Senate Bill 2054
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Florida Senate - 1998 SB 2054
By Senator Diaz-Balart
37-1520-98
1 A bill to be entitled
2 An act relating to property insurance; amending
3 ss. 627.7013, 627.7014, F.S.; providing
4 findings relating to the moratorium on
5 hurricane-related cancellations and nonrenewals
6 of personal lines residential policies and
7 condominium association policies, respectively;
8 deleting provisions relating to accelerated
9 exposure reduction plans; providing
10 circumstances under which the sections are
11 inoperative; delaying the future repeal date of
12 the sections; providing an effective date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Subsection 627.7013, Florida Statutes, is
17 amended to read:
18 627.7013 Orderly markets for personal lines
19 residential property insurance.--
20 (1) FINDINGS AND PURPOSE.--
21 (a) The Legislature finds that personal lines
22 residential property insurers, as a condition of doing
23 business in this state, have a responsibility to contribute to
24 an orderly market for personal lines residential property
25 insurance and that there is a compelling state interest in
26 maintaining an orderly market for personal lines residential
27 property insurance. The Legislature further finds that
28 Hurricane Andrew, which caused over $15 billion of insured
29 losses in South Florida, has reinforced the need of consumers
30 to have reliable homeowner's insurance coverage; however, the
31 enormous monetary impact to insurers of Hurricane Andrew
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1 claims has prompted insurers to propose substantial
2 cancellation or nonrenewal of their homeowner's insurance
3 policyholders. The Legislature further finds that the massive
4 cancellations and nonrenewals announced, proposed, or
5 contemplated by certain insurers constitute a significant
6 danger to the public health, safety, and welfare, and
7 destabilize the insurance market. In furtherance of the
8 overwhelming public necessity for an orderly market for
9 property insurance, the Legislature, in chapter 93-401, Laws
10 of Florida, imposed, for a limited time, a moratorium on
11 cancellation or nonrenewal of personal lines residential
12 property insurance policies. The Legislature further finds
13 that upon expiration of the moratorium, additional actions are
14 required to maintain an orderly market for personal lines
15 residential property insurance in this state. The purposes of
16 this section are to provide for a phaseout of the moratorium
17 and to require advance planning and approval for programs of
18 exposure reduction.
19 (b) The Legislature finds, as of the beginning of the
20 1996 Regular Session of the Legislature, that:
21 1. The conditions described in paragraph (a) remain
22 applicable to the property insurance market in this state in
23 1996 and are likely to remain applicable for several years
24 thereafter.
25 2. The Residential Property and Casualty Joint
26 Underwriting Association, a residual market mechanism created
27 to alleviate temporary unavailability of property insurance
28 coverage, remains the primary or exclusive source of new
29 property insurance coverage in significant portions of the
30 state.
31
2
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1 3. Recent enactments intended to restore a
2 competitive, private sector property insurance market,
3 including creation and enhancement of the Florida Hurricane
4 Catastrophe Fund, incentives for depopulation of the
5 Residential Property and Casualty Joint Underwriting
6 Association, incentives for hurricane loss mitigation and
7 prevention, creation of the Florida Commission on Hurricane
8 Loss Projection Methodology, and revisions of laws relating to
9 rates and coverages, are beginning to have their intended
10 effects; however, the market instability that persists could
11 frustrate these efforts to restore the market.
12 4. The moratorium completion provided in this section
13 is the least intrusive method for maintaining an orderly
14 market, insofar as it applies only to hurricane-related
15 cancellations and nonrenewals of personal lines residential
16 policies that were in force on the effective date, and insofar
17 as it allows an insurer annually to nonrenew up to 5 percent
18 of the total number of such policies as of the effective date.
19 (c) The Legislature finds, as of January 1, 1998,
20 that:
21 1. The conditions described in paragraphs (a) and (b)
22 remain applicable to the property insurance market in this
23 state in 1998 and are likely to remain applicable for several
24 years thereafter.
