CS for SB 678                                    First Engrossed
    1                        A bill to be entitled                      
    2         An act relating to property and casualty insurance;
    3         amending s. 627.715, F.S.; authorizing flexible flood
    4         insurance; specifying coverage requirements; deleting
    5         a provision that prohibits supplemental flood
    6         insurance from including excess coverage over any
    7         other insurance covering the peril of flood; amending
    8         s. 629.271, F.S.; authorizing domestic reciprocal
    9         insurers to return a portion of unassigned funds to
   10         their subscribers; providing limitations; providing an
   11         effective date.
   13  Be It Enacted by the Legislature of the State of Florida:
   15         Section 1. Paragraph (a) of subsection (1) of section
   16  627.715, Florida Statutes, is amended to read:
   17         627.715 Flood insurance.—An authorized insurer may issue an
   18  insurance policy, contract, or endorsement providing personal
   19  lines residential coverage for the peril of flood on any
   20  structure or the contents of personal property contained
   21  therein, subject to this section. This section does not apply to
   22  commercial lines residential or commercial lines nonresidential
   23  coverage for the peril of flood. This section also does not
   24  apply to coverage for the peril of flood that is excess coverage
   25  over any other insurance covering the peril of flood. An insurer
   26  may issue flood insurance policies, contracts, or endorsements
   27  on a standard, preferred, customized, flexible, or supplemental
   28  basis.
   29         (1)(a)1. Standard flood insurance must cover only losses
   30  from the peril of flood, as defined in paragraph (b), equivalent
   31  to that provided under a standard flood insurance policy under
   32  the National Flood Insurance Program. Standard flood insurance
   33  issued under this section must provide the same coverage,
   34  including deductibles and adjustment of losses, as that provided
   35  under a standard flood insurance policy under the National Flood
   36  Insurance Program.
   37         2. Preferred flood insurance must include the same coverage
   38  as standard flood insurance but:
   39         a. Include, within the definition of “flood,” losses from
   40  water intrusion originating from outside the structure that are
   41  not otherwise covered under the definition of “flood” provided
   42  in paragraph (b).
   43         b. Include coverage for additional living expenses.
   44         c. Require that any loss under personal property or
   45  contents coverage that is repaired or replaced be adjusted only
   46  on the basis of replacement costs up to the policy limits.
   47         3. Customized flood insurance must include coverage that is
   48  broader than the coverage provided under standard flood
   49  insurance.
   50         4. Flexible flood insurance must cover losses from the
   51  peril of flood, as defined in paragraph (b), and may also
   52  include coverage for losses from water intrusion originating
   53  from outside the structure which is not otherwise covered by the
   54  definition of flood. Flexible flood insurance must include one
   55  or more of the following provisions:
   56         a. An agreement between the insurer and the insured that
   57  the flood coverage is in a specified amount, such as coverage
   58  that is limited to the total amount of each outstanding mortgage
   59  applicable to the covered property.
   60         b. A requirement for a deductible in an amount authorized
   61  under s. 627.701, including a deductible in an amount authorized
   62  for hurricanes.
   63         c. A requirement that flood loss to a dwelling be adjusted
   64  in accordance with s. 627.7011(3) or adjusted only on the basis
   65  of the actual cash value of the property.
   66         d. A restriction limiting flood coverage to the principal
   67  building defined in the policy.
   68         e. A provision including or excluding coverage for
   69  additional living expenses.
   70         f. A provision excluding coverage for personal property or
   71  contents as to the peril of flood.
   72         5.4. Supplemental flood insurance may provide coverage
   73  designed to supplement a flood policy obtained from the National
   74  Flood Insurance Program or from an insurer issuing standard or
   75  preferred flood insurance pursuant to this section. Supplemental
   76  flood insurance may provide, but need not be limited to,
   77  coverage for jewelry, art, deductibles, and additional living
   78  expenses. Supplemental flood insurance does not include coverage
   79  for the peril of flood that is excess coverage over any other
   80  insurance covering the peril of flood.
   81         Section 2. Section 629.271, Florida Statutes, is amended to
   82  read:
   83         629.271 Distribution of savings.—
   84         (1) A reciprocal insurer may from time to time return to
   85  its subscribers any unused premiums, savings, or credits
   86  accruing to their accounts. Any Such distribution may shall not
   87  unfairly discriminate between classes of risks, or policies, or
   88  between subscribers, but such distribution may vary as to
   89  classes of subscribers based on upon the experience of the such
   90  classes.
   91         (2) In addition to the option provided in subsection (1), a
   92  domestic reciprocal insurer may, upon the prior written approval
   93  of the office, pay to its subscribers a portion of unassigned
   94  funds of up to 10 percent of surplus with such distribution
   95  limited to 50 percent of net income from the previous calendar
   96  year. Such distribution may not unfairly discriminate between
   97  classes of risks or policies, or between subscribers, but may
   98  vary as to classes of subscribers based on the experience of
   99  such classes.
  100         Section 3. This act shall take effect July 1, 2015.