Senate Bill sb1488c1

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    Florida Senate - 2005                           CS for SB 1488

    By the Committee on Banking and Insurance; and Senator Garcia





    597-1812C-05

  1                      A bill to be entitled

  2         An act relating to property insurance; amending

  3         s. 215.555, F.S.; revising the retention of

  4         losses for which an insurer is not entitled to

  5         reimbursement from the Florida Hurricane

  6         Catastrophe Fund; amending s. 215.559, F.S.;

  7         revising the allocation of funds appropriated

  8         to the Department of Community Affairs from the

  9         Florida Hurricane Catastrophe Fund for the

10         Hurricane Loss Mitigation Program; requiring

11         that the department establish a low-interest

12         loan program and pilot project for hurricane

13         loss mitigation; authorizing contractual

14         agreements between the department and financial

15         institutions; authorizing the Department of

16         Community Affairs to adopt rules; amending s.

17         627.062, F.S.; requiring the Office of

18         Insurance Regulation to submit a proposed plan

19         to the Legislature establishing uniform rating

20         territories to be used by insurers for

21         residential property insurance rate filings;

22         requiring a further act of the Legislature to

23         implement the plan; limiting the recoupment by

24         an insurer in its rates of the reimbursement

25         premium it pays to the Florida Hurricane

26         Catastrophe Fund; repealing provisions allowing

27         an insurer to submit a rate filing to an

28         arbitration panel; amending s. 627.0628, F.S.;

29         restricting the admissibility and relevance in

30         rate proceedings of findings of the Florida

31         Commission on Hurricane Loss Projection

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    Florida Senate - 2005                           CS for SB 1488
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 1         Methodology; amending s. 627.0629, F.S.;

 2         lowering the percentage amount of a rate filing

 3         based on a computer model which requires a

 4         public hearing; creating s. 627.06291, F.S.;

 5         requiring residential property insurance and

 6         rating and advisory organizations to report

 7         hurricane loss data for development of a public

 8         hurricane model for hurricane loss projections;

 9         amending s. 627.351, F.S.; limiting the

10         coverage limits for dwellings insured by

11         Citizens Property Insurance Corporation;

12         revising the appointments to the board and the

13         approval of officers and employees of the

14         corporation; creating a Market Accountability

15         Advisory Committee to assist the corporation in

16         developing awareness of it rates and service

17         levels; providing for membership of the

18         committee; providing terms of office; requiring

19         the committee to report to the corporation at

20         each board meeting; revising the criteria and

21         standards for establishing the rates charged

22         for coverage by the corporation; providing that

23         rates may not be increased by more than a

24         specified percentage; creating s. 627.40951,

25         F.S.; providing legislative findings and

26         intent; providing for an advisory committee;

27         providing for membership; providing for

28         recommendations to be submitted to the

29         Legislature regarding standard residential

30         property insurance policies; amending s.

31         627.411, F.S.; adding grounds for which the

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    Florida Senate - 2005                           CS for SB 1488
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 1         Office of Insurance Regulation must disapprove

 2         a form filed by an insurer; amending s.

 3         627.4133, F.S.; prohibiting insurers from

 4         canceling or nonrenewing residential property

 5         insurance policies under certain emergency

 6         circumstances; providing exceptions; providing

 7         notice requirements; providing application to

 8         personal residential and commercial residential

 9         policies covering certain damaged property;

10         amending s. 627.4143, F.S.; requiring insurers

11         to provide personal lines property insurance

12         policyholders with a checklist of items

13         contained in policies; authorizing the

14         Financial Services Commission to adopt rules;

15         prescribing elements to be contained in the

16         checklist; requiring the checklist and outline

17         of insurance coverage to be sent with each

18         renewal; clarifying that homeowners' insurance

19         includes mobile homeowners', dwelling, and

20         condominium unit owners' insurance for purposes

21         of the outline of coverage; amending s.

22         627.701, F.S.; increasing the maximum allowable

23         hurricane deductible for personal lines and

24         certain commercial lines residential policies;

25         requiring insurers to offer specified hurricane

26         deductibles for such policies; requiring

27         insurers to provide written notice explaining

28         hurricane deductible options for such policies;

29         amending s. 627.7011, F.S.; requiring insurers

30         to offer coverage for additional costs of

31         repair due to laws and ordinances; requiring

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    Florida Senate - 2005                           CS for SB 1488
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 1         insurers to pay the replacement cost for a loss

 2         insured on that basis, whether or not the

 3         insured replaces or repairs the dwelling or

 4         property; amending s. 627.7015, F.S.; providing

 5         a penalty for an insurer that fails to notify a

 6         claimant of the availability of mediation

 7         procedures for resolving a disputed property

 8         insurance claim; amending s. 627.702, F.S.;

 9         providing legislative intent regarding the

10         requirement that an insurer pay policy limits

11         if there is a total loss of a building;

12         amending s. 627.706, F.S., relating to sinkhole

13         insurance; providing definitions; amending s.

14         627.707, F.S.; revising requirements for

15         insurers in investigating sinkhole claims;

16         requiring that the insurer provide certain

17         notification to the policyholder; requiring

18         that the insurer engage an engineer and

19         professional geologist; providing requirements

20         for the insurer if a claim is denied; providing

21         requirements if a sinkhole loss is verified;

22         creating s. 627.7071, F.S.; requiring that the

23         Department of Business and Professional

24         Regulation certify persons as qualified to

25         identify sinkholes and recommend remediation of

26         sinkhole damage; providing for the Department

27         of Financial Services to select engineers and

28         professional geologists to verify sinkhole

29         loss; requiring that the insurer pay the fees

30         of the department in selecting the engineer or

31         geologist; authorizing the Department of

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 1         Business and Professional Regulation to adopt

 2         rules; creating s. 627.7072, F.S.; providing

 3         testing standards for sinkholes; authorizing

 4         the Department of Financial Services to adopt

 5         rules; creating s. 627.7073, F.S.; providing

 6         requirements for reports issued by engineers

 7         and professional geologists; requiring certain

 8         reports and certifications to be issued to the

 9         policyholder and the insurer; requiring that

10         the insurer file a copy of the report and

11         certification with the clerk of court to be

12         recorded with the certificate of title or deed

13         for the property; providing that there is no

14         cause of action or liability against an insurer

15         for filing such report and certification;

16         creating s. 627.711, F.S.; requiring insurers

17         to provide written notice to applicants and

18         policyholders of the amount of the premium

19         discounts and credits for fixtures and

20         construction techniques that reduce the amount

21         of windstorm loss; authorizing the Financial

22         Services Commission to adopt rules; creating s.

23         627.712, F.S.; requiring property insurers to

24         pay or deny claims within certain time periods;

25         providing that overdue payments bear interest;

26         requiring the Office of the Auditor General to

27         conduct an operational audit of Citizens

28         Property Insurance Corporation; providing that

29         the amendment to s. 627.702, F.S., is intended

30         to be remedial and clarifying in nature;

31  

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 1         providing an appropriation and authorizing

 2         positions; providing effective dates.

 3  

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

 5  

 6         Section 1.  Effective June 1, 2005, paragraph (e) of

 7  subsection (2) of section 215.555, Florida Statutes, is

 8  amended to read:

 9         215.555  Florida Hurricane Catastrophe Fund.--

10         (2)  DEFINITIONS.--As used in this section:

11         (e)  "Retention" means the amount of losses below which

12  an insurer is not entitled to reimbursement from the fund. An

13  insurer's retention shall be calculated as follows:

14         1.  The board shall calculate and report to each

15  insurer the retention multiples for that year. For the

16  contract year beginning June 1, 2005 2004, the retention

17  multiple shall be equal to $4.5 billion divided by the total

18  estimated reimbursement premium for the contract year; for

19  subsequent years, the retention multiple shall be equal to

20  $4.5 billion, adjusted based upon the reported exposure from

21  the prior contract year to reflect the percentage growth in

22  exposure to the fund for covered policies since 2004 2003,

23  divided by the total estimated reimbursement premium for the

24  contract year. Total reimbursement premium for purposes of the

25  calculation under this subparagraph shall be estimated using

26  the assumption that all insurers have selected the 90-percent

27  coverage level.

28         2.  The retention multiple as determined under

29  subparagraph 1. shall be adjusted to reflect the coverage

30  level elected by the insurer. For insurers electing the

31  90-percent coverage level, the adjusted retention multiple is

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    Florida Senate - 2005                           CS for SB 1488
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 1  100 percent of the amount determined under subparagraph 1. For

 2  insurers electing the 75-percent coverage level, the retention

 3  multiple is 120 percent of the amount determined under

 4  subparagraph 1. For insurers electing the 45-percent coverage

 5  level, the adjusted retention multiple is 200 percent of the

 6  amount determined under subparagraph 1.

 7         3.  An insurer shall determine its provisional

 8  retention by multiplying its provisional reimbursement premium

 9  by the applicable adjusted retention multiple and shall

10  determine its actual retention by multiplying its actual

11  reimbursement premium by the applicable adjusted retention

12  multiple.

13         4.  For insurers who experience multiple covered events

14  causing loss during the contract year, beginning June 1, 2005,

15  each insurer's full retention shall be applied to each of the

16  covered events causing the two largest losses for that

17  insurer. For each other covered event resulting in losses, the

18  insurer's retention shall be reduced to one-third of the full

19  retention. The reimbursement contract shall provide for the

20  reimbursement of losses for each covered event based on the

21  full retention with adjustments made to reflect the reduced

22  retentions after January 1 of the contract year provided the

23  insurer reports its losses as specified in the reimbursement

24  contract.

25         Section 2.  Effective July 1, 2005, section 215.559,

26  Florida Statutes, is amended to read:

27         215.559  Hurricane Loss Mitigation Program.--

28         (1)  There is created a Hurricane Loss Mitigation

29  Program. The Legislature shall annually appropriate $10

30  million of the moneys authorized for appropriation under s.

31  215.555(7)(c) from the Florida Hurricane Catastrophe Fund to

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 1  the Department of Community Affairs for the purposes set forth

 2  in this section.

 3         (2)(a)  Seven million dollars in funds provided in

 4  subsection (1) shall be used for programs to improve the wind

 5  resistance of residences and mobile homes, including loans,

 6  subsidies, grants, demonstration projects, and direct

 7  assistance; cooperative programs with local governments and

 8  the Federal Government; and other efforts to prevent or reduce

 9  losses or reduce the cost of rebuilding after a disaster.

10         (b)  Three million dollars in funds provided in

11  subsection (1) shall be used to retrofit existing facilities

12  used as public hurricane shelters. The department must

13  prioritize the use of these funds for projects included in the

14  September 1, 2000, version of the Shelter Retrofit Report

15  prepared in accordance with s. 252.385(3), and each annual

16  report thereafter. The department must give funding priority

17  to projects in regional planning council regions that have

18  shelter deficits and to projects that maximize use of state

19  funds.

20         (3)  By the 2006-2007 fiscal year, the Department of

21  Community Affairs shall develop a low-interest loan program

22  for homeowners and mobile home owners to retrofit their homes

23  with fixtures or apply construction techniques that have been

24  demonstrated to reduce the amount of damage or loss due to a

25  hurricane. Funding for the program shall be used to subsidize

26  or guaranty private-sector loans for this purpose to qualified

27  homeowners by financial institutions chartered by the state or

28  Federal Government. The department may enter into contracts

29  with financial institutions for this purpose. The department

30  shall establish criteria for determining eligibility for the

31  loans and selecting recipients, standards for retrofitting

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 1  homes or mobile homes, limitations on loan subsidies and loan

 2  guaranties, and other terms and conditions of the program,

 3  which must be specified in the department's report to the

 4  Legislature on January 1, 2006, required by subsection (8).

 5  For the 2005-2006 fiscal year, the Department of Community

 6  Affairs may use up to $1 million of the funds appropriated

 7  pursuant to paragraph (2)(a) to begin the low-interest loan

 8  program as a pilot project in one or more counties. The

 9  Department of Financial Services, the Office of Financial

10  Regulation, the Florida Housing Finance Corporation, and the

11  Office of Tourism, Trade, and Economic Development shall

12  assist the Department of Community Affairs in establishing the

13  program and pilot project. The department may use up to 2.5

14  percent of the funds appropriated in any given fiscal year for

15  administering the loan program. The department may adopt rules

16  to implement the program.

17         (4)(3)  Forty percent of the total appropriation in

18  paragraph (2)(a) shall be used to inspect and improve

19  tie-downs for mobile homes. Within 30 days after the effective

20  date of that appropriation, the department shall contract with

21  a public higher educational institution in this state which

22  has previous experience in administering the programs set

23  forth in this subsection to serve as the administrative entity

24  and fiscal agent pursuant to s. 216.346 for the purpose of

25  administering the programs set forth in this subsection in

26  accordance with established policy and procedures. The

27  administrative entity working with the advisory council set up

28  under subsection (6) (5) shall develop a list of mobile home

29  parks and counties that may be eligible to participate in the

30  tie-down program.

