Florida Senate - 2016 CS for CS for SB 1630
By the Committees on Ethics and Elections; and Banking and
Insurance; and Senator Flores
582-03674-16 20161630c2
1 A bill to be entitled
2 An act relating to operations of the Citizens Property
3 Insurance Corporation; amending s. 627.351, F.S.;
4 specifying that a consumer representative appointed by
5 the Governor to the Citizens Property Insurance
6 Corporation’s board of governors is not prohibited
7 from practicing in a certain profession if required or
8 permitted by law or ordinance; revising the
9 requirements for licensed agents of the corporation;
10 revising provisions related to the corporation’s use
11 of certain public and private hurricane loss
12 projection models in establishing certain rates;
13 revising a provision to permit specified information
14 from certain underwriting and claims files to be made
15 available to certain entities; providing limitations
16 for the use of such information by the entities;
17 requiring the take-out program to be revised for
18 specified purposes by a specified date; requiring the
19 corporation to schedule up to a certain number of
20 cycles annually during which insurers may identify and
21 submit policy take-out requests; specifying
22 information required to be included in such requests;
23 providing conditions that must be agreed to by
24 insurers submitting a request; requiring the
25 corporation to maintain and make available specified
26 lists of insurers to its agents of record; requiring
27 the corporation to provide policyholders and the
28 agents of record with a specified notice regarding
29 their policy renewal options; amending s. 627.3518,
30 F.S.; revising criteria for when an applicant for
31 coverage from the corporation shall be considered a
32 renewal; providing an effective date.
33
34 Be It Enacted by the Legislature of the State of Florida:
35
36 Section 1. Paragraphs (c), (n), and (x) of subsection (6)
37 of section 627.351, Florida Statutes, are amended, and paragraph
38 (ii) is added to that subsection, to read:
39 627.351 Insurance risk apportionment plans.—
40 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
41 (c) The corporation’s plan of operation:
42 1. Must provide for adoption of residential property and
43 casualty insurance policy forms and commercial residential and
44 nonresidential property insurance forms, which must be approved
45 by the office before use. The corporation shall adopt the
46 following policy forms:
47 a. Standard personal lines policy forms that are
48 comprehensive multiperil policies providing full coverage of a
49 residential property equivalent to the coverage provided in the
50 private insurance market under an HO-3, HO-4, or HO-6 policy.
51 b. Basic personal lines policy forms that are policies
52 similar to an HO-8 policy or a dwelling fire policy that provide
53 coverage meeting the requirements of the secondary mortgage
54 market, but which is more limited than the coverage under a
55 standard policy.
56 c. Commercial lines residential and nonresidential policy
57 forms that are generally similar to the basic perils of full
58 coverage obtainable for commercial residential structures and
59 commercial nonresidential structures in the admitted voluntary
60 market.
61 d. Personal lines and commercial lines residential property
62 insurance forms that cover the peril of wind only. The forms are
63 applicable only to residential properties located in areas
64 eligible for coverage under the coastal account referred to in
65 sub-subparagraph (b)2.a.
66 e. Commercial lines nonresidential property insurance forms
67 that cover the peril of wind only. The forms are applicable only
68 to nonresidential properties located in areas eligible for
69 coverage under the coastal account referred to in sub
70 subparagraph (b)2.a.
71 f. The corporation may adopt variations of the policy forms
72 listed in sub-subparagraphs a.-e. which contain more restrictive
73 coverage.
74 g. Effective January 1, 2013, the corporation shall offer a
75 basic personal lines policy similar to an HO-8 policy with
76 dwelling repair based on common construction materials and
77 methods.
78 2. Must provide that the corporation adopt a program in
79 which the corporation and authorized insurers enter into quota
80 share primary insurance agreements for hurricane coverage, as
81 defined in s. 627.4025(2)(a), for eligible risks, and adopt
82 property insurance forms for eligible risks which cover the
83 peril of wind only.
84 a. As used in this subsection, the term:
85 (I) “Quota share primary insurance” means an arrangement in
86 which the primary hurricane coverage of an eligible risk is
87 provided in specified percentages by the corporation and an
88 authorized insurer. The corporation and authorized insurer are
89 each solely responsible for a specified percentage of hurricane
90 coverage of an eligible risk as set forth in a quota share
91 primary insurance agreement between the corporation and an
92 authorized insurer and the insurance contract. The
93 responsibility of the corporation or authorized insurer to pay
94 its specified percentage of hurricane losses of an eligible
95 risk, as set forth in the agreement, may not be altered by the
96 inability of the other party to pay its specified percentage of
97 losses. Eligible risks that are provided hurricane coverage
98 through a quota share primary insurance arrangement must be
99 provided policy forms that set forth the obligations of the
100 corporation and authorized insurer under the arrangement,
101 clearly specify the percentages of quota share primary insurance
102 provided by the corporation and authorized insurer, and
103 conspicuously and clearly state that the authorized insurer and
104 the corporation may not be held responsible beyond their
105 specified percentage of coverage of hurricane losses.