25 2. The general instability of the market is reflected
26 by the following facts:
27 a. In spite of depopulation efforts under which
28 approximately 600,000 policies have been transferred from the
29 Residential Property and Casualty Joint Underwriting
30 Association to the voluntary market, the Joint Underwriting
31 Association, with approximately 500,000 policies in force,
3
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1 remains the primary or exclusive source of new property
2 insurance coverage in significant portions of the state.
3 b. The Florida Windstorm Underwriting Association is
4 growing rapidly, with more than 400,000 policies in force,
5 approximately half of which were initially issued in 1997.
6 3. A further extension of the operation of this
7 section until June 1, 2001, will provide an opportunity for
8 the market to stabilize and for continuation of residual
9 market depopulation efforts.
10 (2) MORATORIUM COMPLETION.--
11 (a) As used in this subsection, the term "total number
12 of policies" means the number of an insurer's policies of a
13 specified type that were in force on June 1, 1996, or the date
14 on which this section became law, whichever was later.
15 (b) The following restrictions apply only to
16 cancellation or nonrenewal of personal lines residential
17 property insurance policies that were in force on June 1,
18 1996, or the date on which this section became law, whichever
19 was later.
20 1. In any 12-month period, an insurer may not cancel
21 or nonrenew more than 5 percent of such insurer's total number
22 of homeowner's policies, 5 percent of such insurer's total
23 number of mobile home owner's policies, or 5 percent of such
24 insurer's total number of personal lines residential policies
25 of all types and classes in the state for the purpose of
26 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 homeowner's policies, 10
29 percent of its total number of mobile home owner's policies,
30 or 10 percent of its total number of personal lines
31 residential policies of all types and classes in the county
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1 for the purpose of reducing the insurer's exposure to
2 hurricane claims. This subparagraph does not prohibit any
3 cancellations or nonrenewals of such policies for any other
4 lawful reason unrelated to the risk of loss from hurricane
5 exposure.
6 2.a. If, for any 12-month period, an insurer proposes
7 to cancel or nonrenew personal lines residential policies to
8 an extent not authorized by subparagraph 1. for the purpose of
9 reducing exposure to hurricane claims, the insurer must file a
10 phaseout plan with the department at least 90 days prior to
11 the effective date of the plan. In the plan, the insurer must
12 demonstrate to the department that the insurer is protecting
13 market stability and the interests of its policyholders. The
14 plan may not be implemented unless it is approved by the
15 department. In developing the plan, the insurer must consider
16 policyholder longevity, the use of voluntary incentives to
17 accomplish the reduction, and geographic distribution. The
18 insurer must demonstrate that under the plan the insurer will
19 not cancel or nonrenew more policies in the 12-month period
20 than the largest number of similar policies the insurer
21 canceled or nonrenewed for any reason in any 12-month period
22 between August 24, 1989, and August 24, 1992.
23 b. If the insurer considers the number of
24 cancellations and nonrenewals under sub-subparagraph a. to be
25 insufficient, the insurer may apply for approval of additional
26 cancellations or nonrenewals on the basis of an unreasonable
27 risk of insolvency. In evaluating a request under this
28 sub-subparagraph, the department shall consider and shall
29 require the insurer to provide information relevant to: the
30 insurer's size, market concentration, and general financial
31 condition; the portion of the insurer's business in this state
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1 represented by personal lines residential property insurance;
2 the reasonableness of assumptions with respect to size,
3 frequency, severity, and path of hurricanes; the reinsurance
4 available to the insurer and potential recoveries from the
5 Florida Hurricane Catastrophe Fund; and the extent to which
6 the insurer's assets have been voluntarily transferred by
7 dividend or otherwise from the insurer to its stockholders,
8 parent companies, or affiliated companies since June 1, 1996,
9 or the date on which this section became law, whichever was
10 later. In the implementation of exposure reductions under this
11 sub-subparagraph, the department and the insurer shall
12 consider such factors as policyholder longevity, the use of
13 voluntary incentives to accomplish the exposure reduction, and
14 geographic distribution.
