205  primary insurance agreement between the corporation and an
  206  authorized insurer and the insurance contract. The
  207  responsibility of the corporation or authorized insurer to pay
  208  its specified percentage of hurricane losses of an eligible
  209  risk, as set forth in the quota share primary insurance
  210  agreement, may not be altered by the inability of the other
  211  party to the agreement to pay its specified percentage of
  212  hurricane losses. Eligible risks that are provided hurricane
  213  coverage through a quota share primary insurance arrangement
  214  must be provided policy forms that set forth the obligations of
  215  the corporation and authorized insurer under the arrangement,
  216  clearly specify the percentages of quota share primary insurance
  217  provided by the corporation and authorized insurer, and
  218  conspicuously and clearly state that neither the authorized
  219  insurer nor the corporation may be held responsible beyond its
  220  specified percentage of coverage of hurricane losses.
  221         (II) “Eligible risks” means personal lines residential and
  222  commercial lines residential risks that meet the underwriting
  223  criteria of the corporation and are located in areas that were
  224  eligible for coverage by the Florida Windstorm Underwriting
  225  Association on January 1, 2002.
  226         b. The corporation may enter into quota share primary
  227  insurance agreements with authorized insurers at corporation
  228  coverage levels of 90 percent and 50 percent.
  229         c. If the corporation determines that additional coverage
  230  levels are necessary to maximize participation in quota share
  231  primary insurance agreements by authorized insurers, the
  232  corporation may establish additional coverage levels. However,
  233  the corporation’s quota share primary insurance coverage level
  234  may not exceed 90 percent.
  235         d. Any quota share primary insurance agreement entered into
  236  between an authorized insurer and the corporation must provide
  237  for a uniform specified percentage of coverage of hurricane
  238  losses, by county or territory as set forth by the corporation
  239  board, for all eligible risks of the authorized insurer covered
  240  under the quota share primary insurance agreement.
  241         e. Any quota share primary insurance agreement entered into
  242  between an authorized insurer and the corporation is subject to
  243  review and approval by the office. However, such agreement shall
  244  be authorized only as to insurance contracts entered into
  245  between an authorized insurer and an insured who is already
  246  insured by the corporation for wind coverage.
  247         f. For all eligible risks covered under quota share primary
  248  insurance agreements, the exposure and coverage levels for both
  249  the corporation and authorized insurers shall be reported by the
  250  corporation to the Florida Hurricane Catastrophe Fund. For all
  251  policies of eligible risks covered under quota share primary
  252  insurance agreements, the corporation and the authorized insurer
  253  shall maintain complete and accurate records for the purpose of
  254  exposure and loss reimbursement audits as required by Florida
  255  Hurricane Catastrophe Fund rules. The corporation and the
  256  authorized insurer shall each maintain duplicate copies of
  257  policy declaration pages and supporting claims documents.
  258         g. The corporation board shall establish in its plan of
  259  operation standards for quota share agreements which ensure that
  260  there is no discriminatory application among insurers as to the
  261  terms of quota share agreements, pricing of quota share
  262  agreements, incentive provisions if any, and consideration paid
  263  for servicing policies or adjusting claims.
  264         h. The quota share primary insurance agreement between the
  265  corporation and an authorized insurer must set forth the
  266  specific terms under which coverage is provided, including, but
  267  not limited to, the sale and servicing of policies issued under
  268  the agreement by the insurance agent of the authorized insurer
  269  producing the business, the reporting of information concerning
  270  eligible risks, the payment of premium to the corporation, and
  271  arrangements for the adjustment and payment of hurricane claims
  272  incurred on eligible risks by the claims adjuster and personnel
  273  of the authorized insurer. Entering into a quota sharing
  274  insurance agreement between the corporation and an authorized
  275  insurer shall be voluntary and at the discretion of the
  276  authorized insurer.
