Florida Senate - 2023                        COMMITTEE AMENDMENT
       Bill No. CS for CS for SB 418
       
       
       
       
       
       
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                              LEGISLATIVE ACTION                        
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       The Committee on Rules (Perry) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsection (12) is added to section 624.4621,
    6  Florida Statutes, to read:
    7         624.4621 Group self-insurance funds.—
    8         (12) For any local governmental entity that is a member of
    9  a self-insurer established under this section, only an elected
   10  official of the local governmental entity may be the local
   11  governmental entity’s representative on the self-insurer’s
   12  governing body.
   13         Section 2. Paragraph (j) of subsection (2) of section
   14  627.062, Florida Statutes, is amended to read:
   15         627.062 Rate standards.—
   16         (2) As to all such classes of insurance:
   17         (j) With respect to residential property insurance rate
   18  filings, the rate filing:
   19         1. Must account for mitigation measures undertaken by
   20  policyholders to reduce hurricane losses.
   21         2.May use a modeling indication that is the weighted or
   22  straight average of two or more hurricane loss projection models
   23  found by the Florida Commission on Hurricane Loss Projection
   24  Methodology to be accurate or reliable pursuant to s. 627.0628.
   25  
   26  The provisions of this subsection do not apply to workers’
   27  compensation, employer’s liability insurance, and motor vehicle
   28  insurance.
   29         Section 3. Paragraph (b) of subsection (2) of section
   30  627.0628, Florida Statutes, is amended to read:
   31         627.0628 Florida Commission on Hurricane Loss Projection
   32  Methodology; public records exemption; public meetings
   33  exemption.—
   34         (2) COMMISSION CREATED.—
   35         (b) The commission shall consist of the following 12
   36  members:
   37         1. The insurance consumer advocate.
   38         2. The senior employee of the State Board of Administration
   39  responsible for operations of the Florida Hurricane Catastrophe
   40  Fund.
   41         3. The Executive Director of the Citizens Property
   42  Insurance Corporation or the executive director’s designee. The
   43  executive director’s designee must be a full-time employee of
   44  the corporation and have actuarial science experience.
   45         4. The Director of the Division of Emergency Management or
   46  the director’s designee. The director’s designee must be a full
   47  time employee of the division.
   48         5. The actuary member of the Florida Hurricane Catastrophe
   49  Fund Advisory Council.
   50         6. An employee of the office who is an actuary responsible
   51  for property insurance rate filings and who is appointed by the
   52  director of the office.
   53         7. Five members appointed by the Chief Financial Officer,
   54  as follows:
   55         a. An actuary who is employed full time by a property and
   56  casualty insurer that was responsible for at least 1 percent of
   57  the aggregate statewide direct written premium for homeowner
   58  insurance in the calendar year preceding the member’s
   59  appointment to the commission.
   60         b. An expert in insurance finance who is a full-time member
   61  of the faculty of the State University System and who has a
   62  background in actuarial science.
   63         c. An expert in statistics who is a full-time member of the
   64  faculty of the State University System and who has a background
   65  in insurance.
   66         d. An expert in computer system design who is a full-time
   67  member of the faculty of the State University System.
   68         e. An expert in meteorology who is a full-time member of
   69  the faculty of the State University System and who specializes
   70  in hurricanes.
   71         8. A licensed professional structural engineer who is a
   72  full-time faculty member in the State University System and who
   73  has expertise in wind mitigation techniques. This appointment
   74  shall be made by the Governor.
   75         Section 4. Subsection (9) is added to section 627.0629,
   76  Florida Statutes, to read:
   77         627.0629 Residential property insurance; rate filings.—
   78         (9)An insurer may file with the office a personal lines
   79  residential property insurance rating plan that provides
   80  justified premium discounts, credits, or other rate
   81  differentials based on windstorm mitigation construction
   82  standards developed by an independent, nonprofit scientific
   83  research organization, if such standards meet the requirements
   84  of this section. Such plan must describe the manner in which the
   85  insurer will document the existence of the mitigation features
   86  and premium discounts, credits, or other rate differentials
   87  created under such plan.
