1 | A bill to be entitled |
2 | An act relating to hurricane preparedness and insurance; |
3 | creating the Citizens Property Insurance Corporation |
4 | Mission Review Task Force; providing purposes; requiring a |
5 | report; providing report requirements; providing for |
6 | appointment of members; providing responsibilities; |
7 | specifying service without compensation; providing for |
8 | reimbursement of per diem and travel expenses; providing |
9 | meeting requirements; requiring the corporation to assist |
10 | the task force; providing for the expiration of the task |
11 | force; exempting certain residential property insurance |
12 | rate filings from being subject to determinations by the |
13 | Office of Insurance Regulation of being excessive or |
14 | unfairly discriminatory; authorizing the office to |
15 | disapprove certain rates as inadequate or disapprove |
16 | certain filings under certain circumstances; providing |
17 | requirements and procedures for filing rates and review of |
18 | rate filings by the office; providing for application only |
19 | to residential property insurance; requiring the Chief |
20 | Financial Officer to provide a report on the economic |
21 | impact on the state of certain hurricanes; providing |
22 | report requirements; amending s. 553.73, F.S.; limiting |
23 | the authority of the Florida Building Commission to modify |
24 | certain codes and standards under certain circumstances; |
25 | requiring counties and municipalities to enforce certain |
26 | windborne debris protections and structural guidelines; |
27 | requiring the commission to amend the Florida Building |
28 | Code to require application of certain standards and |
29 | eliminate certain exceptions; prohibiting amendment of the |
30 | Florida Building Code to diminish certain requirements; |
31 | authorizing the commission to amend the code to enhance |
32 | certain requirements; amending s. 10, ch. 2007-1, Laws of |
33 | Florida; revising reporting requirements for the |
34 | commission's voluntary "Code Plus" guidelines; repealing |
35 | s. 9, ch. 2007-1, Laws of Florida, relating to certain |
36 | windborne debris protection requirements enforcement; |
37 | providing an appropriation; providing an effective date. |
38 |
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39 | Be It Enacted by the Legislature of the State of Florida: |
40 |
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41 | Section 1. (1) The Citizens Property Insurance |
42 | Corporation Mission Review Task Force is created to analyze and |
43 | compile available data and to develop a report setting forth the |
44 | statutory and operational changes needed to return Citizens |
45 | Property Insurance Corporation to its former role as a state- |
46 | created, noncompetitive residual market mechanism that provides |
47 | property insurance coverage to risks that are otherwise entitled |
48 | but unable to obtain such coverage in the private insurance |
49 | market. The task force shall submit a report to the Governor, |
50 | the President of the Senate, and the Speaker of the House of |
51 | Representatives by January 31, 2008. At a minimum, the task |
52 | force shall analyze and evaluate relevant and applicable |
53 | information and data and develop recommendations concerning: |
54 | (a) The nature of Citizens Property Insurance |
55 | Corporation's role in providing property insurance coverage when |
56 | and only if such coverage is not available from private |
57 | insurers. |
58 | (b) The ability of the admitted market to offer policies |
59 | to those consumers formerly insured through Citizens Property |
60 | Insurance Corporation. This consideration shall include, but not |
61 | be limited to, the availability of private market reinsurance |
62 | and coverage through the Florida Hurricane Catastrophe Fund, the |
63 | general adequacy of the admitted market's current rates, and the |
64 | capacity of the industry to offer policies to former Citizens |
65 | Property Insurance Corporation policyholders within existing |
66 | writing ratio limitations. |
67 | (c) The appropriate relationship of rates charged by |
68 | Citizens Property Insurance Corporation to rates charged by |
69 | private insurers, with due consideration for the corporation's |
70 | role as a noncompetitive residual market mechanism. |
71 | (d) The relationships between the exposure of Citizens |
72 | Property Insurance Corporation to catastrophic hurricane losses, |
73 | the corporation's history of purchasing inadequate or no |
74 | reinsurance coverage, and the corporation's lack of adequate |
75 | capital to meet its potential claim obligations without |
76 | incurring large deficits. |
77 | (e) The adverse effects on the people and the economy of |
78 | this state of the large, multiyear deficit assessments by |
79 | Citizens Property Insurance Corporation that may be levied on |
80 | businesses and households in this state, and steps that can be |
81 | taken to reduce those effects. |
82 | (f) The operational implications of the variation in the |
83 | number of policies in force over time in Citizens Property |
84 | Insurance Corporation and the merits of outsourcing some or all |
85 | of its operational responsibilities. |
86 | (g) Changes in the mission and operations of Citizens |
87 | Property Insurance Corporation to reduce or eliminate any |
88 | adverse effect such mission and operations may be having on the |
89 | promotion of sound and economic growth and development of the |
90 | coastal areas of this state. |
91 | (2) The task force shall be composed of 17 members as |
92 | follows: |
93 | (a) Three members appointed by the Speaker of the House of |
