Property Insurance Legislation Week 8

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HB 269 Hays Insurance (12 Y 0 N) Jobs & Entrep. (14 Y 0 N)

Hurricane Preparedness and Insurance

SB 754 Baker Banking & Insurance Community Affairs General Govt. Approps.

Bill creates the Citizens Property Insurance Mission Review Task Force to develop a plan to return Citizens to its role as a non-competitive insurer of last resort. Report is due January 31, 2009. Requires the CFO to provide a report on the impact of a 1-in-250 year storm on the private market, Citizens and the Cat Fund and the subsequent impact on the state, including potential assessments on businesses and families. Allows for the Building Code Commission to amend the Code only if the changes strengthen the structural integrity of buildings.

HB Insurance/ Unfair

Competition/ Deceptive

Acts SB 400 Fasano Banking & Insurance Judiciary

Bill requires that an insurer doing business in Florida that is offering any kind or type of insurance in any other state must offer the same kind and type of insurance in the state of Florida as the insurer offers in another state. This is not restricted to homeowners or automobile insurance.

HB FL Building Code

SB 558 Constantine Community Affairs Banking & Insurance

Bill repeals a provision relating to the requirement that jurisdictions subject to the Florida Building Code require wind-borne-debris protection in compliance with the International Building Code. Specifies that the Florida Building Code does not restrict implementation of standards to provide for accessibility by handicapped persons or standards for thermal efficiency.

HB 565 Nelson Govt. Effic. & Accoun. (15 Y 0 N) Insurance (11 Y 0 N)

Jobs & Entrep. (15 Y 0 N) Policy & Budget (27 Y 0 N)


SB 2528 Deutch Banking & Insurance (11 Y 0 N) Governmental Ops (5 Y 0 N)

General Government Approps.

Bill expands the eligibility requirements for licensure as an insurance customer service representative. Clarifies that the laws governing continuing education requirements for agents apply to Citizens. Specifies that no insurer or Citizens can terminate an agent for not taking general continuing education courses from the insurer or Citizens, unless the agent is an employee or an exclusive independent contractor. Allows an agent or adjuster to provide a sworn statement that he or she has completed “closed book” exam without reference to the written materials. Clarifies that an “unaffiliated insurance consultant” can assist purchasers of insurance without being appointed by an insurer.


Issue Bill Sponsor References Description

HB 563 Robaina Insurance

Jobs & Entrepreneurship Policy & Budget

Property Insurance Appraisal Umpires

SB 1018 Fasano Banking & Insurance (9 Y 0 N) Governmental Ops. (6 Y 0 N)

General Govt. Approps.

Bill provides for the regulation of property insurance appraisal umpires for residential and commercial property insurance and relates to insurance contracts that contain an appraisal clause. Contains requirements for licensure of the umpires, including education

requirements and experience. Regulates the education providers and instructors of umpires. Provides for the discipline of umpires and the revocation or suspension of the umpire’s license in certain circumstances. Contains ethical guidelines for appraisal umpires. Regulates insurer conduct and contracts as to umpires and party appointed appraisers by establishing in law a process and timelines for the appraisal process. Prohibits application of the Florida Arbitration Code to the appraisal process. Specifies that the appraisal process may not address coverage issues, but may consider causation, when necessary, to determine the amount of the loss.

In the Banking and Insurance Committee meeting several amendments were approved, including the following offered at the request of the trial bar. We are analyzing the trial bar amendments. Summary of trial bar amendments:

-The trigger for the exception requiring the insurer to pay these costs tied to the insurer’s original estimate of the loss, not the insurer’s appraisal.

-Provides time frames for the appraisal process by requiring the appraisals to be completed with 60 days; thereafter for both appraisers to consult and try to reach an agreement within 30 days; and failing that, to submit the differences to an umpire within 5 days.

-Provides for applicability of certain sections of the Arbitration Code relating to procedural matters that establish the means to finalize and enforce an umpire’s decision and also provide grounds for modifying or vacating a decision.

-Allows selection of a retired judge or certified civil court appointed mediator to serve as an umpire as provided in an earlier amendment.

