1 | A bill to be entitled |
2 | An act relating to property loss appraisals; amending |
3 | s. 627.351, F.S.; requiring Citizens Property |
4 | Insurance Corporation's plan of operation to provide |
5 | for the adoption of policy forms that require |
6 | compliance with certain conditions and procedures |
7 | relating to the participation of umpires and |
8 | appraisers in the loss appraisal process under certain |
9 | circumstances; providing that either party may submit |
10 | a written demand to enter into the process of |
11 | appraisal when the insured and the corporation fail to |
12 | mutually agree to the actual cash value, the amount of |
13 | loss, or the cost of repair or replacement of property |
14 | for which a claim has been filed; providing an |
15 | exception upon which the corporation may refuse to |
16 | accept such demand; providing that the corporation |
17 | waives the right to demand an appraisal under certain |
18 | circumstances; requiring each party to select a |
19 | competent and independent appraiser and to notify the |
20 | opposing party within a specified period; requiring |
21 | the appraisers to select an appraisal umpire; |
22 | authorizing either party to file a petition, in a |
23 | county or circuit court in the jurisdiction in which |
24 | the covered property is located, to designate an |
25 | appraisal umpire if the appraisers cannot agree on the |
26 | selection of an umpire; providing that appraisal |
27 | proceedings are informal unless the corporation and |
28 | the insured agree otherwise; defining and providing |
29 | the scope of the term "informal" for purposes of |
30 | appraisal proceedings; requiring each appraiser to |
31 | submit a written report to the other appraiser; |
32 | requiring that any differences in findings between the |
33 | appraisers that cannot be resolved by the appraisers |
34 | themselves within a specified period be submitted to |
35 | the umpire for review; providing an exception; |
36 | requiring the umpire to submit his or her conclusions |
37 | regarding any unresolved differences in the findings |
38 | of the appraisers within a specified period; providing |
39 | that if either appraiser agrees with the conclusions |
40 | of the umpire, an itemized written appraisal award |
41 | signed by the umpire and appraiser shall be filed with |
42 | the corporation and shall determine the amount of the |
43 | loss; providing that the appraisal award is binding |
44 | upon the corporation and the insured; providing for |
45 | compensation of the appraisers and the umpire; |
46 | providing applicability of the Florida Arbitration |
47 | Code to residential or commercial residential property |
48 | insurance loss appraisal proceedings and specified |
49 | procedural matters; prohibiting the appraisal process |
50 | from addressing issues involving coverage or lack |
51 | thereof under an insurance contract; authorizing the |
52 | umpire and appraisers to consider causation issues |
53 | when necessary to determine the amount of loss; |
54 | providing an effective date. |
55 |
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56 | Be It Enacted by the Legislature of the State of Florida: |
57 |
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58 | Section 1. Paragraph (c) of subsection (6) of section |
59 | 627.351, Florida Statutes, is amended to read: |
60 | 627.351 Insurance risk apportionment plans.- |
61 | (6) CITIZENS PROPERTY INSURANCE CORPORATION.- |
62 | (c) The corporation's plan of operation: |
63 | 1. Must provide for adoption of residential property and |
64 | casualty insurance policy forms and commercial residential and |
65 | nonresidential property insurance forms, which must be approved |
66 | by the office before use. The corporation shall adopt the |
67 | following policy forms: |
68 | a. Standard personal lines policy forms that are |
69 | comprehensive multiperil policies providing full coverage of a |
70 | residential property equivalent to the coverage provided in the |
71 | private insurance market under an HO-3, HO-4, or HO-6 policy. |
72 | b. Basic personal lines policy forms that are policies |
73 | similar to an HO-8 policy or a dwelling fire policy that provide |
74 | coverage meeting the requirements of the secondary mortgage |
75 | market, but which is more limited than the coverage under a |
76 | standard policy. |
77 | c. Commercial lines residential and nonresidential policy |
78 | forms that are generally similar to the basic perils of full |
79 | coverage obtainable for commercial residential structures and |
80 | commercial nonresidential structures in the admitted voluntary |
81 | market. |
82 | d. Personal lines and commercial lines residential |
83 | property insurance forms that cover the peril of wind only. The |
84 | forms are applicable only to residential properties located in |
85 | areas eligible for coverage under the coastal account referred |
86 | to in sub-subparagraph (b)2.a. |
87 | e. Commercial lines nonresidential property insurance |
88 | forms that cover the peril of wind only. The forms are |
89 | applicable only to nonresidential properties located in areas |
90 | eligible for coverage under the coastal account referred to in |
91 | sub-subparagraph (b)2.a. |
