| 1 | A bill to be entitled |
| 2 | An act relating to hurricane preparedness and insurance; |
| 3 | providing a short title; amending s. 215.5586, F.S.; revising |
| 4 | criteria for wind certification and hurricane mitigation |
| 5 | inspectors; requiring a level 2 background check for wind |
| 6 | certification and hurricane mitigation inspectors; revising |
| 7 | certain financial wind certification and mitigation grant |
| 8 | criteria and use provisions; providing additional uses for |
| 9 | grant funding for certain homeowners; authorizing the |
| 10 | Department of Financial Services to contract with a not-for- |
| 11 | profit corporation to conduct the Florida Comprehensive |
| 12 | Hurricane Damage Mitigation Program and enhance awareness of |
| 13 | the benefits of mitigation; requiring the department to |
| 14 | develop and maintain a list of wind certification and |
| 15 | hurricane mitigation inspectors; amending s. 626.2815, F.S.; |
| 16 | requiring continuing education for certain agents and customer |
| 17 | representatives on the subject of premium discounts for |
| 18 | hurricane mitigation options; amending s. 627.062, F.S.; |
| 19 | requiring certain rate filings to account for certain |
| 20 | mitigation measures; amending s. 627.0629, F.S.; providing for |
| 21 | reductions in deductibles for mitigation measures; amending s. |
| 22 | 627.701, F.S.; requiring insurers to provide insureds options |
| 23 | for certain deductibles, credits, or rate differentials; |
| 24 | amending s. 627.711, F.S.; requiring the Financial Services |
| 25 | Commission to develop uniform mitigation verification |
| 26 | inspection forms; providing duties of the commission; creating |
| 27 | the Windstorm Mitigation Study Committee for the purpose of |
| 28 | analyzing solutions and programs that could address the |
| 29 | state's need to mitigate the effects of windstorms on |
| 30 | structures; providing for membership and qualifications; |
| 31 | providing that the members are entitled to reimbursement for |
| 32 | expenses incurred in connection with their duties; providing |
| 33 | for reimbursement of travel expenses; requiring the Department |
| 34 | of Financial Services, the Office of Insurance Regulation, the |
| 35 | Citizens Property Insurance Corporation, and other state |
| 36 | agencies to supply information, assistance, and facilities to |
| 37 | the committee; requiring the department to provide staff |
| 38 | assistance; specifying duties of the committee; requiring the |
| 39 | committee to report to the Governor, the Legislature, the |
| 40 | Chief Financial Officer, and the Commissioner of Insurance |
| 41 | Regulation by a specified date; providing for expiration of |
| 42 | the committee; requiring the Financial Services Commission to |
| 43 | adopt a uniform home grading scale for certain purposes; |
| 44 | providing criteria; providing an appropriation to the |
| 45 | Department of Community Affairs for certain purposes; |
| 46 | specifying use of funds; providing appropriations; providing |
| 47 | effective dates. |
| 48 |
|
| 49 | Be It Enacted by the Legislature of the State of Florida: |
| 50 |
|
| 51 | Section 1. This act may be cited as the "Home Enhancement |
| 52 | and Loss Prevention Act." |
| 53 | Section 2. Paragraph (b) of subsection (1) and subsection |
| 54 | (2) of section 215.5586, Florida Statutes, are amended, and |
| 55 | subsections (7) and (8) are added to that section, to read: |
| 56 | 215.5586 Florida Comprehensive Hurricane Damage Mitigation |
| 57 | Program.--There is established within the Department of |
| 58 | Financial Services the Florida Comprehensive Hurricane Damage |
| 59 | Mitigation Program. This section does not create an entitlement |
| 60 | for property owners or obligate the state in any way to fund the |
| 61 | inspection or retrofitting of residential property in this |
| 62 | state. Implementation of this program is subject to annual |
| 63 | legislative appropriations. The program shall be administered by |
| 64 | an individual with prior executive experience in the private |
| 65 | sector in the areas of insurance, business, or construction. The |
| 66 | program shall develop and implement a comprehensive and |
| 67 | coordinated approach for hurricane damage mitigation that shall |
| 68 | include the following: |
| 69 | (1) WIND CERTIFICATION AND HURRICANE MITIGATION |
| 70 | INSPECTIONS.-- |
| 71 | (b) To qualify for selection by the department as a |
| 72 | provider of wind certification and hurricane mitigation |
| 73 | inspections, the entity shall, at a minimum: |
| 74 | 1. Use wind certification and hurricane mitigation |