-Exempts retired judges and certified mediators from the licensing requirements. HB 661 Robaina Jobs & Entrep. (15 Y 0 N)

Policy & Budget Insurance Adjusters

SB 1098 Fasano Banking & Insurance ( 9 Y 0 N) Judiciary (10 Y 0 N)

Criminal Justice General Govt. Approps.

Bill contains a number of provisions regulating the conduct of public adjusters. For example, the bill prohibits a public adjuster from contacting an insured for 72 hours after a loss event; prohibits contact by an adjuster between the hours of 9pm and 8am; allows the insured to terminate the contract with the adjuster within 3 days; prohibits “give aways” by adjusters; prohibits loans by adjusters to insureds; and limits the compensation of a public adjuster to no more than 15 percent of the insurance claim payment. Requires a sworn proof of loss form to be filled out by a public adjuster and provided to the insurer under criminal penalty. Amends the licensure and regulatory requirements for public adjusters. Create a category of “public adjuster apprentice” for licensure and regulation. Contains amendments to the “non resident adjuster” regulatory framework.

HB 701 Legg Urban & Local Affairs Govt. Effic. & Account. Pasco County –


SB 1524 Fasano Banking & Insurance General Gov’t Approp.

Bill requires property insurance companies writing insurance policies in Pasco County to take into consideration county ordinance and amendments to the Florida Building Code when setting property insurance rates for county residents.


Issue Bill Sponsor References Description

HB 983 Ross Insurance (14 Y 0 N) Jobs & Entrep. (14 Y 0 N)

Policy & Budget Windstorm Insurance


SB 2784 Baker Banking & Insurance Finance & Tax

General Gov’t Approps.

Bill creates the Florida Windstorm Insurance Program with in the Cat Fund. The Program would be a direct insurer, rather than a reinsurer, for windstorm coverage for

non-commercial residential property insurance, and its coverage of a given residential property would be administered by the insurer providing the underlying property coverage of that property. The Program, administered by the State Board of Administration, would set the rates and the private insurer would collect the premiums and remit to the Program. Otherwise, the private insurer will handle claims, policy issuance, policy service, and basic underwriting of the policies. Citizens as we know it would be dramatically reduced to only cover policies where the private carrier would not take any wind risk or non wind risk on the structure. Key points include the ability of a residential property insurer to elect to place the wind coverage with the Program or keep the wind coverage every 5 years; required purchase of reinsurance (or rapid cash build up factor in the rates) by the Program to limit the state’s risk; and the assessment base for the Program is limited to Program

participants. Transition to this new structure would occur between June 1, 2009 and May 31, 2010.

Insurance Rate Standards

SB 1174 Fasano Banking & Insurance General Govt. Approps.

Bill extends by one year to December 31, 2009, the period during which an insurer writing property insurance policies in this state cannot use the “use and file” option to obtain a rate change.

Insurance Rate Standards

SB 1196 Geller Banking & Insurance General Govt. Approps.

Bill extends by three yeas to December 31, 2011, the period during which an insurer writing property insurance in this state cannot use the “use and file” process to make a rate change. It also extends to prohibition against a demand for a rate arbitration panel by an additional three years to December 31, 2011.

HB 1001 Richter Insurance (14 Y 0 N)

Jobs & Entrepreneurship (14 Y 0 N)

Commercial Property Insurance

SB 1422 Bennett Banking & Insurance (9 Y 0 N) Commerce (8 Y 0 N)

General Gov’t Approps.

Bill provides that an insurer may, at its option, offer a non-assessable policy covering a commercial risk that is not subject to assessments from Citizens in the event of a deficit. Neither the insurer nor the policyholder would be assessed on the premium attributable to the non-assessable policy. The bill also provides that the non-assessable policy is not subject to rate regulation by OIR for excessiveness.

HB Insurance Rate

Standards SB 1564 Atwater Banking & Insurance General Gov’t Approps.

Bill permanently repeals the “use and file” option for property insurance and permanently repeals the arbitration panel that insurers could use for disputes over property insurance rates.

