Florida Senate - 2014 (PROPOSED COMMITTEE BILL) SPB 7062
FOR CONSIDERATION By the Committee on Banking and Insurance
597-01698E-14 20147062__
1 A bill to be entitled
2 An act relating to Citizens Property Insurance
3 Corporation coverage; amending s. 626.854, F.S.;
4 revising the applicability of the limitations on
5 public adjuster charges for claims based on events
6 that are the subject of a declaration of a state of
7 emergency; prohibiting a public adjuster, a public
8 adjuster apprentice, or a person acting on his or her
9 behalf from entering into a contract or accepting a
10 power of attorney that allows the public adjuster, the
11 public adjuster apprentice, or a person acting on his
12 or her behalf to choose the persons or entities that
13 will perform repair work; conforming a cross
14 reference; amending s. 627.351, F.S.; deleting
15 reference to the Residential Property and Casualty
16 Joint Underwriting Association with respect to issuing
17 certain residential or commercial policies; requiring
18 the corporation to cease offering new commercial
19 residential policies providing multiperil coverage
20 after a certain date and providing that the
21 corporation continue offering commercial residential
22 wind-only policies; authorizing the corporation to
23 offer commercial residential policies excluding wind;
24 providing exceptions; specifying the amount of the
25 surcharge to be assessed against personal lines,
26 commercial lines, and coastal accounts to cover a
27 projected deficit; revising the date for submitting
28 the annual loss ratio report for residential coverage;
29 deleting obsolete provisions; revising the annual rate
30 increase implemented by the corporation; amending s.
31 627.3518, F.S.; defining the term “surplus lines
32 insurer”; requiring the corporation to implement
33 procedures for diverting ineligible applicants and
34 existing policyholders for commercial residential
35 coverage from the corporation by a certain date;
36 deleting the requirement that the corporation report
37 such procedures to the Legislature; authorizing
38 eligible surplus lines insurers to participate in the
39 corporation’s clearinghouse program and providing
40 criteria for such eligibility; conforming cross
41 references; providing that certain applicants who
42 accept an offer from a surplus lines insurer are
43 considered a renewal; repealing s. 627.3519, F.S.,
44 relating to an annual report requirement relating to
45 aggregate net probable maximum losses; amending s.
46 627.35191, F.S.; requiring the corporation to annually
47 provide certain estimates for the next 12-month period
48 to the Legislature and the Financial Services
49 Commission; amending s. 627.701, F.S.; increasing the
50 amount of the deductible that an insurer must offer
51 for residential property insurance; providing
52 effective dates.
53
54 Be It Enacted by the Legislature of the State of Florida:
55
56 Section 1. Present subsection (18) of section 626.854,
57 Florida Statutes, is redesignated as subsection (19), paragraph
58 (b) of subsection (11) and present subsection (18) of that
59 section are amended, and a new subsection (18) is added to that
60 section, to read:
61 626.854 “Public adjuster” defined; prohibitions.—The
62 Legislature finds that it is necessary for the protection of the
63 public to regulate public insurance adjusters and to prevent the
64 unauthorized practice of law.
65 (11)
66 (b) A public adjuster may not charge, agree to, or accept
67 from any source compensation, payment, commission, fee, or any
68 other thing of value in excess of:
69 1. Ten percent of the amount of insurance claim payments
70 made by the insurer for claims based on events that are the
71 subject of a declaration of a state of emergency by the
72 Governor. This provision applies to claims made during the year
73 after the declaration of emergency. After that year, the
74 limitations in subparagraph 2. apply.
75 2. Twenty percent of the amount of insurance claim payments
76 made by the insurer for claims that are not based on events that
77 are the subject of a declaration of a state of emergency by the
78 Governor.
79 (18) A public adjuster, a public adjuster apprentice, or
80 any person acting on behalf of a public adjuster or apprentice
81 may not enter into a contract or accept a power of attorney that
82 vests in the public adjuster, the public adjuster apprentice, or
83 the person acting on behalf of a public adjuster or apprentice
84 the effective authority to choose the persons or entities that
85 will perform repair work.
86 (19)(18) The provisions of Subsections (5)-(18) (5)-(17)
87 apply only to residential property insurance policies and
88 condominium unit owner policies as described defined in s.
89 718.111(11).
