CODING: Words stricken are deletions; words underlined are additions.
HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
CHAMBER ACTION
Senate House
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5 ORIGINAL STAMP BELOW
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11 Representative(s) Safley offered the following:
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13 Amendment (with title amendment)
14 On page 14, between lines 26 & 27 of the bill
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16 insert:
17 Section 5. Paragraph (c) is added to subsection (1) of
18 section 627.7013, Florida Statutes, and subsection (2) of said
19 section is amended, to read:
20 627.7013 Orderly markets for personal lines
21 residential property insurance.--
22 (1) FINDINGS AND PURPOSE.--
23 (a) The Legislature finds that personal lines
24 residential property insurers, as a condition of doing
25 business in this state, have a responsibility to contribute to
26 an orderly market for personal lines residential property
27 insurance and that there is a compelling state interest in
28 maintaining an orderly market for personal lines residential
29 property insurance. The Legislature further finds that
30 Hurricane Andrew, which caused over $15 billion of insured
31 losses in South Florida, has reinforced the need of consumers
1
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 to have reliable homeowner's insurance coverage; however, the
2 enormous monetary impact to insurers of Hurricane Andrew
3 claims has prompted insurers to propose substantial
4 cancellation or nonrenewal of their homeowner's insurance
5 policyholders. The Legislature further finds that the massive
6 cancellations and nonrenewals announced, proposed, or
7 contemplated by certain insurers constitute a significant
8 danger to the public health, safety, and welfare, and
9 destabilize the insurance market. In furtherance of the
10 overwhelming public necessity for an orderly market for
11 property insurance, the Legislature, in chapter 93-401, Laws
12 of Florida, imposed, for a limited time, a moratorium on
13 cancellation or nonrenewal of personal lines residential
14 property insurance policies. The Legislature further finds
15 that upon expiration of the moratorium, additional actions are
16 required to maintain an orderly market for personal lines
17 residential property insurance in this state. The purposes of
18 this section are to provide for a phaseout of the moratorium
19 and to require advance planning and approval for programs of
20 exposure reduction.
21 (b) The Legislature finds, as of the beginning of the
22 1996 Regular Session of the Legislature, that:
23 1. The conditions described in paragraph (a) remain
24 applicable to the property insurance market in this state in
25 1996 and are likely to remain applicable for several years
26 thereafter.
27 2. The Residential Property and Casualty Joint
28 Underwriting Association, a residual market mechanism created
29 to alleviate temporary unavailability of property insurance
30 coverage, remains the primary or exclusive source of new
31 property insurance coverage in significant portions of the
2
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 state.
2 3. Recent enactments intended to restore a
3 competitive, private sector property insurance market,
4 including creation and enhancement of the Florida Hurricane
5 Catastrophe Fund, incentives for depopulation of the
6 Residential Property and Casualty Joint Underwriting
7 Association, incentives for hurricane loss mitigation and
8 prevention, creation of the Florida Commission on Hurricane
9 Loss Projection Methodology, and revisions of laws relating to
10 rates and coverages, are beginning to have their intended
11 effects; however, the market instability that persists could
12 frustrate these efforts to restore the market.
13 4. The moratorium completion provided in this section
14 is the least intrusive method for maintaining an orderly
15 market, insofar as it applies only to hurricane-related
16 cancellations and nonrenewals of personal lines residential
17 policies that were in force on the effective date, and insofar
18 as it allows an insurer annually to nonrenew up to 5 percent
19 of the total number of such policies as of the effective date.
20 (c) The Legislature finds, as of January 1, 1998,
21 that:
22 1. The conditions described in paragraphs (a) and (b)
23 remain applicable to the property insurance market in this
24 state in 1998 and are likely to remain applicable for several
25 years thereafter.
26 2. The general instability of the market is reflected
27 by the following facts:
28 a. In spite of depopulation efforts under which
29 approximately 600,000 policies have been transferred from the
30 Residential Property and Casualty Joint Underwriting
31 Association to the voluntary market, the joint underwriting
3
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 association, with approximately 500,000 policies in force,
2 remains the primary or exclusive source of new property
3 insurance coverage in significant portions of the state.
