1 | Representative Wood offered the following: |
2 |
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3 | Amendment (with title amendment) |
4 | Remove everything after the enacting clause and insert: |
5 | Section 1. Subsection (2) of section 95.11, Florida |
6 | Statutes, is amended to read: |
7 | 95.11 Limitations other than for the recovery of real |
8 | property.-Actions other than for recovery of real property shall |
9 | be commenced as follows: |
10 | (2) WITHIN FIVE YEARS.- |
11 | (a) An action on a judgment or decree of any court, not of |
12 | record, of this state or any court of the United States, any |
13 | other state or territory in the United States, or a foreign |
14 | country. |
15 | (b) A legal or equitable action on a contract, obligation, |
16 | or liability founded on a written instrument, except for an |
17 | action to enforce a claim against a payment bond, which shall be |
18 | governed by the applicable provisions of ss. 255.05(10) and |
19 | 713.23(1)(e). |
20 | (c) An action to foreclose a mortgage. |
21 | (d) An action alleging a willful violation of s. 448.110. |
22 | (e) Notwithstanding paragraph (b), an action for breach of |
23 | a property insurance contract, with the period running from the |
24 | date of loss. |
25 | Section 2. Effective June 1, 2011, paragraph (d) of |
26 | subsection (2) of section 215.555, Florida Statutes, is amended |
27 | to read: |
28 | 215.555 Florida Hurricane Catastrophe Fund.- |
29 | (2) DEFINITIONS.-As used in this section: |
30 | (d) "Losses" means all direct incurred losses under |
31 | covered policies, including which shall include losses for |
32 | additional living expenses not to exceed 40 percent of the |
33 | insured value of a residential structure or its contents and |
34 | amounts paid as fees on behalf of or inuring to the benefit of a |
35 | policyholder shall exclude loss adjustment expenses. The term |
36 | "Losses" does not include: |
37 | 1. Losses for fair rental value, loss of rent or rental |
38 | income, or business interruption losses; |
39 | 2. Losses under liability coverages; |
40 | 3. Property losses that are proximately caused by any |
41 | peril other than a covered event, including, but not limited to, |
42 | fire, theft, flood or rising water, or windstorm that does not |
43 | constitute a covered event; |
44 | 4. Amounts paid as the result of a voluntary expansion of |
45 | coverage by the insurer, including, but not limited to, a waiver |
46 | of an applicable deductible; |
47 | 5. Amounts paid to reimburse a policyholder for |
48 | condominium association or homeowners' association loss |
49 | assessments or under similar coverages for contractual |
50 | liabilities; |
51 | 6. Amounts paid as bad faith awards, punitive damage |
52 | awards, or other court-imposed fines, sanctions, or penalties; |
53 | 7. Amounts in excess of the coverage limits under the |
54 | covered policy; or |
55 | 8. Allocated or unallocated loss adjustment expenses. |
56 | Section 3. The amendment to s. 215.555, Florida Statutes, |
57 | made by this act applies first to the Florida Hurricane |
58 | Catastrophe Fund reimbursement contract that takes effect June |
59 | 1, 2011. |
60 | Section 4. Subsection (12) is added to section 215.5595, |
61 | Florida Statutes, to read: |
62 | 215.5595 Insurance Capital Build-Up Incentive Program.- |
63 | (12) The insurer may request that the board renegotiate |
64 | the terms of any surplus note issued under this section before |
65 | January 1, 2011. The request must be submitted to the board by |
66 | January 1, 2012. If the insurer agrees to accelerate the payment |
67 | period of the note by at least 5 years, the board must agree to |
68 | exempt the insurer from the premium-to-surplus ratios required |
69 | under paragraph (2)(d). If the insurer agrees to an acceleration |
70 | of the payment period for less than 5 years, the board may, |
71 | after consultation with the Office of Insurance Regulation, |
72 | agree to an appropriate revision of the premium-to-surplus |
73 | ratios required under paragraph (2)(d) for the remaining term of |
74 | the note if the revised ratios are not lower than a minimum |
75 | writing ratio of net premium to surplus of at least 1 to 1 and, |
76 | alternatively, a minimum writing ratio of gross premium to |
77 | surplus of at least 3 to 1. |
78 | Section 5. Section 624.407, Florida Statutes, is amended |
79 | to read: |
80 | 624.407 Surplus Capital funds required; new insurers.- |
81 | (1) To receive authority to transact any one kind or |
82 | combinations of kinds of insurance, as defined in part V of this |
83 | chapter, an insurer applying for its original certificate of |
84 | authority in this state after the effective date of this section |
85 | shall possess surplus as to policyholders at least not less than |
86 | the greater of: |
87 | (a) Five million dollars For a property and casualty |
88 | insurer, $5 million, or $2.5 million for any other insurer; |
89 | (b) For life insurers, 4 percent of the insurer's total |
90 | liabilities; |
91 | (c) For life and health insurers, 4 percent of the |
92 | insurer's total liabilities, plus 6 percent of the insurer's |
93 | liabilities relative to health insurance; or |
94 | (d) For all insurers other than life insurers and life and |
95 | health insurers, 10 percent of the insurer's total liabilities; |
96 | or |
97 | (e) Notwithstanding paragraph (a) or paragraph (d), for a |
98 | domestic insurer that transacts residential property insurance |
99 | and is: |
100 | 1. Not a wholly owned subsidiary of an insurer domiciled |
101 | in any other state, $15 million. |
102 | 2. however, a domestic insurer that transacts residential |
103 | property insurance and is A wholly owned subsidiary of an |
104 | insurer domiciled in any other state, shall possess surplus as |
105 | to policyholders of at least $50 million. |
106 | (2) Notwithstanding subsection (1), a new insurer may not |
107 | be required, but no insurer shall be required under this |
108 | subsection to have surplus as to policyholders greater than $100 |
109 | million. |
110 | (3)(2) The requirements of this section shall be based |
111 | upon all the kinds of insurance actually transacted or to be |
112 | transacted by the insurer in any and all areas in which it |
113 | operates, whether or not only a portion of such kinds of |
114 | insurance are to be transacted in this state. |
115 | (4)(3) As to surplus as to policyholders required for |
116 | qualification to transact one or more kinds of insurance, |
117 | domestic mutual insurers are governed by chapter 628, and |
118 | domestic reciprocal insurers are governed by chapter 629. |
119 | (5)(4) For the purposes of this section, liabilities do |
120 | shall not include liabilities required under s. 625.041(4). For |
121 | purposes of computing minimum surplus as to policyholders |
122 | pursuant to s. 625.305(1), liabilities shall include liabilities |
123 | required under s. 625.041(4). |
124 | (5) The provisions of this section, as amended by this |
125 | act, shall apply only to insurers applying for a certificate of |
126 | authority on or after the effective date of this act. |
127 | Section 6. Section 624.408, Florida Statutes, is amended |
128 | to read: |
129 | 624.408 Surplus as to policyholders required; current new |
130 | and existing insurers.- |
131 | (1)(a) To maintain a certificate of authority to transact |
132 | any one kind or combinations of kinds of insurance, as defined |
133 | in part V of this chapter, an insurer in this state must shall |
134 | at all times maintain surplus as to policyholders at least not |
135 | less than the greater of: |
136 | (a)1. Except as provided in paragraphs (e), (f), and (g) |
137 | subparagraph 5. and paragraph (b), $1.5 million.; |
138 | (b)2. For life insurers, 4 percent of the insurer's total |
139 | liabilities.; |
140 | (c)3. For life and health insurers, 4 percent of the |
141 | insurer's total liabilities plus 6 percent of the insurer's |
142 | liabilities relative to health insurance.; or |
143 | (d)4. For all insurers other than mortgage guaranty |
144 | insurers, life insurers, and life and health insurers, 10 |
145 | percent of the insurer's total liabilities. |
146 | (e)5. For property and casualty insurers, $4 million, |
147 | except for property and casualty insurers authorized to |
148 | underwrite any line of residential property insurance. |
149 | (f)(b) For residential any property insurers not and |
150 | casualty insurer holding a certificate of authority before July |
151 | 1, 2011 on December 1, 1993, $15 million. the |
152 | (g) For residential property insurers holding a |
153 | certificate of authority before July 1, 2011, and until June 30, |
154 | 2016, $5 million; on or after July 1, 2016, and until June 30, |
155 | 2021, $10 million; on or after July 1, 2021, $15 million. |
156 |
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157 | The office may reduce the surplus requirement in paragraphs (f) |
158 | and (g) if the insurer is not writing new business, has premiums |
159 | in force of less than $1 million per year in residential |
160 | property insurance, or is a mutual insurance company. following |
161 | amounts apply instead of the $4 million required by subparagraph |
162 | (a)5.: |
163 | 1. On December 31, 2001, and until December 30, 2002, $3 |
164 | million. |
165 | 2. On December 31, 2002, and until December 30, 2003, |
166 | $3.25 million. |
167 | 3. On December 31, 2003, and until December 30, 2004, $3.6 |
168 | million. |
169 | 4. On December 31, 2004, and thereafter, $4 million. |
170 | (2) For purposes of this section, liabilities do shall not |
171 | include liabilities required under s. 625.041(4). For purposes |
172 | of computing minimum surplus as to policyholders pursuant to s. |
173 | 625.305(1), liabilities shall include liabilities required under |
174 | s. 625.041(4). |
175 | (3) This section does not require an No insurer shall be |
176 | required under this section to have surplus as to policyholders |
177 | greater than $100 million. |
178 | (4) A mortgage guaranty insurer shall maintain a minimum |
179 | surplus as required by s. 635.042. |
180 | Section 7. Effective June 1, 2011, section 626.854, |
181 | Florida Statutes, is amended to read: |
182 | 626.854 "Public adjuster" defined; prohibitions.-The |
183 | Legislature finds that it is necessary for the protection of the |
184 | public to regulate public insurance adjusters and to prevent the |
185 | unauthorized practice of law. |
186 | (1) A "public adjuster" is any person, except a duly |
187 | licensed attorney at law as hereinafter in s. 626.860 provided, |
188 | who, for money, commission, or any other thing of value, |
189 | prepares, completes, or files an insurance claim form for an |
190 | insured or third-party claimant or who, for money, commission, |
191 | or any other thing of value, acts or aids in any manner on |
192 | behalf of an insured or third-party claimant in negotiating for |
193 | or effecting the settlement of a claim or claims for loss or |
194 | damage covered by an insurance contract or who advertises for |
195 | employment as an adjuster of such claims, and also includes any |
196 | person who, for money, commission, or any other thing of value, |
197 | solicits, investigates, or adjusts such claims on behalf of any |
198 | such public adjuster. |
199 | (2) This definition does not apply to: |
200 | (a) A licensed health care provider or employee thereof |
201 | who prepares or files a health insurance claim form on behalf of |
202 | a patient. |
203 | (b) A person who files a health claim on behalf of another |
204 | and does so without compensation. |
205 | (3) A public adjuster may not give legal advice. A public |
206 | adjuster may not act on behalf of or aid any person in |
207 | negotiating or settling a claim relating to bodily injury, |
208 | death, or noneconomic damages. |
209 | (4) For purposes of this section, the term "insured" |
210 | includes only the policyholder and any beneficiaries named or |
211 | similarly identified in the policy. |
212 | (5) A public adjuster may not directly or indirectly |
213 | through any other person or entity solicit an insured or |
214 | claimant by any means except on Monday through Saturday of each |
215 | week and only between the hours of 8 a.m. and 8 p.m. on those |
216 | days. |
217 | (6) A public adjuster may not directly or indirectly |
218 | through any other person or entity initiate contact or engage in |
219 | face-to-face or telephonic solicitation or enter into a contract |
220 | with any insured or claimant under an insurance policy until at |
221 | least 48 hours after the occurrence of an event that may be the |
222 | subject of a claim under the insurance policy unless contact is |
223 | initiated by the insured or claimant. |
224 | (7) An insured or claimant may cancel a public adjuster's |
225 | contract to adjust a claim without penalty or obligation within |
226 | 3 business days after the date on which the contract is executed |
227 | or within 3 business days after the date on which the insured or |
228 | claimant has notified the insurer of the claim, by phone or in |
229 | writing, whichever is later. The public adjuster's contract |
230 | shall disclose to the insured or claimant his or her right to |
231 | cancel the contract and advise the insured or claimant that |
232 | notice of cancellation must be submitted in writing and sent by |
233 | certified mail, return receipt requested, or other form of |
234 | mailing which provides proof thereof, to the public adjuster at |
235 | the address specified in the contract; provided, during any |
236 | state of emergency as declared by the Governor and for a period |
237 | of 1 year after the date of loss, the insured or claimant shall |
238 | have 5 business days after the date on which the contract is |
239 | executed to cancel a public adjuster's contract. |
240 | (8) It is an unfair and deceptive insurance trade practice |
241 | pursuant to s. 626.9541 for a public adjuster or any other |
242 | person to circulate or disseminate any advertisement, |
243 | announcement, or statement containing any assertion, |
244 | representation, or statement with respect to the business of |
245 | insurance which is untrue, deceptive, or misleading. |
246 | (9) A public adjuster, a public adjuster apprentice, or |
247 | any person or entity acting on behalf of a public adjuster or |
248 | public adjuster apprentice may not give or offer to give a |
249 | monetary loan or advance to a client or prospective client. |
250 | (10) A public adjuster, public adjuster apprentice, or any |
251 | individual or entity acting on behalf of a public adjuster or |
252 | public adjuster apprentice may not give or offer to give, |
253 | directly or indirectly, any article of merchandise having a |
254 | value in excess of $25 to any individual for the purpose of |
255 | advertising or as an inducement to entering into a contract with |
256 | a public adjuster. |
257 | (11)(a) If a public adjuster enters into a contract with |
258 | an insured or claimant to reopen a claim or to file a |
259 | supplemental claim that seeks additional payments for a claim |
260 | that has been previously paid in part or in full or settled by |
261 | the insurer, the public adjuster may not charge, agree to, or |
262 | accept any compensation, payment, commission, fee, or other |
263 | thing of value based on a previous settlement or previous claim |
264 | payments by the insurer for the same cause of loss. The charge, |
265 | compensation, payment, commission, fee, or other thing of value |
266 | may be based only on the claim payments or settlement obtained |
267 | through the work of the public adjuster after entering into the |
268 | contract with the insured or claimant. Compensation for the |
269 | reopened or supplemental claim may not exceed 20 percent of the |
270 | reopened or supplemental claim payment. The contracts described |
271 | in this paragraph are not subject to the limitations in |
272 | paragraph (b). |
273 | (b) A public adjuster may not charge, agree to, or accept |
274 | any compensation, payment, commission, fee, or other thing of |
275 | value in excess of: |
276 | 1. Ten percent of the amount of insurance claim payments |
277 | made by the insurer for claims based on events that are the |
278 | subject of a declaration of a state of emergency by the |
279 | Governor. This provision applies to claims made during the |
280 | period of 1 year after the declaration of emergency. After that |
281 | 1-year period, 20 percent of the amount of insurance claim |
282 | payments made by the insurer. |
283 | 2. Twenty percent of the amount of all other insurance |
284 | claim payments made by the insurer for claims that are not based |
285 | on events that are the subject of a declaration of a state of |
286 | emergency by the Governor. |
287 | (12) Each public adjuster shall provide to the claimant or |
288 | insured a written estimate of the loss to assist in the |
289 | submission of a proof of loss or any other claim for payment of |
290 | insurance proceeds. The public adjuster shall retain such |
291 | written estimate for at least 5 years and shall make such |
292 | estimate available to the claimant or insured and the department |
293 | upon request. |
294 | (13) A public adjuster, public adjuster apprentice, or any |
295 | person acting on behalf of a public adjuster or apprentice may |
296 | not accept referrals of business from any person with whom the |
297 | public adjuster conducts business if there is any form or manner |
298 | of agreement to compensate the person, whether directly or |
299 | indirectly, for referring business to the public adjuster. A |
300 | public adjuster may not compensate any person, except for |
301 | another public adjuster, whether directly or indirectly, for the |
302 | principal purpose of referring business to the public adjuster. |
303 |
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304 | The provisions of subsections (5)-(13) apply only to residential |
305 | property insurance policies and condominium unit owner |
306 | association policies as defined in s. 718.111(11). |
307 | Section 8. Effective January 1, 2012, section 626.854, |
308 | Florida Statutes, as amended by this act, is amended to read: |
309 | 626.854 "Public adjuster" defined; prohibitions.-The |
310 | Legislature finds that it is necessary for the protection of the |
311 | public to regulate public insurance adjusters and to prevent the |
312 | unauthorized practice of law. |
313 | (1) A "public adjuster" is any person, except a duly |
314 | licensed attorney at law as exempted under hereinafter in s. |
315 | 626.860 provided, who, for money, commission, or any other thing |
316 | of value, prepares, completes, or files an insurance claim form |
317 | for an insured or third-party claimant or who, for money, |
318 | commission, or any other thing of value, acts or aids in any |
319 | manner on behalf of, or aids an insured or third-party claimant |
320 | in negotiating for or effecting the settlement of a claim or |
321 | claims for loss or damage covered by an insurance contract or |
322 | who advertises for employment as an adjuster of such claims. The |
323 | term, and also includes any person who, for money, commission, |
324 | or any other thing of value, solicits, investigates, or adjusts |
325 | such claims on behalf of a any such public adjuster. |
326 | (2) This definition does not apply to: |
327 | (a) A licensed health care provider or employee thereof |
328 | who prepares or files a health insurance claim form on behalf of |
329 | a patient. |
330 | (b) A person who files a health claim on behalf of another |
331 | and does so without compensation. |
332 | (3) A public adjuster may not give legal advice or. A |
333 | public adjuster may not act on behalf of or aid any person in |
334 | negotiating or settling a claim relating to bodily injury, |
335 | death, or noneconomic damages. |
336 | (4) For purposes of this section, the term "insured" |
337 | includes only the policyholder and any beneficiaries named or |
338 | similarly identified in the policy. |
339 | (5) A public adjuster may not directly or indirectly |
340 | through any other person or entity solicit an insured or |
341 | claimant by any means except on Monday through Saturday of each |
342 | week and only between the hours of 8 a.m. and 8 p.m. on those |
343 | days. |
344 | (6) A public adjuster may not directly or indirectly |
345 | through any other person or entity initiate contact or engage in |
346 | face-to-face or telephonic solicitation or enter into a contract |
347 | with any insured or claimant under an insurance policy until at |
348 | least 48 hours after the occurrence of an event that may be the |
349 | subject of a claim under the insurance policy unless contact is |
350 | initiated by the insured or claimant. |
351 | (7) An insured or claimant may cancel a public adjuster's |
352 | contract to adjust a claim without penalty or obligation within |
353 | 3 business days after the date on which the contract is executed |
354 | or within 3 business days after the date on which the insured or |
355 | claimant has notified the insurer of the claim, by phone or in |
356 | writing, whichever is later. The public adjuster's contract must |
357 | shall disclose to the insured or claimant his or her right to |
358 | cancel the contract and advise the insured or claimant that |
359 | notice of cancellation must be submitted in writing and sent by |
360 | certified mail, return receipt requested, or other form of |
361 | mailing that which provides proof thereof, to the public |
362 | adjuster at the address specified in the contract; provided, |
363 | during any state of emergency as declared by the Governor and |
364 | for a period of 1 year after the date of loss, the insured or |
365 | claimant has shall have 5 business days after the date on which |
366 | the contract is executed to cancel a public adjuster's contract. |
367 | (8) It is an unfair and deceptive insurance trade practice |
368 | pursuant to s. 626.9541 for a public adjuster or any other |
369 | person to circulate or disseminate any advertisement, |
370 | announcement, or statement containing any assertion, |
371 | representation, or statement with respect to the business of |
372 | insurance which is untrue, deceptive, or misleading. |
373 | (a) The following statements, made in any public |
374 | adjuster's advertisement or solicitation, are considered |
375 | deceptive or misleading: |
376 | 1. A statement or representation that invites an insured |
377 | policyholder to submit a claim when the policyholder does not |
378 | have covered damage to insured property. |
379 | 2. A statement or representation that invites an insured |
380 | policyholder to submit a claim by offering monetary or other |
381 | valuable inducement. |
382 | 3. A statement or representation that invites an insured |
383 | policyholder to submit a claim by stating that there is "no |
384 | risk" to the policyholder by submitting such claim. |
385 | 4. A statement or representation, or use of a logo or |
386 | shield, that implies or could mistakenly be construed to imply |
387 | that the solicitation was issued or distributed by a |
388 | governmental agency or is sanctioned or endorsed by a |
389 | governmental agency. |
390 | (b) For purposes of this paragraph, the term "written |
391 | advertisement" includes only newspapers, magazines, flyers, and |
392 | bulk mailers. The following disclaimer, which is not required to |
393 | be printed on standard size business cards, must be added in |
394 | bold print and capital letters in typeface no smaller than the |
395 | typeface of the body of the text to all written advertisements |
396 | by a public adjuster: |
397 | "THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD |
398 | A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU |
399 | ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU |
400 | MAY DISREGARD THIS ADVERTISEMENT." |
401 |
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402 | (9) A public adjuster, a public adjuster apprentice, or |
403 | any person or entity acting on behalf of a public adjuster or |
404 | public adjuster apprentice may not give or offer to give a |
405 | monetary loan or advance to a client or prospective client. |
406 | (10) A public adjuster, public adjuster apprentice, or any |
407 | individual or entity acting on behalf of a public adjuster or |
408 | public adjuster apprentice may not give or offer to give, |
409 | directly or indirectly, any article of merchandise having a |
410 | value in excess of $25 to any individual for the purpose of |
411 | advertising or as an inducement to entering into a contract with |
412 | a public adjuster. |
413 | (11)(a) If a public adjuster enters into a contract with |
414 | an insured or claimant to reopen a claim or file a supplemental |
415 | claim that seeks additional payments for a claim that has been |
416 | previously paid in part or in full or settled by the insurer, |
417 | the public adjuster may not charge, agree to, or accept any |
418 | compensation, payment, commission, fee, or other thing of value |
419 | based on a previous settlement or previous claim payments by the |
420 | insurer for the same cause of loss. The charge, compensation, |
421 | payment, commission, fee, or other thing of value must be based |
422 | only on the claim payments or settlement obtained through the |
423 | work of the public adjuster after entering into the contract |
424 | with the insured or claimant. Compensation for the reopened or |
425 | supplemental claim may not exceed 20 percent of the reopened or |
426 | supplemental claim payment. The contracts described in this |
427 | paragraph are not subject to the limitations in paragraph (b). |
428 | (b) A public adjuster may not charge, agree to, or accept |
429 | any compensation, payment, commission, fee, or other thing of |
430 | value in excess of: |
431 | 1. Ten percent of the amount of insurance claim payments |
432 | made by the insurer for claims based on events that are the |
433 | subject of a declaration of a state of emergency by the |
434 | Governor. This provision applies to claims made during the year |
435 | after the declaration of emergency. After that year, the |
436 | limitations in subparagraph 2. apply. |
437 | 2. Twenty percent of the amount of insurance claim |
438 | payments made by the insurer for claims that are not based on |
439 | events that are the subject of a declaration of a state of |
440 | emergency by the Governor. |
441 | (12) Each public adjuster must shall provide to the |
442 | claimant or insured a written estimate of the loss to assist in |
443 | the submission of a proof of loss or any other claim for payment |
444 | of insurance proceeds. The public adjuster shall retain such |
445 | written estimate for at least 5 years and shall make the such |
446 | estimate available to the claimant or insured, the insurer, and |
447 | the department upon request. |
448 | (13) A public adjuster, public adjuster apprentice, or any |
449 | person acting on behalf of a public adjuster or apprentice may |
450 | not accept referrals of business from any person with whom the |
451 | public adjuster conducts business if there is any form or manner |
452 | of agreement to compensate the person, whether directly or |
453 | indirectly, for referring business to the public adjuster. A |
454 | public adjuster may not compensate any person, except for |
455 | another public adjuster, whether directly or indirectly, for the |
456 | principal purpose of referring business to the public adjuster. |
457 | (14) A company employee adjuster, independent adjuster, |
458 | attorney, investigator, or other persons acting on behalf of an |
459 | insurer that needs access to an insured or claimant or to the |
460 | insured property that is the subject of a claim must provide at |
461 | least 48 hours' notice to the insured or claimant, public |
462 | adjuster, or legal representative before scheduling a meeting |
463 | with the claimant or an onsite inspection of the insured |
464 | property. The insured or claimant may deny access to the |
465 | property if the notice has not been provided. The insured or |
466 | claimant may waive the 48-hour notice. |
467 | (15) A public adjuster must ensure prompt notice of |
468 | property loss claims submitted to an insurer by or through a |
469 | public adjuster or on which a public adjuster represents the |
470 | insured at the time the claim or notice of loss is submitted to |
471 | the insurer. The public adjuster must ensure that notice is |
472 | given to the insurer, the public adjuster's contract is provided |
473 | to the insurer, the property is available for inspection of the |
474 | loss or damage by the insurer, and the insurer is given an |
475 | opportunity to interview the insured directly about the loss and |
476 | claim. The insurer must be allowed to obtain necessary |
477 | information to investigate and respond to the claim. |
478 | (a) The insurer may not exclude the public adjuster from |
479 | its in-person meetings with the insured. The insurer shall meet |
480 | or communicate with the public adjuster in an effort to reach |
481 | agreement as to the scope of the covered loss under the |
482 | insurance policy. This section does not impair the terms and |
483 | conditions of the insurance policy in effect at the time the |
484 | claim is filed. |
485 | (b) A public adjuster may not restrict or prevent an |
486 | insurer, company employee adjuster, independent adjuster, |
487 | attorney, investigator, or other person acting on behalf of the |
488 | insurer from having reasonable access at reasonable times to an |
489 | insured or claimant or to the insured property that is the |