15 c. A policy shall not be counted as having been
16 canceled or nonrenewed for purposes of this subsection if any
17 of the following apply:
18 (I) The policy was canceled or nonrenewed for an
19 underwriting reason unrelated to the risk of loss from
20 hurricane exposure, nonpayment of premium, or any other lawful
21 reason that is unrelated to the risk of loss from hurricane
22 exposure. The department shall consider the reason specified
23 in the notice of cancellation or nonrenewal to be the reason
24 for the cancellation or nonrenewal unless the department finds
25 by a preponderance of the evidence that the stated reason was
26 not the insurer's actual reason for the cancellation or
27 nonrenewal.
28 (II) The cancellation or nonrenewal was initiated by
29 the insured.
30 (III) The insurer has offered the policyholder
31 replacement or alternative coverage at approved rates, which
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1 coverage meets the requirements of the secondary mortgage
2 market.
3 d. In addition to any other cancellations or
4 nonrenewals subject to the limitations in this subsection, a
5 policy shall be considered as having been canceled or
6 nonrenewed for purposes of this subsection if:
7 (I) The insurer implements a rate increase under the
8 use-and-file provisions of s. 627.062(2)(a)2., which rate
9 increase exceeds 150 percent of the increase ultimately
10 approved by the department, and, while the rate filing was
11 pending, the policyholder voluntarily canceled or nonrenewed
12 the policy and obtained replacement coverage from another
13 insurer, including the Residential Property and Casualty Joint
14 Underwriting Association; or
15 (II) The insurer reduces the commission to an agent by
16 more than 25 percent and the agent thereafter places the risk
17 with another insurer, including the Residential Property and
18 Casualty Joint Underwriting Association, the Florida Windstorm
19 Underwriting Association, or the Coastal Zone Insurance Plan.
20 e. The department must approve or disapprove an
21 application for a waiver within 90 days after the department
22 receives the application for waiver.
23 3. In addition to the cancellations or nonrenewals
24 authorized under this section, an insurer may cancel or
25 nonrenew policies to the extent authorized by an exemption
26 from or waiver of either the moratorium created by chapter
27 93-401, Laws of Florida, or the moratorium phaseout under
28 former s. 627.7013(2).
29 4. Notwithstanding any provisions of this section to
30 the contrary, this section does not apply to any insurer that,
31 prior to August 24, 1992, filed notice of such insurer's
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1 intent to discontinue writing insurance in this state under s.
2 624.430, and for which a finding has been made by the
3 department, the Division of Administrative Hearings of the
4 Department of Management Services, or a court that such notice
5 satisfied all requirements of s. 624.430. Nothing in this
6 section shall be construed to authorize an insurer to withdraw
7 from any line of property insurance business for the purpose
8 of reducing exposure to risk of hurricane loss if such
9 withdrawal commenced at any time that the moratorium under
10 chapter 93-401, Laws of Florida, or the moratorium phaseout
11 under this section is in effect.
12 5. The following actions by an insurer do not
13 constitute cancellations or nonrenewals for purposes of this
14 subsection:
15 a. The transfer of a risk from one admitted insurer to
16 another admitted insurer, unless the terms of the new or
17 replacement policy place the policyholder in default of a
18 mortgage obligation.
19 b. An increase in the hurricane deductible applicable
20 to the policy, unless the new deductible places the
21 policyholder in default of a mortgage obligation or the
22 deductible exceeds the limits specified in s. 627.701.
23 c. Any other lawful change in coverage that does not
24 place the policyholder in default of a mortgage obligation.
25 d. A cancellation or nonrenewal that is part of the
26 same action as the removal of a policy including windstorm or
27 hurricane coverage from the Residential Property and Casualty
28 Joint Underwriting Association.
29 6. In order to assure fair and effective enforcement
30 of this subsection, each insurer shall, no later than October
31 1, 1996, report to the department the policy number of each
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1 policy subject to this subsection, arranged by county. The
2 report shall include the policy number for each personal lines
3 residential policy that was in force on June 1, 1996, or the
4 date this section became law, whichever was later. Beginning
5 October 1, 1996, each insurer shall also report, on a monthly
6 basis, all cancellations and nonrenewals of policies included
7 in such policy list and the reasons for the cancellations and
8 nonrenewals.