4 b. The Florida Windstorm Underwriting Association is
5 growing rapidly, with more than 400,000 policies in force,
6 approximately half of which were initially issued in 1997.
7 3. A further extension of the operation of this
8 section until June 1, 2001, will provide an opportunity for
9 the market to stabilize and for continuation of residual
10 market depopulation efforts.
11 (2) MORATORIUM COMPLETION.--
12 (a) As used in this subsection, the term "total number
13 of policies" means the number of an insurer's policies of a
14 specified type that were in force on June 1, 1996, or the date
15 on which this section became law, whichever was later.
16 (b) The following restrictions apply only to
17 cancellation or nonrenewal of personal lines residential
18 property insurance policies that were in force on June 1,
19 1996, or the date on which this section became law, whichever
20 was later.
21 1. In any 12-month period, an insurer may not cancel
22 or nonrenew more than 5 percent of such insurer's total number
23 of homeowner's policies, 5 percent of such insurer's total
24 number of mobile home owner's policies, or 5 percent of such
25 insurer's total number of personal lines residential policies
26 of all types and classes in the state for the purpose of
27 reducing the insurer's exposure to hurricane claims and may
28 not, with respect to any county, cancel or nonrenew more than
29 10 percent of its total number of homeowner's policies, 10
30 percent of its total number of mobile home owner's policies,
31 or 10 percent of its total number of personal lines
4
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 residential policies of all types and classes in the county
2 for the purpose of reducing the insurer's exposure to
3 hurricane claims. This subparagraph does not prohibit any
4 cancellations or nonrenewals of such policies for any other
5 lawful reason unrelated to the risk of loss from hurricane
6 exposure.
7 2.a. If, for any 12-month period, an insurer proposes
8 to cancel or nonrenew personal lines residential policies to
9 an extent not authorized by subparagraph 1. for the purpose of
10 reducing exposure to hurricane claims, the insurer must file a
11 phaseout plan with the department at least 90 days prior to
12 the effective date of the plan. In the plan, the insurer must
13 demonstrate to the department that the insurer is protecting
14 market stability and the interests of its policyholders. The
15 plan may not be implemented unless it is approved by the
16 department. In developing the plan, the insurer must consider
17 policyholder longevity, the use of voluntary incentives to
18 accomplish the reduction, and geographic distribution. The
19 insurer must demonstrate that under the plan the insurer will
20 not cancel or nonrenew more policies in the 12-month period
21 than the largest number of similar policies the insurer
22 canceled or nonrenewed for any reason in any 12-month period
23 between August 24, 1989, and August 24, 1992.
24 b. If the insurer considers the number of
25 cancellations and nonrenewals under sub-subparagraph a. to be
26 insufficient, the insurer may apply for approval of additional
27 cancellations or nonrenewals on the basis of an unreasonable
28 risk of insolvency. In evaluating a request under this
29 sub-subparagraph, the department shall consider and shall
30 require the insurer to provide information relevant to: the
31 insurer's size, market concentration, and general financial
5
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 condition; the portion of the insurer's business in this state
2 represented by personal lines residential property insurance;
3 the reasonableness of assumptions with respect to size,
4 frequency, severity, and path of hurricanes; the reinsurance
5 available to the insurer and potential recoveries from the
6 Florida Hurricane Catastrophe Fund; and the extent to which
7 the insurer's assets have been voluntarily transferred by
8 dividend or otherwise from the insurer to its stockholders,
9 parent companies, or affiliated companies since June 1, 1996,
10 or the date on which this section became law, whichever was
11 later. In the implementation of exposure reductions under this
12 sub-subparagraph, the department and the insurer shall
13 consider such factors as policyholder longevity, the use of
14 voluntary incentives to accomplish the exposure reduction, and
15 geographic distribution.
