Bill Text: FL H0245 | 2012 | Regular Session | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Depopulation Programs of Citizens Property Insurance Corporation
Spectrum:
Status: (Engrossed - Dead) 2012-03-09 - Died on Calendar, companion bill(s) passed, see CS/CS/HB 1101 (Ch. [H0245 Detail]
Download: Florida-2012-H0245-Comm_Sub.html
Bill Title: Depopulation Programs of Citizens Property Insurance Corporation
Spectrum:
Status: (Engrossed - Dead) 2012-03-09 - Died on Calendar, companion bill(s) passed, see CS/CS/HB 1101 (Ch. [H0245 Detail]
Download: Florida-2012-H0245-Comm_Sub.html
CS/HB 245 |
1 | |
2 | An act relating to the depopulation programs of |
3 | Citizens Property Insurance Corporation; amending s. |
4 | 627.351, F.S.; providing that eligible surplus lines |
5 | insurers may participate, in the same manner and on |
6 | the same terms as an authorized insurer, in |
7 | depopulation, take-out, or keep-out programs relating |
8 | to policies removed from Citizens Property Insurance |
9 | Corporation; providing certain exceptions, conditions, |
10 | and requirements relating to such participation by a |
11 | surplus lines insurer in the corporation's |
12 | depopulation, take-out, or keep-out programs; |
13 | authorizing information from underwriting files and |
14 | confidential files to be released by the corporation |
15 | to specified entities that are considering writing or |
16 | underwriting risks insured by the corporation under |
17 | certain circumstances; specifying that only the |
18 | corporation's transfer of a policy file to an insurer, |
19 | as opposed to the transfer of any file, changes the |
20 | file's public record status; providing an effective |
21 | date. |
22 | |
23 | Be It Enacted by the Legislature of the State of Florida: |
24 | |
25 | Section 1. Paragraphs (q) and (x) of subsection (6) of |
26 | section 627.351, Florida Statutes, are amended to read: |
27 | 627.351 Insurance risk apportionment plans.- |
28 | (6) CITIZENS PROPERTY INSURANCE CORPORATION.- |
29 | (q)1. The corporation shall certify to the office its |
30 | needs for annual assessments as to a particular calendar year, |
31 | and for any interim assessments that it deems to be necessary to |
32 | sustain operations as to a particular year pending the receipt |
33 | of annual assessments. Upon verification, the office shall |
34 | approve such certification, and the corporation shall levy such |
35 | annual or interim assessments. Such assessments shall be |
36 | prorated as provided in paragraph (b). The corporation shall |
37 | take all reasonable and prudent steps necessary to collect the |
38 | amount of assessment due from each assessable insurer, |
39 | including, if prudent, filing suit to collect such assessment. |
40 | If the corporation is unable to collect an assessment from any |
41 | assessable insurer, the uncollected assessments shall be levied |
42 | as an additional assessment against the assessable insurers and |
43 | any assessable insurer required to pay an additional assessment |
44 | as a result of such failure to pay shall have a cause of action |
45 | against such nonpaying assessable insurer. Assessments shall be |
46 | included as an appropriate factor in the making of rates. The |
47 | failure of a surplus lines agent to collect and remit any |
48 | regular or emergency assessment levied by the corporation is |
49 | considered to be a violation of s. 626.936 and subjects the |
50 | surplus lines agent to the penalties provided in that section. |
51 | 2. The governing body of any unit of local government, any |
52 | residents of which are insured by the corporation, may issue |
53 | bonds as defined in s. 125.013 or s. 166.101 from time to time |
54 | to fund an assistance program, in conjunction with the |
55 | corporation, for the purpose of defraying deficits of the |
56 | corporation. In order to avoid needless and indiscriminate |
57 | proliferation, duplication, and fragmentation of such assistance |
58 | programs, any unit of local government, any residents of which |
59 | are insured by the corporation, may provide for the payment of |
60 | losses, regardless of whether or not the losses occurred within |
61 | or outside of the territorial jurisdiction of the local |
62 | government. Revenue bonds under this subparagraph may not be |
63 | issued until validated pursuant to chapter 75, unless a state of |
64 | emergency is declared by executive order or proclamation of the |
65 | Governor pursuant to s. 252.36 making such findings as are |