  277         3. May provide that the corporation may employ or otherwise
  278  contract with individuals or other entities to provide
  279  administrative or professional services that may be appropriate
  280  to effectuate the plan. The corporation shall have the power to
  281  borrow funds, by issuing bonds or by incurring other
  282  indebtedness, and shall have other powers reasonably necessary
  283  to effectuate the requirements of this subsection, including,
  284  without limitation, the power to issue bonds and incur other
  285  indebtedness in order to refinance outstanding bonds or other
  286  indebtedness. The corporation may, but is not required to, seek
  287  judicial validation of its bonds or other indebtedness under
  288  chapter 75. The corporation may issue bonds or incur other
  289  indebtedness, or have bonds issued on its behalf by a unit of
  290  local government pursuant to subparagraph (q)2., in the absence
  291  of a hurricane or other weather-related event, upon a
  292  determination by the corporation, subject to approval by the
  293  office, that such action would enable it to efficiently meet the
  294  financial obligations of the corporation and that such
  295  financings are reasonably necessary to effectuate the
  296  requirements of this subsection. The corporation is authorized
  297  to take all actions needed to facilitate tax-free status for any
  298  such bonds or indebtedness, including formation of trusts or
  299  other affiliated entities. The corporation shall have the
  300  authority to pledge assessments, projected recoveries from the
  301  Florida Hurricane Catastrophe Fund, other reinsurance
  302  recoverables, market equalization and other surcharges, and
  303  other funds available to the corporation as security for bonds
  304  or other indebtedness. In recognition of s. 10, Art. I of the
  305  State Constitution, prohibiting the impairment of obligations of
  306  contracts, it is the intent of the Legislature that no action be
  307  taken whose purpose is to impair any bond indenture or financing
  308  agreement or any revenue source committed by contract to such
  309  bond or other indebtedness.
  310         4.a. Must require that the corporation operate subject to
  311  the supervision and approval of a board of governors consisting
  312  of eight individuals who are residents of this state, from
  313  different geographical areas of this state. The Governor, the
  314  Chief Financial Officer, the President of the Senate, and the
  315  Speaker of the House of Representatives shall each appoint two
  316  members of the board. At least one of the two members appointed
  317  by each appointing officer must have demonstrated expertise in
  318  insurance. The Chief Financial Officer shall designate one of
  319  the appointees as chair. All board members serve at the pleasure
  320  of the appointing officer. All members of the board of governors
  321  are subject to removal at will by the officers who appointed
  322  them. All board members, including the chair, must be appointed
  323  to serve for 3-year terms beginning annually on a date
  324  designated by the plan. However, for the first term beginning on
  325  or after July 1, 2009, each appointing officer shall appoint one
  326  member of the board for a 2-year term and one member for a 3
  327  year term. Any board vacancy shall be filled for the unexpired
  328  term by the appointing officer. The Chief Financial Officer
  329  shall appoint a technical advisory group to provide information
  330  and advice to the board of governors in connection with the
  331  board’s duties under this subsection. The executive director and
  332  senior managers of the corporation shall be engaged by the board
  333  and serve at the pleasure of the board. Any executive director
  334  appointed on or after July 1, 2006, is subject to confirmation
  335  by the Senate. The executive director is responsible for
  336  employing other staff as the corporation may require, subject to
  337  review and concurrence by the board.
  338         b. The board shall create a Market Accountability Advisory
  339  Committee to assist the corporation in developing awareness of
  340  its rates and its customer and agent service levels in
  341  relationship to the voluntary market insurers writing similar
  342  coverage. The members of the advisory committee shall consist of
  343  the following 11 persons, one of whom must be elected chair by
  344  the members of the committee: four representatives, one
  345  appointed by the Florida Association of Insurance Agents, one by
  346  the Florida Association of Insurance and Financial Advisors, one
  347  by the Professional Insurance Agents of Florida, and one by the
  348  Latin American Association of Insurance Agencies; three
  349  representatives appointed by the insurers with the three highest
  350  voluntary market share of residential property insurance
  351  business in the state; one representative from the Office of
  352  Insurance Regulation; one consumer appointed by the board who is
  353  insured by the corporation at the time of appointment to the
  354  committee; one representative appointed by the Florida
  355  Association of Realtors; and one representative appointed by the
  356  Florida Bankers Association. All members must serve for 3-year
  357  terms and may serve for consecutive terms. The committee shall
  358  report to the corporation at each board meeting on insurance
  359  market issues which may include rates and rate competition with
  360  the voluntary market; service, including policy issuance, claims
  361  processing, and general responsiveness to policyholders,
  362  applicants, and agents; and matters relating to depopulation.