| 75 | inspectors who: |
| 76 | a. Have prior experience in residential construction or |
| 77 | inspection and have received specialized training in hurricane |
| 78 | mitigation procedures. |
| 79 | b. Have undergone drug testing and level 2 background |
| 80 | checks pursuant to s. 435.04. |
| 81 | c. Have been certified, in a manner satisfactory to the |
| 82 | department, to conduct the inspections. |
| 83 | 2. Provide a quality assurance program including a |
| 84 | reinspection component. |
| 85 | (2) GRANTS.--Financial grants shall be used to encourage |
| 86 | single-family, site-built, owner-occupied, residential property |
| 87 | owners to retrofit their properties to make them less vulnerable |
| 88 | to hurricane damage. |
| 89 | (a) To be eligible for a grant, a residential property |
| 90 | must: |
| 91 | 1. Have been granted a homestead exemption under chapter |
| 92 | 196. |
| 93 | 2. Be a dwelling with an insured value of $500,000 or |
| 94 | less. Homeowners who are low-income persons, as defined in s. |
| 95 | 420.0004(10), are exempt from this requirement. |
| 96 | 3. Have undergone an acceptable wind certification and |
| 97 | hurricane mitigation inspection, if the property is an existing |
| 98 | structure. |
| 99 |
|
| 100 | A residential property which is part of a multifamily |
| 101 | residential unit may receive a grant only if all homeowners |
| 102 | participate and the total number of units does not exceed four. |
| 103 | (b) All grants must be matched on a dollar-for-dollar |
| 104 | basis for a total of $10,000 for the mitigation project with the |
| 105 | state's contribution not to exceed $5,000. |
| 106 | (c) The program shall create a process in which mitigation |
| 107 | contractors agree to participate and seek reimbursement from the |
| 108 | state and homeowners select from a list of participating |
| 109 | contractors. All mitigation must be based upon the securing of |
| 110 | all required local permits and inspections. Mitigation projects |
| 111 | are subject to random reinspection of up to at least 10 percent |
| 112 | of all projects. |
| 113 | (d) Matching fund grants shall also be made available to |
| 114 | local governments and nonprofit entities for projects that will |
| 115 | reduce hurricane damage to single-family, site-built, owner- |
| 116 | occupied, residential property. |
| 117 | (e) Grants may be used for the following improvements: |
| 118 | 1. Roof deck attachment.; |
| 119 | 2. Secondary water barrier.; |
| 120 | 3. Roof covering.; |
| 121 | 4. Brace gable ends.; |
| 122 | 5. Reinforce roof-to-wall connections.; |
| 123 | 6. Opening protection.; and |
| 124 | 7. Exterior doors, including garage doors. |
| 125 | (f) Grants may be used on a previously inspected existing |
| 126 | structure or on a rebuild. A rebuild is defined as a site-built, |
| 127 | single-family dwelling under construction to replace a home that |
| 128 | was destroyed or significantly damaged by a hurricane and deemed |
| 129 | unlivable by a regulatory authority. The homeowner must have had |
| 130 | a homestead exemption prior to the hurricane and maintained the |
| 131 | homestead exemption. |
| 132 | (g)(f) Low-income homeowners, as defined in s. |
| 133 | 420.0004(10)(9), who otherwise meet the requirements of |
| 134 | paragraphs (a), and (c), (e), and (f) are eligible for a grant |
| 135 | of up to $5,000 and are not required to provide a matching |
| 136 | amount to receive the grant. Additionally, for low-income |
| 137 | homeowners, grant funding may be used for repair to existing |
| 138 | structures leading to any of the mitigation improvements |
| 139 | provided in paragraph (e), limited to 20 percent of the grant |
| 140 | value. Such grants shall be used to retrofit single-family, |
| 141 | site-built, owner-occupied, residential properties in order to |
| 142 | make them less vulnerable to hurricane damage. |
| 143 | (7) CONTRACT WITH NOT-FOR-PROFIT CORPORATION.--The |
| 144 | Department of Financial Services is authorized to contract with |
| 145 | a not-for-profit corporation to conduct all or portions of the |
| 146 | program and to increase the awareness of the benefits of |
| 147 | mitigation among homeowners in this state. The department shall |
| 148 | consider the not-for-profit corporation's ability to raise funds |
| 149 | from the private sector to provide for mitigation grants, as |
| 150 | well as administrative capabilities for conducting other |
| 151 | business related to the program. |
| 152 | (8) WIND CERTIFICATION AND HURRICANE MITIGATION INSPECTOR |
| 153 | LIST.--The department shall develop and maintain as a public |