66 | necessary to determine that it is in the best interests of, and |
67 | necessary for, the protection of the public health, safety, and |
68 | general welfare of residents of this state and declaring it an |
69 | essential public purpose to permit certain municipalities or |
70 | counties to issue such bonds as will permit relief to claimants |
71 | and policyholders of the corporation. Any such unit of local |
72 | government may enter into such contracts with the corporation |
73 | and with any other entity created pursuant to this subsection as |
74 | are necessary to carry out this paragraph. Any bonds issued |
75 | under this subparagraph shall be payable from and secured by |
76 | moneys received by the corporation from emergency assessments |
77 | under sub-subparagraph (b)3.d., and assigned and pledged to or |
78 | on behalf of the unit of local government for the benefit of the |
79 | holders of such bonds. The funds, credit, property, and taxing |
80 | power of the state or of the unit of local government shall not |
81 | be pledged for the payment of such bonds. |
82 | 3.a. The corporation shall adopt one or more programs |
83 | subject to approval by the office for the reduction of both new |
84 | and renewal writings in the corporation. Beginning January 1, |
85 | 2008, any program the corporation adopts for the payment of |
86 | bonuses to an insurer for each risk the insurer removes from the |
87 | corporation shall comply with s. 627.3511(2) and may not exceed |
88 | the amount referenced in s. 627.3511(2) for each risk removed. |
89 | The corporation may consider any prudent and not unfairly |
90 | discriminatory approach to reducing corporation writings, and |
91 | may adopt a credit against assessment liability or other |
92 | liability that provides an incentive for insurers to take risks |
93 | out of the corporation and to keep risks out of the corporation |
94 | by maintaining or increasing voluntary writings in counties or |
95 | areas in which corporation risks are highly concentrated and a |
96 | program to provide a formula under which an insurer voluntarily |
97 | taking risks out of the corporation by maintaining or increasing |
98 | voluntary writings will be relieved wholly or partially from |
99 | assessments under sub-subparagraphs (b)3.a. and b. However, any |
100 | "take-out bonus" or payment to an insurer must be conditioned on |
101 | the property being insured for at least 5 years by the insurer, |
102 | unless canceled or nonrenewed by the policyholder. If the policy |
103 | is canceled or nonrenewed by the policyholder before the end of |
104 | the 5-year period, the amount of the take-out bonus must be |
105 | prorated for the time period the policy was insured. When the |
106 | corporation enters into a contractual agreement for a take-out |
107 | plan, the producing agent of record of the corporation policy is |
108 | entitled to retain any unearned commission on such policy, and |
109 | the insurer shall either: |
110 | (I) Pay to the producing agent of record of the policy, |
111 | for the first year, an amount which is the greater of the |
112 | insurer's usual and customary commission for the type of policy |
113 | written or a policy fee equal to the usual and customary |
114 | commission of the corporation; or |
115 | (II) Offer to allow the producing agent of record of the |
116 | policy to continue servicing the policy for a period of not less |
117 | than 1 year and offer to pay the agent the insurer's usual and |
118 | customary commission for the type of policy written. If the |
119 | producing agent is unwilling or unable to accept appointment by |
120 | the new insurer, the new insurer shall pay the agent in |
121 | accordance with sub-sub-subparagraph (I). |
122 | b. Any credit or exemption from regular assessments |
123 | adopted under this subparagraph shall last no longer than the 3 |
124 | years following the cancellation or expiration of the policy by |
125 | the corporation. With the approval of the office, the board may |
126 | extend such credits for an additional year if the insurer |
127 | guarantees an additional year of renewability for all policies |
128 | removed from the corporation, or for 2 additional years if the |
129 | insurer guarantees 2 additional years of renewability for all |
130 | policies so removed. |
131 | c. There shall be no credit, limitation, exemption, or |
132 | deferment from emergency assessments to be collected from |
133 | policyholders pursuant to sub-subparagraph (b)3.d. |
134 | d. Notwithstanding any other provision of law, for |
