Florida Senate - 2019                        COMMITTEE AMENDMENT
       Bill No. CS for CS for SB 714
       
       
       
       
       
       
                                Ì712076+Î712076                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/08/2019           .                                
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       The Committee on Banking and Insurance (Brandes) recommended the
       following:
       
    1         Senate Substitute for Amendment (454254) (with title
    2  amendment)
    3  
    4         Delete lines 342 - 345
    5  and insert:
    6         Section 9. Subsection (4) of section 626.914, Florida
    7  Statutes, is amended to read:
    8         626.914 Definitions.—As used in this Surplus Lines Law, the
    9  term:
   10         (4) “Diligent effort” means seeking coverage from and
   11  having been rejected by at least three authorized insurers
   12  currently writing this type of coverage and documenting these
   13  rejections. However, if the residential structure has a dwelling
   14  replacement cost of $700,000 $1 million or more, the term means
   15  seeking coverage from and having been rejected by at least one
   16  authorized insurer currently writing this type of coverage and
   17  documenting this rejection.
   18         Section 10. Paragraph (d) of subsection (3) of section
   19  627.062, Florida Statutes, is amended to read:
   20         627.062 Rate standards.—
   21         (3)
   22         (d)1. Personal lines residential property insurance with a
   23  dwelling replacement limit of $700,000 or more which is written
   24  or renewed pursuant to s. 627.1711 and the following categories
   25  or kinds of insurance and types of commercial lines risks are
   26  not subject to paragraph (2)(a) or paragraph (2)(f):
   27         a. Excess or umbrella.
   28         b. Surety and fidelity.
   29         c. Boiler and machinery and leakage and fire extinguishing
   30  equipment.
   31         d. Errors and omissions.
   32         e. Directors and officers, employment practices, fiduciary
   33  liability, and management liability.
   34         f. Intellectual property and patent infringement liability.
   35         g. Advertising injury and Internet liability insurance.
   36         h. Property risks rated under a highly protected risks
   37  rating plan.
   38         i. General liability.
   39         j. Nonresidential property, except for collateral
   40  protection insurance as defined in s. 624.6085.
   41         k. Nonresidential multiperil.
   42         l. Excess property.
   43         m. Burglary and theft.
   44         n. Travel insurance, if issued as a master group policy
   45  with a situs in another state where each certificateholder pays
   46  less than $30 in premium for each covered trip and where the
   47  insurer has written less than $1 million in annual written
   48  premiums in the travel insurance product in this state during
   49  the most recent calendar year.
   50         o. Medical malpractice for a facility that is not a
   51  hospital licensed under chapter 395, a nursing home licensed
   52  under part II of chapter 400, or an assisted living facility
   53  licensed under part I of chapter 429.
   54         p. Medical malpractice for a health care practitioner who
   55  is not a dentist licensed under chapter 466, a physician
   56  licensed under chapter 458, an osteopathic physician licensed
   57  under chapter 459, a chiropractic physician licensed under
   58  chapter 460, a podiatric physician licensed under chapter 461, a
   59  pharmacist licensed under chapter 465, or a pharmacy technician
   60  registered under chapter 465.
   61         q. Any other commercial lines categories or kinds of
   62  insurance or types of commercial lines risks that the office
   63  determines should not be subject to paragraph (2)(a) or
   64  paragraph (2)(f) because of the existence of a competitive
   65  market for such insurance or similarity of such insurance to
   66  other categories or kinds of insurance not subject to paragraph
   67  (2)(a) or paragraph (2)(f), or to improve the general
   68  operational efficiency of the office.
   69         2. Insurers or rating organizations shall establish and use
   70  rates, rating schedules, or rating manuals to allow the insurer
   71  a reasonable rate of return on insurance and risks described in
   72  subparagraph 1. which are written in this state.
   73         3. An insurer shall notify the office of any changes to
   74  rates for insurance and risks described in subparagraph 1.
   75  within 30 days after the effective date of the change. The
   76  notice must include the name of the insurer, the type or kind of
   77  insurance subject to rate change, and the average statewide
   78  percentage change in rates. Actuarial data with regard to rates
   79  for such risks must be maintained by the insurer for 2 years
   80  after the effective date of changes to those rates and are
   81  subject to examination by the office. The office may require the
   82  insurer to incur the costs associated with an examination. Upon
   83  examination, the office, in accordance with generally accepted
   84  and reasonable actuarial techniques, shall consider the rate
   85  factors in paragraphs (2)(b), (c), and (d) and the standards in
   86  paragraph (2)(e) to determine if the rate is excessive,
   87  inadequate, or unfairly discriminatory.
   88         4. A rating organization shall notify the office of any
   89  changes to loss cost for insurance and risks described in
   90  subparagraph 1. within 30 days after the effective date of the
   91  change. The notice must include the name of the rating
   92  organization, the type or kind of insurance subject to a loss
   93  cost change, loss costs during the immediately preceding year
   94  for the type or kind of insurance subject to the loss cost