   88         Section 5. Section 627.0665, Florida Statutes, is amended
   89  to read:
   90         627.0665 Automatic bank withdrawal agreements; notification
   91  required.—Any insurer licensed to issue insurance in the state
   92  who has an automatic bank withdrawal agreement with an insured
   93  party for the payment of insurance premiums for any type of
   94  insurance shall give the named insured at least 10 15 days
   95  advance written notice of any increase in policy premiums which
   96  results in the next automatic bank withdrawal being increased by
   97  more than $10. Such notice must be provided before prior to any
   98  automatic bank withdrawal containing the of an increased
   99  premium.
  100         Section 6. Subsection (1) of section 627.421, Florida
  101  Statutes, is amended to read:
  102         627.421 Delivery of policy.—
  103         (1) Subject to the insurer’s requirement as to payment of
  104  premium, every policy shall be mailed, delivered, or
  105  electronically transmitted to the insured or to the person
  106  entitled thereto not later than 60 days after the effectuation
  107  of coverage. Notwithstanding any other provision of law, an
  108  insurer may allow a policyholder of personal lines insurance to
  109  affirmatively elect delivery of the policy documents, including,
  110  but not limited to, policies, endorsements, notices, or
  111  documents, by electronic means in lieu of delivery by mail.
  112  Electronic transmission of a policy, related notices, and other
  113  documents for individual and group health insurance policies or
  114  certificates of coverage pursuant to parts VI and VII of this
  115  chapter, respectively; health maintenance contracts or
  116  certificates of coverage pursuant to part I of chapter 641;
  117  prepaid limited health service contracts pursuant to part I of
  118  chapter 636; and for commercial risks, including, but not
  119  limited to, workers’ compensation and employers’ liability,
  120  commercial automobile liability, commercial automobile physical
  121  damage, commercial lines residential property, commercial
  122  nonresidential property, farmowners insurance, and the types of
  123  commercial lines risks set forth in s. 627.062(3)(d),
  124  constitutes delivery to the insured or to the person entitled to
  125  delivery, unless the insured or the person entitled to delivery
  126  communicates to the insurer in writing or electronically that he
  127  or she does not agree to delivery by electronic means.
  128  Electronic transmission shall include a notice to the insured or
  129  to the person entitled to delivery of a policy of his or her
  130  right to receive the policy via United States mail rather than
  131  via electronic transmission. A paper copy of the policy shall be
  132  provided to the insured or to the person entitled to delivery at
  133  his or her request.
  134         Section 7. Paragraph (d) of subsection (3) of section
  135  627.701, Florida Statutes, is amended, and paragraph (a) of that
  136  subsection is republished, to read:
  137         627.701 Liability of insureds; coinsurance; deductibles.—
  138         (3)(a) Except as otherwise provided in this subsection,
  139  prior to issuing a personal lines residential property insurance
  140  policy, the insurer must offer alternative deductible amounts
  141  applicable to hurricane losses equal to $500, 2 percent, 5
  142  percent, and 10 percent of the policy dwelling limits, unless
  143  the specific percentage deductible is less than $500. The
  144  written notice of the offer shall specify the hurricane
  145  deductible to be applied in the event that the applicant or
  146  policyholder fails to affirmatively choose a hurricane
  147  deductible. The insurer must provide such policyholder with
  148  notice of the availability of the deductible amounts specified
  149  in this subsection in a form approved by the office in
  150  conjunction with each renewal of the policy. The failure to
  151  provide such notice constitutes a violation of this code but
  152  does not affect the coverage provided under the policy.
  153         (d) For the following policies, the following alternative
  154  deductible amounts are authorized:
  155         1. With respect to a policy covering a risk with dwelling
  156  limits of $250,000 or more, the insurer need not offer the $500
  157  hurricane deductible as required by paragraph (a), but must,
  158  except as otherwise provided in this subsection, offer the other
  159  hurricane deductibles as required by paragraph (a).
  160         2.With respect to a policy covering a risk with dwelling
  161  limits of $1 million or more, but less than $3 million, the
  162  insurer may, in lieu of offering the 2 percent deductible as
  163  required by paragraph (a), offer a deductible amount applicable
  164  to hurricane losses equal to 3 percent of the policy dwelling
  165  limits.