135 | purposes of a depopulation, take-out, or keep-out program |
136 | adopted by the corporation, including an initial or renewal |
137 | offer of coverage made to a policyholder removed from the |
138 | corporation pursuant to such program, an eligible surplus lines |
139 | insurer may participate in the program in the same manner and on |
140 | the same terms as an authorized insurer, except as provided |
141 | under this sub-subparagraph. |
142 | (I) To qualify for participation, the surplus lines |
143 | insurer must first obtain approval from the office for its |
144 | depopulation, take-out, or keep-out plan and then comply with |
145 | all of the corporation's requirements for the plan applicable to |
146 | admitted insurers and with all statutory provisions applicable |
147 | to the removal of policies from the corporation. |
148 | (II) In considering a surplus lines insurer's request for |
149 | approval for its plan, the office must determine that the |
150 | surplus lines insurer meets the following requirements: |
151 | (A) Maintains surplus of $50 million on a company or |
152 | pooled basis; |
153 | (B) Maintains an A.M. Best Financial Strength Rating of A- |
154 | or better; |
155 | (C) Maintains reserves, surplus, reinsurance, and |
156 | reinsurance equivalents sufficient to cover the insurer's 100- |
157 | year probable maximum hurricane loss at least twice in a single |
158 | hurricane season, and submits such reinsurance to the office to |
159 | review for purposes of the take-out; |
160 | (D) Provides prominent notice to the policyholder before |
161 | the assumption of the policy that surplus lines policies are not |
162 | provided coverage by the Florida Insurance Guaranty Association, |
163 | and an outline of any substantial differences in coverage |
164 | between the existing policy and the policy being offered to the |
165 | insured; and |
166 | (E) Provides similar policy coverage. |
167 | |
168 | This sub-sub-subparagraph does not subject any surplus lines |
169 | insurer to requirements in addition to part VIII of chapter 626. |
170 | Surplus lines brokers making an offer of coverage under this |
171 | sub-subparagraph are not required to comply with s. |
172 | 626.916(1)(a), (b), (c), and (e). |
173 | (III) Within 10 days after the date of assumption, the |
174 | surplus lines insurer assuming policies from the corporation |
175 | must remit a special deposit equal to the unearned premium net |
176 | of unearned commissions on the assumed block of business to the |
177 | Department of Financial Services, Bureau of Collateral |
178 | Management. The surplus lines insurer must submit to the office |
179 | with the initial deposit an accounting of the policies assumed |
180 | and the amount of unearned premium for such policies along with |
181 | a sworn affidavit attesting to its accuracy by an officer of the |
182 | surplus lines insurer. Thereafter, the surplus lines insurer |
183 | must make a filing within 10 days after each calendar quarter, |
184 | attesting to the unearned premium in force for the previous |
185 | quarter on policies assumed from the corporation, and must |
186 | submit additional funds with that filing if the special deposit |
187 | is insufficient to cover the unearned premium on assumed |
188 | policies, or must receive a return of funds within 60 days if |
189 | the special deposit exceeds the amount of unearned premium |
190 | required for assumed policies. The special deposit is an asset |
191 | of the surplus lines insurer which is held by the department for |
192 | the benefit of state policyholders of the surplus lines insurer |
193 | in the event of the insolvency of the surplus lines insurer. If |
194 | an order of liquidation is entered in any state against the |
195 | surplus lines insurer, the department may use the special |
196 | deposit for payment of unearned premium or policy claims, return |
197 | all or part of the deposit to the domiciliary receiver, or use |
198 | the funds in accordance with any action authorized under part I |
199 | of chapter 631 or in compliance with any order of a court with |
200 | jurisdiction over the insolvency. |
201 | (IV) Surplus lines brokers representing a surplus lines |
202 | insurer on a take-out program must obtain confirmation, in |
203 | written or e-mail form, from each producing agent in advance |
204 | stating that the agent is willing to participate in the take-out |
205 | program with the surplus lines insurer engaging in the take-out |