94 | Representatives. |
95 | (b) Three members appointed by the President of the |
96 | Senate. |
97 | (c) Three members appointed by the Governor who are not |
98 | employed by or professionally affiliated with an insurance |
99 | company or a subsidiary of an insurance company. |
100 | (d) Eight members appointed as representatives of private |
101 | insurance companies as follows: |
102 | 1. Two members representing two separate insurance |
103 | companies in this state that each provide at least 300,000 |
104 | property insurance policies statewide at the time of the |
105 | creation of the task force. |
106 | 2. Two members representing two separate insurance |
107 | companies in this state that each provide at least 100,000 but |
108 | no more than 299,000 property insurance policies statewide at |
109 | the time of the creation of the task force. |
110 | 3. Two members representing two separate insurance |
111 | companies in this state that each provide fewer than 100,000 |
112 | property insurance policies statewide at the time of the |
113 | creation of the task force. |
114 | 4. Two members appointed by the Chief Financial Officer |
115 | representing insurance agents in this state, at least one of |
116 | whom represents the largest property and casualty insurance |
117 | agent's association in this state. |
118 |
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119 | Of each pair of members appointed under subparagraphs 1., 2., |
120 | and 3., one shall be appointed by the President of the Senate |
121 | and one by the Speaker of the House of Representatives. |
122 | (3) The task force shall conduct research, hold public |
123 | meetings, receive testimony, employ consultants and |
124 | administrative staff, and undertake other activities determined |
125 | by its members to be necessary to complete its responsibilities. |
126 | Citizens Property Insurance Corporation shall have appropriate |
127 | senior staff attend task force meetings, shall respond to |
128 | requests for testimony and data by the task force, and shall |
129 | otherwise cooperate with the task force. |
130 | (4) A member of the task force may not delegate his or her |
131 | attendance or voting power to a designee. |
132 | (5) Members of the task force shall serve without |
133 | compensation but are entitled to receive reimbursement for |
134 | travel and per diem as provided in s. 112.061, Florida Statutes. |
135 | (6) The appointments to the task force must be completed |
136 | within 30 calendar days after the effective date of this act, |
137 | and the task force must hold its initial meeting within 1 month |
138 | after appointment of all members. The task force shall expire no |
139 | later than 60 calendar days after submission of the report |
140 | required in subsection (1). |
141 | Section 2. (1) Effective January 1, 2008, notwithstanding |
142 | any other provision of this section, with respect to any |
143 | residential property insurance, a rate filing, including, but |
144 | not limited to, any rate changes, rating factors, territories, |
145 | classification, discounts, and credits, with respect to any |
146 | policy form, including endorsements issued with the form, that |
147 | results in an overall average statewide premium increase shall |
148 | not be subject to a determination by the Office of Insurance |
149 | Regulation that the rate is excessive or unfairly discriminatory |
150 | or in violation of any other provision of law. |
151 | (2) The Office of Insurance Regulation may disapprove a |
152 | rate as inadequate or disapprove a filing for the use of rating |
153 | factors prohibited by the laws of this state. An insurer |
154 | electing to implement a rate change under subsection (1) shall |
155 | submit a filing to the office at least 40 days prior to the |
156 | effective date of the rate change. The office shall have 30 days |
157 | after the submission of the filing to review the filing and |
158 | determine whether the rate is inadequate or uses rating factors |
159 | prohibited by the laws of this state. Absent a finding by the |
160 | office within such 30-day period that the rate is inadequate or |
161 | that the insurer has used rating factors prohibited by the laws |
162 | of this state, the filing is deemed approved. If the office |
163 | finds during the 30-day period that the filing will result in |
164 | inadequate premiums or otherwise endanger the insurer's |
165 | solvency, the office shall suspend the rate change. If the |
166 | insurer is implementing an overall rate increase that would |
167 | continue to produce an inadequate rate, such increase shall |
168 | proceed pending additional action by the office to ensure the |
169 | adequacy of the rate. |
170 | (3) This section does not apply to rate filings for any |
171 | insurance other than residential property insurance. |
172 | Section 3. The Chief Financial Officer shall provide a |
173 | report on the economic impact on the state of a 1-in-250-year |
174 | hurricane to the Governor, the President of the Senate, and the |
175 | Speaker of the House of Representatives by March 1 of each year. |
176 | The report shall include an estimate of the short-term and long- |
177 | term fiscal impacts of such a storm on Citizens Property |
178 | Insurance Corporation, the Florida Hurricane Catastrophe Fund, |
179 | the private insurance and reinsurance markets, the state |
180 | economy, and the state debt. The report may also include |
181 | recommendations by the Chief Financial Officer for preparing for |
182 | such a hurricane and reducing the economic impact of such a |
183 | hurricane on the state. In preparing the analysis, the Chief |
