Florida Senate - 2019                        COMMITTEE AMENDMENT
       Bill No. CS for CS for SB 714
       
       
       
       
       
       
                                Ì454254(Î454254                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                   Comm: RS            .                                
                  04/08/2019           .                                
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       The Committee on Banking and Insurance (Brandes) recommended the
       following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete lines 342 - 345
    4  and insert:
    5         Section 9. Subsection (4) of section 626.914, Florida
    6  Statutes, is amended to read:
    7         626.914 Definitions.—As used in this Surplus Lines Law, the
    8  term:
    9         (4) “Diligent effort” means seeking coverage from and
   10  having been rejected by at least three authorized insurers
   11  currently writing this type of coverage and documenting these
   12  rejections. However, if the residential structure has a dwelling
   13  replacement cost of $700,000 $1 million or more, the term means
   14  seeking coverage from and having been rejected by at least one
   15  authorized insurer currently writing this type of coverage and
   16  documenting this rejection.
   17         Section 10. Paragraph (d) of subsection (3) of section
   18  627.062, Florida Statutes, is amended to read:
   19         627.062 Rate standards.—
   20         (3)
   21         (d)1. Personal lines residential property insurance with a
   22  dwelling replacement limit of $700,000 or more which is written
   23  or renewed pursuant to s. 627.1711 and the following categories
   24  or kinds of insurance and types of commercial lines risks are
   25  not subject to paragraph (2)(a) or paragraph (2)(f):
   26         a. Excess or umbrella.
   27         b. Surety and fidelity.
   28         c. Boiler and machinery and leakage and fire extinguishing
   29  equipment.
   30         d. Errors and omissions.
   31         e. Directors and officers, employment practices, fiduciary
   32  liability, and management liability.
   33         f. Intellectual property and patent infringement liability.
   34         g. Advertising injury and Internet liability insurance.
   35         h. Property risks rated under a highly protected risks
   36  rating plan.
   37         i. General liability.
   38         j. Nonresidential property, except for collateral
   39  protection insurance as defined in s. 624.6085.
   40         k. Nonresidential multiperil.
   41         l. Excess property.
   42         m. Burglary and theft.
   43         n. Travel insurance, if issued as a master group policy
   44  with a situs in another state where each certificateholder pays
   45  less than $30 in premium for each covered trip and where the
   46  insurer has written less than $1 million in annual written
   47  premiums in the travel insurance product in this state during
   48  the most recent calendar year.
   49         o. Medical malpractice for a facility that is not a
   50  hospital licensed under chapter 395, a nursing home licensed
   51  under part II of chapter 400, or an assisted living facility
   52  licensed under part I of chapter 429.
   53         p. Medical malpractice for a health care practitioner who
   54  is not a dentist licensed under chapter 466, a physician
   55  licensed under chapter 458, an osteopathic physician licensed
   56  under chapter 459, a chiropractic physician licensed under
   57  chapter 460, a podiatric physician licensed under chapter 461, a
   58  pharmacist licensed under chapter 465, or a pharmacy technician
   59  registered under chapter 465.
   60         q. Any other commercial lines categories or kinds of
   61  insurance or types of commercial lines risks that the office
   62  determines should not be subject to paragraph (2)(a) or
   63  paragraph (2)(f) because of the existence of a competitive
   64  market for such insurance or similarity of such insurance to
   65  other categories or kinds of insurance not subject to paragraph
   66  (2)(a) or paragraph (2)(f), or to improve the general
   67  operational efficiency of the office.
   68         2. Insurers or rating organizations shall establish and use
   69  rates, rating schedules, or rating manuals to allow the insurer
   70  a reasonable rate of return on insurance and risks described in
   71  subparagraph 1. which are written in this state.
   72         3. An insurer shall notify the office of any changes to
   73  rates for insurance and risks described in subparagraph 1.
   74  within 30 days after the effective date of the change. The
   75  notice must include the name of the insurer, the type or kind of
   76  insurance subject to rate change, and the average statewide
   77  percentage change in rates. Actuarial data with regard to rates
   78  for such risks must be maintained by the insurer for 2 years
   79  after the effective date of changes to those rates and are
   80  subject to examination by the office. The office may require the
   81  insurer to incur the costs associated with an examination. Upon
   82  examination, the office, in accordance with generally accepted
   83  and reasonable actuarial techniques, shall consider the rate
   84  factors in paragraphs (2)(b), (c), and (d) and the standards in
   85  paragraph (2)(e) to determine if the rate is excessive,
   86  inadequate, or unfairly discriminatory.
   87         4. A rating organization shall notify the office of any
   88  changes to loss cost for insurance and risks described in
   89  subparagraph 1. within 30 days after the effective date of the
   90  change. The notice must include the name of the rating
   91  organization, the type or kind of insurance subject to a loss
   92  cost change, loss costs during the immediately preceding year
   93  for the type or kind of insurance subject to the loss cost
   94  change, and the average statewide percentage change in loss
   95  cost. Actuarial data with regard to changes to loss cost for
   96  risks not subject to paragraph (2)(a) or paragraph (2)(f) must
   97  be maintained by the rating organization for 2 years after the
   98  effective date of the change and are subject to examination by
   99  the office. The office may require the rating organization to
  100  incur the costs associated with an examination. Upon
  101  examination, the office, in accordance with generally accepted
  102  and reasonable actuarial techniques, shall consider the rate
  103  factors in paragraphs (2)(b)-(d) and the standards in paragraph
  104  (2)(e) to determine if the rate is excessive, inadequate, or
