Florida Senate - 2009 SB 1820
By Senator Fasano
11-01879-09 20091820__
1 A bill to be entitled
2 An act relating to insurance; amending s. 624.4213,
3 F.S.; providing penalties for incorrectly marking
4 information as trade secret; providing for attorney's
5 fees and costs; amending s. 624.4305, F.S.; limiting
6 nonrenewals of residential property insurance
7 policies; amending s. 624.605, F.S.; limiting the
8 definition of “casualty insurance” by prohibiting
9 credit property insurance coverage from being issued
10 on an inland marine policy form; amending s. 625.091,
11 F.S.; requiring that every insurer approved to offer
12 large deductibles in workers' compensation policies
13 obtain collateral from the policyholder; providing
14 requirements for such collateral; amending s.
15 626.7451, F.S.; requiring that managing general agents
16 render accounts to the insurer detailing certain
17 information and remit all funds due under a contract
18 within a specified period after collection of such
19 funds; amending s. 626.9541, F.S.; including on the
20 list of unfair methods of competition and unfair or
21 deceptive acts the refusal to insure or continue to
22 insure an individual or risk solely because of the
23 fact the individual owns an animal or animals;
24 authorizing an insurer to ask certain questions and
25 limit or exclude portions of liability coverage
26 pertaining to animals; repealing s. 627.0612, F.S.,
27 relating to administrative proceedings in rating
28 determinations; amending s. 627.062, F.S.; requiring
29 that rates be made in accordance with generally
30 accepted actuarial techniques; requiring that the
31 Office of Insurance Regulation issue an approval
32 letter for certain rate filings; requiring that the
33 office consider certain factors when determining
34 whether a rate is excessive, inadequate, or unfairly
35 discriminatory; deleting conditions under which the
36 office is prohibited from disapproving certain rates
37 as excessive; revising restrictions on altering a rate
38 after notification by the office that such rate may be
39 excessive, inadequate, or unfairly discriminatory;
40 deleting provisions specifying actions constituting
41 violations of the insurance code; deleting a
42 requirement that the office develop a proposed
43 standard rating territory plan; requiring that the
44 chief executive officer or the chief financial officer
45 and the chief actuary of a property insurer certify
46 certain information which must accompany a rate
47 filing; deleting a provision requiring that the office
48 establish that rates are excessive for certain
49 personal lines residential coverage; amending s.
50 627.0621, F.S.; requiring that certain insurers and
51 the office make certain information available on a
52 public website; requiring that the office provide the
53 overall rate change approved for any rate filing made
54 on or after a specified date; revising legislative
55 intent; amending s. 627.0628, F.S.; revising
56 legislative findings and intent; revising membership
57 requirements of the Florida Commission on Hurricane
58 Loss Projection Methodology; providing for a chair of
59 the commission; deleting a limitation on the
60 prohibition of modification of certain rating models;
61 prohibiting a modeler from submitting more than one
62 model per filing with the commission; requiring that
63 each model submitted contain certain information;
64 amending s. 627.0645, F.S.; exempting commercial
65 property insurance from certain annual filing
66 requirements; amending s. 627.0651, F.S.; requiring
67 that an insurer make a file-and-use filing under
68 certain circumstances; requiring that the office issue
69 a notice of intent to disapprove under certain
70 circumstances; amending s. 627.351, F.S.; requiring
71 flood insurance for all new and renewal policies
72 issued by Citizens Property Insurance Corporation for
73 properties located within a specified area between the
74 coast and the coastal construction control line;
75 prohibiting the corporation from insuring such
76 properties constructed or permitted on or after a
77 specified date unless such properties have obtained
78 flood insurance; prohibiting the corporation from
79 issuing wind-only policies after a specified date;
80 amending s. 627.3512, F.S.; providing filing
81 procedures for an insurer or insurer group electing to
82 recoup an assessment that has been paid; providing for
83 the calculation, application, and expiration of a
84 recoupment factor; providing procedures for
85 recoupment-removal and recoupment-continuation
86 filings; requiring that such filings include certain
87 information; requiring an insurer to refund excess
88 recoupment; prohibiting certain insurers or insurer
89 groups from including an uncollected assessment as a
90 component of a subsequent rate filing; prohibiting an
91 insurer or insurer group discontinuing a line, type,
92 or subline of business from recouping amounts assessed
93 against that line, type, or subline; prohibiting such
94 insurer or insurer group from including an uncollected
95 assessment as a component of a subsequent rate filing
96 for other lines, types, or sublines of business;
97 providing a deadline for filing an initial recoupment;
98 amending s. 627.706, F.S.; providing that insurers are
99 not required to issue a notice of nonrenewal to
100 exclude sinkhole coverage upon the renewal of existing
101 policies in certain counties or territories;
102 authorizing insurers to exclude such coverage using a
103 notice of coverage change; requiring that insurers
104 continue to offer optional sinkhole coverage for an
105 appropriate additional premium; providing an effective
106 date.
107
108 Be It Enacted by the Legislature of the State of Florida:
109
110 Section 1. Section 624.4213, Florida Statutes, is amended
111 to read:
112 624.4213 Trade secret documents; abuse of trade secret
113 protection.—
114 (1) If any person who is required to submit documents or
115 other information to the office or department pursuant to the
116 insurance code or by rule or order of the office, department, or
117 commission claims that such submission contains a trade secret,
118 such person may file with the office or department a notice of
119 trade secret as provided in this section. Failure to do so
120 constitutes a waiver of any claim by such person that the
121 document or information is a trade secret.
122 (a) Each page of such document or specific portion of a
123 document claimed to be a trade secret must be clearly marked as
124 “trade secret.”
125 (b) All material marked as a trade secret must be separated
126 from all non-trade secret material, such as being submitted in a
127 separate envelope clearly marked as “trade secret.”
128 (c) In submitting a notice of trade secret to the office or
129 department, the submitting party must include an affidavit
130 certifying under oath to the truth of the following statements
131 concerning all documents or information that are claimed to be
132 trade secrets:
133 1. [I consider/My company considers] this information a
134 trade secret that has value and provides an advantage or an
135 opportunity to obtain an advantage over those who do not know or
136 use it.
137 2. [I have/My company has] taken measures to prevent the
138 disclosure of the information to anyone other than those who
139 have been selected to have access for limited purposes, and [I
140 intend/my company intends] to continue to take such measures.
141 3. The information is not, and has not been, reasonably
142 obtainable without [my/our] consent by other persons by use of
143 legitimate means.
144 4. The information is not publicly available elsewhere.
145 (2) If the office or department receives a public records
146 request for a document or information that is marked and
147 certified as a trade secret, the office or department shall
148 promptly notify the person that certified the document as a
149 trade secret. The notice shall inform such person that he or she
150 or his or her company has 30 days following receipt of such
151 notice to file an action in circuit court seeking a
152 determination whether the document in question contains trade
153 secrets and an order barring public disclosure of the document.
154 If that person or company files an action within 30 days after
155 receipt of notice of the public records request, the office or
156 department may not release the documents pending the outcome of
157 the legal action. The failure to file an action within 30 days
158 constitutes a waiver of any claim of confidentiality, and the
159 office or department shall release the document as requested.
160 (3) The office or department may disclose a trade secret,
161 together with the claim that it is a trade secret, to an officer
162 or employee of another governmental agency whose use of the
163 trade secret is within the scope of his or her employment.
164 (4) If it is determined by a court or administrative
165 tribunal that any document or information marked as a trade
166 secret and submitted to the office, department, or commission
167 pursuant to this section is not a trade secret, the person or
168 entity marking such information as a trade secret may be fined
169 up to $500 for each page of a document or specific portion of a
170 document that is determined to be incorrectly marked as a trade
171 secret, plus attorney's fees and costs.
172 Section 2. Section 624.4305, Florida Statutes, is amended
173 to read:
174 624.4305 Nonrenewal of residential property insurance
175 policies.—
176 (1) Any insurer planning to nonrenew more than 10,000
177 residential property insurance policies in this state within a
178 12-month period shall give notice in writing to the Office of
179 Insurance Regulation for informational purposes 90 days before
180 the issuance of any notices of nonrenewal. The notice provided
181 to the office must set forth the insurer's reasons for such
182 action, the effective dates of nonrenewal, and any arrangements
183 made for other insurers to offer coverage to affected
184 policyholders.
185 (2) For residential property insurance policies, the total
186 number of notices of intention not to renew a covered policy and
187 notices of intention to condition renewal upon reduction of
188 limits or elimination of any coverages that an insurer may
189 issue, rounded to the nearest whole number, shall be limited for
190 each calendar year to 2 percent of the total number of the
191 insurer's covered policies at the completion of the policy
192 period in effect at the last year end in each such insurer’s
193 rating territory in use in this state. However, an insurer may
194 nonrenew or conditionally renew one policy in any such insurer’s
195 rating territory in use in this state if the applicable
196 percentage limitation results in fewer than one policy.
197 Section 3. Paragraph (j) of subsection (1) of section
198 624.605, Florida Statutes, is amended to read:
199 624.605 “Casualty insurance” defined.—
200 (1) “Casualty insurance” includes:
201 (j) Credit property insurance.—Credit property insurance is
202 a limited line of insurance providing coverage on personal
203 property used as collateral for securing a loan or on personal
204 property purchased under an installment sales agreement. Credit
205 property insurance shall not be considered to be property
206 insurance. The coverage may not shall be issued on an inland
207 marine policy form, and coverage limits shall be restricted to
208 the initial amount of the loan or the amount of the installment
209 sale.
