Florida Senate - 2015 CS for SB 842 By the Committee on Banking and Insurance; and Senator Benacquisto 597-02119-15 2015842c1 1 A bill to be entitled 2 An act relating to Citizens Property Insurance 3 Corporation eligibility for coverage; amending s. 4 627.351, F.S.; deleting a provision prohibiting 5 certain improvements to major structures from being 6 eligible for coverage by the Citizens Property 7 Insurance Corporation; prohibiting coverage for major 8 structures rebuilt, repaired, restored, or remodeled 9 to increase the total square footage of finished area 10 by a specified amount; reenacting s. 627.712(1), F.S., 11 relating to residential windstorm coverage, to 12 incorporate the amendment made by this act to s. 13 627.351, F.S.; providing an effective date. 14 15 Be It Enacted by the Legislature of the State of Florida: 16 17 Section 1. Paragraph (a) of subsection (6) of section 18 627.351, Florida Statutes, is amended to read: 19 627.351 Insurance risk apportionment plans.— 20 (6) CITIZENS PROPERTY INSURANCE CORPORATION.— 21 (a) The public purpose of this subsection is to ensure that 22 there is an orderly market for property insurance for residents 23 and businesses of this state. 24 1. The Legislature finds that private insurers are 25 unwilling or unable to provide affordable property insurance 26 coverage in this state to the extent sought and needed. The 27 absence of affordable property insurance threatens the public 28 health, safety, and welfare and likewise threatens the economic 29 health of the state. The state therefore has a compelling public 30 interest and a public purpose to assist in assuring that 31 property in the state is insured and that it is insured at 32 affordable rates so as to facilitate the remediation, 33 reconstruction, and replacement of damaged or destroyed property 34 in order to reduce or avoid the negative effects otherwise 35 resulting to the public health, safety, and welfare, to the 36 economy of the state, and to the revenues of the state and local 37 governments which are needed to provide for the public welfare. 38 It is necessary, therefore, to provide affordable property 39 insurance to applicants who are in good faith entitled to 40 procure insurance through the voluntary market but are unable to 41 do so. The Legislature intends, therefore, that affordable 42 property insurance be provided and that it continue to be 43 provided, as long as necessary, through Citizens Property 44 Insurance Corporation, a government entity that is an integral 45 part of the state, and that is not a private insurance company. 46 To that end, the corporation shall strive to increase the 47 availability of affordable property insurance in this state, 48 while achieving efficiencies and economies, and while providing 49 service to policyholders, applicants, and agents which is no 50 less than the quality generally provided in the voluntary 51 market, for the achievement of the foregoing public purposes. 52 Because it is essential for this government entity to have the 53 maximum financial resources to pay claims following a 54 catastrophic hurricane, it is the intent of the Legislature that 55 the corporation continue to be an integral part of the state and 56 that the income of the corporation be exempt from federal income 57 taxation and that interest on the debt obligations issued by the 58 corporation be exempt from federal income taxation. 59 2. The Residential Property and Casualty Joint Underwriting 60 Association originally created by this statute shall be known as 61 the Citizens Property Insurance Corporation. The corporation 62 shall provide insurance for residential and commercial property, 63 for applicants who are entitled, but, in good faith, are unable 64 to procure insurance through the voluntary market. The 65 corporation shall operate pursuant to a plan of operation 66 approved by order of the Financial Services Commission. The plan 67 is subject to continuous review by the commission. The 68 commission may, by order, withdraw approval of all or part of a 69 plan if the commission determines that conditions have changed 70 since approval was granted and that the purposes of the plan 71 require changes in the plan. For the purposes of this 72 subsection, residential coverage includes both personal lines 73 residential coverage, which consists of the type of coverage 74 provided by homeowner, mobile home owner, dwelling, tenant, 75 condominium unit owner, and similar policies; and commercial 76 lines residential coverage, which consists of the type of 77 coverage provided by condominium association, apartment 78 building, and similar policies. 79 3. With respect to coverage for personal lines residential 80 structures: 81 a. Effective January 1, 2014, a structure that has a 82 dwelling replacement cost of $1 million or more, or a single 83 condominium unit that has a combined dwelling and contents 84 replacement cost of $1 million or more is not eligible for 85 coverage by the corporation. Such dwellings insured by the 86 corporation on December 31, 2013, may continue to be covered by 87 the corporation until the end of the policy term. The office 88 shall approve the method used by the corporation for valuing the 89 dwelling replacement cost for the purposes of this subparagraph. 