31  

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 1         (5)(4)  Of moneys provided to the Department of

 2  Community Affairs in paragraph (2)(a), 10 percent shall be

 3  allocated to a Type I Center within the State University

 4  System dedicated to hurricane research. The Type I Center

 5  shall develop a preliminary work plan approved by the advisory

 6  council set forth in subsection (6) (5) to eliminate the state

 7  and local barriers to upgrading existing mobile homes and

 8  communities, research and develop a program for the recycling

 9  of existing older mobile homes, and support programs of

10  research and development relating to hurricane loss reduction

11  devices and techniques for site-built residences. The State

12  University System also shall consult with the Department of

13  Community Affairs and assist the department with the report

14  required under subsection (8) (7).

15         (6)(5)  Except for the program set forth in subsection

16  (3), The Department of Community Affairs shall develop the

17  programs set forth in this section in consultation with an

18  advisory council consisting of a representative designated by

19  the Chief Financial Officer, a representative designated by

20  the Florida Home Builders Association, a representative

21  designated by the Florida Insurance Council, a representative

22  designated by the Federation of Manufactured Home Owners, a

23  representative designated by the Florida Association of

24  Counties, and a representative designated by the Florida

25  Manufactured Housing Association.

26         (7)(6)  Moneys provided to the Department of Community

27  Affairs under this section are intended to supplement other

28  funding sources of the Department of Community Affairs and may

29  not supplant other funding sources of the Department of

30  Community Affairs.

31  

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 1         (8)(7)  On January 1st of each year, the Department of

 2  Community Affairs shall provide a full report and accounting

 3  of activities under this section and an evaluation of such

 4  activities to the Speaker of the House of Representatives, the

 5  President of the Senate, and the Majority and Minority Leaders

 6  of the House of Representatives and the Senate.

 7         (9)(8)  This section is repealed June 30, 2011.

 8         Section 3.  Subsections (4) and (5) of section 627.062,

 9  Florida Statutes, are amended, subsection (6) of that section

10  is repealed, and subsections (7) and (8) of that section are

11  renumbered as subsections (6) and (7), respectively, to read:

12         627.062  Rate standards.--

13         (4)  The establishment of any rate, rating

14  classification, rating plan or schedule, or variation thereof

15  in violation of part IX of chapter 626 is also in violation of

16  this section. In order to enhance the ability of consumers to

17  compare premiums and to increase the accuracy and usefulness

18  of rate-comparison information provided by the office to the

19  public, the office shall develop a proposed standard rating

20  territory plan to be used by all authorized property and

21  casualty insurers for residential property insurance. In

22  adopting the proposed plan, the office may consider

23  geographical characteristics relevant to risk, county lines,

24  major roadways, existing rating territories used by a

25  significant segment of the market, and other relevant factors.

26  Such plan shall be submitted to the President of the Senate

27  and the Speaker of the House of Representatives by January 15,

28  2006. The plan may not be implemented unless authorized by

29  further act of the Legislature.

30         (5)  With respect to a rate filing involving coverage

31  of the type for which the insurer is required to pay a

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 1  reimbursement premium to the Florida Hurricane Catastrophe

 2  Fund, the insurer may fully recoup in its property insurance

 3  premiums any reimbursement premiums paid to the Florida

 4  Hurricane Catastrophe Fund, together with reasonable costs of

 5  other reinsurance, but may not recoup reinsurance costs that

 6  duplicate coverage provided by the Florida Hurricane

 7  Catastrophe Fund. An insurer may not recoup more than 1 year

 8  of reimbursement premium at a time. Any under-recoupment from

 9  the prior year may be added to the following year's

10  reimbursement premium and any over-recoupment shall be

11  subtracted from the following year's reimbursement premium.

12         (6)(a)  After any action with respect to a rate filing

13  that constitutes agency action for purposes of the

14  Administrative Procedure Act, except for a rate filing for

15  medical malpractice, an insurer may, in lieu of demanding a

16  hearing under s. 120.57, require arbitration of the rate

17  filing. Arbitration shall be conducted by a board of

18  arbitrators consisting of an arbitrator selected by the

19  office, an arbitrator selected by the insurer, and an

20  arbitrator selected jointly by the other two arbitrators. Each

21  arbitrator must be certified by the American Arbitration

22  Association. A decision is valid only upon the affirmative

23  vote of at least two of the arbitrators. No arbitrator may be

24  an employee of any insurance regulator or regulatory body or

25  of any insurer, regardless of whether or not the employing

26  insurer does business in this state. The office and the

27  insurer must treat the decision of the arbitrators as the

28  final approval of a rate filing. Costs of arbitration shall be

29  paid by the insurer.

30         (b)  Arbitration under this subsection shall be

31  conducted pursuant to the procedures specified in ss.

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 1  682.06-682.10. Either party may apply to the circuit court to

 2  vacate or modify the decision pursuant to s. 682.13 or s.

 3  682.14. The commission shall adopt rules for arbitration under

 4  this subsection, which rules may not be inconsistent with the

 5  arbitration rules of the American Arbitration Association as

 6  of January 1, 1996.

 7         (c)  Upon initiation of the arbitration process, the

 8  insurer waives all rights to challenge the action of the

 9  office under the Administrative Procedure Act or any other

10  provision of law; however, such rights are restored to the

11  insurer if the arbitrators fail to render a decision within 90

12  days after initiation of the arbitration process.

13         (6)(7)(a)  The provisions of this subsection apply only

14  with respect to rates for medical malpractice insurance and

15  shall control to the extent of any conflict with other

16  provisions of this section.

17         (b)  Any portion of a judgment entered or settlement

18  paid as a result of a statutory or common-law bad faith action

19  and any portion of a judgment entered which awards punitive

20  damages against an insurer may not be included in the

21  insurer's rate base, and shall not be used to justify a rate

22  or rate change. Any common-law bad faith action identified as

23  such, any portion of a settlement entered as a result of a

24  statutory or common-law action, or any portion of a settlement

25  wherein an insurer agrees to pay specific punitive damages may

26  not be used to justify a rate or rate change. The portion of

27  the taxable costs and attorney's fees which is identified as

28  being related to the bad faith and punitive damages in these

29  judgments and settlements may not be included in the insurer's

30  rate base and may not be utilized to justify a rate or rate

31  change.

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 1         (c)  Upon reviewing a rate filing and determining

 2  whether the rate is excessive, inadequate, or unfairly

 3  discriminatory, the office shall consider, in accordance with

 4  generally accepted and reasonable actuarial techniques, past

 5  and present prospective loss experience, either using loss

 6  experience solely for this state or giving greater credibility

 7  to this state's loss data after applying actuarially sound

 8  methods of assigning credibility to such data.

 9         (d)  Rates shall be deemed excessive if, among other

10  standards established by this section, the rate structure

11  provides for replenishment of reserves or surpluses from

12  premiums when the replenishment is attributable to investment

13  losses.

14         (e)  The insurer must apply a discount or surcharge

15  based on the health care provider's loss experience or shall

16  establish an alternative method giving due consideration to

17  the provider's loss experience. The insurer must include in

18  the filing a copy of the surcharge or discount schedule or a

19  description of the alternative method used, and must provide a

20  copy of such schedule or description, as approved by the

21  office, to policyholders at the time of renewal and to

22  prospective policyholders at the time of application for

23  coverage.

24         (f)  Each medical malpractice insurer must make a rate

25  filing under this section, sworn to by at least two executive

26  officers of the insurer, at least once each calendar year.

27         (7)(8)(a)1.  No later than 60 days after the effective

28  date of medical malpractice legislation enacted during the

29  2003 Special Session D of the Florida Legislature, the office

30  shall calculate a presumed factor that reflects the impact

31  that the changes contained in such legislation will have on

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 1  rates for medical malpractice insurance and shall issue a

 2  notice informing all insurers writing medical malpractice

 3  coverage of such presumed factor. In determining the presumed

 4  factor, the office shall use generally accepted actuarial

 5  techniques and standards provided in this section in

 6  determining the expected impact on losses, expenses, and

 7  investment income of the insurer. To the extent that the

 8  operation of a provision of medical malpractice legislation

 9  enacted during the 2003 Special Session D of the Florida

10  Legislature is stayed pending a constitutional challenge, the

11  impact of that provision shall not be included in the

12  calculation of a presumed factor under this subparagraph.

13         2.  No later than 60 days after the office issues its

14  notice of the presumed rate change factor under subparagraph

15  1., each insurer writing medical malpractice coverage in this

16  state shall submit to the office a rate filing for medical

17  malpractice insurance, which will take effect no later than

18  January 1, 2004, and apply retroactively to policies issued or

19  renewed on or after the effective date of medical malpractice

20  legislation enacted during the 2003 Special Session D of the

21  Florida Legislature. Except as authorized under paragraph (b),

22  the filing shall reflect an overall rate reduction at least as

23  great as the presumed factor determined under subparagraph 1.

24  With respect to policies issued on or after the effective date

25  of such legislation and prior to the effective date of the

26  rate filing required by this subsection, the office shall

27  order the insurer to make a refund of the amount that was

28  charged in excess of the rate that is approved.

29         (b)  Any insurer or rating organization that contends

30  that the rate provided for in paragraph (a) is excessive,

31  inadequate, or unfairly discriminatory shall separately state

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 1  in its filing the rate it contends is appropriate and shall

 2  state with specificity the factors or data that it contends

 3  should be considered in order to produce such appropriate

 4  rate. The insurer or rating organization shall be permitted to

 5  use all of the generally accepted actuarial techniques

 6  provided in this section in making any filing pursuant to this

 7  subsection. The office shall review each such exception and

 8  approve or disapprove it prior to use. It shall be the

 9  insurer's burden to actuarially justify any deviations from

10  the rates required to be filed under paragraph (a). The

11  insurer making a filing under this paragraph shall include in

12  the filing the expected impact of medical malpractice

13  legislation enacted during the 2003 Special Session D of the

14  Florida Legislature on losses, expenses, and rates.

15         (c)  If any provision of medical malpractice

16  legislation enacted during the 2003 Special Session D of the

17  Florida Legislature is held invalid by a court of competent

18  jurisdiction, the office shall permit an adjustment of all

19  medical malpractice rates filed under this section to reflect

20  the impact of such holding on such rates so as to ensure that

21  the rates are not excessive, inadequate, or unfairly

22  discriminatory.

23         (d)  Rates approved on or before July 1, 2003, for

24  medical malpractice insurance shall remain in effect until the

25  effective date of a new rate filing approved under this

26  subsection.

27         (e)  The calculation and notice by the office of the

28  presumed factor pursuant to paragraph (a) is not an order or

29  rule that is subject to chapter 120. If the office enters into

30  a contract with an independent consultant to assist the office

31  in calculating the presumed factor, such contract shall not be

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 1  subject to the competitive solicitation requirements of s.

 2  287.057.

 3         Section 4.  Paragraph (c) of subsection (1) and

 4  paragraph (c) of subsection (3) of section 627.0628, Florida

 5  Statutes, are amended to read:

 6         627.0628  Florida Commission on Hurricane Loss

 7  Projection Methodology.--

 8         (1)  LEGISLATIVE FINDINGS AND INTENT.--

 9         (c)  It is the intent of the Legislature to create the

10  Florida Commission on Hurricane Loss Projection Methodology as

11  a panel of experts to provide the most actuarially

12  sophisticated guidelines and standards for projection of

13  hurricane losses possible, given the current state of

14  actuarial science. It is the further intent of the Legislature

15  that such standards and guidelines must be used by the State

16  Board of Administration in developing reimbursement premium

17  rates for the Florida Hurricane Catastrophe Fund, and, subject

18  to paragraph (3)(c), may be used by insurers in rate filings

19  under s. 627.062 unless the way in which such standards and

20  guidelines were applied by the insurer was erroneous, as shown

21  by a preponderance of the evidence.

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

23         (c)  With respect to a rate filing under s. 627.062, an

24  insurer may employ actuarial methods, principles, standards,

25  models, or output ranges found by the commission to be

26  accurate or reliable to determine hurricane loss factors for

27  use in a rate filing under s. 627.062. Such, which findings

28  and factors are admissible and relevant in consideration of a

29  rate filing by the office or in any arbitration or

30  administrative or judicial review only if the office and the

31  consumer advocate appointed pursuant to s. 627.0613 have

                                  17

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 1  access to all of the assumptions and factors that were used in

 2  developing the actuarial methods, principles, standards,

 3  models, or output ranges, and are not precluded from

 4  disclosing such information in a rate proceeding.

