Florida Senate - 2013                        COMMITTEE AMENDMENT
       Bill No. SB 1770
       
       
       
       
       
       
                                Barcode 883928                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  03/19/2013           .                                
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       Appropriations Subcommittee on General Government (Hays)
       recommended the following:
       
    1         Senate Amendment 
    2  
    3         Delete lines 2425 - 2570
    4  and insert:
    5         (1) As used in this section, the term:
    6         (a) “Clearinghouse” means the clearinghouse diversion
    7  program created under this section.
    8         (b) “Corporation” means Citizens Property Insurance
    9  Corporation.
   10         (c) “Exclusive agent” means a licensed insurance agent who
   11  has agreed, by contract, to act exclusively for one company or
   12  group of affiliated insurance companies and is disallowed by the
   13  provisions of that contract to directly write for any other
   14  unaffiliated insurer absent express consent from the company or
   15  group of affiliated insurance companies.
   16         (d) “Independent agent” means a licensed insurance agent
   17  not described in paragraph (c).
   18         (2) In order to confirm eligibility with the corporation
   19  and to enhance the access of new applicants for coverage and
   20  existing policyholders of the corporation to offers of coverage
   21  from authorized and eligible insurers, the corporation shall
   22  establish a clearinghouse to facilitate the diversion of
   23  ineligible applicants and existing policyholders from the
   24  corporation into the voluntary insurance market.
   25         (3) The clearinghouse shall have the same rights and
   26  responsibilities in carrying out its duties as a licensed
   27  general lines agent, but is not required to employ or engage a
   28  licensed general lines agent or to maintain an insurance agency
   29  license in order to solicit and place insurance coverage. In
   30  establishing the clearinghouse, the corporation may:
   31         (a) Require all new applications and all policies due for
   32  renewal to be submitted to the clearinghouse or a private
   33  alternative in order to facilitate obtaining an offer of
   34  coverage from an authorized insurer before binding or renewing
   35  coverage by the corporation.
   36         (b) Employ or otherwise contract with individuals or other
   37  entities to provide administrative or professional services in
   38  order to effectuate the plan within the corporation in
   39  accordance with the applicable purchasing requirements under s.
   40  627.351.
   41         (c) Enter into contracts with an authorized or eligible
   42  insurer participating in the clearinghouse and accept an
   43  appointment by such insurer.
   44         (d) Provide funds to operate the clearinghouse, or charge
   45  agents and insurers a reasonable fee to offset, or partially
   46  offset, the costs of the clearinghouse. Insurers participating
   47  in the clearinghouse are not required to use the clearinghouse
   48  for the renewal of policies initially written through the
   49  clearinghouse.
   50         (e) Develop an enhanced application for obtaining
   51  information that will assist private insurers in determining
   52  whether to make an offer of coverage through the clearinghouse.
   53         (f) Before approving new applications for coverage by the
   54  corporation, require every application to be subject to a 48
   55  hour period that allows an insurer participating in the
   56  clearinghouse to select the application for coverage. The
   57  insurer may issue a binder on any policy selected for coverage
   58  for a period of at least 30 days, but not more than 60 days.
   59         (4) An authorized or eligible insurer may participate in
   60  the clearinghouse; however, participation is not mandatory.
   61  Insurers making offers of coverage to new applicants or renewing
   62  policyholders through the clearinghouse:
   63         (a) Are not required to individually appoint an agent whose
   64  customer is underwritten and bound through the clearinghouse.
   65  Notwithstanding s. 626.112, insurers are not required to appoint
   66  an agent on a policy underwritten through the clearinghouse as
   67  long as that policy remains with the insurer. Insurers may
   68  appoint an agent whose customer is initially underwritten and
   69  bound through the clearinghouse. If an insurer accepts a policy
   70  from an agent who is not appointed pursuant to this paragraph
   71  and thereafter accepts a policy from such agent, the provisions
   72  of s. 626.112 requiring appointment apply to the agent.
   73         (b) Must enter into a limited agency agreement with each
   74  agent who is not appointed in accordance with paragraph (a) and
   75  whose customer is underwritten and bound through the
   76  clearinghouse.
   77         (c) Must enter into its standard agency agreement with each
   78  agent whose customer is underwritten and bound through the
   79  clearinghouse if that agent has been appointed by the insurer
   80  pursuant to s. 626.112.
   81         (d) Must comply with s. 627.4133(2).
   82         (e) Must allow authorized or eligible insurers
   83  participating in the clearinghouse to participate through their
   84  single, designated managing general agent or broker; however the
   85  provisions of paragraph (6)(a) regarding ownership, control, and
   86  use of the expirations apply.
   87         (5)(a) Notwithstanding s. 627.3517, an applicant for new
   88  coverage is not eligible for coverage from the corporation if
   89  the applicant is offered coverage from an authorized insurer
   90  through the clearinghouse at a premium that is at or below the
   91  eligibility threshold established under s. 627.351(6)(c)5.a.
   92         (b) Notwithstanding any other provisions of law, if a
   93  renewing policyholder of the corporation is offered coverage
   94  from an authorized insurer for a personal lines or commercial
