Senate Bill sb1478c1

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    Florida Senate - 2005                           CS for SB 1478

    By the Committee on Banking and Insurance; and Senator Garcia





    597-1811B-05

  1                      A bill to be entitled

  2         An act relating to public records and meetings;

  3         creating s. 627.06292, F.S.; exempting from

  4         public-records requirements reports of

  5         hurricane loss and exposure data which are

  6         specific to an insurance company and reported

  7         by insurers or rating organizations to the

  8         Office of Insurance Regulation or to a state

  9         university for purposes of developing a public

10         hurricane loss projection model; providing for

11         future legislative review and repeal under the

12         Open Government Sunset Review Act; providing

13         findings of public necessity; amending s.

14         627.0628, F.S.; exempting from public-records

15         and public-meetings requirements trade secrets

16         used in designing and constructing a hurricane

17         loss model, which information is provided to

18         the Florida Commission on Hurricane Loss

19         Projection Methodology, the Office of Insurance

20         Regulation, or the consumer advocate; providing

21         for future legislative review and repeal under

22         the Open Government Sunset Review Act;

23         providing findings of public necessity;

24         providing contingent effective dates.

25  

26  Be It Enacted by the Legislature of the State of Florida:

27  

28         Section 1.  Section 627.06292, Florida Statutes, is

29  created to read:

30         627.06292  Reports of hurricane loss data and

31  associated exposure data; public records exemption.--

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    Florida Senate - 2005                           CS for SB 1478
    597-1811B-05




 1         (1)  Reports of hurricane loss data and associated

 2  exposure data which are specific to a particular insurance

 3  company, as reported by an insurer or a licensed rating

 4  organization to the office or to a type I center at a state

 5  university for the public hurricane model pursuant to s.

 6  627.06291, are exempt from s. 119.07(1) and s. 24(a), Art. I

 7  of the State Constitution.

 8         (2)  This exemption does not apply to:

 9         (a)  Reports of loss or exposure data that are

10  aggregated for all insurers by the office or the type I center

11  at a state university; or

12         (b)  Loss reports for the 2004 hurricanes which are

13  required to be filed with the office pursuant to order by the

14  office, or to such similar reports as may be required for

15  future hurricanes.

16         (3)  This section is subject to the Open Government

17  Sunset Review Act of 1995 in accordance with s. 119.15, and

18  shall stand repealed on October 2, 2009, unless reviewed and

19  saved from repeal through reenactment by the Legislature.

20         Section 2.  The Legislature finds and declares that it

21  is a public necessity to make reports of hurricane loss data

22  and associated exposure data which are specific to a

23  particular insurance company exempt from section 119.07(1),

24  Florida Statutes, and Section 24(a), Article I of the State

25  Constitution in order that proprietary business information of

26  an insurer be protected. The Legislature finds that revealing

27  such information would reveal marketing strategies of an

28  insurer and could substantially harm insurers in the insurance

29  market by giving competitor insurers an unfair economic

30  advantage. Loss exposure data of an insurer includes the type

31  and location of properties insured by an insurer and this

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    Florida Senate - 2005                           CS for SB 1478
    597-1811B-05




 1  information is of value to an insurer and would provide a

 2  competitive advantage if disclosed to another insurer.

 3  Information concerning the hurricane losses that are paid by

 4  an insurer for specific types and locations of homes is

 5  proprietary in nature and could also promote litigation and

 6  result in direct economic harm to the insurer.

 7         Section 3.  Paragraph (e) is added to subsection (3) of

 8  section 627.0628, Florida Statutes, to read:

 9         627.0628  Florida Commission on Hurricane Loss

10  Projection Methodology.--

11         (3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--

12         (e)1.  A trade secret, as defined in s. 812.081, which

13  is used in designing and constructing a hurricane loss model

14  and which is provided pursuant to this section by a private

15  company to the commission, office, or consumer advocate

16  appointed pursuant to s. 627.0613, is exempt from s. 119.07(1)

17  and s. 24(a), Art. I of the State Constitution.

18         2.  That portion of a meeting of the commission or of a

19  rate proceeding on an insurer's rate filing at which a trade

20  secret made confidential and exempt by this paragraph is

21  discussed is exempt from s. 286.011 and s. 24(b), Art. I of

22  the State Constitution.

23         3.  This paragraph is subject to the Open Government

24  Sunset Review Act of 1995 in accordance with s. 119.15, and

25  shall stand repealed on October 2, 2009, unless reviewed and

26  saved from repeal through reenactment by the Legislature.

27         Section 4.  The Legislature finds that it is a public

28  necessity that a trade secret, as defined in section 812.081,

29  Florida Statutes, that is used in the design and construction

30  of a hurricane loss model, and that is provided pursuant to

31  law by a private company to the Commission on Hurricane Loss

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    Florida Senate - 2005                           CS for SB 1478
    597-1811B-05




 1  Projection Methodology, the Office of Insurance Regulation, or

 2  an appointed consumer advocate be made confidential and exempt

 3  from public-records requirements and be made exempt from

 4  public-meetings requirements. Disclosing trade secrets would

 5  negatively impact the business interests of a private company

 6  that has invested substantial economic resources in developing

 7  the model, and competitor companies would gain an unfair

 8  competitive advantage if provided access to such information.

 9  Reliable projections of hurricane losses are necessary in

10  order to ensure that rates for residential property insurance

11  meet the statutory requirement that rates be neither excessive

12  or inadequate. This goal is served by enabling the Commission

13  on Hurricane Loss Projection Methodology, the Office of

14  Insurance Regulation, and the consumer advocate appointed

15  pursuant to section 627.0613, Florida Statutes, to have access

16  to all aspects of hurricane loss models, and encouraging

17  private companies to submit such models to the commission,

18  office, and consumer advocate for review without concern that

19  proprietary information or trade secrets will be disclosed. In

20  addition, without protecting such information during meetings

21  or proceedings at which the information is discussed,

22  competitors and other persons could attend those meetings and

23  discover the proprietary information or trade secrets.

24         Section 5.  Sections 1 and 2 of this act shall take

25  effect on the same date that CS for Senate Bill 1488 or

26  similar legislation takes effect requiring insurers to report

27  hurricane loss and exposure data to the Office of Insurance

28  Regulation or to a public university for developing a

29  hurricane loss model, if such legislation is adopted in the

30  same legislative session or an extension thereof and becomes

31  law, and sections 3 and 4 of this act shall take effect on the

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    Florida Senate - 2005                           CS for SB 1478
    597-1811B-05




 1  same date that CS for Senate Bill 1488 or similar legislation

 2  takes effect, providing for the Office of Insurance Regulation

 3  and the consumer advocate appointed pursuant to section

 4  627.0613, Florida Statutes, to have access to assumptions used

 5  in privately owned hurricane loss models, if such legislation

 6  is adopted in the same legislative session or an extension

 7  thereof and becomes law.

 8  

 9          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
10                         Senate Bill 1478

11                                 

12  Provides that the public records exemption for loss and
    exposure data reported by an insurer for the public hurricane
13  model does not apply to reports of data that are aggregated
    for all insurers by the Office of Insurance Regulation or the
14  type I center at a state university; or to loss reports for
    the 2004 hurricane required to be filed with office persuant
15  to order or similar reports for future hurricanes.

16  Revises public necessity statement.

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