  166         3.With respect to a policy covering a risk with dwelling
  167  limits of $3 million or more, the insurer need not offer the 2
  168  percent deductible as required by paragraph (a), but must,
  169  except as otherwise provided by this subsection, offer the other
  170  hurricane deductibles as required by paragraph (a).
  171         Section 8. Paragraph (a) of subsection (2) and subsection
  172  (3) of section 627.712, Florida Statutes, are amended to read:
  173         627.712 Residential windstorm coverage required;
  174  availability of exclusions for windstorm or contents.—
  175         (2) A property insurer must make available, at the option
  176  of the policyholder, an exclusion of windstorm coverage.
  177         (a) The coverage may be excluded only if:
  178         1. When the policyholder is a natural person, the
  179  policyholder personally writes or types and provides to the
  180  insurer the following statement in his or her own handwriting
  181  and signs his or her name, which must also be signed by every
  182  other named insured on the policy, and dated: “I do not want the
  183  insurance on my (home/mobile home/condominium unit) to pay for
  184  damage from windstorms. I will pay those costs. My insurance
  185  will not.”
  186         2. When the policyholder is other than a natural person,
  187  the policyholder provides to the insurer on the policyholder’s
  188  letterhead the following statement that must be signed by the
  189  policyholder’s authorized representative and dated: “...(Name of
  190  entity)... does not want the insurance on its ...(type of
  191  structure)... to pay for damage from windstorms. ...(Name of
  192  entity)... will be responsible for these costs. ...(Name of
  193  entity’s)... insurance will not.”
  194         (3) An insurer issuing a residential property insurance
  195  policy, except for a condominium unit owner policy or a tenant
  196  policy, must make available, at the option of the policyholder,
  197  an exclusion of coverage for the contents. The coverage may be
  198  excluded only if the policyholder personally writes or types and
  199  provides to the insurer the following statement in his or her
  200  own handwriting and signs his or her signature, which must also
  201  be signed by every other named insured on the policy, and dated:
  202  “I do not want the insurance on my (home/mobile home) to pay for
  203  the costs to repair or replace any contents that are damaged. I
  204  will pay those costs. My insurance will not.”
  205         Section 9. Section 627.7276, Florida Statutes, is amended
  206  to read:
  207         627.7276 Notice of limited coverage.—
  208         (1) An automobile policy that does not contain coverage for
  209  bodily injury and property damage must include a notice be
  210  clearly stamped or printed to the effect that such coverage is
  211  not included in the policy in the following manner:
  212  
  213         “THIS POLICY DOES NOT PROVIDE BODILY INJURY AND
  214         PROPERTY DAMAGE LIABILITY INSURANCE OR ANY OTHER
  215         COVERAGE FOR WHICH A SPECIFIC PREMIUM CHARGE IS NOT
  216         MADE, AND DOES NOT COMPLY WITH ANY FINANCIAL
  217         RESPONSIBILITY LAW.”
  218  
  219         (2) This notice legend must appear on the policy
  220  declaration page and on the filing back of the policy and be
  221  printed in bold type a contrasting color from that used on the
  222  policy and in type larger than the largest type used in the text
  223  thereof, as an overprint or by a rubber stamp impression.
  224         Section 10. Paragraph (b) of subsection (8) of section
  225  634.041, Florida Statutes, is amended to read:
  226         634.041 Qualifications for license.—To qualify for and hold
  227  a license to issue service agreements in this state, a service
  228  agreement company must be in compliance with this part, with
  229  applicable rules of the commission, with related sections of the
  230  Florida Insurance Code, and with its charter powers and must
  231  comply with the following:
  232         (8)
  233         (b) A service agreement company does not have to establish
  234  and maintain an unearned premium reserve if it secures and
  235  maintains contractual liability insurance in accordance with the
  236  following:
  237         1. Coverage of 100 percent of the claim exposure is
  238  obtained from an insurer approved by the office, which holds a
  239  certificate of authority under s. 624.401 to do business within
  240  this state, or secured through a risk retention group, which is
  241  authorized to do business within this state under s. 627.943 or
  242  s. 627.944. Such insurer or risk retention group must maintain a
  243  surplus as regards policyholders of at least $15 million.