 5         Section 5.  Subsection (7) of section 627.0629, Florida

 6  Statutes, is amended to read:

 7         627.0629  Residential property insurance; rate

 8  filings.--

 9         (7)  Any rate filing that is based in whole or part on

10  data from a computer model may not exceed 15 25 percent unless

11  there is a public hearing.

12         Section 6.  Section 627.06291, Florida Statutes, is

13  created to read:

14         627.06291  Reports of hurricane loss data for the

15  public hurricane model.--Residential property insurers and

16  licensed rating and advisory organizations that compile loss

17  data concerning residential property insurance shall report

18  residential hurricane loss data and associated exposure data,

19  within such time and in such manner as specified by the

20  office, to the office or to a type I center at a state

21  university under contract with the office, for the purpose of

22  developing, maintaining, and updating a public hurricane model

23  for hurricane loss projections.

24         Section 7.  Effective August 1, 2005, paragraphs (c),

25  (d), and (g) of subsection (6) of section 627.351, Florida

26  Statutes, are amended to read:

27         627.351  Insurance risk apportionment plans.--

28         (6)  CITIZENS PROPERTY INSURANCE CORPORATION.--

29         (c)  The plan of operation of the corporation:

30         1.  Must provide for adoption of residential property

31  and casualty insurance policy forms and commercial residential

                                  18

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 1  and nonresidential property insurance forms, which forms must

 2  be approved by the office prior to use. The corporation shall

 3  adopt the following policy forms:

 4         a.  Standard personal lines policy forms that are

 5  comprehensive multiperil policies providing full coverage of a

 6  residential property equivalent to the coverage provided in

 7  the private insurance market under an HO-3, HO-4, or HO-6

 8  policy.

 9         b.  Basic personal lines policy forms that are policies

10  similar to an HO-8 policy or a dwelling fire policy that

11  provide coverage meeting the requirements of the secondary

12  mortgage market, but which coverage is more limited than the

13  coverage under a standard policy.

14         c.  Commercial lines residential policy forms that are

15  generally similar to the basic perils of full coverage

16  obtainable for commercial residential structures in the

17  admitted voluntary market.

18         d.  Personal lines and commercial lines residential

19  property insurance forms that cover the peril of wind only.

20  The forms are applicable only to residential properties

21  located in areas eligible for coverage under the high-risk

22  account referred to in sub-subparagraph (b)2.a.

23         e.  Commercial lines nonresidential property insurance

24  forms that cover the peril of wind only.  The forms are

25  applicable only to nonresidential properties located in areas

26  eligible for coverage under the high-risk account referred to

27  in sub-subparagraph (b)2.a.

28  

29  The dwelling limits for any personal lines policy in both the

30  personal lines account and the high-risk account may not

31  

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 1  exceed $1 million. Residential structures valued in excess of

 2  $1 million are not eligible for coverage from the corporation.

 3         2.a.  Must provide that the corporation adopt a program

 4  in which the corporation and authorized insurers enter into

 5  quota share primary insurance agreements for hurricane

 6  coverage, as defined in s. 627.4025(2)(a), for eligible risks,

 7  and adopt property insurance forms for eligible risks which

 8  cover the peril of wind only. As used in this subsection, the

 9  term:

10         (I)  "Quota share primary insurance" means an

11  arrangement in which the primary hurricane coverage of an

12  eligible risk is provided in specified percentages by the

13  corporation and an authorized insurer. The corporation and

14  authorized insurer are each solely responsible for a specified

15  percentage of hurricane coverage of an eligible risk as set

16  forth in a quota share primary insurance agreement between the

17  corporation and an authorized insurer and the insurance

18  contract. The responsibility of the corporation or authorized

19  insurer to pay its specified percentage of hurricane losses of

20  an eligible risk, as set forth in the quota share primary

21  insurance agreement, may not be altered by the inability of

22  the other party to the agreement to pay its specified

23  percentage of hurricane losses. Eligible risks that are

24  provided hurricane coverage through a quota share primary

25  insurance arrangement must be provided policy forms that set

26  forth the obligations of the corporation and authorized

27  insurer under the arrangement, clearly specify the percentages

28  of quota share primary insurance provided by the corporation

29  and authorized insurer, and conspicuously and clearly state

30  that neither the authorized insurer nor the corporation may be

31  

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 1  held responsible beyond its specified percentage of coverage

 2  of hurricane losses.

 3         (II)  "Eligible risks" means personal lines residential

 4  and commercial lines residential risks that meet the

 5  underwriting criteria of the corporation and are located in

 6  areas that were eligible for coverage by the Florida Windstorm

 7  Underwriting Association on January 1, 2002.

 8         b.  The corporation may enter into quota share primary

 9  insurance agreements with authorized insurers at corporation

10  coverage levels of 90 percent and 50 percent.

11         c.  If the corporation determines that additional

12  coverage levels are necessary to maximize participation in

13  quota share primary insurance agreements by authorized

14  insurers, the corporation may establish additional coverage

15  levels. However, the corporation's quota share primary

16  insurance coverage level may not exceed 90 percent.

17         d.  Any quota share primary insurance agreement entered

18  into between an authorized insurer and the corporation must

19  provide for a uniform specified percentage of coverage of

20  hurricane losses, by county or territory as set forth by the

21  corporation board, for all eligible risks of the authorized

22  insurer covered under the quota share primary insurance

23  agreement.

24         e.  Any quota share primary insurance agreement entered

25  into between an authorized insurer and the corporation is

26  subject to review and approval by the office. However, such

27  agreement shall be authorized only as to insurance contracts

28  entered into between an authorized insurer and an insured who

29  is already insured by the corporation for wind coverage.

30         f.  For all eligible risks covered under quota share

31  primary insurance agreements, the exposure and coverage levels

                                  21

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 1  for both the corporation and authorized insurers shall be

 2  reported by the corporation to the Florida Hurricane

 3  Catastrophe Fund. For all policies of eligible risks covered

 4  under quota share primary insurance agreements, the

 5  corporation and the authorized insurer shall maintain complete

 6  and accurate records for the purpose of exposure and loss

 7  reimbursement audits as required by Florida Hurricane

 8  Catastrophe Fund rules. The corporation and the authorized

 9  insurer shall each maintain duplicate copies of policy

10  declaration pages and supporting claims documents.

11         g.  The corporation board shall establish in its plan

12  of operation standards for quota share agreements which ensure

13  that there is no discriminatory application among insurers as

14  to the terms of quota share agreements, pricing of quota share

15  agreements, incentive provisions if any, and consideration

16  paid for servicing policies or adjusting claims.

17         h.  The quota share primary insurance agreement between

18  the corporation and an authorized insurer must set forth the

19  specific terms under which coverage is provided, including,

20  but not limited to, the sale and servicing of policies issued

21  under the agreement by the insurance agent of the authorized

22  insurer producing the business, the reporting of information

23  concerning eligible risks, the payment of premium to the

24  corporation, and arrangements for the adjustment and payment

25  of hurricane claims incurred on eligible risks by the claims

26  adjuster and personnel of the authorized insurer. Entering

27  into a quota sharing insurance agreement between the

28  corporation and an authorized insurer shall be voluntary and

29  at the discretion of the authorized insurer.

30         3.  May provide that the corporation may employ or

31  otherwise contract with individuals or other entities to

                                  22

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 1  provide administrative or professional services that may be

 2  appropriate to effectuate the plan. The corporation shall have

 3  the power to borrow funds, by issuing bonds or by incurring

 4  other indebtedness, and shall have other powers reasonably

 5  necessary to effectuate the requirements of this subsection.

 6  The corporation may, but is not required to, seek judicial

 7  validation of its bonds or other indebtedness under chapter

 8  75. The corporation may issue bonds or incur other

 9  indebtedness, or have bonds issued on its behalf by a unit of

10  local government pursuant to subparagraph (g)2., in the

11  absence of a hurricane or other weather-related event, upon a

12  determination by the corporation, subject to approval by the

13  office, that such action would enable it to efficiently meet

14  the financial obligations of the corporation and that such

15  financings are reasonably necessary to effectuate the

16  requirements of this subsection. The corporation is authorized

17  to take all actions needed to facilitate tax-free status for

18  any such bonds or indebtedness, including formation of trusts

19  or other affiliated entities. The corporation shall have the

20  authority to pledge assessments, projected recoveries from the

21  Florida Hurricane Catastrophe Fund, other reinsurance

22  recoverables, market equalization and other surcharges, and

23  other funds available to the corporation as security for bonds

24  or other indebtedness. In recognition of s. 10, Art. I of the

25  State Constitution, prohibiting the impairment of obligations

26  of contracts, it is the intent of the Legislature that no

27  action be taken whose purpose is to impair any bond indenture

28  or financing agreement or any revenue source committed by

29  contract to such bond or other indebtedness.

30         4.a.  Must require that the corporation operate subject

31  to the supervision and approval of a board of governors

                                  23

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 1  consisting of 8 7 individuals who are residents of this state,

 2  from different geographical areas of this state, appointed by

 3  the Chief Financial Officer. The Governor, the Chief Financial

 4  Officer, the President of the Senate, and the Speaker of the

 5  House of Representatives shall each appoint two members of the

 6  board, effective August 1, 2005. At least one of the two

 7  members appointed by each appointing officer must have

 8  demonstrated expertise in insurance. The Chief Financial

 9  Officer shall designate one of the appointees as chair. All

10  board members serve at the pleasure of the appointing officer

11  Chief Financial Officer. All board members, including the

12  chair, must be appointed to serve for 3-year terms beginning

13  annually on a date designated by the plan. Any board vacancy

14  shall be filled for the unexpired term by the appointing

15  officer Chief Financial Officer. The Chief Financial Officer

16  shall appoint a technical advisory group to provide

17  information and advice to the board of governors in connection

18  with the board's duties under this subsection. The executive

19  director and senior managers of the corporation shall be

20  engaged by the board, as recommended by the Chief Financial

21  Officer and serve at the pleasure of the board Chief Financial

22  Officer. The executive director is responsible for employing

23  other staff as the corporation may require, subject to review

24  and concurrence by the board and office of the Chief Financial

25  Officer.

26         b.  A Market Accountability Advisory Committee shall be

27  created to assist the corporation in developing awareness of

28  its customer and agent service levels in relationship to the

29  voluntary market insurers that are writing similar coverage.

30  The members of the advisory committee shall consist of the

31  following 10 persons, one of whom must be elected chair by the

                                  24

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 1  members of the committee: one representative appointed by each

 2  of the three largest property and casualty insurance agents

 3  associations in this state; one representative appointed by

 4  each of the insurers having the three highest voluntary market

 5  share of residential property insurance business in the state;

 6  one representative from the Office of Insurance Regulation;

 7  one consumer appointed by the board who is insured by the

 8  corporation at the time of appointment to the committee; one

 9  representative appointed by the Florida Association of

10  Realtors; and one representative appointed by the Florida

11  Bankers Association. All members shall be appointed to 3-year

12  terms and may serve consecutive terms. The Market

13  Accountability Advisory Committee shall report to the

14  corporation at each board meeting on insurance market issues,

15  which may include service levels, policy issuance, claims

16  processing and general responsiveness to policyholders,

17  applicants, and agents, and matters relating to depopulation.

18         5.  Must provide a procedure for determining the

19  eligibility of a risk for coverage, as follows:

20         a.  Subject to the provisions of s. 627.3517, with

21  respect to personal lines residential risks, if the risk is

22  offered coverage from an authorized insurer at the insurer's

23  approved rate under either a standard policy including wind

24  coverage or, if consistent with the insurer's underwriting

25  rules as filed with the office, a basic policy including wind

26  coverage, the risk is not eligible for any policy issued by

27  the corporation. If the risk is not able to obtain any such

28  offer, the risk is eligible for either a standard policy

29  including wind coverage or a basic policy including wind

30  coverage issued by the corporation; however, if the risk could

31  not be insured under a standard policy including wind coverage

                                  25

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 1  regardless of market conditions, the risk shall be eligible

 2  for a basic policy including wind coverage unless rejected

 3  under subparagraph 8. The corporation shall determine the type

 4  of policy to be provided on the basis of objective standards

 5  specified in the underwriting manual and based on generally

 6  accepted underwriting practices.

