ENROLLED
2022 Legislature SB 1058, 1st Engrossed
20221058er
1
2 An act relating to property insurer reimbursements;
3 amending s. 215.555, F.S.; defining the term “unsound
4 insurer”; revising requirements for coverage under the
5 Florida Hurricane Catastrophe Fund of certain policies
6 assumed by authorized insurers or the Citizens
7 Property Insurance Corporation; providing
8 construction; amending s. 215.555, F.S.; revising the
9 definition of the term “covered policy”; providing
10 effective dates.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Paragraph (e) of subsection (5) of section
15 215.555, Florida Statutes, is amended, and paragraph (p) is
16 added to subsection (2) of that section, to read:
17 215.555 Florida Hurricane Catastrophe Fund.—
18 (2) DEFINITIONS.—As used in this section:
19 (p) “Unsound insurer” means an insurer determined by the
20 Office of Insurance Regulation to be in unsound condition as
21 defined in s. 624.80(2) or an insurer placed in receivership
22 under chapter 631.
23 (5) REIMBURSEMENT PREMIUMS.—
24 (e)1. If an authorized insurer or the Citizens Property
25 Insurance Corporation assumes or otherwise provides coverage for
26 policies of an unsound insurer an insurer placed in liquidation
27 under chapter 631 pursuant to s. 627.351(6), the authorized
28 insurer or the Citizens Property Insurance Corporation may,
29 pursuant to conditions mutually agreed to between the authorized
30 insurer or the Citizens Property Insurance Corporation and the
31 State Board of Administration, seek to obtain coverage for such
32 policies under its contract with the fund or accept an
33 assignment of the unsound liquidated insurer’s contract with the
34 fund. However, if a covered event has occurred before the
35 effective date of the transfer of the policies, the authorized
36 insurer or the Citizens Property Insurance Corporation may only
37 obtain coverage for such policies through an assignment as
38 provided in subparagraph 3.
39 2. If an authorized insurer or the Citizens Property
40 Insurance Corporation assumes policies from an unsound insurer
41 and elects to cover these policies under its the corporation’s
42 contract with the fund, it shall notify the board of its insured
43 values with respect to such policies within a specified time
44 mutually agreed to between the authorized insurer or the
45 Citizens Property Insurance Corporation and the board, after
46 such assumption or other coverage transaction, and the fund
47 shall treat such policies as having been in effect as of June 30
48 of that year.
49 3. If an authorized insurer or the Citizens Property
50 Insurance Corporation accepts In the event of an assignment of
51 an unsound insurer’s contract, the fund shall apply the unsound
52 insurer’s that contract to such policies and treat the
53 authorized insurer or the Citizens Property Insurance
54 Corporation as if it the corporation were the unsound liquidated
55 insurer for the remaining term of the contract, with and the
56 corporation shall have all rights and duties of the unsound
57 liquidated insurer beginning on the date it provides coverage
58 for such policies. This subparagraph may not be construed to
59 limit the fund’s right to receive the premium due under the
60 unsound insurer’s contract, but the corporation is not subject
61 to any preexisting rights, liabilities, or duties of the
62 liquidated insurer. The assignment, including any unresolved
63 issues between the liquidated insurer and Citizens Property
64 Insurance Corporation under the contract, shall be provided for
65 in the liquidation order or otherwise determined by the court.
66 However, if a covered event occurs before the effective date of
67 the assignment, the corporation may not obtain coverage for such
68 policies under its contract with the fund and shall accept an
69 assignment of the liquidated insurer’s contract as provided in
70 this paragraph.
71 Section 2. Effective June 1, 2023, paragraph (c) of
72 subsection (2) of section 215.555, Florida Statutes, is amended
73 to read:
74 215.555 Florida Hurricane Catastrophe Fund.—
75 (2) DEFINITIONS.—As used in this section:
76 (c) “Covered policy” means any insurance policy covering
77 residential property in this state, including, but not limited
78 to, any homeowner, mobile home owner, farm owner, condominium
79 association, condominium unit owner, tenant, or apartment
80 building policy, or any other policy covering a residential
81 structure or its contents issued by any authorized insurer,
82 including a commercial self-insurance fund holding a certificate
83 of authority issued by the Office of Insurance Regulation under
84 s. 624.462, the Citizens Property Insurance Corporation, and any
85 joint underwriting association or similar entity created under
86 law. The term “covered policy” includes any collateral
87 protection insurance policy covering personal residences which
88 protects both the borrower’s and the lender’s financial
89 interests, in an amount at least equal to the coverage amount
90 for the dwelling in place under the lapsed homeowner’s policy,
91 the coverage amount that the homeowner has been notified of by
92 the collateral protection insurer, or the coverage amount that
93 the homeowner requests from the collateral protection insurer,
94 if such collateral protection insurance policy can be accurately
95 reported as required in subsection (5). Additionally, covered
96 policies include policies covering the peril of wind removed
97 from the Florida Residential Property and Casualty Joint
98 Underwriting Association or from the Citizens Property Insurance
99 Corporation, created under s. 627.351(6), or from the Florida
100 Windstorm Underwriting Association, created under s. 627.351(2),
101 by an authorized insurer under the terms and conditions of an
102 executed assumption agreement between the authorized insurer and
103 such association or Citizens Property Insurance Corporation.
104 Each assumption agreement between the association and such
105 authorized insurer or Citizens Property Insurance Corporation
106 must be approved by the Office of Insurance Regulation before
107 the effective date of the assumption, and the Office of
108 Insurance Regulation must provide written notification to the
109 board within 15 working days after such approval. “Covered
110 policy” does not include any policy that excludes wind coverage
111 or hurricane coverage or any reinsurance agreement and does not
112 include any policy otherwise meeting this definition which is
113 issued by a surplus lines insurer or a reinsurer. All commercial
114 residential excess policies and all deductible buy-back policies
115 that, based on sound actuarial principles, require individual
116 ratemaking shall be excluded by rule if the actuarial soundness
117 of the fund is not jeopardized. For this purpose, the term
118 “excess policy” means a policy that provides insurance
119 protection for large commercial property risks and that provides
120 a layer of coverage above a primary layer insured by another
121 insurer.
122 Section 3. Except as otherwise expressly provided in this
123 act, this act shall take effect July 1, 2022.