  244         2. If the service agreement company does not meet its
  245  contractual obligations, the contractual liability insurance
  246  policy binds its issuer to pay or cause to be paid to the
  247  service agreement holder all legitimate claims and cancellation
  248  refunds for all service agreements issued by the service
  249  agreement company while the policy was in effect. This
  250  requirement also applies to those service agreements for which
  251  no premium has been remitted to the insurer.
  252         3. If the issuer of the contractual liability policy is
  253  fulfilling the service agreements covered by the contractual
  254  liability policy and the service agreement holder cancels the
  255  service agreement, the issuer must make a full refund of
  256  unearned premium to the consumer, subject to the cancellation
  257  fee provisions of s. 634.121(3). The sales representative and
  258  agent must refund to the contractual liability policy issuer
  259  their unearned pro rata commission.
  260         4. The policy may not be canceled, terminated, or
  261  nonrenewed by the insurer or the service agreement company
  262  unless a 90-day written notice thereof has been given to the
  263  office by the insurer before the date of the cancellation,
  264  termination, or nonrenewal.
  265         5. The service agreement company must provide the office
  266  with the claims statistics.
  267         6.A policy issued in compliance with this paragraph may
  268  either pay 100 percent of claims as they are incurred or pay 100
  269  percent of claims due in the event of the failure of the service
  270  agreement company to pay such claims when due.
  271  
  272  All funds or premiums remitted to an insurer by a motor vehicle
  273  service agreement company under this part shall remain in the
  274  care, custody, and control of the insurer and shall be counted
  275  as an asset of the insurer; provided, however, this requirement
  276  does not apply when the insurer and the motor vehicle service
  277  agreement company are affiliated companies and members of an
  278  insurance holding company system. If the motor vehicle service
  279  agreement company chooses to comply with this paragraph but also
  280  maintains a reserve to pay claims, such reserve shall only be
  281  considered an asset of the covered motor vehicle service
  282  agreement company and may not be simultaneously counted as an
  283  asset of any other entity.
  284         Section 11. This act shall take effect July 1, 2023.
  285  
  286  ================= T I T L E  A M E N D M E N T ================
  287  And the title is amended as follows:
  288         Delete everything before the enacting clause
  289  and insert:
  290                        A bill to be entitled                      
  291         An act relating to insurance; amending s. 624.4621,
  292         F.S.; specifying a qualification for a local
  293         governmental entity’s representative on a self
  294         insurer’s governing body; amending s. 627.062, F.S.;
  295         authorizing residential property insurance rate
  296         filings to use a specified modeling indication;
  297         amending s. 627.0628, F.S.; revising membership
  298         requirements for specified members of the Florida
  299         Commission on Hurricane Loss Projection Methodology;
  300         amending s. 627.0629, F.S.; authorizing insurers to
  301         file with the Office of Insurance Regulation personal
  302         lines residential property insurance rating plans
  303         providing rate differentials based on certain
  304         windstorm mitigation construction standards; providing
  305         requirements for such plans; amending s. 627.0665,
  306         F.S.; revising the timeframe for advance notices from
  307         insurers to insureds of automatic bank withdrawal
  308         increases; specifying the increase threshold for such
  309         notices; amending s. 627.421, F.S.; revising the types
  310         of documents and kinds of insurance for which
  311         electronic transmission constitutes delivery to the
  312         insured or person entitled to delivery; deleting a
  313         requirement to include a certain notice to an insured
  314         electing to receive policy documents electronically;
  315         deleting a requirement to provide a paper copy of the
  316         policy upon request by such person; amending s.
  317         627.701, F.S.; revising and specifying alternative
  318         hurricane deductible amounts for personal lines
  319         residential property insurance policies covering risks
  320         with specified dwelling limits; amending s. 627.712,
  321         F.S.; providing that a policyholder’s written
  322         exclusion from residential windstorm coverage or
  323         contents coverage may be typed rather than
  324         handwritten; amending s. 627.7276, F.S.; revising the
  325         requirements for the notice of limited coverage under
  326         certain automobile policies; amending s. 634.041,
  327         F.S.; specifying the manner in which a contractual
  328         liability insurance policy of a service agreement
  329         company may pay claims; providing an effective date.