 7         (I)  If the risk accepts an offer of coverage through

 8  the market assistance plan or an offer of coverage through a

 9  mechanism established by the corporation before a policy is

10  issued to the risk by the corporation or during the first 30

11  days of coverage by the corporation, and the producing agent

12  who submitted the application to the plan or to the

13  corporation is not currently appointed by the insurer, the

14  insurer shall:

15         (A)  Pay to the producing agent of record of the

16  policy, for the first year, an amount that is the greater of

17  the insurer's usual and customary commission for the type of

18  policy written or a fee equal to the usual and customary

19  commission of the corporation; or

20         (B)  Offer to allow the producing agent of record of

21  the policy to continue servicing the policy for a period of

22  not less than 1 year and offer to pay the agent the greater of

23  the insurer's or the corporation's usual and customary

24  commission for the type of policy written.

25  

26  If the producing agent is unwilling or unable to accept

27  appointment, the new insurer shall pay the agent in accordance

28  with sub-sub-sub-subparagraph (A).

29         (II)  When the corporation enters into a contractual

30  agreement for a take-out plan, the producing agent of record

31  

                                  26

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 1  of the corporation policy is entitled to retain any unearned

 2  commission on the policy, and the insurer shall:

 3         (A)  Pay to the producing agent of record of the

 4  corporation policy, for the first year, an amount that is the

 5  greater of the insurer's usual and customary commission for

 6  the type of policy written or a fee equal to the usual and

 7  customary commission of the corporation; or

 8         (B)  Offer to allow the producing agent of record of

 9  the corporation policy to continue servicing the policy for a

10  period of not less than 1 year and offer to pay the agent the

11  greater of the insurer's or the corporation's usual and

12  customary commission for the type of policy written.

13  

14  If the producing agent is unwilling or unable to accept

15  appointment, the new insurer shall pay the agent in accordance

16  with sub-sub-sub-subparagraph (A).

17         b.  With respect to commercial lines residential risks,

18  if the risk is offered coverage under a policy including wind

19  coverage from an authorized insurer at its approved rate, the

20  risk is not eligible for any policy issued by the corporation.

21  If the risk is not able to obtain any such offer, the risk is

22  eligible for a policy including wind coverage issued by the

23  corporation.

24         (I)  If the risk accepts an offer of coverage through

25  the market assistance plan or an offer of coverage through a

26  mechanism established by the corporation before a policy is

27  issued to the risk by the corporation or during the first 30

28  days of coverage by the corporation, and the producing agent

29  who submitted the application to the plan or the corporation

30  is not currently appointed by the insurer, the insurer shall:

31  

                                  27

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    Florida Senate - 2005                           CS for SB 1488
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 1         (A)  Pay to the producing agent of record of the

 2  policy, for the first year, an amount that is the greater of

 3  the insurer's usual and customary commission for the type of

 4  policy written or a fee equal to the usual and customary

 5  commission of the corporation; or

 6         (B)  Offer to allow the producing agent of record of

 7  the policy to continue servicing the policy for a period of

 8  not less than 1 year and offer to pay the agent the greater of

 9  the insurer's or the corporation's usual and customary

10  commission for the type of policy written.

11  

12  If the producing agent is unwilling or unable to accept

13  appointment, the new insurer shall pay the agent in accordance

14  with sub-sub-sub-subparagraph (A).

15         (II)  When the corporation enters into a contractual

16  agreement for a take-out plan, the producing agent of record

17  of the corporation policy is entitled to retain any unearned

18  commission on the policy, and the insurer shall:

19         (A)  Pay to the producing agent of record of the

20  corporation policy, for the first year, an amount that is the

21  greater of the insurer's usual and customary commission for

22  the type of policy written or a fee equal to the usual and

23  customary commission of the corporation; or

24         (B)  Offer to allow the producing agent of record of

25  the corporation policy to continue servicing the policy for a

26  period of not less than 1 year and offer to pay the agent the

27  greater of the insurer's or the corporation's usual and

28  customary commission for the type of policy written.

29  

30  

31  

                                  28

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 1  If the producing agent is unwilling or unable to accept

 2  appointment, the new insurer shall pay the agent in accordance

 3  with sub-sub-sub-subparagraph (A).

 4         6.  Must include rules for classifications of risks and

 5  rates therefor.

 6         7.  Must provide that if premium and investment income

 7  for an account attributable to a particular calendar year are

 8  in excess of projected losses and expenses for the account

 9  attributable to that year, such excess shall be held in

10  surplus in the account. Such surplus shall be available to

11  defray deficits in that account as to future years and shall

12  be used for that purpose prior to assessing assessable

13  insurers and assessable insureds as to any calendar year.

14         8.  Must provide objective criteria and procedures to

15  be uniformly applied for all applicants in determining whether

16  an individual risk is so hazardous as to be uninsurable. In

17  making this determination and in establishing the criteria and

18  procedures, the following shall be considered:

19         a.  Whether the likelihood of a loss for the individual

20  risk is substantially higher than for other risks of the same

21  class; and

22         b.  Whether the uncertainty associated with the

23  individual risk is such that an appropriate premium cannot be

24  determined.

25  

26  The acceptance or rejection of a risk by the corporation shall

27  be construed as the private placement of insurance, and the

28  provisions of chapter 120 shall not apply.

29         9.  Must provide that the corporation shall make its

30  best efforts to procure catastrophe reinsurance at reasonable

31  rates, as determined by the board of governors.

                                  29

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 1         10.  Must provide that in the event of regular deficit

 2  assessments under sub-subparagraph (b)3.a. or sub-subparagraph

 3  (b)3.b., in the personal lines account, the commercial lines

 4  residential account, or the high-risk account, the corporation

 5  shall levy upon corporation policyholders in its next rate

 6  filing, or by a separate rate filing solely for this purpose,

 7  a market equalization surcharge arising from a regular

 8  assessment in such account in a percentage equal to the total

 9  amount of such regular assessments divided by the aggregate

10  statewide direct written premium for subject lines of business

11  for the prior calendar year. Market equalization surcharges

12  under this subparagraph are not considered premium and are not

13  subject to commissions, fees, or premium taxes; however,

14  failure to pay a market equalization surcharge shall be

15  treated as failure to pay premium.

16         11.  The policies issued by the corporation must

17  provide that, if the corporation or the market assistance plan

18  obtains an offer from an authorized insurer to cover the risk

19  at its approved rates, the risk is no longer eligible for

20  renewal through the corporation.

21         12.  Corporation policies and applications must include

22  a notice that the corporation policy could, under this

23  section, be replaced with a policy issued by an authorized

24  insurer that does not provide coverage identical to the

25  coverage provided by the corporation. The notice shall also

26  specify that acceptance of corporation coverage creates a

27  conclusive presumption that the applicant or policyholder is

28  aware of this potential.

29         13.  May establish, subject to approval by the office,

30  different eligibility requirements and operational procedures

31  for any line or type of coverage for any specified county or

                                  30

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    Florida Senate - 2005                           CS for SB 1488
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 1  area if the board determines that such changes to the

 2  eligibility requirements and operational procedures are

 3  justified due to the voluntary market being sufficiently

 4  stable and competitive in such area or for such line or type

 5  of coverage and that consumers who, in good faith, are unable

 6  to obtain insurance through the voluntary market through

 7  ordinary methods would continue to have access to coverage

 8  from the corporation. When coverage is sought in connection

 9  with a real property transfer, such requirements and

10  procedures shall not provide for an effective date of coverage

11  later than the date of the closing of the transfer as

12  established by the transferor, the transferee, and, if

13  applicable, the lender.

14         14.  Must provide that, with respect to the high-risk

15  account, any assessable insurer with a surplus as to

16  policyholders of $25 million or less writing 25 percent or

17  more of its total countrywide property insurance premiums in

18  this state may petition the office, within the first 90 days

19  of each calendar year, to qualify as a limited apportionment

20  company. In no event shall a limited apportionment company be

21  required to participate in the portion of any assessment,

22  within the high-risk account, pursuant to sub-subparagraph

23  (b)3.a. or sub-subparagraph (b)3.b. in the aggregate which

24  exceeds $50 million after payment of available high-risk

25  account funds in any calendar year. However, a limited

26  apportionment company shall collect from its policyholders any

27  emergency assessment imposed under sub-subparagraph (b)3.d.

28  The plan shall provide that, if the office determines that any

29  regular assessment will result in an impairment of the surplus

30  of a limited apportionment company, the office may direct that

31  all or part of such assessment be deferred as provided in

                                  31

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 1  subparagraph (g)4. However, there shall be no limitation or

 2  deferment of an emergency assessment to be collected from

 3  policyholders under sub-subparagraph (b)3.d.

 4         15.  Must provide that the corporation appoint as its

 5  licensed agents only those agents who also hold an appointment

 6  as defined in s. 626.015(3) with an insurer who at the time of

 7  the agent's initial appointment by the corporation is

 8  authorized to write and is actually writing personal lines

 9  residential property coverage, commercial residential property

10  coverage, or commercial nonresidential property coverage

11  within the state.

12         (d)1.  It is the intent of the Legislature that the

13  rates for coverage provided by the corporation be actuarially

14  sound and not competitive with approved rates charged in the

15  admitted voluntary market, so that the corporation functions

16  as a residual market mechanism to provide insurance only when

17  the insurance cannot be procured in the voluntary market.

18  Rates shall include an appropriate catastrophe loading factor

19  that reflects the actual catastrophic exposure of the

20  corporation.

21         2.  For each county, the average rates of the

22  corporation for each line of business for personal lines

23  residential policies excluding rates for wind-only policies

24  shall be no lower than the average rates charged by the

25  insurer that had the highest average rate in that county among

26  the 20 insurers with the greatest total direct written premium

27  in the state for that line of business in the preceding year,

28  except that with respect to mobile home coverages, the average

29  rates of the corporation shall be no lower than the average

30  rates charged by the insurer that had the highest average rate

31  in that county among the 5 insurers with the greatest total

                                  32

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    Florida Senate - 2005                           CS for SB 1488
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 1  written premium for mobile home owner's policies in the state

 2  in the preceding year.

 3         3.  Rates for personal lines residential wind-only

 4  policies must be actuarially sound and not competitive with

 5  approved rates charged by authorized insurers. However, for

 6  personal lines residential wind-only policies issued or

 7  renewed between July 1, 2002, and June 30, 2003, the maximum

 8  premium increase must be no greater than 10 percent of the

 9  Florida Windstorm Underwriting Association premium for that

10  policy in effect on June 30, 2002, as adjusted for coverage

11  changes and seasonal occupancy surcharges. For personal lines

12  residential wind-only policies issued or renewed between July

13  1, 2003, and June 30, 2004, the corporation shall use its

14  existing filed and approved wind-only rating and

15  classification plans, provided, however, that the maximum

16  premium increase must be no greater than 20 percent of the

17  premium for that policy in effect on June 30, 2003, as

18  adjusted for coverage changes and seasonal occupancy

19  surcharges. Corporation rate manuals shall include a rate

20  surcharge for seasonal occupancy. To ensure that personal

21  lines residential wind-only rates effective on or after July

22  1, 2004, are not competitive with approved rates charged by

23  authorized insurers, the corporation, in conjunction with the

24  office, shall develop a wind-only ratemaking methodology,

25  which methodology shall be contained in each a rate filing

26  made by the corporation with the office by January 1, 2004. If

27  the office thereafter determines that the wind-only rates or

28  rating factors filed by the corporation fail to comply with

29  the wind-only ratemaking methodology provided for in this

30  subsection, it shall so notify the corporation and require the

31  corporation to amend its rates or rating factors to come into

                                  33

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 1  compliance within 90 days of notice from the office. The

 2  office shall report to the Speaker of the House of

 3  Representatives and the President of the Senate on the

 4  provisions of the wind-only ratemaking methodology by January

 5  31, 2004.

 6         4.  The provisions of subparagraph 2. do not apply to

 7  coverage provided by the corporation in any county for which

 8  the office determines that a reasonable degree of competition

 9  does not exist for personal lines residential policies. The

10  provisions of subparagraph 3. do not apply to coverage

11  provided by the corporation in any county for which the office

12  determines that a reasonable degree of competition does not

13  exist for personal lines residential policies in the area of

14  that county which is eligible for wind-only coverage. In such

15  counties, the rates for personal lines residential coverage

16  shall be actuarially sound and not excessive, inadequate, or

17  unfairly discriminatory and are subject to the other

18  provisions of this paragraph and s. 627.062. The commission

19  may adopt rules establishing the criteria for determining

20  whether a reasonable degree of competition exists for personal

21  lines residential policies. Beginning October 1, 2005, and

22  each 6 months thereafter, the office shall determine and

23  identify those counties for which a reasonable degree of

24  competition does not exist for purposes of subparagraphs 2.

25  and 3., respectively.