   95  lines risk at a premium that is no more than 15 percent above
   96  the corporation’s renewal premium for comparable coverage, the
   97  risk is not eligible for coverage with the corporation.
   98         (c) Notwithstanding s. 626.916(1), if an applicant for new
   99  or renewal coverage from the corporation does not receive an
  100  offer of coverage from an authorized insurer, the applicant may
  101  choose to accept an offer of coverage from an eligible insurer
  102  or their broker under ss. 626.913-626.937. Such offers of
  103  coverage from an eligible insurer do not make the risk
  104  ineligible for coverage with the corporation.
  105         (d) An applicant for new or renewal coverage from the
  106  corporation may choose to accept any offers of coverage received
  107  through the clearinghouse from an authorized insurer that is
  108  greater than 15 percent of the corporation’s renewal premium.
  109         (e) Sections 627.351(6)(c)5.a.(I) and b.(I) do not apply to
  110  an offer of coverage from an authorized insurer obtained through
  111  the clearinghouse.
  112         (6) Independent agents who submit new applications for
  113  coverage or who are the agent of record on a renewal policy
  114  submitted to the clearinghouse:
  115         (a) Must maintain ownership and the exclusive use of
  116  expirations, records, or other written or electronic information
  117  directly related to such applications or renewals written
  118  through the corporation or through an insurer participating in
  119  the clearinghouse, notwithstanding s. 627.351(6)(c)5.a.(I)(B)
  120  and (II)(B). Contracts with the corporation or required by the
  121  corporation may not amend, modify, interfere with, or limit such
  122  rights of ownership. Such expirations, records, or other written
  123  or electronic information may be used to review an application,
  124  issue a policy, or for any other purpose necessary for placing
  125  business through the clearinghouse.
  126         (b) Are not required to be appointed by an insurer
  127  participating in the clearinghouse for policies written solely
  128  through the clearinghouse, notwithstanding s. 626.112.
  129         (c) May accept an appointment from an insurer participating
  130  in the clearinghouse.
  131         (d) Must enter into a standard or limited agency agreement
  132  with the insurer, at the insurer’s option.
  133  
  134  Applicants ineligible for coverage under paragraph (5) remain
  135  ineligible if their independent agent is unwilling or unable to
  136  enter into a standard or limited agency agreement with an
  137  insurer participating in the clearinghouse.
  138         (7) Exclusive agents submitting new applications for
  139  coverage or who are the agent of record on a renewal policy
  140  submitted to the clearinghouse:
  141         (a) Must maintain ownership and the exclusive use of
  142  expirations, records, or other written or electronic information
  143  directly related to such applications or renewals written
  144  through the corporation or through an insurer participating in
  145  the clearinghouse, notwithstanding s. 627.351(6)(c)5.a.(I)(B)
  146  and (II)(B). Contracts with the corporation or required by the
  147  corporation may not amend, modify, interfere with, or limit such
  148  rights of ownership. Such expirations, records, or other written
  149  or electronic information may be used to review an application,
  150  issue a policy, or for any other purpose necessary for placing
  151  business through the clearinghouse.
  152         (b) Are not required to be appointed by an insurer
  153  participating in the clearinghouse for policies written solely
  154  through the clearinghouse, notwithstanding s. 626.112.
  155         (c) Must accept an offer of coverage from an insurer whose
  156  limited servicing agreement is approved by that agent’s
  157  exclusive insurer as eligible to participate in the
  158  clearinghouse with that insurer’s exclusive agents.
  159         (d) Must enter into a limited servicing agreement with the
  160  insurer making an offer of coverage, and may do so only after
  161  the exclusive agent’s insurer has approved the terms of the
  162  agreement. The exclusive agent’s insurer must approve a limited
  163  service agreement for the clearinghouse if the insurer has
  164  approved a service agreement with the agent for other purposes.
  165  
  166  An applicant is ineligible for coverage under paragraph (5) if
  167  the applicant’s exclusive agent is unwilling or unable to enter
  168  into a standard or limited agency agreement with a participating
  169  insurer making an offer of coverage to that applicant.
  170         (8) To promote private market initiatives that provide
  171  offers of coverage from authorized and eligible insurers to
  172  applicants for coverage by the corporation and to the
  173  corporation’s policyholders on renewal, the corporation shall
  174  publish, by January 1, 2014, reasonable standards for private
  175  alternatives to the submission of a risk to the clearinghouse.
  176  Such private alternatives may act in a master agency arrangement
  177  that allows agents to be appointed as subagents of a master
  178  agency and to use private alternatives for the submission of
  179  risks to the clearinghouse. The alternative option allowed under
  180  this subsection is an alternative to, and not a replacement for,
  181  the clearinghouse. Neither the clearinghouse nor any private
  182  entity operating under this subsection may prohibit insurers
  183  that elect to participate from participating in more than one
  184  clearinghouse or alternative; however, an insurer participating
  185  in the private entity must also participate in the
  186  clearinghouse.
  187         (9) Submission of an application to the clearinghouse for
  188  coverage by the corporation does not constitute the binding of
  189  coverage, and the failure of the clearinghouse to obtain an
  190  offer of coverage by an insurer is not considered acceptance of
  191  coverage of the risk by the corporation.
  192         (10) The clearinghouse does not include commercial
  193  residential policies.