106 (II) “Eligible risks” means personal lines residential and
107 commercial lines residential risks that meet the underwriting
108 criteria of the corporation and are located in areas that were
109 eligible for coverage by the Florida Windstorm Underwriting
110 Association on January 1, 2002.
111 b. The corporation may enter into quota share primary
112 insurance agreements with authorized insurers at corporation
113 coverage levels of 90 percent and 50 percent.
114 c. If the corporation determines that additional coverage
115 levels are necessary to maximize participation in quota share
116 primary insurance agreements by authorized insurers, the
117 corporation may establish additional coverage levels. However,
118 the corporation’s quota share primary insurance coverage level
119 may not exceed 90 percent.
120 d. Any quota share primary insurance agreement entered into
121 between an authorized insurer and the corporation must provide
122 for a uniform specified percentage of coverage of hurricane
123 losses, by county or territory as set forth by the corporation
124 board, for all eligible risks of the authorized insurer covered
125 under the agreement.
126 e. Any quota share primary insurance agreement entered into
127 between an authorized insurer and the corporation is subject to
128 review and approval by the office. However, such agreement shall
129 be authorized only as to insurance contracts entered into
130 between an authorized insurer and an insured who is already
131 insured by the corporation for wind coverage.
132 f. For all eligible risks covered under quota share primary
133 insurance agreements, the exposure and coverage levels for both
134 the corporation and authorized insurers shall be reported by the
135 corporation to the Florida Hurricane Catastrophe Fund. For all
136 policies of eligible risks covered under such agreements, the
137 corporation and the authorized insurer must maintain complete
138 and accurate records for the purpose of exposure and loss
139 reimbursement audits as required by fund rules. The corporation
140 and the authorized insurer shall each maintain duplicate copies
141 of policy declaration pages and supporting claims documents.
142 g. The corporation board shall establish in its plan of
143 operation standards for quota share agreements which ensure that
144 there is no discriminatory application among insurers as to the
145 terms of the agreements, pricing of the agreements, incentive
146 provisions if any, and consideration paid for servicing policies
147 or adjusting claims.
148 h. The quota share primary insurance agreement between the
149 corporation and an authorized insurer must set forth the
150 specific terms under which coverage is provided, including, but
151 not limited to, the sale and servicing of policies issued under
152 the agreement by the insurance agent of the authorized insurer
153 producing the business, the reporting of information concerning
154 eligible risks, the payment of premium to the corporation, and
155 arrangements for the adjustment and payment of hurricane claims
156 incurred on eligible risks by the claims adjuster and personnel
157 of the authorized insurer. Entering into a quota sharing
158 insurance agreement between the corporation and an authorized
159 insurer is voluntary and at the discretion of the authorized
160 insurer.
161 3. May provide that the corporation may employ or otherwise
162 contract with individuals or other entities to provide
163 administrative or professional services that may be appropriate
164 to effectuate the plan. The corporation may borrow funds by
165 issuing bonds or by incurring other indebtedness, and shall have
166 other powers reasonably necessary to effectuate the requirements
167 of this subsection, including, without limitation, the power to
168 issue bonds and incur other indebtedness in order to refinance
169 outstanding bonds or other indebtedness. The corporation may
170 seek judicial validation of its bonds or other indebtedness
171 under chapter 75. The corporation may issue bonds or incur other
172 indebtedness, or have bonds issued on its behalf by a unit of
173 local government pursuant to subparagraph (q)2. in the absence
174 of a hurricane or other weather-related event, upon a
175 determination by the corporation, subject to approval by the
176 office, that such action would enable it to efficiently meet the
177 financial obligations of the corporation and that such
178 financings are reasonably necessary to effectuate the
179 requirements of this subsection. The corporation may take all
180 actions needed to facilitate tax-free status for such bonds or
181 indebtedness, including formation of trusts or other affiliated
182 entities. The corporation may pledge assessments, projected
183 recoveries from the Florida Hurricane Catastrophe Fund, other
184 reinsurance recoverables, policyholder surcharges and other
185 surcharges, and other funds available to the corporation as
186 security for bonds or other indebtedness. In recognition of s.
187 10, Art. I of the State Constitution, prohibiting the impairment
188 of obligations of contracts, it is the intent of the Legislature
189 that no action be taken whose purpose is to impair any bond
190 indenture or financing agreement or any revenue source committed
191 by contract to such bond or other indebtedness.
192 4. Must require that the corporation operate subject to the
193 supervision and approval of a board of governors consisting of
194 nine individuals who are residents of this state and who are
195 from different geographical areas of the state, one of whom is
196 appointed by the Governor and serves solely to advocate on
197 behalf of the consumer. The appointment of a consumer
198 representative by the Governor is deemed to be within the scope
199 of the exemption provided in s. 112.313(7)(b) and is in addition
200 to the appointments authorized under sub-subparagraph a.