490 | subject of a claim. |
491 | (c) A public adjuster may not act or fail to reasonably |
492 | act in any manner that obstructs or prevents an insurer or |
493 | insurer's adjuster from timely conducting an inspection of any |
494 | part of the insured property for which there is a claim for loss |
495 | or damage. The public adjuster representing the insured may be |
496 | present for the insurer's inspection, but if the unavailability |
497 | of the public adjuster otherwise delays the insurer's timely |
498 | inspection of the property, the public adjuster or the insured |
499 | must allow the insurer to have access to the property without |
500 | the participation or presence of the public adjuster or insured |
501 | in order to facilitate the insurer's prompt inspection of the |
502 | loss or damage. |
503 | (16) A licensed contractor under part I of chapter 489, or |
504 | a subcontractor, may not adjust a claim on behalf of an insured |
505 | unless licensed and compliant as a public adjuster under this |
506 | chapter. However, the contractor may discuss or explain a bid |
507 | for construction or repair of covered property with the |
508 | residential property owner who has suffered loss or damage |
509 | covered by a property insurance policy, or the insurer of such |
510 | property, if the contractor is doing so for the usual and |
511 | customary fees applicable to the work to be performed as stated |
512 | in the contract between the contractor and the insured. |
513 | (17) The provisions of subsections (5)-(16) (5)-(13) apply |
514 | only to residential property insurance policies and condominium |
515 | unit owner policies as defined in s. 718.111(11). |
516 | Section 9. Effective January 1, 2012, section 626.8796, |
517 | Florida Statutes, is amended to read: |
518 | 626.8796 Public adjuster contracts; fraud statement.- |
519 | (1) All contracts for public adjuster services must be in |
520 | writing and must prominently display the following statement on |
521 | the contract: "Pursuant to s. 817.234, Florida Statutes, any |
522 | person who, with the intent to injure, defraud, or deceive an |
523 | any insurer or insured, prepares, presents, or causes to be |
524 | presented a proof of loss or estimate of cost or repair of |
525 | damaged property in support of a claim under an insurance policy |
526 | knowing that the proof of loss or estimate of claim or repairs |
527 | contains any false, incomplete, or misleading information |
528 | concerning any fact or thing material to the claim commits a |
529 | felony of the third degree, punishable as provided in s. |
530 | 775.082, s. 775.083, or s. 775.084, Florida Statutes." |
531 | (2) A public adjuster contract relating to a property and |
532 | casualty claim must contain the full name, permanent business |
533 | address, and license number of the public adjuster; the full |
534 | name of the public adjusting firm; and the insured's full name |
535 | and street address, together with a brief description of the |
536 | loss. The contract must state the percentage of compensation for |
537 | the public adjuster's services; the type of claim, including an |
538 | emergency claim, nonemergency claim, or supplemental claim; the |
539 | signatures of the public adjuster and all named insureds; and |
540 | the signature date. If all of the named insureds signatures are |
541 | not available, the public adjuster must submit an affidavit |
542 | signed by the available named insureds attesting that they have |
543 | authority to enter into the contract and settle all claim issues |
544 | on behalf of the named insureds. An unaltered copy of the |
545 | executed contract must be remitted to the insurer within 30 days |
546 | after execution. |
547 | Section 10. Effective June 1, 2011, section 626.70132, |
548 | Florida Statutes, is created to read: |
549 | 626.70132 Notice of windstorm or hurricane claim.-A claim, |
550 | supplemental claim, or reopened claim under an insurance policy |
551 | that provides property insurance, as defined in s. 624.604, for |
552 | loss or damage caused by the peril of windstorm or hurricane is |
553 | barred unless notice of the claim, supplemental claim, or |
554 | reopened claim was given to the insurer in accordance with the |
555 | terms of the policy within 3 years after the hurricane first |
556 | made landfall or the windstorm caused the covered damage. For |
557 | purposes of this section, the term "supplemental claim" or |
558 | "reopened claim" means any additional claim for recovery from |
559 | the insurer for losses from the same hurricane or windstorm |
560 | which the insurer has previously adjusted pursuant to the |
561 | initial claim. This section does not affect any applicable |
562 | limitation on civil actions provided in s. 95.11 for claims, |
563 | supplemental claims, or reopened claims timely filed under this |
564 | section. |
565 | Section 11. Subsection (4) of section 627.0613, Florida |
566 | Statutes, is repealed. |
567 | Section 12. Section 627.062, Florida Statutes, is amended |
568 | to read: |
569 | 627.062 Rate standards.- |
570 | (1) The rates for all classes of insurance to which the |
571 | provisions of this part are applicable may shall not be |
572 | excessive, inadequate, or unfairly discriminatory. |
573 | (2) As to all such classes of insurance: |
574 | (a) Insurers or rating organizations shall establish and |
575 | use rates, rating schedules, or rating manuals that to allow the |
576 | insurer a reasonable rate of return on the such classes of |
577 | insurance written in this state. A copy of rates, rating |
578 | schedules, rating manuals, premium credits or discount |
579 | schedules, and surcharge schedules, and changes thereto, must |
580 | shall be filed with the office under one of the following |
581 | procedures except as provided in subparagraph 3.: |
582 | 1. If the filing is made at least 90 days before the |
583 | proposed effective date and the filing is not implemented during |
584 | the office's review of the filing and any proceeding and |
585 | judicial review, then such filing is shall be considered a "file |
586 | and use" filing. In such case, the office shall finalize its |
587 | review by issuance of a notice of intent to approve or a notice |
588 | of intent to disapprove within 90 days after receipt of the |
589 | filing. The notice of intent to approve and the notice of intent |
590 | to disapprove constitute agency action for purposes of the |
591 | Administrative Procedure Act. Requests for supporting |
592 | information, requests for mathematical or mechanical |
593 | corrections, or notification to the insurer by the office of its |
594 | preliminary findings does shall not toll the 90-day period |
595 | during any such proceedings and subsequent judicial review. The |
596 | rate shall be deemed approved if the office does not issue a |
597 | notice of intent to approve or a notice of intent to disapprove |
598 | within 90 days after receipt of the filing. |
599 | 2. If the filing is not made in accordance with the |
600 | provisions of subparagraph 1., such filing must shall be made as |
601 | soon as practicable, but within no later than 30 days after the |
602 | effective date, and is shall be considered a "use and file" |
603 | filing. An insurer making a "use and file" filing is potentially |
604 | subject to an order by the office to return to policyholders |
605 | those portions of rates found to be excessive, as provided in |
606 | paragraph (h). |
607 | 3. For all property insurance filings made or submitted |
608 | after January 25, 2007, but before May 1, 2012 December 31, |
609 | 2010, an insurer seeking a rate that is greater than the rate |
610 | most recently approved by the office shall make a "file and use" |
611 | filing. For purposes of this subparagraph, motor vehicle |
612 | collision and comprehensive coverages are not considered to be |
613 | property coverages. |
614 | (b) Upon receiving a rate filing, the office shall review |
615 | the rate filing to determine if a rate is excessive, inadequate, |
616 | or unfairly discriminatory. In making that determination, the |
617 | office shall, in accordance with generally accepted and |
618 | reasonable actuarial techniques, consider the following factors: |
619 | 1. Past and prospective loss experience within and without |
620 | this state. |
621 | 2. Past and prospective expenses. |
622 | 3. The degree of competition among insurers for the risk |
623 | insured. |
624 | 4. Investment income reasonably expected by the insurer, |
625 | consistent with the insurer's investment practices, from |
626 | investable premiums anticipated in the filing, plus any other |
627 | expected income from currently invested assets representing the |
628 | amount expected on unearned premium reserves and loss reserves. |
629 | The commission may adopt rules using reasonable techniques of |
630 | actuarial science and economics to specify the manner in which |
631 | insurers shall calculate investment income attributable to such |
632 | classes of insurance written in this state and the manner in |
633 | which such investment income is shall be used to calculate |
634 | insurance rates. Such manner must shall contemplate allowances |
635 | for an underwriting profit factor and full consideration of |
636 | investment income which produce a reasonable rate of return; |
637 | however, investment income from invested surplus may not be |
638 | considered. |
639 | 5. The reasonableness of the judgment reflected in the |
640 | filing. |
641 | 6. Dividends, savings, or unabsorbed premium deposits |
642 | allowed or returned to Florida policyholders, members, or |
643 | subscribers. |
644 | 7. The adequacy of loss reserves. |
645 | 8. The cost of reinsurance. The office may shall not |
646 | disapprove a rate as excessive solely due to the insurer having |
647 | obtained catastrophic reinsurance to cover the insurer's |
648 | estimated 250-year probable maximum loss or any lower level of |
649 | loss. |
650 | 9. Trend factors, including trends in actual losses per |
651 | insured unit for the insurer making the filing. |
652 | 10. Conflagration and catastrophe hazards, if applicable. |
653 | 11. Projected hurricane losses, if applicable, which must |
654 | be estimated using a model or method found to be acceptable or |
655 | reliable by the Florida Commission on Hurricane Loss Projection |
656 | Methodology, and as further provided in s. 627.0628. |
657 | 12. A reasonable margin for underwriting profit and |
658 | contingencies. |
659 | 13. The cost of medical services, if applicable. |
660 | 14. Other relevant factors that affect which impact upon |
661 | the frequency or severity of claims or upon expenses. |
662 | (c) In the case of fire insurance rates, consideration |
663 | must shall be given to the availability of water supplies and |
664 | the experience of the fire insurance business during a period of |
665 | not less than the most recent 5-year period for which such |
666 | experience is available. |
667 | (d) If conflagration or catastrophe hazards are considered |
668 | given consideration by an insurer in its rates or rating plan, |
669 | including surcharges and discounts, the insurer shall establish |
670 | a reserve for that portion of the premium allocated to such |
671 | hazard and shall maintain the premium in a catastrophe reserve. |
672 | Any Removal of such premiums from the reserve for purposes other |
673 | than paying claims associated with a catastrophe or purchasing |
674 | reinsurance for catastrophes must be approved by shall be |
675 | subject to approval of the office. Any ceding commission |
676 | received by an insurer purchasing reinsurance for catastrophes |
677 | must shall be placed in the catastrophe reserve. |
678 | (e) After consideration of the rate factors provided in |
679 | paragraphs (b), (c), and (d), the office may find a rate may be |
680 | found by the office to be excessive, inadequate, or unfairly |
681 | discriminatory based upon the following standards: |
682 | 1. Rates shall be deemed excessive if they are likely to |
683 | produce a profit from Florida business which that is |
684 | unreasonably high in relation to the risk involved in the class |
685 | of business or if expenses are unreasonably high in relation to |
686 | services rendered. |
687 | 2. Rates shall be deemed excessive if, among other things, |
688 | the rate structure established by a stock insurance company |
689 | provides for replenishment of surpluses from premiums, if when |
690 | the replenishment is attributable to investment losses. |
691 | 3. Rates shall be deemed inadequate if they are clearly |
692 | insufficient, together with the investment income attributable |
693 | to them, to sustain projected losses and expenses in the class |
694 | of business to which they apply. |
695 | 4. A rating plan, including discounts, credits, or |
696 | surcharges, shall be deemed unfairly discriminatory if it fails |
697 | to clearly and equitably reflect consideration of the |
698 | policyholder's participation in a risk management program |
699 | adopted pursuant to s. 627.0625. |
700 | 5. A rate shall be deemed inadequate as to the premium |
701 | charged to a risk or group of risks if discounts or credits are |
702 | allowed which exceed a reasonable reflection of expense savings |
703 | and reasonably expected loss experience from the risk or group |
704 | of risks. |
705 | 6. A rate shall be deemed unfairly discriminatory as to a |
706 | risk or group of risks if the application of premium discounts, |
707 | credits, or surcharges among such risks does not bear a |
708 | reasonable relationship to the expected loss and expense |
709 | experience among the various risks. |
710 | (f) In reviewing a rate filing, the office may require the |
711 | insurer to provide, at the insurer's expense, all information |
712 | necessary to evaluate the condition of the company and the |
713 | reasonableness of the filing according to the criteria |
714 | enumerated in this section. |
715 | (g) The office may at any time review a rate, rating |
716 | schedule, rating manual, or rate change; the pertinent records |
717 | of the insurer; and market conditions. If the office finds on a |
718 | preliminary basis that a rate may be excessive, inadequate, or |
719 | unfairly discriminatory, the office shall initiate proceedings |
720 | to disapprove the rate and shall so notify the insurer. However, |
721 | the office may not disapprove as excessive any rate for which it |
722 | has given final approval or which has been deemed approved for a |
723 | period of 1 year after the effective date of the filing unless |
724 | the office finds that a material misrepresentation or material |
725 | error was made by the insurer or was contained in the filing. |
726 | Upon being so notified, the insurer or rating organization |
727 | shall, within 60 days, file with the office all information that |
728 | which, in the belief of the insurer or organization, proves the |
729 | reasonableness, adequacy, and fairness of the rate or rate |
730 | change. The office shall issue a notice of intent to approve or |
731 | a notice of intent to disapprove pursuant to the procedures of |
732 | paragraph (a) within 90 days after receipt of the insurer's |
733 | initial response. In such instances and in any administrative |
734 | proceeding relating to the legality of the rate, the insurer or |
735 | rating organization shall carry the burden of proof by a |
736 | preponderance of the evidence to show that the rate is not |
737 | excessive, inadequate, or unfairly discriminatory. After the |
738 | office notifies an insurer that a rate may be excessive, |
739 | inadequate, or unfairly discriminatory, unless the office |
740 | withdraws the notification, the insurer may shall not alter the |
741 | rate except to conform to with the office's notice until the |
742 | earlier of 120 days after the date the notification was provided |
743 | or 180 days after the date of implementing the implementation of |
744 | the rate. The office may, subject to chapter 120, may disapprove |
745 | without the 60-day notification any rate increase filed by an |
746 | insurer within the prohibited time period or during the time |
747 | that the legality of the increased rate is being contested. |
748 | (h) If In the event the office finds that a rate or rate |
749 | change is excessive, inadequate, or unfairly discriminatory, the |
750 | office shall issue an order of disapproval specifying that a new |
751 | rate or rate schedule, which responds to the findings of the |
752 | office, be filed by the insurer. The office shall further order, |
753 | for any "use and file" filing made in accordance with |
754 | subparagraph (a)2., that premiums charged each policyholder |
755 | constituting the portion of the rate above that which was |
756 | actuarially justified be returned to the such policyholder in |
757 | the form of a credit or refund. If the office finds that an |
758 | insurer's rate or rate change is inadequate, the new rate or |
759 | rate schedule filed with the office in response to such a |
760 | finding is shall be applicable only to new or renewal business |
761 | of the insurer written on or after the effective date of the |
762 | responsive filing. |
763 | (i) Except as otherwise specifically provided in this |
764 | chapter, for property and casualty insurance the office may |
765 | shall not directly or indirectly: |
766 | 1. Prohibit any insurer, including any residual market |
767 | plan or joint underwriting association, from paying acquisition |
768 | costs based on the full amount of premium, as defined in s. |
769 | 627.403, applicable to any policy, or prohibit any such insurer |
770 | from including the full amount of acquisition costs in a rate |
771 | filing; or. |
772 | 2. Impede, abridge, or otherwise compromise an insurer's |
773 | right to acquire policyholders, advertise, or appoint agents, |
774 | including the calculation, manner, or amount of such agent |
775 | commissions, if any. |
776 | (j) With respect to residential property insurance rate |
777 | filings, the rate filing must account for mitigation measures |
778 | undertaken by policyholders to reduce hurricane losses. |
779 | (k)1. A residential property An insurer may make a |
780 | separate filing limited solely to an adjustment of its rates for |
781 | reinsurance, the cost of financing products used as a |
782 | replacement for reinsurance, or financing costs incurred in the |
783 | purchase of reinsurance, or financing products to replace or |
784 | finance the payment of the amount covered by the Temporary |
785 | Increase in Coverage Limits (TICL) portion of the Florida |
786 | Hurricane Catastrophe Fund including replacement reinsurance for |
787 | the TICL reductions made pursuant to s. 215.555(17)(e); the |
788 | actual cost paid due to the application of the TICL premium |
789 | factor pursuant to s. 215.555(17)(f); and the actual cost paid |
790 | due to the application of the cash build-up factor pursuant to |
791 | s. 215.555(5)(b) if the insurer: |
792 | a. Elects to purchase financing products such as a |
793 | liquidity instrument or line of credit, in which case the cost |
794 | included in the filing for the liquidity instrument or line of |
795 | credit may not result in a premium increase exceeding 3 percent |
796 | for any individual policyholder. All costs contained in the |
797 | filing may not result in an overall premium increase of more |
798 | than 15 10 percent for any individual policyholder. |
799 | b. Includes in the filing a copy of all of its |
800 | reinsurance, liquidity instrument, or line of credit contracts; |
801 | proof of the billing or payment for the contracts; and the |
802 | calculation upon which the proposed rate change is based |
803 | demonstrating demonstrates that the costs meet the criteria of |
804 | this section and are not loaded for expenses or profit for the |
805 | insurer making the filing. |
806 | c. Includes no other changes to its rates in the filing. |
807 | d. Has not implemented a rate increase within the 6 months |
808 | immediately preceding the filing. |
809 | e. Does not file for a rate increase under any other |
810 | paragraph within 6 months after making a filing under this |
811 | paragraph. |
812 | 2.f. An insurer that purchases reinsurance or financing |
813 | products from an affiliated company may make a separate filing |
814 | in compliance with this paragraph does so only if the costs for |
815 | such reinsurance or financing products are charged at or below |
816 | charges made for comparable coverage by nonaffiliated reinsurers |
817 | or financial entities making such coverage or financing products |
818 | available in this state. |
819 | 3.2. An insurer may only make only one filing per in any |
820 | 12-month period under this paragraph. |
821 | 4.3. An insurer that elects to implement a rate change |
822 | under this paragraph must file its rate filing with the office |
823 | at least 45 days before the effective date of the rate change. |
824 | After an insurer submits a complete filing that meets all of the |
825 | requirements of this paragraph, the office has 45 days after the |
826 | date of the filing to review the rate filing and determine if |
827 | the rate is excessive, inadequate, or unfairly discriminatory. |
828 |
|
829 | The provisions of this subsection do shall not apply to workers' |
830 | compensation, and employer's liability insurance, and to motor |
831 | vehicle insurance. |
832 | (3)(a) For individual risks that are not rated in |
833 | accordance with the insurer's rates, rating schedules, rating |
834 | manuals, and underwriting rules filed with the office and that |
835 | which have been submitted to the insurer for individual rating, |
836 | the insurer must maintain documentation on each risk subject to |
837 | individual risk rating. The documentation must identify the |
838 | named insured and specify the characteristics and classification |
839 | of the risk supporting the reason for the risk being |
840 | individually risk rated, including any modifications to existing |
841 | approved forms to be used on the risk. The insurer must maintain |
842 | these records for a period of at least 5 years after the |
843 | effective date of the policy. |
844 | (b) Individual risk rates and modifications to existing |
845 | approved forms are not subject to this part or part II, except |
846 | for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404, |
847 | 627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132, |
848 | 627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426, |
849 | 627.4265, 627.427, and 627.428, but are subject to all other |
850 | applicable provisions of this code and rules adopted thereunder. |
851 | (c) This subsection does not apply to private passenger |
852 | motor vehicle insurance. |
853 | (d)1. The following categories or kinds of insurance and |
854 | types of commercial lines risks are not subject to paragraph |
855 | (2)(a) or paragraph (2)(f): |
856 | a. Excess or umbrella. |
857 | b. Surety and fidelity. |
858 | c. Boiler and machinery and leakage and fire extinguishing |
859 | equipment. |
860 | d. Errors and omissions. |
861 | e. Directors and officers, employment practices, and |
862 | management liability. |
863 | f. Intellectual property and patent infringement |
864 | liability. |
865 | g. Advertising injury and Internet liability insurance. |
866 | h. Property risks rated under a highly protected risks |
867 | rating plan. |
868 | i. Any other commercial lines categories or kinds of |
869 | insurance or types of commercial lines risks that the office |
870 | determines should not be subject to paragraph (2)(a) or |
871 | paragraph (2)(f) because of the existence of a competitive |
872 | market for such insurance, similarity of such insurance to other |
873 | categories or kinds of insurance not subject to paragraph (2)(a) |
874 | or paragraph (2)(f), or to improve the general operational |
875 | efficiency of the office. |
876 | 2. Insurers or rating organizations shall establish and |
877 | use rates, rating schedules, or rating manuals to allow the |
878 | insurer a reasonable rate of return on insurance and risks |
879 | described in subparagraph 1. which are written in this state. |
880 | 3. An insurer must notify the office of any changes to |
881 | rates for insurance and risks described in subparagraph 1. |
882 | within no later than 30 days after the effective date of the |
883 | change. The notice must include the name of the insurer, the |
884 | type or kind of insurance subject to rate change, total premium |
885 | written during the immediately preceding year by the insurer for |
886 | the type or kind of insurance subject to the rate change, and |
887 | the average statewide percentage change in rates. Underwriting |
888 | files, premiums, losses, and expense statistics with regard to |
889 | such insurance and risks described in subparagraph 1. written by |
890 | an insurer must shall be maintained by the insurer and subject |
891 | to examination by the office. Upon examination, the office |
892 | shall, in accordance with generally accepted and reasonable |
893 | actuarial techniques, shall consider the rate factors in |
894 | paragraphs (2)(b), (c), and (d) and the standards in paragraph |
895 | (2)(e) to determine if the rate is excessive, inadequate, or |
896 | unfairly discriminatory. |
897 | 4. A rating organization must notify the office of any |
898 | changes to loss cost for insurance and risks described in |
899 | subparagraph 1. within no later than 30 days after the effective |
900 | date of the change. The notice must include the name of the |
901 | rating organization, the type or kind of insurance subject to a |
902 | loss cost change, loss costs during the immediately preceding |
903 | year for the type or kind of insurance subject to the loss cost |
904 | change, and the average statewide percentage change in loss |
905 | cost. Loss and exposure statistics with regard to risks |
906 | applicable to loss costs for a rating organization not subject |
907 | to paragraph (2)(a) or paragraph (2)(f) must shall be maintained |
908 | by the rating organization and are subject to examination by the |
909 | office. Upon examination, the office shall, in accordance with |
910 | generally accepted and reasonable actuarial techniques, shall |
911 | consider the rate factors in paragraphs (2)(b)-(d) and the |
912 | standards in paragraph (2)(e) to determine if the rate is |
913 | excessive, inadequate, or unfairly discriminatory. |
914 | 5. In reviewing a rate, the office may require the insurer |
915 | to provide, at the insurer's expense, all information necessary |
916 | to evaluate the condition of the company and the reasonableness |
917 | of the rate according to the applicable criteria described in |
918 | this section. |
919 | (4) The establishment of any rate, rating classification, |
920 | rating plan or schedule, or variation thereof in violation of |
921 | part IX of chapter 626 is also in violation of this section. In |
922 | order to enhance the ability of consumers to compare premiums |
923 | and to increase the accuracy and usefulness of rate-comparison |
924 | information provided by the office to the public, the office |
925 | shall develop a proposed standard rating territory plan to be |
926 | used by all authorized property and casualty insurers for |
927 | residential property insurance. In adopting the proposed plan, |
928 | the office may consider geographical characteristics relevant to |
929 | risk, county lines, major roadways, existing rating territories |
930 | used by a significant segment of the market, and other relevant |
931 | factors. Such plan shall be submitted to the President of the |
932 | Senate and the Speaker of the House of Representatives by |
933 | January 15, 2006. The plan may not be implemented unless |
934 | authorized by further act of the Legislature. |
935 | (5) With respect to a rate filing involving coverage of |
936 | the type for which the insurer is required to pay a |
937 | reimbursement premium to the Florida Hurricane Catastrophe Fund, |
938 | the insurer may fully recoup in its property insurance premiums |
939 | any reimbursement premiums paid to the Florida Hurricane |
940 | Catastrophe fund, together with reasonable costs of other |
941 | reinsurance; however, but except as otherwise provided in this |
942 | section, the insurer may not recoup reinsurance costs that |
943 | duplicate coverage provided by the Florida Hurricane Catastrophe |
944 | fund. An insurer may not recoup more than 1 year of |
945 | reimbursement premium at a time. Any under-recoupment from the |
946 | prior year may be added to the following year's reimbursement |
947 | premium, and any over-recoupment must shall be subtracted from |
948 | the following year's reimbursement premium. |
949 | (6)(a) If an insurer requests an administrative hearing |
950 | pursuant to s. 120.57 related to a rate filing under this |
951 | section, the director of the Division of Administrative Hearings |
952 | shall expedite the hearing and assign an administrative law |
953 | judge who shall commence the hearing within 30 days after the |
954 | receipt of the formal request and shall enter a recommended |
955 | order within 30 days after the hearing or within 30 days after |
956 | receipt of the hearing transcript by the administrative law |
957 | judge, whichever is later. Each party shall have be allowed 10 |
958 | days in which to submit written exceptions to the recommended |
959 | order. The office shall enter a final order within 30 days after |
960 | the entry of the recommended order. The provisions of this |
961 | paragraph may be waived upon stipulation of all parties. |
962 | (b) Upon entry of a final order, the insurer may request a |
