Florida Senate - 2013 SENATOR AMENDMENT Bill No. CS/CS/HB 635, 1st Eng. Barcode 191194 LEGISLATIVE ACTION Senate . House . . . Floor: WD/2R . 04/26/2013 12:14 PM . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— Senator Brandes moved the following: 1 Senate Amendment (with title amendment) 2 3 Between lines 1404 and 1405 4 insert: 5 Section 31. Section 627.3518, Florida Statutes, is created 6 to read: 7 627.3518 Citizens Property Insurance Corporation 8 clearinghouse.—The Legislature recognizes that Citizens Property 9 Insurance Corporation has authority to establish a clearinghouse 10 as a separate organizational unit within the corporation for the 11 purpose of determining the eligibility of new and renewal risks, 12 excluding commercial residential risks, seeking coverage through 13 the corporation, and facilitating the identification and 14 diversion of ineligible applicants and current policyholders 15 from the corporation into the voluntary insurance market. This 16 section augments that authority by providing a framework for the 17 corporation to implement such a program by January 1, 2014. 18 (1) As used in this section, the term: 19 (a) “Clearinghouse” means the clearinghouse diversion 20 program created under this section. 21 (b) “Corporation” means Citizens Property Insurance 22 Corporation. 23 (c) “Exclusive agent” means a licensed insurance agent who 24 has agreed, by contract, to act exclusively for one company or 25 group of affiliated insurance companies and is disallowed by the 26 provisions of that contract to directly act for any other 27 unaffiliated insurer absent express consent from the company or 28 group of affiliated insurance companies. 29 (d) “Independent agent” means a licensed insurance agent 30 not described in paragraph (c). 31 (2) In order to confirm eligibility with the corporation 32 and to enhance access for new applicants and existing 33 policyholders of the corporation to offers of coverage from 34 authorized and eligible insurers, the corporation shall 35 establish a clearinghouse for personal residential risks to 36 facilitate the diversion of ineligible applicants and existing 37 policyholders from the corporation into the voluntary insurance 38 market. The corporation shall also develop appropriate 39 procedures for facilitating the diversion of ineligible 40 applicants and existing policyholders for commercial residential 41 coverage into the private insurance market, and shall report 42 such procedures to the President of the Senate and the Speaker 43 of the House of Representatives by July 1, 2015. 44 (3) The clearinghouse has the same rights and 45 responsibilities in carrying out its duties as a licensed 46 general lines agent, but is not required to employ or engage a 47 licensed general lines agent or maintain an insurance agency 48 license in order to solicit and place insurance coverage. In 49 establishing the clearinghouse the corporation may: 50 (a) Require all new applications and all policies due for 51 renewal to be submitted to the clearinghouse in order to 52 facilitate obtaining an offer of coverage from an authorized 53 insurer before the binding or renewal of coverage by the 54 corporation. 55 (b) Employ or otherwise contract with individuals or other 56 entities to provide administrative or professional services in 57 order to carry out the plan within the corporation in accordance 58 with the applicable purchasing requirements under s. 627.351. 59 (c) Enter into a contract with an authorized or eligible 60 insurer participating in the clearinghouse and accept an 61 appointment by such insurer. 62 (d) Provide funds to operate the clearinghouse. Insurers 63 and agents participating in the clearinghouse are not required 64 to pay a fee to offset or partially offset the cost of the 65 clearinghouse, or to use the clearinghouse for the renewal of 66 policies initially written through the clearinghouse. 67 (e) Develop an enhanced application for obtaining 68 information that will assist private insurers in determining 69 whether to make an offer of coverage through the clearinghouse. 70 (f) Before approving new applications for coverage by the 71 corporation, require that every application be subject to a hold 72 of 2 business days during which time an insurer participating in 73 the clearinghouse may select the application for coverage. The 74 insurer may issue a binder on any policy selected for coverage 75 for at least 30 days but not more than 60 days. 76 (4) An authorized or eligible insurer may participate in 77 the clearinghouse; however, participation is not mandatory. An 78 insurer that makes an offer of coverage to a new applicant or 79 renews a policy for a policyholder through the clearinghouse: 80 (a) Is not required to individually appoint an agent whose 81 customer is underwritten and bound through the clearinghouse. 82 Notwithstanding s. 626.112, an insurer is not required to 83 appoint an agent on a policy underwritten through the 84 clearinghouse if that policy remains with the insurer. An 85 insurer may appoint an agent whose customer is initially 86 underwritten and bound through the clearinghouse. If an insurer 87 accepts a policy from an agent who is not appointed pursuant to 88 this paragraph and thereafter accepts a subsequent policy from 89 such agent, the provisions of s. 626.112 requiring appointment 90 apply to the agent. 91 (b) Must enter into a limited agency agreement with each 92 agent who is not appointed in accordance with paragraph (a) and 93 whose customer is underwritten and bound through the 94 clearinghouse. 95 (c) Must enter into its standard agency agreement with each 96 agent whose customer is underwritten and bound through the 97 clearinghouse if that agent has been appointed by the insurer 98 pursuant to s. 626.112. 99 (d) Must comply with s. 627.4133(2). 100 (e) Must allow authorized or eligible insurers 101 participating in the clearinghouse to participate through their 102 single, designated managing general agent or broker; however, 103 the provisions of paragraph (6)(a) regarding ownership, control, 104 and use of the expirations apply. 105 (f) Must pay the producing agent a commission equal to that 106 paid by the corporation or the usual and customary commission 107 paid by the insurer for that line of business, whichever is 108 greater. 