201 a. The Governor, the Chief Financial Officer, the President
202 of the Senate, and the Speaker of the House of Representatives
203 shall each appoint two members of the board. At least one of the
204 two members appointed by each appointing officer must have
205 demonstrated expertise in insurance and be deemed to be within
206 the scope of the exemption provided in s. 112.313(7)(b). The
207 Chief Financial Officer shall designate one of the appointees as
208 chair. All board members serve at the pleasure of the appointing
209 officer. All members of the board are subject to removal at will
210 by the officers who appointed them. All board members, including
211 the chair, must be appointed to serve for 3-year terms beginning
212 annually on a date designated by the plan. However, for the
213 first term beginning on or after July 1, 2009, each appointing
214 officer shall appoint one member of the board for a 2-year term
215 and one member for a 3-year term. A board vacancy shall be
216 filled for the unexpired term by the appointing officer. The
217 Chief Financial Officer shall appoint a technical advisory group
218 to provide information and advice to the board in connection
219 with the board’s duties under this subsection. The executive
220 director and senior managers of the corporation shall be engaged
221 by the board and serve at the pleasure of the board. Any
222 executive director appointed on or after July 1, 2006, is
223 subject to confirmation by the Senate. The executive director is
224 responsible for employing other staff as the corporation may
225 require, subject to review and concurrence by the board.
226 b. The board shall create a Market Accountability Advisory
227 Committee to assist the corporation in developing awareness of
228 its rates and its customer and agent service levels in
229 relationship to the voluntary market insurers writing similar
230 coverage.
231 (I) The members of the advisory committee consist of the
232 following 11 persons, one of whom must be elected chair by the
233 members of the committee: four representatives, one appointed by
234 the Florida Association of Insurance Agents, one by the Florida
235 Association of Insurance and Financial Advisors, one by the
236 Professional Insurance Agents of Florida, and one by the Latin
237 American Association of Insurance Agencies; three
238 representatives appointed by the insurers with the three highest
239 voluntary market share of residential property insurance
240 business in the state; one representative from the Office of
241 Insurance Regulation; one consumer appointed by the board who is
242 insured by the corporation at the time of appointment to the
243 committee; one representative appointed by the Florida
244 Association of Realtors; and one representative appointed by the
245 Florida Bankers Association. All members shall be appointed to
246 3-year terms and may serve for consecutive terms.
247 (II) The committee shall report to the corporation at each
248 board meeting on insurance market issues which may include rates
249 and rate competition with the voluntary market; service,
250 including policy issuance, claims processing, and general
251 responsiveness to policyholders, applicants, and agents; and
252 matters relating to depopulation.
253 5. Must provide a procedure for determining the eligibility
254 of a risk for coverage, as follows:
255 a. Subject to s. 627.3517, with respect to personal lines
256 residential risks, if the risk is offered coverage from an
257 authorized insurer at the insurer’s approved rate under a
258 standard policy including wind coverage or, if consistent with
259 the insurer’s underwriting rules as filed with the office, a
260 basic policy including wind coverage, for a new application to
261 the corporation for coverage, the risk is not eligible for any
262 policy issued by the corporation unless the premium for coverage
263 from the authorized insurer is more than 15 percent greater than
264 the premium for comparable coverage from the corporation.
265 Whenever an offer of coverage for a personal lines residential
266 risk is received for a policyholder of the corporation at
267 renewal from an authorized insurer, if the offer is equal to or
268 less than the corporation’s renewal premium for comparable
269 coverage, the risk is not eligible for coverage with the
270 corporation. If the risk is not able to obtain such offer, the
271 risk is eligible for a standard policy including wind coverage
272 or a basic policy including wind coverage issued by the
273 corporation; however, if the risk could not be insured under a
274 standard policy including wind coverage regardless of market
275 conditions, the risk is eligible for a basic policy including
276 wind coverage unless rejected under subparagraph 8. However, a
277 policyholder removed from the corporation through an assumption
278 agreement remains eligible for coverage from the corporation
279 until the end of the assumption period. The corporation shall
280 determine the type of policy to be provided on the basis of
281 objective standards specified in the underwriting manual and
282 based on generally accepted underwriting practices.
283 (I) If the risk accepts an offer of coverage through the
284 market assistance plan or through a mechanism established by the
285 corporation other than a plan established by s. 627.3518, before
286 a policy is issued to the risk by the corporation or during the
287 first 30 days of coverage by the corporation, and the producing
288 agent who submitted the application to the plan or to the
289 corporation is not currently appointed by the insurer, the
290 insurer shall:
291 (A) Pay to the producing agent of record of the policy for
292 the first year, an amount that is the greater of the insurer’s
293 usual and customary commission for the type of policy written or
294 a fee equal to the usual and customary commission of the
295 corporation; or
296 (B) Offer to allow the producing agent of record of the
297 policy to continue servicing the policy for at least 1 year and
298 offer to pay the agent the greater of the insurer’s or the
299 corporation’s usual and customary commission for the type of
300 policy written.
301
302 If the producing agent is unwilling or unable to accept
303 appointment, the new insurer shall pay the agent in accordance
304 with sub-sub-sub-subparagraph (A).