92 | f. When the only issue remaining between an insured and |
93 | the corporation on a residential or commercial residential |
94 | property is the actual cash value, the amount of loss, or the |
95 | cost of repair or replacement of property for which a claim has |
96 | been filed, residential and commercial residential property |
97 | insurance forms that apply to the umpires and appraisers who |
98 | participate in the appraisal process and that require compliance |
99 | with the following conditions and procedures: |
100 | (I) Either party may submit a written demand to enter into |
101 | the process of appraisal. |
102 | (II) The corporation may refuse to accept the demand only |
103 | if the insured materially fails to comply with the proof-of-loss |
104 | obligations of the insured as set forth in the policy |
105 | conditions. |
106 | (III) The corporation is deemed to have waived its right |
107 | to demand an appraisal if it fails to invoke an appraisal within |
108 | 30 days after the insured substantially complies with the proof- |
109 | of-loss obligation as set forth in the policy conditions. |
110 | (IV) Each party shall select a competent appraiser and |
111 | notify the other party of the appraiser selected within 20 days |
112 | after the date of the demand for an appraisal. The appraisers |
113 | shall select a competent, independent, and impartial umpire. If |
114 | the appraisers are unable to agree on an umpire within 15 days, |
115 | the insured or the corporation may file a petition with a county |
116 | or circuit court in the jurisdiction in which the covered |
117 | property is located to designate a property insurance appraisal |
118 | umpire for the appraisal. |
119 | (V) Appraisal proceedings are informal unless the insured |
120 | and the corporation mutually agree otherwise. As used in this |
121 | sub-sub-subparagraph, the term "informal" means that formal |
122 | discovery is not conducted, including depositions, |
123 | interrogatories, requests for admission, or other forms of |
124 | formal civil discovery; formal rules of evidence are not |
125 | applied; and a court reporter is not used for the proceedings. |
126 | However, either appraiser may rely on experts in reaching the |
127 | value of loss. |
128 | (VI) Within 60 days after being appointed, each appraiser |
129 | shall appraise the loss and submit a written report to the other |
130 | appraiser that separately states the cost of the loss, the |
131 | actual cash value, or the cost to repair or replace each item. |
132 | Within 30 days after submitting the reports, the appraisers |
133 | shall attempt to resolve any differences in the appraisals and |
134 | reach a mutual agreement on all matters. If the appraisers are |
135 | unable to agree, they shall, within 5 days after the end of the |
136 | 30-day period, submit the differences in their findings in |
137 | writing to the umpire. However, the appraisers have an |
138 | additional 60 days after appointment to appraise the loss and |
139 | submit a written report if the loss is covered under a |
140 | commercial property insurance policy and the insured structure |
141 | is 10,000 square feet or more or is covered under a residential |
142 | or commercial residential insurance policy and the claim is |
143 | based on and made subsequent to a hurricane designated by the |
144 | National Hurricane Center or an emergency declared by the |
145 | Governor. |
146 | (VII) The umpire shall review any differences in |
147 | appraisals submitted by the appraisers and determine the amount |
148 | of the loss for each item submitted. Within 10 days after |
149 | receipt of any differences in appraisals, the umpire shall |
150 | submit his or her conclusions in writing to each appraiser. |
151 | (VIII) If either appraiser agrees with the conclusions of |
152 | the umpire, an itemized written appraisal award signed by the |
153 | umpire and the appraiser shall be filed with the corporation and |
154 | shall determine the amount of the loss. |
155 | (IX) The appraisal award is binding on the corporation and |
156 | the insured with regard to the amount of the loss. If the |
157 | insurance policy so provides, the corporation may assert that |
158 | there is no coverage under the policy for the loss as a whole or |
159 | that there has been a violation of the policy conditions with |
160 | respect to fraud, lack of notice, or failure to cooperate. |
161 | (X) Each appraiser shall be paid by the party who selects |
162 | the appraiser, and the expenses of the appraisal and fees of the |
163 | umpire shall be paid by the parties equally, except that if the |
164 | final determination of the amount of the loss exceeds the |
165 | corporation's preappraisal estimate of the loss communicated to |
166 | the insured in writing by 50 percent or more, the corporation |
167 | shall pay all expenses, including any fees and expenses charged |
168 | by the insured's appraiser and all fees and expenses of the |
169 | umpire. This sub-sub-subparagraph does not affect an insured's |
170 | claim for attorney fees under s. 627.428. |
171 | (XI) The Florida Arbitration Code does not apply to |
172 | residential and commercial residential property insurance loss |
173 | appraisal proceedings, except for those provisions of the code |