210 Section 4. Subsection (1) of section 625.091, Florida
211 Statutes, is amended to read:
212 625.091 Losses and loss adjustment expense reserves;
213 liability insurance and workers' compensation insurance.—The
214 reserve liabilities recorded in the insurer's annual statement
215 and financial statements for unpaid losses and loss adjustment
216 expenses shall be the estimated value of its claims when
217 ultimately settled and shall be computed as follows:
218 (1) For all liability and workers' compensation claims, the
219 statement and statutory reserves and loss adjustment expenses
220 shall be in accordance with the form of the annual statement as
221 required in s. 624.424, and shall include the computed,
222 determined, or estimated value of the unpaid reported claims and
223 loss adjustment expenses, allocated and unallocated, and a
224 provision for loss and loss adjustment expenses, allocated and
225 unallocated, that are incurred but not reported. For claims
226 under liability policies, the reserve for reported claims shall
227 not be less than $1,000 for each outstanding liability suit.
228 (a) Each insurer approved to offer large deductibles in its
229 workers’ compensation policies shall obtain collateral from the
230 policyholder.
231 (b) The collateral offered by a policyholder shall equal or
232 exceed all losses, including case reserves and incurred
233 reserves, but excluding reported reserves, within the deductible
234 of a large-deductible policy. A large-deductible policy is a
235 policy having a deductible equal to or greater than $100,000.
236 (c) The collateral shall consist only of assets defined in
237 part I or part II, or clean, irrevocable, unconditional letters
238 of credit, issued or confirmed by a domestic financial
239 institution that is regulated, supervised, and examined by
240 federal or state authorities having regulatory authority over
241 banks and trust companies, and which are in the possession of,
242 or in trust for, the insurer.
243 Section 5. Subsections (2) and (3) of section 626.7451,
244 Florida Statutes, are amended to read:
245 626.7451 Managing general agents; required contract
246 provisions.—No person acting in the capacity of a managing
247 general agent shall place business with an insurer unless there
248 is in force a written contract between the parties which sets
249 forth the responsibility for a particular function, specifies
250 the division of responsibilities, and contains the following
251 minimum provisions:
252 (2) The managing general agent shall render accounts to the
253 insurer detailing all transactions and remit all funds due under
254 the terms of the contract to the insurer within 15 working days
255 after collection, regardless of any dispute on a monthly or more
256 frequent basis.
257 (3) All funds collected for the account of the insurer
258 shall be held by the managing general agent in a fiduciary
259 capacity in a bank which is a member of the Federal Reserve
260 System. This account shall be used for all payment as directed
261 by the insurer. The managing general agent may retain no more
262 than 30 60 days of estimated claims payments and allocated loss
263 adjustment expenses.
264 For the purposes of this section and ss. 626.7453 and 626.7454,
265 the term “controlling person” or “controlling” has the meaning
266 set forth in s. 625.012(5)(b)1., and the term “controlled
267 person” or “controlled” has the meaning set forth in s.
268 625.012(5)(b)2.
269 Section 6. Paragraph (x) of subsection (1) of section
270 626.9541, Florida Statutes, is amended to read:
271 626.9541 Unfair methods of competition and unfair or
272 deceptive acts or practices defined.—
273 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
274 ACTS.—The following are defined as unfair methods of competition
275 and unfair or deceptive acts or practices:
276 (x) Refusal to insure.—In addition to other provisions of
277 this code, the refusal to insure, or continue to insure, any
278 individual or risk solely because of:
279 1. Race, color, creed, marital status, sex, or national
280 origin;
281 2. The residence, age, or lawful occupation of the
282 individual or the location of the risk, unless there is a
283 reasonable relationship between the residence, age, or lawful
284 occupation of the individual or the location of the risk and the
285 coverage issued or to be issued;
286 3. The insured's or applicant's failure to agree to place
287 collateral business with any insurer, unless the coverage
288 applied for would provide liability coverage which is excess
289 over that provided in policies maintained on property or motor
290 vehicles;
291 4. The insured's or applicant's failure to purchase
292 noninsurance services or commodities, including automobile
293 services as defined in s. 624.124;
294 5. The fact that the insured or applicant is a public
295 official; or
296 6. The fact that the insured or applicant had been
297 previously refused insurance coverage by any insurer, when such
298 refusal to insure or continue to insure for this reason occurs
299 with such frequency as to indicate a general business practice;
300 or.
301 7. The fact that the insured or applicant owns an animal or
302 animals. An insurer may ask underwriting questions regarding the
303 animal species and history of any bites or aggressive behavior
304 of the animal or animals owned by the insured or applicant. An
305 insurer may limit or exclude any portion of the liability
306 coverage pertaining to animals.
307 Section 7. Section 627.0612, Florida Statutes, is repealed.
308 Section 8. Section 627.062, Florida Statutes, is amended to
309 read:
310 627.062 Rate standards.—
311 (1) The rates for all classes of insurance to which the
312 provisions of this part are applicable shall not be excessive,
313 inadequate, or unfairly discriminatory and shall be made in
314 accordance with generally accepted actuarial techniques.
315 (2) As to all such classes of insurance:
316 (a) Insurers or rating organizations shall establish and
317 use rates, rating schedules, or rating manuals to allow the
318 insurer a reasonable rate of return on such classes of insurance
319 written in this state. A copy of rates, rating schedules, rating
320 manuals, premium credits or discount schedules, and surcharge
321 schedules, and changes thereto, shall be filed with the office
322 under one of the following procedures except as provided in
323 subparagraph 3.:
324 1. If the filing is made at least 90 days before the
325 proposed effective date and the filing is not implemented during
326 the office's review of the filing and any proceeding and
327 judicial review, then such filing shall be considered a “file
328 and use” filing. In such case, the office shall finalize its
329 review by issuance of an approval letter a notice of intent to
330 approve or a notice of intent to disapprove within 90 days after
331 receipt of the filing. The approval letter notice of intent to
332 approve and the notice of intent to disapprove constitute agency
333 action for purposes of the Administrative Procedure Act.
334 Requests for supporting information, requests for mathematical
335 or mechanical corrections, or notification to the insurer by the
336 office of its preliminary findings shall not toll the 90-day
337 period during any such proceedings and subsequent judicial
338 review. The rate shall be deemed approved if the office does not
339 issue an approval letter a notice of intent to approve or a
340 notice of intent to disapprove within 90 days after receipt of
341 the filing.
342 2. If the filing is not made in accordance with the
343 provisions of subparagraph 1., such filing shall be made as soon
344 as practicable, but no later than 30 days after the effective
345 date, and shall be considered a “use and file” filing. An
346 insurer making a “use and file” filing is potentially subject to
347 an order by the office to return to policyholders portions of
348 rates found to be excessive, as provided in paragraph (h).
349 3. For all property insurance filings made or submitted
350 after January 25, 2007, but before December 31, 2009, an insurer
351 seeking a rate that is greater than the rate most recently
352 approved by the office shall make a “file and use” filing. For
353 purposes of this subparagraph, motor vehicle collision and
354 comprehensive coverages are not considered to be property
355 coverages.
356 (b) Upon receiving a rate filing, the office shall review
357 the rate filing to determine if a rate is excessive, inadequate,
358 or unfairly discriminatory. In making that determination, the
359 office shall, in accordance with generally accepted and
360 reasonable actuarial techniques, consider the following factors:
361 1. Past and prospective loss experience within and without
362 this state.
363 2. Past and prospective expenses. For businesses subject to
364 a reimbursement contract with the Florida Hurricane Catastrophe
365 Fund, prospective commissions, other acquisition expenses, and
366 general expenses combined must not exceed 20 percent of the
367 premium.
368 3. The degree of competition among insurers for the risk
369 insured.
370 4. Investment income reasonably expected by the insurer,
371 consistent with the insurer's investment practices, from
372 investable premiums anticipated in the filing, plus any other
373 expected income from currently invested assets representing the
374 amount expected on unearned premium reserves and loss reserves.
375 The commission may adopt rules using reasonable techniques of
376 actuarial science and economics to specify the manner in which
377 insurers shall calculate investment income attributable to such
378 classes of insurance written in this state and the manner in
379 which such investment income shall be used to calculate
380 insurance rates. Such manner shall contemplate allowances for an
381 underwriting profit factor and full consideration of investment
382 income which produce a reasonable rate of return; however,
383 investment income from invested surplus may not be considered.
384 5. The reasonableness of the judgment reflected in the
385 filing.
386 6. Dividends, savings, or unabsorbed premium deposits
387 allowed or returned to Florida policyholders, members, or
388 subscribers.
389 7. The adequacy of loss reserves.
390 8. The cost of reinsurance. The office shall not disapprove
391 a rate as excessive solely due to the insurer having obtained
392 catastrophic reinsurance to cover the insurer's estimated 250
393 year probable maximum loss or any lower level of loss.
394 a. For businesses subject to a reimbursement contract with
395 the Florida Hurricane Catastrophe Fund, the following conditions
396 shall be met:
397 (I) For reinsurance with unaffiliated companies, excluding
398 the Florida Hurricane Catastrophe Fund, the annual expected
399 recoveries must be at least 20 percent of the annual reinsurance
400 premium.
401 (II) For reinsurance with affiliated companies, the annual
402 expected recoveries must be at least 40 percent of the annual
403 reinsurance premium.
404 b. Any increase in limit or reduction in retention or any
405 other increase in reinsurance coverage may not be reflected as
406 reinsurance cost in the rate filing if such action is taken at
407 the time of a coverage expansion by the Florida Hurricane
408 Catastrophe Fund unless required by the office for solvency
409 reasons.