206 | program. The take-out program is also subject to s. 627.3517. If |
207 | a policyholder is selected for removal from the corporation by a |
208 | surplus lines insurer and an authorized insurer, the offer of |
209 | coverage from the authorized insurer shall be given priority by |
210 | the corporation. |
211 | 4. The plan shall provide for the deferment, in whole or |
212 | in part, of the assessment of an assessable insurer, other than |
213 | an emergency assessment collected from policyholders pursuant to |
214 | sub-subparagraph (b)3.d., if the office finds that payment of |
215 | the assessment would endanger or impair the solvency of the |
216 | insurer. In the event an assessment against an assessable |
217 | insurer is deferred in whole or in part, the amount by which |
218 | such assessment is deferred may be assessed against the other |
219 | assessable insurers in a manner consistent with the basis for |
220 | assessments set forth in paragraph (b). |
221 | 5. Effective July 1, 2007, in order to evaluate the costs |
222 | and benefits of approved take-out plans, if the corporation pays |
223 | a bonus or other payment to an insurer for an approved take-out |
224 | plan, it shall maintain a record of the address or such other |
225 | identifying information on the property or risk removed in order |
226 | to track if and when the property or risk is later insured by |
227 | the corporation. |
228 | 6. Any policy taken out, assumed, or removed from the |
229 | corporation is, as of the effective date of the take-out, |
230 | assumption, or removal, direct insurance issued by the insurer |
231 | and not by the corporation, even if the corporation continues to |
232 | service the policies. This subparagraph applies to policies of |
233 | the corporation and not policies taken out, assumed, or removed |
234 | from any other entity. |
235 | (x)1. The following records of the corporation are |
236 | confidential and exempt from the provisions of s. 119.07(1) and |
237 | s. 24(a), Art. I of the State Constitution: |
238 | a. Underwriting files, except that a policyholder or an |
239 | applicant shall have access to his or her own underwriting |
240 | files. Confidential and exempt underwriting file records may |
241 | also be released to other governmental agencies upon written |
242 | request and demonstration of need; such records held by the |
243 | receiving agency remain confidential and exempt as provided |
244 | herein. |
245 | b. Claims files, until termination of all litigation and |
246 | settlement of all claims arising out of the same incident, |
247 | although portions of the claims files may remain exempt, as |
248 | otherwise provided by law. Confidential and exempt claims file |
249 | records may be released to other governmental agencies upon |
250 | written request and demonstration of need; such records held by |
251 | the receiving agency remain confidential and exempt as provided |
252 | herein. |
253 | c. Records obtained or generated by an internal auditor |
254 | pursuant to a routine audit, until the audit is completed, or if |
255 | the audit is conducted as part of an investigation, until the |
256 | investigation is closed or ceases to be active. An investigation |
257 | is considered "active" while the investigation is being |
258 | conducted with a reasonable, good faith belief that it could |
259 | lead to the filing of administrative, civil, or criminal |
260 | proceedings. |
261 | d. Matters reasonably encompassed in privileged attorney- |
262 | client communications. |
263 | e. Proprietary information licensed to the corporation |
264 | under contract and the contract provides for the confidentiality |
265 | of such proprietary information. |
266 | f. All information relating to the medical condition or |
267 | medical status of a corporation employee which is not relevant |
268 | to the employee's capacity to perform his or her duties, except |
269 | as otherwise provided in this paragraph. Information that is |
270 | exempt shall include, but is not limited to, information |
271 | relating to workers' compensation, insurance benefits, and |
272 | retirement or disability benefits. |
273 | g. Upon an employee's entrance into the employee |
274 | assistance program, a program to assist any employee who has a |
275 | behavioral or medical disorder, substance abuse problem, or |
276 | emotional difficulty which affects the employee's job |
277 | performance, all records relative to that participation shall be |
278 | confidential and exempt from the provisions of s. 119.07(1) and |