305 (II) If the corporation enters into a contractual agreement
306 for a take-out plan, the producing agent of record of the
307 corporation policy is entitled to retain any unearned commission
308 on the policy, and the insurer shall:
309 (A) Pay to the producing agent of record, for the first
310 year, an amount that is the greater of the insurer’s usual and
311 customary commission for the type of policy written or a fee
312 equal to the usual and customary commission of the corporation;
313 or
314 (B) Offer to allow the producing agent of record to
315 continue servicing the policy for at least 1 year and offer to
316 pay the agent the greater of the insurer’s or the corporation’s
317 usual and customary commission for the type of policy written.
318
319 If the producing agent is unwilling or unable to accept
320 appointment, the new insurer shall pay the agent in accordance
321 with sub-sub-sub-subparagraph (A).
322 b. With respect to commercial lines residential risks, for
323 a new application to the corporation for coverage, if the risk
324 is offered coverage under a policy including wind coverage from
325 an authorized insurer at its approved rate, the risk is not
326 eligible for a policy issued by the corporation unless the
327 premium for coverage from the authorized insurer is more than 15
328 percent greater than the premium for comparable coverage from
329 the corporation. Whenever an offer of coverage for a commercial
330 lines residential risk is received for a policyholder of the
331 corporation at renewal from an authorized insurer, if the offer
332 is equal to or less than the corporation’s renewal premium for
333 comparable coverage, the risk is not eligible for coverage with
334 the corporation. If the risk is not able to obtain any such
335 offer, the risk is eligible for a policy including wind coverage
336 issued by the corporation. However, a policyholder removed from
337 the corporation through an assumption agreement remains eligible
338 for coverage from the corporation until the end of the
339 assumption period.
340 (I) If the risk accepts an offer of coverage through the
341 market assistance plan or through a mechanism established by the
342 corporation other than a plan established by s. 627.3518, before
343 a policy is issued to the risk by the corporation or during the
344 first 30 days of coverage by the corporation, and the producing
345 agent who submitted the application to the plan or the
346 corporation is not currently appointed by the insurer, the
347 insurer shall:
348 (A) Pay to the producing agent of record of the policy, for
349 the first year, an amount that is the greater of the insurer’s
350 usual and customary commission for the type of policy written or
351 a fee equal to the usual and customary commission of the
352 corporation; or
353 (B) Offer to allow the producing agent of record of the
354 policy to continue servicing the policy for at least 1 year and
355 offer to pay the agent the greater of the insurer’s or the
356 corporation’s usual and customary commission for the type of
357 policy written.
358
359 If the producing agent is unwilling or unable to accept
360 appointment, the new insurer shall pay the agent in accordance
361 with sub-sub-sub-subparagraph (A).
362 (II) If the corporation enters into a contractual agreement
363 for a take-out plan, the producing agent of record of the
364 corporation policy is entitled to retain any unearned commission
365 on the policy, and the insurer shall:
366 (A) Pay to the producing agent of record, for the first
367 year, an amount that is the greater of the insurer’s usual and
368 customary commission for the type of policy written or a fee
369 equal to the usual and customary commission of the corporation;
370 or
371 (B) Offer to allow the producing agent of record to
372 continue servicing the policy for at least 1 year and offer to
373 pay the agent the greater of the insurer’s or the corporation’s
374 usual and customary commission for the type of policy written.
375
376 If the producing agent is unwilling or unable to accept
377 appointment, the new insurer shall pay the agent in accordance
378 with sub-sub-sub-subparagraph (A).
379 c. For purposes of determining comparable coverage under
380 sub-subparagraphs a. and b., the comparison must be based on
381 those forms and coverages that are reasonably comparable. The
382 corporation may rely on a determination of comparable coverage
383 and premium made by the producing agent who submits the
384 application to the corporation, made in the agent’s capacity as
385 the corporation’s agent. A comparison may be made solely of the
386 premium with respect to the main building or structure only on
387 the following basis: the same coverage A or other building
388 limits; the same percentage hurricane deductible that applies on
389 an annual basis or that applies to each hurricane for commercial
390 residential property; the same percentage of ordinance and law
391 coverage, if the same limit is offered by both the corporation
392 and the authorized insurer; the same mitigation credits, to the
393 extent the same types of credits are offered both by the
394 corporation and the authorized insurer; the same method for loss
395 payment, such as replacement cost or actual cash value, if the
396 same method is offered both by the corporation and the
397 authorized insurer in accordance with underwriting rules; and
398 any other form or coverage that is reasonably comparable as
399 determined by the board. If an application is submitted to the
400 corporation for wind-only coverage in the coastal account, the
401 premium for the corporation’s wind-only policy plus the premium
402 for the ex-wind policy that is offered by an authorized insurer
403 to the applicant must be compared to the premium for multiperil
404 coverage offered by an authorized insurer, subject to the
405 standards for comparison specified in this subparagraph. If the
406 corporation or the applicant requests from the authorized
407 insurer a breakdown of the premium of the offer by types of
408 coverage so that a comparison may be made by the corporation or
409 its agent and the authorized insurer refuses or is unable to
410 provide such information, the corporation may treat the offer as
411 not being an offer of coverage from an authorized insurer at the
412 insurer’s approved rate.