26         5.  Notwithstanding subparagraphs 2., 3., and 4., for

27  personal lines residential policies and personal lines

28  residential wind-only policies issued or renewed between July

29  1, 2005, and June 30, 2006, the maximum premium increase must

30  be not greater than 5 percent of the premium for that policy

31  

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 1  in effect on June 30, 2005, as adjusted for coverage changes

 2  and seasonal-occupancy surcharges.

 3         6.4.  Rates for commercial lines coverage shall not be

 4  subject to the requirements of subparagraph 2., but shall be

 5  subject to all other requirements of this paragraph and s.

 6  627.062.

 7         7.5.  Nothing in this paragraph shall require or allow

 8  the corporation to adopt a rate that is inadequate under s.

 9  627.062.

10         8.6.  The corporation shall certify to the office at

11  least twice annually that its personal lines rates comply with

12  the requirements of this paragraph subparagraphs 1. and 2. If

13  any adjustment in the rates or rating factors of the

14  corporation is necessary to ensure such compliance, the

15  corporation shall make and implement such adjustments and file

16  its revised rates and rating factors with the office. If the

17  office thereafter determines that the revised rates and rating

18  factors fail to comply with the provisions of this paragraph

19  subparagraphs 1. and 2., it shall notify the corporation and

20  require the corporation to amend its rates or rating factors

21  in conjunction with its next rate filing. The office must

22  notify the corporation by electronic means of any rate filing

23  it approves for any insurer among the insurers referred to in

24  subparagraph 2.

25         9.7.  In addition to the rates otherwise determined

26  pursuant to this paragraph, the corporation shall impose and

27  collect an amount equal to the premium tax provided for in s.

28  624.509 to augment the financial resources of the corporation.

29         10.8.a.  To assist the corporation in developing

30  additional ratemaking methods to assure compliance with this

31  paragraph subparagraphs 1. and 4., the corporation shall

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 1  appoint a rate methodology panel consisting of one person

 2  recommended by the Florida Association of Insurance Agents,

 3  one person recommended by the Professional Insurance Agents of

 4  Florida, one person recommended by the Florida Association of

 5  Insurance and Financial Advisors, one person recommended by

 6  the insurer with the highest voluntary market share of

 7  residential property insurance business in the state, one

 8  person recommended by the insurer with the second-highest

 9  voluntary market share of residential property insurance

10  business in the state, one person recommended by an insurer

11  writing commercial residential property insurance in this

12  state, one person recommended by the Office of Insurance

13  Regulation, and one board member designated by the board

14  chairman, who shall serve as chairman of the panel.

15         b.  By January 1, 2004, the rate methodology panel

16  shall provide a report to the corporation of its findings and

17  recommendations for the use of additional ratemaking methods

18  and procedures, including the use of a rate equalization

19  surcharge in an amount sufficient to assure that the total

20  cost of coverage for policyholders or applicants to the

21  corporation is sufficient to comply with subparagraph 1.

22         c.  Within 30 days after such report, the corporation

23  shall present to the President of the Senate, the Speaker of

24  the House of Representatives, the minority party leaders of

25  each house of the Legislature, and the chairs of the standing

26  committees of each house of the Legislature having

27  jurisdiction of insurance issues, a plan for implementing the

28  additional ratemaking methods and an outline of any

29  legislation needed to facilitate use of the new methods.

30         d.  The plan must include a provision that producer

31  commissions paid by the corporation shall not be calculated in

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 1  such a manner as to include any rate equalization surcharge.

 2  However, without regard to the plan to be developed or its

 3  implementation, producer commissions paid by the corporation

 4  for each account, other than the quota share primary program,

 5  shall remain fixed as to percentage, effective rate,

 6  calculation, and payment method until January 1, 2004.

 7         11.9.  By January 1, 2004, The corporation shall

 8  develop a notice to policyholders or applicants that the rates

 9  of Citizens Property Insurance Corporation are intended to be

10  higher than the rates of any admitted carrier and providing

11  other information the corporation deems necessary to assist

12  consumers in finding other voluntary admitted insurers willing

13  to insure their property.

14         (g)1.  The corporation shall certify to the office its

15  needs for annual assessments as to a particular calendar year,

16  and for any interim assessments that it deems to be necessary

17  to sustain operations as to a particular year pending the

18  receipt of annual assessments. Upon verification, the office

19  shall approve such certification, and the corporation shall

20  levy such annual or interim assessments. Such assessments

21  shall be prorated as provided in paragraph (b). The

22  corporation shall take all reasonable and prudent steps

23  necessary to collect the amount of assessment due from each

24  assessable insurer, including, if prudent, filing suit to

25  collect such assessment. If the corporation is unable to

26  collect an assessment from any assessable insurer, the

27  uncollected assessments shall be levied as an additional

28  assessment against the assessable insurers and any assessable

29  insurer required to pay an additional assessment as a result

30  of such failure to pay shall have a cause of action against

31  such nonpaying assessable insurer. Assessments shall be

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 1  included as an appropriate factor in the making of rates. The

 2  failure of a surplus lines agent to collect and remit any

 3  regular or emergency assessment levied by the corporation is

 4  considered to be a violation of s. 626.936 and subjects the

 5  surplus lines agent to the penalties provided in that section.

 6         2.  The governing body of any unit of local government,

 7  any residents of which are insured by the corporation, may

 8  issue bonds as defined in s. 125.013 or s. 166.101 from time

 9  to time to fund an assistance program, in conjunction with the

10  corporation, for the purpose of defraying deficits of the

11  corporation. In order to avoid needless and indiscriminate

12  proliferation, duplication, and fragmentation of such

13  assistance programs, any unit of local government, any

14  residents of which are insured by the corporation, may provide

15  for the payment of losses, regardless of whether or not the

16  losses occurred within or outside of the territorial

17  jurisdiction of the local government. Revenue bonds under this

18  subparagraph may not be issued until validated pursuant to

19  chapter 75, unless a state of emergency is declared by

20  executive order or proclamation of the Governor pursuant to s.

21  252.36 making such findings as are necessary to determine that

22  it is in the best interests of, and necessary for, the

23  protection of the public health, safety, and general welfare

24  of residents of this state and declaring it an essential

25  public purpose to permit certain municipalities or counties to

26  issue such bonds as will permit relief to claimants and

27  policyholders of the corporation. Any such unit of local

28  government may enter into such contracts with the corporation

29  and with any other entity created pursuant to this subsection

30  as are necessary to carry out this paragraph. Any bonds issued

31  under this subparagraph shall be payable from and secured by

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 1  moneys received by the corporation from emergency assessments

 2  under sub-subparagraph (b)3.d., and assigned and pledged to or

 3  on behalf of the unit of local government for the benefit of

 4  the holders of such bonds.  The funds, credit, property, and

 5  taxing power of the state or of the unit of local government

 6  shall not be pledged for the payment of such bonds. If any of

 7  the bonds remain unsold 60 days after issuance, the office

 8  shall require all insurers subject to assessment to purchase

 9  the bonds, which shall be treated as admitted assets; each

10  insurer shall be required to purchase that percentage of the

11  unsold portion of the bond issue that equals the insurer's

12  relative share of assessment liability under this subsection.

13  An insurer shall not be required to purchase the bonds to the

14  extent that the office determines that the purchase would

15  endanger or impair the solvency of the insurer.

16         3.a.  The corporation shall adopt one or more programs

17  subject to approval by the office for the reduction of both

18  new and renewal writings in the corporation. The corporation

19  may consider any prudent and not unfairly discriminatory

20  approach to reducing corporation writings, and may adopt a

21  credit against assessment liability or other liability that

22  provides an incentive for insurers to take risks out of the

23  corporation and to keep risks out of the corporation by

24  maintaining or increasing voluntary writings in counties or

25  areas in which corporation risks are highly concentrated and a

26  program to provide a formula under which an insurer

27  voluntarily taking risks out of the corporation by maintaining

28  or increasing voluntary writings will be relieved wholly or

29  partially from assessments under sub-subparagraphs (b)3.a. and

30  b. When the corporation enters into a contractual agreement

31  for a take-out plan, the producing agent of record of the

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 1  corporation policy is entitled to retain any unearned

 2  commission on such policy, and the insurer shall either:

 3         (I)  Pay to the producing agent of record of the

 4  policy, for the first year, an amount which is the greater of

 5  the insurer's usual and customary commission for the type of

 6  policy written or a policy fee equal to the usual and

 7  customary commission of the corporation; or

 8         (II)  Offer to allow the producing agent of record of

 9  the policy to continue servicing the policy for a period of

10  not less than 1 year and offer to pay the agent the insurer's

11  usual and customary commission for the type of policy written.

12  If the producing agent is unwilling or unable to accept

13  appointment by the new insurer, the new insurer shall pay the

14  agent in accordance with sub-sub-subparagraph (I).

15         b.  Any credit or exemption from regular assessments

16  adopted under this subparagraph shall last no longer than the

17  3 years following the cancellation or expiration of the policy

18  by the corporation. With the approval of the office, the board

19  may extend such credits for an additional year if the insurer

20  guarantees an additional year of renewability for all policies

21  removed from the corporation, or for 2 additional years if the

22  insurer guarantees 2 additional years of renewability for all

23  policies so removed.

24         c.  There shall be no credit, limitation, exemption, or

25  deferment from emergency assessments to be collected from

26  policyholders pursuant to sub-subparagraph (b)3.d.

27         4.  The plan shall provide for the deferment, in whole

28  or in part, of the assessment of an assessable insurer, other

29  than an emergency assessment collected from policyholders

30  pursuant to sub-subparagraph (b)3.d., if the office finds that

31  payment of the assessment would endanger or impair the

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 1  solvency of the insurer. In the event an assessment against an

 2  assessable insurer is deferred in whole or in part, the amount

 3  by which such assessment is deferred may be assessed against

 4  the other assessable insurers in a manner consistent with the

 5  basis for assessments set forth in paragraph (b).

 6         Section 8.  Section 627.40951, Florida Statutes, is

 7  created to read:

 8         627.40951  Standard personal lines residential

 9  insurance policy.--

10         (1)  The Legislature finds that many consumers who

11  filed property loss claims as a result of the hurricanes that

12  struck this state in 2004 were inadequately insured due to the

13  difficulty consumers encounter in trying to understand the

14  complex nature of property insurance policies. The purpose and

15  intent of this section is to have property and casualty

16  insurers offer standard personal lines residential property

17  insurance policies and standard checklists of policy contents,

18  in accordance with s. 627.4143, to consumers and to ensure

19  that these policies and checklists are written in a simple

20  format with easily readable language that will enable most

21  consumers to understand the principal benefits and coverage

22  provided in the policy; the principal exclusions and

23  limitations or reductions contained in the policy, including,

24  but not limited to, deductibles, coinsurance, and any other

25  limitations or reductions; and any additional coverage

26  provided through any rider or endorsement that accompanies the

27  policy and renewal or cancellation provisions.

28         (2)  The Chief Financial Officer shall appoint an

29  advisory committee composed of two representatives of insurers

30  currently selling personal lines residential property

31  insurance coverage, two representatives of property and

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 1  casualty agents, two representatives of consumers, two

 2  representatives of the Commissioner of Insurance Regulation,

 3  and the Insurance Consumer Advocate or her or his designee.

 4  The Chief Financial Officer or her or his designee shall serve

 5  as chair of the committee. The committee shall develop policy

 6  language for coverage that represents general industry

 7  standards in the market for comprehensive coverage under

 8  personal lines residential insurance policies and shall

 9  develop a checklist to be used with each type of personal

10  lines residential property insurance policy. The committee

11  shall review policies and related forms written by Insurance

12  Services Office, Inc. The committee shall file a report

13  containing its recommendations to the President of the Senate

14  and the Speaker of the House of Representatives by January 15,

15  2006. No insurer shall be required to offer the standard

16  policy unless required by further act of the Legislature.

17         Section 9.  Subsection (1) of section 627.411, Florida

18  Statutes, is amended to read:

19         627.411  Grounds for disapproval.--

20         (1)  The office shall disapprove any form filed under

21  s. 627.410, or withdraw any previous approval thereof, only if

22  the form:

23         (a)  Is in any respect in violation of, or does not

24  comply with, this code.

25         (b)  Contains or incorporates by reference, where such

26  incorporation is otherwise permissible, any inconsistent,

27  ambiguous, or misleading clauses, or exceptions and conditions

28  which deceptively affect the risk purported to be assumed in

29  the general coverage of the contract.

30         (c)  Has any title, heading, or other indication of its

31  provisions which is misleading.

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 1         (d)  Is printed or otherwise reproduced in such manner

 2  as to render any material provision of the form substantially

 3  illegible.

 4         (e)  Contains provisions that are unfair or inequitable

 5  or contrary to the public policy of this state or that

 6  encourage misrepresentation.

