Florida Senate - 2013 COMMITTEE AMENDMENT Bill No. SB 1770 Barcode 883928 LEGISLATIVE ACTION Senate . House Comm: RCS . 03/19/2013 . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— Appropriations Subcommittee on General Government (Hays) recommended the following: 1 Senate Amendment 2 3 Delete lines 2425 - 2570 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 20 existing policyholders of the corporation to offers of coverage 21 from authorized and eligible insurers, the corporation shall 22 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) The clearinghouse shall have the same rights and 26 responsibilities in carrying out its duties as a licensed 27 general lines agent, but is not required to employ or engage a 28 licensed general lines agent or to maintain an insurance agency 29 license in order to solicit and place insurance coverage. In 30 establishing the clearinghouse, the corporation may: 31 (a) Require all new applications and all policies due for 32 renewal to be submitted to the clearinghouse or a private 33 alternative in order to facilitate obtaining an offer of 34 coverage from an authorized insurer before binding or renewing 35 coverage by the corporation. 36 (b) Employ or otherwise contract with individuals or other 37 entities to provide administrative or professional services in 38 order to effectuate the plan within the corporation in 39 accordance with the applicable purchasing requirements under s. 40 627.351. 41 (c) Enter into contracts 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. Insurers participating 47 in the clearinghouse are not required to use the clearinghouse 48 for the renewal of policies initially written through the 49 clearinghouse. 50 (e) Develop an enhanced application for obtaining 51 information that will assist private insurers in determining 52 whether to make an offer of coverage through the clearinghouse. 53 (f) Before approving new applications for coverage by the 54 corporation, require every application to be subject to a 48 55 hour period that allows an insurer participating in the 56 clearinghouse to select the application for coverage. The 57 insurer may issue a binder on any policy selected for coverage 58 for a period of at least 30 days, but not more than 60 days. 59 (4) An authorized or eligible insurer may participate in 60 the clearinghouse; however, participation is not mandatory. 61 Insurers making offers of coverage to new applicants or renewing 62 policyholders through the clearinghouse: 63 (a) Are not required to individually appoint an agent whose 64 customer is underwritten and bound through the clearinghouse. 65 Notwithstanding s. 626.112, insurers are not required to appoint 66 an agent on a policy underwritten through the clearinghouse as 67 long as that policy remains with the insurer. Insurers may 68 appoint an agent whose customer is initially underwritten and 69 bound through the clearinghouse. If an insurer accepts a policy 70 from an agent who is not appointed pursuant to this paragraph 71 and thereafter accepts a policy from such agent, the provisions 72 of s. 626.112 requiring appointment apply to the agent. 73 (b) Must enter into a limited agency agreement with each 74 agent who is not appointed in accordance with paragraph (a) and 75 whose customer is underwritten and bound through the 76 clearinghouse. 77 (c) Must enter into its standard agency agreement with each 78 agent whose customer is underwritten and bound through the 79 clearinghouse if that agent has been appointed by the insurer 80 pursuant to s. 626.112. 81 (d) Must comply with s. 627.4133(2). 82 (e) Must allow authorized or eligible insurers 83 participating in the clearinghouse to participate through their 84 single, designated managing general agent or broker; however the 85 provisions of paragraph (6)(a) regarding ownership, control, and 86 use of the expirations apply. 87 (5)(a) Notwithstanding s. 627.3517, an applicant for new 88 coverage is not eligible for coverage from the corporation if 89 the applicant is offered coverage from an authorized insurer 90 through the clearinghouse at a premium that is at or below the 91 eligibility threshold established under s. 627.351(6)(c)5.a. 92 (b) Notwithstanding any other provisions of law, if a 93 renewing policyholder of the corporation is offered coverage 94 from an authorized insurer for a personal lines or commercial 95 lines risk at a premium that is no more than 15 percent above 96 the corporation’s renewal premium for comparable coverage, the 97 risk is not eligible for coverage with the corporation. 98 (c) Notwithstanding s. 626.916(1), if an applicant for new 99 or renewal coverage from the corporation does not receive an 100 offer of coverage from an authorized insurer, the applicant may 101 choose to accept an offer of coverage from an eligible insurer 102 or their broker under ss. 626.913-626.937. Such offers of 103 coverage from an eligible insurer do not make the risk 104 ineligible for coverage with the corporation. 