Florida Senate - 2006 SENATOR AMENDMENT
Bill No. CS for CS for SB 1980
Barcode 114110
CHAMBER ACTION
Senate House
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05/05/2006 10:59 AM .
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11 Senator Geller moved the following amendment to amendment
12 (021596):
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14 Senate Amendment (with title amendment)
15 On page 65, line 7, through
16 page 70, line 18, delete those lines
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18 and insert:
19 (m)(d)1. It is the intent of the Legislature that the
20 rates for coverage provided by the corporation be actuarially
21 sound and not competitive with approved rates charged in the
22 admitted voluntary market, so that the corporation functions
23 as a residual market mechanism to provide insurance only when
24 the insurance cannot be procured in the voluntary market.
25 Rates shall include an appropriate catastrophe loading factor
26 that reflects the actual catastrophic exposure of the
27 corporation.
28 2.a. Except as provided in subparagraph 3., for each
29 county, the average rates of the corporation for each line of
30 business for personal lines residential policies excluding
31 rates for wind-only policies shall be no lower than the
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Florida Senate - 2006 SENATOR AMENDMENT
Bill No. CS for CS for SB 1980
Barcode 114110
1 average rates charged by the insurer that had the highest
2 average rate in that county among the 20 insurers with the
3 greatest total direct written premium in the state for that
4 line of business in the preceding year, except that with
5 respect to mobile home coverages, the average rates of the
6 corporation shall be no lower than the average rates charged
7 by the insurer that had the highest average rate in that
8 county among the 5 insurers with the greatest total written
9 premium for mobile home owner's policies in the state in the
10 preceding year.
11 b.3. Rates for personal lines residential wind-only
12 policies must be actuarially sound and not competitive with
13 approved rates charged by authorized insurers. Corporation
14 rate manuals shall include a rate surcharge for seasonal
15 occupancy. To ensure that personal lines residential wind-only
16 rates are not competitive with approved rates charged by
17 authorized insurers, the corporation, in conjunction with the
18 office, shall develop a wind-only ratemaking methodology,
19 which methodology shall be contained in each rate filing made
20 by the corporation with the office. If the office determines
21 that the wind-only rates or rating factors filed by the
22 corporation fail to comply with the wind-only ratemaking
23 methodology provided for in this subsection, it shall so
24 notify the corporation and require the corporation to amend
25 its rates or rating factors to come into compliance within 90
26 days of notice from the office.
27 3. The provisions of sub-subparagraph 2.a. do not
28 apply to coverage provided by the corporation in any area of a
29 postal zip code for which the office determines that no
30 competition exists for personal lines residential policies.
31 The provisions of sub-subparagraph 2.b. do not apply to
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Florida Senate - 2006 SENATOR AMENDMENT
Bill No. CS for CS for SB 1980
Barcode 114110
1 coverage provided by the corporation in any area of a postal
2 zip code for which the office determines that no competition
3 exists for personal lines residential policies in the portion
4 of the area of that postal zip code which is eligible for
5 wind-only coverage. In such postal zip code areas, the rates
6 for personal lines residential coverage must only be
7 actuarially sound and not excessive, inadequate, or unfairly
8 discriminatory and are subject to the other provisions of this
9 paragraph and s. 627.062. The commission shall adopt rules
10 establishing criteria for determining whether no competition
11 exists for personal lines residential policies in an area of a
12 postal zip code. Beginning October 1, 2006, and each 3 months
13 thereafter, the office shall determine and identify for
14 purposes of this subparagraph those areas of postal zip codes
15 for which no competition exists for personal lines residential
16 policies.
17 4. For the purposes of establishing a pilot program to
18 evaluate issues relating to the availability and affordability
19 of insurance in an area where historically there has been
20 little market competition, the provisions of sub-subparagraph
21 2.a. subparagraph 2. do not apply to coverage provided by the
22 corporation in Monroe County if the office determines that a
23 reasonable degree of competition does not exist for personal
24 lines residential policies. The provisions of sub-subparagraph
25 2.b. subparagraph 3. do not apply to coverage provided by the
26 corporation in Monroe County if the office determines that a
27 reasonable degree of competition does not exist for personal
28 lines residential policies in the area of that county which is
29 eligible for wind-only coverage. In this county, the rates for
30 personal lines residential coverage shall be actuarially sound
31 and not excessive, inadequate, or unfairly discriminatory and
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Florida Senate - 2006 SENATOR AMENDMENT
Bill No. CS for CS for SB 1980
Barcode 114110
1 are subject to the other provisions of the paragraph and s.
2 627.062. The commission shall adopt rules establishing the
3 criteria for determining whether a reasonable degree of
4 competition exists for personal lines residential policies in
5 Monroe County. By March 1, 2006, the office shall submit a
6 report to the Legislature providing an evaluation of the
7 implementation of the pilot program affecting Monroe County.