 7         (f)(e)  Is for health insurance, and:

 8         1.  Provides benefits that are unreasonable in relation

 9  to the premium charged; or

10         2.  Contains provisions that are unfair or inequitable

11  or contrary to the public policy of this state or that

12  encourage misrepresentation;

13         2.3.  Contains provisions that apply rating practices

14  that result in unfair discrimination pursuant to s.

15  626.9541(1)(g)2.

16         (g)(f)  Excludes coverage for human immunodeficiency

17  virus infection or acquired immune deficiency syndrome or

18  contains limitations in the benefits payable, or in the terms

19  or conditions of such contract, for human immunodeficiency

20  virus infection or acquired immune deficiency syndrome which

21  are different than those which apply to any other sickness or

22  medical condition.

23         Section 10.  Paragraph (d) is added to subsection (2)

24  of section 627.4133, Florida Statutes, to read:

25         627.4133  Notice of cancellation, nonrenewal, or

26  renewal premium.--

27         (2)  With respect to any personal lines or commercial

28  residential property insurance policy, including, but not

29  limited to, any homeowner's, mobile home owner's, farmowner's,

30  condominium association, condominium unit owner's, apartment

31  

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 1  building, or other policy covering a residential structure or

 2  its contents:

 3         (d)1.  Upon a declaration of an emergency pursuant to

 4  s. 252.36 and the filing of an order by the Commissioner of

 5  Insurance Regulation, an insurer may not cancel or nonrenew a

 6  personal residential or commercial residential property

 7  insurance policy covering a dwelling or residential property

 8  located in this state which has been damaged as a result of a

 9  hurricane or wind loss that is the subject of the declaration

10  of emergency for a period of 60 days after the dwelling or

11  residential property has been repaired. A structure is deemed

12  to be repaired when substantially completed and restored to

13  the extent that it is insurable by another authorized insurer

14  that is writing policies in this state.

15         2.  However, an insurer or agent may cancel or nonrenew

16  such a policy prior to the repair of the dwelling or

17  residential property:

18         a.  Upon 10 days' notice for nonpayment of premium; or

19         b.  Upon 45 days' notice:

20         (I)  For a material misstatement or fraud related to

21  the claim;

22         (II)  If the insurer can demonstrate that the insured

23  has unreasonably caused a delay in the repair of the dwelling;

24  or

25         (III)  If the insurer has paid policy limits, provided

26  the insurer has offered the insured a builder's risk or

27  similar policy that would cover the property until completion

28  of repairs.

29         3.  If the insurer elects to nonrenew a policy covering

30  a property that has been damaged, the insurer shall provide at

31  least 60 days' notice to the insured that the insurer intends

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 1  to nonrenew the policy 60 days after the dwelling or

 2  residential property has been repaired. This paragraph does

 3  not prevent the insurer from canceling or nonrenewing the

 4  policy 60 days after the repairs are complete for the same

 5  reasons the insurer would otherwise have canceled or

 6  nonrenewed the policy but for the limitations of subparagraph

 7  1. The Financial Services Commission may adopt rules, and the

 8  Commissioner of Insurance Regulation may issue orders,

 9  necessary to administer this paragraph.

10         4.  This paragraph also applies to personal residential

11  and commercial residential policies covering property that was

12  damaged as the result of Tropical Storm Bonnie, Hurricane

13  Charley, Hurricane Frances, Hurricane Ivan, or Hurricane

14  Jeanne.

15         Section 11.  Effective January 1, 2006, section

16  627.4143, Florida Statutes, is amended to read:

17         627.4143  Outline of coverage.--

18         (1)  No private passenger automobile or basic

19  homeowner's policy shall be delivered or issued for delivery

20  in this state unless an appropriate outline of coverage has

21  been delivered prior to issuance of the policy or accompanies

22  the policy when issued.

23         (2)  The outline of coverage for a private passenger

24  motor vehicle insurance policy shall contain all of the

25  following:

26         (a)  A brief description of the principal benefits and

27  coverage provided in the policy, broken down by each class or

28  type of coverage provided under the policy for which a premium

29  is charged, and itemization of the applicable premium.

30         (b)  A summary statement of the principal exclusions

31  and limitations or reductions contained in the policy by class

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 1  or type, including, but not limited to, deductibles,

 2  coinsurance, and any other limitations or reductions.

 3         (c)  A summary statement of any renewal or cancellation

 4  provisions.

 5         (d)  A description of the credit or surcharge plan that

 6  is being applied.  The description may display numerical or

 7  alphabetical codes on the declarations page or premium notice

 8  to enable the insured to determine the reason or reasons why

 9  her or his policy is being surcharged or is receiving a

10  credit.

11         (e)  A list of any additional coverage provided through

12  any rider or endorsement which accompanies the policy.  The

13  list shall contain a descriptive reference to each additional

14  coverage, rather than solely a reference to a form or code

15  number.

16         (f)  For a private passenger motor vehicle insurance

17  policy, The extent of coverage provided to the insured in the

18  event of collision damage to a rental vehicle rented by the

19  insured. The proof-of-insurance card required by s. 316.646

20  must also specify whether rental car coverage is provided, and

21  may refer to the outline of coverage as to the details or

22  extent of coverage.

23         (3)  A basic homeowners', mobile homeowners', dwelling,

24  or condominium unit owners' policy may not be delivered or

25  issued for delivery in this state unless a comprehensive

26  checklist of coverage on a form adopted by the commission and

27  an appropriate outline of coverage have been delivered prior

28  to issuance of the policy or accompanies the policy when

29  issued. The commission shall, by rule, adopt a form for the

30  checklist for each type of policy to which this subsection

31  

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 1  applies. Each form shall indicate that it was adopted by the

 2  commission.

 3         (a)  The checklist must contain a list of the standard

 4  provisions and elements that may typically be included in

 5  these policies, whether or not they are included in the

 6  particular policy being issued, in a format that allows the

 7  insurer to place a check mark next to the provisions elements

 8  that are included so that the consumer can see both what is

 9  included and what is not included in the policy. As an

10  alternative to checking the boxes on the checklist, an insurer

11  may delete the check boxes from the form and replace them with

12  text indicating whether the provision's elements are included

13  or not. Limits of liability shall be listed for each item. The

14  checklist must include, but is not limited to, the following:

15         1.  Property coverage for the principal premises shown

16  in the declarations.

17         2.  Property coverage for other structures on the

18  residence premises.

19         3.  Whether the principal premises and other structures

20  are insured against the following perils:

21         a.  Fire.

22         b.  Lightning.

23         c.  Explosion.

24         d.  Hurricane loss.

25         e.  Nonhurricane wind loss.

26         f.  Collapse.

27         g.  Mold.

28         h.  Sinkhole loss.

29         i.  Vandalism.

30         4.  Personal property coverage.

31  

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 1         5.  Whether personal property is insured against the

 2  following perils:

 3         a.  Fire.

 4         b.  Lightning.

 5         c.  Hurricane loss.

 6         d.  Nonhurricane wind loss.

 7         e.  Collapse.

 8         f.  Mold.

 9         g.  Sinkhole loss.

10         h.  Theft.

11         6.  The following additional coverages:

12         a.  Debris removal.

13         b.  Loss assessment.

14         c.  Additional living expenses.

15         7.  Personal liability coverage.

16         8.  Medical payments coverage.

17         9.  Discounts applied to the premium.

18         10.  Deductibles for loss due to hurricane and loss to

19  other perils.

20         11.  Building ordinance or law coverage.

21         12.  Replacement cost coverage.

22         13.  Actual cash value coverage.

23         (b)  The forms shall allow insurers to place other

24  coverages on the checklists which may or may not be included

25  in the insurer's policies.

26         (c)  The outline of coverage must contain:

27         1.  A brief description of the principal benefits and

28  coverage provided in the policy, broken down by each class or

29  type of coverage provided under the policy for which a premium

30  is charged, and itemization of the applicable premium.

31  

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 1         2.  A summary statement of the principal exclusions and

 2  limitations or reductions contained in the policy by class or

 3  type, including, but not limited to, deductibles, coinsurance,

 4  and any other limitations or reductions.

 5         3.  A summary statement of any renewal or cancellation

 6  provisions.

 7         4.  A description of the credit or surcharge plan that

 8  is being applied. The description may display numerical or

 9  alphabetical codes on the declarations page or premium notice

10  to enable the insured to determine the reason or reasons why

11  her or his policy is being surcharged or is receiving a

12  credit.

13         5.  A summary of any additional coverage provided

14  through any rider or endorsement that accompanies the policy.

15         (4)(3)  The outline of coverage for a private passenger

16  motor vehicle policy is required only on the initial policy

17  issued by an insurer. The outline of coverage and the

18  checklist for a basic homeowners', mobile homeowners',

19  dwelling, or condominium unit owners' policy is required on

20  the initial policy and each renewal thereof issued by an

21  insurer.

22         (5)(4)  An insurer must insert the following language

23  on the outline of coverage:

24  

25  "The following outline of coverage  or checklist  is for

26  informational purposes only. Florida law prohibits this

27  outline  or checklist  from changing any of the provisions of

28  the insurance contract which is the subject of this outline.

29  Any endorsement regarding changes in types of coverage,

30  exclusions, limitations, reductions, deductibles, coinsurance,

31  

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 1  renewal provisions, cancellation provisions, surcharges, or

 2  credits will be sent separately."

 3  

 4         (6)(5)  Neither this section nor the outline of

 5  coverage or checklist mandated by this section alters or

 6  modifies the terms of the insurance contract, creates a cause

 7  of action, or is admissible in any civil action.

 8         Section 12.  Effective January 1, 2006, subsections

 9  (3), (8), and (9) of section 627.701, Florida Statutes, as

10  amended by section 4 of chapter 2004-480, Laws of Florida, are

11  amended to read:

12         627.701  Liability of insureds; coinsurance;

13  deductibles.--

14         (3)(a)  A policy of residential property insurance

15  shall include a deductible amount applicable to hurricane or

16  wind losses no lower than $500 and no higher than 2 percent of

17  the policy dwelling limits with respect to personal lines

18  residential risks, and no higher than 3 percent of the policy

19  limits with respect to commercial lines residential risks;

20  however, if a risk was covered on August 24, 1992, under a

21  policy having a higher deductible than the deductibles allowed

22  by this paragraph, a policy covering such risk may include a

23  deductible no higher than the deductible in effect on August

24  24, 1992. Notwithstanding the other provisions of this

25  paragraph, a personal lines residential policy covering a risk

26  valued at $50,000 or less may include a deductible amount

27  attributable to hurricane or wind losses no lower than $250,

28  and a personal lines residential policy covering a risk valued

29  at $100,000 or more may include a deductible amount

30  attributable to hurricane or wind losses no higher than 10 5

31  percent of the policy limits unless subject to a higher

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 1  deductible on August 24, 1992; however, no maximum deductible

 2  is required with respect to a personal lines residential

 3  policy covering a risk valued at more than $500,000.  An

 4  insurer may require a higher deductible, provided such

 5  deductible is the same as or similar to a deductible program

 6  lawfully in effect on June 14, 1995.  In addition to the

 7  deductible amounts authorized by this paragraph, an insurer

 8  may also offer policies with a copayment provision under

 9  which, after exhaustion of the deductible, the policyholder is

10  responsible for 10 percent of the next $10,000 of insured

11  hurricane or wind losses.

12         (b)1.  Except as otherwise provided in this paragraph,

13  prior to issuing a personal lines residential property

14  insurance policy on or after January 1, 2006 April 1, 1996, or

15  prior to the first renewal of a residential property insurance

16  policy on or after January 1, 2006 April 1, 1996, the insurer

17  must offer alternative deductible amounts applicable to

18  hurricane or wind losses equal to $500, 1 percent, and 2

19  percent, 5 percent, and 10 percent of the policy dwelling

20  limits, unless the specific percentage 2 percent deductible is

21  less than $500. The written notice of the offer shall specify

22  the hurricane or wind deductible to be applied in the event

23  that the applicant or policyholder fails to affirmatively

24  choose a hurricane deductible. The insurer must provide such

25  policyholder with notice of the availability of the deductible

26  amounts specified in this paragraph in a form approved by the

27  office in conjunction with each renewal of the policy. The

28  failure to provide such notice constitutes a violation of this

29  code but does not affect the coverage provided under the

30  policy.

31  

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 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         2.3.  With respect to a policy covering a risk with

 7  dwelling limits of at least $100,000, but less than $250,000,

 8  the insurer may, in lieu of offering a policy with a $500

 9  hurricane or wind deductible as required by subparagraph 1.,

10  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         3.4.  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 other 2 percent hurricane

19  deductibles or wind deductible as required by subparagraph 1.