16 c. A policy shall not be counted as having been
17 canceled or nonrenewed for purposes of this subsection if any
18 of the following apply:
19 (I) The policy was canceled or nonrenewed for an
20 underwriting reason unrelated to the risk of loss from
21 hurricane exposure, nonpayment of premium, or any other lawful
22 reason that is unrelated to the risk of loss from hurricane
23 exposure. The department shall consider the reason specified
24 in the notice of cancellation or nonrenewal to be the reason
25 for the cancellation or nonrenewal unless the department finds
26 by a preponderance of the evidence that the stated reason was
27 not the insurer's actual reason for the cancellation or
28 nonrenewal.
29 (II) The cancellation or nonrenewal was initiated by
30 the insured.
31 (III) The insurer has offered the policyholder
6
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 replacement or alternative coverage at approved rates, which
2 coverage meets the requirements of the secondary mortgage
3 market.
4 d. In addition to any other cancellations or
5 nonrenewals subject to the limitations in this subsection, a
6 policy shall be considered as having been canceled or
7 nonrenewed for purposes of this subsection if:
8 (I) The insurer implements a rate increase under the
9 use-and-file provisions of s. 627.062(2)(a)2., which rate
10 increase exceeds 150 percent of the increase ultimately
11 approved by the department, and, while the rate filing was
12 pending, the policyholder voluntarily canceled or nonrenewed
13 the policy and obtained replacement coverage from another
14 insurer, including the Residential Property and Casualty Joint
15 Underwriting Association; or
16 (II) The insurer reduces the commission to an agent by
17 more than 25 percent and the agent thereafter places the risk
18 with another insurer, including the Residential Property and
19 Casualty Joint Underwriting Association, or the Florida
20 Windstorm Underwriting Association, or the Coastal Zone
21 Insurance Plan.
22 e. The department must approve or disapprove an
23 application for a waiver within 90 days after the department
24 receives the application for waiver.
25 3. In addition to the cancellations or nonrenewals
26 authorized under this section, an insurer may cancel or
27 nonrenew policies to the extent authorized by an exemption
28 from or waiver of either the moratorium created by chapter
29 93-401, Laws of Florida, or the moratorium phaseout under
30 former s. 627.7013(2).
31 4. Notwithstanding any provisions of this section to
7
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 the contrary, this section does not apply to any insurer that,
2 prior to August 24, 1992, filed notice of such insurer's
3 intent to discontinue writing insurance in this state under s.
4 624.430, and for which a finding has been made by the
5 department, the Division of Administrative Hearings of the
6 Department of Management Services, or a court that such notice
7 satisfied all requirements of s. 624.430. Nothing in this
8 section shall be construed to authorize an insurer to withdraw
9 from any line of property insurance business for the purpose
10 of reducing exposure to risk of hurricane loss if such
11 withdrawal commenced at any time that the moratorium under
12 chapter 93-401, Laws of Florida, or the moratorium phaseout
13 under this section is in effect.
14 5. The following actions by an insurer do not
15 constitute cancellations or nonrenewals for purposes of this
16 subsection:
17 a. The transfer of a risk from one admitted insurer to
18 another admitted insurer, unless the terms of the new or
19 replacement policy place the policyholder in default of a
20 mortgage obligation.
21 b. An increase in the hurricane deductible applicable
22 to the policy, unless the new deductible places the
23 policyholder in default of a mortgage obligation or the
24 deductible exceeds the limits specified in s. 627.701.
25 c. Any other lawful change in coverage that does not
26 place the policyholder in default of a mortgage obligation.
27 d. A cancellation or nonrenewal that is part of the
28 same action as the removal of a policy including windstorm or
29 hurricane coverage from the Residential Property and Casualty
30 Joint Underwriting Association.
31 6. In order to assure fair and effective enforcement
8
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 of this subsection, each insurer shall, no later than October
2 1, 1996, report to the department the policy number of each
3 policy subject to this subsection, arranged by county. The
4 report shall include the policy number for each personal lines
5 residential policy that was in force on June 1, 1996, or the
6 date this section became law, whichever was later. Beginning
7 October 1, 1996, each insurer shall also report, on a monthly
8 basis, all cancellations and nonrenewals of policies included
9 in such policy list and the reasons for the cancellations and
10 nonrenewals.