184 | Financial Officer shall coordinate with and obtain data from the |
185 | Office of Insurance Regulation, Citizens Property Insurance |
186 | Corporation, the Florida Hurricane Catastrophe Fund, the Florida |
187 | Commission on Hurricane Loss Projection Methodology, the State |
188 | Board of Administration, the Office of Economic and Demographic |
189 | Research, and other state agencies. |
190 | Section 4. Subsection (3) of section 553.73, Florida |
191 | Statutes, as amended by chapter 2007-1, Laws of Florida, is |
192 | amended, and subsection (13) is added to that section, to read: |
193 | 553.73 Florida Building Code.-- |
194 | (3) The commission shall select from available national or |
195 | international model building codes, or other available building |
196 | codes and standards currently recognized by the laws of this |
197 | state, to form the foundation for the Florida Building Code. The |
198 | commission may modify the selected model codes and standards as |
199 | needed to accommodate the specific needs of this state, but only |
200 | to the extent that any such modifications strengthen, not |
201 | weaken, the structural integrity of buildings constructed in |
202 | compliance with provisions of the Florida Building Code relating |
203 | to wind protection. Standards or criteria referenced by the |
204 | selected model codes shall be similarly incorporated by |
205 | reference. If a referenced standard or criterion requires |
206 | amplification or modification to be appropriate for use in this |
207 | state, only the amplification or modification shall be |
208 | specifically set forth in the Florida Building Code. The Florida |
209 | Building Commission may approve technical amendments to the |
210 | code, subject to the requirements of subsections (7) and (8), |
211 | after the amendments have been subject to the following |
212 | conditions: |
213 | (a) The proposed amendment has been published on the |
214 | commission's website for a minimum of 45 days and all the |
215 | associated documentation has been made available to any |
216 | interested party before any consideration by any Technical |
217 | Advisory Committee; |
218 | (b) In order for a Technical Advisory Committee to make a |
219 | favorable recommendation to the commission, the proposal must |
220 | receive a three-fourths vote of the members present at the |
221 | Technical Advisory Committee meeting and at least half of the |
222 | regular members must be present in order to conduct a meeting; |
223 | (c) After Technical Advisory Committee consideration and a |
224 | recommendation for approval of any proposed amendment, the |
225 | proposal must be published on the commission's website for not |
226 | less than 45 days before any consideration by the commission; |
227 | and |
228 | (d) Any proposal may be modified by the commission based |
229 | on public testimony and evidence from a public hearing held in |
230 | accordance with chapter 120. |
231 |
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232 | The commission shall incorporate within sections of the Florida |
233 | Building Code provisions which address regional and local |
234 | concerns and variations, but only to the extent that any such |
235 | modifications strengthen, not weaken, the structural integrity |
236 | of buildings constructed in compliance with provisions of the |
237 | Florida Building Code relating to wind protection. The |
238 | commission shall make every effort to minimize conflicts between |
239 | the Florida Building Code, the Florida Fire Prevention Code, and |
240 | the Life Safety Code. |
241 | (13) Each county and municipality in this state shall, at |
242 | a minimum, enforce the windborne debris protections and |
243 | structural guidelines adopted by the American Society of Civil |
244 | Engineers in the standard commonly referred to as ASCE 7-02. |
245 | Notwithstanding s. 109, chapter 2000-141, Laws of Florida, the |
246 | Florida Building Commission shall amend the Florida Building |
247 | Code to require application of ASCE 7-02 throughout the state |
248 | and to eliminate all exceptions providing less stringent |
249 | requirements. Provisions of the Florida Building Code, including |
250 | those contained in referenced standards and criteria, relating |
251 | to wind resistance shall not be amended pursuant to this |
252 | subsection to diminish construction requirements; however, the |
253 | commission may amend the provisions to enhance those |
254 | construction requirements. |
255 | Section 5. Subsection (2) of section 10 of chapter 2007-1, |
256 | Laws of Florida, is amended to read: |
257 | Section 10. |
258 | (2) The Florida Building Commission shall develop |
259 | voluntary "Code Plus" guidelines for increasing the hurricane |
260 | resistance of buildings. The guidelines may be modeled on the |
261 | requirements for the High Velocity Hurricane Zone and must |
262 | identify products, systems, and methods of construction that the |
263 | commission anticipates could result in stronger construction. |
264 | The commission shall include these guidelines in its report to |
265 | the President of the Senate and the Speaker of the House of |
266 | Representatives during the 2008 Regular Session of the |
267 | Legislature. |
268 | Section 6. Section 9 of chapter 2007-1, Laws of Florida, |
269 | is repealed. |
270 | Section 7. For the 2007-2008 fiscal year, the nonrecurring |
271 | sum of $250,000 is appropriated from the General Revenue Fund |
272 | for the purpose of implementing the provisions of this act |
273 | relating to the Citizens Property Insurance Corporation Mission |
274 | Review Task Force. |
275 | Section 8. This act shall take effect upon becoming a law. |