House Bill 0799
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
By Representative Rayson
1 A bill to be entitled
2 An act relating to insurance; amending s.
3 627.0629, F.S.; requiring insurers to provide
4 certain discounts, credits, or other rate
5 differentials in their rating manuals under
6 certain circumstances; clarifying the
7 application of certain discounts for mobile
8 home owner's insurance rate filings; requiring
9 insurers to implement certain discounts or rate
10 differentials for mobile home insurance
11 premiums; providing criteria; amending s.
12 627.4091, F.S.; prohibiting insurers from
13 canceling or nonrenewing residential policies
14 without notice; providing requirements for such
15 notice; amending s. 627.4133, F.S.; requiring
16 insurers to offer coverage for certain
17 replacement property under certain
18 circumstances; creating s. 627.4138, F.S.;
19 providing restrictions on cancellation or
20 nonrenewal of residential coverage; amending s.
21 627.701, F.S.; increasing the value of a risk
22 at which certain hurricane or wind loss
23 deductible provisions apply; providing
24 definitions governing the applicability of
25 hurricane and wind loss deductible provisions;
26 repealing s. 627.3511(5)(b), F.S., relating
27 conditions under which an insurer or agent may
28 qualify for a bonus or exception from
29 assessment with respect to the Residential
30 Property and Casualty Joint Underwriting
31 Association; providing an effective date.
1
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
288-210B-99
1 Be It Enacted by the Legislature of the State of Florida:
2
3 Section 1. Subsections (1), (3), and (8) of section
4 627.0629, Florida Statutes, are amended to read:
5 627.0629 Residential property insurance; rate
6 filings.--
7 (1) Effective July 1, 2000 1994, a rating manual rate
8 filing for residential property insurance must include
9 appropriate discounts, credits, or other rate differentials,
10 or appropriate reductions in deductibles, for properties on
11 which fixtures or construction techniques actuarially
12 demonstrated to reduce the amount of loss in a windstorm have
13 been installed or implemented. The fixtures or construction
14 techniques shall include, but not be limited to, fixtures or
15 techniques which enhance roof strength, roof to wall strength,
16 wall to floor to foundation strength, and window, door, and
17 skylight strength.
18 (3) A rate filing made on or after July 1, 1995, for
19 mobile home owner's insurance must include appropriate
20 discounts, credits, or other rate differentials for mobile
21 homes constructed to comply with American Society of Civil
22 Engineers Standard ANSI/ASCE 7-88, adopted by the United
23 States Department of Housing and Urban Development on July 13,
24 1994, provided the policyholder has, with respect to the
25 mobile home which is the subject to the discount, complied and
26 that also comply with all applicable tie-down requirements
27 provided by state law. The discount authorized under this
28 subsection shall be in addition to any other discounts,
29 credits, or rate differentials authorized under this code,
30 including those authorized under subsection (8).
31
2
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
288-210B-99
1 (8) An insurer shall may implement appropriate
2 discounts or other rate differentials of up to 10 percent of
3 the annual premium to mobile home owners who provide to the
4 insurer evidence of a current inspection of tie-downs for the
5 mobile home, certifying that the tie-downs have been properly
6 installed and are in good condition. Any discount or other
7 rate differential implemented under this subsection shall be
8 in addition to any discount, credit, or rate differential
9 authorized under any other provision of this code including
10 those authorized under subsection (3). The insurer shall not
11 raise its base rate in order to offset the amount of the
12 discount.
13 Section 2. Subsection (2) of section 627.4091, Florida
14 Statutes, is amended to read:
15 627.4091 Specific reasons for denial, cancellation, or
16 nonrenewal.--
17 (2)(a) Each notice of nonrenewal or cancellation must
18 be accompanied by the specific reasons for nonrenewal or
19 cancellation, including the specific underwriting reasons, if
20 applicable.
21 (b) An insurer may not cancel or nonrenew a policy
22 providing residential coverage as described in s. 627.4025(1)
23 for an underwriting reason unless the insurer provides the
24 policyholder, in writing, with the underwriting reason for the
25 cancellation or nonrenewal. The reason stated shall be based
26 upon a specific underwriting rule on file with the department
27 or contained in an approved rating manual of a licensed rating
28 organization of which the insurer is a subscriber or member,
29 cite to the specific underwriting rule being invoked as a
30 basis for the cancellation or nonrenewal, and state or
31 paraphrase such underwriting rule.