963 | expedited appellate review pursuant to the Florida Rules of |
964 | Appellate Procedure. It is the intent of the Legislature that |
965 | the First District Court of Appeal grant an insurer's request |
966 | for an expedited appellate review. |
967 | (7)(a) The provisions of this subsection apply only with |
968 | respect to rates for medical malpractice insurance and shall |
969 | control to the extent of any conflict with other provisions of |
970 | this section. |
971 | (a)(b) Any portion of a judgment entered or settlement |
972 | paid as a result of a statutory or common-law bad faith action |
973 | and any portion of a judgment entered which awards punitive |
974 | damages against an insurer may not be included in the insurer's |
975 | rate base, and shall not be used to justify a rate or rate |
976 | change. Any common-law bad faith action identified as such, any |
977 | portion of a settlement entered as a result of a statutory or |
978 | common-law action, or any portion of a settlement wherein an |
979 | insurer agrees to pay specific punitive damages may not be used |
980 | to justify a rate or rate change. The portion of the taxable |
981 | costs and attorney's fees which is identified as being related |
982 | to the bad faith and punitive damages in these judgments and |
983 | settlements may not be included in the insurer's rate base and |
984 | used may not be utilized to justify a rate or rate change. |
985 | (b)(c) Upon reviewing a rate filing and determining |
986 | whether the rate is excessive, inadequate, or unfairly |
987 | discriminatory, the office shall consider, in accordance with |
988 | generally accepted and reasonable actuarial techniques, past and |
989 | present prospective loss experience, either using loss |
990 | experience solely for this state or giving greater credibility |
991 | to this state's loss data after applying actuarially sound |
992 | methods of assigning credibility to such data. |
993 | (c)(d) Rates shall be deemed excessive if, among other |
994 | standards established by this section, the rate structure |
995 | provides for replenishment of reserves or surpluses from |
996 | premiums when the replenishment is attributable to investment |
997 | losses. |
998 | (d)(e) The insurer must apply a discount or surcharge |
999 | based on the health care provider's loss experience or shall |
1000 | establish an alternative method giving due consideration to the |
1001 | provider's loss experience. The insurer must include in the |
1002 | filing a copy of the surcharge or discount schedule or a |
1003 | description of the alternative method used, and must provide a |
1004 | copy of such schedule or description, as approved by the office, |
1005 | to policyholders at the time of renewal and to prospective |
1006 | policyholders at the time of application for coverage. |
1007 | (e)(f) Each medical malpractice insurer must make a rate |
1008 | filing under this section, sworn to by at least two executive |
1009 | officers of the insurer, at least once each calendar year. |
1010 | (8)(a)1. No later than 60 days after the effective date of |
1011 | medical malpractice legislation enacted during the 2003 Special |
1012 | Session D of the Florida Legislature, the office shall calculate |
1013 | a presumed factor that reflects the impact that the changes |
1014 | contained in such legislation will have on rates for medical |
1015 | malpractice insurance and shall issue a notice informing all |
1016 | insurers writing medical malpractice coverage of such presumed |
1017 | factor. In determining the presumed factor, the office shall use |
1018 | generally accepted actuarial techniques and standards provided |
1019 | in this section in determining the expected impact on losses, |
1020 | expenses, and investment income of the insurer. To the extent |
1021 | that the operation of a provision of medical malpractice |
1022 | legislation enacted during the 2003 Special Session D of the |
1023 | Florida Legislature is stayed pending a constitutional |
1024 | challenge, the impact of that provision shall not be included in |
1025 | the calculation of a presumed factor under this subparagraph. |
1026 | 2. No later than 60 days after the office issues its |
1027 | notice of the presumed rate change factor under subparagraph 1., |
1028 | each insurer writing medical malpractice coverage in this state |
1029 | shall submit to the office a rate filing for medical malpractice |
1030 | insurance, which will take effect no later than January 1, 2004, |
1031 | and apply retroactively to policies issued or renewed on or |
1032 | after the effective date of medical malpractice legislation |
1033 | enacted during the 2003 Special Session D of the Florida |
1034 | Legislature. Except as authorized under paragraph (b), the |
1035 | filing shall reflect an overall rate reduction at least as great |
1036 | as the presumed factor determined under subparagraph 1. With |
1037 | respect to policies issued on or after the effective date of |
1038 | such legislation and prior to the effective date of the rate |
1039 | filing required by this subsection, the office shall order the |
1040 | insurer to make a refund of the amount that was charged in |
1041 | excess of the rate that is approved. |
1042 | (b) Any insurer or rating organization that contends that |
1043 | the rate provided for in paragraph (a) is excessive, inadequate, |
1044 | or unfairly discriminatory shall separately state in its filing |
1045 | the rate it contends is appropriate and shall state with |
1046 | specificity the factors or data that it contends should be |
1047 | considered in order to produce such appropriate rate. The |
1048 | insurer or rating organization shall be permitted to use all of |
1049 | the generally accepted actuarial techniques provided in this |
1050 | section in making any filing pursuant to this subsection. The |
1051 | office shall review each such exception and approve or |
1052 | disapprove it prior to use. It shall be the insurer's burden to |
1053 | actuarially justify any deviations from the rates required to be |
1054 | filed under paragraph (a). The insurer making a filing under |
1055 | this paragraph shall include in the filing the expected impact |
1056 | of medical malpractice legislation enacted during the 2003 |
1057 | Special Session D of the Florida Legislature on losses, |
1058 | expenses, and rates. |
1059 | (c) If any provision of medical malpractice legislation |
1060 | enacted during the 2003 Special Session D of the Florida |
1061 | Legislature is held invalid by a court of competent |
1062 | jurisdiction, the office shall permit an adjustment of all |
1063 | medical malpractice rates filed under this section to reflect |
1064 | the impact of such holding on such rates so as to ensure that |
1065 | the rates are not excessive, inadequate, or unfairly |
1066 | discriminatory. |
1067 | (d) Rates approved on or before July 1, 2003, for medical |
1068 | malpractice insurance shall remain in effect until the effective |
1069 | date of a new rate filing approved under this subsection. |
1070 | (e) The calculation and notice by the office of the |
1071 | presumed factor pursuant to paragraph (a) is not an order or |
1072 | rule that is subject to chapter 120. If the office enters into a |
1073 | contract with an independent consultant to assist the office in |
1074 | calculating the presumed factor, such contract shall not be |
1075 | subject to the competitive solicitation requirements of s. |
1076 | 287.057. |
1077 | (8)(9)(a) The chief executive officer or chief financial |
1078 | officer of a property insurer and the chief actuary of a |
1079 | property insurer must certify under oath and subject to the |
1080 | penalty of perjury, on a form approved by the commission, the |
1081 | following information, which must accompany a rate filing: |
1082 | 1. The signing officer and actuary have reviewed the rate |
1083 | filing; |
1084 | 2. Based on the signing officer's and actuary's knowledge, |
1085 | the rate filing does not contain any untrue statement of a |
1086 | material fact or omit to state a material fact necessary in |
1087 | order to make the statements made, in light of the circumstances |
1088 | under which such statements were made, not misleading; |
1089 | 3. Based on the signing officer's and actuary's knowledge, |
1090 | the information and other factors described in paragraph (2)(b), |
1091 | including, but not limited to, investment income, fairly present |
1092 | in all material respects the basis of the rate filing for the |
1093 | periods presented in the filing; and |
1094 | 4. Based on the signing officer's and actuary's knowledge, |
1095 | the rate filing reflects all premium savings that are reasonably |
1096 | expected to result from legislative enactments and are in |
1097 | accordance with generally accepted and reasonable actuarial |
1098 | techniques. |
1099 | (b) A signing officer or actuary who knowingly makes |
1100 | making a false certification under this subsection commits a |
1101 | violation of s. 626.9541(1)(e) and is subject to the penalties |
1102 | under s. 626.9521. |
1103 | (c) Failure to provide such certification by the officer |
1104 | and actuary shall result in the rate filing being disapproved |
1105 | without prejudice to be refiled. |
1106 | (d) The certification made pursuant to paragraph (a) is |
1107 | not rendered false if, after making the subject rate filing, the |
1108 | insurer provides the office with additional or supplementary |
1109 | information pursuant to a formal or informal request from the |
1110 | office. However, the actuary who is primarily responsible for |
1111 | preparing and submitting such information must certify the |
1112 | information in accordance with the certification required under |
1113 | paragraph (a) and the penalties in paragraph (b), except that |
1114 | the chief executive officer, chief financial officer, or chief |
1115 | actuary need not certify the additional or supplementary |
1116 | information. |
1117 | (e)(d) The commission may adopt rules and forms pursuant |
1118 | to ss. 120.536(1) and 120.54 to administer this subsection. |
1119 | (9)(10) The burden is on the office to establish that |
1120 | rates are excessive for personal lines residential coverage with |
1121 | a dwelling replacement cost of $1 million or more or for a |
1122 | single condominium unit with a combined dwelling and contents |
1123 | replacement cost of $1 million or more. Upon request of the |
1124 | office, the insurer shall provide to the office such loss and |
1125 | expense information as the office reasonably needs to meet this |
1126 | burden. |
1127 | (10)(11) Any interest paid pursuant to s. 627.70131(5) may |
1128 | not be included in the insurer's rate base and may not be used |
1129 | to justify a rate or rate change. |
1130 | Section 13. Paragraph (b) of subsection (3) of section |
1131 | 627.06281, Florida Statutes, is amended to read: |
1132 | 627.06281 Public hurricane loss projection model; |
1133 | reporting of data by insurers.- |
1134 | (3) |
1135 | (b) The fees charged for private sector access and use of |
1136 | the model shall be the reasonable costs associated with the |
1137 | operation and maintenance of the model by the office. Such fees |
1138 | do not apply to access and use of the model by the office. By |
1139 | January 1, 2009, The office shall establish by rule a fee |
1140 | schedule for access to and the use of the model. The fee |
1141 | schedule must be reasonably calculated to cover only the actual |
1142 | costs of providing access to and the use of the model. |
1143 | Section 14. Subsections (1) and (5) of section 627.0629, |
1144 | Florida Statutes, are amended to read: |
1145 | 627.0629 Residential property insurance; rate filings.- |
1146 | (1)(a) It is the intent of the Legislature that insurers |
1147 | must provide savings to consumers who install or implement |
1148 | windstorm damage mitigation techniques, alterations, or |
1149 | solutions to their properties to prevent windstorm losses. A |
1150 | rate filing for residential property insurance must include |
1151 | actuarially reasonable discounts, credits, or other rate |
1152 | differentials, or appropriate reductions in deductibles, for |
1153 | properties on which fixtures or construction techniques |
1154 | demonstrated to reduce the amount of loss in a windstorm have |
1155 | been installed or implemented. The fixtures or construction |
1156 | techniques must shall include, but are not be limited to, |
1157 | fixtures or construction techniques that which enhance roof |
1158 | strength, roof covering performance, roof-to-wall strength, |
1159 | wall-to-floor-to-foundation strength, opening protection, and |
1160 | window, door, and skylight strength. Credits, discounts, or |
1161 | other rate differentials, or appropriate reductions in |
1162 | deductibles, for fixtures and construction techniques that which |
1163 | meet the minimum requirements of the Florida Building Code must |
1164 | be included in the rate filing. All insurance companies must |
1165 | make a rate filing which includes the credits, discounts, or |
1166 | other rate differentials or reductions in deductibles by |
1167 | February 28, 2003. By July 1, 2007, the office shall reevaluate |
1168 | the discounts, credits, other rate differentials, and |
1169 | appropriate reductions in deductibles for fixtures and |
1170 | construction techniques that meet the minimum requirements of |
1171 | the Florida Building Code, based upon actual experience or any |
1172 | other loss relativity studies available to the office. The |
1173 | office shall determine the discounts, credits, other rate |
1174 | differentials, and appropriate reductions in deductibles that |
1175 | reflect the full actuarial value of such revaluation, which may |
1176 | be used by insurers in rate filings. |
1177 | (b) By February 1, 2011, the Office of Insurance |
1178 | Regulation, in consultation with the Department of Financial |
1179 | Services and the Department of Community Affairs, shall develop |
1180 | and make publicly available a proposed method for insurers to |
1181 | establish discounts, credits, or other rate differentials for |
1182 | hurricane mitigation measures which directly correlate to the |
1183 | numerical rating assigned to a structure pursuant to the uniform |
1184 | home grading scale adopted by the Financial Services Commission |
1185 | pursuant to s. 215.55865, including any proposed changes to the |
1186 | uniform home grading scale. By October 1, 2011, the commission |
1187 | shall adopt rules requiring insurers to make rate filings for |
1188 | residential property insurance which revise insurers' discounts, |
1189 | credits, or other rate differentials for hurricane mitigation |
1190 | measures so that such rate differentials correlate directly to |
1191 | the uniform home grading scale. The rules may include such |
1192 | changes to the uniform home grading scale as the commission |
1193 | determines are necessary, and may specify the minimum required |
1194 | discounts, credits, or other rate differentials. Such rate |
1195 | differentials must be consistent with generally accepted |
1196 | actuarial principles and wind-loss mitigation studies. The rules |
1197 | shall allow a period of at least 2 years after the effective |
1198 | date of the revised mitigation discounts, credits, or other rate |
1199 | differentials for a property owner to obtain an inspection or |
1200 | otherwise qualify for the revised credit, during which time the |
1201 | insurer shall continue to apply the mitigation credit that was |
1202 | applied immediately prior to the effective date of the revised |
1203 | credit. Discounts, credits, and other rate differentials |
1204 | established for rate filings under this paragraph shall |
1205 | supersede, after adoption, the discounts, credits, and other |
1206 | rate differentials included in rate filings under paragraph (a). |
1207 | (5) In order to provide an appropriate transition period, |
1208 | an insurer may, in its sole discretion, implement an approved |
1209 | rate filing for residential property insurance over a period of |
1210 | years. Such An insurer electing to phase in its rate filing must |
1211 | provide an informational notice to the office setting out its |
1212 | schedule for implementation of the phased-in rate filing. The An |
1213 | insurer may include in its rate the actual cost of private |
1214 | market reinsurance that corresponds to available coverage of the |
1215 | Temporary Increase in Coverage Limits, TICL, from the Florida |
1216 | Hurricane Catastrophe Fund. The insurer may also include the |
1217 | cost of reinsurance to replace the TICL reduction implemented |
1218 | pursuant to s. 215.555(17)(d)9. However, this cost for |
1219 | reinsurance may not include any expense or profit load or result |
1220 | in a total annual base rate increase in excess of 10 percent. |
1221 | Section 15. Paragraphs (a), (b), (c), (d), (n), (v), and |
1222 | (y) of subsection (6) of section 627.351, Florida Statutes, are |
1223 | amended to read: |
1224 | 627.351 Insurance risk apportionment plans.- |
1225 | (6) CITIZENS PROPERTY INSURANCE CORPORATION.- |
1226 | (a)1. It is The public purpose of this subsection is to |
1227 | ensure that there is the existence of an orderly market for |
1228 | property insurance for residents Floridians and Florida |
1229 | businesses of this state. |
1230 | 1. The Legislature finds that private insurers are |
1231 | unwilling or unable to provide affordable property insurance |
1232 | coverage in this state to the extent sought and needed. The |
1233 | absence of affordable property insurance threatens the public |
1234 | health, safety, and welfare and likewise threatens the economic |
1235 | health of the state. The state therefore has a compelling public |
1236 | interest and a public purpose to assist in assuring that |
1237 | property in the state is insured and that it is insured at |
1238 | affordable rates so as to facilitate the remediation, |
1239 | reconstruction, and replacement of damaged or destroyed property |
1240 | in order to reduce or avoid the negative effects otherwise |
1241 | resulting to the public health, safety, and welfare, to the |
1242 | economy of the state, and to the revenues of the state and local |
1243 | governments which are needed to provide for the public welfare. |
1244 | It is necessary, therefore, to provide affordable property |
1245 | insurance to applicants who are in good faith entitled to |
1246 | procure insurance through the voluntary market but are unable to |
1247 | do so. The Legislature intends, therefore, by this subsection |
1248 | that affordable property insurance be provided and that it |
1249 | continue to be provided, as long as necessary, through Citizens |
1250 | Property Insurance Corporation, a government entity that is an |
1251 | integral part of the state, and that is not a private insurance |
1252 | company. To that end, the Citizens Property Insurance |
1253 | corporation shall strive to increase the availability of |
1254 | affordable property insurance in this state, while achieving |
1255 | efficiencies and economies, and while providing service to |
1256 | policyholders, applicants, and agents which is no less than the |
1257 | quality generally provided in the voluntary market, for the |
1258 | achievement of the foregoing public purposes. Because it is |
1259 | essential for this government entity to have the maximum |
1260 | financial resources to pay claims following a catastrophic |
1261 | hurricane, it is the intent of the Legislature that the Citizens |
1262 | Property Insurance corporation continue to be an integral part |
1263 | of the state and that the income of the corporation be exempt |
1264 | from federal income taxation and that interest on the debt |
1265 | obligations issued by the corporation be exempt from federal |
1266 | income taxation. |
1267 | 2. The Residential Property and Casualty Joint |
1268 | Underwriting Association originally created by this statute |
1269 | shall be known, as of July 1, 2002, as the Citizens Property |
1270 | Insurance Corporation. The corporation shall provide insurance |
1271 | for residential and commercial property, for applicants who are |
1272 | in good faith entitled, but, in good faith, are unable, to |
1273 | procure insurance through the voluntary market. The corporation |
1274 | shall operate pursuant to a plan of operation approved by order |
1275 | of the Financial Services Commission. The plan is subject to |
1276 | continuous review by the commission. The commission may, by |
1277 | order, withdraw approval of all or part of a plan if the |
1278 | commission determines that conditions have changed since |
1279 | approval was granted and that the purposes of the plan require |
1280 | changes in the plan. The corporation shall continue to operate |
1281 | pursuant to the plan of operation approved by the Office of |
1282 | Insurance Regulation until October 1, 2006. For the purposes of |
1283 | this subsection, residential coverage includes both personal |
1284 | lines residential coverage, which consists of the type of |
1285 | coverage provided by homeowner's, mobile home owner's, dwelling, |
1286 | tenant's, condominium unit owner's, and similar policies;, and |
1287 | commercial lines residential coverage, which consists of the |
1288 | type of coverage provided by condominium association, apartment |
1289 | building, and similar policies. |
1290 | 3. Effective January 1, 2009, a personal lines residential |
1291 | structure that has a dwelling replacement cost of $2 million or |
1292 | more, or a single condominium unit that has a combined dwelling |
1293 | and contents content replacement cost of $2 million or more is |
1294 | not eligible for coverage by the corporation. Such dwellings |
1295 | insured by the corporation on December 31, 2008, may continue to |
1296 | be covered by the corporation until the end of the policy term. |
1297 | However, such dwellings that are insured by the corporation and |
1298 | become ineligible for coverage due to the provisions of this |
1299 | subparagraph may reapply and obtain coverage if the property |
1300 | owner provides the corporation with a sworn affidavit from one |
1301 | or more insurance agents, on a form provided by the corporation, |
1302 | stating that the agents have made their best efforts to obtain |
1303 | coverage and that the property has been rejected for coverage by |
1304 | at least one authorized insurer and at least three surplus lines |
1305 | insurers. If such conditions are met, the dwelling may be |
1306 | insured by the corporation for up to 3 years, after which time |
1307 | the dwelling is ineligible for coverage. The office shall |
1308 | approve the method used by the corporation for valuing the |
1309 | dwelling replacement cost for the purposes of this subparagraph. |
1310 | If a policyholder is insured by the corporation prior to being |
1311 | determined to be ineligible pursuant to this subparagraph and |
1312 | such policyholder files a lawsuit challenging the determination, |
1313 | the policyholder may remain insured by the corporation until the |
1314 | conclusion of the litigation. |
1315 | 4. It is the intent of the Legislature that policyholders, |
1316 | applicants, and agents of the corporation receive service and |
1317 | treatment of the highest possible level but never less than that |
1318 | generally provided in the voluntary market. It is also is |
1319 | intended that the corporation be held to service standards no |
1320 | less than those applied to insurers in the voluntary market by |
1321 | the office with respect to responsiveness, timeliness, customer |
1322 | courtesy, and overall dealings with policyholders, applicants, |
1323 | or agents of the corporation. |
1324 | 5. Effective January 1, 2009, a personal lines residential |
1325 | structure that is located in the "wind-borne debris region," as |
1326 | defined in s. 1609.2, International Building Code (2006), and |
1327 | that has an insured value on the structure of $750,000 or more |
1328 | is not eligible for coverage by the corporation unless the |
1329 | structure has opening protections as required under the Florida |
1330 | Building Code for a newly constructed residential structure in |
1331 | that area. A residential structure shall be deemed to comply |
1332 | with the requirements of this subparagraph if it has shutters or |
1333 | opening protections on all openings and if such opening |
1334 | protections complied with the Florida Building Code at the time |
1335 | they were installed. |
1336 | 6. For any claim filed under any policy of the |
1337 | corporation, a public adjuster may not charge, agree to, or |
1338 | accept any compensation, payment, commission, fee, or other |
1339 | thing of value greater than 10 percent of the additional amount |
1340 | actually paid over the amount that was originally offered by the |
1341 | corporation for any one claim. |
1342 | (b)1. All insurers authorized to write one or more subject |
1343 | lines of business in this state are subject to assessment by the |
1344 | corporation and, for the purposes of this subsection, are |
1345 | referred to collectively as "assessable insurers." Insurers |
1346 | writing one or more subject lines of business in this state |
1347 | pursuant to part VIII of chapter 626 are not assessable |
1348 | insurers, but insureds who procure one or more subject lines of |
1349 | business in this state pursuant to part VIII of chapter 626 are |
1350 | subject to assessment by the corporation and are referred to |
1351 | collectively as "assessable insureds." An authorized insurer's |
1352 | assessment liability begins shall begin on the first day of the |
1353 | calendar year following the year in which the insurer was issued |
1354 | a certificate of authority to transact insurance for subject |
1355 | lines of business in this state and terminates shall terminate 1 |
1356 | year after the end of the first calendar year during which the |
1357 | insurer no longer holds a certificate of authority to transact |
1358 | insurance for subject lines of business in this state. |
1359 | 2.a. All revenues, assets, liabilities, losses, and |
1360 | expenses of the corporation shall be divided into three separate |
1361 | accounts as follows: |
1362 | (I) A personal lines account for personal residential |
1363 | policies issued by the corporation, or issued by the Residential |
1364 | Property and Casualty Joint Underwriting Association and renewed |
1365 | by the corporation, which provides that provide comprehensive, |
1366 | multiperil coverage on risks that are not located in areas |
1367 | eligible for coverage by in the Florida Windstorm Underwriting |
1368 | Association as those areas were defined on January 1, 2002, and |
1369 | for such policies that do not provide coverage for the peril of |
1370 | wind on risks that are located in such areas; |
1371 | (II) A commercial lines account for commercial residential |
1372 | and commercial nonresidential policies issued by the |
1373 | corporation, or issued by the Residential Property and Casualty |
1374 | Joint Underwriting Association and renewed by the corporation, |
1375 | which provides that provide coverage for basic property perils |
1376 | on risks that are not located in areas eligible for coverage by |
1377 | in the Florida Windstorm Underwriting Association as those areas |
1378 | were defined on January 1, 2002, and for such policies that do |
1379 | not provide coverage for the peril of wind on risks that are |
1380 | located in such areas; and |
1381 | (III) A coastal high-risk account for personal residential |
1382 | policies and commercial residential and commercial |
1383 | nonresidential property policies issued by the corporation, or |
1384 | transferred to the corporation, which provides that provide |
1385 | coverage for the peril of wind on risks that are located in |
1386 | areas eligible for coverage by in the Florida Windstorm |
1387 | Underwriting Association as those areas were defined on January |
1388 | 1, 2002. The corporation may offer policies that provide |
1389 | multiperil coverage and the corporation shall continue to offer |
1390 | policies that provide coverage only for the peril of wind for |
1391 | risks located in areas eligible for coverage in the coastal |
1392 | high-risk account. In issuing multiperil coverage, the |
1393 | corporation may use its approved policy forms and rates for the |
1394 | personal lines account. An applicant or insured who is eligible |
1395 | to purchase a multiperil policy from the corporation may |
1396 | purchase a multiperil policy from an authorized insurer without |
1397 | prejudice to the applicant's or insured's eligibility to |
1398 | prospectively purchase a policy that provides coverage only for |
1399 | the peril of wind from the corporation. An applicant or insured |
1400 | who is eligible for a corporation policy that provides coverage |
1401 | only for the peril of wind may elect to purchase or retain such |
1402 | policy and also purchase or retain coverage excluding wind from |
1403 | an authorized insurer without prejudice to the applicant's or |
1404 | insured's eligibility to prospectively purchase a policy that |
1405 | provides multiperil coverage from the corporation. It is the |
1406 | goal of the Legislature that there would be an overall average |
1407 | savings of 10 percent or more for a policyholder who currently |
1408 | has a wind-only policy with the corporation, and an ex-wind |
1409 | policy with a voluntary insurer or the corporation, and who then |
1410 | obtains a multiperil policy from the corporation. It is the |
1411 | intent of the Legislature that the offer of multiperil coverage |
1412 | in the coastal high-risk account be made and implemented in a |