105 (d) An applicant for new or renewal coverage from the 106 corporation may choose to accept any offers of coverage received 107 through the clearinghouse from an authorized insurer that is 108 greater than 15 percent of the corporation’s renewal premium. 109 (e) Sections 627.351(6)(c)5.a.(I) and b.(I) do not apply to 110 an offer of coverage from an authorized insurer obtained through 111 the clearinghouse. 112 (6) Independent agents who submit new applications for 113 coverage or who are the agent of record on a renewal policy 114 submitted to the clearinghouse: 115 (a) Must maintain ownership and the exclusive use of 116 expirations, records, or other written or electronic information 117 directly related to such applications or renewals written 118 through the corporation or through an insurer participating in 119 the clearinghouse, notwithstanding s. 627.351(6)(c)5.a.(I)(B) 120 and (II)(B). Contracts with the corporation or required by the 121 corporation may not amend, modify, interfere with, or limit such 122 rights of ownership. Such expirations, records, or other written 123 or electronic information may be used to review an application, 124 issue a policy, or for any other purpose necessary for placing 125 business through the clearinghouse. 126 (b) Are not required to be appointed by an insurer 127 participating in the clearinghouse for policies written solely 128 through the clearinghouse, notwithstanding s. 626.112. 129 (c) May accept an appointment from an insurer participating 130 in the clearinghouse. 131 (d) Must enter into a standard or limited agency agreement 132 with the insurer, at the insurer’s option. 133 134 Applicants ineligible for coverage under paragraph (5) remain 135 ineligible if their independent agent is unwilling or unable to 136 enter into a standard or limited agency agreement with an 137 insurer participating in the clearinghouse. 138 (7) Exclusive agents submitting new applications for 139 coverage or who are the agent of record on a renewal policy 140 submitted to the clearinghouse: 141 (a) Must maintain ownership and the exclusive use of 142 expirations, records, or other written or electronic information 143 directly related to such applications or renewals written 144 through the corporation or through an insurer participating in 145 the clearinghouse, notwithstanding s. 627.351(6)(c)5.a.(I)(B) 146 and (II)(B). Contracts with the corporation or required by the 147 corporation may not amend, modify, interfere with, or limit such 148 rights of ownership. Such expirations, records, or other written 149 or electronic information may be used to review an application, 150 issue a policy, or for any other purpose necessary for placing 151 business through the clearinghouse. 152 (b) Are not required to be appointed by an insurer 153 participating in the clearinghouse for policies written solely 154 through the clearinghouse, notwithstanding s. 626.112. 155 (c) Must accept an offer of coverage from an insurer whose 156 limited servicing agreement is approved by that agent’s 157 exclusive insurer as eligible to participate in the 158 clearinghouse with that insurer’s exclusive agents. 159 (d) Must enter into a limited servicing agreement with the 160 insurer making an offer of coverage, and may do so only after 161 the exclusive agent’s insurer has approved the terms of the 162 agreement. The exclusive agent’s insurer must approve a limited 163 service agreement for the clearinghouse if the insurer has 164 approved a service agreement with the agent for other purposes. 165 166 An applicant is ineligible for coverage under paragraph (5) if 167 the applicant’s exclusive agent is unwilling or unable to enter 168 into a standard or limited agency agreement with a participating 169 insurer making an offer of coverage to that applicant. 170 (8) To promote private market initiatives that provide 171 offers of coverage from authorized and eligible insurers to 172 applicants for coverage by the corporation and to the 173 corporation’s policyholders on renewal, the corporation shall 174 publish, by January 1, 2014, reasonable standards for private 175 alternatives to the submission of a risk to the clearinghouse. 176 Such private alternatives may act in a master agency arrangement 177 that allows agents to be appointed as subagents of a master 178 agency and to use private alternatives for the submission of 179 risks to the clearinghouse. The alternative option allowed under 180 this subsection is an alternative to, and not a replacement for, 181 the clearinghouse. Neither the clearinghouse nor any private 182 entity operating under this subsection may prohibit insurers 183 that elect to participate from participating in more than one 184 clearinghouse or alternative; however, an insurer participating 185 in the private entity must also participate in the 186 clearinghouse. 187 (9) Submission of an application to the clearinghouse for 188 coverage by the corporation does not constitute the binding of 189 coverage, and the failure of the clearinghouse to obtain an 190 offer of coverage by an insurer is not considered acceptance of 191 coverage of the risk by the corporation. 192 (10) The clearinghouse does not include commercial 193 residential policies.