90 Section 2. Paragraphs (b) and (hh) of subsection (6) of
91 section 627.351, Florida Statutes, are amended to read:
92 627.351 Insurance risk apportionment plans.—
93 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
94 (b)1. All insurers authorized to write one or more subject
95 lines of business in this state are subject to assessment by the
96 corporation and, for the purposes of this subsection, are
97 referred to collectively as “assessable insurers.” Insurers
98 writing one or more subject lines of business in this state
99 pursuant to part VIII of chapter 626 are not assessable
100 insurers; however, but insureds who procure one or more subject
101 lines of business in this state pursuant to part VIII of chapter
102 626 are subject to assessment by the corporation and are
103 referred to collectively as “assessable insureds.” An insurer’s
104 assessment liability begins on the first day of the calendar
105 year following the year in which the insurer was issued a
106 certificate of authority to transact insurance for subject lines
107 of business in this state and terminates 1 year after the end of
108 the first calendar year during which the insurer no longer holds
109 a certificate of authority to transact insurance for subject
110 lines of business in this state.
111 2.a. All revenues, assets, liabilities, losses, and
112 expenses of the corporation shall be divided into three separate
113 accounts as follows:
114 (I) A personal lines account for personal residential
115 policies issued by the corporation, or issued by the Residential
116 Property and Casualty Joint Underwriting Association and renewed
117 by the corporation, which provides comprehensive, multiperil
118 coverage on risks that are not located in areas eligible for
119 coverage by the Florida Windstorm Underwriting Association as
120 those areas were defined on January 1, 2002, and for policies
121 that do not provide coverage for the peril of wind on risks that
122 are located in such areas;
123 (II) A commercial lines account for commercial residential
124 and commercial nonresidential policies issued by the
125 corporation, or issued by the Residential Property and Casualty
126 Joint Underwriting Association and renewed by the corporation,
127 which provides coverage for basic property perils on risks that
128 are not located in areas eligible for coverage by the Florida
129 Windstorm Underwriting Association as those areas were defined
130 on January 1, 2002, and for policies that do not provide
131 coverage for the peril of wind on risks that are located in such
132 areas; and
133 (III) A coastal account for personal residential policies
134 and commercial residential and commercial nonresidential
135 property policies issued by the corporation, or transferred to
136 the corporation, which provides coverage for the peril of wind
137 on risks that are located in areas eligible for coverage by the
138 Florida Windstorm Underwriting Association as those areas were
139 defined on January 1, 2002. The corporation may offer policies
140 that provide multiperil coverage and the corporation shall
141 continue to offer policies that provide coverage only for the
142 peril of wind for risks located in areas eligible for coverage
143 in the coastal account. Effective July 1, 2014, the corporation
144 shall cease offering new commercial residential policies
145 providing multiperil coverage and shall instead continue to
146 offer commercial residential wind-only policies, and may offer
147 commercial residential policies excluding wind. The corporation
148 may, however, continue to renew a commercial residential
149 multiperil policy on a building that is insured by the
150 corporation on June 30, 2014, under a multiperil policy. In
151 issuing multiperil coverage, the corporation may use its
152 approved policy forms and rates for the personal lines account.
153 An applicant or insured who is eligible to purchase a multiperil
154 policy from the corporation may purchase a multiperil policy
155 from an authorized insurer without prejudice to the applicant’s
156 or insured’s eligibility to prospectively purchase a policy that
157 provides coverage only for the peril of wind from the
158 corporation. An applicant or insured who is eligible for a
159 corporation policy that provides coverage only for the peril of
160 wind may elect to purchase or retain such policy and also
161 purchase or retain coverage excluding wind from an authorized
162 insurer without prejudice to the applicant’s or insured’s
163 eligibility to prospectively purchase a policy that provides
164 multiperil coverage from the corporation. It is the goal of the
165 Legislature that there be an overall average savings of 10
166 percent or more for a policyholder who currently has a wind-only
167 policy with the corporation, and an ex-wind policy with a
168 voluntary insurer or the corporation, and who obtains a
169 multiperil policy from the corporation. It is the intent of the
170 Legislature that the offer of multiperil coverage in the coastal
171 account be made and implemented in a manner that does not
172 adversely affect the tax-exempt status of the corporation or
173 creditworthiness of or security for currently outstanding
174 financing obligations or credit facilities of the coastal
175 account, the personal lines account, or the commercial lines
176 account. The coastal account must also include quota share
177 primary insurance under subparagraph (c)2. The area eligible for
178 coverage under the coastal account also includes the area within
179 Port Canaveral, which is bordered on the south by the City of
180 Cape Canaveral, bordered on the west by the Banana River, and
181 bordered on the north by Federal Government property.