174 | regarding proceedings to compel and stay arbitration in s. |
175 | 682.03; procedures for correcting, vacating, or modifying an |
176 | award in ss. 682.10, 682.13, and 682.14; procedures for entry of |
177 | judgment on the award in s. 682.15; and procedures regarding |
178 | confirmation of an award in s. 682.12. |
179 | (XII) The appraisal process may not address issues |
180 | involving whether the loss or damage is covered under the terms |
181 | of the insurance contract. However, the appraisers and the |
182 | umpire may consider causation issues, if necessary, to determine |
183 | the amount of loss. |
184 |
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185 | f. The corporation may adopt variations of the policy forms |
186 | listed in sub-subparagraphs a.-e. which contain more restrictive |
187 | coverage. |
188 | 2. Must provide that the corporation adopt a program in |
189 | which the corporation and authorized insurers enter into quota |
190 | share primary insurance agreements for hurricane coverage, as |
191 | defined in s. 627.4025(2)(a), for eligible risks, and adopt |
192 | property insurance forms for eligible risks which cover the |
193 | peril of wind only. |
194 | a. As used in this subsection, the term: |
195 | (I) "Quota share primary insurance" means an arrangement |
196 | in which the primary hurricane coverage of an eligible risk is |
197 | provided in specified percentages by the corporation and an |
198 | authorized insurer. The corporation and authorized insurer are |
199 | each solely responsible for a specified percentage of hurricane |
200 | coverage of an eligible risk as set forth in a quota share |
201 | primary insurance agreement between the corporation and an |
202 | authorized insurer and the insurance contract. The |
203 | responsibility of the corporation or authorized insurer to pay |
204 | its specified percentage of hurricane losses of an eligible |
205 | risk, as set forth in the agreement, may not be altered by the |
206 | inability of the other party to pay its specified percentage of |
207 | losses. Eligible risks that are provided hurricane coverage |
208 | through a quota share primary insurance arrangement must be |
209 | provided policy forms that set forth the obligations of the |
210 | corporation and authorized insurer under the arrangement, |
211 | clearly specify the percentages of quota share primary insurance |
212 | provided by the corporation and authorized insurer, and |
213 | conspicuously and clearly state that the authorized insurer and |
214 | the corporation may not be held responsible beyond their |
215 | specified percentage of coverage of hurricane losses. |
216 | (II) "Eligible risks" means personal lines residential and |
217 | commercial lines residential risks that meet the underwriting |
218 | criteria of the corporation and are located in areas that were |
219 | eligible for coverage by the Florida Windstorm Underwriting |
220 | Association on January 1, 2002. |
221 | b. The corporation may enter into quota share primary |
222 | insurance agreements with authorized insurers at corporation |
223 | coverage levels of 90 percent and 50 percent. |
224 | c. If the corporation determines that additional coverage |
225 | levels are necessary to maximize participation in quota share |
226 | primary insurance agreements by authorized insurers, the |
227 | corporation may establish additional coverage levels. However, |
228 | the corporation's quota share primary insurance coverage level |
229 | may not exceed 90 percent. |
230 | d. Any quota share primary insurance agreement entered |
231 | into between an authorized insurer and the corporation must |
232 | provide for a uniform specified percentage of coverage of |
233 | hurricane losses, by county or territory as set forth by the |
234 | corporation board, for all eligible risks of the authorized |
235 | insurer covered under the agreement. |
236 | e. Any quota share primary insurance agreement entered |
237 | into between an authorized insurer and the corporation is |
238 | subject to review and approval by the office. However, such |
239 | agreement shall be authorized only as to insurance contracts |
240 | entered into between an authorized insurer and an insured who is |
241 | already insured by the corporation for wind coverage. |
242 | f. For all eligible risks covered under quota share |
243 | primary insurance agreements, the exposure and coverage levels |
244 | for both the corporation and authorized insurers shall be |
245 | reported by the corporation to the Florida Hurricane Catastrophe |
246 | Fund. For all policies of eligible risks covered under such |
247 | agreements, the corporation and the authorized insurer must |
248 | maintain complete and accurate records for the purpose of |
249 | exposure and loss reimbursement audits as required by fund |
250 | rules. The corporation and the authorized insurer shall each |
251 | maintain duplicate copies of policy declaration pages and |
252 | supporting claims documents. |
253 | g. The corporation board shall establish in its plan of |
254 | operation standards for quota share agreements which ensure that |
255 | there is no discriminatory application among insurers as to the |