| 154 | record a current list of wind certification and hurricane |
| 155 | mitigation inspectors authorized to conduct wind certification |
| 156 | and hurricane mitigation inspections pursuant to this section. |
| 157 | Section 3. Paragraph (a) of subsection (3) of section |
| 158 | 626.2815, Florida Statutes, is amended to read: |
| 159 | 626.2815 Continuing education required; application; |
| 160 | exceptions; requirements; penalties.-- |
| 161 | (3)(a) Each person subject to the provisions of this |
| 162 | section must, except as set forth in paragraphs (b), (c), and |
| 163 | (d), complete a minimum of 24 hours of continuing education |
| 164 | courses every 2 years in basic or higher-level courses |
| 165 | prescribed by this section or in other courses approved by the |
| 166 | department. Each person subject to the provisions of this |
| 167 | section must complete, as part of his or her required number of |
| 168 | continuing education hours, 3 hours of continuing education, |
| 169 | approved by the department, every 2 years on the subject matter |
| 170 | of ethics. Each licensed general lines agent and customer |
| 171 | representative subject to this section must complete, as part of |
| 172 | his or her required number of continuing education hours, 1 hour |
| 173 | of continuing education, approved by the department, every 2 |
| 174 | years on the subject matter of premium discounts available on |
| 175 | property insurance policies based on various hurricane |
| 176 | mitigation options and the means for obtaining the discounts. |
| 177 | Section 4. Paragraph (k) is added to subsection (2) of |
| 178 | section 627.062, Florida Statutes, to read: |
| 179 | 627.062 Rate standards.-- |
| 180 | (2) As to all such classes of insurance: |
| 181 | (k) With respect to residential property insurance rate |
| 182 | filings, the rate filing must account for mitigation measures |
| 183 | undertaken by policyholders to reduce hurricane losses. |
| 184 |
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| 185 | The provisions of this subsection shall not apply to workers' |
| 186 | compensation and employer's liability insurance and to motor |
| 187 | vehicle insurance. |
| 188 | Section 5. Effective October 1, 2007, subsection (1) of |
| 189 | section 627.0629, Florida Statutes, is amended to read: |
| 190 | 627.0629 Residential property insurance; rate filings.-- |
| 191 | (1) Effective June 1, 2002, a rate filing for residential |
| 192 | property insurance must include actuarially reasonable |
| 193 | discounts, credits, or other rate differentials, and, exclusive |
| 194 | of discounts, credits, or other rate differentials, subject to |
| 195 | deductible minimums set forth in s. 627.701, or appropriate |
| 196 | reductions in deductibles, for properties on which fixtures or |
| 197 | construction techniques demonstrated to reduce the amount of |
| 198 | loss in a windstorm have been installed or implemented. The |
| 199 | fixtures or construction techniques shall include, but not be |
| 200 | limited to, fixtures or construction techniques which enhance |
| 201 | roof strength, roof covering performance, roof-to-wall strength, |
| 202 | wall-to-floor-to-foundation strength, opening protection, and |
| 203 | window, door, and skylight strength. Credits, discounts, or |
| 204 | other rate differentials, or appropriate reductions in |
| 205 | deductibles, for fixtures and construction techniques which meet |
| 206 | the minimum requirements of the Florida Building Code must be |
| 207 | included in the rate filing. All insurance companies must make a |
| 208 | rate filing which includes the credits, discounts, or other rate |
| 209 | differentials or reductions in deductibles by February 28, 2003. |
| 210 | By July 1, 2007, the office shall reevaluate the discounts, |
| 211 | credits, other rate differentials, and appropriate reductions in |
| 212 | deductibles for fixtures and construction techniques that meet |
| 213 | the minimum requirements of the Florida Building Code, based |
| 214 | upon actual experience or any other loss relativity studies |
| 215 | available to the office. The office shall determine the |
| 216 | discounts, credits, other rate differentials, and appropriate |
| 217 | reductions in deductibles that reflect the full actuarial value |
| 218 | of such revaluation, which may be used by insurers in rate |
| 219 | filings. |
| 220 | Section 6. Subsection (9) of section 627.701, Florida |
| 221 | Statutes, is amended to read: |
| 222 | 627.701 Liability of insureds; coinsurance; deductibles.-- |
| 223 | (9) With respect to hurricane coverage provided in a |