182 b. The three separate accounts must be maintained as long
183 as financing obligations entered into by the Florida Windstorm
184 Underwriting Association or Residential Property and Casualty
185 Joint Underwriting Association are outstanding, in accordance
186 with the terms of the corresponding financing documents. If the
187 financing obligations are no longer outstanding, the corporation
188 may use a single account for all revenues, assets, liabilities,
189 losses, and expenses of the corporation. Consistent with this
190 subparagraph and prudent investment policies that minimize the
191 cost of carrying debt, the board shall exercise its best efforts
192 to retire existing debt or obtain the approval of necessary
193 parties to amend the terms of existing debt, so as to structure
194 the most efficient plan for consolidating to consolidate the
195 three separate accounts into a single account.
196 c. Creditors of the Residential Property and Casualty Joint
197 Underwriting Association and the accounts specified in sub-sub
198 subparagraphs a.(I) and (II) may have a claim against, and
199 recourse to, those accounts and no claim against, or recourse
200 to, the account referred to in sub-sub-subparagraph a.(III).
201 Creditors of the Florida Windstorm Underwriting Association have
202 a claim against, and recourse to, the account referred to in
203 sub-sub-subparagraph a.(III) and no claim against, or recourse
204 to, the accounts referred to in sub-sub-subparagraphs a.(I) and
205 (II).
206 d. Revenues, assets, liabilities, losses, and expenses not
207 attributable to particular accounts shall be prorated among the
208 accounts.
209 e. The Legislature finds that the revenues of the
210 corporation are revenues that are necessary to meet the
211 requirements set forth in documents authorizing the issuance of
212 bonds under this subsection.
213 f. The income of the corporation may not inure to the
214 benefit of any private person.
215 3. With respect to a deficit in an account:
216 a. After accounting for the Citizens policyholder surcharge
217 imposed under sub-subparagraph i., if the remaining projected
218 deficit incurred in the coastal account in a particular calendar
219 year:
220 (I) Is not greater than 2 percent of the aggregate
221 statewide direct written premium for the subject lines of
222 business for the prior calendar year, the entire deficit shall
223 be recovered through regular assessments of assessable insurers
224 under paragraph (q) and assessable insureds.
225 (II) Exceeds 2 percent of the aggregate statewide direct
226 written premium for the subject lines of business for the prior
227 calendar year, the corporation shall levy regular assessments on
228 assessable insurers under paragraph (q) and on assessable
229 insureds in an amount equal to the greater of 2 percent of the
230 projected deficit or 2 percent of the aggregate statewide direct
231 written premium for the subject lines of business for the prior
232 calendar year. Any remaining projected deficit shall be
233 recovered through emergency assessments under sub-subparagraph
234 d.
235 b. Each assessable insurer’s share of the amount being
236 assessed under sub-subparagraph a. must be in the proportion
237 that the assessable insurer’s direct written premium for the
238 subject lines of business for the year preceding the assessment
239 bears to the aggregate statewide direct written premium for the
240 subject lines of business for that year. The assessment
241 percentage applicable to each assessable insured is the ratio of
242 the amount being assessed under sub-subparagraph a. to the
243 aggregate statewide direct written premium for the subject lines
244 of business for the prior year. Assessments levied by the
245 corporation on assessable insurers under sub-subparagraph a.
246 must be paid as required by the corporation’s plan of operation
247 and paragraph (q). Assessments levied by the corporation on
248 assessable insureds under sub-subparagraph a. shall be collected
249 by the surplus lines agent at the time the surplus lines agent
250 collects the surplus lines tax required by s. 626.932, and paid
251 to the Florida Surplus Lines Service Office at the time the
252 surplus lines agent pays the surplus lines tax to that office.
253 Upon receipt of regular assessments from surplus lines agents,
254 the Florida Surplus Lines Service Office shall transfer the
255 assessments directly to the corporation as determined by the
256 corporation.
257 c. After accounting for the Citizens policyholder surcharge
258 imposed under sub-subparagraph i., the remaining projected
259 deficits in the personal lines account and in the commercial
260 lines account in a particular calendar year shall be recovered
261 through emergency assessments under sub-subparagraph d.