410 9. Trend factors, including trends in actual losses per
411 insured unit for the insurer making the filing.
412 10. Conflagration and catastrophe hazards, if applicable.
413 11. Projected hurricane losses, if applicable, which must
414 be estimated using a model or method found to be acceptable or
415 reliable by the Florida Commission on Hurricane Loss Projection
416 Methodology, and as further provided in s. 627.0628.
417 12. A reasonable margin for underwriting profit and
418 contingencies.
419 13. The cost of medical services, if applicable.
420 14. Other relevant factors which impact upon the frequency
421 or severity of claims or upon expenses.
422 (c) In the case of fire insurance rates, consideration
423 shall be given to the availability of water supplies and the
424 experience of the fire insurance business during a period of not
425 less than the most recent 5-year period for which such
426 experience is available.
427 (d) If conflagration or catastrophe hazards are given
428 consideration by an insurer in its rates or rating plan,
429 including surcharges and discounts, the insurer shall establish
430 a reserve for that portion of the premium allocated to such
431 hazard and shall maintain the premium in a catastrophe reserve.
432 Any removal of such premiums from the reserve for purposes other
433 than paying claims associated with a catastrophe or purchasing
434 reinsurance for catastrophes shall be subject to approval of the
435 office. Any ceding commission received by an insurer purchasing
436 reinsurance for catastrophes shall be placed in the catastrophe
437 reserve.
438 (e) After consideration of the rate factors provided in
439 paragraphs (b), (c), and (d), a rate may be found by the office
440 to be excessive, inadequate, or unfairly discriminatory based
441 upon the following standards:
442 1. Rates shall be deemed excessive if they are likely to
443 produce a profit from Florida business that is unreasonably high
444 in relation to the risk involved in the class of business or if
445 expenses are unreasonably high in relation to services rendered.
446 2. Rates shall be deemed excessive if, among other things,
447 the rate structure established by a stock insurance company
448 provides for replenishment of surpluses from premiums, when the
449 replenishment is attributable to investment losses.
450 3. Rates shall be deemed inadequate if they are clearly
451 insufficient, together with the investment income attributable
452 to them, to sustain projected losses and expenses in the class
453 of business to which they apply.
454 4. A rating plan, including discounts, credits, or
455 surcharges, shall be deemed unfairly discriminatory if it fails
456 to clearly and equitably reflect consideration of the
457 policyholder's participation in a risk management program
458 adopted pursuant to s. 627.0625.
459 5. A rate shall be deemed inadequate as to the premium
460 charged to a risk or group of risks if discounts or credits are
461 allowed which exceed a reasonable reflection of expense savings
462 and reasonably expected loss experience from the risk or group
463 of risks.
464 6. A rate shall be deemed unfairly discriminatory as to a
465 risk or group of risks if the application of premium discounts,
466 credits, or surcharges among such risks does not bear a
467 reasonable relationship to the expected loss and expense
468 experience among the various risks.
469 (f) In reviewing a rate filing, the office may require the
470 insurer to provide at the insurer's expense all information
471 necessary to evaluate the condition of the company and the
472 reasonableness of the filing according to the criteria
473 enumerated in this section.
474 (g) The office may at any time review a rate, rating
475 schedule, rating manual, or rate change; the pertinent records
476 of the insurer; and market conditions. If the office finds on a
477 preliminary basis that a rate may be excessive, inadequate, or
478 unfairly discriminatory, the office shall initiate proceedings
479 to disapprove the rate and shall so notify the insurer. However,
480 the office may not disapprove as excessive any rate for which it
481 has given final approval or which has been deemed approved for a
482 period of 1 year after the effective date of the filing unless
483 the office finds that a material misrepresentation or material
484 error was made by the insurer or was contained in the filing.
485 Upon being so notified, the insurer or rating organization
486 shall, within 60 days, file with the office all information
487 which, in the belief of the insurer or organization, proves the
488 reasonableness, adequacy, and fairness of the rate or rate
489 change. The office shall issue an approval letter a notice of
490 intent to approve or a notice of intent to disapprove pursuant
491 to the procedures of paragraph (a) within 90 days after receipt
492 of the insurer's initial response. In such instances and in any
493 administrative proceeding relating to the legality of the rate,
494 the insurer or rating organization shall carry the burden of
495 proof by a preponderance of the evidence to show that the rate
496 is not excessive, inadequate, or unfairly discriminatory. After
497 the office notifies an insurer that a rate may be excessive,
498 inadequate, or unfairly discriminatory, unless the office
499 withdraws the notice of intent to disapprove notification, the
500 insurer shall not alter the rate or submit a new rate filing
501 affecting the disputed rate, without the office's approval
502 except to conform with the office's notice until the earlier of
503 120 days after the date the notification was provided or 180
504 days after the date of the implementation of the rate. The
505 office may, subject to chapter 120, disapprove without the 60
506 day notification any rate increase filed by an insurer within
507 the prohibited time period or during the time that the legality
508 of the disputed increased rate is being contested.
509 (h) In the event the office finds that a rate or rate
510 change is excessive, inadequate, or unfairly discriminatory, the
511 office shall issue an order of disapproval specifying that a new
512 rate or rate schedule which responds to the findings of the
513 office be filed by the insurer. The office shall further order,
514 for any “use and file” filing made in accordance with
515 subparagraph (a)2., that premiums charged each policyholder
516 constituting the portion of the rate above that which was
517 actuarially justified be returned to such policyholder in the
518 form of a credit or refund. If the office finds that an
519 insurer's rate or rate change is inadequate, the new rate or
520 rate schedule filed with the office in response to such a
521 finding shall be applicable only to new or renewal business of
522 the insurer written on or after the effective date of the
523 responsive filing.
524 (i) Except as otherwise specifically provided in this
525 chapter, the office shall not prohibit any insurer, including
526 any residual market plan or joint underwriting association, from
527 paying acquisition costs based on the full amount of premium, as
528 defined in s. 627.403, applicable to any policy, or prohibit any
529 such insurer from including the full amount of acquisition costs
530 in a rate filing.
531 (j) With respect to residential property insurance rate
532 filings, the rate filing must account for mitigation measures
533 undertaken by policyholders to reduce hurricane losses.
534 The provisions of this subsection shall not apply to workers'
535 compensation and employer's liability insurance and to motor
536 vehicle insurance.
537 (3)(a) For individual risks that are not rated in
538 accordance with the insurer's rates, rating schedules, rating
539 manuals, and underwriting rules filed with the office and which
540 have been submitted to the insurer for individual rating, the
541 insurer must maintain documentation on each risk subject to
542 individual risk rating. The documentation must identify the
543 named insured and specify the characteristics and classification
544 of the risk supporting the reason for the risk being
545 individually risk rated, including any modifications to existing
546 approved forms to be used on the risk. The insurer must maintain
547 these records for a period of at least 5 years after the
548 effective date of the policy.
549 (b) Individual risk rates and modifications to existing
550 approved forms are not subject to this part or part II, except
551 for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404,
552 627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132,
553 627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426,
554 627.4265, 627.427, and 627.428, but are subject to all other
555 applicable provisions of this code and rules adopted thereunder.
556 (c) This subsection does not apply to private passenger
557 motor vehicle insurance.
558 (4) The establishment of any rate, rating classification,
559 rating plan or schedule, or variation thereof in violation of
560 part IX of chapter 626 is also in violation of this section. In
561 order to enhance the ability of consumers to compare premiums
562 and to increase the accuracy and usefulness of rate-comparison
563 information provided by the office to the public, the office
564 shall develop a proposed standard rating territory plan to be
565 used by all authorized property and casualty insurers for
566 residential property insurance. In adopting the proposed plan,
567 the office may consider geographical characteristics relevant to
568 risk, county lines, major roadways, existing rating territories
569 used by a significant segment of the market, and other relevant
570 factors. Such plan shall be submitted to the President of the
571 Senate and the Speaker of the House of Representatives by
572 January 15, 2006. The plan may not be implemented unless
573 authorized by further act of the Legislature.
574 (4)(5) With respect to a rate filing involving coverage of
575 the type for which the insurer is required to pay a
576 reimbursement premium to the Florida Hurricane Catastrophe Fund,
577 the insurer may fully recoup in its property insurance premiums
578 any reimbursement premiums paid to the Florida Hurricane
579 Catastrophe Fund, together with reasonable costs of other
580 reinsurance, but may not recoup reinsurance costs that duplicate
581 coverage provided by the Florida Hurricane Catastrophe Fund. An
582 insurer may not recoup more than 1 year of reimbursement premium
583 at a time. Any under-recoupment from the prior year may be added
584 to the following year's reimbursement premium and any over
585 recoupment shall be subtracted from the following year's
586 reimbursement premium.
587 (5)(6)(a) If an insurer requests an administrative hearing
588 pursuant to s. 120.57 related to a rate filing under this
589 section, the director of the Division of Administrative Hearings
590 shall expedite the hearing and assign an administrative law
591 judge who shall commence the hearing within 30 days after the
592 receipt of the formal request and shall enter a recommended
593 order within 30 days after the hearing or within 30 days after
594 receipt of the hearing transcript by the administrative law
595 judge, whichever is later. Each party shall be allowed 10 days
596 in which to submit written exceptions to the recommended order.
597 The office shall enter a final order within 30 days after the
598 entry of the recommended order. The provisions of this paragraph
599 may be waived upon stipulation of all parties.