| 224 | policy of residential coverage, when the policyholder has taken |
| 225 | appropriate hurricane mitigation measures regarding the |
| 226 | residence covered under the policy, the insurer shall may |
| 227 | provide the insured the option of selecting an appropriate |
| 228 | reduction in the policy's hurricane deductible or in lieu of |
| 229 | selecting the appropriate discount credit or other rate |
| 230 | differential as provided in s. 627.0629. If made available by |
| 231 | the insurer, The insurer must provide the policyholder with |
| 232 | notice of the options available under this subsection on a form |
| 233 | approved by the office. |
| 234 | Section 7. Section 627.711, Florida Statutes, is amended |
| 235 | to read: |
| 236 | 627.711 Notice of premium discounts for hurricane loss |
| 237 | mitigation; uniform mitigation verification inspection form.-- |
| 238 | (1) Using a form prescribed by the Office of Insurance |
| 239 | Regulation, the insurer shall clearly notify the applicant or |
| 240 | policyholder of any personal lines residential property |
| 241 | insurance policy, at the time of the issuance of the policy and |
| 242 | at each renewal, of the availability and the range of each |
| 243 | premium discount, credit, other rate differential, or reduction |
| 244 | in deductibles for properties on which fixtures or construction |
| 245 | techniques demonstrated to reduce the amount of loss in a |
| 246 | windstorm can be or have been installed or implemented. The |
| 247 | prescribed form shall describe generally what actions the |
| 248 | policyholders may be able to take to reduce their windstorm |
| 249 | premium. The prescribed form and a list of such ranges approved |
| 250 | by the office for each insurer licensed in the state and |
| 251 | providing such discounts, credits, other rate differentials, or |
| 252 | reductions in deductibles for properties described in this |
| 253 | subsection shall be available for electronic viewing and |
| 254 | download from the Department of Financial Services' or the |
| 255 | Office of Insurance Regulation's Internet website. The Financial |
| 256 | Services Commission may adopt rules to implement this |
| 257 | subsection. |
| 258 | (2) The Financial Services Commission shall develop by |
| 259 | rule a uniform mitigation verification inspection form that |
| 260 | shall be used by all insurers when factoring discounts for wind |
| 261 | insurance. In developing the form, the commission shall seek |
| 262 | input from insurance, construction, and building code |
| 263 | representatives. Further, the commission shall provide guidance |
| 264 | as to the length of time the inspection results are valid. |
| 265 | Section 8. Windstorm Mitigation Study Committee.-- |
| 266 | (1)(a) The Windstorm Mitigation Study Commission is |
| 267 | created and shall be composed of eight members as follows: |
| 268 | 1. Two members shall be appointed by the Governor, with |
| 269 | one designated by the Governor to serve as chair. |
| 270 | 2. Two members shall be appointed by the Chief Financial |
| 271 | Officer. |
| 272 | 3. Two members shall be appointed by the President of the |
| 273 | Senate. |
| 274 | 4. Two members shall be appointed by the Speaker of the |
| 275 | House of Representatives. |
| 276 | (b) Each member must be knowledgeable of issues concerning |
| 277 | the mitigation of the effects of windstorms on structures in |
| 278 | this state and at least one member must represent primarily the |
| 279 | interests of homeowners. |
| 280 | (2)(a) The members of the committee shall serve without |
| 281 | compensation, but are entitled to reimbursement for all |
| 282 | necessary expenses incurred in performing their duties, |
| 283 | including travel expenses, in accordance with s. 112.061, |
| 284 | Florida Statutes. Reimbursements for travel shall be paid by the |
| 285 | appointing entity. |
| 286 | (b) The committee shall meet as necessary, at the call of |
| 287 | the chair, and at the time and place designated by the chair. |
| 288 | The committee may conduct its meetings through teleconferences |
| 289 | or other similar means. The first meeting of the committee shall |
| 290 | occur no later than February 9, 2007. |
| 291 | (3) The Department of Financial Services, the Office of |
| 292 | Insurance Regulation, the Citizens Property Insurance |
| 293 | Corporation, and other agencies of this state shall supply any |
| 294 | information, assistance, and facilities that are considered |
| 295 | necessary by the committee to carry out its duties under this |
| 296 | section. The department shall provide staff assistance as |
| 297 | necessary in order to carry out the required clerical and |