262 d. Upon a determination by the board of governors that a
263 projected deficit in an account exceeds the amount that is
264 expected to be recovered through regular assessments under sub
265 subparagraph a., plus the amount that is expected to be
266 recovered through surcharges under sub-subparagraph i., the
267 board, after verification by the office, shall levy emergency
268 assessments for as many years as necessary to cover the
269 deficits, to be collected by assessable insurers and the
270 corporation and collected from assessable insureds upon issuance
271 or renewal of policies for subject lines of business, excluding
272 National Flood Insurance policies. The amount collected in a
273 particular year must be a uniform percentage of that year’s
274 direct written premium for subject lines of business and all
275 accounts of the corporation, excluding National Flood Insurance
276 Program policy premiums, as annually determined by the board and
277 verified by the office. The office shall verify the arithmetic
278 calculations involved in the board’s determination within 30
279 days after receipt of the information on which the determination
280 was based. The office shall notify assessable insurers and the
281 Florida Surplus Lines Service Office of the date on which
282 assessable insurers shall begin to collect and assessable
283 insureds shall begin to pay such assessment. The date must be at
284 least may be not less than 90 days after the date the
285 corporation levies emergency assessments pursuant to this sub
286 subparagraph. Notwithstanding any other provision of law, the
287 corporation and each assessable insurer that writes subject
288 lines of business shall collect emergency assessments from its
289 policyholders without such obligation being affected by any
290 credit, limitation, exemption, or deferment. Emergency
291 assessments levied by the corporation on assessable insureds
292 shall be collected by the surplus lines agent at the time the
293 surplus lines agent collects the surplus lines tax required by
294 s. 626.932 and paid to the Florida Surplus Lines Service Office
295 at the time the surplus lines agent pays the surplus lines tax
296 to that office. The emergency assessments collected shall be
297 transferred directly to the corporation on a periodic basis as
298 determined by the corporation and held by the corporation solely
299 in the applicable account. The aggregate amount of emergency
300 assessments levied for an account under this sub-subparagraph in
301 any calendar year may be less than but may not exceed the
302 greater of 10 percent of the amount needed to cover the deficit,
303 plus interest, fees, commissions, required reserves, and other
304 costs associated with financing the original deficit, or 10
305 percent of the aggregate statewide direct written premium for
306 subject lines of business and all accounts of the corporation
307 for the prior year, plus interest, fees, commissions, required
308 reserves, and other costs associated with financing the deficit.
309 e. The corporation may pledge the proceeds of assessments,
310 projected recoveries from the Florida Hurricane Catastrophe
311 Fund, other insurance and reinsurance recoverables, policyholder
312 surcharges and other surcharges, and other funds available to
313 the corporation as the source of revenue for and to secure bonds
314 issued under paragraph (q), bonds or other indebtedness issued
315 under subparagraph (c)3., or lines of credit or other financing
316 mechanisms issued or created under this subsection, or to retire
317 any other debt incurred as a result of deficits or events giving
318 rise to deficits, or in any other way that the board determines
319 will efficiently recover such deficits. The purpose of the lines
320 of credit or other financing mechanisms is to provide additional
321 resources to assist the corporation in covering claims and
322 expenses attributable to a catastrophe. As used in this
323 subsection, the term “assessments” includes regular assessments
324 under sub-subparagraph a. or subparagraph (q)1. and emergency
325 assessments under sub-subparagraph d. Emergency assessments
326 collected under sub-subparagraph d. are not part of an insurer’s
327 rates, are not premium, and are not subject to premium tax,
328 fees, or commissions; however, failure to pay the emergency
329 assessment shall be treated as failure to pay premium. The
330 emergency assessments under sub-subparagraph d. shall continue
331 as long as any bonds issued or other indebtedness incurred with
332 respect to a deficit for which the assessment was imposed remain
333 outstanding, unless adequate provision has been made for the
334 payment of such bonds or other indebtedness pursuant to the
335 documents governing such bonds or indebtedness.