256 | terms of the agreements, pricing of the agreements, incentive |
257 | provisions if any, and consideration paid for servicing policies |
258 | or adjusting claims. |
259 | h. The quota share primary insurance agreement between the |
260 | corporation and an authorized insurer must set forth the |
261 | specific terms under which coverage is provided, including, but |
262 | not limited to, the sale and servicing of policies issued under |
263 | the agreement by the insurance agent of the authorized insurer |
264 | producing the business, the reporting of information concerning |
265 | eligible risks, the payment of premium to the corporation, and |
266 | arrangements for the adjustment and payment of hurricane claims |
267 | incurred on eligible risks by the claims adjuster and personnel |
268 | of the authorized insurer. Entering into a quota sharing |
269 | insurance agreement between the corporation and an authorized |
270 | insurer is voluntary and at the discretion of the authorized |
271 | insurer. |
272 | 3.a. May provide that the corporation may employ or |
273 | otherwise contract with individuals or other entities to provide |
274 | administrative or professional services that may be appropriate |
275 | to effectuate the plan. The corporation may borrow funds by |
276 | issuing bonds or by incurring other indebtedness, and shall have |
277 | other powers reasonably necessary to effectuate the requirements |
278 | of this subsection, including, without limitation, the power to |
279 | issue bonds and incur other indebtedness in order to refinance |
280 | outstanding bonds or other indebtedness. The corporation may |
281 | seek judicial validation of its bonds or other indebtedness |
282 | under chapter 75. The corporation may issue bonds or incur other |
283 | indebtedness, or have bonds issued on its behalf by a unit of |
284 | local government pursuant to subparagraph (q)2. in the absence |
285 | of a hurricane or other weather-related event, upon a |
286 | determination by the corporation, subject to approval by the |
287 | office, that such action would enable it to efficiently meet the |
288 | financial obligations of the corporation and that such |
289 | financings are reasonably necessary to effectuate the |
290 | requirements of this subsection. The corporation may take all |
291 | actions needed to facilitate tax-free status for such bonds or |
292 | indebtedness, including formation of trusts or other affiliated |
293 | entities. The corporation may pledge assessments, projected |
294 | recoveries from the Florida Hurricane Catastrophe Fund, other |
295 | reinsurance recoverables, market equalization and other |
296 | surcharges, and other funds available to the corporation as |
297 | security for bonds or other indebtedness. In recognition of s. |
298 | 10, Art. I of the State Constitution, prohibiting the impairment |
299 | of obligations of contracts, it is the intent of the Legislature |
300 | that no action be taken whose purpose is to impair any bond |
301 | indenture or financing agreement or any revenue source committed |
302 | by contract to such bond or other indebtedness. |
303 | b. To ensure that the corporation is operating in an |
304 | efficient and economic manner while providing quality service to |
305 | policyholders, applicants, and agents, the board shall |
306 | commission an independent third-party consultant having |
307 | expertise in insurance company management or insurance company |
308 | management consulting to prepare a report and make |
309 | recommendations on the relative costs and benefits of |
310 | outsourcing various policy issuance and service functions to |
311 | private servicing carriers or entities performing similar |
312 | functions in the private market for a fee, rather than |
313 | performing such functions in-house. In making such |
314 | recommendations, the consultant shall consider how other |
315 | residual markets, both in this state and around the country, |
316 | outsource appropriate functions or use servicing carriers to |
317 | better match expenses with revenues that fluctuate based on a |
318 | widely varying policy count. The report must be completed by |
319 | July 1, 2012. Upon receiving the report, the board shall develop |
320 | a plan to implement the report and submit the plan for review, |
321 | modification, and approval to the Financial Services Commission. |
322 | Upon the commission's approval of the plan, the board shall |
323 | begin implementing the plan by January 1, 2013. |
324 | 4. Must require that the corporation operate subject to |
325 | the supervision and approval of a board of governors consisting |
326 | of eight individuals who are residents of this state, from |
327 | different geographical areas of this state. |
328 | a. The Governor, the Chief Financial Officer, the |
329 | President of the Senate, and the Speaker of the House of |
330 | Representatives shall each appoint two members of the board. At |
331 | least one of the two members appointed by each appointing |
332 | officer must have demonstrated expertise in insurance and is |
333 | deemed to be within the scope of the exemption provided in s. |
334 | 112.313(7)(b). The Chief Financial Officer shall designate one |
