HB 0009A

1	A bill to be entitled
2	An act relating to hurricane deductibles; providing
3	legislative findings and intent; providing a definition;
4	providing for the Department of Financial Services to
5	reimburse policyholders of residential property insurance
6	for multiple deductibles applied by insurers for two or
7	more hurricanes; establishing criteria for policyholders
8	to be eligible for reimbursements; requiring applications
9	to be submitted to the department, including certain
10	information; limiting the maximum amount of
11	reimbursements; limiting total reimbursements to the
12	amount appropriated for this purpose; providing
13	reimbursement criteria for the department under certain
14	circumstances; requiring insurers to provide certain
15	information to the department relating to claims for
16	reimbursement, subject to policyholders' authorization;
17	authorizing the department to contract with third parties
18	for investigation or adjustment of claims for
19	reimbursement; requiring insurers to mail notices to
20	certain policyholders of the reimbursement procedures;
21	authorizing the department to adopt certain rules;
22	providing legislative intent; providing that applications
23	for reimbursements shall be insurance claims for purposes
24	of determining insurance fraud; amending s. 627.701, F.S.;
25	requiring that hurricane deductibles of residential
26	property insurance policies be applied on an annual basis
27	to all hurricane losses that occur during the calendar
28	year; allowing insurers to apply an alternative deductible
29	to subsequent hurricane losses after the annual deductible
30	is met; providing for calculations of hurricane
31	deductibles for new or renewed policies; allowing insurers
32	to require policyholders to report hurricane losses or to
33	maintain receipts or records in order to apply hurricane
34	losses to subsequent hurricane claims; providing
35	applicability; providing an appropriation; providing an
36	effective date.
37
38	Be It Enacted by the Legislature of the State of Florida:
39
40	Section 1.  Legislative findings and intent.--The
41	Legislature finds that the four hurricanes striking Florida in
42	2004 resulted in at least 30,000 residential property insurance
43	policyholders experiencing damage from two or more hurricanes
44	for which insurers have applied the hurricane deductible to each
45	hurricane claim. The fact that policyholders have separate
46	hurricane deductibles can result in significant out-of-pocket
47	expense and financial hardship to policyholders. Although
48	insurers are required by law to notify policyholders that the
49	hurricane deductible can result in a large out-of-pocket
50	expense, it was not anticipated that the citizens of Florida
51	would experience hurricanes with such frequency and severity and
52	that some policyholders would have such extensive damage from
53	two or more hurricanes in the same year and be forced to meet
54	two or more deductibles in this circumstance. The Legislature
55	further finds that the public health, safety, and welfare demand
56	that residential structures damaged or destroyed in a
57	catastrophe be repaired or reconstructed as soon as possible and
58	that application of multiple deductibles delays or prevents such
59	reconstruction, hinders the economic recovery of the state and
60	its citizens, and endangers the public health, safety, and
61	welfare. Therefore, state action to establish a program to
62	reimburse policyholders for the financial loss suffered due to
63	the application of multiple hurricane deductibles constitutes a
64	valid and necessary public and governmental purpose. The
65	Legislature intends to establish a program to reimburse
66	policyholders for such losses, up to specified limits.
67	Section 2.  Reimbursement for multiple hurricane
68	deductibles.--
69	(1)  For the purposes of this section, "residential
70	property insurance" means residential coverage as described in
71	s. 627.4025(1), Florida Statutes.
72	(2)  The Department of Financial Services shall reimburse
73	policyholders of residential property insurance whose property
74	was damaged by two or more hurricanes in 2004 and whose insurer
75	applied more than one hurricane deductible to the insurance
76	claims.
77	(3)  To be eligible for reimbursement, a policyholder must
78	meet the criteria of subsection (2) and must:
79	(a)  Have filed a claim for the damage with the insurer by
80	December 1, 2004, and apply to the department by March 1, 2005,
81	on a form provided by the department. The form shall identify
82	the amount of the claims paid by the insurer, per hurricane, the
83	amount of the deductible that was applied to each claim, and
84	such additional information as the department may require to
85	verify the claim for reimbursement, including documentation from
86	the insurer.
87	(b)  Have incurred damages in excess of the full amount of
88	a single hurricane deductible from one hurricane or from a
89	combination or two or more hurricanes.
90	(c)  Provide written authorization for the department to
91	obtain information from the policyholder's insurer related to
92	the claim for reimbursement.
93	(4)(a)  Reimbursement may be provided only for damages that
94	would have been paid under the policy but for application of the
95	deductible. For those policyholders who have met one full
96	hurricane deductible as applied by the insurer, the amount of
97	reimbursement shall be the amount of the hurricane claim that
98	was not paid or was reduced due to application of a second or
99	subsequent deductible. For those policyholders who were denied
100	payment by their insurer for not meeting the hurricane
101	deductible from any hurricane but who have met one full
102	hurricane deductible from the combination of two or more
103	hurricanes, the amount of reimbursement shall be the amount in
104	excess of one full hurricane deductible. The maximum
105	reimbursement shall be limited to the amount of the
106	policyholder's loss in excess of one full deductible, but not
107	more than $10,000 per policy for damage caused by two
108	hurricanes, not more than $20,000 per policy for damage caused
109	by three hurricanes, and not more than $30,000 per policy for
110	damage caused by four hurricanes, except as otherwise provided
111	in this subsection.
112	(b)  For a policy issued to a condominium association, the
113	maximum reimbursement shall be limited to an amount equal to
114	$3,000 multiplied by the number of condominium units, or the
115	maximum amount specified in paragraph (a) or paragraph (c),
116	whichever is greater.