336 f. As used in this subsection for purposes of any deficit
337 incurred on or after January 25, 2007, the term “subject lines
338 of business” means insurance written by assessable insurers or
339 procured by assessable insureds for all property and casualty
340 lines of business in this state, but not including workers’
341 compensation or medical malpractice. As used in this sub
342 subparagraph, the term “property and casualty lines of business”
343 includes all lines of business identified on Form 2, Exhibit of
344 Premiums and Losses, in the annual statement required of
345 authorized insurers under s. 624.424 and any rule adopted under
346 this section, except for those lines identified as accident and
347 health insurance and except for policies written under the
348 National Flood Insurance Program or the Federal Crop Insurance
349 Program. For purposes of this sub-subparagraph, the term
350 “workers’ compensation” includes both workers’ compensation
351 insurance and excess workers’ compensation insurance.
352 g. The Florida Surplus Lines Service Office shall determine
353 annually the aggregate statewide written premium in subject
354 lines of business procured by assessable insureds and report
355 that information to the corporation in a form and at a time the
356 corporation specifies to ensure that the corporation can meet
357 the requirements of this subsection and the corporation’s
358 financing obligations.
359 h. The Florida Surplus Lines Service Office shall verify
360 the proper application by surplus lines agents of assessment
361 percentages for regular assessments and emergency assessments
362 levied under this subparagraph on assessable insureds and assist
363 the corporation in ensuring the accurate, timely collection and
364 payment of assessments by surplus lines agents as required by
365 the corporation.
366 i. In 2008 or thereafter, Upon a determination by the board
367 of governors that an account has a projected deficit, the board
368 shall levy a Citizens policyholder surcharge against all
369 policyholders of the corporation.
370 (I) The surcharge shall be levied as a uniform percentage
371 of the premium for all corporation policyholders for the policy
372 of up to 10 percent of the policy premium for deficits in the
373 personal lines account, up to 15 percent of the policy such
374 premium for deficits in the commercial lines account, and up to
375 20 percent of the policy premium for deficits in the coastal
376 account, which funds shall be used to offset the deficit.
377 (II) The surcharge is payable upon cancellation or
378 termination of the policy, upon renewal of the policy, or upon
379 issuance of a new policy by the corporation within the first 12
380 months after the date of the levy or the period of time
381 necessary to fully collect the surcharge amount.
382 (III) The corporation may not levy any regular assessments
383 under paragraph (q) pursuant to sub-subparagraph a. or sub
384 subparagraph b. with respect to a particular year’s deficit
385 until the corporation has first levied the full amount of the
386 surcharge authorized by this sub-subparagraph.
387 (IV) The surcharge is not considered premium and is not
388 subject to commissions, fees, or premium taxes. However, failure
389 to pay the surcharge shall be treated as failure to pay premium.
390 j. If the amount of any assessments or surcharges collected
391 from corporation policyholders, assessable insurers or their
392 policyholders, or assessable insureds exceeds the amount of the
393 deficits, such excess amounts shall be remitted to and retained
394 by the corporation in a reserve to be used by the corporation,
395 as determined by the board of governors and approved by the
396 office, to pay claims or reduce any past, present, or future
397 plan-year deficits or to reduce outstanding debt.
398 (hh) The corporation shall must prepare a report for each
399 calendar year outlining both the statewide average and county
400 specific details of the loss ratio attributable to losses that
401 are not catastrophic losses for residential coverage provided by
402 the corporation, which information must be presented to the
403 office and available for public inspection on the Internet
404 website of the corporation by March 1 January 15th of the
405 following calendar year.
406 Section 3. Effective January 1, 2015, paragraph (n) of
407 subsection (6) of section 627.351, Florida Statutes, is amended
408 to read:
409 627.351 Insurance risk apportionment plans.—
410 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
411 (n)1. Rates for coverage provided by the corporation must
412 be actuarially sound and subject to s. 627.062, except as
413 otherwise provided in this paragraph.
414 1. The corporation shall file its recommended rates for
415 each personal and commercial line of business it writes with the
416 office at least annually. The corporation shall provide any
417 additional information regarding the rates which the office
418 requires. The office shall consider the recommendations of the
419 board and issue a final order establishing the rates for the
420 corporation within 45 days after the recommended rates are
421 filed. The corporation may not pursue an administrative
422 challenge or judicial review of the final order of the office.
423 2. In addition to the rates otherwise determined pursuant
424 to this paragraph, the corporation shall impose and collect an
425 amount equal to the premium tax provided in s. 624.509 to
426 augment the financial resources of the corporation.