9 7. An insurer that has an overconcentration of wind
10 risk in areas eligible for coverage under the Florida
11 Windstorm Underwriting Association may submit to the
12 department for approval an accelerated exposure reduction
13 plan. The plan, if approved, shall allow the insurer to
14 nonrenew additional policies for reasons of reducing hurricane
15 loss, beyond the amounts authorized elsewhere in this
16 paragraph, subject to the following conditions:
17 a. All additional nonrenewals under this subparagraph
18 shall consist of nonrenewals of only the windstorm portion of
19 a policy, and shall be allowed only if the Florida Windstorm
20 Underwriting Association provides windstorm coverage to
21 replace the nonrenewed windstorm coverage.
22 b. At the conclusion of the accelerated exposure
23 reduction plan, which shall be no later than 12 months after
24 the date of the first nonrenewal under such plan, the insurer
25 is prohibited from any further nonrenewals for purposes of
26 reducing hurricane loss until the expiration of this
27 subsection.
28 c. The total number of nonrenewals statewide for
29 purposes of reduction of hurricane loss, under this
30 subparagraph taken together with the other provisions of this
31 paragraph, shall not exceed the total number of nonrenewals
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1 that would have been allowed statewide under subparagraph 1.
2 between June 1, 1996, and the expiration of this subsection.
3 d. Notwithstanding the provisions of s. 627.4133, the
4 insurer must give the policyholder 45 days' advance notice of
5 the nonrenewal of windstorm coverage under this subparagraph
6 and the availability of such coverage through the Florida
7 Windstorm Underwriting Association.
8 e. The first nonrenewal under an accelerated exposure
9 reduction program under this subparagraph may not take effect
10 earlier than February 1, 1997.
11 f. In reviewing the proposed accelerated exposure
12 reduction plan, the department shall consider:
13 (I) The degree to which the exposure reduction plan is
14 necessary to address the insurer's overconcentration.
15 (II) Prior levels of participation in writing
16 voluntary wind coverage in areas eligible for coverage through
17 the Florida Windstorm Underwriting Association.
18 (III) The availability of wind coverage in the
19 voluntary market for the subject risks.
20 (IV) The capacity of the Florida Windstorm
21 Underwriting Association to absorb the risks proposed to be
22 covered by the association.
23 (c) The department may adopt rules to implement this
24 subsection.
25 (d) This section shall cease to operate when the
26 department determines that the insured value of all
27 residential properties insured by the Florida Windstorm
28 Underwriting Association and all properties insured by the
29 Residential Property and Casualty Joint Underwriting
30 Association under policies providing wind coverage, combined,
31 has remained below $25 billion for 3 consecutive months, based
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1 on exposure data reported to the department by the
2 associations.
3 (e)(d) This subsection is repealed on June 1, 2001
4 1999.
5 Section 2. Section 627.7014, Florida Statutes, is
6 amended to read:
7 627.7014 Orderly markets for condominium association
8 residential property insurance.--
9 (1) FINDINGS AND PURPOSE.--
10 (a) The Legislature finds:
11 1. That residential property insurers providing
12 condominium association coverage, as a condition of doing
13 business in this state, have a responsibility to contribute to
14 an orderly market for condominium association residential
15 property insurance and that there is a compelling state
16 interest in maintaining an orderly market for condominium
17 association residential property insurance.
18 2. That Hurricane Andrew, which caused over $15
19 billion of insured losses in South Florida, has reinforced the
20 need of consumers to have reliable condominium association
21 insurance coverage; however, even more than 3 years after
22 Hurricane Andrew, the hurricane's enormous monetary impact is
23 causing insurers to propose substantial cancellation or
24 nonrenewal of their condominium association insurance
25 policyholders.