109 (5)(a) Notwithstanding s. 627.3517, an applicant for new 110 coverage is not eligible for coverage from the corporation if 111 the applicant is offered coverage from an authorized insurer 112 through the clearinghouse at a premium that is at or below the 113 eligibility threshold established under s. 627.351(6)(c)5.a. 114 (b) Notwithstanding any other provisions of law, if a 115 renewing policyholder of the corporation is offered coverage 116 from an authorized insurer for a personal lines or commercial 117 lines risk at a premium that is no more than 15 percent above 118 the corporation’s renewal premium for comparable coverage, the 119 risk is not eligible for coverage with the corporation. 120 (c) Notwithstanding s. 626.916(1), if an applicant for new 121 or renewal coverage from the corporation does not receive an 122 offer of coverage from an authorized insurer, the applicant may 123 choose to accept an offer of coverage from an eligible insurer 124 or its broker under ss. 626.913-626.937. Such offer of coverage 125 from an eligible insurer does not make the risk ineligible for 126 coverage with the corporation. 127 (d) An applicant for new or renewal coverage from the 128 corporation may choose to accept any offer of coverage received 129 through the clearinghouse from an authorized insurer which is 130 greater than 15 percent of the corporation’s renewal premium. 131 (e) Section 627.351(6)(c)5.a.(I) and b.(I) do not apply to 132 an offer of coverage from an authorized insurer obtained through 133 the clearinghouse. 134 (6) An independent agent who submits a new application for 135 coverage or who is the agent of record on a renewal policy 136 submitted to the clearinghouse: 137 (a) Is granted and must maintain ownership and the 138 exclusive use of expirations, records, or other written or 139 electronic information directly related to such application or 140 renewal written through the corporation or through an insurer 141 participating in the clearinghouse, notwithstanding s. 142 627.351(6)(c)5.a.(I)(B) and (II)(B). Such ownership is granted 143 for as long as the insured remains with the agency or until sold 144 or surrendered in writing by the agent. A contract with the 145 corporation or required by the corporation may not amend, 146 modify, interfere with, or limit such rights of ownership. Such 147 expirations, records, or other written or electronic information 148 may be used to review an application, issue a policy, or for any 149 other purpose necessary for placing business through the 150 clearinghouse. 151 (b) Is not required to be appointed by an insurer 152 participating in the clearinghouse for policies written solely 153 through the clearinghouse, notwithstanding s. 626.112. 154 (c) May accept an appointment from an insurer participating 155 in the clearinghouse. 156 (d) May enter into a standard or limited agency agreement 157 with the insurer, at the insurer’s option. 158 159 An applicant ineligible for coverage under subsection (5) 160 remains ineligible if the applicant’s independent agent is 161 unwilling or unable to enter into a standard or limited agency 162 agreement with an insurer participating in the clearinghouse. 163 (7) An exclusive agent who submits a new application for 164 coverage or who is the agent of record on a renewal policy 165 submitted to the clearinghouse: 166 (a) Must maintain ownership and the exclusive use of 167 expirations, records, or other written or electronic information 168 directly related to such application or renewal written through 169 the corporation or through an insurer participating in the 170 clearinghouse, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and 171 (II)(B). A contract with the corporation or required by the 172 corporation may not amend, modify, interfere with, or limit such 173 rights of ownership. Such expirations, records, or other written 174 or electronic information may be used to review an application, 175 issue a policy, or for any other purpose necessary for placing 176 business through the clearinghouse. 177 (b) Is not required to be appointed by an insurer 178 participating in the clearinghouse for policies written solely 179 through the clearinghouse, notwithstanding s. 626.112. 180 (c) Must only facilitate the placement of an offer of 181 coverage from an insurer whose limited servicing agreement is 182 approved by that exclusive agent’s exclusive insurer. 183 (d) May enter into a limited servicing agreement with the 184 insurer making an offer of coverage only after the exclusive 185 agent’s insurer has approved the terms of the agreement. The 186 exclusive agent’s insurer must approve a limited service 187 agreement for the clearinghouse if the insurer has approved a 188 service agreement with the agent for other purposes. 189 190 An applicant is ineligible for coverage under subsection (5) if 191 the applicant’s exclusive agent is unwilling or unable to enter 192 into a standard or limited agency agreement with a participating 193 insurer making an offer of coverage to that applicant. 194 (8) Submission of an application to the clearinghouse for 195 coverage by the corporation does not constitute the binding of 196 coverage, and the failure of the clearinghouse to obtain an 197 offer of coverage by an insurer is not considered acceptance or 198 coverage of the risk by the corporation. 199 (9) The clearinghouse may not include commercial 200 nonresidential policies. 201 202 ================= T I T L E A M E N D M E N T ================ 203 And the title is amended as follows: 204 Between lines 130 and 131 205 insert: 206 creating s. 627.3518, F.S.; authorizing the creation 207 of a clearinghouse diversion program within the 208 Citizens Property Insurance Corporation for 209 identifying and diverting insurance coverage to 210 private insurers; providing definitions; providing 211 requirements and duties of the corporation, insurers, 212 insureds, agents, and applicants; specifying criteria 213 for coverage eligibility; providing that submission of 214 an application to the clearinghouse does not 215 constitute binding coverage by the corporation; 216 prohibiting the clearinghouse from including 217 commercial nonresidential policies;