HB 7021 JEC Bill Policy & Budget (33 Y 0 N)

Florida Hurricane Catastrophe Fund

SB 2156 Banking & Insurance

Banking & Insurance (8 Y 0 N) Gov’t Operations (5 Y 0 N)

General Gov’t Approps.

Bill creates the FHCF as a division within the SBA that reports directly to the Governor and Cabinet, rather than the current structure which has the FHCF administratively housed in the SBA and reporting through the executive director of the SBA. Expands the board of FHCF Finance Corporation, which is the issuer of bonds, to include the Commissioner of Agriculture. Provides that the governing board may purchase reinsurance for the FHCF. Reduces the size of TICL from $12 billion to $9 billion and changes the payout percentage from 90% of losses at the TICL level to 70% of the losses.


Issue Bill Sponsor References Description

HB 1513 Braynon Urban & Local Affairs

Gov’t Efficiency & Accountability Policy & Budget Council Low & Moderate Income

Insurance Assistance Fund

SB 1358 Wilson Community Affairs Banking & Insurance Finance & Tax General Gov’t Approp. TED Approp.

Bill provides for counties to establish a fund for providing no-interest loans to assist low-income and moderate-low-income homeowners in paying homeowners’ insurance premiums.

HB 245 Sands Insurance

Jobs & Entrepreneurship Policy & Budget

My Safe Florida Home Program

SB 644 Justice Banking & Ins. (10 Y 0 N)

General Gov’t Approp.

Bill provides that persons who filed an application for hurricane mitigation inspections prior to May 1, 2007, are eligible for a grant under the Program. Provides that eligibility for such grant requires the persons' residential property to be granted a homestead exemption, to be a dwelling that has an insured value of $500,000 or less, and to have undergone an acceptable wind certification and hurricane mitigation inspection.

HB 589 Brown Constitution & Civil Law Safety & Security Civil Remedies

SB 882 Baker Banking & Insurance Commerce


Bill limits actions against insurers to insureds; specifies duty to cooperate with insurers in asserting demands for settlement; provides specified activities as defense in specified actions; revises time periods relating to notices in specified actions; revises notice requirements; provides for preemption of specified civil remedies; provides for effect of judgments; provides criteria for burden of proof in actions against insurers.

Mitigation Discounts for Residential Property Insurance Premiums

SB 2306 Gaetz Banking & Insurance Community Affairs Finance & Tax

General Gov’t Approps.

Bill requires the Office of Insurance Regulation, by February 1, 2009, to develop and make publicly available a proposed method for insurers to establish windstorm mitigation

premium discounts that correlate to the uniform home rating scale. By October 1, 2009, the Financial Services Commission are required to adopt rules that require insurers to make rate filings consistent with generally accepted actuarial principles and wind loss mitigation studies based on the uniform home grading scale.

Violations of the Insurance

Code/Administrative Fines

SB 2362 Gaetz Banking & Insurance General Gov’t Approps.

Bill increases the maximum fines from $10,000 per violation to $25,000 per violation per day that may be imposed for any violations of the Insurance Code. Provides that OIR must consider the degree of consumer harm, whether there is an immediate danger to the public, whether there is a repeat violation, the effect on the solvency of the company, the premium volume of the company and the effect of the fine on the insurer’s ability to comply with the code.

National Catastrophe Fund

SB 2452 Posey Banking & Insurance (11 Y 0 N)

Senate Floor

Memorial urges Congress to support a National Catastrophe Insurance Program. Insurance Reserves SB 2488 Posey Banking & Insurance (11 Y 0 N)

Senate Floor


Issue Bill Sponsor References Description

Florida Hurricane Catastrophe Fund

HB 1497 Gelber Jobs & Entrepreneurship Policy & Budget

Bill creates the Rate Reduction Authority that can sell Cat Fund reinsurance below the current retention at rates below those currently authorized by law. Currently, coverage is available below the retention at rates ranging between 75 to 85 percent online. The Authority can sell reinsurance for rates ranging between 30 to 60 percent online if the company agrees to take policies out of CPIC. Policies taken out of CPIC must receive a discount of no less than 10 percent. Continues TICL (above the base Cat Fund) for 10 additional years. The SBA can extend coverage for additional amounts, not to exceed an additional $15 Billion (currently $4 Billion) and the cost shall not be less than 150% of the current base Cat Fund rate online. Provides that “this additional insurance” cannot be purchased from parent company. The Authority can add additional years of TICL. The Authority may require property insurance policies to contain a penalty of between 50% and 200% of premium for cancellation without “good cause.” The Authority can pursue an anti trust or collusion action against insurers. It may also come up with other methods to sell reinsurance to CPIC and private insurers to reduce rates.