335 | of the appointees as chair. All board members serve at the |
336 | pleasure of the appointing officer. All members of the board are |
337 | subject to removal at will by the officers who appointed them. |
338 | All board members, including the chair, must be appointed to |
339 | serve for 3-year terms beginning annually on a date designated |
340 | by the plan. However, for the first term beginning on or after |
341 | July 1, 2009, each appointing officer shall appoint one member |
342 | of the board for a 2-year term and one member for a 3-year term. |
343 | A board vacancy shall be filled for the unexpired term by the |
344 | appointing officer. The Chief Financial Officer shall appoint a |
345 | technical advisory group to provide information and advice to |
346 | the board in connection with the board's duties under this |
347 | subsection. The executive director and senior managers of the |
348 | corporation shall be engaged by the board and serve at the |
349 | pleasure of the board. Any executive director appointed on or |
350 | after July 1, 2006, is subject to confirmation by the Senate. |
351 | The executive director is responsible for employing other staff |
352 | as the corporation may require, subject to review and |
353 | concurrence by the board. |
354 | b. The board shall create a Market Accountability Advisory |
355 | Committee to assist the corporation in developing awareness of |
356 | its rates and its customer and agent service levels in |
357 | relationship to the voluntary market insurers writing similar |
358 | coverage. |
359 | (I) The members of the advisory committee consist of the |
360 | following 11 persons, one of whom must be elected chair by the |
361 | members of the committee: four representatives, one appointed by |
362 | the Florida Association of Insurance Agents, one by the Florida |
363 | Association of Insurance and Financial Advisors, one by the |
364 | Professional Insurance Agents of Florida, and one by the Latin |
365 | American Association of Insurance Agencies; three |
366 | representatives appointed by the insurers with the three highest |
367 | voluntary market share of residential property insurance |
368 | business in the state; one representative from the Office of |
369 | Insurance Regulation; one consumer appointed by the board who is |
370 | insured by the corporation at the time of appointment to the |
371 | committee; one representative appointed by the Florida |
372 | Association of Realtors; and one representative appointed by the |
373 | Florida Bankers Association. All members shall be appointed to |
374 | 3-year terms and may serve for consecutive terms. |
375 | (II) The committee shall report to the corporation at each |
376 | board meeting on insurance market issues which may include rates |
377 | and rate competition with the voluntary market; service, |
378 | including policy issuance, claims processing, and general |
379 | responsiveness to policyholders, applicants, and agents; and |
380 | matters relating to depopulation. |
381 | 5. Must provide a procedure for determining the |
382 | eligibility of a risk for coverage, as follows: |
383 | a. Subject to s. 627.3517, with respect to personal lines |
384 | residential risks, if the risk is offered coverage from an |
385 | authorized insurer at the insurer's approved rate under a |
386 | standard policy including wind coverage or, if consistent with |
387 | the insurer's underwriting rules as filed with the office, a |
388 | basic policy including wind coverage, for a new application to |
389 | the corporation for coverage, the risk is not eligible for any |
390 | policy issued by the corporation unless the premium for coverage |
391 | from the authorized insurer is more than 15 percent greater than |
392 | the premium for comparable coverage from the corporation. If the |
393 | risk is not able to obtain such offer, the risk is eligible for |
394 | a standard policy including wind coverage or a basic policy |
395 | including wind coverage issued by the corporation; however, if |
396 | the risk could not be insured under a standard policy including |
397 | wind coverage regardless of market conditions, the risk is |
398 | eligible for a basic policy including wind coverage unless |
399 | rejected under subparagraph 8. However, a policyholder of the |
400 | corporation or a policyholder removed from the corporation |
401 | through an assumption agreement until the end of the assumption |
402 | period remains eligible for coverage from the corporation |
403 | regardless of any offer of coverage from an authorized insurer |
404 | or surplus lines insurer. The corporation shall determine the |
405 | type of policy to be provided on the basis of objective |
406 | standards specified in the underwriting manual and based on |
407 | generally accepted underwriting practices. |
408 | (I) If the risk accepts an offer of coverage through the |
409 | market assistance plan or through a mechanism established by the |
410 | corporation before a policy is issued to the risk by the |
411 | corporation or during the first 30 days of coverage by the |
412 | corporation, and the producing agent who submitted the |
413 | application to the plan or to the corporation is not currently |
414 | appointed by the insurer, the insurer shall: |
