| 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. |