Homeowners’ Insurance SB 2620 Dean Banking & Insurance Commerce

General Gov’t Approps.

Requires OIR to notify each homeowner of possibility that the property insurance policy may be terminated that includes a notice of options and alternatives for coverage. The notice of possible termination and options shall be provided immediately to the policyholder and no later than 60 days prior to the effect of the termination. The notice shall inform the homeowner of how to contact agents to assist in the process of finding new coverage.

Insurance/Rating Factor/Catastrophic Losses

SB 2858 Atwater Banking & Insurance Bill eliminates the ability of insurers to include a reasonable rate of return for exposed capital of the insurer. Practically, this will force carriers to purchase reinsurance, which is more expensive that simply providing a reasonable rate of return on exposed capital.


Issue Bill Sponsor References Description

Insurance SB 2860 Atwater Banking & Insurance (6 Y 2 N) General Gov’t Approps (5 Y 1 N) Senate Floor (32 Y 7 N)

Provides for CPIC to file rates on January 15, 2009. In addition, the bill contains proposed changes which make it more likely Citizens would assess policyholders over multiple years and eliminates the additional assessment burden now faced by Citizens policyholders without homestead exemptions. The bill also takes a laddered approach to future Citizens rate increases as follows: for years 2009-2011 for multi-peril residential policies, no increase to the statewide average or person of greater than 5 percent for the first year and 10 percent for the second and third year. For residential wind-only policies, no increase to the statewide average or person of greater than 10 percent for each of the three years; Make changes to the Capital Build-Up Incentive Program, which provides surplus loans to companies taking policies from Citizens. The legislation would create additional requirements related to the number Citizens policies assumed; Require that beginning July 1, 2008 Citizens would no longer issue new wind-only policies; Allow property owners with homes insured for $1 million or more to continue to be eligible for Citizens’; Increase administrative fines available to OIR for company violations from $2,500-$20,000 to $20,000-$100,000. In addition, OIR would also have the option to impose a $25,000 per day administrative fine; Provides for a cap of 1% of surplus for a non-willful violation and a 5% of surplus for a willful violation; Provide criminal penalties for individuals who willfully make a false or misleading rate filing or who attempt to obstruct the lawful regulation of insurance; Require approval of non-renewals of more than 10,000 policies. The bill also requires OIR to disapprove a nonrenewal plan not adequately staggered or when no arrangement for replacement coverage is made, except that disapproval may not be issued if 100,000 spread out over 24 months or any number over 36 months; Permanently ban companies from choosing the “use and file” option for a property insurance rate filing which increases rates; Permanently ban companies from seeking arbitration as a means to resolve rate disputes with regulators; Provides for an expedited review of rate filing at DOAH and DCA; Require insurance companies to use only hurricane models approved by the Florida Commission on Hurricane Loss Projection -Methodology when estimating loss costs. In addition, only approved models may be used in a rate filing or to calculate a company’s P.M.L.; Allow OIR to disapprove a company’s rates within one year of approval if OIR finds that company non-renewals result in an excessive rate; Require additional certifications to accompany a rate filing including the number of policies the company plans to non-renew and that the filing includes all information the company intends to use for support. ; Subject insurance companies to the Florida Antitrust Act; Require insurance companies to publicly file claims handling procedures based on market conduct examination findings; Create additional requirements for companies claiming trade secret exemptions for documents provided to OIR; Create a private cause of action against an insurance company that considers age, race, income, education, credit score, or other personal characteristic when adjusting a property insurance claim; Repeal the requirement that insurance companies purchase CPIC bonds remaining unsold; Tie hurricane mitigation credits to the Uniform Home Rating Scale, beginning in 2011; Require homes in wind-borne-debris region insured for $500,000 or more to have opening protection (hurricane shutters); Require that property owners with homes built or retrofitted to meet the wind-borne debris requirements of the Florida Building Code be issued insurance policies guaranteed to be renewable for three years; Require that home purchasers be provided information as to the windstorm mitigation rating of the structure.