26 3. That the massive cancellations and nonrenewals
27 announced, proposed, or contemplated by certain insurers
28 constitute a significant danger to the public health, safety,
29 and welfare and destabilize the insurance market.
30 4. That the Residential Property and Casualty Joint
31 Underwriting Association, a residual market mechanism created
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1 to alleviate temporary unavailability of property insurance
2 coverage, remains the primary or exclusive source of new
3 property insurance in significant portions of the state.
4 5. That recent enactments intended to restore a
5 competitive, private sector property insurance market,
6 including creation and enhancement of the Florida Hurricane
7 Catastrophe Fund, incentives for depopulation of the
8 Residential Property and Casualty Joint Underwriting
9 Association, incentives for hurricane loss mitigation and
10 prevention, creation of the Florida Commission on Hurricane
11 Loss Projection Methodology, and revisions of laws relating to
12 rates and coverages, are beginning to have their intended
13 effects; however, the market remains unstable.
14 6. That the moratorium created by this section is the
15 least intrusive method for maintaining an orderly market for
16 condominium association insurance, insofar as it applies only
17 to hurricane-related cancellations and nonrenewals of personal
18 lines residential policies that were in force on the effective
19 date of this section, and insofar as it allows an insurer
20 annually to nonrenew up to 5 percent of the total number of
21 such policies as of the effective date of this section.
22 (b) The Legislature finds, as of January 1, 1998,
23 that:
24 1. The conditions described in paragraph (a) remain
25 applicable to the commercial residential property insurance
26 market in this state in 1998 and are likely to remain
27 applicable for several years thereafter.
28 2. The general instability of the market is reflected
29 by the recent rapid growth of the Florida Windstorm
30 Underwriting Association, which had more than 9,500 commercial
31 residential policies in force as of December 31, 1997,
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1 representing a 58 percent increase over the number of
2 commercial residential policies in force on December 31, 1996.
3 3. An extension of the operation of this section until
4 June 1, 2001, will provide an opportunity for the market to
5 stabilize and for continuation of residual market depopulation
6 efforts.
7 (c)(b) The purposes of this section are to provide for
8 a temporary moratorium on hurricane-related cancellations and
9 nonrenewals of condominium association coverage and to require
10 advance planning and approval for programs of condominium
11 association exposure reduction.
12 (2) MORATORIUM.--
13 (a) As used in this subsection, the term "total number
14 of policies" means the number of an insurer's condominium
15 association policies providing windstorm or hurricane coverage
16 that were in force on the effective date of this section. The
17 following restrictions apply to the cancellation or nonrenewal
18 of condominium association residential property insurance
19 policies that were in force on the effective date of this
20 section:
21 1. In any 12-month period, an insurer may not cancel
22 or nonrenew more than 5 percent of its total number of
23 condominium association policies in the state for the purpose
24 of reducing the insurer's exposure to hurricane claims and may
25 not, with respect to any county, cancel or nonrenew more than
26 10 percent of its total number of condominium association
27 policies in the county for the purpose of reducing the
28 insurer's exposure to hurricane claims. This subparagraph does
29 not prohibit any cancellations or nonrenewals of such policies
30 for any other lawful reason unrelated to the risk of loss from
31 hurricane exposure.
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1 2.a. If, for any 12-month period, an insurer proposes
2 to cancel or nonrenew condominium association policies to an
3 extent not authorized by subparagraph 1. for the purpose of
4 reducing exposure to hurricane claims, the insurer must file a
5 phaseout plan with the department at least 90 days prior to
6 the effective date of the plan. In the plan, the insurer must
7 demonstrate to the department that the insurer is protecting
8 market stability and the interests of its policyholders. The
9 plan may not be implemented unless it is approved by the
10 department. In developing the plan, the insurer must consider
11 policyholder longevity, the use of voluntary incentives to
12 accomplish the reduction, and geographic distribution. The
13 insurer must demonstrate that under the plan the insurer will
14 not cancel or nonrenew more policies in the 12-month period
15 than the largest number of similar policies the insurer
16 canceled or nonrenewed for any reason in any 12-month period
17 between August 24, 1989, and August 24, 1992.