11 7. An insurer that has an overconcentration of wind
12 risk in areas eligible for coverage under the Florida
13 Windstorm Underwriting Association may submit to the
14 department for approval an accelerated exposure reduction
15 plan. The plan, if approved, shall allow the insurer to
16 nonrenew additional policies for reasons of reducing hurricane
17 loss, beyond the amounts authorized elsewhere in this
18 paragraph, subject to the following conditions:
19 a. All additional nonrenewals under this subparagraph
20 shall consist of nonrenewals of only the windstorm portion of
21 a policy, and shall be allowed only if the Florida Windstorm
22 Underwriting Association provides windstorm coverage to
23 replace the nonrenewed windstorm coverage.
24 b. At the conclusion of the accelerated exposure
25 reduction plan, which shall be no later than 12 months after
26 the date of the first nonrenewal under such plan, the insurer
27 is prohibited from any further nonrenewals for purposes of
28 reducing hurricane loss until the expiration of this
29 subsection.
30 c. The total number of nonrenewals statewide for
31 purposes of reduction of hurricane loss, under this
9
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 subparagraph taken together with the other provisions of this
2 paragraph, shall not exceed the total number of nonrenewals
3 that would have been allowed statewide under subparagraph 1.
4 between June 1, 1996, and the expiration of this subsection.
5 d. Notwithstanding the provisions of s. 627.4133, the
6 insurer must give the policyholder 45 days' advance notice of
7 the nonrenewal of windstorm coverage under this subparagraph
8 and the availability of such coverage through the Florida
9 Windstorm Underwriting Association.
10 e. The first nonrenewal under an accelerated exposure
11 reduction program under this subparagraph may not take effect
12 earlier than February 1, 1997.
13 f. In reviewing the proposed accelerated exposure
14 reduction plan, the department shall consider:
15 (I) The degree to which the exposure reduction plan is
16 necessary to address the insurer's overconcentration.
17 (II) Prior levels of participation in writing
18 voluntary wind coverage in areas eligible for coverage through
19 the Florida Windstorm Underwriting Association.
20 (III) The availability of wind coverage in the
21 voluntary market for the subject risks.
22 (IV) The capacity of the Florida Windstorm
23 Underwriting Association to absorb the risks proposed to be
24 covered by the association.
25 (c) The department may adopt rules to implement this
26 subsection.
27 (d) This section shall cease to operate at such time
28 as the department determines that the insured value of all
29 residential properties insured by the Florida Windstorm
30 Underwriting Association and all properties insured by the
31 Residential Property and Casualty Joint Underwriting
10
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 Association under policies providing wind coverage, combined,
2 has remained below $25 billion for 3 consecutive months, based
3 on exposure data reported to the department by the
4 associations.
5 (e)(d) This subsection is repealed on June 1, 2001
6 1999.
7 Section 6. Section 627.7014, Florida Statutes, is
8 amended to read:
9 627.7014 Orderly markets for condominium association
10 residential property insurance.--
11 (1) FINDINGS AND PURPOSE.--
12 (a) The Legislature finds:
13 1. That residential property insurers providing
14 condominium association coverage, as a condition of doing
15 business in this state, have a responsibility to contribute to
16 an orderly market for condominium association residential
17 property insurance and that there is a compelling state
18 interest in maintaining an orderly market for condominium
19 association residential property insurance.
20 2. That Hurricane Andrew, which caused over $15
21 billion of insured losses in South Florida, has reinforced the
22 need of consumers to have reliable condominium association
23 insurance coverage; however, even more than 3 years after
24 Hurricane Andrew, the hurricane's enormous monetary impact is
25 causing insurers to propose substantial cancellation or
26 nonrenewal of their condominium association insurance
27 policyholders.
28 3. That the massive cancellations and nonrenewals
29 announced, proposed, or contemplated by certain insurers
30 constitute a significant danger to the public health, safety,
31 and welfare and destabilize the insurance market.
11
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 4. That the Residential Property and Casualty Joint
2 Underwriting Association, a residual market mechanism created
3 to alleviate temporary unavailability of property insurance
4 coverage, remains the primary or exclusive source of new
5 property insurance in significant portions of the state.