600 (b) Upon entry of a final order, the insurer may request a
601 expedited appellate review pursuant to the Florida Rules of
602 Appellate Procedure. It is the intent of the Legislature that
603 the First District Court of Appeal grant an insurer's request
604 for an expedited appellate review.
605 (6)(7)(a) The provisions of this subsection apply only with
606 respect to rates for medical malpractice insurance and shall
607 control to the extent of any conflict with other provisions of
608 this section.
609 (b) Any portion of a judgment entered or settlement paid as
610 a result of a statutory or common-law bad faith action and any
611 portion of a judgment entered which awards punitive damages
612 against an insurer may not be included in the insurer's rate
613 base, and shall not be used to justify a rate or rate change.
614 Any common-law bad faith action identified as such, any portion
615 of a settlement entered as a result of a statutory or common-law
616 action, or any portion of a settlement wherein an insurer agrees
617 to pay specific punitive damages may not be used to justify a
618 rate or rate change. The portion of the taxable costs and
619 attorney's fees which is identified as being related to the bad
620 faith and punitive damages in these judgments and settlements
621 may not be included in the insurer's rate base and may not be
622 utilized to justify a rate or rate change.
623 (c) Upon reviewing a rate filing and determining whether
624 the rate is excessive, inadequate, or unfairly discriminatory,
625 the office shall consider, in accordance with generally accepted
626 and reasonable actuarial techniques, past and present
627 prospective loss experience, either using loss experience solely
628 for this state or giving greater credibility to this state's
629 loss data after applying actuarially sound methods of assigning
630 credibility to such data.
631 (d) Rates shall be deemed excessive if, among other
632 standards established by this section, the rate structure
633 provides for replenishment of reserves or surpluses from
634 premiums when the replenishment is attributable to investment
635 losses.
636 (e) The insurer must apply a discount or surcharge based on
637 the health care provider's loss experience or shall establish an
638 alternative method giving due consideration to the provider's
639 loss experience. The insurer must include in the filing a copy
640 of the surcharge or discount schedule or a description of the
641 alternative method used, and must provide a copy of such
642 schedule or description, as approved by the office, to
643 policyholders at the time of renewal and to prospective
644 policyholders at the time of application for coverage.
645 (f) Each medical malpractice insurer must make a rate
646 filing under this section, sworn to by at least two executive
647 officers of the insurer, at least once each calendar year.
648 (7)(8)(a)1. No later than 60 days after the effective date
649 of medical malpractice legislation enacted during the 2003
650 Special Session D of the Florida Legislature, the office shall
651 calculate a presumed factor that reflects the impact that the
652 changes contained in such legislation will have on rates for
653 medical malpractice insurance and shall issue a notice informing
654 all insurers writing medical malpractice coverage of such
655 presumed factor. In determining the presumed factor, the office
656 shall use generally accepted actuarial techniques and standards
657 provided in this section in determining the expected impact on
658 losses, expenses, and investment income of the insurer. To the
659 extent that the operation of a provision of medical malpractice
660 legislation enacted during the 2003 Special Session D of the
661 Florida Legislature is stayed pending a constitutional
662 challenge, the impact of that provision shall not be included in
663 the calculation of a presumed factor under this subparagraph.
664 2. No later than 60 days after the office issues its notice
665 of the presumed rate change factor under subparagraph 1., each
666 insurer writing medical malpractice coverage in this state shall
667 submit to the office a rate filing for medical malpractice
668 insurance, which will take effect no later than January 1, 2004,
669 and apply retroactively to policies issued or renewed on or
670 after the effective date of medical malpractice legislation
671 enacted during the 2003 Special Session D of the Florida
672 Legislature. Except as authorized under paragraph (b), the
673 filing shall reflect an overall rate reduction at least as great
674 as the presumed factor determined under subparagraph 1. With
675 respect to policies issued on or after the effective date of
676 such legislation and prior to the effective date of the rate
677 filing required by this subsection, the office shall order the
678 insurer to make a refund of the amount that was charged in
679 excess of the rate that is approved.
680 (b) Any insurer or rating organization that contends that
681 the rate provided for in paragraph (a) is excessive, inadequate,
682 or unfairly discriminatory shall separately state in its filing
683 the rate it contends is appropriate and shall state with
684 specificity the factors or data that it contends should be
685 considered in order to produce such appropriate rate. The
686 insurer or rating organization shall be permitted to use all of
687 the generally accepted actuarial techniques provided in this
688 section in making any filing pursuant to this subsection. The
689 office shall review each such exception and approve or
690 disapprove it prior to use. It shall be the insurer's burden to
691 actuarially justify any deviations from the rates required to be
692 filed under paragraph (a). The insurer making a filing under
693 this paragraph shall include in the filing the expected impact
694 of medical malpractice legislation enacted during the 2003
695 Special Session D of the Florida Legislature on losses,
696 expenses, and rates.
697 (c) If any provision of medical malpractice legislation
698 enacted during the 2003 Special Session D of the Florida
699 Legislature is held invalid by a court of competent
700 jurisdiction, the office shall permit an adjustment of all
701 medical malpractice rates filed under this section to reflect
702 the impact of such holding on such rates so as to ensure that
703 the rates are not excessive, inadequate, or unfairly
704 discriminatory.
705 (d) Rates approved on or before July 1, 2003, for medical
706 malpractice insurance shall remain in effect until the effective
707 date of a new rate filing approved under this subsection.
708 (e) The calculation and notice by the office of the
709 presumed factor pursuant to paragraph (a) is not an order or
710 rule that is subject to chapter 120. If the office enters into a
711 contract with an independent consultant to assist the office in
712 calculating the presumed factor, such contract shall not be
713 subject to the competitive solicitation requirements of s.
714 287.057.
715 (8)(9)(a) The chief executive officer or chief financial
716 officer of a property insurer and the chief actuary of a
717 property insurer must certify under oath and subject to the
718 penalty of perjury, on a form approved by the commission, the
719 following information, which must accompany a rate filing:
720 1. The signing officer and actuary have reviewed the rate
721 filing;
722 2. Based on the signing officer's and actuary's knowledge,
723 the rate filing does not contain any untrue statement of a
724 material fact or omit to state a material fact necessary in
725 order to make the statements made, in light of the circumstances
726 under which such statements were made, not misleading, and that
727 the filing complies with all applicable laws and rules;
728 3. Based on the signing officer's and actuary's knowledge,
729 the information and other factors described in paragraph (2)(b),
730 including, but not limited to, investment income, fairly present
731 in all material respects the basis of the rate filing for the
732 periods presented in the filing; and
733 4. Based on the signing officer's and actuary's knowledge,
734 the rate filing reflects all premium savings that are reasonably
735 expected to result from legislative enactments and are in
736 accordance with generally accepted and reasonable actuarial
737 techniques; and.
738 5. Based on the signing officer's and actuary's knowledge,
739 the rate filing reflects the impact of any nonrenewals that have
740 occurred since the last annual rate filing or will occur within
741 the next 12 months following the effective date of this filing.
742 (b) An insurer and its A signing officer or actuary
743 knowingly making a false certification under this subsection
744 commits a violation of s. 626.9541(1)(e) and is subject to the
745 penalties under s. 626.9521.
746 (c) Failure to provide such certification by the officer
747 and actuary shall result in the rate filing being disapproved
748 without prejudice to be refiled.
749 (d) The commission may adopt rules and forms pursuant to
750 ss. 120.536(1) and 120.54 to administer this subsection.
751 (10) The burden is on the office to establish that rates
752 are excessive for personal lines residential coverage with a
753 dwelling replacement cost of $1 million or more or for a single
754 condominium unit with a combined dwelling and contents
755 replacement cost of $1 million or more. Upon request of the
756 office, the insurer shall provide to the office such loss and
757 expense information as the office reasonably needs to meet this
758 burden.
759 (9)(11) Any interest paid pursuant to s. 627.70131(5) may
760 not be included in the insurer's rate base and may not be used
761 to justify a rate or rate change.
762 Section 9. Subsections (2) and (3) of section 627.0621,
763 Florida Statutes, are amended to read:
764 627.0621 Transparency in rate regulation.—
765 (2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING INFORMATION.
766 With respect to any rate filing made on or after July 1, 2009
767 July 1, 2008, an insurer making a rate filing that includes rate
768 level indication and the office shall provide the following
769 information on a publicly accessible Internet website:
770 (a) The overall rate change requested by the insurer.
771 (b) All assumptions made by the insurer's and office's
772 actuaries.
773 (c) A statement describing any assumptions or methods that
774 deviate from the actuarial standards of practice of the Casualty
775 Actuarial Society or the American Academy of Actuaries,
776 including an explanation of the nature, rationale, and effect of
777 the deviation.
778 (d) All recommendations made by any insurer or office
779 actuary who certified or reviewed the rate filing.
780 (e) Certification by the insurer's and office's actuary
781 that, based on the actuary's knowledge, his or her
782 recommendations are consistent with accepted actuarial
783 principles.
784 (f) The overall rate change approved by the office.
785 (3) RATE CHANGE.—The office shall also provide the overall
786 rate change approved for any rate filing made on or after July
787 1, 2009.