  363         5. Must provide a procedure for determining the eligibility
  364  of a risk for coverage, as follows:
  365         a. Subject to the provisions of s. 627.3517, with respect
  366  to personal lines residential risks, if the risk is offered
  367  coverage from an authorized insurer at the insurer’s approved
  368  rate under either a standard policy including wind coverage or,
  369  if consistent with the insurer’s underwriting rules as filed
  370  with the office, a basic policy including wind coverage, for a
  371  new application to the corporation for coverage, the risk is not
  372  eligible for any policy issued by the corporation unless the
  373  premium for coverage from the authorized insurer is more than 15
  374  percent greater than the premium for comparable coverage from
  375  the corporation. If the risk is not able to obtain any such
  376  offer, the risk is eligible for either a standard policy
  377  including wind coverage or a basic policy including wind
  378  coverage issued by the corporation; however, if the risk could
  379  not be insured under a standard policy including wind coverage
  380  regardless of market conditions, the risk shall be eligible for
  381  a basic policy including wind coverage unless rejected under
  382  subparagraph 8. However, with regard to a policyholder of the
  383  corporation or a policyholder removed from the corporation
  384  through an assumption agreement until the end of the assumption
  385  period, the policyholder remains eligible for coverage from the
  386  corporation regardless of any offer of coverage from an
  387  authorized insurer or surplus lines insurer. The corporation
  388  shall determine the type of policy to be provided on the basis
  389  of objective standards specified in the underwriting manual and
  390  based on generally accepted underwriting practices.
  391         (I) If the risk accepts an offer of coverage through the
  392  market assistance plan or an offer of coverage through a
  393  mechanism established by the corporation before a policy is
  394  issued to the risk by the corporation or during the first 30
  395  days of coverage by the corporation, and the producing agent who
  396  submitted the application to the plan or to the corporation is
  397  not currently appointed by the insurer, the insurer shall:
  398         (A) Pay to the producing agent of record of the policy, for
  399  the first year, an amount that is the greater of the insurer’s
  400  usual and customary commission for the type of policy written or
  401  a fee equal to the usual and customary commission of the
  402  corporation; or
  403         (B) Offer to allow the producing agent of record of the
  404  policy to continue servicing the policy for a period of not less
  405  than 1 year and offer to pay the agent the greater of the
  406  insurer’s or the corporation’s usual and customary commission
  407  for the type of policy written.
  408  
  409  If the producing agent is unwilling or unable to accept
  410  appointment, the new insurer shall pay the agent in accordance
  411  with sub-sub-sub-subparagraph (A).
  412         (II) When the corporation enters into a contractual
  413  agreement for a take-out plan, the producing agent of record of
  414  the corporation policy is entitled to retain any unearned
  415  commission on the policy, and the insurer shall:
  416         (A) Pay to the producing agent of record of the corporation
  417  policy, for the first year, an amount that is the greater of the
  418  insurer’s usual and customary commission for the type of policy
  419  written or a fee equal to the usual and customary commission of
  420  the corporation; or
  421         (B) Offer to allow the producing agent of record of the
  422  corporation policy to continue servicing the policy for a period
  423  of not less than 1 year and offer to pay the agent the greater
  424  of the insurer’s or the corporation’s usual and customary
  425  commission for the type of policy written.
  426  
  427  If the producing agent is unwilling or unable to accept
  428  appointment, the new insurer shall pay the agent in accordance
  429  with sub-sub-sub-subparagraph (A).
  430         b. With respect to commercial lines residential risks, for
  431  a new application to the corporation for coverage, if the risk
  432  is offered coverage under a policy including wind coverage from
  433  an authorized insurer at its approved rate, the risk is not
  434  eligible for any policy issued by the corporation unless the
  435  premium for coverage from the authorized insurer is more than 15
  436  percent greater than the premium for comparable coverage from
  437  the corporation. If the risk is not able to obtain any such
  438  offer, the risk is eligible for a policy including wind coverage
  439  issued by the corporation. However, with regard to a
  440  policyholder of the corporation or a policyholder removed from
  441  the corporation through an assumption agreement until the end of
  442  the assumption period, the policyholder remains eligible for
  443  coverage from the corporation regardless of any offer of
  444  coverage from an authorized insurer or surplus lines insurer.