427 3. After the public hurricane loss-projection model under
428 s. 627.06281 has been found to be accurate and reliable by the
429 Florida Commission on Hurricane Loss Projection Methodology, the
430 model shall serve as the minimum benchmark for determining the
431 windstorm portion of the corporation’s rates. This subparagraph
432 does not require or allow the corporation to adopt rates lower
433 than the rates otherwise required or allowed by this paragraph.
434 4. The rate filings for the corporation which were approved
435 by the office and took effect January 1, 2007, are rescinded,
436 except for those rates that were lowered. As soon as possible,
437 the corporation shall begin using the lower rates that were in
438 effect on December 31, 2006, and provide refunds to
439 policyholders who paid higher rates as a result of that rate
440 filing. The rates in effect on December 31, 2006, remain in
441 effect for the 2007 and 2008 calendar years except for any rate
442 change that results in a lower rate. The next rate change that
443 may increase rates shall take effect pursuant to a new rate
444 filing recommended by the corporation and established by the
445 office, subject to this paragraph.
446 4.5. Beginning on July 15, 2009, and annually thereafter,
447 The corporation shall must make a recommended actuarially sound
448 rate filing for each personal and commercial line of business it
449 writes, to be effective no earlier than January 1, 2010.
450 5.6. Beginning on or after January 1, 2015 2010, and
451 notwithstanding the board’s recommended rates and the office’s
452 final order regarding the corporation’s filed rates under
453 subparagraph 1., the corporation shall annually implement a rate
454 increase that which, except for sinkhole coverage:
455 a. For personal residential and commercial residential
456 policies, does not exceed 10 percent for any single policy
457 issued by the corporation, excluding coverage changes and
458 surcharges.
459 b. For commercial nonresidential policies, does not exceed
460 15 percent for any single policy issued by the corporation,
461 excluding coverage changes and surcharges.
462 6.7. The corporation may also implement an increase to
463 reflect the effect on the corporation of the cash buildup factor
464 pursuant to s. 215.555(5)(b).
465 7.8. The corporation’s implementation of rates as
466 prescribed in subparagraph 5. 6. shall cease for any line of
467 business written by the corporation upon the corporation’s
468 implementation of actuarially sound rates. Thereafter, the
469 corporation shall annually make a recommended actuarially sound
470 rate filing for each commercial and personal line of business
471 the corporation writes.
472 Section 4. Paragraph (e) is added to subsection (1) of
473 section 627.3518, Florida Statutes, subsection (2) and paragraph
474 (e) of subsection (4) of that section are amended, present
475 subsections (5) through (10) of that section are redesignated as
476 subsections (6) through (11), respectively, present subsection
477 (11) is redesignated as subsection (13), new subsections (5) and
478 (12) are added to that section, and present subsections (5)
479 through (7) of that section are amended, to read:
480 627.3518 Citizens Property Insurance Corporation
481 policyholder eligibility clearinghouse program.—The purpose of
482 this section is to provide a framework for the corporation to
483 implement a clearinghouse program by January 1, 2014.
484 (1) As used in this section, the term:
485 (e) “Surplus lines insurer” means an unauthorized insurer
486 that has been made eligible by the office to issue coverage
487 under the Surplus Lines Law.
488 (2) In order to confirm eligibility with the corporation
489 and to enhance the access of new applicants for coverage and
490 existing policyholders of the corporation to offers of coverage
491 from authorized insurers and surplus lines insurers, the
492 corporation shall establish a program for personal residential
493 risks in order to facilitate the diversion of ineligible
494 applicants and existing policyholders from the corporation into
495 the voluntary insurance market. The corporation shall also
496 develop appropriate procedures for facilitating the diversion of
497 ineligible applicants and existing policyholders for commercial
498 residential coverage into the private insurance market and
499 implement these procedures by October 1, 2015 shall report such
500 procedures to the President of the Senate and the Speaker of the
501 House of Representatives by January 1, 2014.
502 (4) Any authorized insurer may participate in the program;
503 however, participation is not mandatory for any insurer.
504 Insurers making offers of coverage to new applicants or renewal
505 policyholders through the program:
506 (e) May participate through their single-designated
507 managing general agent or broker; however, the provisions of
508 paragraph (7)(a) (6)(a) regarding ownership, control, and use of
509 the expirations continue to apply.