6 5. That recent enactments intended to restore a
7 competitive, private sector property insurance market,
8 including creation and enhancement of the Florida Hurricane
9 Catastrophe Fund, incentives for depopulation of the
10 Residential Property and Casualty Joint Underwriting
11 Association, incentives for hurricane loss mitigation and
12 prevention, creation of the Florida Commission on Hurricane
13 Loss Projection Methodology, and revisions of laws relating to
14 rates and coverages, are beginning to have their intended
15 effects; however, the market remains unstable.
16 6. That the moratorium created by this section is the
17 least intrusive method for maintaining an orderly market for
18 condominium association insurance, insofar as it applies only
19 to hurricane-related cancellations and nonrenewals of personal
20 lines residential policies that were in force on the effective
21 date of this section, and insofar as it allows an insurer
22 annually to nonrenew up to 5 percent of the total number of
23 such policies as of the effective date of this section.
24 (b) The Legislature finds, as of January 1, 1998,
25 that:
26 1. The conditions described in paragraph (a) remain
27 applicable to the commercial residential property insurance
28 market in this state in 1998 and are likely to remain
29 applicable for several years thereafter.
30 2. The general instability of the market is reflected
31 by the recent rapid growth of the Florida Windstorm
12
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 Underwriting Association, which had more than 9,500 commercial
2 residential policies in force as of December 31, 1997,
3 representing a 58 percent increase over the number of
4 commercial residential policies in force on December 31, 1996.
5 3. An extension of the operation of this section until
6 June 1, 2001, will provide an opportunity for the market to
7 stabilize and for continuation of residual market depopulation
8 efforts.
9 (c)(b) The purposes of this section are to provide for
10 a temporary moratorium on hurricane-related cancellations and
11 nonrenewals of condominium association coverage and to require
12 advance planning and approval for programs of condominium
13 association exposure reduction.
14 (2) MORATORIUM.--
15 (a) As used in this subsection, the term "total number
16 of policies" means the number of an insurer's condominium
17 association policies providing windstorm or hurricane coverage
18 that were in force on the effective date of this section. The
19 following restrictions apply to the cancellation or nonrenewal
20 of condominium association residential property insurance
21 policies that were in force on the effective date of this
22 section:
23 1. In any 12-month period, an insurer may not cancel
24 or nonrenew more than 5 percent of its total number of
25 condominium association policies in the state for the purpose
26 of reducing the insurer's exposure to hurricane claims and may
27 not, with respect to any county, cancel or nonrenew more than
28 10 percent of its total number of condominium association
29 policies in the county for the purpose of reducing the
30 insurer's exposure to hurricane claims. This subparagraph does
31 not prohibit any cancellations or nonrenewals of such policies
13
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 for any other lawful reason unrelated to the risk of loss from
2 hurricane exposure.
3 2.a. If, for any 12-month period, an insurer proposes
4 to cancel or nonrenew condominium association policies to an
5 extent not authorized by subparagraph 1. for the purpose of
6 reducing exposure to hurricane claims, the insurer must file a
7 phaseout plan with the department at least 90 days prior to
8 the effective date of the plan. In the plan, the insurer must
9 demonstrate to the department that the insurer is protecting
10 market stability and the interests of its policyholders. The
11 plan may not be implemented unless it is approved by the
12 department. In developing the plan, the insurer must consider
13 policyholder longevity, the use of voluntary incentives to
14 accomplish the reduction, and geographic distribution. The
15 insurer must demonstrate that under the plan the insurer will
16 not cancel or nonrenew more policies in the 12-month period
17 than the largest number of similar policies the insurer
18 canceled or nonrenewed for any reason in any 12-month period
19 between August 24, 1989, and August 24, 1992.