  445         (I) If the risk accepts an offer of coverage through the
  446  market assistance plan or an offer of coverage through a
  447  mechanism established by the corporation before a policy is
  448  issued to the risk by the corporation or during the first 30
  449  days of coverage by the corporation, and the producing agent who
  450  submitted the application to the plan or the corporation is not
  451  currently appointed by the insurer, the insurer shall:
  452         (A) Pay to the producing agent of record of the policy, for
  453  the first year, an amount that is the greater of the insurer’s
  454  usual and customary commission for the type of policy written or
  455  a fee equal to the usual and customary commission of the
  456  corporation; or
  457         (B) Offer to allow the producing agent of record of the
  458  policy to continue servicing the policy for a period of not less
  459  than 1 year and offer to pay the agent the greater of the
  460  insurer’s or the corporation’s usual and customary commission
  461  for the type of policy written.
  462  
  463  If the producing agent is unwilling or unable to accept
  464  appointment, the new insurer shall pay the agent in accordance
  465  with sub-sub-sub-subparagraph (A).
  466         (II) When the corporation enters into a contractual
  467  agreement for a take-out plan, the producing agent of record of
  468  the corporation policy is entitled to retain any unearned
  469  commission on the policy, and the insurer shall:
  470         (A) Pay to the producing agent of record of the corporation
  471  policy, for the first year, an amount that is the greater of the
  472  insurer’s usual and customary commission for the type of policy
  473  written or a fee equal to the usual and customary commission of
  474  the corporation; or
  475         (B) Offer to allow the producing agent of record of the
  476  corporation policy to continue servicing the policy for a period
  477  of not less than 1 year and offer to pay the agent the greater
  478  of the insurer’s or the corporation’s usual and customary
  479  commission for the type of policy written.
  480  
  481  If the producing agent is unwilling or unable to accept
  482  appointment, the new insurer shall pay the agent in accordance
  483  with sub-sub-sub-subparagraph (A).
  484         c. For purposes of determining comparable coverage under
  485  sub-subparagraphs a. and b., the comparison shall be based on
  486  those forms and coverages that are reasonably comparable. The
  487  corporation may rely on a determination of comparable coverage
  488  and premium made by the producing agent who submits the
  489  application to the corporation, made in the agent’s capacity as
  490  the corporation’s agent. A comparison may be made solely of the
  491  premium with respect to the main building or structure only on
  492  the following basis: the same coverage A or other building
  493  limits; the same percentage hurricane deductible that applies on
  494  an annual basis or that applies to each hurricane for commercial
  495  residential property; the same percentage of ordinance and law
  496  coverage, if the same limit is offered by both the corporation
  497  and the authorized insurer; the same mitigation credits, to the
  498  extent the same types of credits are offered both by the
  499  corporation and the authorized insurer; the same method for loss
  500  payment, such as replacement cost or actual cash value, if the
  501  same method is offered both by the corporation and the
  502  authorized insurer in accordance with underwriting rules; and
  503  any other form or coverage that is reasonably comparable as
  504  determined by the board. If an application is submitted to the
  505  corporation for wind-only coverage in the high-risk account, the
  506  premium for the corporation’s wind-only policy plus the premium
  507  for the ex-wind policy that is offered by an authorized insurer
  508  to the applicant shall be compared to the premium for multiperil
  509  coverage offered by an authorized insurer, subject to the
  510  standards for comparison specified in this subparagraph. If the
  511  corporation or the applicant requests from the authorized
  512  insurer a breakdown of the premium of the offer by types of
  513  coverage so that a comparison may be made by the corporation or
  514  its agent and the authorized insurer refuses or is unable to
  515  provide such information, the corporation may treat the offer as
  516  not being an offer of coverage from an authorized insurer at the
  517  insurer’s approved rate.
  518         6. Must include rules for classifications of risks and
  519  rates therefor.