| 298 | administrative functions of the committee. |
| 299 | (4) The committee shall analyze those solutions and |
| 300 | programs that address the state's acute need to mitigate the |
| 301 | effects of windstorms on structures, especially residential |
| 302 | property that is located in areas at greatest risk of windstorm |
| 303 | damage, including programs or proposals that provide for: |
| 304 | (a) The availability of home inspections for windstorm |
| 305 | resistance. |
| 306 | (b) Grants to assist homeowners, and possibly other groups |
| 307 | of property owners, to harden their property against windstorm |
| 308 | damage. |
| 309 | (c) The full actuarial value to be reflected in premium |
| 310 | credits for windstorm mitigation. |
| 311 | (d) The most effective way to inform policyholders of the |
| 312 | availability of and means by which to obtain premium credits for |
| 313 | windstorm mitigation. |
| 314 | (e) Coordination among federal, local, and private |
| 315 | initiatives. |
| 316 | (f) Streamlining or strengthening applicable state, |
| 317 | regional, and local regulations. |
| 318 | (g) The stimulation of public and private efforts to |
| 319 | mitigate against windstorm injury and damage. |
| 320 | (h) The discovery and assessment of funding sources for |
| 321 | windstorm mitigation. |
| 322 | (i) Tax incentives for windstorm mitigation. |
| 323 | (j) Consumer information concerning the benefits of |
| 324 | windstorm mitigation, including personal safety as well as |
| 325 | property security. |
| 326 | (k) Research on windstorm mitigation. |
| 327 |
|
| 328 | The committee may develop any other solutions and programs that |
| 329 | it considers appropriate. |
| 330 | (5) In performing its analysis, the committee shall |
| 331 | consider both the safety of the residents of this state and the |
| 332 | protection of real property, especially residential. In |
| 333 | addition, the committee shall consider both short-term and long- |
| 334 | term solutions and programs. |
| 335 | (6) The committee shall review, evaluate, and make |
| 336 | recommendations regarding existing and proposed programs and |
| 337 | initiatives for mitigating windstorm damage. |
| 338 | (7) The committee shall provide recommendations, including |
| 339 | proposed legislation, to the Governor, the President of the |
| 340 | Senate, the Speaker of the House of Representatives, the Chief |
| 341 | Financial Officer, and the Commissioner of Insurance Regulation |
| 342 | by March 6, 2007. |
| 343 | (8) The committee shall expire on May 15, 2007. |
| 344 | Section 9. The Financial Services Commission shall adopt a |
| 345 | uniform home grading scale to grade the ability of a home to |
| 346 | withstand the wind load from a sustained severe tropical storm |
| 347 | or hurricane. The commission shall coordinate with the Office of |
| 348 | Insurance Regulation, the Department of Financial Services, and |
| 349 | the Department of Community Affairs in developing the grading |
| 350 | scale, which must be based upon and consistent with the rating |
| 351 | system required by chapter 2006-12, Laws of Florida. The |
| 352 | commission shall adopt the uniform grading scale by rule no |
| 353 | later than June 30, 2007. |
| 354 | Section 10. For fiscal year 2006-2007, the sum of |
| 355 | $100,066,518 is appropriated in fixed capital outlay from the |
| 356 | Florida Small Cities Community Development Block Grant Program |
| 357 | Fund to the Department of Community Affairs. These funds shall |
| 358 | be used consistent with The Federal Register, Vol. 71, No. 209, |
| 359 | Docket No. FR-5089-N-01, and the Action Plan for Disaster |
| 360 | Recovery Approved by the United States Department of Housing and |
| 361 | Urban Development. This funding shall be used to harden single- |
| 362 | family and multifamily housing to ensure that affordable |
| 363 | housing can withstand the effects of hurricane force winds and |
| 364 | to mitigate against the increasing costs of insurance. Funds may |
| 365 | also be used to support housing rehabilitation or repair and |
| 366 | infrastructure development or improvement in accordance with the |
| 367 | approved action plan. |
| 368 | Section 11. For fiscal year 2006-2007, there is |
| 369 | appropriated $2,000,000 from the Department of Financial |
| 370 | Services' Insurance Regulatory Trust Fund to the Department of |
| 371 | Financial Services for the purposes of implementing section 9 of |
| 372 | this act. |
| 373 | Section 12. Except as otherwise expressly provided in this |
| 374 | act, this act shall take effect upon becoming a law. |