1413 | manner that does not adversely affect the tax-exempt status of |
1414 | the corporation or creditworthiness of or security for currently |
1415 | outstanding financing obligations or credit facilities of the |
1416 | coastal high-risk account, the personal lines account, or the |
1417 | commercial lines account. The coastal high-risk account must |
1418 | also include quota share primary insurance under subparagraph |
1419 | (c)2. The area eligible for coverage under the coastal high-risk |
1420 | account also includes the area within Port Canaveral, which is |
1421 | bordered on the south by the City of Cape Canaveral, bordered on |
1422 | the west by the Banana River, and bordered on the north by |
1423 | Federal Government property. |
1424 | b. The three separate accounts must be maintained as long |
1425 | as financing obligations entered into by the Florida Windstorm |
1426 | Underwriting Association or Residential Property and Casualty |
1427 | Joint Underwriting Association are outstanding, in accordance |
1428 | with the terms of the corresponding financing documents. If When |
1429 | the financing obligations are no longer outstanding, in |
1430 | accordance with the terms of the corresponding financing |
1431 | documents, the corporation may use a single account for all |
1432 | revenues, assets, liabilities, losses, and expenses of the |
1433 | corporation. Consistent with the requirement of this |
1434 | subparagraph and prudent investment policies that minimize the |
1435 | cost of carrying debt, the board shall exercise its best efforts |
1436 | to retire existing debt or to obtain the approval of necessary |
1437 | parties to amend the terms of existing debt, so as to structure |
1438 | the most efficient plan to consolidate the three separate |
1439 | accounts into a single account. |
1440 | c. Creditors of the Residential Property and Casualty |
1441 | Joint Underwriting Association and of the accounts specified in |
1442 | sub-sub-subparagraphs a.(I) and (II) may have a claim against, |
1443 | and recourse to, those the accounts referred to in sub-sub- |
1444 | subparagraphs a.(I) and (II) and shall have no claim against, or |
1445 | recourse to, the account referred to in sub-sub-subparagraph |
1446 | a.(III). Creditors of the Florida Windstorm Underwriting |
1447 | Association shall have a claim against, and recourse to, the |
1448 | account referred to in sub-sub-subparagraph a.(III) and shall |
1449 | have no claim against, or recourse to, the accounts referred to |
1450 | in sub-sub-subparagraphs a.(I) and (II). |
1451 | d. Revenues, assets, liabilities, losses, and expenses not |
1452 | attributable to particular accounts shall be prorated among the |
1453 | accounts. |
1454 | e. The Legislature finds that the revenues of the |
1455 | corporation are revenues that are necessary to meet the |
1456 | requirements set forth in documents authorizing the issuance of |
1457 | bonds under this subsection. |
1458 | f. No part of the income of the corporation may inure to |
1459 | the benefit of any private person. |
1460 | 3. With respect to a deficit in an account: |
1461 | a. After accounting for the Citizens policyholder |
1462 | surcharge imposed under sub-subparagraph h. i., if when the |
1463 | remaining projected deficit incurred in a particular calendar |
1464 | year: |
1465 | (I) Is not greater than 6 percent of the aggregate |
1466 | statewide direct written premium for the subject lines of |
1467 | business for the prior calendar year, the entire deficit shall |
1468 | be recovered through regular assessments of assessable insurers |
1469 | under paragraph (q) and assessable insureds. |
1470 | (II)b. After accounting for the Citizens policyholder |
1471 | surcharge imposed under sub-subparagraph i., when the remaining |
1472 | projected deficit incurred in a particular calendar year Exceeds |
1473 | 6 percent of the aggregate statewide direct written premium for |
1474 | the subject lines of business for the prior calendar year, the |
1475 | corporation shall levy regular assessments on assessable |
1476 | insurers under paragraph (q) and on assessable insureds in an |
1477 | amount equal to the greater of 6 percent of the deficit or 6 |
1478 | percent of the aggregate statewide direct written premium for |
1479 | the subject lines of business for the prior calendar year. Any |
1480 | remaining deficit shall be recovered through emergency |
1481 | assessments under sub-subparagraph c. d. |
1482 | b.c. Each assessable insurer's share of the amount being |
1483 | assessed under sub-subparagraph a. must or sub-subparagraph b. |
1484 | shall be in the proportion that the assessable insurer's direct |
1485 | written premium for the subject lines of business for the year |
1486 | preceding the assessment bears to the aggregate statewide direct |
1487 | written premium for the subject lines of business for that year. |
1488 | The assessment percentage applicable to each assessable insured |
1489 | is the ratio of the amount being assessed under sub-subparagraph |
1490 | a. or sub-subparagraph b. to the aggregate statewide direct |
1491 | written premium for the subject lines of business for the prior |
1492 | year. Assessments levied by the corporation on assessable |
1493 | insurers under sub-subparagraph a. must sub-subparagraphs a. and |
1494 | b. shall be paid as required by the corporation's plan of |
1495 | operation and paragraph (q). Assessments levied by the |
1496 | corporation on assessable insureds under sub-subparagraph a. |
1497 | sub-subparagraphs a. and b. shall be collected by the surplus |
1498 | lines agent at the time the surplus lines agent collects the |
1499 | surplus lines tax required by s. 626.932, and shall be paid to |
1500 | the Florida Surplus Lines Service Office at the time the surplus |
1501 | lines agent pays the surplus lines tax to that the Florida |
1502 | Surplus Lines Service office. Upon receipt of regular |
1503 | assessments from surplus lines agents, the Florida Surplus Lines |
1504 | Service Office shall transfer the assessments directly to the |
1505 | corporation as determined by the corporation. |
1506 | c.d. Upon a determination by the board of governors that a |
1507 | deficit in an account exceeds the amount that will be recovered |
1508 | through regular assessments under sub-subparagraph a. or sub- |
1509 | subparagraph b., plus the amount that is expected to be |
1510 | recovered through surcharges under sub-subparagraph h. i., as to |
1511 | the remaining projected deficit the board shall levy, after |
1512 | verification by the office, shall levy emergency assessments, |
1513 | for as many years as necessary to cover the deficits, to be |
1514 | collected by assessable insurers and the corporation and |
1515 | collected from assessable insureds upon issuance or renewal of |
1516 | policies for subject lines of business, excluding National Flood |
1517 | Insurance policies. The amount of the emergency assessment |
1518 | collected in a particular year must shall be a uniform |
1519 | percentage of that year's direct written premium for subject |
1520 | lines of business and all accounts of the corporation, excluding |
1521 | National Flood Insurance Program policy premiums, as annually |
1522 | determined by the board and verified by the office. The office |
1523 | shall verify the arithmetic calculations involved in the board's |
1524 | determination within 30 days after receipt of the information on |
1525 | which the determination was based. Notwithstanding any other |
1526 | provision of law, the corporation and each assessable insurer |
1527 | that writes subject lines of business shall collect emergency |
1528 | assessments from its policyholders without such obligation being |
1529 | affected by any credit, limitation, exemption, or deferment. |
1530 | Emergency assessments levied by the corporation on assessable |
1531 | insureds shall be collected by the surplus lines agent at the |
1532 | time the surplus lines agent collects the surplus lines tax |
1533 | required by s. 626.932 and shall be paid to the Florida Surplus |
1534 | Lines Service Office at the time the surplus lines agent pays |
1535 | the surplus lines tax to that the Florida Surplus Lines Service |
1536 | office. The emergency assessments so collected shall be |
1537 | transferred directly to the corporation on a periodic basis as |
1538 | determined by the corporation and shall be held by the |
1539 | corporation solely in the applicable account. The aggregate |
1540 | amount of emergency assessments levied for an account under this |
1541 | sub-subparagraph in any calendar year may, at the discretion of |
1542 | the board of governors, be less than but may not exceed the |
1543 | greater of 10 percent of the amount needed to cover the deficit, |
1544 | plus interest, fees, commissions, required reserves, and other |
1545 | costs associated with financing of the original deficit, or 10 |
1546 | percent of the aggregate statewide direct written premium for |
1547 | subject lines of business and for all accounts of the |
1548 | corporation for the prior year, plus interest, fees, |
1549 | commissions, required reserves, and other costs associated with |
1550 | financing the deficit. |
1551 | d.e. The corporation may pledge the proceeds of |
1552 | assessments, projected recoveries from the Florida Hurricane |
1553 | Catastrophe Fund, other insurance and reinsurance recoverables, |
1554 | policyholder surcharges and other surcharges, and other funds |
1555 | available to the corporation as the source of revenue for and to |
1556 | secure bonds issued under paragraph (q), bonds or other |
1557 | indebtedness issued under subparagraph (c)3., or lines of credit |
1558 | or other financing mechanisms issued or created under this |
1559 | subsection, or to retire any other debt incurred as a result of |
1560 | deficits or events giving rise to deficits, or in any other way |
1561 | that the board determines will efficiently recover such |
1562 | deficits. The purpose of the lines of credit or other financing |
1563 | mechanisms is to provide additional resources to assist the |
1564 | corporation in covering claims and expenses attributable to a |
1565 | catastrophe. As used in this subsection, the term "assessments" |
1566 | includes regular assessments under sub-subparagraph a., sub- |
1567 | subparagraph b., or subparagraph (q)1. and emergency assessments |
1568 | under sub-subparagraph d. Emergency assessments collected under |
1569 | sub-subparagraph d. are not part of an insurer's rates, are not |
1570 | premium, and are not subject to premium tax, fees, or |
1571 | commissions; however, failure to pay the emergency assessment |
1572 | shall be treated as failure to pay premium. The emergency |
1573 | assessments under sub-subparagraph c. d. shall continue as long |
1574 | as any bonds issued or other indebtedness incurred with respect |
1575 | to a deficit for which the assessment was imposed remain |
1576 | outstanding, unless adequate provision has been made for the |
1577 | payment of such bonds or other indebtedness pursuant to the |
1578 | documents governing such bonds or other indebtedness. |
1579 | e.f. As used in this subsection for purposes of any |
1580 | deficit incurred on or after January 25, 2007, the term "subject |
1581 | lines of business" means insurance written by assessable |
1582 | insurers or procured by assessable insureds for all property and |
1583 | casualty lines of business in this state, but not including |
1584 | workers' compensation or medical malpractice. As used in this |
1585 | the sub-subparagraph, the term "property and casualty lines of |
1586 | business" includes all lines of business identified on Form 2, |
1587 | Exhibit of Premiums and Losses, in the annual statement required |
1588 | of authorized insurers under by s. 624.424 and any rule adopted |
1589 | under this section, except for those lines identified as |
1590 | accident and health insurance and except for policies written |
1591 | under the National Flood Insurance Program or the Federal Crop |
1592 | Insurance Program. For purposes of this sub-subparagraph, the |
1593 | term "workers' compensation" includes both workers' compensation |
1594 | insurance and excess workers' compensation insurance. |
1595 | f.g. The Florida Surplus Lines Service Office shall |
1596 | determine annually the aggregate statewide written premium in |
1597 | subject lines of business procured by assessable insureds and |
1598 | shall report that information to the corporation in a form and |
1599 | at a time the corporation specifies to ensure that the |
1600 | corporation can meet the requirements of this subsection and the |
1601 | corporation's financing obligations. |
1602 | g.h. The Florida Surplus Lines Service Office shall verify |
1603 | the proper application by surplus lines agents of assessment |
1604 | percentages for regular assessments and emergency assessments |
1605 | levied under this subparagraph on assessable insureds and shall |
1606 | assist the corporation in ensuring the accurate, timely |
1607 | collection and payment of assessments by surplus lines agents as |
1608 | required by the corporation. |
1609 | h.i. If a deficit is incurred in any account in 2008 or |
1610 | thereafter, the board of governors shall levy a Citizens |
1611 | policyholder surcharge against all policyholders of the |
1612 | corporation. for a 12-month period, which |
1613 | (I) The surcharge shall be levied collected at the time of |
1614 | issuance or renewal of a policy, as a uniform percentage of the |
1615 | premium for the policy of up to 15 percent of such premium, |
1616 | which funds shall be used to offset the deficit. |
1617 | (II) The surcharge is payable upon cancellation or |
1618 | termination of the policy, upon renewal of the policy, or upon |
1619 | issuance of a new policy by the corporation within the first 12 |
1620 | months after the date of the levy or the period of time |
1621 | necessary to fully collect the surcharge amount. |
1622 | (III) The corporation may not levy any regular assessments |
1623 | under paragraph (q) pursuant to sub-subparagraph a. or sub- |
1624 | subparagraph b. with respect to a particular year's deficit |
1625 | until the corporation has first levied the full amount of the |
1626 | surcharge authorized by this sub-subparagraph. |
1627 | (IV) The surcharge is Citizens policyholder surcharges |
1628 | under this sub-subparagraph are not considered premium and is |
1629 | are not subject to commissions, fees, or premium taxes. However, |
1630 | failure to pay the surcharge such surcharges shall be treated as |
1631 | failure to pay premium. |
1632 | i.j. If the amount of any assessments or surcharges |
1633 | collected from corporation policyholders, assessable insurers or |
1634 | their policyholders, or assessable insureds exceeds the amount |
1635 | of the deficits, such excess amounts shall be remitted to and |
1636 | retained by the corporation in a reserve to be used by the |
1637 | corporation, as determined by the board of governors and |
1638 | approved by the office, to pay claims or reduce any past, |
1639 | present, or future plan-year deficits or to reduce outstanding |
1640 | debt. |
1641 | (c) The corporation's plan of operation of the |
1642 | corporation: |
1643 | 1. Must provide for adoption of residential property and |
1644 | casualty insurance policy forms and commercial residential and |
1645 | nonresidential property insurance forms, which forms must be |
1646 | approved by the office before prior to use. The corporation |
1647 | shall adopt the following policy forms: |
1648 | a. Standard personal lines policy forms that are |
1649 | comprehensive multiperil policies providing full coverage of a |
1650 | residential property equivalent to the coverage provided in the |
1651 | private insurance market under an HO-3, HO-4, or HO-6 policy. |
1652 | b. Basic personal lines policy forms that are policies |
1653 | similar to an HO-8 policy or a dwelling fire policy that provide |
1654 | coverage meeting the requirements of the secondary mortgage |
1655 | market, but which coverage is more limited than the coverage |
1656 | under a standard policy. |
1657 | c. Commercial lines residential and nonresidential policy |
1658 | forms that are generally similar to the basic perils of full |
1659 | coverage obtainable for commercial residential structures and |
1660 | commercial nonresidential structures in the admitted voluntary |
1661 | market. |
1662 | d. Personal lines and commercial lines residential |
1663 | property insurance forms that cover the peril of wind only. The |
1664 | forms are applicable only to residential properties located in |
1665 | areas eligible for coverage under the coastal high-risk account |
1666 | referred to in sub-subparagraph (b)2.a. |
1667 | e. Commercial lines nonresidential property insurance |
1668 | forms that cover the peril of wind only. The forms are |
1669 | applicable only to nonresidential properties located in areas |
1670 | eligible for coverage under the coastal high-risk account |
1671 | referred to in sub-subparagraph (b)2.a. |
1672 | f. The corporation may adopt variations of the policy |
1673 | forms listed in sub-subparagraphs a.-e. which that contain more |
1674 | restrictive coverage. |
1675 | 2.a. Must provide that the corporation adopt a program in |
1676 | which the corporation and authorized insurers enter into quota |
1677 | share primary insurance agreements for hurricane coverage, as |
1678 | defined in s. 627.4025(2)(a), for eligible risks, and adopt |
1679 | property insurance forms for eligible risks which cover the |
1680 | peril of wind only. |
1681 | a. As used in this subsection, the term: |
1682 | (I) "Quota share primary insurance" means an arrangement |
1683 | in which the primary hurricane coverage of an eligible risk is |
1684 | provided in specified percentages by the corporation and an |
1685 | authorized insurer. The corporation and authorized insurer are |
1686 | each solely responsible for a specified percentage of hurricane |
1687 | coverage of an eligible risk as set forth in a quota share |
1688 | primary insurance agreement between the corporation and an |
1689 | authorized insurer and the insurance contract. The |
1690 | responsibility of the corporation or authorized insurer to pay |
1691 | its specified percentage of hurricane losses of an eligible |
1692 | risk, as set forth in the quota share primary insurance |
1693 | agreement, may not be altered by the inability of the other |
1694 | party to the agreement to pay its specified percentage of |
1695 | hurricane losses. Eligible risks that are provided hurricane |
1696 | coverage through a quota share primary insurance arrangement |
1697 | must be provided policy forms that set forth the obligations of |
1698 | the corporation and authorized insurer under the arrangement, |
1699 | clearly specify the percentages of quota share primary insurance |
1700 | provided by the corporation and authorized insurer, and |
1701 | conspicuously and clearly state that neither the authorized |
1702 | insurer and nor the corporation may not be held responsible |
1703 | beyond their its specified percentage of coverage of hurricane |
1704 | losses. |
1705 | (II) "Eligible risks" means personal lines residential and |
1706 | commercial lines residential risks that meet the underwriting |
1707 | criteria of the corporation and are located in areas that were |
1708 | eligible for coverage by the Florida Windstorm Underwriting |
1709 | Association on January 1, 2002. |
1710 | b. The corporation may enter into quota share primary |
1711 | insurance agreements with authorized insurers at corporation |
1712 | coverage levels of 90 percent and 50 percent. |
1713 | c. If the corporation determines that additional coverage |
1714 | levels are necessary to maximize participation in quota share |
1715 | primary insurance agreements by authorized insurers, the |
1716 | corporation may establish additional coverage levels. However, |
1717 | the corporation's quota share primary insurance coverage level |
1718 | may not exceed 90 percent. |
1719 | d. Any quota share primary insurance agreement entered |
1720 | into between an authorized insurer and the corporation must |
1721 | provide for a uniform specified percentage of coverage of |
1722 | hurricane losses, by county or territory as set forth by the |
1723 | corporation board, for all eligible risks of the authorized |
1724 | insurer covered under the quota share primary insurance |
1725 | agreement. |
1726 | e. Any quota share primary insurance agreement entered |
1727 | into between an authorized insurer and the corporation is |
1728 | subject to review and approval by the office. However, such |
1729 | agreement shall be authorized only as to insurance contracts |
1730 | entered into between an authorized insurer and an insured who is |
1731 | already insured by the corporation for wind coverage. |
1732 | f. For all eligible risks covered under quota share |
1733 | primary insurance agreements, the exposure and coverage levels |
1734 | for both the corporation and authorized insurers shall be |
1735 | reported by the corporation to the Florida Hurricane Catastrophe |
1736 | Fund. For all policies of eligible risks covered under such |
1737 | quota share primary insurance agreements, the corporation and |
1738 | the authorized insurer must shall maintain complete and accurate |
1739 | records for the purpose of exposure and loss reimbursement |
1740 | audits as required by Florida Hurricane Catastrophe fund rules. |
1741 | The corporation and the authorized insurer shall each maintain |
1742 | duplicate copies of policy declaration pages and supporting |
1743 | claims documents. |
1744 | g. The corporation board shall establish in its plan of |
1745 | operation standards for quota share agreements which ensure that |
1746 | there is no discriminatory application among insurers as to the |
1747 | terms of the quota share agreements, pricing of the quota share |
1748 | agreements, incentive provisions if any, and consideration paid |
1749 | for servicing policies or adjusting claims. |
1750 | h. The quota share primary insurance agreement between the |
1751 | corporation and an authorized insurer must set forth the |
1752 | specific terms under which coverage is provided, including, but |
1753 | not limited to, the sale and servicing of policies issued under |
1754 | the agreement by the insurance agent of the authorized insurer |
1755 | producing the business, the reporting of information concerning |
1756 | eligible risks, the payment of premium to the corporation, and |
1757 | arrangements for the adjustment and payment of hurricane claims |
1758 | incurred on eligible risks by the claims adjuster and personnel |
1759 | of the authorized insurer. Entering into a quota sharing |
1760 | insurance agreement between the corporation and an authorized |
1761 | insurer is shall be voluntary and at the discretion of the |
1762 | authorized insurer. |
1763 | 3.a. May provide that the corporation may employ or |
1764 | otherwise contract with individuals or other entities to provide |
1765 | administrative or professional services that may be appropriate |
1766 | to effectuate the plan. The corporation may shall have the power |
1767 | to borrow funds, by issuing bonds or by incurring other |
1768 | indebtedness, and shall have other powers reasonably necessary |
1769 | to effectuate the requirements of this subsection, including, |
1770 | without limitation, the power to issue bonds and incur other |
1771 | indebtedness in order to refinance outstanding bonds or other |
1772 | indebtedness. The corporation may, but is not required to, seek |
1773 | judicial validation of its bonds or other indebtedness under |
1774 | chapter 75. The corporation may issue bonds or incur other |
1775 | indebtedness, or have bonds issued on its behalf by a unit of |
1776 | local government pursuant to subparagraph (q)2., in the absence |
1777 | of a hurricane or other weather-related event, upon a |
1778 | determination by the corporation, subject to approval by the |
1779 | office, that such action would enable it to efficiently meet the |
1780 | financial obligations of the corporation and that such |
1781 | financings are reasonably necessary to effectuate the |
1782 | requirements of this subsection. The corporation may is |
1783 | authorized to take all actions needed to facilitate tax-free |
1784 | status for any such bonds or indebtedness, including formation |
1785 | of trusts or other affiliated entities. The corporation may |
1786 | shall have the authority to pledge assessments, projected |
1787 | recoveries from the Florida Hurricane Catastrophe Fund, other |
1788 | reinsurance recoverables, market equalization and other |
1789 | surcharges, and other funds available to the corporation as |
1790 | security for bonds or other indebtedness. In recognition of s. |
1791 | 10, Art. I of the State Constitution, prohibiting the impairment |
1792 | of obligations of contracts, it is the intent of the Legislature |
1793 | that no action be taken whose purpose is to impair any bond |
1794 | indenture or financing agreement or any revenue source committed |
1795 | by contract to such bond or other indebtedness. |
1796 | b. To ensure that the corporation is operating in an |
1797 | efficient and economic manner while providing quality service to |
1798 | policyholders, applicants, and agents, the board shall |
1799 | commission an independent third-party consultant having |
1800 | expertise in insurance company management or insurance company |
1801 | management consulting to prepare a report and make |
1802 | recommendations on the relative costs and benefits of |
1803 | outsourcing various policy issuance and service functions to |
1804 | private servicing carriers or entities performing similar |
1805 | functions in the private market for a fee, rather than |
1806 | performing such functions in house. In making such |
1807 | recommendations, the consultant shall consider how other |
1808 | residual markets, both in this state and around the country, |
1809 | outsource appropriate functions or use servicing carriers to |
1810 | better match expenses with revenues that fluctuate based on a |
1811 | widely varying policy count. The report must be completed by |
1812 | July 1, 2012. Upon receiving the report, the board shall develop |
1813 | a plan to implement the report and submit the plan for review, |
1814 | modification, and approval to the Financial Services Commission. |
1815 | Upon the commission's approval of the plan, the board shall |
1816 | begin implementing the plan by January 1, 2013. |
1817 | 4.a. Must require that the corporation operate subject to |
1818 | the supervision and approval of a board of governors consisting |
1819 | of eight individuals who are residents of this state, from |
1820 | different geographical areas of this state. |
1821 | a. The Governor, the Chief Financial Officer, the |
1822 | President of the Senate, and the Speaker of the House of |
1823 | Representatives shall each appoint two members of the board. At |
1824 | least one of the two members appointed by each appointing |
1825 | officer must have demonstrated expertise in insurance, and is |
1826 | deemed to be within the scope of the exemption provided in s. |
1827 | 112.313(7)(b). The Chief Financial Officer shall designate one |
1828 | of the appointees as chair. All board members serve at the |
1829 | pleasure of the appointing officer. All members of the board of |
1830 | governors are subject to removal at will by the officers who |
1831 | appointed them. All board members, including the chair, must be |
1832 | appointed to serve for 3-year terms beginning annually on a date |
1833 | designated by the plan. However, for the first term beginning on |
1834 | or after July 1, 2009, each appointing officer shall appoint one |
1835 | member of the board for a 2-year term and one member for a 3- |
1836 | year term. A Any board vacancy shall be filled for the unexpired |
1837 | term by the appointing officer. The Chief Financial Officer |
1838 | shall appoint a technical advisory group to provide information |
1839 | and advice to the board of governors in connection with the |
1840 | board's duties under this subsection. The executive director and |
1841 | senior managers of the corporation shall be engaged by the board |
1842 | and serve at the pleasure of the board. Any executive director |
1843 | appointed on or after July 1, 2006, is subject to confirmation |
1844 | by the Senate. The executive director is responsible for |
1845 | employing other staff as the corporation may require, subject to |
1846 | review and concurrence by the board. |
1847 | b. The board shall create a Market Accountability Advisory |
1848 | Committee to assist the corporation in developing awareness of |
1849 | its rates and its customer and agent service levels in |
1850 | relationship to the voluntary market insurers writing similar |
1851 | coverage. |
1852 | (I) The members of the advisory committee shall consist of |
1853 | the following 11 persons, one of whom must be elected chair by |
1854 | the members of the committee: four representatives, one |
1855 | appointed by the Florida Association of Insurance Agents, one by |
1856 | the Florida Association of Insurance and Financial Advisors, one |
1857 | by the Professional Insurance Agents of Florida, and one by the |
1858 | Latin American Association of Insurance Agencies; three |
1859 | representatives appointed by the insurers with the three highest |
1860 | voluntary market share of residential property insurance |
1861 | business in the state; one representative from the Office of |
1862 | Insurance Regulation; one consumer appointed by the board who is |
1863 | insured by the corporation at the time of appointment to the |