413 6. Must include rules for classifications of risks and
414 rates.
415 7. Must provide that if premium and investment income for
416 an account attributable to a particular calendar year are in
417 excess of projected losses and expenses for the account
418 attributable to that year, such excess shall be held in surplus
419 in the account. Such surplus must be available to defray
420 deficits in that account as to future years and used for that
421 purpose before assessing assessable insurers and assessable
422 insureds as to any calendar year.
423 8. Must provide objective criteria and procedures to be
424 uniformly applied to all applicants in determining whether an
425 individual risk is so hazardous as to be uninsurable. In making
426 this determination and in establishing the criteria and
427 procedures, the following must be considered:
428 a. Whether the likelihood of a loss for the individual risk
429 is substantially higher than for other risks of the same class;
430 and
431 b. Whether the uncertainty associated with the individual
432 risk is such that an appropriate premium cannot be determined.
433
434 The acceptance or rejection of a risk by the corporation shall
435 be construed as the private placement of insurance, and the
436 provisions of chapter 120 do not apply.
437 9. Must provide that the corporation make its best efforts
438 to procure catastrophe reinsurance at reasonable rates, to cover
439 its projected 100-year probable maximum loss as determined by
440 the board of governors.
441 10. The policies issued by the corporation must provide
442 that if the corporation or the market assistance plan obtains an
443 offer from an authorized insurer to cover the risk at its
444 approved rates, the risk is no longer eligible for renewal
445 through the corporation, except as otherwise provided in this
446 subsection.
447 11. Corporation policies and applications must include a
448 notice that the corporation policy could, under this section, be
449 replaced with a policy issued by an authorized insurer which
450 does not provide coverage identical to the coverage provided by
451 the corporation. The notice must also specify that acceptance of
452 corporation coverage creates a conclusive presumption that the
453 applicant or policyholder is aware of this potential.
454 12. May establish, subject to approval by the office,
455 different eligibility requirements and operational procedures
456 for any line or type of coverage for any specified county or
457 area if the board determines that such changes are justified due
458 to the voluntary market being sufficiently stable and
459 competitive in such area or for such line or type of coverage
460 and that consumers who, in good faith, are unable to obtain
461 insurance through the voluntary market through ordinary methods
462 continue to have access to coverage from the corporation. If
463 coverage is sought in connection with a real property transfer,
464 the requirements and procedures may not provide an effective
465 date of coverage later than the date of the closing of the
466 transfer as established by the transferor, the transferee, and,
467 if applicable, the lender.
468 13. Must provide that, with respect to the coastal account,
469 any assessable insurer with a surplus as to policyholders of $25
470 million or less writing 25 percent or more of its total
471 countrywide property insurance premiums in this state may
472 petition the office, within the first 90 days of each calendar
473 year, to qualify as a limited apportionment company. A regular
474 assessment levied by the corporation on a limited apportionment
475 company for a deficit incurred by the corporation for the
476 coastal account may be paid to the corporation on a monthly
477 basis as the assessments are collected by the limited
478 apportionment company from its insureds, but a limited
479 apportionment company must begin collecting the regular
480 assessments not later than 90 days after the regular assessments
481 are levied by the corporation, and the regular assessments must
482 be paid in full within 15 months after being levied by the
483 corporation. A limited apportionment company shall collect from
484 its policyholders any emergency assessment imposed under sub
485 subparagraph (b)3.d. The plan must provide that, if the office
486 determines that any regular assessment will result in an
487 impairment of the surplus of a limited apportionment company,
488 the office may direct that all or part of such assessment be
489 deferred as provided in subparagraph (q)4. However, an emergency
490 assessment to be collected from policyholders under sub
491 subparagraph (b)3.d. may not be limited or deferred.
492 14. Must provide that the corporation appoint as its
493 licensed agents only those agents who throughout such
494 appointments also hold an appointment as defined in s.
495 626.015(3) by with an insurer who at the time of the agent’s
496 initial appointment by the corporation is authorized to write
497 and is actually writing or renewing personal lines residential
498 property coverage, commercial residential property coverage, or
499 commercial nonresidential property coverage within the state.
500 15. Must provide a premium payment plan option to its
501 policyholders which, at a minimum, allows for quarterly and
502 semiannual payment of premiums. A monthly payment plan may, but
503 is not required to, be offered.
504 16. Must limit coverage on mobile homes or manufactured
505 homes built before 1994 to actual cash value of the dwelling
506 rather than replacement costs of the dwelling.