18 b. If the insurer considers the number of
19 cancellations and nonrenewals under sub-subparagraph a. to be
20 insufficient, the insurer may apply for approval of additional
21 cancellations or nonrenewals on the basis of an unreasonable
22 risk of insolvency. In evaluating a request under this
23 sub-subparagraph, the department shall consider, and shall
24 require the insurer to provide information relevant to: the
25 insurer's size, market concentration, and general financial
26 condition; the portion of the insurer's business in this state
27 represented by condominium association residential property
28 insurance; the reasonableness of assumptions with respect to
29 size, frequency, severity, and path of hurricanes; and the
30 reinsurance available to the insurer and potential recoveries
31 from the Florida Hurricane Catastrophe Fund. In the
14
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1 implementation of exposure reductions under this
2 sub-subparagraph, the department and the insurer shall
3 consider such factors as policyholder longevity, the use of
4 voluntary incentives to accomplish the exposure reduction, and
5 geographic distribution.
6 c. A policy shall not be counted as having been
7 canceled or nonrenewed for purposes of this subsection if any
8 of the following apply:
9 (I) The policy was canceled or nonrenewed for an
10 underwriting reason unrelated to the risk of loss from
11 hurricane exposure, nonpayment of premium, or any other lawful
12 reason that is unrelated to the risk of loss from hurricane
13 exposure. The department shall consider the reason specified
14 in the notice of cancellation or nonrenewal to be the reason
15 for the cancellation or nonrenewal unless the department finds
16 by a preponderance of the evidence that the stated reason was
17 not the insurer's actual reason for the cancellation or
18 nonrenewal.
19 (II) The cancellation or nonrenewal was initiated by
20 the insured.
21 (III) The insurer has offered the policyholder
22 replacement or alternative coverage at approved rates.
23 (IV) The risk is transferred from one admitted insurer
24 to another admitted insurer, unless the terms of the new or
25 replacement policy place the policyholder in default of a
26 mortgage obligation.
27 (V) The hurricane deductible applicable to the policy
28 is increased unless the new deductible exceeds statutory
29 limits or places the policyholder in default of a mortgage
30 obligation.
31
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1 (VI) Any other lawful change in coverage that does not
2 place the policyholder in default of a mortgage obligation is
3 made.
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.
20 e. The department must approve or disapprove an
21 application for a waiver within 90 days after the department
22 receives the application for waiver.
23 3. Notwithstanding any provisions of this section to
24 the contrary, this section does not apply to any insurer that,
25 prior to August 24, 1992, filed notice of such insurer's
26 intent to discontinue writing insurance in this state under s.
27 624.430, and for which a finding has been made by the
28 department, the Division of Administrative Hearings of the
29 Department of Management Services, or a court that such notice
30 satisfied all requirements of s. 624.430. This section also
31 does not apply to any insurer that:
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1 a. Collects at least 75 percent of its Florida
2 premiums from policies that include hurricane coverage
3 provided to condominium associations in coastal counties.
4 b. Collects at least 80 percent of its Florida
5 premiums from policies that include hurricane coverage
6 provided to condominium associations in Broward, Dade, and
7 Palm Beach Counties.
8 c. Has, annually since 1992:
9 (I) Increased its aggregate Florida premium volume
10 from policies that include hurricane coverage provided to
11 condominium associations in coastal counties.
12 (II) Increased its aggregate Florida premium volume
13 from policies that include hurricane coverage provided to
14 condominium associations in Broward, Dade, and Palm Beach
15 Counties.
16 (III) Increased its aggregate Florida exposure from
17 policies that include hurricane coverage provided to
18 condominium associations in coastal counties.