415 | (A) Pay to the producing agent of record of the policy for |
416 | the first year, an amount that is the greater of the insurer's |
417 | usual and customary commission for the type of policy written or |
418 | a fee equal to the usual and customary commission of the |
419 | corporation; or |
420 | (B) Offer to allow the producing agent of record of the |
421 | policy to continue servicing the policy for at least 1 year and |
422 | offer to pay the agent the greater of the insurer's or the |
423 | corporation's usual and customary commission for the type of |
424 | policy written. |
425 |
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426 | If the producing agent is unwilling or unable to accept |
427 | appointment, the new insurer shall pay the agent in accordance |
428 | with sub-sub-sub-subparagraph (A). |
429 | (II) If the corporation enters into a contractual |
430 | agreement for a take-out plan, the producing agent of record of |
431 | the corporation policy is entitled to retain any unearned |
432 | commission on the policy, and the insurer shall: |
433 | (A) Pay to the producing agent of record, for the first |
434 | year, an amount that is the greater of the insurer's usual and |
435 | customary commission for the type of policy written or a fee |
436 | equal to the usual and customary commission of the corporation; |
437 | or |
438 | (B) Offer to allow the producing agent of record to |
439 | continue servicing the policy for at least 1 year and offer to |
440 | pay the agent the greater of the insurer's or the corporation's |
441 | usual and customary commission for the type of policy written. |
442 |
|
443 | If the producing agent is unwilling or unable to accept |
444 | appointment, the new insurer shall pay the agent in accordance |
445 | with sub-sub-sub-subparagraph (A). |
446 | b. With respect to commercial lines residential risks, for |
447 | a new application to the corporation for coverage, if the risk |
448 | is offered coverage under a policy including wind coverage from |
449 | an authorized insurer at its approved rate, the risk is not |
450 | eligible for a policy issued by the corporation unless the |
451 | premium for coverage from the authorized insurer is more than 15 |
452 | percent greater than the premium for comparable coverage from |
453 | the corporation. If the risk is not able to obtain any such |
454 | offer, the risk is eligible for a policy including wind coverage |
455 | issued by the corporation. However, a policyholder of the |
456 | corporation or a policyholder removed from the corporation |
457 | through an assumption agreement until the end of the assumption |
458 | period remains eligible for coverage from the corporation |
459 | regardless of an offer of coverage from an authorized insurer or |
460 | surplus lines insurer. |
461 | (I) If the risk accepts an offer of coverage through the |
462 | market assistance plan or through a mechanism established by the |
463 | corporation before a policy is issued to the risk by the |
464 | corporation or during the first 30 days of coverage by the |
465 | corporation, and the producing agent who submitted the |
466 | application to the plan or the corporation is not currently |
467 | appointed by the insurer, the insurer shall: |
468 | (A) Pay to the producing agent of record of the policy, |
469 | for the first year, an amount that is the greater of the |
470 | insurer's usual and customary commission for the type of policy |
471 | written or a fee equal to the usual and customary commission of |
472 | the corporation; or |
473 | (B) Offer to allow the producing agent of record of the |
474 | policy to continue servicing the policy for at least 1 year and |
475 | offer to pay the agent the greater of the insurer's or the |
476 | corporation's usual and customary commission for the type of |
477 | policy written. |
478 |
|
479 | If the producing agent is unwilling or unable to accept |
480 | appointment, the new insurer shall pay the agent in accordance |
481 | with sub-sub-sub-subparagraph (A). |
482 | (II) If the corporation enters into a contractual |
483 | agreement for a take-out plan, the producing agent of record of |
484 | the corporation policy is entitled to retain any unearned |
485 | commission on the policy, and the insurer shall: |
486 | (A) Pay to the producing agent of record, for the first |
487 | year, an amount that is the greater of the insurer's usual and |
488 | customary commission for the type of policy written or a fee |
489 | equal to the usual and customary commission of the corporation; |
490 | or |
491 | (B) Offer to allow the producing agent of record to |
492 | continue servicing the policy for at least 1 year and offer to |
493 | pay the agent the greater of the insurer's or the corporation's |
494 | usual and customary commission for the type of policy written. |
495 |
|
496 | If the producing agent is unwilling or unable to accept |
497 | appointment, the new insurer shall pay the agent in accordance |
498 | with sub-sub-sub-subparagraph (A). |
499 | c. For purposes of determining comparable coverage under |
500 | sub-subparagraphs a. and b., the comparison must be based on |
501 | those forms and coverages that are reasonably comparable. The |