20 b. If the insurer considers the number of
21 cancellations and nonrenewals under sub-subparagraph a. to be
22 insufficient, the insurer may apply for approval of additional
23 cancellations or nonrenewals on the basis of an unreasonable
24 risk of insolvency. In evaluating a request under this
25 sub-subparagraph, the department shall consider, and shall
26 require the insurer to provide information relevant to: the
27 insurer's size, market concentration, and general financial
28 condition; the portion of the insurer's business in this state
29 represented by condominium association residential property
30 insurance; the reasonableness of assumptions with respect to
31 size, frequency, severity, and path of hurricanes; and the
14
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 reinsurance available to the insurer and potential recoveries
2 from the Florida Hurricane Catastrophe Fund. In the
3 implementation of exposure reductions under this
4 sub-subparagraph, the department and the insurer shall
5 consider such factors as policyholder longevity, the use of
6 voluntary incentives to accomplish the exposure reduction, and
7 geographic distribution.
8 c. A policy shall not be counted as having been
9 canceled or nonrenewed for purposes of this subsection if any
10 of the following apply:
11 (I) The policy was canceled or nonrenewed for an
12 underwriting reason unrelated to the risk of loss from
13 hurricane exposure, nonpayment of premium, or any other lawful
14 reason that is unrelated to the risk of loss from hurricane
15 exposure. The department shall consider the reason specified
16 in the notice of cancellation or nonrenewal to be the reason
17 for the cancellation or nonrenewal unless the department finds
18 by a preponderance of the evidence that the stated reason was
19 not the insurer's actual reason for the cancellation or
20 nonrenewal.
21 (II) The cancellation or nonrenewal was initiated by
22 the insured.
23 (III) The insurer has offered the policyholder
24 replacement or alternative coverage at approved rates.
25 (IV) The risk is transferred from one admitted insurer
26 to another admitted insurer, unless the terms of the new or
27 replacement policy place the policyholder in default of a
28 mortgage obligation.
29 (V) The hurricane deductible applicable to the policy
30 is increased unless the new deductible exceeds statutory
31 limits or places the policyholder in default of a mortgage
15
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 obligation.
2 (VI) Any other lawful change in coverage that does not
3 place the policyholder in default of a mortgage obligation is
4 made.
5 d. In addition to any other cancellations or
6 nonrenewals subject to the limitations in this subsection, a
7 policy shall be considered as having been canceled or
8 nonrenewed for purposes of this subsection if:
9 (I) The insurer implements a rate increase under the
10 use-and-file provisions of s. 627.062(2)(a)2., which rate
11 increase exceeds 150 percent of the increase ultimately
12 approved by the department, and, while the rate filing was
13 pending, the policyholder voluntarily canceled or nonrenewed
14 the policy and obtained replacement coverage from another
15 insurer, including the Residential Property and Casualty Joint
16 Underwriting Association; or
17 (II) The insurer reduces the commission to an agent by
18 more than 25 percent and the agent thereafter places the risk
19 with another insurer, including the Residential Property and
20 Casualty Joint Underwriting Association.
21 e. The department must approve or disapprove an
22 application for a waiver within 90 days after the department
23 receives the application for waiver.
24 3. Notwithstanding any provisions of this section to
25 the contrary, this section does not apply to any insurer that,
26 prior to August 24, 1992, filed notice of such insurer's
27 intent to discontinue writing insurance in this state under s.
28 624.430, and for which a finding has been made by the
29 department, the Division of Administrative Hearings of the
30 Department of Management Services, or a court that such notice
31 satisfied all requirements of s. 624.430. This section also
16
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 does not apply to any insurer that:
2 a. Collects at least 75 percent of its Florida
3 premiums from policies that include hurricane coverage
4 provided to condominium associations in coastal counties.
5 b. Collects at least 80 percent of its Florida
6 premiums from policies that include hurricane coverage
7 provided to condominium associations in Broward, Dade, and
8 Palm Beach Counties.
9 c. Has, annually since 1992:
10 (I) Increased its aggregate Florida premium volume
11 from policies that include hurricane coverage provided to
12 condominium associations in coastal counties.
13 (II) Increased its aggregate Florida premium volume
14 from policies that include hurricane coverage provided to
15 condominium associations in Broward, Dade, and Palm Beach
16 Counties.
17 (III) Increased its aggregate Florida exposure from
18 policies that include hurricane coverage provided to
19 condominium associations in coastal counties.
