HB 0009A

CS

CHAMBER ACTION

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

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