  520         7. Must provide that if premium and investment income for
  521  an account attributable to a particular calendar year are in
  522  excess of projected losses and expenses for the account
  523  attributable to that year, such excess shall be held in surplus
  524  in the account. Such surplus shall be available to defray
  525  deficits in that account as to future years and shall be used
  526  for that purpose prior to assessing assessable insurers and
  527  assessable insureds as to any calendar year.
  528         8. Must provide objective criteria and procedures to be
  529  uniformly applied for all applicants in determining whether an
  530  individual risk is so hazardous as to be uninsurable. In making
  531  this determination and in establishing the criteria and
  532  procedures, the following shall be considered:
  533         a. Whether the likelihood of a loss for the individual risk
  534  is substantially higher than for other risks of the same class;
  535  and
  536         b. Whether the uncertainty associated with the individual
  537  risk is such that an appropriate premium cannot be determined.
  538  
  539  The acceptance or rejection of a risk by the corporation shall
  540  be construed as the private placement of insurance, and the
  541  provisions of chapter 120 shall not apply.
  542         9. Must provide that the corporation shall make its best
  543  efforts to procure catastrophe reinsurance at reasonable rates,
  544  to cover its projected 100-year probable maximum loss as
  545  determined by the board of governors.
  546         10. The policies issued by the corporation must provide
  547  that, if the corporation or the market assistance plan obtains
  548  an offer from an authorized insurer to cover the risk at its
  549  approved rates, the risk is no longer eligible for renewal
  550  through the corporation, except as otherwise provided in this
  551  subsection.
  552         11. Corporation policies and applications must include a
  553  notice that the corporation policy could, under this section, be
  554  replaced with a policy issued by an authorized insurer that does
  555  not provide coverage identical to the coverage provided by the
  556  corporation. The notice shall also specify that acceptance of
  557  corporation coverage creates a conclusive presumption that the
  558  applicant or policyholder is aware of this potential.
  559         12. May establish, subject to approval by the office,
  560  different eligibility requirements and operational procedures
  561  for any line or type of coverage for any specified county or
  562  area if the board determines that such changes to the
  563  eligibility requirements and operational procedures are
  564  justified due to the voluntary market being sufficiently stable
  565  and competitive in such area or for such line or type of
  566  coverage and that consumers who, in good faith, are unable to
  567  obtain insurance through the voluntary market through ordinary
  568  methods would continue to have access to coverage from the
  569  corporation. When coverage is sought in connection with a real
  570  property transfer, such requirements and procedures shall not
  571  provide for an effective date of coverage later than the date of
  572  the closing of the transfer as established by the transferor,
  573  the transferee, and, if applicable, the lender.
  574         13. Must provide that, with respect to the high-risk
  575  account, any assessable insurer with a surplus as to
  576  policyholders of $25 million or less writing 25 percent or more
  577  of its total countrywide property insurance premiums in this
  578  state may petition the office, within the first 90 days of each
  579  calendar year, to qualify as a limited apportionment company. A
  580  regular assessment levied by the corporation on a limited
  581  apportionment company for a deficit incurred by the corporation
  582  for the high-risk account in 2006 or thereafter may be paid to
  583  the corporation on a monthly basis as the assessments are
  584  collected by the limited apportionment company from its insureds
  585  pursuant to s. 627.3512, but the regular assessment must be paid
  586  in full within 12 months after being levied by the corporation.
  587  A limited apportionment company shall collect from its
  588  policyholders any emergency assessment imposed under sub
  589  subparagraph (b)3.d. The plan shall provide that, if the office
  590  determines that any regular assessment will result in an
  591  impairment of the surplus of a limited apportionment company,
  592  the office may direct that all or part of such assessment be
  593  deferred as provided in subparagraph (q)4. However, there shall
  594  be no limitation or deferment of an emergency assessment to be
  595  collected from policyholders under sub-subparagraph (b)3.d.
  596         14. Must provide that the corporation appoint as its
  597  licensed agents only those agents who also hold an appointment
  598  as defined in s. 626.015(3) with an insurer who at the time of
  599  the agent’s initial appointment by the corporation is authorized
  600  to write and is actually writing personal lines residential
  601  property coverage, commercial residential property coverage, or
  602  commercial nonresidential property coverage within the state.