  105  unfairly discriminatory.
  106         Section 11. Section 627.1711, Florida Statutes, is created
  107  to read:
  108         627.1711 Alternative personal lines residential property
  109  insurance rates.—In each calendar year, the sum of personal
  110  lines residential property insurance policies issued or renewed
  111  by an insurer using rates established under s. 627.062(3)(d)
  112  plus personal lines residential property insurance policies
  113  issued or renewed using rates established under s. 627.171 may
  114  not exceed 5 percent of all personal lines residential insurance
  115  policies written or renewed by the insurer.
  116         Section 12. Subsection (1) of section 627.4102, Florida
  117  Statutes, is amended to read:
  118         627.4102 Informational filing of forms.—
  119         (1) Property and casualty forms, excluding except workers’
  120  compensation and personal lines forms, but including residential
  121  property insurance with rates established pursuant to s.
  122  627.062(3)(d), are exempt from the approval process required
  123  under s. 627.410 if:
  124         (a) The form has been electronically submitted to the
  125  office in an informational filing made through I-File 30 days
  126  before the delivery or issuance for delivery of the form within
  127  this state; and
  128         (b) At the time the informational filing is made, a
  129  notarized certification is attached to the filing that certifies
  130  that each form within the filing is in compliance with all
  131  applicable state laws and rules. The certification must be on
  132  the insurer’s letterhead and signed and dated by the insurer’s
  133  president, chief executive officer, general counsel, or an
  134  employee of the insurer responsible for the filing on behalf of
  135  the insurer. The certification must contain the following
  136  statement, and no other language: “I, ...(name)..., as
  137  ...(title)... of ...(insurer name)..., do hereby certify that
  138  this form filing has been thoroughly and diligently reviewed by
  139  me and by all appropriate company personnel, as well as company
  140  consultants, if applicable, and certify that each form contained
  141  within the filing is in compliance with all applicable Florida
  142  laws and rules. Should a form be found not to be in compliance
  143  with Florida laws and rules, I acknowledge that the Office of
  144  Insurance Regulation shall disapprove the form.”
  145         Section 13. Paragraph (b) of subsection (3) and subsection
  146  (4) of section 626.916, Florida Statutes, are amended,
  147  subsection (5) is added to that section, and paragraph (a) of
  148  subsection (1) of that section is republished, to read:
  149         626.916 Eligibility for export.—
  150         (1) No insurance coverage shall be eligible for export
  151  unless it meets all of the following conditions:
  152         (a) The full amount of insurance required must not be
  153  procurable, after a diligent effort has been made by the
  154  producing agent to do so, from among the insurers authorized to
  155  transact and actually writing that kind and class of insurance
  156  in this state, and the amount of insurance exported shall be
  157  only the excess over the amount so procurable from authorized
  158  insurers. Surplus lines agents must verify that a diligent
  159  effort has been made by requiring a properly documented
  160  statement of diligent effort from the retail or producing agent.
  161  However, to be in compliance with the diligent effort
  162  requirement, the surplus lines agent’s reliance must be
  163  reasonable under the particular circumstances surrounding the
  164  export of that particular risk. Reasonableness shall be assessed
  165  by taking into account factors which include, but are not
  166  limited to, a regularly conducted program of verification of the
  167  information provided by the retail or producing agent.
  168  Declinations must be documented on a risk-by-risk basis. If it
  169  is not possible to obtain the full amount of insurance required
  170  by layering the risk, it is permissible to export the full
  171  amount.
  172         (3)
  173         (b) Paragraphs (1)(a)-(d) do not apply to classes of
  174  insurance which are subject to s. 627.062(3)(d)1., except that
  175  paragraph (1)(a) applies to residential property insurance with
  176  rates established pursuant to s. 627.062(3)(d). These classes
  177  may be exportable under the following conditions:
  178         1. The insurance must be placed only by or through a
  179  surplus lines agent licensed in this state;
  180         2. The insurer must be made eligible under s. 626.918; and
  181         3. The insured must sign a disclosure that substantially
  182  provides the following: “You are agreeing to place coverage in
  183  the surplus lines market. Superior coverage may be available in
  184  the admitted market and at a lesser cost. Persons insured by
  185  surplus lines carriers are not protected under the Florida
  186  Insurance Guaranty Act with respect to any right of recovery for
  187  the obligation of an insolvent unlicensed insurer.” If the
  188  notice is signed by the insured, the insured is presumed to have
  189  been informed and to know that other coverage may be available,
  190  and, with respect to the diligent-effort requirement under
  191  subsection (1), there is no liability on the part of, and no
  192  cause of action arises against, the retail agent presenting the
  193  form.
  194  
  195  ================= T I T L E  A M E N D M E N T ================
  196  And the title is amended as follows:
  197         Delete line 42
  198  and insert:
  199         service organizations; amending s. 626.914, F.S.;
  200         revising the definition of the term “diligent effort”
  201         as used in the Surplus Lines Law; amending s. 627.062,
  202         F.S.; specifying applicable rate standards and
  203         requirements for certain personal lines residential
  204         property insurance; creating s. 627.1711, F.S.;
  205         providing a limitation on certain personal lines
  206         residential property insurance policies that may be
  207         written or renewed by an insurer each calendar year;
  208         amending s. 627.4102, F.S.; providing an exemption, if
  209         certain conditions are met, from a form approval
  210         process for certain personal lines residential
  211         property insurance forms; amending s. 626.916, F.S.;
  212         specifying applicable requirements before certain
  213         personal lines residential property insurance may be
  214         exported;