CODING: Words stricken are deletions; words underlined are additions.





                                                  SENATE AMENDMENT

    Bill No. CS/HB 339

    Amendment No.    

                            CHAMBER ACTION
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11  Senator Holzendorf moved the following amendment:

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13         Senate Amendment (with title amendment) 

14         On page 8, between lines 18 and 19,

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16  insert:

17         Section 10.  Paragraphs (a) and (b) of subsection (5)

18  of section 627.351, Florida Statutes, are amended to read:

19         627.351  Insurance risk apportionment plans.--

20         (5)  PROPERTY AND CASUALTY INSURANCE RISK

21  APPORTIONMENT.--The department shall adopt by rule a joint

22  underwriting plan to equitably apportion among insurers

23  authorized in this state to write property insurance as

24  defined in s. 624.604 or casualty insurance as defined in s.

25  624.605, the underwriting of one or more classes of property

26  insurance or casualty insurance, except for the types of

27  insurance that are included within property insurance or

28  casualty insurance for which an equitable apportionment plan,

29  assigned risk plan, or joint underwriting plan is authorized

30  under s. 627.311 or subsection (1), subsection (2), subsection

31  (3), subsection (4), or subsection (6) and except for risks

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 339

    Amendment No.    





 1  eligible for flood insurance written through the federal flood

 2  insurance program to persons with risks eligible under

 3  subparagraph (a)1. and who are in good faith entitled to, but

 4  are unable to, obtain such property or casualty insurance

 5  coverage, including excess coverage, through the voluntary

 6  market. For purposes of this subsection, an adequate level of

 7  coverage means that coverage which is required by state law or

 8  by responsible or prudent business practices. The Joint

 9  Underwriting Association shall not be required to provide

10  coverage for any type of risk for which there are no insurers

11  providing similar coverage in this state. The department may

12  designate one or more participating insurers who agree to

13  provide policyholder and claims service, including the

14  issuance of policies, on behalf of the participating insurers.

15         (a)  The plan shall provide:

16         1.  A means of establishing eligibility of a risk for

17  obtaining insurance through the plan, which provides that:

18         a.  A risk shall be eligible for such property

19  insurance or casualty insurance as is required by Florida law

20  if the insurance is unavailable in the voluntary market,

21  including the market assistance program and the surplus lines

22  market.

23         b.  A commercial risk not eligible under

24  sub-subparagraph a. shall be eligible for property or casualty

25  insurance if:

26         (I)  The insurance is unavailable in the voluntary

27  market, including the market assistance plan and the surplus

28  lines market;

29         (II)  Failure to secure the insurance would

30  substantially impair the ability of the entity to conduct its

31  affairs; and

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 339

    Amendment No.    





 1         (III)  The risk is not determined by the Risk

 2  Underwriting Committee to be uninsurable.

 3         c.  In the event the Federal Government terminates the

 4  Federal Crime Insurance Program established under 44 C.F.R.

 5  ss. 80-83, Florida commercial and residential risks previously

 6  insured under the federal program shall be eligible under the

 7  plan.

 8         d.(I)  In the event a risk is eligible under this

 9  paragraph and in the event the market assistance plan receives

10  a minimum of 100 applications for coverage within a 3-month

11  period, or 200 applications for coverage within a 1-year

12  period or less, for a given class of risk contained in the

13  classification system defined in the plan of operation of the

14  Joint Underwriting Association, and unless the market

15  assistance plan provides a quotation for at least 80 percent

16  of such applicants, such classification shall immediately be

17  eligible for coverage in the Joint Underwriting Association.

18         (II)  Any market assistance plan application which is

19  rejected because an individual risk is so hazardous as to be

20  practically uninsurable, considering whether the likelihood of

21  a loss for such a risk is substantially higher than for other

22  risks of the same class due to individual risk

23  characteristics, prior loss experience, unwillingness to

24  cooperate with a prior insurer, physical characteristics and

25  physical location shall not be included in the minimum

26  percentage calculation provided above. In the event that there

27  is any legal or administrative challenge to a determination by

28  the department that the conditions of this subparagraph have

29  been met for eligibility for coverage in the Joint

30  Underwriting Association for a given classification, any

31  eligible risk may obtain coverage during the pendency of any

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 339

    Amendment No.    





 1  such challenge.

 2         e.  In order to qualify as a quotation for the purpose

 3  of meeting the minimum percentage calculation in this

 4  subparagraph, the quoted premium must meet the following

 5  criteria:

 6         (I)  In the case of an admitted carrier, the quoted

 7  premium must not exceed the premium available for a given

 8  classification currently in use by the Joint Underwriting

 9  Association or the premium developed by using the rates and

10  rating plans on file with the department by the quoting

11  insurer, whichever is greater.

12         (II)  In the case of an authorized surplus lines

13  insurer, the quoted premium must not exceed the premium

14  available for a given classification currently in use by the

15  Joint Underwriting Association by more than 25 percent, after

16  consideration of any individual risk surcharge or credit.

17         f.  Any agent who falsely certifies the unavailability

18  of coverage as provided by sub-subparagraphs a. and b., is

19  subject to the penalties provided in s. 626.611.

20         2.  A means for the equitable apportionment of profits

21  or losses and expenses among participating insurers.