19 (IV) Increased its aggregate Florida exposure from
20 policies that include hurricane coverage provided to
21 condominium associations in Broward, Dade, and Palm Beach
22 Counties.
23 d. Has surplus as to policyholders of no more than
24 $200 million as reflected in its annual statement for 1995.
25 4. In order to assure fair and effective enforcement
26 of this subsection, each insurer shall, no later than October
27 1, 1996, report to the department the policy number of each
28 policy subject to this subsection, arranged by county. The
29 report shall include the policy number for each condominium
30 association policy that was in force on the effective date of
31 this section. Beginning October 1, 1996, each insurer shall
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1 also report, on a monthly basis, all cancellations and
2 nonrenewals of policies included in such policy list and the
3 reasons for the cancellations and nonrenewals.
4 5. An insurer that has an overconcentration of wind
5 risk in areas eligible for coverage under the Florida
6 Windstorm Underwriting Association may submit to the
7 department for approval an accelerated exposure reduction
8 plan. The plan, if approved, shall allow the insurer to
9 nonrenew additional policies for reasons of reducing hurricane
10 loss, beyond the amounts authorized elsewhere in this
11 paragraph, subject to the following conditions:
12 a. All additional nonrenewals under this subparagraph
13 shall consist of nonrenewals of only the windstorm portion of
14 a policy, and shall be allowed only if the Florida Windstorm
15 Underwriting Association provides windstorm coverage to
16 replace the nonrenewed windstorm coverage.
17 b. At the conclusion of the accelerated exposure
18 reduction plan, which shall be no later than 12 months after
19 the date of the first nonrenewal under such plan, the insurer
20 is prohibited from any further nonrenewals for purposes of
21 reducing hurricane loss until the expiration of this
22 subsection.
23 c. The total number of nonrenewals statewide for
24 purposes of reduction of hurricane loss, under this
25 subparagraph taken together with the other provisions of this
26 paragraph, shall not exceed the total number of nonrenewals
27 that would have been allowed statewide under subparagraph 1.
28 between June 1, 1996, and the expiration of this subsection.
29 d. Notwithstanding the provisions of s. 627.4133, the
30 insurer must give the policyholder 45 days' advance notice of
31 the nonrenewal of windstorm coverage under this subparagraph
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1 and the availability of such coverage through the Florida
2 Windstorm Underwriting Association.
3 e. The first nonrenewal under an accelerated exposure
4 reduction program under this subparagraph may not take effect
5 earlier than February 1, 1997.
6 f. In reviewing the proposed accelerated exposure
7 reduction plan, the department shall consider:
8 (I) The degree to which the exposure reduction plan is
9 necessary to address the insurer's overconcentration.
10 (II) Prior levels of participation in writing
11 voluntary wind coverage in areas eligible for coverage through
12 the Florida Windstorm Underwriting Association.
13 (III) The availability of wind coverage in the
14 voluntary market for the subject risks.
15 (IV) The capacity of the Florida Windstorm
16 Underwriting Association to absorb the risks proposed to be
17 covered by the association.
18 (b) The department may adopt rules to implement this
19 subsection.
20 (c) This section shall cease to operate when the
21 department determines that the insured value of all
22 residential properties insured by the Florida Windstorm
23 Underwriting Association and all properties insured by the
24 Residential Property and Casualty Joint Underwriting
25 Association under policies providing wind coverage, combined,
26 has remained below $25 billion for 3 consecutive months, based
27 on exposure data reported to the department by the
28 associations.
29 (d)(c) This subsection is repealed on June 1, 2001
30 1999.
31
19
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 1998 SB 2054
37-1520-98
1 Section 3. This act shall take effect upon becoming a
2 law.
3
4 *****************************************
5 SENATE SUMMARY
6 Provides findings relating to a moratorium on
hrricane-related cancellations and nonrenewals of
7 personal lines residential policies and condominium
association policies. Deletes provisions relating to
8 accelerated exposure reduction plans and specifies
circumstances under which the sections are inoperative.
9 Delays the future repeal of the sections.
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