3
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
288-210B-99
1 Section 3. Subsection (4) is added to section
2 627.4133, Florida Statutes, to read:
3 627.4133 Notice of cancellation, nonrenewal, or
4 renewal premium.--
5 (4) With respect to any personal lines residential
6 property insurance policy, if the insured property is sold,
7 and a replacement property is purchased by the named insured
8 within 6 months after the closing of the sale of the insured
9 property, the insurer providing the property insurance
10 coverage on the insured property sold shall offer
11 substantially similar coverage for such replacement property
12 if the replacement property is of a type for which the insurer
13 has approved rates and forms, is insurable pursuant to the
14 insurer's written underwriting rules filed with the
15 department, and, unless the insured property sold was also
16 located in a Florida Windstorm Underwriting Association
17 eligible area, is not located in an area which is eligible for
18 coverage with the Florida Windstorm Underwriting Association
19 created under s. 627.351(2).
20 Section 4. Section 627.4138, Florida Statutes, is
21 created to read:
22 627.4138 Residential coverage; restrictions on
23 cancellation or nonrenewal.--
24 (1) For purposes of this section, the term
25 "residential coverage" shall have the same meaning as provided
26 in s. 627.4025.
27 (2) An insurer may not cancel or nonrenew a policy of
28 residential coverage because of a property damage claim that
29 arose due to causes which were not within the control of the
30 policyholder and does not exceed 25 percent of the insured
31
4
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
288-210B-99
1 value of the dwelling, unless there has been a similar claim
2 by the policyholder within the previous 5-year period.
3 (3) An insurer may not use as grounds for cancellation
4 or nonrenewal of a policy of residential coverage notice to
5 the insurer of damage to an insured property if a claim is not
6 filed.
7 (4) The provisions of this section shall supplement
8 and shall not restrict or replace any other provision of the
9 Florida Insurance Code relating to the cancellation or
10 nonrenewal of a policy of residential coverage.
11 Section 5. Subsection (3) of section 627.701, Florida
12 Statutes, is amended, and subsection (9) is added to said
13 section, to read:
14 627.701 Liability of insureds; coinsurance;
15 deductibles.--
16 (3)(a) A policy of residential property insurance
17 shall include a deductible amount applicable to hurricane or
18 wind losses no lower than $500 and no higher than 2 percent of
19 the policy dwelling limits with respect to personal lines
20 residential risks, and no higher than 3 percent of the policy
21 limits with respect to commercial lines residential risks;
22 however, if a risk was covered on August 24, 1992, under a
23 policy having a higher deductible than the deductibles allowed
24 by this paragraph, a policy covering such risk may include a
25 deductible no higher than the deductible in effect on August
26 24, 1992. Notwithstanding the other provisions of this
27 paragraph, a personal lines residential policy covering a risk
28 valued at $50,000 or less may include a deductible amount
29 attributable to hurricane or wind losses no lower than $250,
30 and a personal lines residential policy covering a risk valued
31 at $150,000 $100,000 or more may include a deductible amount
5
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
288-210B-99
1 attributable to hurricane or wind losses no higher than 5
2 percent of the policy limits unless subject to a higher
3 deductible on August 24, 1992; however, no maximum deductible
4 is required with respect to a personal lines residential
5 policy covering a risk valued at more than $500,000. An
6 insurer may require a higher deductible, provided such
7 deductible is the same as or similar to a deductible program
8 lawfully in effect on June 14, 1995. In addition to the
9 deductible amounts authorized by this paragraph, an insurer
10 may also offer policies with a copayment provision under
11 which, after exhaustion of the deductible, the policyholder is
12 responsible for 10 percent of the next $10,000 of insured
13 hurricane or wind losses.
14 (b)1. Except as otherwise provided in this paragraph,
15 prior to issuing a personal lines residential property
16 insurance policy on or after April 1, 1996, or prior to the
17 first renewal of a residential property insurance policy on or
18 after April 1, 1996, the insurer must offer alternative
19 deductible amounts applicable to hurricane or wind losses
20 equal to $500 and 2 percent of the policy dwelling limits,
21 unless the 2 percent deductible is less than $500. The written
22 notice of the offer shall specify the hurricane or wind
23 deductible to be applied in the event that the applicant or
24 policyholder fails to affirmatively choose a hurricane
25 deductible. The insurer must provide such policyholder with
26 notice of the availability of the deductible amounts specified
27 in this paragraph in a form specified by the department in
28 conjunction with each renewal of the policy. The failure to
29 provide such notice constitutes a violation of this code but
30 does not affect the coverage provided under the policy.