1864 | committee; one representative appointed by the Florida |
1865 | Association of Realtors; and one representative appointed by the |
1866 | Florida Bankers Association. All members shall be appointed to |
1867 | must serve for 3-year terms and may serve for consecutive terms. |
1868 | (II) The committee shall report to the corporation at each |
1869 | board meeting on insurance market issues which may include rates |
1870 | and rate competition with the voluntary market; service, |
1871 | including policy issuance, claims processing, and general |
1872 | responsiveness to policyholders, applicants, and agents; and |
1873 | matters relating to depopulation. |
1874 | 5. Must provide a procedure for determining the |
1875 | eligibility of a risk for coverage, as follows: |
1876 | a. Subject to the provisions of s. 627.3517, with respect |
1877 | to personal lines residential risks, if the risk is offered |
1878 | coverage from an authorized insurer at the insurer's approved |
1879 | rate under either a standard policy including wind coverage or, |
1880 | if consistent with the insurer's underwriting rules as filed |
1881 | with the office, a basic policy including wind coverage, for a |
1882 | new application to the corporation for coverage, the risk is not |
1883 | eligible for any policy issued by the corporation unless the |
1884 | premium for coverage from the authorized insurer is more than 15 |
1885 | percent greater than the premium for comparable coverage from |
1886 | the corporation. If the risk is not able to obtain any such |
1887 | offer, the risk is eligible for either a standard policy |
1888 | including wind coverage or a basic policy including wind |
1889 | coverage issued by the corporation; however, if the risk could |
1890 | not be insured under a standard policy including wind coverage |
1891 | regardless of market conditions, the risk is shall be eligible |
1892 | for a basic policy including wind coverage unless rejected under |
1893 | subparagraph 8. However, with regard to a policyholder of the |
1894 | corporation or a policyholder removed from the corporation |
1895 | through an assumption agreement until the end of the assumption |
1896 | period, the policyholder remains eligible for coverage from the |
1897 | corporation regardless of any offer of coverage from an |
1898 | authorized insurer or surplus lines insurer. The corporation |
1899 | shall determine the type of policy to be provided on the basis |
1900 | of objective standards specified in the underwriting manual and |
1901 | based on generally accepted underwriting practices. |
1902 | (I) If the risk accepts an offer of coverage through the |
1903 | market assistance plan or an offer of coverage through a |
1904 | mechanism established by the corporation before a policy is |
1905 | issued to the risk by the corporation or during the first 30 |
1906 | days of coverage by the corporation, and the producing agent who |
1907 | submitted the application to the plan or to the corporation is |
1908 | not currently appointed by the insurer, the insurer shall: |
1909 | (A) Pay to the producing agent of record of the policy, |
1910 | for the first year, an amount that is the greater of the |
1911 | insurer's usual and customary commission for the type of policy |
1912 | written or a fee equal to the usual and customary commission of |
1913 | the corporation; or |
1914 | (B) Offer to allow the producing agent of record of the |
1915 | policy to continue servicing the policy for at least a period of |
1916 | not less than 1 year and offer to pay the agent the greater of |
1917 | the insurer's or the corporation's usual and customary |
1918 | commission for the type of policy written. |
1919 |
|
1920 | If the producing agent is unwilling or unable to accept |
1921 | appointment, the new insurer shall pay the agent in accordance |
1922 | with sub-sub-sub-subparagraph (A). |
1923 | (II) If When the corporation enters into a contractual |
1924 | agreement for a take-out plan, the producing agent of record of |
1925 | the corporation policy is entitled to retain any unearned |
1926 | commission on the policy, and the insurer shall: |
1927 | (A) Pay to the producing agent of record of the |
1928 | corporation policy, for the first year, an amount that is the |
1929 | greater of the insurer's usual and customary commission for the |
1930 | type of policy written or a fee equal to the usual and customary |
1931 | commission of the corporation; or |
1932 | (B) Offer to allow the producing agent of record of the |
1933 | corporation policy to continue servicing the policy for at least |
1934 | a period of not less than 1 year and offer to pay the agent the |
1935 | greater of the insurer's or the corporation's usual and |
1936 | customary commission for the type of policy written. |
1937 |
|
1938 | If the producing agent is unwilling or unable to accept |
1939 | appointment, the new insurer shall pay the agent in accordance |
1940 | with sub-sub-sub-subparagraph (A). |
1941 | b. With respect to commercial lines residential risks, for |
1942 | a new application to the corporation for coverage, if the risk |
1943 | is offered coverage under a policy including wind coverage from |
1944 | an authorized insurer at its approved rate, the risk is not |
1945 | eligible for a any policy issued by the corporation unless the |
1946 | premium for coverage from the authorized insurer is more than 15 |
1947 | percent greater than the premium for comparable coverage from |
1948 | the corporation. If the risk is not able to obtain any such |
1949 | offer, the risk is eligible for a policy including wind coverage |
1950 | issued by the corporation. However, with regard to a |
1951 | policyholder of the corporation or a policyholder removed from |
1952 | the corporation through an assumption agreement until the end of |
1953 | the assumption period, the policyholder remains eligible for |
1954 | coverage from the corporation regardless of an any offer of |
1955 | coverage from an authorized insurer or surplus lines insurer. |
1956 | (I) If the risk accepts an offer of coverage through the |
1957 | market assistance plan or an offer of coverage through a |
1958 | mechanism established by the corporation before a policy is |
1959 | issued to the risk by the corporation or during the first 30 |
1960 | days of coverage by the corporation, and the producing agent who |
1961 | submitted the application to the plan or the corporation is not |
1962 | currently appointed by the insurer, the insurer shall: |
1963 | (A) Pay to the producing agent of record of the policy, |
1964 | for the first year, an amount that is the greater of the |
1965 | insurer's usual and customary commission for the type of policy |
1966 | written or a fee equal to the usual and customary commission of |
1967 | the corporation; or |
1968 | (B) Offer to allow the producing agent of record of the |
1969 | policy to continue servicing the policy for at least a period of |
1970 | not less than 1 year and offer to pay the agent the greater of |
1971 | the insurer's or the corporation's usual and customary |
1972 | commission for the type of policy written. |
1973 |
|
1974 | If the producing agent is unwilling or unable to accept |
1975 | appointment, the new insurer shall pay the agent in accordance |
1976 | with sub-sub-sub-subparagraph (A). |
1977 | (II) If When the corporation enters into a contractual |
1978 | agreement for a take-out plan, the producing agent of record of |
1979 | the corporation policy is entitled to retain any unearned |
1980 | commission on the policy, and the insurer shall: |
1981 | (A) Pay to the producing agent of record of the |
1982 | corporation policy, for the first year, an amount that is the |
1983 | greater of the insurer's usual and customary commission for the |
1984 | type of policy written or a fee equal to the usual and customary |
1985 | commission of the corporation; or |
1986 | (B) Offer to allow the producing agent of record of the |
1987 | corporation policy to continue servicing the policy for at least |
1988 | a period of not less than 1 year and offer to pay the agent the |
1989 | greater of the insurer's or the corporation's usual and |
1990 | customary commission for the type of policy written. |
1991 |
|
1992 | If the producing agent is unwilling or unable to accept |
1993 | appointment, the new insurer shall pay the agent in accordance |
1994 | with sub-sub-sub-subparagraph (A). |
1995 | c. For purposes of determining comparable coverage under |
1996 | sub-subparagraphs a. and b., the comparison must shall be based |
1997 | on those forms and coverages that are reasonably comparable. The |
1998 | corporation may rely on a determination of comparable coverage |
1999 | and premium made by the producing agent who submits the |
2000 | application to the corporation, made in the agent's capacity as |
2001 | the corporation's agent. A comparison may be made solely of the |
2002 | premium with respect to the main building or structure only on |
2003 | the following basis: the same coverage A or other building |
2004 | limits; the same percentage hurricane deductible that applies on |
2005 | an annual basis or that applies to each hurricane for commercial |
2006 | residential property; the same percentage of ordinance and law |
2007 | coverage, if the same limit is offered by both the corporation |
2008 | and the authorized insurer; the same mitigation credits, to the |
2009 | extent the same types of credits are offered both by the |
2010 | corporation and the authorized insurer; the same method for loss |
2011 | payment, such as replacement cost or actual cash value, if the |
2012 | same method is offered both by the corporation and the |
2013 | authorized insurer in accordance with underwriting rules; and |
2014 | any other form or coverage that is reasonably comparable as |
2015 | determined by the board. If an application is submitted to the |
2016 | corporation for wind-only coverage in the coastal high-risk |
2017 | account, the premium for the corporation's wind-only policy plus |
2018 | the premium for the ex-wind policy that is offered by an |
2019 | authorized insurer to the applicant must shall be compared to |
2020 | the premium for multiperil coverage offered by an authorized |
2021 | insurer, subject to the standards for comparison specified in |
2022 | this subparagraph. If the corporation or the applicant requests |
2023 | from the authorized insurer a breakdown of the premium of the |
2024 | offer by types of coverage so that a comparison may be made by |
2025 | the corporation or its agent and the authorized insurer refuses |
2026 | or is unable to provide such information, the corporation may |
2027 | treat the offer as not being an offer of coverage from an |
2028 | authorized insurer at the insurer's approved rate. |
2029 | 6. Must include rules for classifications of risks and |
2030 | rates therefor. |
2031 | 7. Must provide that if premium and investment income for |
2032 | an account attributable to a particular calendar year are in |
2033 | excess of projected losses and expenses for the account |
2034 | attributable to that year, such excess shall be held in surplus |
2035 | in the account. Such surplus must shall be available to defray |
2036 | deficits in that account as to future years and shall be used |
2037 | for that purpose before prior to assessing assessable insurers |
2038 | and assessable insureds as to any calendar year. |
2039 | 8. Must provide objective criteria and procedures to be |
2040 | uniformly applied to for all applicants in determining whether |
2041 | an individual risk is so hazardous as to be uninsurable. In |
2042 | making this determination and in establishing the criteria and |
2043 | procedures, the following must shall be considered: |
2044 | a. Whether the likelihood of a loss for the individual |
2045 | risk is substantially higher than for other risks of the same |
2046 | class; and |
2047 | b. Whether the uncertainty associated with the individual |
2048 | risk is such that an appropriate premium cannot be determined. |
2049 |
|
2050 | The acceptance or rejection of a risk by the corporation shall |
2051 | be construed as the private placement of insurance, and the |
2052 | provisions of chapter 120 do shall not apply. |
2053 | 9. Must provide that the corporation shall make its best |
2054 | efforts to procure catastrophe reinsurance at reasonable rates, |
2055 | to cover its projected 100-year probable maximum loss as |
2056 | determined by the board of governors. |
2057 | 10. The policies issued by the corporation must provide |
2058 | that, if the corporation or the market assistance plan obtains |
2059 | an offer from an authorized insurer to cover the risk at its |
2060 | approved rates, the risk is no longer eligible for renewal |
2061 | through the corporation, except as otherwise provided in this |
2062 | subsection. |
2063 | 11. Corporation policies and applications must include a |
2064 | notice that the corporation policy could, under this section, be |
2065 | replaced with a policy issued by an authorized insurer which |
2066 | that does not provide coverage identical to the coverage |
2067 | provided by the corporation. The notice must shall also specify |
2068 | that acceptance of corporation coverage creates a conclusive |
2069 | presumption that the applicant or policyholder is aware of this |
2070 | potential. |
2071 | 12. May establish, subject to approval by the office, |
2072 | different eligibility requirements and operational procedures |
2073 | for any line or type of coverage for any specified county or |
2074 | area if the board determines that such changes to the |
2075 | eligibility requirements and operational procedures are |
2076 | justified due to the voluntary market being sufficiently stable |
2077 | and competitive in such area or for such line or type of |
2078 | coverage and that consumers who, in good faith, are unable to |
2079 | obtain insurance through the voluntary market through ordinary |
2080 | methods would continue to have access to coverage from the |
2081 | corporation. If When coverage is sought in connection with a |
2082 | real property transfer, the such requirements and procedures may |
2083 | shall not provide for an effective date of coverage later than |
2084 | the date of the closing of the transfer as established by the |
2085 | transferor, the transferee, and, if applicable, the lender. |
2086 | 13. Must provide that, with respect to the coastal high- |
2087 | risk account, any assessable insurer with a surplus as to |
2088 | policyholders of $25 million or less writing 25 percent or more |
2089 | of its total countrywide property insurance premiums in this |
2090 | state may petition the office, within the first 90 days of each |
2091 | calendar year, to qualify as a limited apportionment company. A |
2092 | regular assessment levied by the corporation on a limited |
2093 | apportionment company for a deficit incurred by the corporation |
2094 | for the coastal high-risk account in 2006 or thereafter may be |
2095 | paid to the corporation on a monthly basis as the assessments |
2096 | are collected by the limited apportionment company from its |
2097 | insureds pursuant to s. 627.3512, but the regular assessment |
2098 | must be paid in full within 12 months after being levied by the |
2099 | corporation. A limited apportionment company shall collect from |
2100 | its policyholders any emergency assessment imposed under sub- |
2101 | subparagraph (b)3.d. The plan must shall provide that, if the |
2102 | office determines that any regular assessment will result in an |
2103 | impairment of the surplus of a limited apportionment company, |
2104 | the office may direct that all or part of such assessment be |
2105 | deferred as provided in subparagraph (q)4. However, there shall |
2106 | be no limitation or deferment of an emergency assessment to be |
2107 | collected from policyholders under sub-subparagraph (b)3.d. may |
2108 | not be limited or deferred. |
2109 | 14. Must provide that the corporation appoint as its |
2110 | licensed agents only those agents who also hold an appointment |
2111 | as defined in s. 626.015(3) with an insurer who at the time of |
2112 | the agent's initial appointment by the corporation is authorized |
2113 | to write and is actually writing personal lines residential |
2114 | property coverage, commercial residential property coverage, or |
2115 | commercial nonresidential property coverage within the state. |
2116 | 15. Must provide, by July 1, 2007, a premium payment plan |
2117 | option to its policyholders which, allows at a minimum, allows |
2118 | for quarterly and semiannual payment of premiums. A monthly |
2119 | payment plan may, but is not required to, be offered. |
2120 | 16. Must limit coverage on mobile homes or manufactured |
2121 | homes built before prior to 1994 to actual cash value of the |
2122 | dwelling rather than replacement costs of the dwelling. |
2123 | 17. May provide such limits of coverage as the board |
2124 | determines, consistent with the requirements of this subsection. |
2125 | 18. May require commercial property to meet specified |
2126 | hurricane mitigation construction features as a condition of |
2127 | eligibility for coverage. |
2128 | 19. Must provide that new or renewal policies issued by |
2129 | the corporation on or after January 1, 2012, which cover |
2130 | sinkhole loss do not include coverage for any loss to |
2131 | appurtenant structures, driveways, sidewalks, decks, or patios |
2132 | that are directly or indirectly caused by sinkhole activity. The |
2133 | corporation shall exclude such coverage using a notice of |
2134 | coverage change, which may be included with the policy renewal, |
2135 | and not by issuance of a notice of nonrenewal of the excluded |
2136 | coverage upon renewal of the current policy. |
2137 | 20. As of January 1, 2012, must require that the agent |
2138 | obtain from an applicant for coverage from the corporation an |
2139 | acknowledgement signed by the applicant, which includes, at a |
2140 | minimum, the following statement: |
2141 |
|
2142 | ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE |
2143 | AND ASSESSMENT LIABILITY: |
2144 |
|
2145 | 1. AS A POLICYHOLDER OF CITIZENS PROPERTY |
2146 | INSURANCE CORPORATION, I UNDERSTAND THAT IF THE |
2147 | CORPORATION SUSTAINS A DEFICIT AS A RESULT OF |
2148 | HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY |
2149 | COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND |
2150 | PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF |
2151 | THE POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH |
2152 | AS 45 PERCENT OF MY PREMIUM, OR A DIFFERENT AMOUNT AS |
2153 | IMPOSED BY THE FLORIDA LEGISLATURE. |
2154 | 2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO |
2155 | EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS |
2156 | POLICYHOLDERS OF OTHER INSURANCE COMPANIES, OR A |
2157 | DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA |
2158 | LEGISLATURE. |
2159 | 3. I ALSO UNDERSTAND THAT CITIZENS PROPERTY |
2160 | INSURANCE CORPORATION IS NOT SUPPORTED BY THE FULL |
2161 | FAITH AND CREDIT OF THE STATE OF FLORIDA. |
2162 |
|
2163 | a. The corporation shall maintain, in electronic format or |
2164 | otherwise, a copy of the applicant's signed acknowledgement and |
2165 | provide a copy of the statement to the policyholder as part of |
2166 | the first renewal after the effective date of this subparagraph. |
2167 | b. The signed acknowledgement form creates a conclusive |
2168 | presumption that the policyholder understood and accepted his or |
2169 | her potential surcharge and assessment liability as a |
2170 | policyholder of the corporation. |
2171 | (d)1. All prospective employees for senior management |
2172 | positions, as defined by the plan of operation, are subject to |
2173 | background checks as a prerequisite for employment. The office |
2174 | shall conduct the background checks on such prospective |
2175 | employees pursuant to ss. 624.34, 624.404(3), and 628.261. |
2176 | 2. On or before July 1 of each year, employees of the |
2177 | corporation must are required to sign and submit a statement |
2178 | attesting that they do not have a conflict of interest, as |
2179 | defined in part III of chapter 112. As a condition of |
2180 | employment, all prospective employees must are required to sign |
2181 | and submit to the corporation a conflict-of-interest statement. |
2182 | 3. Senior managers and members of the board of governors |
2183 | are subject to the provisions of part III of chapter 112, |
2184 | including, but not limited to, the code of ethics and public |
2185 | disclosure and reporting of financial interests, pursuant to s. |
2186 | 112.3145. Notwithstanding s. 112.3143(2), a board member may not |
2187 | vote on any measure that would inure to his or her special |
2188 | private gain or loss; that he or she knows would inure to the |
2189 | special private gain or loss of any principal by whom he or she |
2190 | is retained or to the parent organization or subsidiary of a |
2191 | corporate principal by which he or she is retained, other than |
2192 | an agency as defined in s. 112.312; or that he or she knows |
2193 | would inure to the special private gain or loss of a relative or |
2194 | business associate of the public officer. Before the vote is |
2195 | taken, such member shall publicly state to the assembly the |
2196 | nature of his or her interest in the matter from which he or she |
2197 | is abstaining from voting and, within 15 days after the vote |
2198 | occurs, disclose the nature of his or her interest as a public |
2199 | record in a memorandum filed with the person responsible for |
2200 | recording the minutes of the meeting, who shall incorporate the |
2201 | memorandum in the minutes. Senior managers and board members are |
2202 | also required to file such disclosures with the Commission on |
2203 | Ethics and the Office of Insurance Regulation. The executive |
2204 | director of the corporation or his or her designee shall notify |
2205 | each existing and newly appointed and existing appointed member |
2206 | of the board of governors and senior managers of their duty to |
2207 | comply with the reporting requirements of part III of chapter |
2208 | 112. At least quarterly, the executive director or his or her |
2209 | designee shall submit to the Commission on Ethics a list of |
2210 | names of the senior managers and members of the board of |
2211 | governors who are subject to the public disclosure requirements |
2212 | under s. 112.3145. |
2213 | 4. Notwithstanding s. 112.3148 or s. 112.3149, or any |
2214 | other provision of law, an employee or board member may not |
2215 | knowingly accept, directly or indirectly, any gift or |
2216 | expenditure from a person or entity, or an employee or |
2217 | representative of such person or entity, which that has a |
2218 | contractual relationship with the corporation or who is under |
2219 | consideration for a contract. An employee or board member who |
2220 | fails to comply with subparagraph 3. or this subparagraph is |
2221 | subject to penalties provided under ss. 112.317 and 112.3173. |
2222 | 5. Any senior manager of the corporation who is employed |
2223 | on or after January 1, 2007, regardless of the date of hire, who |
2224 | subsequently retires or terminates employment is prohibited from |
2225 | representing another person or entity before the corporation for |
2226 | 2 years after retirement or termination of employment from the |
2227 | corporation. |
2228 | 6. Any senior manager of the corporation who is employed |
2229 | on or after January 1, 2007, regardless of the date of hire, who |
2230 | subsequently retires or terminates employment is prohibited from |
2231 | having any employment or contractual relationship for 2 years |
2232 | with an insurer that has entered into a take-out bonus agreement |
2233 | with the corporation. |
2234 | (n)1. Rates for coverage provided by the corporation must |
2235 | shall be actuarially sound and subject to the requirements of s. |
2236 | 627.062, except as otherwise provided in this paragraph. The |
2237 | corporation shall file its recommended rates with the office at |
2238 | least annually. The corporation shall provide any additional |
2239 | information regarding the rates which the office requires. The |
2240 | office shall consider the recommendations of the board and issue |
2241 | a final order establishing the rates for the corporation within |
2242 | 45 days after the recommended rates are filed. The corporation |
2243 | may not pursue an administrative challenge or judicial review of |
2244 | the final order of the office. |
2245 | 2. In addition to the rates otherwise determined pursuant |
2246 | to this paragraph, the corporation shall impose and collect an |
2247 | amount equal to the premium tax provided for in s. 624.509 to |
2248 | augment the financial resources of the corporation. |
2249 | 3. After the public hurricane loss-projection model under |
2250 | s. 627.06281 has been found to be accurate and reliable by the |
2251 | Florida Commission on Hurricane Loss Projection Methodology, the |
2252 | that model shall serve as the minimum benchmark for determining |
2253 | the windstorm portion of the corporation's rates. This |
2254 | subparagraph does not require or allow the corporation to adopt |
2255 | rates lower than the rates otherwise required or allowed by this |
2256 | paragraph. |
2257 | 4. The rate filings for the corporation which were |
2258 | approved by the office and which took effect January 1, 2007, |
2259 | are rescinded, except for those rates that were lowered. As soon |
2260 | as possible, the corporation shall begin using the lower rates |
2261 | that were in effect on December 31, 2006, and shall provide |
2262 | refunds to policyholders who have paid higher rates as a result |
2263 | of that rate filing. The rates in effect on December 31, 2006, |
2264 | shall remain in effect for the 2007 and 2008 calendar years |
2265 | except for any rate change that results in a lower rate. The |
2266 | next rate change that may increase rates shall take effect |
2267 | pursuant to a new rate filing recommended by the corporation and |
2268 | established by the office, subject to the requirements of this |
2269 | paragraph. |
2270 | 5. Beginning on July 15, 2009, and annually each year |
2271 | thereafter, the corporation must make a recommended actuarially |
2272 | sound rate filing for each personal and commercial line of |
2273 | business it writes, to be effective no earlier than January 1, |
2274 | 2010. |
2275 | 6. Beginning on or after January 1, 2010, and |
2276 | notwithstanding the board's recommended rates and the office's |
2277 | final order regarding the corporation's filed rates under |
2278 | subparagraph 1., the corporation shall annually implement a rate |
2279 | increase each year which, except for sinkhole coverage, does not |
2280 | exceed 10 percent for any single policy issued by the |
2281 | corporation, excluding coverage changes and surcharges. |
2282 | 7. The corporation may also implement an increase to |
2283 | reflect the effect on the corporation of the cash buildup factor |
2284 | pursuant to s. 215.555(5)(b). |
2285 | 8. The corporation's implementation of rates as prescribed |
2286 | in subparagraph 6. shall cease for any line of business written |
2287 | by the corporation upon the corporation's implementation of |
2288 | actuarially sound rates. Thereafter, the corporation shall |
2289 | annually make a recommended actuarially sound rate filing for |
2290 | each commercial and personal line of business the corporation |
2291 | writes. |
2292 | (v)1. Effective July 1, 2002, policies of the Residential |
2293 | Property and Casualty Joint Underwriting Association shall |
2294 | become policies of the corporation. All obligations, rights, |
2295 | assets and liabilities of the Residential Property and Casualty |
2296 | Joint Underwriting association, including bonds, note and debt |
2297 | obligations, and the financing documents pertaining to them |
2298 | become those of the corporation as of July 1, 2002. The |
2299 | corporation is not required to issue endorsements or |
2300 | certificates of assumption to insureds during the remaining term |
2301 | of in-force transferred policies. |
2302 | 2. Effective July 1, 2002, policies of the Florida |
2303 | Windstorm Underwriting Association are transferred to the |
2304 | corporation and shall become policies of the corporation. All |
2305 | obligations, rights, assets, and liabilities of the Florida |
2306 | Windstorm Underwriting association, including bonds, note and |
2307 | debt obligations, and the financing documents pertaining to them |
2308 | are transferred to and assumed by the corporation on July 1, |
2309 | 2002. The corporation is not required to issue endorsements or |
2310 | certificates of assumption to insureds during the remaining term |
2311 | of in-force transferred policies. |
2312 | 3. The Florida Windstorm Underwriting Association and the |
2313 | Residential Property and Casualty Joint Underwriting Association |
2314 | shall take all actions necessary as may be proper to further |
2315 | evidence the transfers and shall provide the documents and |
2316 | instruments of further assurance as may reasonably be requested |
2317 | by the corporation for that purpose. The corporation shall |
2318 | execute assumptions and instruments as the trustees or other |
2319 | parties to the financing documents of the Florida Windstorm |
2320 | Underwriting Association or the Residential Property and |
2321 | Casualty Joint Underwriting Association may reasonably request |
2322 | to further evidence the transfers and assumptions, which |
2323 | transfers and assumptions, however, are effective on the date |