502 | corporation may rely on a determination of comparable coverage |
503 | and premium made by the producing agent who submits the |
504 | application to the corporation, made in the agent's capacity as |
505 | the corporation's agent. A comparison may be made solely of the |
506 | premium with respect to the main building or structure only on |
507 | the following basis: the same coverage A or other building |
508 | limits; the same percentage hurricane deductible that applies on |
509 | an annual basis or that applies to each hurricane for commercial |
510 | residential property; the same percentage of ordinance and law |
511 | coverage, if the same limit is offered by both the corporation |
512 | and the authorized insurer; the same mitigation credits, to the |
513 | extent the same types of credits are offered both by the |
514 | corporation and the authorized insurer; the same method for loss |
515 | payment, such as replacement cost or actual cash value, if the |
516 | same method is offered both by the corporation and the |
517 | authorized insurer in accordance with underwriting rules; and |
518 | any other form or coverage that is reasonably comparable as |
519 | determined by the board. If an application is submitted to the |
520 | corporation for wind-only coverage in the coastal account, the |
521 | premium for the corporation's wind-only policy plus the premium |
522 | for the ex-wind policy that is offered by an authorized insurer |
523 | to the applicant must be compared to the premium for multiperil |
524 | coverage offered by an authorized insurer, subject to the |
525 | standards for comparison specified in this subparagraph. If the |
526 | corporation or the applicant requests from the authorized |
527 | insurer a breakdown of the premium of the offer by types of |
528 | coverage so that a comparison may be made by the corporation or |
529 | its agent and the authorized insurer refuses or is unable to |
530 | provide such information, the corporation may treat the offer as |
531 | not being an offer of coverage from an authorized insurer at the |
532 | insurer's approved rate. |
533 | 6. Must include rules for classifications of risks and |
534 | rates. |
535 | 7. Must provide that if premium and investment income for |
536 | an account attributable to a particular calendar year are in |
537 | excess of projected losses and expenses for the account |
538 | attributable to that year, such excess shall be held in surplus |
539 | in the account. Such surplus must be available to defray |
540 | deficits in that account as to future years and used for that |
541 | purpose before assessing assessable insurers and assessable |
542 | insureds as to any calendar year. |
543 | 8. Must provide objective criteria and procedures to be |
544 | uniformly applied to all applicants in determining whether an |
545 | individual risk is so hazardous as to be uninsurable. In making |
546 | this determination and in establishing the criteria and |
547 | procedures, the following must be considered: |
548 | a. Whether the likelihood of a loss for the individual |
549 | risk is substantially higher than for other risks of the same |
550 | class; and |
551 | b. Whether the uncertainty associated with the individual |
552 | risk is such that an appropriate premium cannot be determined. |
553 |
|
554 | The acceptance or rejection of a risk by the corporation shall |
555 | be construed as the private placement of insurance, and the |
556 | provisions of chapter 120 do not apply. |
557 | 9. Must provide that the corporation make its best efforts |
558 | to procure catastrophe reinsurance at reasonable rates, to cover |
559 | its projected 100-year probable maximum loss as determined by |
560 | the board of governors. |
561 | 10. The policies issued by the corporation must provide |
562 | that if the corporation or the market assistance plan obtains an |
563 | offer from an authorized insurer to cover the risk at its |
564 | approved rates, the risk is no longer eligible for renewal |
565 | through the corporation, except as otherwise provided in this |
566 | subsection. |
567 | 11. Corporation policies and applications must include a |
568 | notice that the corporation policy could, under this section, be |
569 | replaced with a policy issued by an authorized insurer which |
570 | does not provide coverage identical to the coverage provided by |
571 | the corporation. The notice must also specify that acceptance of |
572 | corporation coverage creates a conclusive presumption that the |
573 | applicant or policyholder is aware of this potential. |
574 | 12. May establish, subject to approval by the office, |
575 | different eligibility requirements and operational procedures |
576 | for any line or type of coverage for any specified county or |
577 | area if the board determines that such changes are justified due |
578 | to the voluntary market being sufficiently stable and |
579 | competitive in such area or for such line or type of coverage |
580 | and that consumers who, in good faith, are unable to obtain |
581 | insurance through the voluntary market through ordinary methods |
582 | continue to have access to coverage from the corporation. If |
583 | coverage is sought in connection with a real property transfer, |