22         3.  Rules for the classification of risks and rates

23  which reflect the past and prospective loss experience.

24         4.  A rating plan which reasonably reflects the prior

25  claims experience of the insureds. Such rating plan shall

26  include at least two levels of rates for risks that have

27  favorable loss experience and risks that have unfavorable loss

28  experience, as established by the plan.

29         4.5.  Reasonable limits to available amounts of

30  insurance. Such limits may not be less than the amounts of

31  insurance required of eligible risks by Florida law.

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 339

    Amendment No.    





 1         5.6.  Risk management requirements for insurance where

 2  such requirements are reasonable and are expected to reduce

 3  losses.

 4         6.7.  Deductibles as may be necessary to meet the needs

 5  of insureds.

 6         7.8.  Policy forms which are consistent with the forms

 7  in use by the majority of the insurers providing coverage in

 8  the voluntary market for the coverage requested by the

 9  applicant.

10         8.9.  A means to remove risks from the plan once such

11  risks no longer meet the eligibility requirements of this

12  paragraph. For this purpose, the plan shall include the

13  following requirements: At each 6-month interval after the

14  activation of any class of insureds, the board of governors or

15  its designated committee shall review the number of

16  applications to the market assistance plan for that class. If,

17  based on these latest numbers, at least 90 percent of such

18  applications have been provided a quotation, the Joint

19  Underwriting Association shall cease underwriting new

20  applications for such class within 30 days, and notification

21  of this decision shall be sent to the Insurance Commissioner,

22  the major agents' associations, and the board of directors of

23  the market assistance plan. A quotation for the purpose of

24  this subparagraph shall meet the same criteria for a quotation

25  as provided in sub-subparagraph d. All policies which were

26  previously written for that class shall continue in force

27  until their normal expiration date, at which time, subject to

28  the required timely notification of nonrenewal by the Joint

29  Underwriting Association, the insured may then elect to

30  reapply to the Joint Underwriting Association according to the

31  requirements of eligibility. If, upon reapplication, those

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 339

    Amendment No.    





 1  previously insured Joint Underwriting Association risks meet

 2  the eligibility requirements, the Joint Underwriting

 3  Association shall provide the coverage requested.

 4         9.10.  A means for providing credits to insurers

 5  against any deficit assessment levied pursuant to paragraph

 6  (c), for risks voluntarily written through the market

 7  assistance plan by such insurers.

 8         10.11.  That the Joint Underwriting Association shall

 9  operate subject to the supervision and approval of a board of

10  governors consisting of 13 individuals appointed by the

11  Insurance Commissioner, and shall have an executive or

12  underwriting committee. At least four of the members shall be

13  representatives of insurance trade associations as follows:

14  one member from the American Insurance Association, one member

15  from the Alliance of American Insurers, one member from the

16  National Association of Independent Insurers, and one member

17  from an unaffiliated insurer writing coverage on a national

18  basis. Two representatives shall be from two of the statewide

19  agents' associations. Each board member shall be appointed to

20  serve for 2-year terms beginning on a date designated by the

21  plan and shall serve at the pleasure of the commissioner.

22  Members may be reappointed for subsequent terms.

23         (b)  Rates used by the Joint Underwriting Association

24  shall be actuarially sound and shall be subject to the

25  provisions of s. 627.062. To the extent applicable, the rate

26  standards set forth in s. 627.062 shall be considered by the

27  department in establishing rates to be used by the joint

28  underwriting plan. The initial rate level shall be determined

29  using the rates, rules, rating plans, and classifications

30  contained in the most current Insurance Services Office (ISO)

31  filing with the department or the filing of other licensed

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 339

    Amendment No.    





 1  rating organizations with an additional increment of 25

 2  percent of premium. For any type of coverage or classification

 3  which lends itself to manual rating for which the Insurance

 4  Services Office or another licensed rating organization does

 5  not file or publish a rate, the Joint Underwriting Association

 6  shall file and use an initial rate based on the average

 7  current market rate. The initial rate level for the rate plan

 8  shall also be subject to an experience and schedule rating

 9  plan which may produce a maximum of 25 percent debits or

10  credits. For any risk which does not lend itself to manual

11  rating and for which no rate has been promulgated under the

12  rate plan, the board shall develop and file with the

13  commissioner, subject to his or her approval, appropriate

14  criteria and factors for rating the individual risk. Such

15  criteria and factors shall include, but not be limited to,

16  loss rating plans, composite rating plans, and unique and

17  unusual risk rating plans. The initial rates required under

18  this paragraph shall be adjusted in conformity with future

19  filings by the Insurance Services Office with the department

20  and shall remain in effect until such time as the Joint

21  Underwriting Association has sufficient data as to

22  independently justify an actuarially sound change in such

23  rates.

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25  (Redesignate subsequent sections.)

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27

28  ================ T I T L E   A M E N D M E N T ===============

29  And the title is amended as follows:

30         On page 1, line 2, delete that line

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 339

    Amendment No.    





 1  and insert:

 2         An act relating to property and casualty

 3         insurance; amending s. 627.351, F.S.; revising

 4         the standard for the rates established under

 5         the property and casualty insurance risk

 6         apportionment plan;

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