2324 | provided under this paragraph whether or not, and regardless of |
2325 | the date on which, the assumptions or instruments are executed |
2326 | by the corporation. Subject to the relevant financing documents |
2327 | pertaining to their outstanding bonds, notes, indebtedness, or |
2328 | other financing obligations, the moneys, investments, |
2329 | receivables, choses in action, and other intangibles of the |
2330 | Florida Windstorm Underwriting Association shall be credited to |
2331 | the coastal high-risk account of the corporation, and those of |
2332 | the personal lines residential coverage account and the |
2333 | commercial lines residential coverage account of the Residential |
2334 | Property and Casualty Joint Underwriting Association shall be |
2335 | credited to the personal lines account and the commercial lines |
2336 | account, respectively, of the corporation. |
2337 | 4. Effective July 1, 2002, a new applicant for property |
2338 | insurance coverage who would otherwise have been eligible for |
2339 | coverage in the Florida Windstorm Underwriting Association is |
2340 | eligible for coverage from the corporation as provided in this |
2341 | subsection. |
2342 | 5. The transfer of all policies, obligations, rights, |
2343 | assets, and liabilities from the Florida Windstorm Underwriting |
2344 | Association to the corporation and the renaming of the |
2345 | Residential Property and Casualty Joint Underwriting Association |
2346 | as the corporation does not shall in no way affect the coverage |
2347 | with respect to covered policies as defined in s. 215.555(2)(c) |
2348 | provided to these entities by the Florida Hurricane Catastrophe |
2349 | Fund. The coverage provided by the Florida Hurricane Catastrophe |
2350 | fund to the Florida Windstorm Underwriting Association based on |
2351 | its exposures as of June 30, 2002, and each June 30 thereafter |
2352 | shall be redesignated as coverage for the coastal high-risk |
2353 | account of the corporation. Notwithstanding any other provision |
2354 | of law, the coverage provided by the Florida Hurricane |
2355 | Catastrophe fund to the Residential Property and Casualty Joint |
2356 | Underwriting Association based on its exposures as of June 30, |
2357 | 2002, and each June 30 thereafter shall be transferred to the |
2358 | personal lines account and the commercial lines account of the |
2359 | corporation. Notwithstanding any other provision of law, the |
2360 | coastal high-risk account shall be treated, for all Florida |
2361 | Hurricane Catastrophe Fund purposes, as if it were a separate |
2362 | participating insurer with its own exposures, reimbursement |
2363 | premium, and loss reimbursement. Likewise, the personal lines |
2364 | and commercial lines accounts shall be viewed together, for all |
2365 | Florida Hurricane Catastrophe fund purposes, as if the two |
2366 | accounts were one and represent a single, separate participating |
2367 | insurer with its own exposures, reimbursement premium, and loss |
2368 | reimbursement. The coverage provided by the Florida Hurricane |
2369 | Catastrophe fund to the corporation shall constitute and operate |
2370 | as a full transfer of coverage from the Florida Windstorm |
2371 | Underwriting Association and Residential Property and Casualty |
2372 | Joint Underwriting to the corporation. |
2373 | (y) It is the intent of the Legislature that the |
2374 | amendments to this subsection enacted in 2002 should, over time, |
2375 | reduce the probable maximum windstorm losses in the residual |
2376 | markets and should reduce the potential assessments to be levied |
2377 | on property insurers and policyholders statewide. In furtherance |
2378 | of this intent: |
2379 | 1. the board shall, on or before February 1 of each year, |
2380 | provide a report to the President of the Senate and the Speaker |
2381 | of the House of Representatives showing the reduction or |
2382 | increase in the 100-year probable maximum loss attributable to |
2383 | wind-only coverages and the quota share program under this |
2384 | subsection combined, as compared to the benchmark 100-year |
2385 | probable maximum loss of the Florida Windstorm Underwriting |
2386 | Association. For purposes of this paragraph, the benchmark 100- |
2387 | year probable maximum loss of the Florida Windstorm Underwriting |
2388 | Association shall be the calculation dated February 2001 and |
2389 | based on November 30, 2000, exposures. In order to ensure |
2390 | comparability of data, the board shall use the same methods for |
2391 | calculating its probable maximum loss as were used to calculate |
2392 | the benchmark probable maximum loss. |
2393 | 2. Beginning December 1, 2010, if the report under |
2394 | subparagraph 1. for any year indicates that the 100-year |
2395 | probable maximum loss attributable to wind-only coverages and |
2396 | the quota share program combined does not reflect a reduction of |
2397 | at least 25 percent from the benchmark, the board shall reduce |
2398 | the boundaries of the high-risk area eligible for wind-only |
2399 | coverages under this subsection in a manner calculated to reduce |
2400 | such probable maximum loss to an amount at least 25 percent |
2401 | below the benchmark. |
2402 | 3. Beginning February 1, 2015, if the report under |
2403 | subparagraph 1. for any year indicates that the 100-year |
2404 | probable maximum loss attributable to wind-only coverages and |
2405 | the quota share program combined does not reflect a reduction of |
2406 | at least 50 percent from the benchmark, the boundaries of the |
2407 | high-risk area eligible for wind-only coverages under this |
2408 | subsection shall be reduced by the elimination of any area that |
2409 | is not seaward of a line 1,000 feet inland from the Intracoastal |
2410 | Waterway. |
2411 | Section 16. Paragraph (a) of subsection (5) of section |
2412 | 627.3511, Florida Statutes, is amended to read: |
2413 | 627.3511 Depopulation of Citizens Property Insurance |
2414 | Corporation.- |
2415 | (5) APPLICABILITY.- |
2416 | (a) The take-out bonus provided by subsection (2) and the |
2417 | exemption from assessment provided by paragraph (3)(a) apply |
2418 | only if the corporation policy is replaced by either a standard |
2419 | policy including wind coverage or, if consistent with the |
2420 | insurer's underwriting rules as filed with the office, a basic |
2421 | policy including wind coverage; however, for with respect to |
2422 | risks located in areas where coverage through the coastal high- |
2423 | risk account of the corporation is available, the replacement |
2424 | policy need not provide wind coverage. The insurer must renew |
2425 | the replacement policy at approved rates on substantially |
2426 | similar terms for four additional 1-year terms, unless canceled |
2427 | or not renewed by the policyholder. If an insurer assumes the |
2428 | corporation's obligations for a policy, it must issue a |
2429 | replacement policy for a 1-year term upon expiration of the |
2430 | corporation policy and must renew the replacement policy at |
2431 | approved rates on substantially similar terms for four |
2432 | additional 1-year terms, unless canceled or not renewed by the |
2433 | policyholder. For each replacement policy canceled or nonrenewed |
2434 | by the insurer for any reason during the 5-year coverage period |
2435 | required by this paragraph, the insurer must remove from the |
2436 | corporation one additional policy covering a risk similar to the |
2437 | risk covered by the canceled or nonrenewed policy. In addition |
2438 | to these requirements, the corporation must place the bonus |
2439 | moneys in escrow for a period of 5 years; such moneys may be |
2440 | released from escrow only to pay claims. If the policy is |
2441 | canceled or nonrenewed before the end of the 5-year period, the |
2442 | amount of the take-out bonus must be prorated for the time |
2443 | period the policy was insured. A take-out bonus provided by |
2444 | subsection (2) or subsection (6) is shall not be considered |
2445 | premium income for purposes of taxes and assessments under the |
2446 | Florida Insurance Code and shall remain the property of the |
2447 | corporation, subject to the prior security interest of the |
2448 | insurer under the escrow agreement until it is released from |
2449 | escrow;, and after it is released from escrow it is shall be |
2450 | considered an asset of the insurer and credited to the insurer's |
2451 | capital and surplus. |
2452 | Section 17. Paragraph (b) of subsection (2) of section |
2453 | 627.4133, Florida Statutes, is amended to read: |
2454 | 627.4133 Notice of cancellation, nonrenewal, or renewal |
2455 | premium.- |
2456 | (2) With respect to any personal lines or commercial |
2457 | residential property insurance policy, including, but not |
2458 | limited to, any homeowner's, mobile home owner's, farmowner's, |
2459 | condominium association, condominium unit owner's, apartment |
2460 | building, or other policy covering a residential structure or |
2461 | its contents: |
2462 | (b) The insurer shall give the named insured written |
2463 | notice of nonrenewal, cancellation, or termination at least 100 |
2464 | days before prior to the effective date of the nonrenewal, |
2465 | cancellation, or termination. However, the insurer shall give at |
2466 | least 100 days' written notice, or written notice by June 1, |
2467 | whichever is earlier, for any nonrenewal, cancellation, or |
2468 | termination that would be effective between June 1 and November |
2469 | 30. The notice must include the reason or reasons for the |
2470 | nonrenewal, cancellation, or termination, except that: |
2471 | 1. The insurer shall give the named insured written notice |
2472 | of nonrenewal, cancellation, or termination at least 120 180 |
2473 | days prior to the effective date of the nonrenewal, |
2474 | cancellation, or termination for a named insured whose |
2475 | residential structure has been insured by that insurer or an |
2476 | affiliated insurer for at least a 5-year period immediately |
2477 | prior to the date of the written notice. |
2478 | 2. If When cancellation is for nonpayment of premium, at |
2479 | least 10 days' written notice of cancellation accompanied by the |
2480 | reason therefor must shall be given. As used in this |
2481 | subparagraph, the term "nonpayment of premium" means failure of |
2482 | the named insured to discharge when due any of her or his |
2483 | obligations in connection with the payment of premiums on a |
2484 | policy or any installment of such premium, whether the premium |
2485 | is payable directly to the insurer or its agent or indirectly |
2486 | under any premium finance plan or extension of credit, or |
2487 | failure to maintain membership in an organization if such |
2488 | membership is a condition precedent to insurance coverage. The |
2489 | term "Nonpayment of premium" also means the failure of a |
2490 | financial institution to honor an insurance applicant's check |
2491 | after delivery to a licensed agent for payment of a premium, |
2492 | even if the agent has previously delivered or transferred the |
2493 | premium to the insurer. If a dishonored check represents the |
2494 | initial premium payment, the contract and all contractual |
2495 | obligations are shall be void ab initio unless the nonpayment is |
2496 | cured within the earlier of 5 days after actual notice by |
2497 | certified mail is received by the applicant or 15 days after |
2498 | notice is sent to the applicant by certified mail or registered |
2499 | mail, and if the contract is void, any premium received by the |
2500 | insurer from a third party must shall be refunded to that party |
2501 | in full. |
2502 | 3. If When such cancellation or termination occurs during |
2503 | the first 90 days during which the insurance is in force and the |
2504 | insurance is canceled or terminated for reasons other than |
2505 | nonpayment of premium, at least 20 days' written notice of |
2506 | cancellation or termination accompanied by the reason therefor |
2507 | must shall be given unless except where there has been a |
2508 | material misstatement or misrepresentation or failure to comply |
2509 | with the underwriting requirements established by the insurer. |
2510 | 4. The requirement for providing written notice of |
2511 | nonrenewal by June 1 of any nonrenewal that would be effective |
2512 | between June 1 and November 30 does not apply to the following |
2513 | situations, but the insurer remains subject to the requirement |
2514 | to provide such notice at least 100 days before prior to the |
2515 | effective date of nonrenewal: |
2516 | a. A policy that is nonrenewed due to a revision in the |
2517 | coverage for sinkhole losses and catastrophic ground cover |
2518 | collapse pursuant to s. 627.706, as amended by s. 30, chapter |
2519 | 2007-1, Laws of Florida. |
2520 | b. A policy that is nonrenewed by Citizens Property |
2521 | Insurance Corporation, pursuant to s. 627.351(6), for a policy |
2522 | that has been assumed by an authorized insurer offering |
2523 | replacement or renewal coverage to the policyholder is exempt |
2524 | from the notice requirements of paragraph (a) and this |
2525 | paragraph. In such cases, the corporation must give the named |
2526 | insured written notice of nonrenewal at least 45 days before the |
2527 | effective date of the nonrenewal. |
2528 |
|
2529 | After the policy has been in effect for 90 days, the policy may |
2530 | shall not be canceled by the insurer unless except when there |
2531 | has been a material misstatement, a nonpayment of premium, a |
2532 | failure to comply with underwriting requirements established by |
2533 | the insurer within 90 days after of the date of effectuation of |
2534 | coverage, or a substantial change in the risk covered by the |
2535 | policy or if when the cancellation is for all insureds under |
2536 | such policies for a given class of insureds. This paragraph does |
2537 | not apply to individually rated risks having a policy term of |
2538 | less than 90 days. |
2539 | 5. Notwithstanding any other provision of law, an insurer |
2540 | may cancel or nonrenew a property insurance policy after at |
2541 | least 45 days' notice if the office finds that the early |
2542 | cancellation of some or all of the insurer's policies is |
2543 | necessary to protect the best interests of the public or |
2544 | policyholders and the office approves the insurer's plan for |
2545 | early cancellation or nonrenewal of some or all of its policies. |
2546 | The office may base such finding upon the financial condition of |
2547 | the insurer, lack of adequate reinsurance coverage for hurricane |
2548 | risk, or other relevant factors. The office may condition its |
2549 | finding on the consent of the insurer to be placed under |
2550 | administrative supervision pursuant to s. 624.81 or to the |
2551 | appointment of a receiver under chapter 631. |
2552 | 6. A policy covering both a home and motor vehicle may be |
2553 | nonrenewed for any reason applicable to either the property or |
2554 | motor vehicle insurance after providing 90 days' notice. |
2555 | Section 18. Section 627.43141, Florida Statutes, is |
2556 | created to read: |
2557 | 627.43141 Notice of change in policy terms.- |
2558 | (1) As used in this section, the term: |
2559 | (a) "Change in policy terms" means the modification, |
2560 | addition, or deletion of any term, coverage, duty, or condition |
2561 | from the previous policy. The correction of typographical or |
2562 | scrivener's errors or the application of mandated legislative |
2563 | changes is not a change in policy terms. |
2564 | (b) "Policy" means a written contract of property and |
2565 | casualty insurance or written agreement for such insurance, by |
2566 | whatever name called, and includes all clauses, riders, |
2567 | endorsements, and papers that are a part of such policy. The |
2568 | term does not include a binder as defined in s. 627.420 unless |
2569 | the duration of the binder period exceeds 60 days. |
2570 | (c) "Renewal" means the issuance and delivery by an |
2571 | insurer of a policy superseding at the end of the policy period |
2572 | a policy previously issued and delivered by the same insurer or |
2573 | the issuance and delivery of a certificate or notice extending |
2574 | the term of a policy beyond its policy period or term. Any |
2575 | policy that has a policy period or term of less than 6 months or |
2576 | that does not have a fixed expiration date shall, for purposes |
2577 | of this section, be considered as written for successive policy |
2578 | periods or terms of 6 months. |
2579 | (2) A renewal policy may contain a change in policy terms. |
2580 | If a renewal policy does contains such change, the insurer must |
2581 | give the named insured written notice of the change, which must |
2582 | be enclosed along with the written notice of renewal premium |
2583 | required by ss. 627.4133 and 627.728. Such notice shall be |
2584 | entitled "Notice of Change in Policy Terms." |
2585 | (3) Although not required, proof of mailing or registered |
2586 | mailing through the United States Postal Service of the Notice |
2587 | of Change in Policy Terms to the named insured at the address |
2588 | shown in the policy is sufficient proof of notice. |
2589 | (4) Receipt of the premium payment for the renewal policy |
2590 | by the insurer is deemed to be acceptance of the new policy |
2591 | terms by the named insured. |
2592 | (5) If an insurer fails to provide the notice required in |
2593 | subsection (2), the original policy terms remain in effect until |
2594 | the next renewal and the proper service of the notice, or until |
2595 | the effective date of replacement coverage obtained by the named |
2596 | insured, whichever occurs first. |
2597 | (6) The intent of this section is to: |
2598 | (a) Allow an insurer to make a change in policy terms |
2599 | without nonrenewing those policyholders that the insurer wishes |
2600 | to continue insuring. |
2601 | (b) Alleviate concern and confusion to the policyholder |
2602 | caused by the required policy nonrenewal for the limited issue |
2603 | if an insurer intends to renew the insurance policy, but the new |
2604 | policy contains a change in policy terms. |
2605 | (c) Encourage policyholders to discuss their coverages |
2606 | with their insurance agents. |
2607 | Section 19. Section 627.7011, Florida Statutes, is amended |
2608 | to read: |
2609 | 627.7011 Homeowners' policies; offer of replacement cost |
2610 | coverage and law and ordinance coverage.- |
2611 | (1) Prior to issuing a homeowner's insurance policy on or |
2612 | after October 1, 2005, or prior to the first renewal of a |
2613 | homeowner's insurance policy on or after October 1, 2005, the |
2614 | insurer must offer each of the following: |
2615 | (a) A policy or endorsement providing that any loss that |
2616 | which is repaired or replaced will be adjusted on the basis of |
2617 | replacement costs to the dwelling not exceeding policy limits as |
2618 | to the dwelling, rather than actual cash value, but not |
2619 | including costs necessary to meet applicable laws and ordinances |
2620 | regulating the construction, use, or repair of any property or |
2621 | requiring the tearing down of any property, including the costs |
2622 | of removing debris. |
2623 | (b) A policy or endorsement providing that, subject to |
2624 | other policy provisions, any loss that which is repaired or |
2625 | replaced at any location will be adjusted on the basis of |
2626 | replacement costs to the dwelling not exceeding policy limits as |
2627 | to the dwelling, rather than actual cash value, and also |
2628 | including costs necessary to meet applicable laws and ordinances |
2629 | regulating the construction, use, or repair of any property or |
2630 | requiring the tearing down of any property, including the costs |
2631 | of removing debris.; However, such additional costs necessary to |
2632 | meet applicable laws and ordinances may be limited to either 25 |
2633 | percent or 50 percent of the dwelling limit, as selected by the |
2634 | policyholder, and such coverage applies shall apply only to |
2635 | repairs of the damaged portion of the structure unless the total |
2636 | damage to the structure exceeds 50 percent of the replacement |
2637 | cost of the structure. |
2638 |
|
2639 | An insurer is not required to make the offers required by this |
2640 | subsection with respect to the issuance or renewal of a |
2641 | homeowner's policy that contains the provisions specified in |
2642 | paragraph (b) for law and ordinance coverage limited to 25 |
2643 | percent of the dwelling limit, except that the insurer must |
2644 | offer the law and ordinance coverage limited to 50 percent of |
2645 | the dwelling limit. This subsection does not prohibit the offer |
2646 | of a guaranteed replacement cost policy. |
2647 | (2) Unless the insurer obtains the policyholder's written |
2648 | refusal of the policies or endorsements specified in subsection |
2649 | (1), any policy covering the dwelling is deemed to include the |
2650 | law and ordinance coverage limited to 25 percent of the dwelling |
2651 | limit. The rejection or selection of alternative coverage shall |
2652 | be made on a form approved by the office. The form must shall |
2653 | fully advise the applicant of the nature of the coverage being |
2654 | rejected. If this form is signed by a named insured, it is will |
2655 | be conclusively presumed that there was an informed, knowing |
2656 | rejection of the coverage or election of the alternative |
2657 | coverage on behalf of all insureds. Unless the policyholder |
2658 | requests in writing the coverage specified in this section, it |
2659 | need not be provided in or supplemental to any other policy that |
2660 | renews, insures, extends, changes, supersedes, or replaces an |
2661 | existing policy if when the policyholder has rejected the |
2662 | coverage specified in this section or has selected alternative |
2663 | coverage. The insurer must provide the such policyholder with |
2664 | notice of the availability of such coverage in a form approved |
2665 | by the office at least once every 3 years. The failure to |
2666 | provide such notice constitutes a violation of this code, but |
2667 | does not affect the coverage provided under the policy. |
2668 | (3) In the event of a loss for which a dwelling or |
2669 | personal property is insured on the basis of replacement costs: |
2670 | (a) For a dwelling, the insurer must initially pay at |
2671 | least the actual cash value of the insured loss, less any |
2672 | applicable deductible. The insurer shall pay any remaining |
2673 | amounts necessary to perform such repairs as work is performed |
2674 | and expenses are incurred. If a total loss of a dwelling occurs, |
2675 | the insurer shall pay the replacement cost coverage without |
2676 | reservation or holdback of any depreciation in value, pursuant |
2677 | to s. 627.702. |
2678 | (b) For personal property: |
2679 | 1. The insurer must offer coverage under which the insurer |
2680 | is obligated to pay the replacement cost without reservation or |
2681 | holdback for any depreciation in value, whether or not the |
2682 | insured replaces the property. |
2683 | 2. The insurer may also offer coverage under which the |
2684 | insurer may limit the initial payment to the actual cash value |
2685 | of the personal property to be replaced, require the insured to |
2686 | provide receipts for the purchase of the property financed by |
2687 | the initial payment, use such receipts to make the next payment |
2688 | requested by the insured for the replacement of insured |
2689 | property, and continue this process until the insured remits all |
2690 | receipts up to the policy limits for replacement costs. The |
2691 | insurer must provide clear notice of this process before the |
2692 | policy is bound. A policyholder must be provided an actuarially |
2693 | reasonable premium credit or discount for this coverage. The |
2694 | insurer may not require the policyholder to advance payment for |
2695 | the replaced property, the insurer shall pay the replacement |
2696 | cost without reservation or holdback of any depreciation in |
2697 | value, whether or not the insured replaces or repairs the |
2698 | dwelling or property. |
2699 | (4) A Any homeowner's insurance policy issued or renewed |
2700 | on or after October 1, 2005, must include in bold type no |
2701 | smaller than 18 points the following statement: |
2702 | "LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE |
2703 | THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO |
2704 | CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE |
2705 | NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS |
2706 | COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE |
2707 | DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT." |
2708 |
|
2709 | The intent of this subsection is to encourage policyholders to |
2710 | purchase sufficient coverage to protect them in case events |
2711 | excluded from the standard homeowners policy, such as law and |
2712 | ordinance enforcement and flood, combine with covered events to |
2713 | produce damage or loss to the insured property. The intent is |
2714 | also to encourage policyholders to discuss these issues with |
2715 | their insurance agent. |
2716 | (5) Nothing in This section does not: shall be construed |
2717 | to |
2718 | (a) Apply to policies not considered to be "homeowners' |
2719 | policies," as that term is commonly understood in the insurance |
2720 | industry. This section specifically does not |
2721 | (b) Apply to mobile home policies. Nothing in this section |
2722 | (c) Limit shall be construed as limiting the ability of an |
2723 | any insurer to reject or nonrenew any insured or applicant on |
2724 | the grounds that the structure does not meet underwriting |
2725 | criteria applicable to replacement cost or law and ordinance |
2726 | policies or for other lawful reasons. |
2727 | (d)(6) This section does not Prohibit an insurer from |
2728 | limiting its liability under a policy or endorsement providing |
2729 | that loss will be adjusted on the basis of replacement costs to |
2730 | the lesser of: |
2731 | 1.(a) The limit of liability shown on the policy |
2732 | declarations page; |
2733 | 2.(b) The reasonable and necessary cost to repair the |
2734 | damaged, destroyed, or stolen covered property; or |
2735 | 3.(c) The reasonable and necessary cost to replace the |
2736 | damaged, destroyed, or stolen covered property. |
2737 | (e)(7) This section does not Prohibit an insurer from |
2738 | exercising its right to repair damaged property in compliance |
2739 | with its policy and s. 627.702(7). |
2740 | Section 20. Paragraph (a) of subsection (5) of section |
2741 | 627.70131, Florida Statutes, is amended to read: |
2742 | 627.70131 Insurer's duty to acknowledge communications |
2743 | regarding claims; investigation.- |
2744 | (5)(a) Within 90 days after an insurer receives notice of |
2745 | an initial, reopened, or supplemental a property insurance claim |
2746 | from a policyholder, the insurer shall pay or deny such claim or |
2747 | a portion of the claim unless the failure to pay such claim or a |
2748 | portion of the claim is caused by factors beyond the control of |
2749 | the insurer which reasonably prevent such payment. Any payment |
2750 | of an initial or supplemental a claim or portion of such a claim |
2751 | made paid 90 days after the insurer receives notice of the |
2752 | claim, or made paid more than 15 days after there are no longer |
2753 | factors beyond the control of the insurer which reasonably |
2754 | prevented such payment, whichever is later, bears shall bear |
2755 | interest at the rate set forth in s. 55.03. Interest begins to |
2756 | accrue from the date the insurer receives notice of the claim. |
2757 | The provisions of this subsection may not be waived, voided, or |
2758 | nullified by the terms of the insurance policy. If there is a |
2759 | right to prejudgment interest, the insured shall select whether |
2760 | to receive prejudgment interest or interest under this |
2761 | subsection. Interest is payable when the claim or portion of the |
2762 | claim is paid. Failure to comply with this subsection |
2763 | constitutes a violation of this code. However, failure to comply |
2764 | with this subsection does shall not form the sole basis for a |
2765 | private cause of action. |
2766 | Section 21. The Legislature finds and declares: |
2767 | (1) There is a compelling state interest in maintaining a |
2768 | viable and orderly private-sector market for property insurance |
2769 | in this state. The lack of a viable and orderly property market |
2770 | reduces the availability of property insurance coverage to state |
2771 | residents, increases the cost of property insurance, and |
2772 | increases the state's reliance on a residual property insurance |
2773 | market and its potential for imposing assessments on |
2774 | policyholders throughout the state. |
2775 | (2) In 2005, the Legislature revised ss. 627.706-627.7074, |
2776 | Florida Statutes, to adopt certain geological or technical |
2777 | terms; to increase reliance on objective, scientific testing |
2778 | requirements; and generally to reduce the number of sinkhole |
2779 | claims and related disputes arising under prior law. The |
2780 | Legislature determined that since the enactment of these |
2781 | statutory revisions, both private-sector insurers and Citizens |
2782 | Property Insurance Corporation have, nevertheless, continued to |
2783 | experience high claims frequency and severity for sinkhole |
2784 | insurance claims. In addition, many properties remain unrepaired |