   95  change, and the average statewide percentage change in loss
   96  cost. Actuarial data with regard to changes to loss cost for
   97  risks not subject to paragraph (2)(a) or paragraph (2)(f) must
   98  be maintained by the rating organization for 2 years after the
   99  effective date of the change and are subject to examination by
  100  the office. The office may require the rating organization to
  101  incur the costs associated with an examination. Upon
  102  examination, the office, in accordance with generally accepted
  103  and reasonable actuarial techniques, shall consider the rate
  104  factors in paragraphs (2)(b)-(d) and the standards in paragraph
  105  (2)(e) to determine if the rate is excessive, inadequate, or
  106  unfairly discriminatory.
  107         Section 11. Section 627.1711, Florida Statutes, is created
  108  to read:
  109         627.1711 Alternative personal lines residential property
  110  insurance rates.—In each calendar year, the sum of personal
  111  lines residential property insurance policies issued or renewed
  112  by an insurer using rates established under s. 627.062(3)(d)
  113  plus personal lines residential property insurance policies
  114  issued or renewed using rates established under s. 627.171 may
  115  not exceed 5 percent of all personal lines residential insurance
  116  policies written or renewed by the insurer.
  117         Section 12. Subsection (1) of section 627.4102, Florida
  118  Statutes, is amended to read:
  119         627.4102 Informational filing of forms.—
  120         (1) Property and casualty forms, excluding except workers’
  121  compensation and personal lines forms, but including residential
  122  property insurance with rates established pursuant to s.
  123  627.062(3)(d), are exempt from the approval process required
  124  under s. 627.410 if:
  125         (a) The form has been electronically submitted to the
  126  office in an informational filing made through I-File 30 days
  127  before the delivery or issuance for delivery of the form within
  128  this state; and
  129         (b) At the time the informational filing is made, a
  130  notarized certification is attached to the filing that certifies
  131  that each form within the filing is in compliance with all
  132  applicable state laws and rules. The certification must be on
  133  the insurer’s letterhead and signed and dated by the insurer’s
  134  president, chief executive officer, general counsel, or an
  135  employee of the insurer responsible for the filing on behalf of
  136  the insurer. The certification must contain the following
  137  statement, and no other language: “I, ...(name)..., as
  138  ...(title)... of ...(insurer name)..., do hereby certify that
  139  this form filing has been thoroughly and diligently reviewed by
  140  me and by all appropriate company personnel, as well as company
  141  consultants, if applicable, and certify that each form contained
  142  within the filing is in compliance with all applicable Florida
  143  laws and rules. Should a form be found not to be in compliance
  144  with Florida laws and rules, I acknowledge that the Office of
  145  Insurance Regulation shall disapprove the form.”
  146         Section 13. Paragraph (b) of subsection (3) and subsection
  147  (4) of section 626.916, Florida Statutes, are amended, and
  148  subsection (5) is added to that section, to read:
  149         626.916 Eligibility for export.—
  150         (3)
  151         (b) Except for personal lines insurance covering a
  152  residential structure that has a dwelling replacement cost of
  153  $700,000 or more, paragraphs (1)(a)-(d) do not apply to classes
  154  of insurance which are subject to s. 627.062(3)(d)1. These
  155  classes may be exportable under the following conditions:
  156         1. The insurance must be placed only by or through a
  157  surplus lines agent licensed in this state;
  158         2. The insurer must be made eligible under s. 626.918; and
  159         3. The insured must sign a disclosure that substantially
  160  provides the following: “You are agreeing to place coverage in
  161  the surplus lines market. Superior coverage may be available in
  162  the admitted market and at a lesser cost. Persons insured by
  163  surplus lines carriers are not protected under the Florida
  164  Insurance Guaranty Act with respect to any right of recovery for
  165  the obligation of an insolvent unlicensed insurer.” If the
  166  notice is signed by the insured, the insured is presumed to have
  167  been informed and to know that other coverage may be available,
  168  and, with respect to the diligent-effort requirement under
  169  subsection (1), there is no liability on the part of, and no
  170  cause of action arises against, the retail agent presenting the
  171  form.
  172  
  173  ================= T I T L E  A M E N D M E N T ================
  174  And the title is amended as follows:
  175         Delete line 42
  176  and insert:
  177         service organizations; amending s. 626.914, F.S.;
  178         revising the definition of the term “diligent effort”
  179         as used in the Surplus Lines Law; amending s. 627.062,
  180         F.S.; specifying applicable rate standards and
  181         requirements for certain personal lines residential
  182         property insurance; creating s. 627.1711, F.S.;
  183         providing a limitation on certain personal lines
  184         residential property insurance policies that may be
  185         written or renewed by an insurer each calendar year;
  186         amending s. 627.4102, F.S.; providing an exemption, if
  187         certain conditions are met, from a form approval
  188         process for certain personal lines residential
  189         property insurance forms; amending s. 626.916, F.S.;
  190         specifying applicable requirements before certain
  191         personal lines residential property insurance may be
  192         exported;