90 If a policyholder is insured by the corporation before being 91 determined to be ineligible pursuant to this subparagraph and 92 such policyholder files a lawsuit challenging the determination, 93 the policyholder may remain insured by the corporation until the 94 conclusion of the litigation. 95 b. Effective January 1, 2015, a structure that has a 96 dwelling replacement cost of $900,000 or more, or a single 97 condominium unit that has a combined dwelling and contents 98 replacement cost of $900,000 or more, is not eligible for 99 coverage by the corporation. Such dwellings insured by the 100 corporation on December 31, 2014, may continue to be covered by 101 the corporation only until the end of the policy term. 102 c. Effective January 1, 2016, a structure that has a 103 dwelling replacement cost of $800,000 or more, or a single 104 condominium unit that has a combined dwelling and contents 105 replacement cost of $800,000 or more, is not eligible for 106 coverage by the corporation. Such dwellings insured by the 107 corporation on December 31, 2015, may continue to be covered by 108 the corporation until the end of the policy term. 109 d. Effective January 1, 2017, a structure that has a 110 dwelling replacement cost of $700,000 or more, or a single 111 condominium unit that has a combined dwelling and contents 112 replacement cost of $700,000 or more, is not eligible for 113 coverage by the corporation. Such dwellings insured by the 114 corporation on December 31, 2016, may continue to be covered by 115 the corporation until the end of the policy term. 116 117 The requirements of sub-subparagraphs b.-d. do not apply in 118 counties where the office determines there is not a reasonable 119 degree of competition. In such counties a personal lines 120 residential structure that has a dwelling replacement cost of 121 less than $1 million, or a single condominium unit that has a 122 combined dwelling and contents replacement cost of less than $1 123 million, is eligible for coverage by the corporation. 124 4. It is the intent of the Legislature that policyholders, 125 applicants, and agents of the corporation receive service and 126 treatment of the highest possible level but never less than that 127 generally provided in the voluntary market. It is also intended 128 that the corporation be held to service standards no less than 129 those applied to insurers in the voluntary market by the office 130 with respect to responsiveness, timeliness, customer courtesy, 131 and overall dealings with policyholders, applicants, or agents 132 of the corporation. 133 5.a. Effective January 1, 2009, a personal lines 134 residential structure that is located in the “wind-borne debris 135 region,” as defined in s. 1609.2, International Building Code 136 (2006), and that has an insured value on the structure of 137 $750,000 or more is not eligible for coverage by the corporation 138 unless the structure has opening protections as required under 139 the Florida Building Code for a newly constructed residential 140 structure in that area. A residential structure is deemed to 141 comply with this sub-subparagraph if it has shutters or opening 142 protections on all openings and if such opening protections 143 complied with the Florida Building Code at the time they were 144 installed. 145 b. Any major structure, as defined in s. 161.54(6)(a), 146 which is newly constructed or rebuilt, repaired, restored, or 147 remodeled to increase the total square footage of finished area 148 by more than 25 percent pursuant to
for whicha permit is149 applied for on orafter July 1, 2015, for new construction or150 substantial improvement as defined in s. 161.54(12)is not 151 eligible for coverage by the corporation if the structure is 152 seaward of the coastal construction control line established 153 pursuant to s. 161.053 or is within the Coastal Barrier 154 Resources System as designated by 16 U.S.C. ss. 3501-3510. 155 6. With respect to wind-only coverage for commercial lines 156 residential condominiums, effective July 1, 2014, a condominium 157 shall be deemed ineligible for coverage if 50 percent or more of 158 the units are rented more than eight times in a calendar year 159 for a rental agreement period of less than 30 days. 160 Section 2. For the purpose of incorporating the amendment 161 made by this act to section 627.351, Florida Statutes, in a 162 reference thereto, subsection (1) of section 627.712, Florida 163 Statutes, is reenacted to read: 164 627.712 Residential windstorm coverage required; 165 availability of exclusions for windstorm or contents.— 166 (1) An insurer issuing a residential property insurance 167 policy must provide windstorm coverage. Except as provided in 168 paragraph (2)(c), this section does not apply to risks that are 169 eligible for wind-only coverage from Citizens Property Insurance 170 Corporation under s. 627.351(6), and risks that are not eligible 171 for coverage from Citizens Property Insurance Corporation under 172 s. 627.351(6)(a)3. or 5. A risk ineligible for coverage by the 173 corporation under s. 627.351(6)(a)3. or 5. is exempt from this 174 section only if the risk is located within the boundaries of the 175 coastal account of the corporation. 176 Section 3. This act shall take effect July 1, 2015.