117	(c)  If more than one residential structure is insured
118	under the policy and a separate hurricane deductible applies to
119	each residential structure, the maximum reimbursement shall be
120	limited to $10,000 per structure for multiple hurricane claims
121	for that structure.
122	(d)  Reimbursement may not be paid for loss amounts for
123	which the policyholder has received a grant from the Federal
124	Emergency Management Agency.
125	(5)  The total amount of funds paid to policyholders
126	pursuant to this section is limited to the amount appropriated
127	for this purpose.
128	(a)  The department shall reimburse policyholders who met
129	at least two full hurricane deductibles for two or more
130	hurricanes for which each payment was reduced by the full amount
131	of the deductible for each hurricane.
132	(b)  The department shall reimburse policyholders who met
133	one full hurricane deductible as a result of one hurricane and
134	were not paid for a different claim by the application of a
135	hurricane deductible.
136	(c)  After reimbursing all policyholders who meet the
137	criteria of paragraph (a) or paragraph (b), the department shall
138	reimburse all other eligible policyholders. If the amount
139	appropriated for this purpose is not adequate to pay all other
140	eligible policyholders up to the maximum reimbursement amounts,
141	the department shall provide reimbursement on a pro rata basis
142	so that each policyholder receives an equal percentage of the
143	funds available.
144	(6)  The insurer issuing the policy to the applicant for
145	reimbursement shall provide to the department, upon request,
146	such information in the applicant's claim file that would assist
147	the department in determining the validity and reasonableness of
148	the claim, subject to the policyholder's authorization to
149	release such information. The department may further investigate
150	or adjust the claim as the department determines is necessary
151	and may contract with third parties for this purpose.
152	(7)  Insurers shall mail notice to those residential
153	property insurance policyholders who filed claims with the
154	insurer for two or more hurricanes in 2004 and to whom the
155	insurer applied more than one hurricane deductible, whether
156	there was a claims payment or not. The notice shall be on a form
157	provided by the department informing the policyholder of the
158	reimbursement program established by this section and the
159	procedures for seeking reimbursement, including the application
160	form provided by the department. The notice shall be mailed in
161	such manner and within such time as specified by the department.
162	For subsequent claims, the insurer shall provide the notice at
163	the time that the insurer notifies the policyholder of the
164	application of the second deductible.
165	(8)  The department may adopt rules to implement this
166	section. It is the Legislature's intent that the department
167	implement this section as soon as possible in order to provide
168	immediate relief to affected policyholders. Therefore, the
169	department may adopt such rules pursuant to the emergency rule
170	procedures of s. 120.54(4), Florida Statutes.
171	(9)  Applications for reimbursement shall be considered
172	submitting an insurance claim for purposes of determining
173	whether a person has committed insurance fraud pursuant to s.
174	817.234, Florida Statutes. The Department of Financial Services
175	and the department's Division of Insurance Fraud shall have such
176	powers to investigate and enforce such actions as provided in s.
177	626.989, Florida Statutes.
178	Section 3.  Subsections (5), (6), (7), and (8) of section
179	627.701, Florida Statutes, are renumbered as subsections (6),
180	(7), (8), and (9), respectively, and a new subsection (5) is
181	added to said section to read:
182	627.701  Liability of insureds; coinsurance; deductibles.--
183	(5)  The hurricane deductible of any residential property
184	insurance policy shall be applied as follows:
185	(a)  The hurricane deductible shall apply on an annual
186	basis to all covered hurricane losses that occur during the
187	calendar year for losses that are covered under one or more
188	policies issued by the same insurer or an insurer in the same
189	insurer group.
190	(b)  If a hurricane deductible applies separately to each
191	of one or more structures insured under a single policy, the
192	requirements of this subsection apply with respect to the
193	deductible for each structure.
194	(c)  If there was a hurricane loss for a prior hurricane or
195	hurricanes during the calendar year, the insurer may apply a
196	deductible to a subsequent hurricane that is the greater of the
197	remaining amount of the hurricane deductible or the amount of
198	the deductible that applies to perils other than a hurricane.
199	Insurers may require policyholders to report hurricane losses
200	that are below the hurricane deductible or to maintain receipts
201	or other records of such hurricane losses in order to apply such
202	losses to subsequent hurricane claims.
203	(d)  If there are hurricane losses in a calendar year on
204	more than one policy issued by the same insurer or an insurer in
205	the same insurer group, the hurricane deductible shall be the
206	highest amount stated in any one of the policies. If a
207	policyholder who had a hurricane loss under the prior policy is
208	provided or offered a lower hurricane deductible under the new
209	or renewal policy, the insurer must notify the policyholder, in
210	writing, at the time the lower hurricane deductible is provided
211	or offered, that the lower hurricane deductible will not apply
212	until January 1 of the following calendar year.
213	Section 4.  The amendment of s. 627.701, Florida Statutes,
214	by section 3 applies only to policies issued or renewed on or
215	after May 1, 2005.
216	Section 5.  The sum of $100 million is appropriated from
217	the General Revenue Fund in special appropriation category
218	"Hurricane Multiple Deductible Relief" to the Department of
219	Financial Services for reimbursement to residential property
220	insurance policyholders for the expense of multiple hurricane
221	deductibles, as provided in sections 1 and 2. Up to 1 percent of
222	this appropriation may be used by the department for the
223	administration of payments to such policyholders.
224	Section 6.  This act shall take effect upon becoming a law.

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