510 (5) Effective January 1, 2015, an eligible surplus lines
511 insurer may make an offer of similar coverage on a risk
512 submitted though the clearinghouse program if no offers of
513 coverage were submitted by authorized insurers participating in
514 the program and the office determines that the eligible surplus
515 lines insurer:
516 (a) Maintains a surplus of $50 million on a company or
517 pooled basis;
518 (b) Is rated “A-” or higher by A.M. Best Company;
519 (c) Maintains reserves, surplus, reinsurance, and
520 reinsurance equivalents to cover the eligible surplus lines
521 insurer’s 100-year probable maximum hurricane loss at least
522 twice in a single hurricane season, and submits such reinsurance
523 to the office for review for purposes of participation in the
524 program; and
525 (d) Provides prominent notice to the policyholder:
526 1. That an offer of coverage from a surplus lines insurer
527 does not affect whether the policyholder is eligible for
528 coverage from the corporation;
529 2. That a policyholder who accepts an offer of coverage
530 from a surplus lines insurer may, at any time, submit a new
531 application for coverage to the corporation;
532 3. That surplus lines policies are not covered by the
533 Florida Insurance Guaranty Association;
534 4. That rates for surplus lines insurance are not subject
535 to review by the office; and
536 5. Of any additional information required by the office.
537 (6)(5) Notwithstanding s. 627.3517, an any applicant for
538 new coverage from the corporation is not eligible for coverage
539 from the corporation if provided an offer of coverage from an
540 authorized insurer through the program at a premium that is at
541 or below the eligibility threshold established in s.
542 627.351(6)(c)5.a. or b. Whenever an offer of coverage for a
543 personal lines or commercial lines residential risk is received
544 for a policyholder of the corporation at renewal from an
545 authorized insurer through the program, if the offer is equal to
546 or less than the corporation’s renewal premium for comparable
547 coverage, the risk is not eligible for coverage with the
548 corporation. If In the event an offer of coverage for a new
549 applicant is received from an authorized insurer through the
550 program, and the premium offered exceeds the eligibility
551 threshold contained in s. 627.351(6)(c)5.a. or b., the applicant
552 or insured may elect to accept such coverage, or may elect to
553 accept or continue coverage with the corporation. If In the
554 event an offer of coverage for a personal lines or commercial
555 lines residential risk is received from an authorized insurer at
556 renewal through the program, and if the premium offered is more
557 than the corporation’s renewal premium for comparable coverage,
558 the insured may elect to accept such coverage, or may elect to
559 accept or continue coverage with the corporation. Section
560 627.351(6)(c)5.a.(I) or b.(I) does not apply to an offer of
561 coverage from an authorized insurer obtained through the
562 program. An applicant for personal lines residential coverage
563 from the corporation who was declared ineligible for coverage at
564 renewal by the corporation in the previous 36 months due to an
565 offer of coverage pursuant to this subsection is shall be
566 considered a renewal under this section if the corporation
567 determines that the authorized insurer making the offer of
568 coverage pursuant to this subsection continues to insure the
569 applicant and increased the rate on the policy in excess of the
570 increase allowed for the corporation under s. 627.351(6)(n)5
571 627.351(6)(n)6.
572 (7)(6) Independent insurance agents submitting new
573 applications for coverage or that are the agent of record on a
574 renewal policy submitted to the program:
575 (a) Are granted and must maintain ownership and the
576 exclusive use of expirations, records, or other written or
577 electronic information directly related to such applications or
578 renewals written through the corporation or through an insurer
579 participating in the program, notwithstanding s.
580 627.351(6)(c)5.a.(I)(B) and (II)(B) and b.(I)(B) and (II)(B).
581 Such ownership is granted for as long as the insured remains
582 with the agency or until sold or surrendered in writing by the
583 agent. Contracts with the corporation or required by the
584 corporation must not amend, modify, interfere with, or limit
585 such rights of ownership. Such expirations, records, or other
586 written or electronic information may be used to review an
587 application, issue a policy, or for any other purpose necessary
588 for placing such business through the program.
589 (b) May not be required to be appointed by any insurer
590 participating in the program for policies written solely through
591 the program, notwithstanding the provisions of s. 626.112.
592 (c) May accept an appointment from an any insurer
593 participating in the program.
594 (d) May enter into either a standard or limited agency
595 agreement with the insurer, at the insurer’s option.
596
597 Applicants ineligible for coverage in accordance with subsection
598 (6) (5) remain ineligible if their independent agent is
599 unwilling or unable to enter into a standard or limited agency
600 agreement with an insurer participating in the program.