788 (4)(3) ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.—It is the
789 intent of the Legislature that the principles of the public
790 records and open meetings laws apply to the assertion of
791 attorney-client privilege and work product confidentiality by
792 the office in connection with a challenge to its actions on a
793 rate filing without providing the insurers an unfair advantage
794 in any administrative proceeding challenging the office’s
795 decision regarding a rate filing. Therefore, in any
796 administrative or judicial proceeding relating to a rate filing,
797 attorney-client privilege and work product exemptions from
798 disclosure do not apply to communications with office attorneys
799 or records prepared by or at the direction of an office attorney
800 when an insurer agrees to waive its attorney-client privilege
801 and work-product exemptions from disclosure, except when the
802 conditions of paragraphs (a) and (b) have been met:
803 (a) The communication or record reflects a mental
804 impression, conclusion, litigation strategy, or legal theory of
805 the attorney or office that was prepared exclusively for civil
806 or criminal litigation or adversarial administrative
807 proceedings.
808 (b) The communication occurred or the record was prepared
809 after the initiation of an action in a court of competent
810 jurisdiction, after the issuance of a notice of intent to deny a
811 rate filing, or after the filing of a request for a proceeding
812 under ss. 120.569 and 120.57.
813 Section 10. Paragraph (a) of subsection (1), paragraphs
814 (b), (c), and (d) of subsection (2), and paragraphs (a) and (d)
815 of subsection (3) of section 627.0628, Florida Statutes, are
816 amended, and paragraph (g) is added to subsection (3) of that
817 section, to read:
818 627.0628 Florida Commission on Hurricane Loss Projection
819 Methodology; public records exemption; public meetings
820 exemption.—
821 (1) LEGISLATIVE FINDINGS AND INTENT.—
822 (a) Reliable projections of hurricane losses are necessary
823 in order to assure that rates for personal residential property
824 insurance meet the statutory requirement that rates be neither
825 excessive nor inadequate. The ability to accurately project
826 hurricane losses has been enhanced greatly in recent years
827 through the use of computer modeling. It is the public policy of
828 this state to encourage the use of the most sophisticated
829 actuarial methods to assure that consumers are charged lawful
830 rates for personal residential property insurance coverage.
831 (2) COMMISSION CREATED.—
832 (b) The commission shall consist of the following 9 11
833 members:
834 1. Five members appointed by the Governor.
835 2. Four members appointed by the Chief Financial Officer.
836 1. The insurance consumer advocate.
837 2. The senior employee of the State Board of Administration
838 responsible for operations of the Florida Hurricane Catastrophe
839 Fund.
840 3. The Executive Director of the Citizens Property
841 Insurance Corporation.
842 4. The Director of the Division of Emergency Management of
843 the Department of Community Affairs.
844 5. The actuary member of the Florida Hurricane Catastrophe
845 Fund Advisory Council.
846 6. An employee of the office who is an actuary responsible
847 for property insurance rate filings and who is appointed by the
848 director of the office.
849 7. Five members appointed by the Chief Financial Officer,
850 as follows:
851 a. An actuary who is employed full time by a property and
852 casualty insurer which was responsible for at least 1 percent of
853 the aggregate statewide direct written premium for homeowner's
854 insurance in the calendar year preceding the member's
855 appointment to the commission.
856 b. An expert in insurance finance who is a full-time member
857 of the faculty of the State University System and who has a
858 background in actuarial science.
859 c. An expert in statistics who is a full-time member of the
860 faculty of the State University System and who has a background
861 in insurance.
862 d. An expert in computer system design who is a full-time
863 member of the faculty of the State University System.
864 e. An expert in meteorology who is a full-time member of
865 the faculty of the State University System and who specializes
866 in hurricanes.
867 (c) Members shall serve at the pleasure of the appointing
868 official. A member may not be a person who may profit personally
869 or professionally from the work product of the commission
870 designated under subparagraphs (b)1.-5. shall serve on the
871 commission as long as they maintain the respective offices
872 designated in subparagraphs (b)1.-5. The member appointed by the
873 director of the office under subparagraph (b)6. shall serve on
874 the commission until the end of the term of office of the
875 director who appointed him or her, unless removed earlier by the
876 director for cause. Members appointed by the Chief Financial
877 Officer under subparagraph (b)7. shall serve on the commission
878 until the end of the term of office of the Chief Financial
879 Officer who appointed them, unless earlier removed by the Chief
880 Financial Officer for cause. Vacancies on the commission shall
881 be filled in the same manner as the original appointment.
882 (d) The State Board of Administration shall annually
883 appoint one of the members of the commission to serve as chair.
884 Such member shall serve as chair at the pleasure of the State
885 Board of Administration.
886 (3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.—
887 (a) The commission shall consider any actuarial methods,
888 principles, standards, models, or output ranges that have the
889 potential for improving the accuracy of or reliability of the
890 hurricane loss projections used in personal residential property
891 insurance rate filings. The commission shall, from time to time,
892 adopt findings as to the accuracy or reliability of particular
893 methods, principles, standards, models, or output ranges.
894 (d) With respect to a rate filing under s. 627.062, an
895 insurer shall employ and may not modify or adjust actuarial
896 methods, principles, standards, models, or output ranges found
897 by the commission to be accurate or reliable in determining
898 hurricane loss factors for use in a rate filing under s.
899 627.062. An insurer shall employ and may not modify or adjust
900 models found by the commission to be accurate or reliable in
901 determining probable maximum loss levels pursuant to paragraph
902 (b) with respect to a rate filing under s. 627.062 made more
903 than 60 days after the commission has made such findings.
904 (g) A modeler may not submit more than one model per filing
905 with the commission. Each model submitted to the commission
906 shall contain all historical data and all hurricane sets.
907 Section 11. Subsection (1) of section 627.0645, Florida
908 Statutes, is amended to read:
909 627.0645 Annual filings.—
910 (1) Each rating organization filing rates for, and each
911 insurer writing, any line of property or casualty insurance to
912 which this part applies, except:
913 (a) Workers' compensation and employer's liability
914 insurance; or
915 (b) Commercial property and casualty insurance as defined
916 in s. 627.0625(1) other than commercial property, commercial
917 multiple line, and commercial motor vehicle,
918 shall make an annual base rate filing for each such line with
919 the office no later than 12 months after its previous base rate
920 filing, demonstrating that its rates are not inadequate,
921 excessive, or unfairly discriminatory.
922 Section 12. Paragraph (c) is added to subsection (1) of
923 section 627.0651, Florida Statutes, and subsection (11) of that
924 section is amended, to read:
925 627.0651 Making and use of rates for motor vehicle
926 insurance.—
927 (1) Insurers shall establish and use rates, rating
928 schedules, or rating manuals to allow the insurer a reasonable
929 rate of return on motor vehicle insurance written in this state.
930 A copy of rates, rating schedules, and rating manuals, and
931 changes therein, shall be filed with the office under one of the
932 following procedures:
933 (c) For all motor vehicle insurance filings, an insurer
934 seeking a rate that is greater than the rate most recently
935 approved by the office shall make a “file and use” filing.
936 (11) If In the event the office finds that a rate or rate
937 change is excessive, inadequate, or unfairly discriminatory, the
938 office shall issue a notice of intent to disapprove an order of
939 disapproval specifying that a new rate or rate schedule which
940 responds to the findings of the office be filed by the insurer.
941 The office shall further order for any “use and file” filing
942 made in accordance with paragraph (1)(b), that premiums charged
943 each policyholder constituting the portion of the rate above
944 that which was actuarially justified be returned to such
945 policyholder in the form of a credit or refund. If the office
946 finds that an insurer's rate or rate change is inadequate, the
947 new rate or rate schedule filed with the office in response to
948 such a finding shall be applicable only to new or renewal
949 business of the insurer written on or after the effective date
950 of the responsive filing.
951 Section 13. Paragraphs (a) and (b) of subsection (6) of
952 section 627.351, Florida Statutes, are amended to read:
953 627.351 Insurance risk apportionment plans.—
954 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
955 (a)1. It is the public purpose of this subsection to ensure
956 the existence of an orderly market for property insurance for
957 Floridians and Florida businesses. The Legislature finds that
958 private insurers are unwilling or unable to provide affordable
959 property insurance coverage in this state to the extent sought
960 and needed. The absence of affordable property insurance
961 threatens the public health, safety, and welfare and likewise
962 threatens the economic health of the state. The state therefore
963 has a compelling public interest and a public purpose to assist
964 in assuring that property in the state is insured and that it is
965 insured at affordable rates so as to facilitate the remediation,
966 reconstruction, and replacement of damaged or destroyed property
967 in order to reduce or avoid the negative effects otherwise
968 resulting to the public health, safety, and welfare, to the
969 economy of the state, and to the revenues of the state and local
970 governments which are needed to provide for the public welfare.
971 It is necessary, therefore, to provide affordable property
972 insurance to applicants who are in good faith entitled to
973 procure insurance through the voluntary market but are unable to
974 do so. The Legislature intends by this subsection that
975 affordable property insurance be provided and that it continue
976 to be provided, as long as necessary, through Citizens Property
977 Insurance Corporation, a government entity that is an integral
978 part of the state, and that is not a private insurance company.
979 To that end, Citizens Property Insurance Corporation shall
980 strive to increase the availability of affordable property
981 insurance in this state, while achieving efficiencies and
982 economies, and while providing service to policyholders,
983 applicants, and agents which is no less than the quality
984 generally provided in the voluntary market, for the achievement
985 of the foregoing public purposes. Because it is essential for
986 this government entity to have the maximum financial resources
987 to pay claims following a catastrophic hurricane, it is the
988 intent of the Legislature that Citizens Property Insurance
989 Corporation continue to be an integral part of the state and
990 that the income of the corporation be exempt from federal income
991 taxation and that interest on the debt obligations issued by the
992 corporation be exempt from federal income taxation.
