Florida Senate - 2013 COMMITTEE AMENDMENT Bill No. SB 1622 Barcode 874164 LEGISLATIVE ACTION Senate . House . . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Banking and Insurance (Richter) recommended the following: 1 Senate Amendment 2 3 Delete lines 28 - 176 4 and insert: 5 (1) As used in this section, the term: 6 (a) “Clearinghouse” means the clearinghouse diversion 7 program created under this section. 8 (b) “Corporation” means Citizens Property Insurance 9 Corporation. 10 (c) “Exclusive agent” means a licensed insurance agent who 11 has agreed, by contract, to act exclusively for one company or 12 group of affiliated insurance companies and is disallowed by the 13 provisions of that contract to directly write for any other 14 unaffiliated insurer, absent express consent from the company or 15 group of affiliated insurance companies. 16 (d) “Independent agent” means a licensed insurance agent 17 not described in paragraph (c). 18 (2) In order to confirm eligibility with the corporation 19 and to enhance the access of new applicants for coverage and the 20 access of existing policyholders of the corporation to offers of 21 coverage from authorized and eligible insurers, the corporation 22 shall establish a clearinghouse to facilitate the diversion of 23 ineligible applicants and existing policyholders from the 24 corporation into the voluntary insurance market. 25 (3) Notwithstanding s. 626.752, the clearinghouse shall 26 have the same rights and responsibilities in carrying out its 27 duties as a licensed general lines agent, but is not required to 28 employ or engage a licensed general lines agent or to maintain 29 an insurance agency license in order to solicit and place 30 insurance coverage. In establishing the clearinghouse, the 31 corporation may: 32 (a) Require all new applications and all policies due for 33 renewal to be submitted to the clearinghouse or a private 34 alternative in order to facilitate obtaining an offer of 35 coverage from an authorized insurer before binding or renewing 36 coverage by the corporation. 37 (b) Employ or otherwise contract with individuals or other 38 entities to provide administrative or professional services in 39 order to carry out the plan within the corporation in accordance 40 with the applicable purchasing requirements under s. 627.351. 41 (c) Enter into a contract with an authorized or eligible 42 insurer participating in the clearinghouse and accept an 43 appointment by such insurer. 44 (d) Provide funds to operate the clearinghouse, or charge 45 agents and insurers a reasonable fee to offset or partially 46 offset the costs of the clearinghouse on policies that are 47 accepted by the participating insurers. An insurer that 48 participates in the clearinghouse is not required to use the 49 clearinghouse for the renewal of policies initially written 50 through the clearinghouse. 51 (e) Develop an enhanced application for obtaining 52 information that will assist private insurers in determining 53 whether to make an offer of coverage through the clearinghouse. 54 (f) Before approving new applications for coverage by the 55 corporation, require every application to be subject to a 48 56 hour period that allows an insurer participating in the 57 clearinghouse to select the application for coverage. The 58 insurer may issue a binder on any policy selected for coverage 59 for a period of at least 30 days, but not more than 60 days. 60 (4) An authorized or eligible insurer may participate in 61 the clearinghouse; however, participation is not mandatory. An 62 insurer that makes an offer of coverage to a new applicant or 63 renews a policy for a policyholder through the clearinghouse: 64 (a) Is not required to individually appoint an agent whose 65 customer is underwritten and bound through the clearinghouse. 66 Notwithstanding s. 626.112, an insurer is not required to 67 appoint an agent on a policy underwritten through the 68 clearinghouse if that policy remains with the insurer. An 69 insurer may appoint an agent whose customer is initially 70 underwritten and bound through the clearinghouse. If an insurer 71 accepts a policy from an agent who is not appointed pursuant to 72 this paragraph and thereafter accepts a policy from such agent, 73 the provisions of s. 626.112 requiring appointment apply to the 74 agent. 75 (b) Must enter into a limited agency agreement with each 76 agent who is not appointed in accordance with paragraph (a) and 77 whose customer is underwritten and bound through the 78 clearinghouse. 79 (c) Must enter into its standard agency agreement with each 80 agent whose customer is underwritten and bound through the 81 clearinghouse if that agent has been appointed by the insurer 82 pursuant to s. 626.112. 83 (d) Must comply with s. 627.4133(2). 84 (e) Must participate through their single designated 85 managing general agent or broker; however, the provisions of 86 paragraph (6)(a) regarding ownership, control, and use of the 87 expirations apply. 88 (5)(a) Notwithstanding s. 627.3517, an applicant for new 89 coverage is not eligible for coverage from the corporation if 90 the applicant is offered coverage from an authorized insurer 91 through the clearinghouse at a premium that is at or below the 92 eligibility threshold established under s. 627.351(6)(c)5.a. 93 (b) Notwithstanding any other provisions of law, if a 94 renewing policyholder of the corporation is offered coverage 95 from an authorized insurer for a personal lines or commercial 96 lines risk at a premium that is no more than 15 percent above 97 the corporation’s renewal premium for comparable coverage, the 98 risk is not eligible for coverage with the corporation. 