Florida Senate - 2013                          SENATOR AMENDMENT
       Bill No. CS for SB 1770
                                Barcode 639430                          
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                Floor: 19/F/2R         .                                
             04/11/2013 04:26 PM       .                                

       Senator Simpson moved the following:
    1         Senate Amendment (with directory and title amendments)
    3         Between lines 2189 and 2190
    4  insert:
    5         (ee)1. The corporation may not decline a request for
    6  coverage of residential sinkhole loss based upon: conditions
    7  existing at or on the property which do not constitute sinkhole
    8  related activity; or the proximity of the property to the
    9  location of another property on which conditions exist which do
   10  not constitute sinkhole-related activity.
   11         a. For the purposes of this subparagraph, the term
   12  “sinkhole-related activity” means settlement or systematic
   13  weakening of the earth if the settlement or systematic weakening
   14  results from contemporaneous movement or raveling of soils,
   15  sediments, or rock materials into subterranean voids created by
   16  the effect of water on a limestone or similar rock formation.
   17         b. On or before December 31 of each calendar year, the
   18  corporation shall submit an annual report to the Office of
   19  Insurance Regulation and the Insurance Consumer Advocate
   20  disclosing:
   21         (I) The total number of requests received for residential
   22  sinkhole loss coverage;
   23         (II) The total number of policies issued for residential
   24  sinkhole loss coverage;
   25         (III) The total number of requests declined for residential
   26  sinkhole loss coverage; and
   27         (IV) The reasons for each decline of residential sinkhole
   28  loss coverage.
   29         2. A policy for residential property insurance issued by
   30  the corporation must include a deductible applicable to sinkhole
   31  losses equal to 1 percent, 2 percent, 5 percent, or 10 percent
   32  of the policy dwelling limits, with an appropriate premium
   33  discount amount offered with each deductible amount.
   34         3. The Legislature finds that it is in the public interest
   35  that indemnity funds paid pursuant to sinkhole loss claims are
   36  applied to repairing property damage in order to ensure that
   37  sinkhole indemnity funds paid for sinkhole damage are applied to
   38  above-ground and subsurface repairs. Therefore, a Citizens
   39  Sinkhole Repair Program shall be established by the corporation,
   40  subject to approval by the Office of Insurance Regulation and
   41  the Financial Services Commission. Any claim against a
   42  corporation policy that covers residential sinkhole loss for
   43  which it is determined that such loss has occurred must be
   44  included in the repair program.
   45         a. The repair program may be managed by a third-party
   46  administrator and, at a minimum, must include the following
   47  components:
   48         (I) The corporation may not require the policyholder to
   49  advance payment for repairs.
   50         (II) All applicable provisions contained in the
   51  corporation’s plan of operation apply, including, but not
   52  limited to, the consumer’s right to courteous, prompt, and
   53  professional customer service and the right to fair, prompt and
   54  professional services.
   55         (III) Repairs shall be conducted by repair contractors who
   56  are qualified based upon guidelines adopted by the Financial
   57  Services Commission by rule.
   58         (A) The repair program shall select qualified repair
   59  contractors to perform repairs to damaged property pursuant to a
   60  fixed-price contract between the contractor and the
   61  policyholder. Pursuant to the terms of the contract, the
   62  selected repair contractor is solely responsible for the
   63  performance of all necessary repairs.
   64         (B) Each qualified contractor shall post a performance
   65  bond, secured by a third-party surety, in favor of the
   66  corporation as obligee, in a principle amount equal to the total
   67  cost of all fixed-price contracts annually awarded to that
   68  repair contractor.
   69         (C) Each repair contractor shall also provide a warranty to
   70  the policyholder which covers all repairs provided by the
   71  contractor for at least 5 years after completion of the repairs.
   72         b. The corporation is not responsible for serving as a
   73  repair contractor. The corporation’s obligations pursuant to the
   74  repair program are not an election to repair by the corporation
   75  and therefore do not imply a new contractual relationship.
   76         c. The corporation’s liability related to repair activity
   77  for damaged property included in the repair program is no
   78  greater than the limits of the policy covering that property.
   79         d. For the purposes of the repair program, the presumed
   80  correctness specified in s. 627.7073(1)(c) of the findings,
   81  opinions, and recommendations by the professional engineer or
   82  geologist as to land and building stabilization and foundation
   83  repair are recognized by the Legislature as necessary to address
   84  the public policy interest in ensuring that sinkhole-damaged
   85  residential property is repaired. Therefore, the presumption is
   86  intended to operate as a burden-shifting presumption under ss.
   87  90.302(2) and 90.304. The office may establish a pilot program
   88  to offer optional sinkhole coverage in one or more counties or
   89  other territories of the corporation for the purpose of
   90  implementing s. 627.706, as amended by s. 30, chapter 2007-1,
   91  Laws of Florida. Under the pilot program, the corporation is not
   92  required to issue a notice of nonrenewal to exclude sinkhole
   93  coverage upon the renewal of existing policies, but may exclude
   94  such coverage using a notice of coverage change.
   96  ====== D I R E C T O R Y  C L A U S E  A M E N D M E N T ======
   97         And the directory clause is amended as follows:
   98         Delete line 765
   99  and insert:
  100  (z), and (ee) of subsection (6) of section 627.351, Florida
  101  Statutes,
  103  ================= T I T L E  A M E N D M E N T ================
  104         And the title is amended as follows:
  105         Delete line 69
  106  and insert:
  107         secured by a surplus note; prohibiting the corporation
  108         from denying sinkhole coverage for certain reasons;
  109         requiring the corporation to submit an annual report
  110         to the Office of Insurance Regulation and the
  111         Insurance Consumer Advocate on the number of
  112         residential sinkhole policies issued and declined;
  113         requiring the policy to include a deductible;
  114         establishing a Citizens Sinkhole Repair Program for
  115         sinkhole claims; providing program components;
  116         specifying the corporation’s liability with respect to
  117         sinkhole claims; specifying the presumed correctness
  118         of professional engineer and geologist opinions;
  119         deleting obsolete provisions; requiring the
  120         corporation