993 2. The Residential Property and Casualty Joint Underwriting
994 Association originally created by this statute shall be known,
995 as of July 1, 2002, as the Citizens Property Insurance
996 Corporation. The corporation shall provide insurance for
997 residential and commercial property, for applicants who are in
998 good faith entitled, but are unable, to procure insurance
999 through the voluntary market. The corporation shall operate
1000 pursuant to a plan of operation approved by order of the
1001 Financial Services Commission. The plan is subject to continuous
1002 review by the commission. The commission may, by order, withdraw
1003 approval of all or part of a plan if the commission determines
1004 that conditions have changed since approval was granted and that
1005 the purposes of the plan require changes in the plan. The
1006 corporation shall continue to operate pursuant to the plan of
1007 operation approved by the Office of Insurance Regulation until
1008 October 1, 2006. For the purposes of this subsection,
1009 residential coverage includes both personal lines residential
1010 coverage, which consists of the type of coverage provided by
1011 homeowner's, mobile home owner's, dwelling, tenant's,
1012 condominium unit owner's, and similar policies, and commercial
1013 lines residential coverage, which consists of the type of
1014 coverage provided by condominium association, apartment
1015 building, and similar policies.
1016 3. Effective January 1, 2009, a personal lines residential
1017 structure that has a dwelling replacement cost of $2 million or
1018 more, or a single condominium unit that has a combined dwelling
1019 and content replacement cost of $2 million or more is not
1020 eligible for coverage by the corporation. Such dwellings insured
1021 by the corporation on December 31, 2008, may continue to be
1022 covered by the corporation until the end of the policy term.
1023 However, such dwellings that are insured by the corporation and
1024 become ineligible for coverage due to the provisions of this
1025 subparagraph may reapply and obtain coverage if the property
1026 owner provides the corporation with a sworn affidavit from one
1027 or more insurance agents, on a form provided by the corporation,
1028 stating that the agents have made their best efforts to obtain
1029 coverage and that the property has been rejected for coverage by
1030 at least one authorized insurer and at least three surplus lines
1031 insurers. If such conditions are met, the dwelling may be
1032 insured by the corporation for up to 3 years, after which time
1033 the dwelling is ineligible for coverage. The office shall
1034 approve the method used by the corporation for valuing the
1035 dwelling replacement cost for the purposes of this subparagraph.
1036 If a policyholder is insured by the corporation prior to being
1037 determined to be ineligible pursuant to this subparagraph and
1038 such policyholder files a lawsuit challenging the determination,
1039 the policyholder may remain insured by the corporation until the
1040 conclusion of the litigation.
1041 4. It is the intent of the Legislature that policyholders,
1042 applicants, and agents of the corporation receive service and
1043 treatment of the highest possible level but never less than that
1044 generally provided in the voluntary market. It also is intended
1045 that the corporation be held to service standards no less than
1046 those applied to insurers in the voluntary market by the office
1047 with respect to responsiveness, timeliness, customer courtesy,
1048 and overall dealings with policyholders, applicants, or agents
1049 of the corporation.
1050 5. Effective January 1, 2009, a personal lines residential
1051 structure that is located in the “wind-borne debris region,” as
1052 defined in s. 1609.2, International Building Code (2006), and
1053 that has an insured value on the structure of $750,000 or more
1054 is not eligible for coverage by the corporation unless the
1055 structure has opening protections as required under the Florida
1056 Building Code for a newly constructed residential structure in
1057 that area. A residential structure shall be deemed to comply
1058 with the requirements of this subparagraph if it has shutters or
1059 opening protections on all openings and if such opening
1060 protections complied with the Florida Building Code at the time
1061 they were installed. Effective January 1, 2010, for personal
1062 lines residential property insured by the corporation that is
1063 located in the wind-borne debris region and has an insured value
1064 on the structure of $500,000 or more, a prospective purchaser of
1065 any such residential property must be provided by the seller a
1066 written disclosure that contains the structure's windstorm
1067 mitigation rating based on the uniform home grading scale
1068 adopted under s. 215.55865. Such rating shall be provided to the
1069 purchaser at or before the time the purchaser executes a
1070 contract for sale and purchase.
1071 6. Flood insurance is required for all new or renewal
1072 policies for properties located within the area between the
1073 coast and 2,500 feet landward of the coastal construction
1074 control line. For properties constructed or permitted for
1075 construction on or after January 1, 2010, the corporation may
1076 not insure such properties located within the area between the
1077 coast and 2,500 feet landward of the coastal construction
1078 control line unless such properties have obtained flood
1079 insurance.
1080 (b)1. All insurers authorized to write one or more subject
1081 lines of business in this state are subject to assessment by the
1082 corporation and, for the purposes of this subsection, are
1083 referred to collectively as “assessable insurers.” Insurers
1084 writing one or more subject lines of business in this state
1085 pursuant to part VIII of chapter 626 are not assessable
1086 insurers, but insureds who procure one or more subject lines of
1087 business in this state pursuant to part VIII of chapter 626 are
1088 subject to assessment by the corporation and are referred to
1089 collectively as “assessable insureds.” An authorized insurer's
1090 assessment liability shall begin on the first day of the
1091 calendar year following the year in which the insurer was issued
1092 a certificate of authority to transact insurance for subject
1093 lines of business in this state and shall terminate 1 year after
1094 the end of the first calendar year during which the insurer no
1095 longer holds a certificate of authority to transact insurance
1096 for subject lines of business in this state.
1097 2.a. All revenues, assets, liabilities, losses, and
1098 expenses of the corporation shall be divided into three separate
1099 accounts as follows:
1100 (I) A personal lines account for personal residential
1101 policies issued by the corporation or issued by the Residential
1102 Property and Casualty Joint Underwriting Association and renewed
1103 by the corporation that provide comprehensive, multiperil
1104 coverage on risks that are not located in areas eligible for
1105 coverage in the Florida Windstorm Underwriting Association as
1106 those areas were defined on January 1, 2002, and for such
1107 policies that do not provide coverage for the peril of wind on
1108 risks that are located in such areas;
1109 (II) A commercial lines account for commercial residential
1110 and commercial nonresidential policies issued by the corporation
1111 or issued by the Residential Property and Casualty Joint
1112 Underwriting Association and renewed by the corporation that
1113 provide coverage for basic property perils on risks that are not
1114 located in areas eligible for coverage in the Florida Windstorm
1115 Underwriting Association as those areas were defined on January
1116 1, 2002, and for such policies that do not provide coverage for
1117 the peril of wind on risks that are located in such areas; and
1118 (III) A high-risk account for personal residential policies
1119 and commercial residential and commercial nonresidential
1120 property policies issued by the corporation or transferred to
1121 the corporation that provide coverage for the peril of wind on
1122 risks that are located in areas eligible for coverage in the
1123 Florida Windstorm Underwriting Association as those areas were
1124 defined on January 1, 2002. The corporation may offer policies
1125 that provide multiperil coverage and the corporation may renew
1126 shall continue to offer policies that provide coverage only for
1127 the peril of wind for risks located in areas eligible for
1128 coverage in the high-risk account. Beginning July 1, 2009, the
1129 corporation may not issue new policies providing coverage for
1130 the peril of wind only. In issuing multiperil coverage, the
1131 corporation may use its approved policy forms and rates for the
1132 personal lines account. An applicant or insured who is eligible
1133 to purchase a multiperil policy from the corporation may
1134 purchase a multiperil policy from an authorized insurer without
1135 prejudice to the applicant's or insured's eligibility to
1136 prospectively purchase a policy that provides coverage only for
1137 the peril of wind from the corporation. An applicant or insured
1138 who is eligible for a corporation policy that provides coverage
1139 only for the peril of wind may elect to purchase or retain such
1140 policy and also purchase or retain coverage excluding wind from
1141 an authorized insurer without prejudice to the applicant's or
1142 insured's eligibility to prospectively purchase a policy that
1143 provides multiperil coverage from the corporation. It is the
1144 goal of the Legislature that there would be an overall average
1145 savings of 10 percent or more for a policyholder who currently
1146 has a wind-only policy with the corporation, and an ex-wind
1147 policy with a voluntary insurer or the corporation, and who then
1148 obtains a multiperil policy from the corporation. It is the
1149 intent of the Legislature that the offer of multiperil coverage
1150 in the high-risk account be made and implemented in a manner
1151 that does not adversely affect the tax-exempt status of the
1152 corporation or creditworthiness of or security for currently
1153 outstanding financing obligations or credit facilities of the
1154 high-risk account, the personal lines account, or the commercial
1155 lines account. The high-risk account must also include quota
1156 share primary insurance under subparagraph (c)2. The area
1157 eligible for coverage under the high-risk account also includes
1158 the area within Port Canaveral, which is bordered on the south
1159 by the City of Cape Canaveral, bordered on the west by the
1160 Banana River, and bordered on the north by Federal Government
1161 property.