2785 | even after loss payments, which reduces the local property tax |
2786 | base and adversely affects the real estate market. Therefore, |
2787 | the Legislature finds that losses associated with sinkhole |
2788 | claims adversely affect the public health, safety, and welfare |
2789 | of this state and its citizens. |
2790 | (3) Pursuant to sections 23 through 28 of this act, |
2791 | technical or scientific definitions adopted in the 2005 |
2792 | legislation are clarified to implement and advance the |
2793 | Legislature's intended reduction of sinkhole claims and |
2794 | disputes. Certain other revisions to ss. 627.706-627.7074, |
2795 | Florida Statutes, are enacted to advance legislative intent to |
2796 | rely on scientific or technical determinations relating to |
2797 | sinkholes and sinkhole claims, reduce the number and cost of |
2798 | disputes relating to sinkhole claims, and ensure that repairs |
2799 | are made commensurate with the scientific and technical |
2800 | determinations and insurance claims payments. |
2801 | Section 22. Section 627.706, Florida Statutes, is |
2802 | reordered and amended to read: |
2803 | 627.706 Sinkhole insurance; catastrophic ground cover |
2804 | collapse; definitions.- |
2805 | (1)(a) Every insurer authorized to transact property |
2806 | insurance in this state must shall provide coverage for a |
2807 | catastrophic ground cover collapse. |
2808 | (b) The insurer and shall make available, for an |
2809 | appropriate additional premium, coverage for sinkhole losses on |
2810 | any structure, including the contents of personal property |
2811 | contained therein, to the extent provided in the form to which |
2812 | the coverage attaches. The insurer may require an inspection of |
2813 | the property before issuance of sinkhole loss coverage. A policy |
2814 | for residential property insurance may include a deductible |
2815 | amount applicable to sinkhole losses equal to 1 percent, 2 |
2816 | percent, 5 percent, or 10 percent of the policy dwelling limits, |
2817 | with appropriate premium discounts offered with each deductible |
2818 | amount. |
2819 | (c) The insurer may restrict catastrophic ground cover |
2820 | collapse and sinkhole loss coverage to the principal building, |
2821 | as defined in the applicable policy. |
2822 | (2) As used in ss. 627.706-627.7074, and as used in |
2823 | connection with any policy providing coverage for a catastrophic |
2824 | ground cover collapse or for sinkhole losses, the term: |
2825 | (a) "Catastrophic ground cover collapse" means geological |
2826 | activity that results in all the following: |
2827 | 1. The abrupt collapse of the ground cover; |
2828 | 2. A depression in the ground cover clearly visible to the |
2829 | naked eye; |
2830 | 3. Structural damage to the covered building, including |
2831 | the foundation; and |
2832 | 4. The insured structure being condemned and ordered to be |
2833 | vacated by the governmental agency authorized by law to issue |
2834 | such an order for that structure. |
2835 |
|
2836 | Contents coverage applies if there is a loss resulting from a |
2837 | catastrophic ground cover collapse. Structural Damage consisting |
2838 | merely of the settling or cracking of a foundation, structure, |
2839 | or building does not constitute a loss resulting from a |
2840 | catastrophic ground cover collapse. |
2841 | (b) "Neutral evaluation" means the alternative dispute |
2842 | resolution provided in s. 627.7074. |
2843 | (c) "Neutral evaluator" means a professional engineer or a |
2844 | professional geologist who has completed a course of study in |
2845 | alternative dispute resolution designed or approved by the |
2846 | department for use in the neutral evaluation process and who is |
2847 | determined by the department to be fair and impartial. |
2848 | (h)(b) "Sinkhole" means a landform created by subsidence |
2849 | of soil, sediment, or rock as underlying strata are dissolved by |
2850 | groundwater. A sinkhole forms may form by collapse into |
2851 | subterranean voids created by dissolution of limestone or |
2852 | dolostone or by subsidence as these strata are dissolved. |
2853 | (j)(c) "Sinkhole loss" means structural damage to the |
2854 | covered building, including the foundation, caused by sinkhole |
2855 | activity. Contents coverage and additional living expenses shall |
2856 | apply only if there is structural damage to the covered building |
2857 | caused by sinkhole activity. |
2858 | (i)(d) "Sinkhole activity" means settlement or systematic |
2859 | weakening of the earth supporting the covered building such |
2860 | property only if the when such settlement or systematic |
2861 | weakening results from contemporaneous movement or raveling of |
2862 | soils, sediments, or rock materials into subterranean voids |
2863 | created by the effect of water on a limestone or similar rock |
2864 | formation. |
2865 | (f)(e) "Professional engineer" means a person, as defined |
2866 | in s. 471.005, who has a bachelor's degree or higher in |
2867 | engineering with a specialty in the geotechnical engineering |
2868 | field. A professional engineer must also have geotechnical |
2869 | experience and expertise in the identification of sinkhole |
2870 | activity as well as other potential causes of structural damage |
2871 | to the structure. |
2872 | (g)(f) "Professional geologist" means a person, as defined |
2873 | in by s. 492.102, who has a bachelor's degree or higher in |
2874 | geology or related earth science and with expertise in the |
2875 | geology of Florida. A professional geologist must have |
2876 | geological experience and expertise in the identification of |
2877 | sinkhole activity as well as other potential geologic causes of |
2878 | structural damage to the structure. |
2879 | (k) "Structural damage" means a covered building, |
2880 | regardless of the date of its construction, has experienced the |
2881 | following: |
2882 | 1. Interior floor displacement or deflection in excess of |
2883 | acceptable variances as defined in ACI 117-90 or the Florida |
2884 | Building Code, which results in settlement related damage to the |
2885 | interior such that the interior building structure or members |
2886 | become unfit for service or represents a safety hazard as |
2887 | defined within the Florida Building Code; |
2888 | 2. Foundation displacement or deflection in excess of |
2889 | acceptable variances as defined in ACI 318-95 or the Florida |
2890 | Building Code, which results in settlement related damage to the |
2891 | primary structural members or primary structural systems that |
2892 | prevents those members or systems from supporting the loads and |
2893 | forces they were designed to support to the extent that stresses |
2894 | in those primary structural members or primary structural |
2895 | systems exceeds one and one-third the nominal strength allowed |
2896 | under the Florida Building Code for new buildings of similar |
2897 | structure, purpose, or location; |
2898 | 3. Damage that results in listing, leaning, or buckling of |
2899 | the exterior load bearing walls or other vertical primary |
2900 | structural members to such an extent that a plumb line passing |
2901 | through the center of gravity does not fall inside the middle |
2902 | one-third of the base as defined within the Florida Building |
2903 | Code; |
2904 | 4. Damage that results in the building, or any portion of |
2905 | the building containing primary structural members or primary |
2906 | structural systems, being significantly likely to imminently |
2907 | collapse because of the movement or instability of the ground |
2908 | within the influence zone of the supporting ground within the |
2909 | sheer plane necessary for the purpose of supporting such |
2910 | building as defined within the Florida Building Code; or |
2911 | 5. Damage occurring on or after October 15, 2005, that |
2912 | qualifies as "substantial structural damage" as defined in the |
2913 | Florida Building Code. |
2914 | (d) "Primary structural member" means a structural element |
2915 | designed to provide support and stability for the vertical or |
2916 | lateral loads of the overall structure. |
2917 | (e) "Primary structural system" means an assemblage of |
2918 | primary structural members. |
2919 | (3) On or before June 1, 2007, Every insurer authorized to |
2920 | transact property insurance in this state shall make a proper |
2921 | filing with the office for the purpose of extending the |
2922 | appropriate forms of property insurance to include coverage for |
2923 | catastrophic ground cover collapse or for sinkhole losses. |
2924 | coverage for catastrophic ground cover collapse may not go into |
2925 | effect until the effective date provided for in the filing |
2926 | approved by the office. |
2927 | (3)(4) Insurers offering policies that exclude coverage |
2928 | for sinkhole losses must shall inform policyholders in bold type |
2929 | of not less than 14 points as follows: "YOUR POLICY PROVIDES |
2930 | COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS |
2931 | IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE, |
2932 | YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU |
2933 | MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN |
2934 | ADDITIONAL PREMIUM." |
2935 | (4)(5) An insurer offering sinkhole coverage to |
2936 | policyholders before or after the adoption of s. 30, chapter |
2937 | 2007-1, Laws of Florida, may nonrenew the policies of |
2938 | policyholders maintaining sinkhole coverage in Pasco County or |
2939 | Hernando County, at the option of the insurer, and provide an |
2940 | offer of coverage that to such policyholders which includes |
2941 | catastrophic ground cover collapse and excludes sinkhole |
2942 | coverage. Insurers acting in accordance with this subsection are |
2943 | subject to the following requirements: |
2944 | (a) Policyholders must be notified that a nonrenewal is |
2945 | for purposes of removing sinkhole coverage, and that the |
2946 | policyholder is still being offered a policy that provides |
2947 | coverage for catastrophic ground cover collapse. |
2948 | (b) Policyholders must be provided an actuarially |
2949 | reasonable premium credit or discount for the removal of |
2950 | sinkhole coverage and provision of only catastrophic ground |
2951 | cover collapse. |
2952 | (c) Subject to the provisions of this subsection and the |
2953 | insurer's approved underwriting or insurability guidelines, the |
2954 | insurer shall provide each policyholder with the opportunity to |
2955 | purchase an endorsement to his or her policy providing sinkhole |
2956 | coverage and may require an inspection of the property before |
2957 | issuance of a sinkhole coverage endorsement. |
2958 | (d) Section 624.4305 does not apply to nonrenewal notices |
2959 | issued pursuant to this subsection. |
2960 | (5) Any claim, including, but not limited to, initial, |
2961 | supplemental, and reopened claims under an insurance policy that |
2962 | provides sinkhole coverage is barred unless notice of the claim |
2963 | was given to the insurer in accordance with the terms of the |
2964 | policy within 2 years after the policyholder knew or reasonably |
2965 | should have known about the sinkhole loss. |
2966 | Section 23. Section 627.7061, Florida Statutes, is amended |
2967 | to read: |
2968 | 627.7061 Coverage inquiries.-Inquiries about coverage on a |
2969 | property insurance contract are not claim activity, unless an |
2970 | actual claim is filed by the policyholder which insured that |
2971 | results in a company investigation of the claim. |
2972 | Section 24. Section 627.7065, Florida Statutes, is |
2973 | repealed. |
2974 | Section 25. Section 627.707, Florida Statutes, is amended |
2975 | to read: |
2976 | 627.707 Standards for Investigation of sinkhole claims by |
2977 | insurers; insurer payment; nonrenewals.-Upon receipt of a claim |
2978 | for a sinkhole loss to a covered building, an insurer must meet |
2979 | the following standards in investigating a claim: |
2980 | (1) The insurer must inspect make an inspection of the |
2981 | policyholder's insured's premises to determine if there is |
2982 | structural has been physical damage that to the structure which |
2983 | may be the result of sinkhole activity. |
2984 | (2) If the insurer confirms that structural damage exists |
2985 | but is unable to identify a valid cause of such damage or |
2986 | discovers that such damage is consistent with sinkhole loss |
2987 | Following the insurer's initial inspection, the insurer shall |
2988 | engage a professional engineer or a professional geologist to |
2989 | conduct testing as provided in s. 627.7072 to determine the |
2990 | cause of the loss within a reasonable professional probability |
2991 | and issue a report as provided in s. 627.7073, only if sinkhole |
2992 | loss is covered under the policy. Except as provided in |
2993 | subsections (4) and (6), the fees and costs of the professional |
2994 | engineer or professional geologist shall be paid by the |
2995 | insurer.: |
2996 | (a) The insurer is unable to identify a valid cause of the |
2997 | damage or discovers damage to the structure which is consistent |
2998 | with sinkhole loss; or |
2999 | (b) The policyholder demands testing in accordance with |
3000 | this section or s. 627.7072. |
3001 | (3) Following the initial inspection of the policyholder's |
3002 | insured premises, the insurer shall provide written notice to |
3003 | the policyholder disclosing the following information: |
3004 | (a) What the insurer has determined to be the cause of |
3005 | damage, if the insurer has made such a determination. |
3006 | (b) A statement of the circumstances under which the |
3007 | insurer is required to engage a professional engineer or a |
3008 | professional geologist to verify or eliminate sinkhole loss and |
3009 | to engage a professional engineer to make recommendations |
3010 | regarding land and building stabilization and foundation repair. |
3011 | (c) A statement regarding the right of the policyholder to |
3012 | request testing by a professional engineer or a professional |
3013 | geologist, and the circumstances under which the policyholder |
3014 | may demand certain testing, and the circumstances under which |
3015 | the policyholder may incur costs associated with testing. |
3016 | (4)(a) If the insurer determines that there is no sinkhole |
3017 | loss, the insurer may deny the claim. |
3018 | (b) If coverage for sinkhole loss is available and If the |
3019 | insurer denies the claim, without performing testing under s. |
3020 | 627.7072, the policyholder may demand testing by the insurer |
3021 | under s. 627.7072. |
3022 | 1. The policyholder's demand for testing must be |
3023 | communicated to the insurer in writing within 60 days after the |
3024 | policyholder's receipt of the insurer's denial of the claim. |
3025 | 2. The policyholder shall pay 50 percent of the actual |
3026 | costs of the analyses and services provided under ss. 627.7072 |
3027 | and 627.7073 or $2,500, whichever is less. |
3028 | 3. The insurer shall reimburse the policyholder for the |
3029 | costs if the insurer's engineer or geologist provides written |
3030 | certification pursuant to s. 627.7073 that there is sinkhole |
3031 | loss. |
3032 | (5)(a) Subject to paragraph (b), If a sinkhole loss is |
3033 | verified, the insurer shall pay to stabilize the land and |
3034 | building and repair the foundation in accordance with the |
3035 | recommendations of the professional engineer retained pursuant |
3036 | to subsection (2), as provided under s. 627.7073, and in |
3037 | consultation with notice to the policyholder, subject to the |
3038 | coverage and terms of the policy. The insurer shall pay for |
3039 | other repairs to the structure and contents in accordance with |
3040 | the terms of the policy. If a covered building suffers a |
3041 | sinkhole loss or a catastrophic ground cover collapse, the |
3042 | insured must repair such damage or loss in accordance with the |
3043 | insurer's professional engineer's recommended repairs. However, |
3044 | if the insurer's professional engineer determines that the |
3045 | repair cannot be completed within policy limits, the insurer |
3046 | must pay to complete the repairs recommended by the insurer's |
3047 | professional engineer or tender the policy limits to the |
3048 | policyholder. |
3049 | (a)(b) The insurer may limit its total claims payment to |
3050 | the actual cash value of the sinkhole loss, which does not |
3051 | include including underpinning or grouting or any other repair |
3052 | technique performed below the existing foundation of the |
3053 | building, until the policyholder enters into a contract for the |
3054 | performance of building stabilization or foundation repairs in |
3055 | accordance with the recommendations set forth in the insurer's |
3056 | report issued pursuant to s. 627.7073. |
3057 | (b) In order to prevent additional damage to the building |
3058 | or structure, the policyholder must enter into a contract for |
3059 | the performance of building stabilization and foundation repairs |
3060 | within 90 days after the insurance company confirms coverage for |
3061 | the sinkhole loss and notifies the policyholder of such |
3062 | confirmation. This time period is tolled if either party invokes |
3063 | the neutral evaluation process, and begins again 10 days after |
3064 | the conclusion of the neutral evaluation process. |
3065 | (c) After the policyholder enters into the contract for |
3066 | the performance of building stabilization and foundation |
3067 | repairs, the insurer shall pay the amounts necessary to begin |
3068 | and perform such repairs as the work is performed and the |
3069 | expenses are incurred. The insurer may not require the |
3070 | policyholder to advance payment for such repairs. If repair |
3071 | covered by a personal lines residential property insurance |
3072 | policy has begun and the professional engineer selected or |
3073 | approved by the insurer determines that the repair cannot be |
3074 | completed within the policy limits, the insurer must either |
3075 | complete the professional engineer's recommended repair or |
3076 | tender the policy limits to the policyholder without a reduction |
3077 | for the repair expenses incurred. |
3078 | (d) The stabilization and all other repairs to the |
3079 | structure and contents must be completed within 12 months after |
3080 | entering into the contract for repairs described in paragraph |
3081 | (b) unless: |
3082 | 1. There is a mutual agreement between the insurer and the |
3083 | policyholder; |
3084 | 2. The claim is involved with the neutral evaluation |
3085 | process; |
3086 | 3. The claim is in litigation; or |
3087 | 4. The claim is under appraisal or mediation. |
3088 | (e)(c) Upon the insurer's obtaining the written approval |
3089 | of the policyholder and any lienholder, the insurer may make |
3090 | payment directly to the persons selected by the policyholder to |
3091 | perform the land and building stabilization and foundation |
3092 | repairs. The decision by the insurer to make payment to such |
3093 | persons does not hold the insurer liable for the work performed. |
3094 | The policyholder may not accept a rebate from any person |
3095 | performing the repairs specified in this section. If a |
3096 | policyholder does receive a rebate, coverage is void and the |
3097 | policyholder must refund the amount of the rebate to the |
3098 | insurer. Any person making the repairs specified in this section |
3099 | who offers a rebate commits insurance fraud punishable as a |
3100 | third degree felony as provided in s. 775.082, s. 775.083, or s. |
3101 | 775.084. |
3102 | (6) Except as provided in subsection (7), the fees and |
3103 | costs of the professional engineer or the professional geologist |
3104 | shall be paid by the insurer. |
3105 | (6)(7) If the insurer obtains, pursuant to s. 627.7073, |
3106 | written certification that there is no sinkhole loss or that the |
3107 | cause of the damage was not sinkhole activity, and if the |
3108 | policyholder has submitted the sinkhole claim without good faith |
3109 | grounds for submitting such claim, the policyholder shall |
3110 | reimburse the insurer for 50 percent of the actual costs of the |
3111 | analyses and services provided under ss. 627.7072 and 627.7073; |
3112 | however, a policyholder is not required to reimburse an insurer |
3113 | more than $2,500 with respect to any claim. A policyholder is |
3114 | required to pay reimbursement under this subsection only if the |
3115 | policyholder requested the analysis and services provided under |
3116 | ss. 627.7072 and 627.7073 and the insurer, before prior to |
3117 | ordering the analysis under s. 627.7072, informs the |
3118 | policyholder in writing of the policyholder's potential |
3119 | liability for reimbursement and gives the policyholder the |
3120 | opportunity to withdraw the claim. |
3121 | (7)(8) An No insurer may not shall nonrenew any policy of |
3122 | property insurance on the basis of filing of claims for sinkhole |
3123 | partial loss if caused by sinkhole damage or clay shrinkage as |
3124 | long as the total of such payments does not equal or exceed the |
3125 | current policy limits of coverage for the policy in effect on |
3126 | the date of loss, for property damage to the covered building, |
3127 | as set forth on the declarations page, or if and provided the |
3128 | policyholder insured has repaired the structure in accordance |
3129 | with the engineering recommendations made pursuant to subsection |
3130 | (2) upon which any payment or policy proceeds were based. If the |
3131 | insurer pays such limits, it may nonrenew the policy. |
3132 | (8)(9) The insurer may engage a professional structural |
3133 | engineer to make recommendations as to the repair of the |
3134 | structure. |
3135 | Section 26. Section 627.7073, Florida Statutes, is amended |
3136 | to read: |
3137 | 627.7073 Sinkhole reports.- |
3138 | (1) Upon completion of testing as provided in s. 627.7072, |
3139 | the professional engineer or professional geologist shall issue |
3140 | a report and certification to the insurer and the policyholder |
3141 | as provided in this section. |
3142 | (a) Sinkhole loss is verified if, based upon tests |
3143 | performed in accordance with s. 627.7072, a professional |
3144 | engineer or a professional geologist issues a written report and |
3145 | certification stating: |
3146 | 1. That structural damage to the covered building has been |
3147 | identified within a reasonable professional probability. |
3148 | 2.1. That the cause of the actual physical and structural |
3149 | damage is sinkhole activity within a reasonable professional |
3150 | probability. |
3151 | 3.2. That the analyses conducted were of sufficient scope |
3152 | to identify sinkhole activity as the cause of damage within a |
3153 | reasonable professional probability. |
3154 | 4.3. A description of the tests performed. |
3155 | 5.4. A recommendation by the professional engineer of |
3156 | methods for stabilizing the land and building and for making |
3157 | repairs to the foundation. |
3158 | (b) If there is no structural damage or if sinkhole |
3159 | activity is eliminated as the cause of such damage to the |
3160 | covered building structure, the professional engineer or |
3161 | professional geologist shall issue a written report and |
3162 | certification to the policyholder and the insurer stating: |
3163 | 1. That there is no structural damage or the cause of such |
3164 | the damage is not sinkhole activity within a reasonable |
3165 | professional probability. |
3166 | 2. That the analyses and tests conducted were of |
3167 | sufficient scope to eliminate sinkhole activity as the cause of |
3168 | the structural damage within a reasonable professional |
3169 | probability. |
3170 | 3. A statement of the cause of the structural damage |
3171 | within a reasonable professional probability. |
3172 | 4. A description of the tests performed. |
3173 | (c) The respective findings, opinions, and recommendations |
3174 | of the insurer's professional engineer or professional geologist |
3175 | as to the cause of distress to the property and the findings, |
3176 | opinions, and recommendations of the insurer's professional |
3177 | engineer as to land and building stabilization and foundation |
3178 | repair set forth by s. 627.7072 shall be presumed correct. |
3179 | (2)(a) An Any insurer that has paid a claim for a sinkhole |
3180 | loss shall file a copy of the report and certification, prepared |
3181 | pursuant to subsection (1), including the legal description of |
3182 | the real property and the name of the property owner, the |
3183 | neutral evaluator's report, if any, which indicates that |
3184 | sinkhole activity caused the damage claimed, a copy of the |
3185 | certification indicating that stabilization has been completed, |
3186 | if applicable, and the amount of the payment, with the county |
3187 | clerk of court, who shall record the report and certification. |
3188 | The insurer shall bear the cost of filing and recording one or |
3189 | more reports and certifications the report and certification. |
3190 | There shall be no cause of action or liability against an |
3191 | insurer for compliance with this section. |
3192 | (a) The recording of the report and certification does |
3193 | not: |
3194 | 1. Constitute a lien, encumbrance, or restriction on the |
3195 | title to the real property or constitute a defect in the title |
3196 | to the real property; |
3197 | 2. Create any cause of action or liability against any |
3198 | grantor of the real property for breach of any warranty of good |
3199 | title or warranty against encumbrances; or |
3200 | 3. Create any cause of action or liability against any |
3201 | title insurer that insures the title to the real property. |
3202 | (b) As a precondition to accepting payment for a sinkhole |
3203 | loss, the policyholder must file a copy of any sinkhole report |
3204 | regarding the insured property which was prepared on behalf or |
3205 | at the request of the policyholder. The policyholder shall bear |
3206 | the cost of filing and recording the sinkhole report. The |
3207 | recording of the report does not: |
3208 | 1. Constitute a lien, encumbrance, or restriction on the |
3209 | title to the real property or constitute a defect in the title |
3210 | to the real property; |
3211 | 2. Create any cause of action or liability against any |
3212 | grantor of the real property for breach of any warranty of good |
3213 | title or warranty against encumbrances; or |
3214 | 3. Create any cause of action or liability against a title |
3215 | insurer that insures the title to the real property. |
3216 | (c)(b) The seller of real property upon which a sinkhole |
3217 | claim has been made by the seller and paid by the insurer must |
3218 | shall disclose to the buyer of such property, before the |
3219 | closing, that a claim has been paid and whether or not the full |
3220 | amount of the proceeds were used to repair the sinkhole damage. |
3221 | (3) Upon completion of any building stabilization or |
3222 | foundation repairs for a verified sinkhole loss, the |
3223 | professional engineer responsible for monitoring the repairs |
3224 | shall issue a report to the property owner which specifies what |
3225 | repairs have been performed and certifies within a reasonable |
3226 | degree of professional probability that such repairs have been |
3227 | properly performed. The professional engineer issuing the report |
3228 | shall file a copy of the report and certification, which |
3229 | includes a legal description of the real property and the name |
3230 | of the property owner, with the county clerk of the court, who |
3231 | shall record the report and certification. This subsection does |
3232 | not create liability for an insurer based on any representation |
3233 | or certification by a professional engineer related to the |
3234 | stabilization or foundation repairs for the verified sinkhole |
3235 | loss. |
3236 | Section 27. Section 627.7074, Florida Statutes, is amended |
3237 | to read: |
3238 | 627.7074 Alternative procedure for resolution of disputed |
3239 | sinkhole insurance claims.- |
3240 | (1) As used in this section, the term: |
3241 | (a) "Neutral evaluation" means the alternative dispute |
3242 | resolution provided for in this section. |
3243 | (b) "Neutral evaluator" means a professional engineer or a |
3244 | professional geologist who has completed a course of study in |
3245 | alternative dispute resolution designed or approved by the |
3246 | department for use in the neutral evaluation process, who is |
3247 | determined to be fair and impartial. |
3248 | (1)(2)(a) The department shall: |
3249 | (a) Certify and maintain a list of persons who are neutral |
3250 | evaluators. |
3251 | (b) The department shall Prepare a consumer information |
3252 | pamphlet for distribution by insurers to policyholders which |
3253 | clearly describes the neutral evaluation process and includes |
3254 | information and forms necessary for the policyholder to request |
3255 | a neutral evaluation. |
3256 | (2) Neutral evaluation is available to either party if a |
3257 | sinkhole report has been issued pursuant to s. 627.7073. At a |
3258 | minimum, neutral evaluation must determine: |
3259 | (a) Causation; |
3260 | (b) All methods of stabilization and repair both above and |
3261 | below ground; |
3262 | (c) The costs for stabilization and all repairs; and |
3263 | (d) Information necessary to carry out subsection (12). |
3264 | (3) Following the receipt of the report provided under s. |
3265 | 627.7073 or the denial of a claim for a sinkhole loss, the |
3266 | insurer shall notify the policyholder of his or her right to |
