CS for SB 742                                    First Engrossed
       
       
       
       
       
       
       
       
       2009742e1
       
    1                        A bill to be entitled                      
    2         An act relating to sinkhole losses; amending s.
    3         627.706, F.S.; authorizing an insurer offering
    4         sinkhole coverage before or after a certain date to
    5         nonrenew the policies of policyholders maintaining
    6         sinkhole coverage in Pasco and Hernando Counties, at
    7         the option of the insurer, and provide an offer of
    8         coverage to such policyholders which includes
    9         catastrophic ground cover collapse and excludes
   10         sinkhole coverage; requiring that an insurer taking
   11         such action meet specified requirements; creating s.
   12         627.7063, F.S.; defining the term “sinkhole loss
   13         prevention ordinance”; requiring the Financial
   14         Services Commission to adopt a building code
   15         effectiveness grading schedule by rule to evaluate the
   16         effectiveness of sinkhole loss prevention ordinances
   17         in reducing the number of sinkhole claims and the
   18         severity of sinkhole losses; requiring insurance
   19         discounts and surcharges based on the grade assigned
   20         to a sinkhole loss prevention ordinance; providing an
   21         effective date.
   22  
   23  Be It Enacted by the Legislature of the State of Florida:
   24  
   25         Section 1. Subsection (5) is added to section 627.706,
   26  Florida Statutes, to read:
   27         627.706 Sinkhole insurance; catastrophic ground cover
   28  collapse; definitions.—
   29         (5) An insurer offering sinkhole coverage to policyholders
   30  before or after the adoption of s. 30, chapter 2007-1, Laws of
   31  Florida, may nonrenew the policies of policyholders maintaining
   32  sinkhole coverage in Pasco County or Hernando County, at the
   33  option of the insurer, and provide an offer of coverage to such
   34  policyholders which includes catastrophic ground cover collapse
   35  and excludes sinkhole coverage. Insurers acting in accordance
   36  with this subsection are subject to the following requirements:
   37         (a) Policyholders must be notified that a nonrenewal is for
   38  purposes of removing sinkhole coverage, and that the
   39  policyholder is still being offered a policy that provides
   40  coverage for catastrophic ground cover collapse.
   41         (b) Policyholders must be provided an actuarially
   42  reasonable premium credit or discount for the removal of
   43  sinkhole coverage and provision of only catastrophic ground
   44  cover collapse.
   45         (c) Subject to the provisions of this subsection and the
   46  insurer’s approved underwriting or insurability guidelines, the
   47  insurer shall provide each policyholder with the opportunity to
   48  purchase an endorsement to his or her policy providing sinkhole
   49  coverage and may require an inspection of the property before
   50  issuance of a sinkhole coverage endorsement.
   51         (d) Section 624.4305 does not apply to nonrenewal notices
   52  issued pursuant to this subsection.
   53         Section 2. Section 627.7063, Florida Statutes, is created
   54  to read:
   55         627.7063 Building code effectiveness grading schedule.—
   56         (1) As used in this section, the term “sinkhole loss
   57  prevention ordinance” means a county ordinance that amends the
   58  Florida Building Code and that is intended to reduce the number
   59  of sinkhole claims and the severity of sinkhole losses.
   60         (2) The commission shall adopt a building code
   61  effectiveness grading schedule by rule. The grading schedule
   62  shall evaluate the effectiveness of each sinkhole loss
   63  prevention ordinance in reducing the number of sinkhole claims
   64  and severity of sinkhole losses. Each ordinance shall be
   65  evaluated 4 years after the ordinance takes effect. The grading
   66  schedule shall be based on the effectiveness of code enforcement
   67  in each county and scientific, modeling, and engineering
   68  methodologies. The rules shall further mandate insurance premium
   69  discounts or surcharges on personal residential property
   70  insurance based on a property’s compliance with an ordinance and
   71  the grade assigned to the applicable sinkhole loss prevention
   72  ordinance.
   73         Section 3. This act shall take effect January 1, 2010.