601 (8)(7) Exclusive agents submitting new applications for
602 coverage or that are the agent of record on a renewal policy
603 submitted to the program:
604 (a) Must maintain ownership and the exclusive use of
605 expirations, records, or other written or electronic information
606 directly related to such applications or renewals written
607 through the corporation or through an insurer participating in
608 the program, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and
609 (II)(B) and b.(I)(B) and (II)(B). Contracts with the corporation
610 or required by the corporation must not amend, modify, interfere
611 with, or limit such rights of ownership. Such expirations,
612 records, or other written or electronic information may be used
613 to review an application, issue a policy, or for any other
614 purpose necessary for placing such business through the program.
615 (b) May not be required to be appointed by any insurer
616 participating in the program for policies written solely through
617 the program, notwithstanding the provisions of s. 626.112.
618 (c) Must only facilitate the placement of an offer of
619 coverage from an insurer whose limited servicing agreement is
620 approved by that exclusive agent’s exclusive insurer.
621 (d) May enter into a limited servicing agreement with the
622 insurer making an offer of coverage, and only after the
623 exclusive agent’s insurer has approved the limited servicing
624 agreement terms. The exclusive agent’s insurer must approve a
625 limited service agreement for the program for an any insurer for
626 which it has approved a service agreement for other purposes.
627
628 Applicants ineligible for coverage in accordance with subsection
629 (6) (5) remain ineligible if their exclusive agent is unwilling
630 or unable to enter into a standard or limited agency agreement
631 with an insurer making an offer of coverage to that applicant.
632 (12) An applicant for coverage from the corporation who was
633 a policyholder of the corporation within the previous 36 months
634 and who subsequently accepted an offer of coverage from a
635 surplus lines insurer is considered a renewal under this
636 section.
637 Section 5. Section 627.3519, Florida Statutes, is repealed.
638 Section 6. Section 627.35191, Florida Statutes, is amended
639 to read:
640 627.35191 Required reports Annual report of aggregate net
641 probable maximum losses, financing options, and potential
642 assessments.—
643 (1) By No later than February 1 of each year, the Florida
644 Hurricane Catastrophe Fund and Citizens Property Insurance
645 Corporation shall each submit a report to the Legislature and
646 the Financial Services Commission identifying their respective
647 aggregate net probable maximum losses, financing options, and
648 potential assessments. The report issued by the fund and the
649 corporation must include their respective 50-year, 100-year, and
650 250-year probable maximum losses; analysis of all reasonable
651 financing strategies for each such probable maximum loss,
652 including the amount and term of debt instruments; specification
653 of the percentage assessments that would be needed to support
654 each of the financing strategies; and calculations of the
655 aggregate assessment burden on Florida property and casualty
656 policyholders for each of the probable maximum losses.
657 (2) In May of each year, Citizens Property Insurance
658 Corporation shall also provide to the Legislature and the
659 Financial Services Commission a statement of the estimated
660 borrowing capacity of the corporation for the next 12-month
661 period, the estimated claims-paying capacity of the corporation,
662 and the corporation’s estimated balance as of December 31 of the
663 current calendar year. Such estimates must take into account
664 that the corporation, the Florida Hurricane Catastrophe Fund,
665 and the Florida Insurance Guaranty Association may all be
666 concurrently issuing debt instruments following a catastrophic
667 event.
668 Section 7. Effective January 1, 2015, subsection (7) of
669 section 627.701, Florida Statutes, is amended to read:
670 627.701 Liability of insureds; coinsurance; deductibles.—
671 (7) Before Prior to issuing a personal lines residential
672 property insurance policy on or after January 1, 2015 April 1,
673 1997, or before prior to the first renewal of a residential
674 property insurance policy on or after January 1, 2015 April 1,
675 1997, the insurer must offer a deductible equal to $1,000 $500
676 applicable to losses from perils other than hurricane. The
677 insurer must provide the policyholder with notice of the
678 availability of the deductible specified in this subsection in a
679 form approved by the office at least once every 3 years. The
680 failure to provide such notice constitutes a violation of this
681 code but does not affect the coverage provided under the policy.
682 An insurer may require a higher deductible only as part of a
683 deductible program lawfully in effect on June 1, 1996, or as
684 part of a similar deductible program.
685 Section 8. Except as otherwise expressly provided in this
686 act, this act shall take effect July 1, 2014.