1162 b. The three separate accounts must be maintained as long
1163 as financing obligations entered into by the Florida Windstorm
1164 Underwriting Association or Residential Property and Casualty
1165 Joint Underwriting Association are outstanding, in accordance
1166 with the terms of the corresponding financing documents. When
1167 the financing obligations are no longer outstanding, in
1168 accordance with the terms of the corresponding financing
1169 documents, the corporation may use a single account for all
1170 revenues, assets, liabilities, losses, and expenses of the
1171 corporation. Consistent with the requirement of this
1172 subparagraph and prudent investment policies that minimize the
1173 cost of carrying debt, the board shall exercise its best efforts
1174 to retire existing debt or to obtain approval of necessary
1175 parties to amend the terms of existing debt, so as to structure
1176 the most efficient plan to consolidate the three separate
1177 accounts into a single account. By February 1, 2007, the board
1178 shall submit a report to the Financial Services Commission, the
1179 President of the Senate, and the Speaker of the House of
1180 Representatives which includes an analysis of consolidating the
1181 accounts, the actions the board has taken to minimize the cost
1182 of carrying debt, and its recommendations for executing the most
1183 efficient plan.
1184 c. Creditors of the Residential Property and Casualty Joint
1185 Underwriting Association and of the accounts specified in sub
1186 sub-subparagraphs a.(I) and (II) may have a claim against, and
1187 recourse to, the accounts referred to in sub-sub-subparagraphs
1188 a.(I) and (II) and shall have no claim against, or recourse to,
1189 the account referred to in sub-sub-subparagraph a.(III).
1190 Creditors of the Florida Windstorm Underwriting Association
1191 shall have a claim against, and recourse to, the account
1192 referred to in sub-sub-subparagraph a.(III) and shall have no
1193 claim against, or recourse to, the accounts referred to in sub
1194 sub-subparagraphs a.(I) and (II).
1195 d. Revenues, assets, liabilities, losses, and expenses not
1196 attributable to particular accounts shall be prorated among the
1197 accounts.
1198 e. The Legislature finds that the revenues of the
1199 corporation are revenues that are necessary to meet the
1200 requirements set forth in documents authorizing the issuance of
1201 bonds under this subsection.
1202 f. No part of the income of the corporation may inure to
1203 the benefit of any private person.
1204 3. With respect to a deficit in an account:
1205 a. After accounting for the Citizens policyholder surcharge
1206 imposed under sub-subparagraph i., when the remaining projected
1207 deficit incurred in a particular calendar year is not greater
1208 than 6 percent of the aggregate statewide direct written premium
1209 for the subject lines of business for the prior calendar year,
1210 the entire deficit shall be recovered through regular
1211 assessments of assessable insurers under paragraph (p) and
1212 assessable insureds.
1213 b. After accounting for the Citizens policyholder surcharge
1214 imposed under sub-subparagraph i., when the remaining projected
1215 deficit incurred in a particular calendar year exceeds 6 percent
1216 of the aggregate statewide direct written premium for the
1217 subject lines of business for the prior calendar year, the
1218 corporation shall levy regular assessments on assessable
1219 insurers under paragraph (p) and on assessable insureds in an
1220 amount equal to the greater of 6 percent of the deficit or 6
1221 percent of the aggregate statewide direct written premium for
1222 the subject lines of business for the prior calendar year. Any
1223 remaining deficit shall be recovered through emergency
1224 assessments under sub-subparagraph d.
1225 c. Each assessable insurer's share of the amount being
1226 assessed under sub-subparagraph a. or sub-subparagraph b. shall
1227 be in the proportion that the assessable insurer's direct
1228 written premium for the subject lines of business for the year
1229 preceding the assessment bears to the aggregate statewide direct
1230 written premium for the subject lines of business for that year.
1231 The assessment percentage applicable to each assessable insured
1232 is the ratio of the amount being assessed under sub-subparagraph
1233 a. or sub-subparagraph b. to the aggregate statewide direct
1234 written premium for the subject lines of business for the prior
1235 year. Assessments levied by the corporation on assessable
1236 insurers under sub-subparagraphs a. and b. shall be paid as
1237 required by the corporation's plan of operation and paragraph
1238 (p). Assessments levied by the corporation on assessable
1239 insureds under sub-subparagraphs a. and b. shall be collected by
1240 the surplus lines agent at the time the surplus lines agent
1241 collects the surplus lines tax required by s. 626.932 and shall
1242 be paid to the Florida Surplus Lines Service Office at the time
1243 the surplus lines agent pays the surplus lines tax to the
1244 Florida Surplus Lines Service Office. Upon receipt of regular
1245 assessments from surplus lines agents, the Florida Surplus Lines
1246 Service Office shall transfer the assessments directly to the
1247 corporation as determined by the corporation.
1248 d. Upon a determination by the board of governors that a
1249 deficit in an account exceeds the amount that will be recovered
1250 through regular assessments under sub-subparagraph a. or sub
1251 subparagraph b., plus the amount that is expected to be
1252 recovered through surcharges under sub-subparagraph i., as to
1253 the remaining projected deficit the board shall levy, after
1254 verification by the office, emergency assessments, for as many
1255 years as necessary to cover the deficits, to be collected by
1256 assessable insurers and the corporation and collected from
1257 assessable insureds upon issuance or renewal of policies for
1258 subject lines of business, excluding National Flood Insurance
1259 policies. The amount of the emergency assessment collected in a
1260 particular year shall be a uniform percentage of that year's
1261 direct written premium for subject lines of business and all
1262 accounts of the corporation, excluding National Flood Insurance
1263 Program policy premiums, as annually determined by the board and
1264 verified by the office. The office shall verify the arithmetic
1265 calculations involved in the board's determination within 30
1266 days after receipt of the information on which the determination
1267 was based. Notwithstanding any other provision of law, the
1268 corporation and each assessable insurer that writes subject
1269 lines of business shall collect emergency assessments from its
1270 policyholders without such obligation being affected by any
1271 credit, limitation, exemption, or deferment. Emergency
1272 assessments levied by the corporation on assessable insureds
1273 shall be collected by the surplus lines agent at the time the
1274 surplus lines agent collects the surplus lines tax required by
1275 s. 626.932 and shall be paid to the Florida Surplus Lines
1276 Service Office at the time the surplus lines agent pays the
1277 surplus lines tax to the Florida Surplus Lines Service Office.
1278 The emergency assessments so collected shall be transferred
1279 directly to the corporation on a periodic basis as determined by
1280 the corporation and shall be held by the corporation solely in
1281 the applicable account. The aggregate amount of emergency
1282 assessments levied for an account under this sub-subparagraph in
1283 any calendar year may, at the discretion of the board of
1284 governors, be less than but may not exceed the greater of 10
1285 percent of the amount needed to cover the deficit, plus
1286 interest, fees, commissions, required reserves, and other costs
1287 associated with financing of the original deficit, or 10 percent
1288 of the aggregate statewide direct written premium for subject
1289 lines of business and for all accounts of the corporation for
1290 the prior year, plus interest, fees, commissions, required
1291 reserves, and other costs associated with financing the deficit.
1292 e. The corporation may pledge the proceeds of assessments,
1293 projected recoveries from the Florida Hurricane Catastrophe
1294 Fund, other insurance and reinsurance recoverables, policyholder
1295 surcharges and other surcharges, and other funds available to
1296 the corporation as the source of revenue for and to secure bonds
1297 issued under paragraph (p), bonds or other indebtedness issued
1298 under subparagraph (c)3., or lines of credit or other financing
1299 mechanisms issued or created under this subsection, or to retire
1300 any other debt incurred as a result of deficits or events giving
1301 rise to deficits, or in any other way that the board determines
1302 will efficiently recover such deficits. The purpose of the lines
1303 of credit or other financing mechanisms is to provide additional
1304 resources to assist the corporation in covering claims and
1305 expenses attributable to a catastrophe. As used in this
1306 subsection, the term “assessments” includes regular assessments
1307 under sub-subparagraph a., sub-subparagraph b., or subparagraph
1308 (p)1. and emergency assessments under sub-subparagraph d.
1309 Emergency assessments collected under sub-subparagraph d. are
1310 not part of an insurer's rates, are not premium, and are not
1311 subject to premium tax, fees, or commissions; however, failure
1312 to pay the emergency assessment shall be treated as failure to
1313 pay premium. The emergency assessments under sub-subparagraph d.
1314 shall continue as long as any bonds issued or other indebtedness
1315 incurred with respect to a deficit for which the assessment was
1316 imposed remain outstanding, unless adequate provision has been
1317 made for the payment of such bonds or other indebtedness
1318 pursuant to the documents governing such bonds or other
1319 indebtedness.
1320 f. As used in this subsection for purposes of any deficit
1321 incurred on or after January 25, 2007, the term “subject lines
1322 of business” means insurance written by assessable insurers or
1323 procured by assessable insureds for all property and casualty
1324 lines of business in this state, but not including workers'
1325 compensation or medical malpractice. As used in the sub
1326 subparagraph, the term “property and casualty lines of business”
1327 includes all lines of business identified on Form 2, Exhibit of
1328 Premiums and Losses, in the annual statement required of
1329 authorized insurers by s. 624.424 and any rule adopted under
1330 this section, except for those lines identified as accident and
1331 health insurance and except for policies written under the
1332 National Flood Insurance Program or the Federal Crop Insurance
1333 Program. For purposes of this sub-subparagraph, the term
1334 “workers' compensation” includes both workers' compensation
1335 insurance and excess workers' compensation insurance.
1336 g. The Florida Surplus Lines Service Office shall determine
1337 annually the aggregate statewide written premium in subject
1338 lines of business procured by assessable insureds and shall
1339 report that information to the corporation in a form and at a
1340 time the corporation specifies to ensure that the corporation
1341 can meet the requirements of this subsection and the
1342 corporation's financing obligations.
1343 h. The Florida Surplus Lines Service Office shall verify
1344 the proper application by surplus lines agents of assessment
1345 percentages for regular assessments and emergency assessments
1346 levied under this subparagraph on assessable insureds and shall
1347 assist the corporation in ensuring the accurate, timely
1348 collection and payment of assessments by surplus lines agents as
1349 required by the corporation.
