CS for CS for SB 1274                            First Engrossed
       
       
       
       
       
       
       
       
       20141274e1
       
    1                        A bill to be entitled                      
    2         An act relating to Citizens Property Insurance
    3         Corporation; amending s. 627.351, F.S.; postponing the
    4         date that certain major structures become ineligible
    5         for coverage by the corporation; providing that a
    6         condominium association is ineligible for commercial
    7         residential wind-only coverage under certain
    8         conditions; providing an effective date.
    9          
   10  Be It Enacted by the Legislature of the State of Florida:
   11  
   12         Section 1. Paragraph (a) of subsection (6) of section
   13  627.351, Florida Statutes, is amended to read:
   14         627.351 Insurance risk apportionment plans.—
   15         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
   16         (a) The public purpose of this subsection is to ensure that
   17  there is an orderly market for property insurance for residents
   18  and businesses of this state.
   19         1. The Legislature finds that private insurers are
   20  unwilling or unable to provide affordable property insurance
   21  coverage in this state to the extent sought and needed. The
   22  absence of affordable property insurance threatens the public
   23  health, safety, and welfare and likewise threatens the economic
   24  health of the state. The state therefore has a compelling public
   25  interest and a public purpose to assist in assuring that
   26  property in the state is insured and that it is insured at
   27  affordable rates so as to facilitate the remediation,
   28  reconstruction, and replacement of damaged or destroyed property
   29  in order to reduce or avoid the negative effects on otherwise
   30  resulting to the public health, safety, and welfare, to the
   31  economy of the state, and to the revenues of the state and local
   32  governments which are needed to provide for the public welfare.
   33  It is necessary, therefore, to provide affordable property
   34  insurance to applicants who are in good faith entitled to
   35  procure insurance through the voluntary market but are unable to
   36  do so. The Legislature intends, therefore, that affordable
   37  property insurance be provided and that it continue to be
   38  provided, as long as necessary, through Citizens Property
   39  Insurance Corporation, a government entity that is an integral
   40  part of the state, and that is not a private insurance company.
   41  To that end, the corporation shall strive to increase the
   42  availability of affordable property insurance in this state,
   43  while achieving efficiencies and economies, and while providing
   44  service to policyholders, applicants, and agents which is no
   45  less than the quality generally provided in the voluntary
   46  market, for the achievement of the foregoing public purposes.
   47  Because it is essential for this government entity to have the
   48  maximum financial resources to pay claims following a
   49  catastrophic hurricane, it is further the intent of the
   50  Legislature that the corporation continue to be an integral part
   51  of the state, and that the income of the corporation be exempt
   52  from federal income taxation, and that interest on the debt
   53  obligations issued by the corporation be exempt from federal
   54  income taxation.
   55         2. The Residential Property and Casualty Joint Underwriting
   56  Association originally created by this statute shall be known as
   57  the Citizens Property Insurance Corporation. The corporation
   58  shall provide insurance for residential and commercial property,
   59  for applicants who are entitled, but, in good faith, are unable
   60  to procure insurance through the voluntary market. The
   61  corporation shall operate pursuant to a plan of operation
   62  approved by order of the Financial Services Commission. The plan
   63  is subject to continuous review by the commission. The
   64  commission may, by order, withdraw approval of all or part of a
   65  plan if the commission determines that conditions have changed
   66  since approval was granted and that the purposes of the plan
   67  require changes in the plan. For the purposes of this
   68  subsection, residential coverage includes both personal lines
   69  residential coverage, which consists of the type of coverage
   70  provided by homeowner’s, mobile home owner’s, dwelling,
   71  tenant’s, condominium unit owner’s, and similar policies; and
   72  commercial lines residential coverage, which consists of the
   73  type of coverage provided by condominium association, apartment
   74  building, and similar policies.
   75         3. With respect to coverage for personal lines residential
   76  structures:
   77         a. Effective January 1, 2014, a structure that has a