  603         15. Must provide, by July 1, 2007, a premium payment plan
  604  option to its policyholders which allows at a minimum for
  605  quarterly and semiannual payment of premiums. A monthly payment
  606  plan may, but is not required to, be offered.
  607         16. Must limit coverage on mobile homes or manufactured
  608  homes built prior to 1994 to actual cash value of the dwelling
  609  rather than replacement costs of the dwelling.
  610         17. May provide such limits of coverage as the board
  611  determines, consistent with the requirements of this subsection.
  612         18. May require commercial property to meet specified
  613  hurricane mitigation construction features as a condition of
  614  eligibility for coverage.
  615         19.a. Must require an agent to obtain from any applicant
  616  for coverage the following acknowledgment, signed by the
  617  applicant, and must require the agent of record to obtain the
  618  following acknowledgment from each policyholder of the
  619  corporation, signed by the policyholder, before the policy’s
  620  first renewal after the effective date of this subparagraph:
  621  
  622        ACKNOWLEDGMENT OF POTENTIAL SURCHARGE AND ASSESSMENT       
  623                             LIABILITY:                            
  624         1. I UNDERSTAND, AS A CITIZENS PROPERTY INSURANCE
  625         CORPORATION POLICYHOLDER, THAT IF THE CORPORATION
  626         SUSTAINS A DEFICIT AS A RESULT OF HURRICANE LOSSES OR
  627         FOR ANY OTHER REASON, MY POLICY COULD BE SUBJECT TO
  628         CITIZENS POLICYHOLDER SURCHARGES, WHICH WOULD BE DUE
  629         AND PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION
  630         OF THE POLICY.
  631         2. I UNDERSTAND THAT THE SURCHARGES COULD BE AS
  632         HIGH AS 15 PERCENT OF MY PREMIUM FOR DEFICITS IN EACH
  633         OF THREE CITIZENS ACCOUNTS, OR A DIFFERENT AMOUNT AS
  634         ESTABLISHED BY THE FLORIDA LEGISLATURE.
  635         3. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
  636         EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
  637         POLICYHOLDERS OF OTHER INSURANCE COMPANIES.
  638  
  639         b. The corporation must permanently maintain a signed copy
  640  of the signed acknowledgment required by this subparagraph, and
  641  the agent may also retain a copy.
  642         c. The signed acknowledgment form creates a conclusive
  643  presumption that the policyholder understood and accepted his or
  644  her potential surcharge and assessment liability as a Citizens
  645  Property Insurance Corporation policyholder.
  646         Section 4. Section 627.7031, Florida Statutes, is created
  647  to read:
  648         627.7031 Residential property insurance option.—
  649         (1) An insurer holding a certificate of authority to write
  650  property insurance in this state may offer or renew residential
  651  property insurance policies at rates established in accordance
  652  with s. 627.062(2)(l), subject to all of the requirements and
  653  prohibitions of this section.
  654         (2) An insurer offering or renewing policies at rates
  655  established in accordance with s. 627.062(2)(l) may not purchase
  656  coverage from the Florida Hurricane Catastrophe Fund under the
  657  temporary increase in coverage limit option under s.
  658  215.555(17).
  659         (3)(a) Before the effective date of a newly issued policy
  660  at rates established in accordance with s. 627.062(2)(l) or
  661  before the effective date of a renewal policy at rates
  662  established in accordance with s. 627.062(2)(l), the applicant
  663  or insured must be given the following notice, printed in at
  664  least 12-point boldfaced type:
  665  
  666         THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
  667         REGULATION BY THE FLORIDA OFFICE OF INSURANCE
  668         REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY
  669         THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT TO
  670         FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE
  671         FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
  672         PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR
  673         POLICY OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE
  674         A CITIZENS QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF
  675         INSURANCE REGULATION’S WEBSITE AT
  676         WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION ABOUT
  677         CHOICES AVAILABLE TO YOU.
  678  
  679         (b) For policies renewed at a rate established in
  680  accordance with s. 627.062(2)(l), the notice described in
  681  paragraph (a) must be furnished in writing at the same time as
  682  the renewal notice on a document separate from the renewal
  683  notice, but may be contained within the same mailing as the
  684  renewal notice.