1350 i. If a deficit is incurred in any account in 2008 or
1351 thereafter, the board of governors shall levy a Citizens
1352 policyholder surcharge against all policyholders of the
1353 corporation for a 12-month period, which shall be collected at
1354 the time of issuance or renewal of a policy, as a uniform
1355 percentage of the premium for the policy of up to 15 percent of
1356 such premium, which funds shall be used to offset the deficit.
1357 Citizens policyholder surcharges under this sub-subparagraph are
1358 not considered premium and are not subject to commissions, fees,
1359 or premium taxes. However, failure to pay such surcharges shall
1360 be treated as failure to pay premium.
1361 j. If the amount of any assessments or surcharges collected
1362 from corporation policyholders, assessable insurers or their
1363 policyholders, or assessable insureds exceeds the amount of the
1364 deficits, such excess amounts shall be remitted to and retained
1365 by the corporation in a reserve to be used by the corporation,
1366 as determined by the board of governors and approved by the
1367 office, to pay claims or reduce any past, present, or future
1368 plan-year deficits or to reduce outstanding debt.
1369 Section 14. Section 627.3512, Florida Statutes, is amended
1370 to read:
1371 627.3512 Recoupment of residual market deficit
1372 assessments.—
1373 (1) An insurer or insurer group may recoup any assessments
1374 that have been paid during or after 1995 by the insurer or
1375 insurer group to defray deficits of an insurance risk
1376 apportionment plan or assigned risk plan under ss. 627.311 and
1377 627.351, net of any earnings returned to the insurer or insurer
1378 group by the association or plan for any year after 1993. A
1379 limited apportionment company as defined in s. 627.351(6)(c) may
1380 recoup any regular assessment that has been levied by, or paid
1381 to, Citizens Property Insurance Corporation.
1382 (2) If an insurer or insurer group elects to recoup an
1383 assessment that has been paid, the following filing procedures
1384 shall apply:
1385 (a) The insurer or insurer group shall submit an initial
1386 recoupment filing to the office within 180 days after the date
1387 of the assessment as indicated on the invoice received by the
1388 insurer or insurer group. Failure to submit the filing within
1389 180 days shall result in the inability to recoup the amount
1390 assessed.
1391 (b) The initial recoupment filing shall be submitted on a
1392 file-and-use basis, pursuant to s. 627.062 or s. 627.0651 and
1393 subsection (10).
1394 (c) The initial recoupment filing shall include the
1395 following:
1396 1. A copy of the invoice received from the corporation and
1397 proof of payment.
1398 2. A 1-year direct written premium projection for that line
1399 or type of business as defined in s. 624.6012 and subject to the
1400 assessment, including supporting documentation. The dates of the
1401 1-year direct written premium projection shall coincide with the
1402 proposed effective dates of the initial recoupment filing.
1403 3. A manual page listing the initial recoupment factor and
1404 explaining how such recoupment factor is applied.
1405 (d) The initial recoupment factor shall be calculated by
1406 dividing the assessment amount for that line or type of business
1407 by the projected 1-year direct written premium for that line or
1408 type of business.
1409 (3) For purposes of calculating a The recoupment shall be
1410 made by applying a separate assessment factor, on policies of
1411 the same line or type as were considered by the residual markets
1412 in determining the assessment liability of the insurer or
1413 insurer group. an insurer or insurer group may combine all shall
1414 calculate a separate assessment factor for personal lines of
1415 business or all and commercial lines of business. An insurer or
1416 insurer group may not combine personal and commercial lines of
1417 business. The recoupment separate assessment factor shall
1418 provide for full recoupment of the assessments over a period of
1419 1 year, unless the insurer or insurer group, at its option,
1420 elects to recoup the assessments over a longer period. The
1421 recoupment assessment factor expires upon collection of the full
1422 amount allowed to be recouped or at the end of the 1-year
1423 period, whichever occurs first. Amounts recouped under this
1424 section are not subject to premium taxes, fees, or commissions.
1425 (4)(2) The recoupment assessment factor may must not be
1426 more than 2 3 percentage points above the ratio of the deficit
1427 assessment to the Florida direct written premium for policies
1428 for the lines or types of business as to which the assessment
1429 was calculated, as written in the year the deficit assessment
1430 was paid. If an insurer or insurer group fails to collect the
1431 full amount of the deficit assessment, the insurer or insurer
1432 group may must carry forward the amount of the deficit and
1433 adjust the deficit assessment to be recouped in the next a
1434 subsequent year by that amount.
1435 (5) A recoupment-removal filing shall be submitted to the
1436 office to stop the recoupment process. The following filing
1437 procedures shall apply to the recoupment-removal filing:
1438 (a) The filing may be submitted on a file-and-use basis or
1439 use-and-file basis as provided in s. 627.062 or s. 627.0651.
1440 (b) The filing shall include the following:
1441 1. A copy of the exhibit used to show the calculation of
1442 the factor originally approved in the initial recoupment filing,
1443 including the effective dates of the policy.
1444 2. An exhibit showing the direct written premium and
1445 associated recoupment amounts received by month for the entire
1446 recoupment period.
1447 3. A manual page indicating that the recoupment factor no
1448 longer applies.
1449 (6) If the insurer or insurer group elects to continue the
1450 recoupment process for an additional year, the following filing
1451 procedures shall apply:
1452 (a) The recoupment-continuation filing may be submitted on
1453 a file-and-use basis or use-and-file basis as provided in s.
1454 627.062 or s. 627.0651. The recoupment-continuation filing does
1455 not result in a gap between the application of the approved
1456 initial recoupment factor and the application of the recoupment
1457 continuation factor. If the initial recoupment filing used a
1458 combination of lines or types of business to compute a
1459 recoupment factor, those same lines or types of business
1460 combinations shall be used again to compute the recoupment
1461 continuation factor.
1462 (b) The recoupment-continuation filing shall include the
1463 following:
1464 1. A copy of the exhibit used to show the calculation of
1465 the factor approved in the initial recoupment filing, including
1466 the effective dates of the policy.
1467 2. An exhibit showing the direct written premium and
1468 associated recoupment amounts received by month for the entire
1469 initial recoupment period.
1470 3. A subsequent 1-year direct written premium projection
1471 for that line or type of business as defined in s. 624.6012 and
1472 subject to the assessment, including supporting documentation.
1473 The dates of the subsequent 1-year direct written premium
1474 projection shall coincide with the proposed effective dates of
1475 the recoupment-continuation filing.
1476 4. The recoupment-continuation factor, which shall be
1477 calculated by dividing the remaining uncollected assessment
1478 amount for that line or type of business by the projected 1-year
1479 direct written premium for that line or type of business.
1480 5. A manual page listing the recoupment-continuation factor
1481 and explaining how such factor is to be applied.
1482 (c) Recoupment-continuation filings are subject to
1483 subsections (3), (4), and (5).
1484 (7) If an insurer or insurer group over-recoups any
1485 assessment it has paid, it shall refund the over-recoupment
1486 amount to its policyholders. The refund process shall be
1487 monitored by the office. The administrative costs to accomplish
1488 such refund may not be included as any component in any
1489 subsequent rate filing required by s. 627.062 or s. 627.0651.
1490 (8) Any insurer or insurer group that does not elect to use
1491 the process described in subsection (7) to recoup an assessment
1492 amount that it has paid may not include an uncollected
1493 assessment amount as a component in any subsequent rate filing
1494 required by s. 627.062 or s. 627.0651.
1495 (9) An insurer or insurer group that discontinues a line or
1496 type of business or subline within a line or type of business
1497 may not recoup amounts assessed against that line, type, or
1498 subline from policyholders under different lines, types, or
1499 sublines of business. The assessment amounts attributable to the
1500 discontinued line, type, or subline of business shall remain
1501 uncollected. The uncollected assessment amount may not be
1502 included in any component in any subsequent rate filing for
1503 other lines, types, or sublines of business as required by s.
1504 627.062 or s. 627.0651
1505 (10)(3) The initial recoupment shall be filed insurer or
1506 insurer group shall file with the office a statement setting
1507 forth the amount of the assessment factor and an explanation of
1508 how the factor will be applied, at least 45 15 days before prior
1509 to the factor is being applied to any policies. The statement
1510 shall include documentation of the assessment paid by the
1511 insurer or insurer group and the arithmetic calculations
1512 supporting the assessment factor. The office shall complete its
1513 review within 15 days after receipt of the filing and shall
1514 limit its review to verification of the arithmetic calculations.
1515 The insurer or insurer group may use the assessment factor at
1516 any time after the expiration of the 15-day period unless the
1517 office has notified the insurer or insurer group in writing that
1518 the arithmetic calculations are incorrect.
1519 (11)(4) The commission may adopt rules to implement this
1520 section.
1521 Section 15. Subsection (5) is added to section 627.706,
1522 Florida Statutes, to read:
1523 627.706 Sinkhole insurance; catastrophic ground cover
1524 collapse; definitions.—
1525 (5) Insurers are not required to issue a notice of
1526 nonrenewal to exclude sinkhole coverage upon the renewal of
1527 existing policies in one or more counties or other territories
1528 as determined by the office. Insurers may exclude such coverage
1529 using a notice of coverage change. Insurers shall continue to
1530 offer optional sinkhole coverage for an appropriate additional
1531 premium.
1532 Section 16. This act shall take effect July 1, 2009.