Issue Bill Sponsor References Description

Insurance SB 2862 Atwater Banking & Insurance Commerce

Bill provides that violations of the Insurance Unfair Trade Practices Act are now also violations of the general Unfair Trade Practices Act. This will create a boon to trial lawyers to pursue causes of action against insurers for matters previously regulated by the state insurance regulator. Makes it an unfair trade practice to consider age, race, income level, education, credit score, or any other personal characteristic of a policyholder when evaluating, adjusting, settling or attempting to settle a property insurance claim. Citizens Property

Insurance Corporation

SB 2878 Atwater Banking & Insurance Finance & Tax

Bill extends the CPIC rate freeze from January 1, 2009 to January 1, 2010. Reduces the assessment authority of CPIC for regular assessments from 10 percent to 8 percent per year which reduces the amount of regular assessments that must be paid up front by insurers. The net effect is to clarify that emergency assessments can be made over multiple years. Eliminates the enhanced assessment authority (10 percent) on “non homestead” CPIC policyholders. Provides that over-recoupment by insurers of CPIC assessments shall be remitted to CPIC to pay future claims. It eliminates the

non-homestead CPIC Assessment and the CPIC only assessment. Under the bill, CPIC policy holders will pay 10% assessment before non CPIC policyholders are assessed up to 8%. Caps rate increases for CPIC as follows: for years 2010-2012 for multi-peril policies, no increase to the statewide average or person of greater than 10% and for wind only policies, no increase to the statewide average or person of greater than 15%. Beginning January 1, 2009, eliminates the issuance of “new” wind only policies by CPIC. Beginning January 1, 2010, totally eliminates the wind only option.

HB Insurance (shell Bills)

SB 2176, 2178, 2180, 2182

Posey Banking & Insurance GGA



Issue Bill Sponsor References Description

HB 697 Aubuchon Infrastructure (9 Y 0 N) EEIC (14 Y 0 N)

Florida Building Code

SB 560 Constantine Community Affairs (9 Y 0 N) Regulated Industries (7 Y 0 N) Env. Preserv. & Conserv. (6 Y 0 N)

TED Approps (4 Y 0 N)

Bill implements recommendations of the FL Energy Commission and revises requirements relating to installation of energy devices based on renewable resources on building. Contains other provisions related to energy efficiency issues. Membership in the Florida Building Commission is revised. Requires the Building Code to facilitate and promote the use of cost-effective energy conservation measures. The Commission is directed to study energy efficiency rating of new buildings and appliances. A report is due by February 1, 2009. DCA must identify and review issues relating to the Low Income Home Energy Assistance Program and the Weatherization Program and make recommendations by January 1, 2009.

Insurance Capital Build Up Incentive Program

HB 5057 Reagan Jobs & Entrep. (16 Y 1 N) Policy & Budget (31 Y 1 N) House Floor (109 Y 7 N) Senate Floor (40 Y 0 N)

Provides for appropriation of state funds in exchange for surplus notes issued by residential property insurers; requires commitment by insurers to meet minimum premium-to-surplus writing ratios for residential property insurance & for taking policies out of Citizens Property Insurance Corporation; authorizes SBA to charge fees for late payments; provides that amendments made by act do not affect terms of surplus notes approved prior to specified date; authorizes SBA and insurers to renegotiate such terms consistent with such

amendments; requires Citizens Property Insurance Corporation to transfer funds to General Revenue Fund for appropriation by Legislature for program purposes. The program activates after the 2008 hurricane season and money is only available to the extent that CPIC has it. Repayment of the notes by insurers shall be directly to CPIC.

Citizens Legislation Assessment disclosure (no bill yet)

Legislation would require that every Citizens policy contain a written notice disclosing the fact that Citizens non homestead policies are subject to an enhanced initial assessment before homestead policies and non Citizens policies are assessed.




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