507 17. Must provide coverage for manufactured or mobile home
508 dwellings. Such coverage must also include the following
509 attached structures:
510 a. Screened enclosures that are aluminum framed or screened
511 enclosures that are not covered by the same or substantially the
512 same materials as those of the primary dwelling;
513 b. Carports that are aluminum or carports that are not
514 covered by the same or substantially the same materials as those
515 of the primary dwelling; and
516 c. Patios that have a roof covering that is constructed of
517 materials that are not the same or substantially the same
518 materials as those of the primary dwelling.
519
520 The corporation shall make available a policy for mobile homes
521 or manufactured homes for a minimum insured value of at least
522 $3,000.
523 18. May provide such limits of coverage as the board
524 determines, consistent with the requirements of this subsection.
525 19. May require commercial property to meet specified
526 hurricane mitigation construction features as a condition of
527 eligibility for coverage.
528 20. Must provide that new or renewal policies issued by the
529 corporation on or after January 1, 2012, which cover sinkhole
530 loss do not include coverage for any loss to appurtenant
531 structures, driveways, sidewalks, decks, or patios that are
532 directly or indirectly caused by sinkhole activity. The
533 corporation shall exclude such coverage using a notice of
534 coverage change, which may be included with the policy renewal,
535 and not by issuance of a notice of nonrenewal of the excluded
536 coverage upon renewal of the current policy.
537 21. As of January 1, 2012, must require that the agent
538 obtain from an applicant for coverage from the corporation an
539 acknowledgment signed by the applicant, which includes, at a
540 minimum, the following statement:
541 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE
542 AND ASSESSMENT LIABILITY:
543 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
544 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
545 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
546 MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
547 PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
548 POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
549 OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
550 LEGISLATURE.
551 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
552 SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM,
553 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
554 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
555 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
556 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
557 ARE REGULATED AND APPROVED BY THE STATE.
558 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
559 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
560 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
561 FLORIDA LEGISLATURE.
562 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
563 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
564 STATE OF FLORIDA.
565 a. The corporation shall maintain, in electronic format or
566 otherwise, a copy of the applicant’s signed acknowledgment and
567 provide a copy of the statement to the policyholder as part of
568 the first renewal after the effective date of this subparagraph.
569 b. The signed acknowledgment form creates a conclusive
570 presumption that the policyholder understood and accepted his or
571 her potential surcharge and assessment liability as a
572 policyholder of the corporation.
573 (n)1. Rates for coverage provided by the corporation must
574 be actuarially sound and subject to s. 627.062, except as
575 otherwise provided in this paragraph. The corporation shall file
576 its recommended rates with the office at least annually. The
577 corporation shall provide any additional information regarding
578 the rates which the office requires. The office shall consider
579 the recommendations of the board and issue a final order
580 establishing the rates for the corporation within 45 days after
581 the recommended rates are filed. The corporation may not pursue
582 an administrative challenge or judicial review of the final
583 order of the office.
584 2. In addition to the rates otherwise determined pursuant
585 to this paragraph, the corporation shall impose and collect an
586 amount equal to the premium tax provided in s. 624.509 to
587 augment the financial resources of the corporation.
588 3. After the public hurricane loss-projection model under
589 s. 627.06281 has been found to be accurate and reliable by the
590 Florida Commission on Hurricane Loss Projection Methodology, the
591 model shall be considered when establishing serve as the minimum
592 benchmark for determining the windstorm portion of the
593 corporation’s rates. The corporation may use the public model
594 results in combination with the results of private models to
595 calculate rates for the windstorm portion of the corporation’s
596 rates. This subparagraph does not require or allow the
597 corporation to adopt rates lower than the rates otherwise
598 required or allowed by this paragraph.
599 4. The rate filings for the corporation which were approved
600 by the office and took effect January 1, 2007, are rescinded,
601 except for those rates that were lowered. As soon as possible,
602 the corporation shall begin using the lower rates that were in
603 effect on December 31, 2006, and provide refunds to
604 policyholders who paid higher rates as a result of that rate
605 filing. The rates in effect on December 31, 2006, remain in
606 effect for the 2007 and 2008 calendar years except for any rate
607 change that results in a lower rate. The next rate change that
608 may increase rates shall take effect pursuant to a new rate
609 filing recommended by the corporation and established by the
610 office, subject to this paragraph.
611 5. Beginning on July 15, 2009, and annually thereafter, the
612 corporation must make a recommended actuarially sound rate
613 filing for each personal and commercial line of business it
614 writes, to be effective no earlier than January 1, 2010.
615 6. Beginning on or after January 1, 2010, and
616 notwithstanding the board’s recommended rates and the office’s
617 final order regarding the corporation’s filed rates under
618 subparagraph 1., the corporation shall annually implement a rate
619 increase which, except for sinkhole coverage, does not exceed 10
620 percent for any single policy issued by the corporation,
621 excluding coverage changes and surcharges.
622 7. The corporation may also implement an increase to
623 reflect the effect on the corporation of the cash buildup factor
624 pursuant to s. 215.555(5)(b).