20         (c)  Before issuing a personal lines residential

21  property insurance policy and before each renewal thereof, an

22  insurer must provide each policyholder and applicant with a

23  notice of the availability of the deductible amounts that

24  insurers are required to offer and any other deductible that

25  the insurer chooses to offer which is not prohibited by this

26  section. The notice shall be on a form approved by the office.

27  The form shall fully advise the policyholder or applicant of

28  the nature of the deductible, including the fact that higher

29  deductibles result in lower premiums but will also result in

30  higher out-of-pocket expenses to the policyholder in the event

31  of a hurricane damage claim. For each percentage deductible

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 1  available to the policyholder or applicant, the form shall

 2  include the dollar amount of the deduction which will result

 3  from application of the percentage deductible. The heading of

 4  the form shall be in 12-point bold type and shall state: "You

 5  are required by Florida law to choose a deductible that will

 6  apply to any claims that you may have with your insurer as a

 7  result of damage to your residence by a hurricane. This form

 8  explains the deductible options that your insurer is required

 9  or permitted to offer to you. Please read carefully." If this

10  form is signed by the named insured, it will be conclusively

11  presumed that there was an informed, knowing selection of the

12  amount of the deductible. Such notice shall provide for a

13  means to allow the policyholder or applicant to select the

14  deductible. The failure to provide such notice constitutes a

15  violation of this code but does not affect the coverage

16  provided under the policy.

17         (c)  In order to provide for the transition from wind

18  deductibles to hurricane deductibles as required by this

19  subsection, an insurer is required to provide wind deductibles

20  meeting the requirements of this subsection until the

21  effective date of the insurer's first rate filing made after

22  January 1, 1997, and is thereafter required to provide

23  hurricane deductibles meeting the requirements of this

24  subsection.

25         (8)(a)  The Legislature finds that property insurance

26  coverage has become unaffordable for a significant number of

27  mobile home owners, as evidenced by reports that up to 100,000

28  mobile home owners have terminated their insurance coverage

29  because they cannot afford to pay approved rates charged in

30  the voluntary or residual markets. The Legislature further

31  finds that additional flexibility in available coverages will

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 1  enable mobile home owners to obtain affordable insurance and

 2  increase capacity.

 3         (b)  Notwithstanding the provisions of subsection (3),

 4  with respect to mobile home policies:

 5         1.  The deductible for hurricane coverage may not

 6  exceed 10 percent of the property value if the property is not

 7  subject to any liens and may not exceed 5 percent of the

 8  property value if the property is subject to any liens.

 9         2.  The insurer need not make the offers required by

10  paragraph (3)(b).

11         (8)(9)  Notwithstanding the other provisions of this

12  section or of other law, but only as to hurricane coverage as

13  defined in s. 627.4025 for commercial lines residential

14  coverages, an insurer may offer a deductible in an amount not

15  exceeding 5 percent of the insured value with respect to a

16  condominium association or cooperative association policy, or

17  in an amount not exceeding 10 percent of the insured value

18  with respect to any other commercial lines residential policy,

19  if, at the time of such offer and at each renewal, the insurer

20  also offers to the policyholder a deductible in the amount of

21  3 percent of the insured value. Nothing in this subsection

22  prohibits any deductible otherwise authorized by this section.

23  All forms by which the offers authorized in this subsection

24  are made or required to be made shall be on forms that are

25  adopted or approved by the commission or office.

26         Section 13.  Effective October 1, 2005, section

27  627.7011, Florida Statutes, is amended to read:

28         627.7011  Homeowners' policies; offer of replacement

29  cost coverage and law and ordinance coverage.--

30         (1)  Prior to issuing a homeowner's insurance policy on

31  or after October 1, 2005 June 1, 1994, or prior to the first

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 1  renewal of a homeowner's insurance policy on or after October

 2  1, 2005 June 1, 1994, the insurer must offer each of the

 3  following:

 4         (a)  A policy or endorsement providing that any loss

 5  which is repaired or replaced will be adjusted on the basis of

 6  replacement costs not exceeding policy limits as to the

 7  dwelling, rather than actual cash value, but not including

 8  costs necessary to meet applicable laws and ordinances

 9  regulating the construction, use, or repair of any property or

10  requiring the tearing down of any property, including the

11  costs of removing debris.

12         (b)  A policy or endorsement providing that, subject to

13  other policy provisions, any loss which is repaired or

14  replaced at any location will be adjusted on the basis of

15  replacement costs not exceeding policy limits as to the

16  dwelling, rather than actual cash value, and also including

17  costs necessary to meet applicable laws and ordinances

18  regulating the construction, use, or repair of any property or

19  requiring the tearing down of any property, including the

20  costs of removing debris; however, such additional costs

21  necessary to meet applicable laws and ordinances may be

22  limited to either 25 percent or 50 percent of the dwelling

23  limit, as selected by the policyholder, and such coverage

24  shall apply only to repairs of the damaged portion of the

25  structure unless the total damage to the structure exceeds 50

26  percent of the replacement cost of the structure.

27  

28  An insurer is not required to make the offers required by this

29  subsection with respect to the issuance or renewal of a

30  homeowner's policy that contains the provisions specified in

31  paragraph (b) for law and ordinance coverage limited to 25

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 1  percent of the dwelling limit, except that the insurer must

 2  offer the law and ordinance coverage limited to 50 percent of

 3  the dwelling limit. This subsection does not prohibit the

 4  offer of a guaranteed replacement cost policy.

 5         (2)  Unless the insurer obtains the policyholder's

 6  written refusal of the policies or endorsements specified in

 7  subsection (1), any policy covering the dwelling is deemed to

 8  include the coverage specified in paragraph (1)(b). The

 9  rejection or selection of alternative coverage shall be made

10  on a form approved by the office. The form shall fully advise

11  the applicant of the nature of the coverage being rejected. If

12  this form is signed by a named insured, it will be

13  conclusively presumed that there was an informed, knowing

14  rejection of the coverage or election of the alternative

15  coverage on behalf of all insureds. Unless the policyholder

16  requests in writing the coverage specified in this section, it

17  need not be provided in or supplemental to any other policy

18  that renews, insures, extends, changes, supersedes, or

19  replaces an existing policy when the policyholder has rejected

20  the coverage specified in this section or has selected

21  alternative coverage. The insurer must provide such

22  policyholder with notice of the availability of such coverage

23  in a form approved by the office at least once every 3 years.

24  The failure to provide such notice constitutes a violation of

25  this code, but does not affect the coverage provided under the

26  policy.

27         (3)  In the event of a loss for which a dwelling or

28  personal property is insured on the basis of replacement

29  costs, the insurer shall pay the replacement cost without

30  reservation or holdback of any depreciation in value, whether

31  

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 1  or not the insured replaces or repairs the dwelling or

 2  property.

 3         (4)(3)  Nothing in this section shall be construed to

 4  apply to policies not considered to be "homeowners' policies,"

 5  as that term is commonly understood in the insurance industry.

 6  This section specifically does not apply to mobile home

 7  policies. Nothing in this section shall be construed as

 8  limiting the ability of any insurer to reject or nonrenew any

 9  insured or applicant on the grounds that the structure does

10  not meet underwriting criteria applicable to replacement cost

11  or law and ordinance policies or for other lawful reasons.

12         Section 14.  Effective July 1, 2005, subsection (7) of

13  section 627.7015, Florida Statutes, is amended, and subsection

14  (2) of that section is republished, to read:

15         627.7015  Alternative procedure for resolution of

16  disputed property insurance claims.--

17         (2)  At the time a first-party claim within the scope

18  of this section is filed, the insurer shall notify all

19  first-party claimants of their right to participate in the

20  mediation program under this section. The department shall

21  prepare a consumer information pamphlet for distribution to

22  persons participating in mediation under this section.

23         (7)  If the insurer fails to comply with the

24  requirements of subsection (2) by failing to notify a

25  first-party claimant of his or her right to participate in the

26  mediation program under this section, or if the insurer

27  requests the mediation, and the mediation results are rejected

28  by either party, the insured shall not be required to submit

29  to or participate in any contractual loss appraisal process of

30  the property loss damage as a precondition to legal action for

31  

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 1  breach of contract against the insurer for its failure to pay

 2  the policyholder's claims covered by the policy.

 3         Section 15.  Subsection (1) of section 627.702, Florida

 4  Statutes, is amended to read:

 5         627.702  Valued policy law.--

 6         (1)(a)  In the event of the total loss of any building,

 7  structure, mobile home as defined in s. 320.01(2), or

 8  manufactured building as defined in s. 553.36(12), located in

 9  this state and insured by any insurer as to a covered peril,

10  in the absence of any change increasing the risk without the

11  insurer's consent and in the absence of fraudulent or criminal

12  fault on the part of the insured or one acting in her or his

13  behalf, the insurer's liability, if any, under the policy for

14  such total loss shall be in the amount of money for which such

15  property was so insured as specified in the policy and for

16  which a premium has been charged and paid.

17         (b)  The legislative intent of this subsection is not

18  to require an insurer to pay for a loss caused by a peril

19  other than the covered peril. In furtherance of such

20  legislative intent, when a loss was caused in part by a

21  covered peril and in part by a noncovered peril, the insurer's

22  liability under this section is limited to the percentage of

23  the loss caused by the covered peril.

24         Section 16.  Section 627.706, Florida Statutes, is

25  amended to read:

26         627.706  Sinkhole insurance; definitions.--

27         (1)  Every insurer authorized to transact property

28  insurance in this state shall make available coverage for

29  insurable sinkhole losses on any structure, including contents

30  of personal property contained therein, to the extent provided

31  in the form to which the sinkhole coverage attaches.

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 1         (2)  As used in ss. 627.706-627.7074, and as used in

 2  connection with any policy providing coverage for sinkhole

 3  losses:

 4         (a)(2)  "Sinkhole loss" means structural damage to the

 5  building caused by sinkhole activity. Contents coverage shall

 6  apply only if there is structural damage to the building

 7  caused by sinkhole activity. Building coverage shall apply

 8  only to the reasonable costs to stabilize the land if possible

 9  and building if necessary and to repair the damage to the

10  foundation and building, subject to the coverage and terms of

11  the policy.

12         (b)(3)  "Sinkhole activity loss" means actual physical

13  damage to the property covered arising out of or caused by

14  sudden settlement or systematic weakening collapse of the

15  earth supporting such property only when such settlement or

16  systematic weakening collapse results from naturally occurring

17  movement or raveling of soils, sediments, or rock materials

18  into subterranean voids created by the effect action of water

19  on a limestone or similar rock formation.

20         (c)  "Engineer" means a person, as defined in s.

21  471.005, who has a bachelor degree or higher in engineering

22  with a specialty in the geotechnical engineering field. An

23  engineer must have geotechnical experience and expertise in

24  the identification of sinkhole activity as well as other

25  potential causes of damage to the structure.

26         (d)  "Professional geologist" means a person, as

27  defined by s. 492.102, who has a bachelor degree or higher in

28  geology or related earth science with expertise in the geology

29  of Florida. A professional geologist must have geological

30  experience and expertise in the identification of sinkhole

31  

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 1  activity as well as other potential causes of damage to the

 2  structure.

 3         (3)(4)  Every insurer authorized to transact property

 4  insurance in this state shall make a proper filing with the

 5  office for the purpose of extending the appropriate forms of

 6  property insurance to include coverage for insurable sinkhole

 7  losses.

 8         Section 17.  Section 627.707, Florida Statutes, is

 9  amended to read:

10         627.707  Minimum Standards for investigation of

11  sinkhole claims by insurers; nonrenewals.--

12         (1)  Upon receipt of a claim for a sinkhole loss, an

13  insurer must meet the following minimum standards in

14  investigating a claim:

15         (1)(a)  Upon receipt of a claim for a sinkhole loss,

16  The insurer must make an inspection of the insured's premises

17  to determine if there has been physical damage to the

18  structure which may might be the result of sinkhole activity.

19         (b)  If, upon the investigation pursuant to paragraph

20  (a), the insurer discovers damage to a structure which is

21  consistent with sinkhole activity or if the structure is

22  located in close proximity to a structure in which sinkhole

23  damage has been verified, then prior to denying a claim, the

24  insurer must obtain a written certification from an individual

25  qualified to determine the existence of sinkhole activity,

26  stating that the cause of the claim is not sinkhole activity,

27  and that the analysis conducted was of sufficient scope to

28  eliminate sinkhole activity as the cause of damage within a

29  reasonable professional probability.  The written

30  certification must also specify the professional discipline

31  

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 1  and professional licensure or registration under which the

 2  analysis was conducted.