   78  dwelling replacement cost of $1 million or more, or a single
   79  condominium unit that has a combined dwelling and contents
   80  replacement cost of $1 million or more is not eligible for
   81  coverage by the corporation. Such dwellings insured by the
   82  corporation on December 31, 2013, may continue to be covered by
   83  the corporation until the end of the policy term. The office
   84  shall approve the method used by the corporation for valuing the
   85  dwelling replacement costs under cost for the purposes of this
   86  subparagraph. If a policyholder is insured by the corporation
   87  before being determined to be ineligible pursuant to this
   88  subparagraph and such policyholder files a lawsuit challenging
   89  the determination, the policyholder may remain insured by the
   90  corporation until the conclusion of the litigation.
   91         b. Effective January 1, 2015, a structure that has a
   92  dwelling replacement cost of $900,000 or more, or a single
   93  condominium unit that has a combined dwelling and contents
   94  replacement cost of $900,000 or more, is not eligible for
   95  coverage by the corporation. Such dwellings insured by the
   96  corporation on December 31, 2014, may continue to be covered by
   97  the corporation only until the end of the policy term.
   98         c. Effective January 1, 2016, a structure that has a
   99  dwelling replacement cost of $800,000 or more, or a single
  100  condominium unit that has a combined dwelling and contents
  101  replacement cost of $800,000 or more, is not eligible for
  102  coverage by the corporation. Such dwellings insured by the
  103  corporation on December 31, 2015, may continue to be covered by
  104  the corporation until the end of the policy term.
  105         d. Effective January 1, 2017, a structure that has a
  106  dwelling replacement cost of $700,000 or more, or a single
  107  condominium unit that has a combined dwelling and contents
  108  replacement cost of $700,000 or more, is not eligible for
  109  coverage by the corporation. Such dwellings insured by the
  110  corporation on December 31, 2016, may continue to be covered by
  111  the corporation until the end of the policy term.
  112  
  113  The requirements of sub-subparagraphs b.-d. do not apply in
  114  counties where the office determines there is not a reasonable
  115  degree of competition. In such counties a personal lines
  116  residential structure that has a dwelling replacement cost of
  117  less than $1 million, or a single condominium unit that has a
  118  combined dwelling and contents replacement cost of less than $1
  119  million, is eligible for coverage by the corporation.
  120         4. It is the intent of the Legislature that policyholders,
  121  applicants, and agents of the corporation receive service and
  122  treatment of the highest possible level but never less than that
  123  generally provided in the voluntary market. It is also intended
  124  that the corporation be held to service standards no less than
  125  those applied to insurers in the voluntary market by the office
  126  with respect to responsiveness, timeliness, customer courtesy,
  127  and overall dealings with policyholders, applicants, or agents
  128  of the corporation.
  129         5.a. Effective January 1, 2009, a personal lines
  130  residential structure that is located in the “wind-borne debris
  131  region,” as defined in s. 1609.2, International Building Code
  132  (2006), and that has an insured value on the structure of
  133  $750,000 or more is not eligible for coverage by the corporation
  134  unless the structure has opening protections as required under
  135  the Florida Building Code for a newly constructed residential
  136  structure in that area. A residential structure is deemed to
  137  comply with this sub-subparagraph subparagraph if it has
  138  shutters or opening protections on all openings and if such
  139  opening protections complied with the Florida Building Code at
  140  the time they were installed.
  141         b. Any major structure as defined in s. 161.54(6)(a) for
  142  which a permit is applied on or after July 1, 2015 2014, for new
  143  construction or substantial improvement as defined in s. 161.54
  144  s. 161.54(12) is not eligible for coverage by the corporation if
  145  the structure is seaward of the coastal construction control
  146  line established pursuant to s. 161.053 or is within the Coastal
  147  Barrier Resources System as designated by 16 U.S.C. ss. 3501
  148  3510.
  149         6. With respect to wind-only coverage for commercial lines
  150  residential condominiums, effective July 1, 2014, a condominium
  151  shall be deemed ineligible for coverage if 50 percent or more of
  152  the units are rented more than eight times in a calendar year
  153  for a rental agreement period of less than 30 days.
  154         Section 2. This act shall take effect July 1, 2014.