Florida Senate - 2013 SB 1622 By Senator Richter 23-01409A-13 20131622__ 1 A bill to be entitled 2 An act relating to the establishment of a 3 clearinghouse diversion program within the Citizens 4 Property Insurance Corporation; creating s. 627.3518, 5 F.S.; authorizing the creation of a clearinghouse 6 diversion program within the corporation for 7 identifying and diverting insurance coverage to 8 private insurers; providing definitions; providing 9 requirements and duties of the corporation, insurers, 10 and agents; providing for an alternative to submitting 11 risks to the corporation; providing an effective date. 12 13 Be It Enacted by the Legislature of the State of Florida: 14 15 Section 1. Section 627.3518, Florida Statutes, is created 16 to read: 17 627.3518 Citizens Property Insurance Corporation 18 clearinghouse.—The Legislature recognizes that Citizens Property 19 Insurance Corporation has authority to establish a clearinghouse 20 as a separate organizational unit within the corporation for the 21 purpose of determining the eligibility of new and renewal risks 22 seeking coverage through the corporation and facilitating the 23 identification and diversion of ineligible applicants and 24 current policyholders from the corporation into the voluntary 25 insurance market. The purpose of this section is to augment that 26 authority by providing a framework for the corporation to 27 implement such program by July 1, 2013. 28 (1) DEFINITIONS.—As used in this section, the term: 29 (a) “Clearinghouse” means the clearinghouse diversion 30 program created under this section. 31 (b) “Corporation” means Citizens Property Insurance 32 Corporation. 33 (c) “Exclusive agent” means any licensed insurance agent 34 who has, by contract, agreed to act exclusively for one company 35 or group of affiliated insurance companies, and who is 36 disallowed by that contract to directly write for any other 37 unaffiliated insurer absent express consent from the company or 38 group of affiliated companies. 39 (d) “Independent agent” means a licensed insurance agent 40 who is not required by contract to act only on behalf of one 41 company or group of affiliated insurance companies. 42 (2) The clearinghouse shall have all the rights and 43 responsibilities in carrying out its duties as a licensed 44 general lines agent, but is not required to employ or engage a 45 licensed general lines agent or maintain an insurance agency 46 license in order to solicit and place insurance coverage. In 47 establishing the clearinghouse the corporation: 48 (a) Shall require all new applications for coverage and all 49 policies up for renewal to be submitted to the clearinghouse to 50 facilitate obtaining an offer of coverage from an authorized 51 insurer before binding or renewing coverage with the 52 corporation. 53 (b) Shall develop an enhanced application for obtaining 54 information that will assist private insurers in determining 55 whether or not to make an offer of coverage through the 56 clearinghouse. 57 (c) Shall require all new applications for coverage to be 58 subject to a 48-hour period that allows a private insurer 59 participating in the clearinghouse to select applicants for 60 coverage before the application is submitted to the corporation 61 for coverage. The insurer may issue a binder to a selected 62 applicant for at least 30 days, but not more than 60 days. 63 (d) Notwithstanding s. 626.916(1), if an applicant for new 64 or renewal coverage from the corporation does not receive an 65 offer of coverage from admitted insurers, may allow the 66 applicant to accept an offer from a surplus lines insurer 67 eligible under ss. 626.913-626.937. 68 (e) Shall provide funds to operate the clearinghouse. The 69 corporation may charge a reasonable fee as a percentage of an 70 agent’s commission to offset, or partially offset the costs of 71 the clearinghouse. However, insurers participating in the 72 clearinghouse are not required to pay a fee or use the 73 clearinghouse to renew policies initially written through the 74 clearinghouse. 75 (f) Shall enter into contracts with licensed property 76 insurance companies operating in this state to participate in 77 the clearinghouse and accept appointments from voluntary market 78 insurers. 79 (g) May employ or otherwise contract with individuals or 80 other entities to provide administrative or professional 81 services in accordance with purchasing requirements set forth in 82 the corporation’s plan under s. 627.351(6)(c). 83 (3) A licensed insurer may participate in the 84 clearinghouse. Insurers making offers of coverage to new 85 applicants or renewing policyholders through the clearinghouse: 86 (a) Are not required to individually appoint an agent whose 87 customer is bound and underwritten through the clearinghouse for 88 as long as that policy remains with the insurer. Notwithstanding 89 s. 626.112, an insurer is not required to appoint an agent on a 90 policy underwritten through the clearinghouse as long as that 91 policy remains with the insurer. Insurers may appoint an agent 92 whose customer is initially underwritten and bound through the 93 clearinghouse. If an insurer accepts a policy from an agent who 94 is not appointed and thereafter elects to accept a policy from 95 that agent which was not submitted through the program, the 96 provisions of s. 626.112 requiring appointment apply to that 97 agent. 