625 8. The corporation’s implementation of rates as prescribed
626 in subparagraph 6. shall cease for any line of business written
627 by the corporation upon the corporation’s implementation of
628 actuarially sound rates. Thereafter, the corporation shall
629 annually make a recommended actuarially sound rate filing for
630 each commercial and personal line of business the corporation
631 writes.
632 (x)1. The following records of the corporation are
633 confidential and exempt from the provisions of s. 119.07(1) and
634 s. 24(a), Art. I of the State Constitution:
635 a. Underwriting files, except that a policyholder or an
636 applicant shall have access to his or her own underwriting
637 files. Confidential and exempt underwriting file records may
638 also be released to other governmental agencies upon written
639 request and demonstration of need; such records held by the
640 receiving agency remain confidential and exempt as provided
641 herein.
642 b. Claims files, until termination of all litigation and
643 settlement of all claims arising out of the same incident,
644 although portions of the claims files may remain exempt, as
645 otherwise provided by law. Confidential and exempt claims file
646 records may be released to other governmental agencies upon
647 written request and demonstration of need; such records held by
648 the receiving agency remain confidential and exempt as provided
649 herein.
650 c. Records obtained or generated by an internal auditor
651 pursuant to a routine audit, until the audit is completed, or if
652 the audit is conducted as part of an investigation, until the
653 investigation is closed or ceases to be active. An investigation
654 is considered “active” while the investigation is being
655 conducted with a reasonable, good faith belief that it could
656 lead to the filing of administrative, civil, or criminal
657 proceedings.
658 d. Matters reasonably encompassed in privileged attorney
659 client communications.
660 e. Proprietary information licensed to the corporation
661 under contract and the contract provides for the confidentiality
662 of such proprietary information.
663 f. All information relating to the medical condition or
664 medical status of a corporation employee which is not relevant
665 to the employee’s capacity to perform his or her duties, except
666 as otherwise provided in this paragraph. Information that is
667 exempt shall include, but is not limited to, information
668 relating to workers’ compensation, insurance benefits, and
669 retirement or disability benefits.
670 g. Upon an employee’s entrance into the employee assistance
671 program, a program to assist any employee who has a behavioral
672 or medical disorder, substance abuse problem, or emotional
673 difficulty that which affects the employee’s job performance,
674 all records relative to that participation shall be confidential
675 and exempt from the provisions of s. 119.07(1) and s. 24(a),
676 Art. I of the State Constitution, except as otherwise provided
677 in s. 112.0455(11).
678 h. Information relating to negotiations for financing,
679 reinsurance, depopulation, or contractual services, until the
680 conclusion of the negotiations.
681 i. Minutes of closed meetings regarding underwriting files,
682 and minutes of closed meetings regarding an open claims file
683 until termination of all litigation and settlement of all claims
684 with regard to that claim, except that information otherwise
685 confidential or exempt by law shall be redacted.
686 2. If an authorized insurer is considering underwriting a
687 risk insured by the corporation, relevant underwriting files and
688 confidential claims files may be released to the insurer
689 provided the insurer agrees in writing, notarized and under
690 oath, to maintain the confidentiality of such files. If a file
691 is transferred to an insurer, that file is no longer a public
692 record because it is not held by an agency subject to the
693 provisions of the public records law. Underwriting files and
694 confidential claims files may also be released to staff and the
695 board of governors of the market assistance plan established
696 pursuant to s. 627.3515, who must retain the confidentiality of
697 such files, except such files may be released to authorized
698 insurers that are considering assuming the risks to which the
699 files apply, provided the insurer agrees in writing, notarized
700 and under oath, to maintain the confidentiality of such files.
701 Finally, the corporation or the board or staff of the market
702 assistance plan may make the following information obtained from
703 underwriting files and confidential claims files available to an
704 entity that has obtained a permit to become an authorized
705 insurer, a reinsurer that may provide reinsurance under s.
706 624.610, a licensed reinsurance broker, a licensed rating
707 organization, a modeling company, or a licensed general lines
708 insurance agent agents: name, address, and telephone number of
709 the residential property owner or insured; location of the risk;
710 rating information; loss history; and policy type. The receiving
711 person licensed general lines insurance agent must retain the
712 confidentiality of the information received and may use the
713 information only for the purposes of developing a take-out plan
714 or a rating plan to be submitted to the office for approval or
715 otherwise analyzing the underwriting of a risk or risks insured
716 by the corporation on behalf of the private insurance market. A
717 licensed general lines insurance agent may not use such
718 information for the direct solicitation of policyholders.
719 3. A policyholder who has filed suit against the
720 corporation has the right to discover the contents of his or her
721 own claims file to the same extent that discovery of such
722 contents would be available from a private insurer in litigation
723 as provided by the Florida Rules of Civil Procedure, the Florida
724 Evidence Code, and other applicable law. Pursuant to subpoena, a
725 third party has the right to discover the contents of an
726 insured’s or applicant’s underwriting or claims file to the same
727 extent that discovery of such contents would be available from a
728 private insurer by subpoena as provided by the Florida Rules of
729 Civil Procedure, the Florida Evidence Code, and other applicable
730 law, and subject to any confidentiality protections requested by
731 the corporation and agreed to by the seeking party or ordered by
732 the court. The corporation may release confidential underwriting
733 and claims file contents and information as it deems necessary
734 and appropriate to underwrite or service insurance policies and
735 claims, subject to any confidentiality protections deemed
736 necessary and appropriate by the corporation.