8 5. Rates for commercial lines coverage shall not be
9 subject to the requirements of sub-subparagraph 2.a.
10 subparagraph 2., but shall be subject to all other
11 requirements of this paragraph and s. 627.062.
12 6. Nothing in this paragraph shall require or allow
13 the corporation to adopt a rate that is inadequate under s.
14 627.062.
15 7. The corporation shall certify to the office at
16 least twice annually that its personal lines rates comply with
17 the requirements of this paragraph subparagraphs 1. and 2. If
18 any adjustment in the rates or rating factors of the
19 corporation is necessary to ensure such compliance, the
20 corporation shall make and implement such adjustments and file
21 its revised rates and rating factors with the office. If the
22 office thereafter determines that the revised rates and rating
23 factors fail to comply with the provisions of this paragraph
24 subparagraphs 1. and 2., the office it shall notify the
25 corporation and require the corporation to amend its rates or
26 rating factors in conjunction with its next rate filing. The
27 office must notify the corporation by electronic means of any
28 rate filing it approves for any insurer among the insurers
29 referred to in sub-subparagraph 2.a subparagraph 2.
30 8. In addition to the rates otherwise determined
31 pursuant to this paragraph, the corporation shall impose and
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Florida Senate - 2006 SENATOR AMENDMENT
Bill No. CS for CS for SB 1980
Barcode 114110
1 collect an amount equal to the premium tax provided for in s.
2 624.509 to augment the financial resources of the corporation.
3 9.a. To assist the corporation in developing
4 additional ratemaking methods to ensure assure compliance with
5 this paragraph subparagraphs 1. and 4., the corporation shall
6 appoint a rate methodology panel consisting of one person
7 recommended by the Florida Association of Insurance Agents,
8 one person recommended by the Professional Insurance Agents of
9 Florida, one person recommended by the Florida Association of
10 Insurance and Financial Advisors, one person recommended by
11 the insurer with the highest voluntary market share of
12 residential property insurance business in the state, one
13 person recommended by the insurer with the second-highest
14 voluntary market share of residential property insurance
15 business in the state, one person recommended by an insurer
16 writing commercial residential property insurance in this
17 state, one person recommended by the Office of Insurance
18 Regulation, and one board member designated by the board
19 chairman, who shall serve as chairman of the panel.
20 b. By January 1, 2004, the rate methodology panel
21 shall provide a report to the corporation of its findings and
22 recommendations for the use of additional ratemaking methods
23 and procedures, including the use of a rate equalization
24 surcharge in an amount sufficient to assure that the total
25 cost of coverage for policyholders or applicants to the
26 corporation is sufficient to comply with subparagraph 1.
27 c. Within 30 days after such report, the corporation
28 shall present to the President of the Senate, the Speaker of
29 the House of Representatives, the minority party leaders of
30 each house of the Legislature, and the chairs of the standing
31 committees of each house of the Legislature having
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Florida Senate - 2006 SENATOR AMENDMENT
Bill No. CS for CS for SB 1980
Barcode 114110
1 jurisdiction of insurance issues, a plan for implementing the
2 additional ratemaking methods and an outline of any
3 legislation needed to facilitate use of the new methods.
4 d. The plan must include a provision that producer
5 commissions paid by the corporation shall not be calculated in
6 such a manner as to include any rate equalization surcharge.
7 However, without regard to the plan to be developed or its
8 implementation, producer commissions paid by the corporation
9 for each account, other than the quota share primary program,
10 shall remain fixed as to percentage, effective rate,
11 calculation, and payment method until January 1, 2004.
12 10. By January 1, 2004, The corporation shall develop
13 a notice to policyholders or applicants that the rates of
14 Citizens Property Insurance Corporation are intended to be
15 higher than the rates of any admitted carrier and providing
16 other information the corporation deems necessary to assist
17 consumers in finding other voluntary admitted insurers willing
18 to insure their property.
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21 ================ T I T L E A M E N D M E N T ===============
22 And the title is amended as follows:
23 On page 5, lines 13-15, delete those lines
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25 and insert:
26 certain determination; providing additional
27 legislative intent relating to coverage rates
28 provided by the Citizens Property Insurance
29 Corporation; specifying nonapplication of
30 certain policy requirements in postal zip code
31 areas lacking any competition for personal
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Florida Senate - 2006 SENATOR AMENDMENT
Bill No. CS for CS for SB 1980
Barcode 114110
1 lines residential policies under certain
2 circumstances; requiring the Financial Services
3 Commission to adopt rules; requiring the Office
4 of Insurance Regulation to periodically
5 determine and identify postal zip code areas in
6 which no competition exists for personal lines
7 residential policies; deleting an obsolete rate
8 methodology panel reporting requirement
9 provision;
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