31
6
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
288-210B-99
1 2. This paragraph does not apply with respect to a
2 deductible program lawfully in effect on June 14, 1995, or to
3 any similar deductible program, if the deductible program
4 requires a minimum deductible amount of no less than 2 percent
5 of the policy limits.
6 3. With respect to a policy covering a risk with
7 dwelling limits of at least $150,000 $100,000, but less than
8 $250,000, the insurer may, in lieu of offering a policy with a
9 $500 hurricane or wind deductible as required by subparagraph
10 1., offer a policy that the insurer guarantees it will not
11 nonrenew for reasons of reducing hurricane loss for one
12 renewal period and that contains up to a 2 percent hurricane
13 or wind deductible as required by subparagraph 1.
14 4. With respect to a policy covering a risk with
15 dwelling limits of $250,000 or more, the insurer need not
16 offer the $500 hurricane or wind deductible as required by
17 subparagraph 1., but must, except as otherwise provided in
18 this subsection, offer the 2 percent hurricane or wind
19 deductible as required by subparagraph 1.
20 (c) In order to provide for the transition from wind
21 deductibles to hurricane deductibles as required by this
22 subsection, an insurer is required to provide wind deductibles
23 meeting the requirements of this subsection until the
24 effective date of the insurer's first rate filing made after
25 January 1, 1997, and is thereafter required to provide
26 hurricane deductibles meeting the requirements of this
27 subsection.
28 (9) For purposes of this section, the term:
29 (a) "Hurricane or wind losses" means loss or damage
30 caused by the peril of windstorm during a hurricane, if such
31 loss or damage occurs in a county of this state in which the
7
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
288-210B-99
1 county was in a hurricane warning area declared by the
2 National Hurricane Center of the National Weather Service, or
3 in which the National Hurricane Center determines that an area
4 of the county sustained hurricane force winds. The term
5 includes ensuing damage to the interior of a building, or to
6 property inside a building, caused by rain, snow, sleet, hail,
7 sand, or dust if the direct force of the windstorm first
8 damages the building, causing an opening through which rain,
9 snow, sleet, hail, sand, or dust enters and causes damage.
10 (b) "Windstorm" for purposes of paragraph (a) means
11 wind, wind gusts, hail, rain, tornadoes, or cyclones caused by
12 or resulting from a hurricane which results in direct physical
13 loss or damage to property.
14 (c) "Hurricane" for purposes of paragraphs (a) and (b)
15 means a storm system that has been declared to be a hurricane
16 by the National Hurricane Center. The duration of the
17 hurricane includes the time period, in this state, beginning
18 at the time a hurricane watch or hurricane warning is issued
19 for any part of this state by the National Hurricane Center,
20 continuing for the time period during which the hurricane
21 conditions exist anywhere in this state, and ending 72 hours
22 following the termination of the last hurricane watch or
23 hurricane warning issued for any part of Florida by the
24 National Hurricane Center of the National Weather Service.
25 Section 6. Paragraph (b) of subsection (5) of section
26 627.3511, Florida Statutes, is repealed.
27 Section 7. This act shall take effect July 1, 1999.
28
29
30
31
8
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 1999 HB 799
288-210B-99
1 *****************************************
2 HOUSE SUMMARY
3
Requires insurers to provide discounts, credits, or other
4 rate differentials in their rating manuals. Clarifies the
application of discounts for mobile home owner's
5 insurance rate filings. Requires insurers to implement
discounts or rate differentials for mobile home insurance
6 premiums. Revises the conditions under which an insurer
or agent may qualify for a bonus or exception from
7 assessment with respect to the Residential Property and
Casualty Joint Underwriting Association. Prohibits
8 insurers from canceling or nonrenewing residential
policies without notice. Provides additional requirements
9 relating to notice of cancellation or nonrenewal.
Requires insurers to offer coverage for replacement
10 property. Provides restrictions on cancellation or
nonrenewal of residential coverage. Increases the value
11 of a risk at which hurricane or wind loss deductible
provisions apply and provides definitions governing the
12 applicability of hurricane and wind loss deductible
provisions.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
9