  685         (4) Before the effective date of a newly issued policy at
  686  rates established in accordance with s. 627.062(2)(l) or before
  687  the effective date of the first renewal at rates established in
  688  accordance with s. 627.062(2)(l) of a policy originally issued
  689  before the effective date of this section, the applicant or
  690  insured must:
  691         (a) Be provided or offered, for comparison purposes, an
  692  estimate of the premium for a policy from Citizens Property
  693  Insurance Corporation reflecting substantially similar
  694  coverages, limits, and deductibles to the extent available.
  695         (b) Provide the insurer or agent with a signed copy of the
  696  following acknowledgment form, which must be retained by the
  697  insurer or agent for at least 3 years. If the acknowledgment
  698  form is signed by the insured or if the insured remits payment
  699  in the amount of the rate established in accordance with s.
  700  627.062(2)(l) after being mailed, otherwise provided, or offered
  701  the comparison specified in paragraph (a), an insurer renewing a
  702  policy at such rate shall be deemed to comply with this section,
  703  and it is presumed that the insured has been informed and
  704  understands the information contained in the comparison and
  705  acknowledgment forms:
  706  
  707                           ACKNOWLEDGMENT:                         
  708         1. I HAVE REVIEWED THE REQUIRED DISCLOSURES AND
  709         THE REQUIRED PREMIUM COMPARISON.
  710         2. I UNDERSTAND THAT THE RATE FOR THIS
  711         RESIDENTIAL PROPERTY INSURANCE POLICY IS NOT SUBJECT
  712         TO FULL RATE REGULATION BY THE FLORIDA OFFICE OF
  713         INSURANCE REGULATION AND MAY BE HIGHER THAN RATES
  714         APPROVED BY THAT OFFICE.
  715         3. I UNDERSTAND THAT A RESIDENTIAL PROPERTY
  716         INSURANCE POLICY SUBJECT TO FULL RATE REGULATION
  717         REQUIREMENTS MAY BE AVAILABLE FROM CITIZENS PROPERTY
  718         INSURANCE CORPORATION.
  719         4. I UNDERSTAND THAT THE FLORIDA OFFICE OF
  720         INSURANCE REGULATION’S WEBSITE
  721         WWW.SHOPANDCOMPARERATES.COM CONTAINS RESIDENTIAL
  722         PROPERTY INSURANCE RATE COMPARISON INFORMATION.
  723  
  724         (5) The following types of residential property insurance
  725  policies are not eligible for rates established in accordance
  726  with s. 627.062(2)(l) and are not subject to the other
  727  provisions of this section:
  728         (a) Residential property insurance policies that exclude
  729  coverage for the perils of windstorm or hurricane.
  730         (b) Residential property insurance policies subject to a
  731  consent decree, agreement, understanding, or other arrangement
  732  between the insurer and the office relating to rates or premiums
  733  for policies removed from Citizens Property Insurance Corp.
  734         Section 5. Effective January 1, 2015, section 627.7031,
  735  Florida Statutes, as created by this act, is amended to read:
  736         627.7031 Residential property insurance option.—
  737         (1) An insurer holding a certificate of authority to write
  738  property insurance in this state may offer or renew residential
  739  property insurance policies at rates established in accordance
  740  with s. 627.062(2)(l), subject to all of the requirements and
  741  prohibitions of this section.
  742         (2) An insurer may offer or renew policies at rates
  743  established in accordance with s. 627.062(2)(l) only if the
  744  insurer has in place a combination of surplus, Florida Hurricane
  745  Catastrophe Fund coverage, reinsurance, and reinsurance
  746  equivalents sufficient to cover the insurer’s 100-year probable
  747  maximum hurricane loss for residential property as determined on
  748  a seasonal, rather than a single-event, basis. The insurer shall
  749  determine its probable maximum loss using one or more models
  750  that meet the standards of the Florida Commission on Hurricane
  751  Loss Projection Methodology.
  752         (3)(2) An insurer offering or renewing policies at rates
  753  established in accordance with s. 627.062(2)(l) may not purchase
  754  coverage from the Florida Hurricane Catastrophe Fund under the
  755  temporary increase in coverage limit option under s.