20 (IV) Increased its aggregate Florida exposure from
21 policies that include hurricane coverage provided to
22 condominium associations in Broward, Dade, and Palm Beach
23 Counties.
24 d. Has surplus as to policyholders of no more than
25 $200 million as reflected in its annual statement for 1995.
26 4. In order to assure fair and effective enforcement
27 of this subsection, each insurer shall, no later than October
28 1, 1996, report to the department the policy number of each
29 policy subject to this subsection, arranged by county. The
30 report shall include the policy number for each condominium
31 association policy that was in force on the effective date of
17
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 this section. Beginning October 1, 1996, each insurer shall
2 also report, on a monthly basis, all cancellations and
3 nonrenewals of policies included in such policy list and the
4 reasons for the cancellations and nonrenewals.
5 5. An insurer that has an overconcentration of wind
6 risk in areas eligible for coverage under the Florida
7 Windstorm Underwriting Association may submit to the
8 department for approval an accelerated exposure reduction
9 plan. The plan, if approved, shall allow the insurer to
10 nonrenew additional policies for reasons of reducing hurricane
11 loss, beyond the amounts authorized elsewhere in this
12 paragraph, subject to the following conditions:
13 a. All additional nonrenewals under this subparagraph
14 shall consist of nonrenewals of only the windstorm portion of
15 a policy, and shall be allowed only if the Florida Windstorm
16 Underwriting Association provides windstorm coverage to
17 replace the nonrenewed windstorm coverage.
18 b. At the conclusion of the accelerated exposure
19 reduction plan, which shall be no later than 12 months after
20 the date of the first nonrenewal under such plan, the insurer
21 is prohibited from any further nonrenewals for purposes of
22 reducing hurricane loss until the expiration of this
23 subsection.
24 c. The total number of nonrenewals statewide for
25 purposes of reduction of hurricane loss, under this
26 subparagraph taken together with the other provisions of this
27 paragraph, shall not exceed the total number of nonrenewals
28 that would have been allowed statewide under subparagraph 1.
29 between June 1, 1996, and the expiration of this subsection.
30 d. Notwithstanding the provisions of s. 627.4133, the
31 insurer must give the policyholder 45 days' advance notice of
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 the nonrenewal of windstorm coverage under this subparagraph
2 and the availability of such coverage through the Florida
3 Windstorm Underwriting Association.
4 e. The first nonrenewal under an accelerated exposure
5 reduction program under this subparagraph may not take effect
6 earlier than February 1, 1997.
7 f. In reviewing the proposed accelerated exposure
8 reduction plan, the department shall consider:
9 (I) The degree to which the exposure reduction plan is
10 necessary to address the insurer's overconcentration.
11 (II) Prior levels of participation in writing
12 voluntary wind coverage in areas eligible for coverage through
13 the Florida Windstorm Underwriting Association.
14 (III) The availability of wind coverage in the
15 voluntary market for the subject risks.
16 (IV) The capacity of the Florida Windstorm
17 Underwriting Association to absorb the risks proposed to be
18 covered by the association.
19 (b) The department may adopt rules to implement this
20 subsection.
21 (c) This section shall cease to operate at such time
22 as the department determines that the insured value of all
23 residential properties insured by the Florida Windstorm
24 Underwriting Association and all properties insured by the
25 Residential Property and Casualty Joint Underwriting
26 Association under policies providing wind coverage, combined,
27 has remained below $25 billion for 3 consecutive months, based
28 on exposure data reported to the department by the
29 associations.
30 (d)(c) This subsection is repealed on June 1, 2001
31 1999.
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HOUSE AMENDMENT
Bill No. CS for SB 1108
Amendment No. 2 (for drafter's use only)
1 ================ T I T L E A M E N D M E N T ===============
2 And the title is amended as follows:
3 On page 1, line 12
4
5 after the semicolon; insert:
6 amending ss. 627.7013 and 627.7014, F.S.;
7 providing findings relating to the moratorium
8 on hurricane-related cancellations and
9 nonrenewals of personal lines residential
10 policies and condominium association policies,
11 respectively; deleting provisions relating to
12 accelerated exposure reduction plans; providing
13 circumstances under which the sections are
14 inoperative; delaying the future repeal date of
15 the sections;
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