3267 | participate in the neutral evaluation program under this |
3268 | section. Neutral evaluation supersedes the alternative dispute |
3269 | resolution process under s. 627.7015, but does not invalidate |
3270 | the appraisal clause of the insurance policy. The insurer shall |
3271 | provide to the policyholder the consumer information pamphlet |
3272 | prepared by the department pursuant to subsection (1) |
3273 | electronically or by United States mail paragraph (2)(b). |
3274 | (4) Neutral evaluation is nonbinding, but mandatory if |
3275 | requested by either party. A request for neutral evaluation may |
3276 | be filed with the department by the policyholder or the insurer |
3277 | on a form approved by the department. The request for neutral |
3278 | evaluation must state the reason for the request and must |
3279 | include an explanation of all the issues in dispute at the time |
3280 | of the request. Filing a request for neutral evaluation tolls |
3281 | the applicable time requirements for filing suit for a period of |
3282 | 60 days following the conclusion of the neutral evaluation |
3283 | process or the time prescribed in s. 95.11, whichever is later. |
3284 | (5) Neutral evaluation shall be conducted as an informal |
3285 | process in which formal rules of evidence and procedure need not |
3286 | be observed. A party to neutral evaluation is not required to |
3287 | attend neutral evaluation if a representative of the party |
3288 | attends and has the authority to make a binding decision on |
3289 | behalf of the party. All parties shall participate in the |
3290 | evaluation in good faith. The neutral evaluator must be allowed |
3291 | reasonable access to the interior and exterior of insured |
3292 | structures to be evaluated or for which a claim has been made. |
3293 | Any reports initiated by the policyholder, or an agent of the |
3294 | policyholder, confirming a sinkhole loss or disputing another |
3295 | sinkhole report regarding insured structures must be provided to |
3296 | the neutral evaluator before the evaluator's physical inspection |
3297 | of the insured property. |
3298 | (6) The insurer shall pay reasonable the costs associated |
3299 | with the neutral evaluation. However, if a party chooses to hire |
3300 | a court reporter or stenographer to contemporaneously record and |
3301 | document the neutral evaluation, that party must bear such |
3302 | costs. |
3303 | (7) Upon receipt of a request for neutral evaluation, the |
3304 | department shall provide the parties a list of certified neutral |
3305 | evaluators. The parties shall mutually select a neutral |
3306 | evaluator from the list and promptly inform the department. If |
3307 | the parties cannot agree to a neutral evaluator within 10 |
3308 | business days, The department shall allow the parties to submit |
3309 | requests to disqualify evaluators on the list for cause. |
3310 | (a) The department shall disqualify neutral evaluators for |
3311 | cause based only on any of the following grounds: |
3312 | 1. A familial relationship exists between the neutral |
3313 | evaluator and either party or a representative of either party |
3314 | within the third degree. |
3315 | 2. The proposed neutral evaluator has, in a professional |
3316 | capacity, previously represented either party or a |
3317 | representative of either party, in the same or a substantially |
3318 | related matter. |
3319 | 3. The proposed neutral evaluator has, in a professional |
3320 | capacity, represented another person in the same or a |
3321 | substantially related matter and that person's interests are |
3322 | materially adverse to the interests of the parties. The term |
3323 | "substantially related matter" means participation by the |
3324 | neutral evaluator on the same claim, property, or adjacent |
3325 | property. |
3326 | 4. The proposed neutral evaluator has, within the |
3327 | preceding 5 years, worked as an employer or employee of any |
3328 | party to the case. |
3329 | (b) The parties shall appoint a neutral evaluator from the |
3330 | department list and promptly inform the department. If the |
3331 | parties cannot agree to a neutral evaluator within 14 business |
3332 | days, the department shall appoint a neutral evaluator from the |
3333 | list of certified neutral evaluators. The department shall allow |
3334 | each party to disqualify two neutral evaluators without cause. |
3335 | Upon selection or appointment, the department shall promptly |
3336 | refer the request to the neutral evaluator. |
3337 | (c) Within 14 5 business days after the referral, the |
3338 | neutral evaluator shall notify the policyholder and the insurer |
3339 | of the date, time, and place of the neutral evaluation |
3340 | conference. The conference may be held by telephone, if feasible |
3341 | and desirable. The neutral evaluator shall make reasonable |
3342 | efforts to hold the neutral evaluation conference shall be held |
3343 | within 90 45 days after the receipt of the request by the |
3344 | department. Failure of the neutral evaluator to hold the |
3345 | conference within 90 days does not invalidate either party's |
3346 | right to neutral evaluation or to a neutral evaluation |
3347 | conference held outside this timeframe. |
3348 | (8) The department shall adopt rules of procedure for the |
3349 | neutral evaluation process. |
3350 | (8)(9) For policyholders not represented by an attorney, a |
3351 | consumer affairs specialist of the department or an employee |
3352 | designated as the primary contact for consumers on issues |
3353 | relating to sinkholes under s. 20.121 shall be available for |
3354 | consultation to the extent that he or she may lawfully do so. |
3355 | (9)(10) Evidence of an offer to settle a claim during the |
3356 | neutral evaluation process, as well as any relevant conduct or |
3357 | statements made in negotiations concerning the offer to settle a |
3358 | claim, is inadmissible to prove liability or absence of |
3359 | liability for the claim or its value, except as provided in |
3360 | subsection (14) (13). |
3361 | (10)(11) Regardless of when noticed, any court proceeding |
3362 | related to the subject matter of the neutral evaluation shall be |
3363 | stayed pending completion of the neutral evaluation and for 5 |
3364 | days after the filing of the neutral evaluator's report with the |
3365 | court. |
3366 | (11) If, based upon his or her professional training and |
3367 | credentials, a neutral evaluator is qualified to determine only |
3368 | disputes relating to causation or method of repair, the |
3369 | department shall allow the neutral evaluator to enlist the |
3370 | assistance of another professional from the neutral evaluators |
3371 | list not previously stricken, who, based upon his or her |
3372 | professional training and credentials, is able to provide an |
3373 | opinion as to other disputed issues. A professional who would be |
3374 | disqualified for any reason listed in subsection (7) must be |
3375 | disqualified. The neutral evaluator may also use the services of |
3376 | professional engineers and professional geologists who are not |
3377 | certified as neutral evaluators, as well as licensed building |
3378 | contractors, in order to ensure that all items in dispute are |
3379 | addressed and the neutral evaluation can be completed. Any |
3380 | professional engineer, professional geologist, or licensed |
3381 | building contractor retained may be disqualified for any of the |
3382 | reasons listed in subsection (7). The neutral evaluator may |
3383 | request the entity that performed the investigation pursuant to |
3384 | s. 627.7072 perform such additional and reasonable testing as |
3385 | deemed necessary in the professional opinion of the neutral |
3386 | evaluator. |
3387 | (12) At For matters that are not resolved by the parties |
3388 | at the conclusion of the neutral evaluation, the neutral |
3389 | evaluator shall prepare a report describing all matters that are |
3390 | the subject of the neutral evaluation, including whether, |
3391 | stating that in his or her opinion, the sinkhole loss has been |
3392 | verified or eliminated within a reasonable degree of |
3393 | professional probability and, if verified, whether the sinkhole |
3394 | activity caused structural damage to the covered building, and |
3395 | if so, the need for and estimated costs of stabilizing the land |
3396 | and any covered structures or buildings and other appropriate |
3397 | remediation or necessary building structural repairs due to the |
3398 | sinkhole loss. The evaluator's report shall be sent to all |
3399 | parties in attendance at the neutral evaluation and to the |
3400 | department, within 14 days after completing the neutral |
3401 | evaluation conference. |
3402 | (13) The recommendation of the neutral evaluator is not |
3403 | binding on any party, and the parties retain access to the |
3404 | court. The neutral evaluator's written recommendation, oral |
3405 | testimony, and full report shall be admitted is admissible in |
3406 | any subsequent action, litigation, or proceeding relating to the |
3407 | claim or to the cause of action giving rise to the claim. |
3408 | (14) If the neutral evaluator first verifies the existence |
3409 | of a sinkhole that caused structural damage and, second, |
3410 | recommends the need for and estimates costs of stabilizing the |
3411 | land and any covered structures or buildings and other |
3412 | appropriate remediation or building structural repairs, which |
3413 | costs exceed the amount that the insurer has offered to pay the |
3414 | policyholder, the insurer is liable to the policyholder for up |
3415 | to $2,500 in attorney's fees for the attorney's participation in |
3416 | the neutral evaluation process. For purposes of this subsection, |
3417 | the term "offer to pay" means a written offer signed by the |
3418 | insurer or its legal representative and delivered to the |
3419 | policyholder within 10 days after the insurer receives notice |
3420 | that a request for neutral evaluation has been made under this |
3421 | section. |
3422 | (15) If the insurer timely agrees in writing to comply and |
3423 | timely complies with the recommendation of the neutral |
3424 | evaluator, but the policyholder declines to resolve the matter |
3425 | in accordance with the recommendation of the neutral evaluator |
3426 | pursuant to this section: |
3427 | (a) The insurer is not liable for extracontractual damages |
3428 | related to a claim for a sinkhole loss but only as related to |
3429 | the issues determined by the neutral evaluation process. This |
3430 | section does not affect or impair claims for extracontractual |
3431 | damages unrelated to the issues determined by the neutral |
3432 | evaluation process contained in this section; and |
3433 | (b) The actions of the insurer are not a confession of |
3434 | judgment or admission of liability, and the insurer is not |
3435 | liable for attorney's fees under s. 627.428 or other provisions |
3436 | of the insurance code unless the policyholder obtains a judgment |
3437 | that is more favorable than the recommendation of the neutral |
3438 | evaluator. |
3439 | (16) If the insurer agrees to comply with the neutral |
3440 | evaluator's report, payments shall be made in accordance with |
3441 | the terms and conditions of the applicable insurance policy |
3442 | pursuant to s. 627.707(5). |
3443 | (17) Neutral evaluators are deemed to be agents of the |
3444 | department and have immunity from suit as provided in s. 44.107. |
3445 | (18) The department shall adopt rules of procedure for the |
3446 | neutral evaluation process. |
3447 | Section 28. Subsection (8) of section 627.711, Florida |
3448 | Statutes, is amended to read: |
3449 | 627.711 Notice of premium discounts for hurricane loss |
3450 | mitigation; uniform mitigation verification inspection form.- |
3451 | (8) At its expense, the insurer may require that a any |
3452 | uniform mitigation verification form provided by a policyholder, |
3453 | a policyholder's agent, or an authorized mitigation inspector or |
3454 | inspection company be independently verified by an inspector, an |
3455 | inspection company, or an independent third-party quality |
3456 | assurance provider which possesses does possess a quality |
3457 | assurance program before prior to accepting the uniform |
3458 | mitigation verification form as valid. |
3459 | Section 29. Subsection (1) of section 627.712, Florida |
3460 | Statutes, is amended to read: |
3461 | 627.712 Residential windstorm coverage required; |
3462 | availability of exclusions for windstorm or contents.- |
3463 | (1) An insurer issuing a residential property insurance |
3464 | policy must provide windstorm coverage. Except as provided in |
3465 | paragraph (2)(c), this section does not apply with respect to |
3466 | risks that are eligible for wind-only coverage from Citizens |
3467 | Property Insurance Corporation under s. 627.351(6), and with |
3468 | respect to risks that are not eligible for coverage from |
3469 | Citizens Property Insurance Corporation under s. 627.351(6)(a)3. |
3470 | or 5. A risk ineligible for Citizens coverage by the corporation |
3471 | under s. 627.351(6)(a)3. or 5. is exempt from the requirements |
3472 | of this section only if the risk is located within the |
3473 | boundaries of the coastal high-risk account of the corporation. |
3474 | Section 30. Subsection (3) of section 631.54, Florida |
3475 | Statutes, is amended to read: |
3476 | 631.54 Definitions.-As used in this part: |
3477 | (3) "Covered claim" means an unpaid claim, including one |
3478 | of unearned premiums, which arises out of, and is within the |
3479 | coverage, and not in excess of, the applicable limits of an |
3480 | insurance policy to which this part applies, issued by an |
3481 | insurer, if such insurer becomes an insolvent insurer and the |
3482 | claimant or insured is a resident of this state at the time of |
3483 | the insured event or the property from which the claim arises is |
3484 | permanently located in this state. For entities other than |
3485 | individuals, the residence of a claimant, insured, or |
3486 | policyholder is the state in which the entity's principal place |
3487 | of business is located at the time of the insured event. The |
3488 | term does "Covered claim" shall not include: |
3489 | (a) Any amount due any reinsurer, insurer, insurance pool, |
3490 | or underwriting association, sought directly or indirectly |
3491 | through a third party, as subrogation, contribution, |
3492 | indemnification, or otherwise; or |
3493 | (b) Any claim that would otherwise be a covered claim |
3494 | under this part that has been rejected by any other state |
3495 | guaranty fund on the grounds that an insured's net worth is |
3496 | greater than that allowed under that state's guaranty law. |
3497 | Member insurers shall have no right of subrogation, |
3498 | contribution, indemnification, or otherwise, sought directly or |
3499 | indirectly through a third party, against the insured of any |
3500 | insolvent member; or |
3501 | (c) Any amount payable for a sinkhole loss other than |
3502 | testing deemed appropriate by the association or payable for the |
3503 | actual repair of the loss, except that the association may not |
3504 | pay for attorney's fees or public adjuster's fees in connection |
3505 | with a sinkhole loss or pay the policyholder. The association |
3506 | may pay for actual repairs to the property, but is not liable |
3507 | for amounts in excess of policy limits. |
3508 | Section 31. If any provision of this act, or the |
3509 | application thereof to any person or circumstance is held |
3510 | invalid, such invalidity shall not affect other provisions or |
3511 | applications of this act which can be given effect without the |
3512 | invalid provision or application. It is the express intent of |
3513 | the Legislature to enact multiple important, but independent, |
3514 | reforms to Florida law relating to sinkhole insurance coverage |
3515 | and related claims. The Legislature further intends that the |
3516 | multiple reforms in the act could and should be enforced if one |
3517 | or more provisions are held invalid. To this end, the provisions |
3518 | of this act are declared to be severable. |
3519 | Section 32. Except as otherwise expressly provided in this |
3520 | act, this act shall take effect upon becoming a law. |
3521 |
|
3522 |
|
3523 | ----------------------------------------------------- |
3524 | T I T L E A M E N D M E N T |
3525 | Remove the entire title and insert: |
3526 | A bill to be entitled |
3527 | An act relating to property and casualty insurance; |
3528 | amending s. 95.11, F.S.; specifying a statute of |
3529 | limitation for a breach of a property insurance contract |
3530 | runs from the date of loss; amending s. 215.555, F.S.; |
3531 | revising the definition of "losses," relating to the |
3532 | Florida Hurricane Catastrophe Fund, to include and exclude |
3533 | certain losses; providing applicability; amending s. |
3534 | 215.5595, F.S.; authorizing an insurer to renegotiate the |
3535 | terms a surplus note issued before a certain date; |
3536 | providing limitations; amending s. 624.407, F.S.; revising |
3537 | the amount of surplus funds required for domestic insurers |
3538 | applying for a certificate of authority; amending s. |
3539 | 624.408, F.S.; revising the minimum surplus that must be |
3540 | maintained by certain insurers; authorizing the Office of |
3541 | Insurance Regulation to reduce the surplus requirement |
3542 | under specified circumstances; amending s. 626.854, F.S.; |
3543 | providing limitations on the amount of compensation that |
3544 | may be received by a public adjuster for a reopened or |
3545 | supplemental claim; providing limitations on the amount of |
3546 | compensation that may be received by a public adjuster for |
3547 | a claim; applying specified provisions regulating the |
3548 | conduct of public adjusters to condominium unit owners |
3549 | rather than to condominium associations as is currently |
3550 | required; providing statements that may be considered |
3551 | deceptive or misleading if made in any public adjuster's |
3552 | advertisement or solicitation; providing a definition for |
3553 | the term "written advertisement"; requiring that a |
3554 | disclaimer be included in any public adjuster's written |
3555 | advertisement; providing requirements for such disclaimer; |
3556 | requiring certain persons who act on behalf of an insurer |
3557 | to provide notice to the insurer, claimant, public |
3558 | adjuster, or legal representative for an onsite inspection |
3559 | of the insured property; authorizing the insured or |
3560 | claimant to deny access to the property if notice is not |
3561 | provided; requiring the public adjuster to ensure prompt |
3562 | notice of certain property loss claims; providing that an |
3563 | insurer be allowed to interview the insured directly about |
3564 | the loss claim; prohibiting the insurer from obstructing |
3565 | or preventing the public adjuster from communicating with |
3566 | the insured; requiring that the insurer communicate with |
3567 | the public adjuster in an effort to reach an agreement as |
3568 | to the scope of the covered loss under the insurance |
3569 | policy; prohibiting a public adjuster from restricting or |
3570 | preventing persons acting on behalf of the insured from |
3571 | having reasonable access to the insured or the insured's |
3572 | property; prohibiting a public adjuster from restricting |
3573 | or preventing the insured's adjuster from having |
3574 | reasonable access to or inspecting the insured's property; |
3575 | authorizing the insured's adjuster to be present for the |
3576 | inspection; prohibiting a licensed contractor or |
3577 | subcontractor from adjusting a claim on behalf of an |
3578 | insured if such contractor or subcontractor is not a |
3579 | licensed public adjuster; providing an exception; amending |
3580 | s. 626.8796, F.S.; providing requirements for a public |
3581 | adjuster contract; creating s. 626.70132, F.S.; requiring |
3582 | that notice of a claim, supplemental claim, or reopened |
3583 | claim be given to the insurer within a specified period |
3584 | after a windstorm or hurricane occurs; providing a |
3585 | definition for the terms "supplemental claim" or "reopened |
3586 | claim"; providing applicability; repealing s. 627.0613(4), |
3587 | F.S., relating to the requirement that the consumer |
3588 | advocate for the Chief Financial Officer prepare an annual |
3589 | report card for each personal residential property |
3590 | insurer; amending s. 627.062, F.S.; extending the |
3591 | expiration date for making a "file and use" filing; |
3592 | prohibiting the Office of Insurance Regulation from, |
3593 | directly or indirectly, impeding the right of an insurer |
3594 | to acquire policyholders, advertise or appoint agents, or |
3595 | regulate agent commissions; revising the information that |
3596 | must be included in a rate filing relating to certain |
3597 | reinsurance or financing products; deleting a provision |
3598 | that prohibited an insurer from making certain rate |
3599 | filings within a certain period of time after a rate |
3600 | increase; deleting a provision prohibiting an insurer from |
3601 | filing for a rate increase within 6 months after it makes |
3602 | certain rate filings; deleting obsolete provisions |
3603 | relating to legislation enacted during the 2003 Special |
3604 | Session D of the Legislature; providing for the submission |
3605 | of additional or supplementary information pursuant to a |
3606 | rate filing; revising provisions relating to the |
3607 | certifications that are required to be made under oath by |
3608 | certain officers or actuaries of an insurer regarding |
3609 | information that must accompany a rate filing; amending s. |
3610 | 627.06281, F.S.; providing limitations on fees charged for |
3611 | use of the public hurricane model; amending s. 627.0629, |
3612 | F.S.; deleting obsolete provisions; deleting a requirement |
3613 | that the Office of Insurance Regulation propose a method |
3614 | for establishing discounts, debits, credits, and other |
3615 | rate differentials for hurricane mitigation by a certain |
3616 | date; conforming provisions to changes made by the act; |
3617 | amending s. 627.351, F.S.; limiting an adjuster's fee for |
3618 | a claim against the corporation; renaming the "high-risk |
3619 | account" as the "coastal account"; revising the conditions |
3620 | under which the Citizens policyholder surcharge may be |
3621 | imposed; providing that members of the Citizens Property |
3622 | Insurance Corporation Board of Governors are not |
3623 | prohibited from practicing in a certain profession if not |
3624 | prohibited by law or ordinance; requiring the corporation |
3625 | to commission a consultant to prepare a report on |
3626 | outsourcing various functions and to submit such report to |
3627 | the Financial Services Commission by a certain date; |
3628 | limiting coverage for damage from sinkholes after a |
3629 | certain date; requiring the policyholders to sign a |
3630 | statement acknowledging that they may be assessed |
3631 | surcharges to cover corporate deficits; prohibiting board |
3632 | members from voting on certain measures; exempting |
3633 | sinkhole coverage from the corporation's annual rate |
3634 | increase requirements; deleting a requirement that the |
3635 | board provide an annual report to the Legislature relating |
3636 | to certain coverages; deleting a requirement that the |
3637 | board reduce the boundaries of certain high-risk areas |
3638 | eligible for wind-only coverages under certain |
3639 | circumstances; amending s. 627.3511, F.S.; conforming |
3640 | provisions to changes made by the act; amending s. |
3641 | 627.4133, F.S.; revising the requirements for providing an |
3642 | insured with notice of nonrenewal, cancellation, or |
3643 | termination of personal lines or commercial residential |
3644 | property insurance; authorizing an insurer to cancel |
3645 | policies after 45 days' notice if the Office of Insurance |
3646 | Regulation determines that the cancellation of policies is |
3647 | necessary to protect the interests of the public or |
3648 | policyholders; authorizing the Office of Insurance |
3649 | Regulation to place an insurer under administrative |
3650 | supervision or appoint a receiver upon the consent of the |
3651 | insurer under certain circumstances; providing criteria |
3652 | and notice requirements relating to the nonrenewal of |
3653 | policy covering both a home and motor vehicle; creating s. |
3654 | 627.43141, F.S.; providing definitions; requiring the |
3655 | delivery of a "Notice of Change in Policy Terms" under |
3656 | certain circumstances; specifying requirements for such |
3657 | notice; specifying actions constituting proof of notice; |
3658 | authorizing policy renewals to contain a change in policy |
3659 | terms; providing that receipt of payment by an insurer is |
3660 | deemed acceptance of new policy terms by an insured; |
3661 | providing that the original policy remains in effect until |
3662 | the occurrence of specified events if an insurer fails to |
3663 | provide notice; providing intent; amending s. 627.7011, |
3664 | F.S.; requiring the insurer to pay the actual cash value |
3665 | of an insured loss for a dwelling, less any applicable |
3666 | deductible; requiring the insurer to offer coverage under |
3667 | which the insurer is obligated to pay replacement costs; |
3668 | authorizing the insurer to offer coverage that limits the |
3669 | initial payment for personal property to the actual cash |
3670 | value of the property to be replaced and to require the |
3671 | insured to provide receipts for purchases; requiring the |
3672 | insurer to provide notice of this process before the |
3673 | policy is bound; requiring certain premium credits or |
3674 | discounts for such coverage; prohibiting an insurer from |
3675 | requiring the insured to advance payment; amending s. |
3676 | 627.70131, F.S.; specifying application of certain time |
3677 | periods to initial or supplemental property insurance |
3678 | claim notices and payments; providing legislative findings |
3679 | with respect to 2005 statutory changes relating to |
3680 | sinkhole insurance coverage and statutory changes in this |
3681 | act; amending s. 627.706, F.S.; authorizing an insurer to |
3682 | limit coverage for catastrophic ground cover collapse to |
3683 | the principal building; authorizing an insurer to require |
3684 | an inspection before issuance of sinkhole loss coverage; |
3685 | revising definitions; defining the term "structural |
3686 | damage"; placing a 2-year statute of repose on claims for |
3687 | sinkhole coverage; amending s. 627.7061, F.S.; conforming |
3688 | provisions to changes made by the act; repealing s. |
3689 | 627.7065, F.S., relating to the establishment of a |
3690 | sinkhole database; amending s. 627.707, F.S.; revising |
3691 | provisions relating to the investigation of sinkholes by |
3692 | insurers; providing a time limitation for demanding |
3693 | sinkhole testing by a policyholder and entering into a |
3694 | contract for repairs; requiring the insurer to provide |
3695 | repairs in accordance with the insurer's engineer's |
3696 | recommendations or tender the policy limits to the |
3697 | policyholder; requiring all repairs to be completed within |
3698 | a certain time; providing exceptions; providing criminal |
3699 | penalties for a person performing repairs who offers a |
3700 | rebate; amending s. 627.7073, F.S.; revising provisions |
3701 | relating to inspection reports; revising the reports that |
3702 | an insurer must file with the clerk of the court; |
3703 | requiring the policyholder to file certain reports as a |
3704 | precondition to accepting payment; requiring the |
3705 | professional engineer responsible for monitoring sinkhole |
3706 | repairs to issue a report and certification to the |
3707 | property owner and file such report with the court; |
3708 | providing that the act does not create liability for an |
3709 | insurer based on a representation or certification by the |
3710 | engineer; amending s. 627.7074, F.S.; revising provisions |
3711 | relating to neutral evaluation; requiring evaluation in |
3712 | order to make certain determinations; requiring that the |
3713 | neutral evaluator be allowed access to structures being |
3714 | evaluated; providing grounds for disqualifying an |
3715 | evaluator; allowing the Department of Financial Services |
3716 | to appoint an evaluator if the parties cannot come to |
3717 | agreement; revising the timeframes for scheduling a |
3718 | neutral evaluation conference; authorizing an evaluator to |
3719 | enlist another evaluator or other professionals; providing |
3720 | a time certain for issuing a report; requiring admission |
3721 | of certain information relating to the neutral evaluation |
3722 | into evidence; revising provisions relating to compliance |
3723 | with the evaluator's recommendations; providing that the |
3724 | evaluator is an agent of the department for the purposes |
3725 | of immunity from suit; requiring the department to adopt |
3726 | rules; amending s. 627.711, F.S.; revising the requirement |
3727 | that the insurer pay for verification of a uniform |
3728 | mitigation verification form that the insurer requires; |
3729 | amending s. 627.712, F.S.; conforming provisions to |
3730 | changes made by the act; amending s. 631.54, F.S.; |
3731 | revising the definition of the term "covered claim" for |
3732 | purposes of the Florida Insurance Guaranty Association |
3733 | Act; providing for applicability; providing severability; |
3734 | providing effective dates. |