584 | the requirements and procedures may not provide an effective |
585 | date of coverage later than the date of the closing of the |
586 | transfer as established by the transferor, the transferee, and, |
587 | if applicable, the lender. |
588 | 13. Must provide that, with respect to the coastal |
589 | account, any assessable insurer with a surplus as to |
590 | policyholders of $25 million or less writing 25 percent or more |
591 | of its total countrywide property insurance premiums in this |
592 | state may petition the office, within the first 90 days of each |
593 | calendar year, to qualify as a limited apportionment company. A |
594 | regular assessment levied by the corporation on a limited |
595 | apportionment company for a deficit incurred by the corporation |
596 | for the coastal account may be paid to the corporation on a |
597 | monthly basis as the assessments are collected by the limited |
598 | apportionment company from its insureds pursuant to s. 627.3512, |
599 | but the regular assessment must be paid in full within 12 months |
600 | after being levied by the corporation. A limited apportionment |
601 | company shall collect from its policyholders any emergency |
602 | assessment imposed under sub-subparagraph (b)3.d. The plan must |
603 | provide that, if the office determines that any regular |
604 | assessment will result in an impairment of the surplus of a |
605 | limited apportionment company, the office may direct that all or |
606 | part of such assessment be deferred as provided in subparagraph |
607 | (q)4. However, an emergency assessment to be collected from |
608 | policyholders under sub-subparagraph (b)3.d. may not be limited |
609 | or deferred. |
610 | 14. Must provide that the corporation appoint as its |
611 | licensed agents only those agents who also hold an appointment |
612 | as defined in s. 626.015(3) with an insurer who at the time of |
613 | the agent's initial appointment by the corporation is authorized |
614 | to write and is actually writing personal lines residential |
615 | property coverage, commercial residential property coverage, or |
616 | commercial nonresidential property coverage within the state. |
617 | 15. Must provide a premium payment plan option to its |
618 | policyholders which, at a minimum, allows for quarterly and |
619 | semiannual payment of premiums. A monthly payment plan may, but |
620 | is not required to, be offered. |
621 | 16. Must limit coverage on mobile homes or manufactured |
622 | homes built before 1994 to actual cash value of the dwelling |
623 | rather than replacement costs of the dwelling. |
624 | 17. May provide such limits of coverage as the board |
625 | determines, consistent with the requirements of this subsection. |
626 | 18. May require commercial property to meet specified |
627 | hurricane mitigation construction features as a condition of |
628 | eligibility for coverage. |
629 | 19. Must provide that new or renewal policies issued by |
630 | the corporation on or after January 1, 2012, which cover |
631 | sinkhole loss do not include coverage for any loss to |
632 | appurtenant structures, driveways, sidewalks, decks, or patios |
633 | that are directly or indirectly caused by sinkhole activity. The |
634 | corporation shall exclude such coverage using a notice of |
635 | coverage change, which may be included with the policy renewal, |
636 | and not by issuance of a notice of nonrenewal of the excluded |
637 | coverage upon renewal of the current policy. |
638 | 20. As of January 1, 2012, must require that the agent |
639 | obtain from an applicant for coverage from the corporation an |
640 | acknowledgement signed by the applicant, which includes, at a |
641 | minimum, the following statement: |
642 | ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE |
643 | AND ASSESSMENT LIABILITY: |
644 | 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE |
645 | CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A |
646 | DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON, |
647 | MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND |
648 | PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE |
649 | POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT |
650 | OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA |
651 | LEGISLATURE. |
652 | 2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY |
653 | ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER |
654 | INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE |
655 | FLORIDA LEGISLATURE. |
656 | 3. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE |
657 | CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE |
658 | STATE OF FLORIDA. |
659 | a. The corporation shall maintain, in electronic format or |
660 | otherwise, a copy of the applicant's signed acknowledgement and |
661 | provide a copy of the statement to the policyholder as part of |
662 | the first renewal after the effective date of this subparagraph. |
663 | b. The signed acknowledgement form creates a conclusive |
664 | presumption that the policyholder understood and accepted his or |
665 | her potential surcharge and assessment liability as a |
666 | policyholder of the corporation. |
667 | Section 2. This act shall take effect July 1, 2012. |