Florida Senate - 2014 CS for CS for SB 1274
By the Committees on Community Affairs; and Banking and
Insurance; and Senator Hays
578-04056-14 20141274c2
1 A bill to be entitled
2 An act relating to Citizens Property Insurance
3 Corporation; amending s. 627.351, F.S.; providing that
4 a condominium association is ineligible for commercial
5 residential wind-only coverage under certain
6 conditions; providing an effective date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Paragraph (a) of subsection (6) of section
11 627.351, Florida Statutes, is amended to read:
12 627.351 Insurance risk apportionment plans.—
13 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
14 (a) The public purpose of this subsection is to ensure that
15 there is an orderly market for property insurance for residents
16 and businesses of this state.
17 1. The Legislature finds that private insurers are
18 unwilling or unable to provide affordable property insurance
19 coverage in this state to the extent sought and needed. The
20 absence of affordable property insurance threatens the public
21 health, safety, and welfare and likewise threatens the economic
22 health of the state. The state therefore has a compelling public
23 interest and a public purpose to assist in assuring that
24 property in the state is insured and that it is insured at
25 affordable rates so as to facilitate the remediation,
26 reconstruction, and replacement of damaged or destroyed property
27 in order to reduce or avoid the negative effects on otherwise
28 resulting to the public health, safety, and welfare, to the
29 economy of the state, and to the revenues of the state and local
30 governments which are needed to provide for the public welfare.
31 It is necessary, therefore, to provide affordable property
32 insurance to applicants who are in good faith entitled to
33 procure insurance through the voluntary market but are unable to
34 do so. The Legislature intends, therefore, that affordable
35 property insurance be provided and that it continue to be
36 provided, as long as necessary, through Citizens Property
37 Insurance Corporation, a government entity that is an integral
38 part of the state, and that is not a private insurance company.
39 To that end, the corporation shall strive to increase the
40 availability of affordable property insurance in this state,
41 while achieving efficiencies and economies, and while providing
42 service to policyholders, applicants, and agents which is no
43 less than the quality generally provided in the voluntary
44 market, for the achievement of the foregoing public purposes.
45 Because it is essential for this government entity to have the
46 maximum financial resources to pay claims following a
47 catastrophic hurricane, it is further the intent of the
48 Legislature that the corporation continue to be an integral part
49 of the state, and that the income of the corporation be exempt
50 from federal income taxation, and that interest on the debt
51 obligations issued by the corporation be exempt from federal
52 income taxation.
53 2. The Residential Property and Casualty Joint Underwriting
54 Association originally created by this statute shall be known as
55 the Citizens Property Insurance Corporation. The corporation
56 shall provide insurance for residential and commercial property,
57 for applicants who are entitled, but, in good faith, are unable
58 to procure insurance through the voluntary market. The
59 corporation shall operate pursuant to a plan of operation
60 approved by order of the Financial Services Commission. The plan
61 is subject to continuous review by the commission. The
62 commission may, by order, withdraw approval of all or part of a
63 plan if the commission determines that conditions have changed
64 since approval was granted and that the purposes of the plan
65 require changes in the plan. For the purposes of this
66 subsection, residential coverage includes both personal lines
67 residential coverage, which consists of the type of coverage
68 provided by homeowner’s, mobile home owner’s, dwelling,
69 tenant’s, condominium unit owner’s, and similar policies; and
70 commercial lines residential coverage, which consists of the
71 type of coverage provided by condominium association, apartment
72 building, and similar policies.
73 3. With respect to coverage for personal lines residential
74 structures:
75 a. Effective January 1, 2014, a structure that has a
76 dwelling replacement cost of $1 million or more, or a single
77 condominium unit that has a combined dwelling and contents
78 replacement cost of $1 million or more is not eligible for
79 coverage by the corporation. Such dwellings insured by the
80 corporation on December 31, 2013, may continue to be covered by
81 the corporation until the end of the policy term. The office
82 shall approve the method used by the corporation for valuing the
83 dwelling replacement costs under cost for the purposes of this
84 subparagraph. If a policyholder is insured by the corporation
85 before being determined to be ineligible pursuant to this
86 subparagraph and such policyholder files a lawsuit challenging
87 the determination, the policyholder may remain insured by the
88 corporation until the conclusion of the litigation.
89 b. Effective January 1, 2015, a structure that has a
90 dwelling replacement cost of $900,000 or more, or a single
91 condominium unit that has a combined dwelling and contents
92 replacement cost of $900,000 or more, is not eligible for
93 coverage by the corporation. Such dwellings insured by the
94 corporation on December 31, 2014, may continue to be covered by
95 the corporation only until the end of the policy term.
96 c. Effective January 1, 2016, a structure that has a
97 dwelling replacement cost of $800,000 or more, or a single
98 condominium unit that has a combined dwelling and contents
99 replacement cost of $800,000 or more, is not eligible for
100 coverage by the corporation. Such dwellings insured by the
101 corporation on December 31, 2015, may continue to be covered by
102 the corporation until the end of the policy term.
103 d. Effective January 1, 2017, a structure that has a
104 dwelling replacement cost of $700,000 or more, or a single
105 condominium unit that has a combined dwelling and contents
106 replacement cost of $700,000 or more, is not eligible for
107 coverage by the corporation. Such dwellings insured by the
108 corporation on December 31, 2016, may continue to be covered by
109 the corporation until the end of the policy term.
110
111 The requirements of sub-subparagraphs b.-d. do not apply in
112 counties where the office determines there is not a reasonable
113 degree of competition. In such counties a personal lines
114 residential structure that has a dwelling replacement cost of
115 less than $1 million, or a single condominium unit that has a
116 combined dwelling and contents replacement cost of less than $1
117 million, is eligible for coverage by the corporation.
118 4. It is the intent of the Legislature that policyholders,
119 applicants, and agents of the corporation receive service and
120 treatment of the highest possible level but never less than that
121 generally provided in the voluntary market. It is also intended
122 that the corporation be held to service standards no less than
123 those applied to insurers in the voluntary market by the office
124 with respect to responsiveness, timeliness, customer courtesy,
125 and overall dealings with policyholders, applicants, or agents
126 of the corporation.
127 5.a. Effective January 1, 2009, a personal lines
128 residential structure that is located in the “wind-borne debris
129 region,” as defined in s. 1609.2, International Building Code
130 (2006), and that has an insured value on the structure of
131 $750,000 or more is not eligible for coverage by the corporation
132 unless the structure has opening protections as required under
133 the Florida Building Code for a newly constructed residential
134 structure in that area. A residential structure is deemed to
135 comply with this sub-subparagraph subparagraph if it has
136 shutters or opening protections on all openings and if such
137 opening protections complied with the Florida Building Code at
138 the time they were installed.
139 b. Any major structure as defined in s. 161.54(6)(a) for
140 which a permit is applied on or after July 1, 2015 2014, for new
141 construction or substantial improvement as defined in s. 161.54
142 s. 161.54(12) is not eligible for coverage by the corporation if
143 the structure is seaward of the coastal construction control
144 line established pursuant to s. 161.053 or is within the Coastal
145 Barrier Resources System as designated by 16 U.S.C. ss. 3501
146 3510.
147 6. With respect to wind-only coverage for commercial lines
148 residential condominiums, effective July 1, 2014, a condominium
149 shall be deemed ineligible for coverage if 50 percent or more of
150 the units are rented more than eight times in a calendar year
151 for a rental agreement period of less than 30 days.
152 Section 2. This act shall take effect July 1, 2014.