99 (c) Notwithstanding s. 626.916(1), if an applicant for new 100 or renewal coverage from the corporation does not receive an 101 offer of coverage from an authorized insurer, the applicant may 102 choose to accept an offer of coverage from an eligible insurer 103 or its broker under ss. 626.913-626.937. Such offer of coverage 104 from an eligible insurer does not make the risk ineligible for 105 coverage with the corporation. 106 (d) An applicant for new or renewal coverage from the 107 corporation may choose to accept any offer of coverage received 108 through the clearinghouse from an authorized insurer which is 109 greater than 15 percent of the corporation’s renewal premium. 110 (e) Section 627.351(6)(c)5.a.(I) and b.(I) does not apply 111 to an offer of coverage from an authorized insurer obtained 112 through the clearinghouse. 113 (6) An independent agent who submits a new application for 114 coverage or who is the agent of record on a renewal policy 115 submitted to the clearinghouse: 116 (a) Must maintain ownership and the exclusive use of 117 expiration, record, or other written or electronic information 118 directly related to such application or renewal written through 119 the corporation or through an insurer participating in the 120 clearinghouse, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and 121 (II)(B). A contract with the corporation or required by the 122 corporation may not amend, modify, interfere with, or limit such 123 rights of ownership. Such expiration, record, or other written 124 or electronic information may be used to review an application 125 or issue a policy or for any other purpose necessary for placing 126 business through the clearinghouse. 127 (b) Is not required to be appointed by an insurer 128 participating in the clearinghouse for policies written solely 129 through the clearinghouse, notwithstanding s. 626.112. 130 (c) May accept an appointment from an insurer participating 131 in the clearinghouse. 132 (d) Must enter into a standard or limited agency agreement 133 with the insurer, at the insurer’s option. 134 135 An applicant who is ineligible for coverage under subsection (5) 136 remains ineligible if the applicant’s independent agent is 137 unwilling or unable to enter into a standard or limited agency 138 agreement with an insurer participating in the clearinghouse. 139 (7) An exclusive agent who submits a new application for 140 coverage or who is the agent of record on a renewal policy 141 submitted to the clearinghouse: 142 (a) Must maintain ownership and the exclusive use of 143 expiration, record, or other written or electronic information 144 directly related to such application or renewal written through 145 the corporation or through an insurer participating in the 146 clearinghouse, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and 147 (II)(B). A contract with the corporation or required by the 148 corporation may not amend, modify, interfere with, or limit such 149 rights of ownership. Such expiration, record, or other written 150 or electronic information may be used to review an application 151 or issue a policy or for any other purpose necessary for placing 152 business through the clearinghouse. 153 (b) Is not required to be appointed by an insurer 154 participating in the clearinghouse for policies written solely 155 through the clearinghouse, notwithstanding s. 626.112. 156 (c) Must accept an offer of coverage from an insurer whose 157 limited servicing agreement is approved by that agent’s 158 exclusive insurer as eligible to participate in the 159 clearinghouse with that insurer’s exclusive agents. 160 (d) Must enter into a limited servicing agreement with the 161 insurer making an offer of coverage, and may do so only after 162 the exclusive agent’s insurer has approved the terms of the 163 agreement. The exclusive agent’s insurer must approve a limited 164 service agreement for the clearinghouse if the insurer has 165 approved a service agreement with the agent for other purposes. 166 167 An applicant is ineligible for coverage under subsection (5) if 168 the applicant’s exclusive agent is unwilling or unable to enter 169 into a standard or limited agency agreement with a participating 170 insurer making an offer of coverage to that applicant. 171 (8) To promote private market initiatives that provide 172 offers of coverage from authorized and eligible insurers to 173 applicants for coverage by the corporation and to the 174 corporation’s policyholders on renewal, the corporation shall 175 publish, by January 1, 2014, reasonable standards for private 176 alternatives to the submission of a risk to the clearinghouse. 177 Notwithstanding s. 626.752, such private alternatives may act in 178 a master agency arrangement that allows agents to be appointed 179 as subagents of a master agency and to use private alternatives 180 for the submission of risks to the clearinghouse. The 181 alternative option allowed under this subsection is an 182 alternative to and not a replacement for the clearinghouse. The 183 clearinghouse or any private entity operating under this 184 subsection may not prohibit insurers that elect to participate 185 from participating in more than one clearinghouse or 186 alternative; however, an insurer participating in the private 187 entity must also participate in the clearinghouse. 188 (9) Submission of an application to the clearinghouse for 189 coverage by the corporation does not constitute the binding of 190 coverage, and the failure of the clearinghouse to obtain an 191 offer of coverage by an insurer is not considered acceptance of 192 coverage of the risk by the corporation. 193 (10) The clearinghouse does not include commercial 194 residential policies.