 3         (2)  Following the initial inspection of the insured

 4  premises, the insurer shall provide written notice to the

 5  policyholder containing the following disclosure:

 6         (a)  What the insurer has determined to be the cause of

 7  damage, if it has made such a determination.

 8         (b)  A statement of the circumstances under which the

 9  insurer is required to engage an engineer and a professional

10  geologist to verify or eliminate sinkhole loss and to make

11  recommendations regarding land and building stabilization and

12  foundation repair.

13         (c)  A statement regarding the right of the

14  policyholder to request that the department appoint an

15  engineer and a professional geologist and the circumstances

16  under which the policyholder may demand certain testing.

17         (3)(a)  Following the insurer's initial inspection, the

18  insurer shall engage an engineer and a professional geologist

19  to conduct testing as provided in s. 627.7072 to determine the

20  cause of the loss within a reasonable professional probability

21  and issue a report as provided in s. 627.7073, if:

22         1.  The insurer is unable to identify a valid cause of

23  the damage or discovers damage to the structure which is

24  consistent with sinkhole loss; or

25         2.  The policyholder demands testing in accordance with

26  this section or s. 627.7072.

27         (4)  If the insurer determines that there is no

28  sinkhole loss, the insurer may deny the claim. If the insurer

29  denies the claim, the policyholder may demand testing under s.

30  627.7072. The policyholder's demand for testing must be

31  

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 1  communicated to the insurer in writing within 60 days after

 2  the policyholder's receipt of insurer's denial of the claim.

 3         (5)  If a sinkhole loss is verified, the insurer shall

 4  pay to stabilize the land, if possible, and building, if

 5  necessary, and repair the foundation and building in

 6  accordance with the recommendations of the engineer and the

 7  professional geologist as provided under s. 627.7073, and in

 8  consultation with the insurer and the policyholder, subject to

 9  the coverage and terms of the policy. The insurer shall pay

10  for other repairs to the structure and contents in accordance

11  with the terms of the policy. The insurer may make payment

12  directly to the persons performing the land and building

13  stabilization and foundation repairs. The insurer has no

14  liability for the work performed unless it agrees to such

15  liability in writing.

16         (6)(a)  Except as provided in paragraph (b), the fees

17  and costs of the engineer or the professional geologist shall

18  be paid by the insurer.

19         (7)(c)  If the insurer obtains, pursuant to s. 627.7073

20  paragraph (b), written certification that there is no sinkhole

21  loss or that the cause of the damage claim was not sinkhole

22  activity, and if the policyholder has submitted the sinkhole

23  claim without good faith grounds for submitting such claim,

24  the policyholder shall reimburse the insurer for 50 percent of

25  the actual costs cost of the analyses and services provided

26  under ss. 627.7072 and 627.7073 analysis under paragraph (b);

27  however, a policyholder is not required to reimburse an

28  insurer more than $2,500 with respect to any claim. A

29  policyholder is required to pay reimbursement under this

30  subsection paragraph only if the insurer, prior to ordering

31  the analysis under s. 627.7072 paragraph (b), informs the

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 1  policyholder in writing of the policyholder's potential

 2  liability for reimbursement and gives the policyholder the

 3  opportunity to withdraw the claim.

 4         (8)(2)  No insurer shall nonrenew any policy of

 5  property insurance on the basis of filing of claims for

 6  partial loss caused by sinkhole damage or clay shrinkage as

 7  long as the total of such payments does not exceed the current

 8  policy limits of coverage for property damage, and provided

 9  the insured has repaired the structure in accordance with the

10  engineering recommendations upon which any payment or policy

11  proceeds were based.

12         Section 18.  Section 627.7071, Florida Statutes, is

13  created to read:

14         627.7071  Certification of engineers and professional

15  geologists.--

16         (1)  The Department of Business and Professional

17  Regulation in consultation with the Florida Board of

18  Professional Geologists and Florida Board of Professional

19  Engineers shall certify persons as engineers and professional

20  geologists qualified to identify sinkholes and make

21  recommendations for remediation of sinkhole damage to real

22  property and structures thereon. The Department of Business

23  and Professional Regulation shall forward the list to the

24  Department of Financial Services.

25         (2)  If requested by the insurer or the policyholder,

26  the Department of Financial Services randomly shall select up

27  to three engineers and three professional geologists to

28  perform the services provided in ss. 627.7072 and 627.7073.

29  The policyholder or the insurer each may reject any one

30  engineer and one professional geologist selected by the

31  department. The insurer shall pay the fees of the department

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 1  for its services in selecting the engineer or professional

 2  geologist.

 3         (3)  The Department of Financial Services and the

 4  Department of Business and Professional Regulation, in

 5  consultation with the Florida Board of Professional Geologists

 6  and Florida Board of Professional Engineers may adopt rules to

 7  administer this section.

 8         Section 19.  Section 627.7072, Florida Statutes, is

 9  created to read:

10         627.7072  Testing standards for sinkholes.--

11         (1)  The engineer and professional geologist shall

12  perform such tests as sufficient, in their professional

13  opinion, to determine the presence or absence of sinkhole loss

14  or other cause of damage within reasonable professional

15  probability, and to make recommendations regarding necessary

16  building stabilization.

17         (2)  Testing shall be conducted in compliance with

18  standards of the American Society for Testing and Materials

19  International, the United States Army Corps of Engineers, the

20  Department of Transportation, or other appropriate standards,

21  as determined by rule of the department, to the extent

22  applicable.

23         (3)  The department may adopt rules to establish

24  testing standards to administer this section.

25         Section 20.  Section 627.7073, Florida Statutes, is

26  created to read:

27         627.7073  Sinkhole reports.--

28         (1)  Upon completion of testing as provided in s.

29  627.7072, the engineer or professional geologist shall issue a

30  report and certification to the insurer and the policyholder

31  as provided in this section.

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 1         (a)  Sinkhole loss is verified only if an engineer or a

 2  professional geologist performs tests in accordance with s.

 3  627.7072 and issues a written report and certification to the

 4  policyholder and the insurer stating:

 5         1.  That the cause of the actual physical and

 6  structural damage is sinkhole activity within a reasonable

 7  professional probability.

 8         2.  That the analyses conducted was of sufficient scope

 9  to eliminate any other activity as the cause of damage within

10  a reasonable professional probability.

11         3.  A description of the tests performed.

12         4.  A recommendation of methods for stabilizing the

13  land, if possible, and building, if required, and

14  recommendations for making repairs to the foundation.

15         (b)  If sinkhole activity is eliminated as the cause of

16  damage to the structure, the engineer or professional

17  geologist shall issue a written report and certification to

18  the policyholder and the insurer stating:

19         1.  That the cause of the damage is not sinkhole

20  activity within a reasonable professional probability.

21         2.  That the analyses and tests conducted were of

22  sufficient scope to eliminate sinkhole activity as the cause

23  of damage within a reasonable professional probability.

24         3.  A statement of the cause of the damage within a

25  reasonable professional probability.

26         4.  A description of the tests performed.

27         (c)  The respective findings, opinions and

28  recommendations of the engineer or professional geologist as

29  to the verification of a sinkhole loss, land and building

30  stabilization, foundation repair, and elimination of sinkhole

31  

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 1  loss shall be presumed correct, unless rebutted by clear and

 2  convincing evidence in a civil proceeding.

 3         (2)  Any insurer that has paid a claim for a sinkhole

 4  loss shall file a copy of the report and certification

 5  prepared pursuant to subsection (1), with the clerk of court

 6  and the clerk shall record the report and certification with

 7  the certificate of title or deed for that property. The

 8  insurer shall bear the cost of filing and recording the report

 9  and certification. There shall be no cause of action or

10  liability against an insurer for compliance with this section.

11         Section 21.  Effective October 1, 2005, and applicable

12  to policies issued or renewed on or after that date, section

13  627.711, Florida Statutes, is created to read:

14         627.711  Notice of premium discounts for hurricane loss

15  mitigation.--Before issuing a personal lines residential

16  property insurance policy and as part of each premium renewal

17  notice, the insurer shall provide written notice to the

18  applicant or policyholder, on a form approved by the office,

19  of the availability and amount of the premium discounts and

20  credits for fixtures and construction techniques that reduce

21  the amount of loss in a windstorm, as required by s.

22  627.0629(1). The notice must clearly inform the applicant or

23  policyholder as to what the policyholder must do to qualify

24  for such credits or discounts. The commission may adopt rules

25  to administer this section.

26         Section 22.  Section 627.712, Florida Statutes, is

27  created to read:

28         627.712  Timely payment of claims.--

29         (1)  An insurer shall, within 30 days after receipt of

30  a claim under a property insurance policy:

31  

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 1         (a)  Pay that portion of the claim for which the

 2  policyholder has submitted all information that is required

 3  for payment under the terms of the policy;

 4         (b)  Provide a written denial to the policyholder for

 5  that portion of a claim which the insurer determines is not

 6  covered under the policy, including the specific reasons; and

 7         (c)  Specify, in writing, the additional information

 8  that the policyholder must submit to the insurer in order for

 9  any remaining amount of the claim to be paid.

10         (2)  Within 30 days after receipt of the additional

11  information specified in paragraph (1)(c), the insurer shall

12  either pay or deny the claim as specified in paragraph (1)(a)

13  or paragraph (1)(b).

14         (3)  Payment shall be considered made on the date a

15  check or other valid payment instrument is placed in the

16  United States mail in a properly addressed, postpaid envelope,

17  or if not so posted, on the date of delivery.

18         (4)  All overdue payments shall bear simple interest at

19  the rate of 10 percent per year.

20         (5)  Following a hurricane or natural disaster, the

21  requirements of this section are subject to such exceptions or

22  alternative requirements as may be provided by rule of the

23  commission or order of the office.

24         Section 23.  By January 15, 2006, the Office of the

25  Auditor General shall conduct an operational audit of Citizens

26  Property Insurance Corporation regarding its customer service,

27  claims handling, accessibility of policyholder information to

28  the agent of record, take-out programs, and financing

29  arrangements, including recommendations for legislative

30  changes related to the findings of the audit.

31  

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 1         Section 24.  The amendment to section 627.702, Florida

 2  Statutes, contained in this act is remedial in nature and

 3  intended to clarify the intent of that section.

 4         Section 25.  For the 2005-2006 fiscal year, there is

 5  appropriated $350,000 in recurring funds from the Insurance

 6  Regulatory Trust Fund and four positions are authorized to the

 7  Office of the Consumer Advocate within the Department of

 8  Financial Services for the purposes provided in section

 9  627.0613, Florida Statutes.

10         Section 26.  Except as otherwise expressly provided in

11  this act, this act shall take effect upon becoming a law.

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    Florida Senate - 2005                           CS for SB 1488
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 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 1488

 3                                 

 4  The Committee Substitute makes the following changes:  

 5  o    Lowers the retention in the Florida Hurricane Catastrophe
         Fund;
 6  
    o    Requires the Department of Community Affairs to establish
 7       a low-interest loan program for hurricane loss
         mitigation;
 8  
    o    Revises the rating law for property and casualty
 9       insurance;

10  o    Limits admissibility of hurricane loss models in rate
         hearings;
11  
    o    Requires public hearings on certain rate filings;
12  
    o    Requires standard rating territories and standard
13       policies to be proposed to the Legislature for further
         consideration;
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    o    Requires insurers to report data for the public hurricane
15       loss model;

16  o    Makes changes to Citizens Property Insurance Corporation,
         regarding appointment of the board, limits of coverage,
17       standards for rates, premium limitations, and requiring
         an audit;
18  
    o    Revises standards for disapproval of policy forms;
19  
    o    Requires that insurers provide a checklist of coverage;
20  
    o    Increases maximum hurricane deductibles and requires
21       insurers to offer specified deductibles;

22  o    Requires insurers to offer coverage for costs of meeting
         building codes;
23  
    o    Requires replacement cost coverage to be paid whether or
24       not the insured replaces or repairs the dwelling or
         property;
25  
    o    Provides a penalty for insurers failing to notify
26       claimants of their right to mediation;

27  o    Provides legislative intent that the valued policy law is
         not intended to require an insurer to pay for a loss
28       caused by a peril other than the covered peril;

29  o    Revises requirements for sinkhole claims;

30  o    Requires insurers to provide notice or premium discounts
         for certain construction techniques for mitigating
31       losses;

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    Florida Senate - 2005                           CS for SB 1488
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 1  o    Requires property insurers to pay claims within certain
         time periods;
 2  
    o    Prohibits an insurer from canceling coverage for a
 3       hurricane damaged dwelling;

 4  o    Makes appropriations for the Office of the Consumer
         Advocate.
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