737 4. Portions of meetings of the corporation are exempt from
738 the provisions of s. 286.011 and s. 24(b), Art. I of the State
739 Constitution wherein confidential underwriting files or
740 confidential open claims files are discussed. All portions of
741 corporation meetings which are closed to the public shall be
742 recorded by a court reporter. The court reporter shall record
743 the times of commencement and termination of the meeting, all
744 discussion and proceedings, the names of all persons present at
745 any time, and the names of all persons speaking. No portion of
746 any closed meeting shall be off the record. Subject to the
747 provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s
748 notes of any closed meeting shall be retained by the corporation
749 for a minimum of 5 years. A copy of the transcript, less any
750 exempt matters, of any closed meeting wherein claims are
751 discussed shall become public as to individual claims after
752 settlement of the claim.
753 (ii) The corporation shall revise the programs adopted
754 pursuant to sub-subparagraph (q)3.a. for personal lines
755 residential policies to maximize policyholder options and
756 encourage increased participation by insurers and agents. Such
757 revisions must comply with this paragraph no later than January
758 1, 2017.
759 1. The corporation must schedule no more than 6 cycles per
760 year during which insurers may identify policies they wish to
761 take out and may submit requests to take out such policies to
762 the corporation in a form and manner prescribed by the
763 corporation. An insurer’s take-out request must include a
764 description of the coverages offered and an estimated premium.
765 In submitting any take-out request, an insurer must agree to
766 offer comparable coverage to that offered by the corporation and
767 that the initial premium of the insurer after assumption will
768 not exceed its estimated premium by more than 10 percent,
769 excluding coverage changes, surcharges, and assessments.
770 2. For each policy of the corporation identified under
771 subparagraph 1., the corporation shall maintain and make
772 available to the agent of record a consolidated list of all
773 insurers requesting the policy. The list must contain the
774 information described in subparagraph 1.
775 3. The corporation shall provide written notice to its
776 policyholders and the agents of record informing them of their
777 option to accept one of the take-out offers presented or to
778 remain with the corporation. The notice must be in a format
779 prescribed by the corporation and include the amount of the
780 estimated premium for the coverage of each offering insurer, the
781 amount of the premium for the coverage provided by the
782 corporation, and a description of the coverage offered by each
783 insurer and the coverage provided by the corporation, which
784 includes an explanation of any differences among the coverage
785 offered by each insurer and the coverage provided by the
786 corporation.
787 Section 2. Subsection (5) of section 627.3518, Florida
788 Statutes, is amended to read:
789 627.3518 Citizens Property Insurance Corporation
790 policyholder eligibility clearinghouse program.—The purpose of
791 this section is to provide a framework for the corporation to
792 implement a clearinghouse program by January 1, 2014.
793 (5) Notwithstanding s. 627.3517, any applicant for new
794 coverage from the corporation is not eligible for coverage from
795 the corporation if provided an offer of coverage from an
796 authorized insurer through the program at a premium that is at
797 or below the eligibility threshold established in s.
798 627.351(6)(c)5.a. Whenever an offer of coverage for a personal
799 lines risk is received for a policyholder of the corporation at
800 renewal from an authorized insurer through the program, if the
801 offer is equal to or less than the corporation’s renewal premium
802 for comparable coverage, the risk is not eligible for coverage
803 with the corporation. In the event an offer of coverage for a
804 new applicant is received from an authorized insurer through the
805 program, and the premium offered exceeds the eligibility
806 threshold contained in s. 627.351(6)(c)5.a., the applicant or
807 insured may elect to accept such coverage, or may elect to
808 accept or continue coverage with the corporation. In the event
809 an offer of coverage for a personal lines risk is received from
810 an authorized insurer at renewal through the program, and the
811 premium offered is more than the corporation’s renewal premium
812 for comparable coverage, the insured may elect to accept such
813 coverage, or may elect to accept or continue coverage with the
814 corporation. Section 627.351(6)(c)5.a.(I) does not apply to an
815 offer of coverage from an authorized insurer obtained through
816 the program. An applicant for coverage from the corporation who
817 in the previous 36 months has been assumed through a take-out
818 offer from an insurer or who was declared ineligible for
819 coverage at renewal by the corporation in the previous 36 months
820 due to an offer of coverage pursuant to this subsection shall be
821 considered a renewal under this section if the corporation
822 determines that the same authorized insurer making the offer of
823 coverage pursuant to this subsection continues to insure the
824 applicant and increased the rate on the policy in excess of the
825 increase allowed for the corporation under s. 627.351(6)(n)6.
826 Section 3. This act shall take effect July 1, 2016.