98 (b) Shall enter into a limited agency agreement with each 99 agent whose customer is underwritten and bound through the 100 clearinghouse and who is not appointed in accordance with this 101 subsection. 102 (c) Shall enter into its standard agency agreement with 103 each agent whose customer is underwritten and bound through the 104 clearinghouse if that agent has been appointed by the insurer 105 pursuant to s. 626.112. 106 (d) Must comply with the s. 627.4133(2). 107 (4) Notwithstanding section 627.3157, if an applicant for 108 new coverage from the corporation is offered coverage from an 109 admitted insurer through the clearinghouse or through an 110 alternative option under subsection (7) at a rate that is at or 111 below the eligibility threshold established in s. 627.351(c)5., 112 the risk is not eligible for coverage with the corporation. 113 Notwithstanding any other provisions of law, if a policyholder 114 at renewal is provided an offer of coverage from an admitted 115 insurer through the program or through an alternative option 116 under subsection (7), and the offer is no more than 15 percent 117 above the policyholder’s premium for comparable coverage through 118 the corporation, the risk is not eligible for coverage with the 119 corporation. 120 (5) Independent insurance agents submitting new 121 applications for coverage or who are the agent of record on a 122 renewal policy submitted to the clearinghouse: 123 (a) Notwithstanding s. 626.112, are not required to be 124 appointed by an insurer participating in the clearinghouse for 125 policies written solely through the clearinghouse. 126 (b) May accept an appointment from an insurer participating 127 in the clearinghouse. 128 (c) Must enter into a standard or limited agency agreement 129 with the insurer, at the insurer’s option. 130 (d) Must maintain the exclusive use of expirations, 131 records, or other written or electronic information directly 132 related to such applications or renewals written through the 133 corporation or through an insurer participating in the 134 clearinghouse. Such expirations, records, or other written or 135 electronic information may be used to review an application, 136 issue a policy, or for any other purpose necessary for placing 137 such business through the clearinghouse. 138 (6) Exclusive agents submitting new applications for 139 coverage or that are the agent of record on a renewal policy 140 submitted to the program: 141 (a) Notwithstanding s. 626.112, are not required to be 142 appointed by an insurer participating in the clearinghouse for 143 policies written solely through the clearinghouse. 144 (b) Must provide the new applicant or renewing policyholder 145 the opportunity to accept an offer of coverage from an insurer 146 whose limited servicing agreement is approved by that agent’s 147 exclusive insurer as eligible to participate in the 148 clearinghouse with that insurer’s exclusive agents. 149 (c) Must enter into only a limited servicing agreement with 150 the insurer making an offer of coverage. 151 (d) Must maintain the exclusive use of expirations, 152 records, or other written or electronic information directly 153 related to such applications or renewals written through the 154 corporation or through an insurer participating in the program, 155 notwithstanding s. 627.351(6)(c)5.a.(I)(B) and (II)(B). Such 156 expirations, records, or other written or electronic information 157 may be used to review an application, issue a policy, or for any 158 other purpose necessary for placing such business through the 159 clearinghouse. 160 (7) The corporation may recognize private entities that the 161 independent agent elects to use as an alternative to submitting 162 a risk to the clearinghouse. An alternative option allowed under 163 this subsection shall obtain offers of coverage from authorized 164 insurers for new applicants seeking coverage from the 165 corporation and for corporation policyholders on renewal. The 166 alternative option may not be used as a replacement for the 167 clearinghouse. Neither the clearinghouse nor a private entity 168 operating under this subsection may prohibit insurers from 169 electing to participate in more than one program or alternative, 170 and an insurer participating in the private entity alternative 171 must also participate in the clearinghouse. 172 (8) Submission of an application for coverage by the 173 corporation to the clearinghouse does not constitute the binding 174 of coverage by the corporation, and failure of the clearinghouse 175 to obtain an offer of coverage by an insurer is not considered 176 acceptance of coverage of the risk by the corporation. 177 Section 2. This act shall take effect July 1, 2013.