  756  215.555(17).
  757         (4)(3)(a) Before the effective date of a newly issued
  758  policy at rates established in accordance with s. 627.062(2)(l)
  759  or before the effective date of a renewal policy at rates
  760  established in accordance with s. 627.062(2)(l), the applicant
  761  or insured must be given the following notice, printed in at
  762  least 12-point boldfaced type:
  763  
  764         THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
  765         REGULATION BY THE FLORIDA OFFICE OF INSURANCE
  766         REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY
  767         THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT TO
  768         FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE
  769         FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
  770         PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR
  771         POLICY OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE
  772         A CITIZENS QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF
  773         INSURANCE REGULATION’S WEBSITE AT
  774         WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION ABOUT
  775         CHOICES AVAILABLE TO YOU.
  776  
  777         (b) For policies renewed at a rate established in
  778  accordance with s. 627.062(2)(l), the notice described in
  779  paragraph (a) must be furnished in writing at the same time as
  780  the renewal notice on a document separate from the renewal
  781  notice, but may be contained within the same mailing as the
  782  renewal notice.
  783         (5)(4) Before the effective date of a newly issued policy
  784  at rates established in accordance with s. 627.062(2)(l) or
  785  before the effective date of the first renewal at rates
  786  established in accordance with s. 627.062(2)(l) of a policy
  787  originally issued before the effective date of this section, the
  788  applicant or insured must:
  789         (a) Be provided or offered, for comparison purposes, an
  790  estimate of the premium for a policy from Citizens Property
  791  Insurance Corporation reflecting substantially similar
  792  coverages, limits, and deductibles to the extent available.
  793         (b) Provide the insurer or agent with a signed copy of the
  794  following acknowledgment form, which must be retained by the
  795  insurer or agent for at least 3 years. If the acknowledgment
  796  form is signed by the insured or if the insured remits payment
  797  in the amount of the rate established in accordance with s.
  798  627.062(2)(l) after being mailed, otherwise provided, or offered
  799  the comparison specified in paragraph (a), an insurer renewing a
  800  policy at such rate shall be deemed to comply with this section,
  801  and it is presumed that the insured has been informed and
  802  understands the information contained in the comparison and
  803  acknowledgment forms:
  804  
  805                           ACKNOWLEDGMENT:                         
  806         1. I HAVE REVIEWED THE REQUIRED DISCLOSURES AND
  807         THE REQUIRED PREMIUM COMPARISON.
  808         2. I UNDERSTAND THAT THE RATE FOR THIS
  809         RESIDENTIAL PROPERTY INSURANCE POLICY IS NOT SUBJECT
  810         TO FULL RATE REGULATION BY THE FLORIDA OFFICE OF
  811         INSURANCE REGULATION AND MAY BE HIGHER THAN RATES
  812         APPROVED BY THAT OFFICE.
  813         3. I UNDERSTAND THAT A RESIDENTIAL PROPERTY
  814         INSURANCE POLICY SUBJECT TO FULL RATE REGULATION
  815         REQUIREMENTS MAY BE AVAILABLE FROM CITIZENS PROPERTY
  816         INSURANCE CORPORATION.
  817         4. I UNDERSTAND THAT THE FLORIDA OFFICE OF
  818         INSURANCE REGULATION’S WEBSITE
  819         WWW.SHOPANDCOMPARERATES.COM CONTAINS RESIDENTIAL
  820         PROPERTY INSURANCE RATE COMPARISON INFORMATION.
  821  
  822         (6)(5) The following types of residential property
  823  insurance policies are not eligible for rates established in
  824  accordance with s. 627.062(2)(l) and are not subject to the
  825  other provisions of this section:
  826         (a) Residential property insurance policies that exclude
  827  coverage for the perils of windstorm or hurricane.
  828         (b) Residential property insurance policies subject to a
  829  consent decree, agreement, understanding, or other arrangement
  830  between the insurer and the office relating to rates or premiums
  831  for policies removed from Citizens Property Insurance Corp.
  832         Section 6. Except as otherwise expressly provided in this
  833  act, this act shall take effect upon becoming a law.

feedback