279 | s. 24(a), Art. I of the State Constitution, except as otherwise |
280 | provided in s. 112.0455(11). |
281 | h. Information relating to negotiations for financing, |
282 | reinsurance, depopulation, or contractual services, until the |
283 | conclusion of the negotiations. |
284 | i. Minutes of closed meetings regarding underwriting |
285 | files, and minutes of closed meetings regarding an open claims |
286 | file until termination of all litigation and settlement of all |
287 | claims with regard to that claim, except that information |
288 | otherwise confidential or exempt by law shall be redacted. |
289 | 2. If an authorized insurer, reinsurance intermediary, |
290 | eligible surplus lines insurer, or entity that has been created |
291 | to seek authority to write property insurance in this state is |
292 | considering writing or assisting in the underwriting of a risk |
293 | insured by the corporation, relevant information from both the |
294 | underwriting files and confidential claims files may be released |
295 | to the insurer, reinsurance intermediary, eligible surplus lines |
296 | insurer, or entity that has been created to seek authority to |
297 | write property insurance in this state provided the recipient |
298 | |
299 | the confidentiality of such files. If a policy file is |
300 | transferred to an insurer, that policy file is no longer a |
301 | public record because it is not held by an agency subject to the |
302 | provisions of the public records law. Underwriting files and |
303 | confidential claims files may also be released to staff and the |
304 | board of governors of the market assistance plan established |
305 | pursuant to s. 627.3515, who must retain the confidentiality of |
306 | such files, except such files may be released to authorized |
307 | insurers that are considering assuming the risks to which the |
308 | files apply, provided the insurer agrees in writing, notarized |
309 | and under oath, to maintain the confidentiality of such files. |
310 | Finally, the corporation or the board or staff of the market |
311 | assistance plan may make the following information obtained from |
312 | underwriting files and confidential claims files available to |
313 | licensed general lines insurance agents: name, address, and |
314 | telephone number of the residential property owner or insured; |
315 | location of the risk; rating information; loss history; and |
316 | policy type. The receiving licensed general lines insurance |
317 | agent must retain the confidentiality of the information |
318 | received. |
319 | 3. A policyholder who has filed suit against the |
320 | corporation has the right to discover the contents of his or her |
321 | own claims file to the same extent that discovery of such |
322 | contents would be available from a private insurer in litigation |
323 | as provided by the Florida Rules of Civil Procedure, the Florida |
324 | Evidence Code, and other applicable law. Pursuant to subpoena, a |
325 | third party has the right to discover the contents of an |
326 | insured's or applicant's underwriting or claims file to the same |
327 | extent that discovery of such contents would be available from a |
328 | private insurer by subpoena as provided by the Florida Rules of |
329 | Civil Procedure, the Florida Evidence Code, and other applicable |
330 | law, and subject to any confidentiality protections requested by |
331 | the corporation and agreed to by the seeking party or ordered by |
332 | the court. The corporation may release confidential underwriting |
333 | and claims file contents and information as it deems necessary |
334 | and appropriate to underwrite or service insurance policies and |
335 | claims, subject to any confidentiality protections deemed |
336 | necessary and appropriate by the corporation. |
337 | 4. Portions of meetings of the corporation are exempt from |
338 | the provisions of s. 286.011 and s. 24(b), Art. I of the State |
339 | Constitution wherein confidential underwriting files or |
340 | confidential open claims files are discussed. All portions of |
341 | corporation meetings which are closed to the public shall be |
342 | recorded by a court reporter. The court reporter shall record |
343 | the times of commencement and termination of the meeting, all |
344 | discussion and proceedings, the names of all persons present at |
345 | any time, and the names of all persons speaking. No portion of |
346 | any closed meeting shall be off the record. Subject to the |
347 | provisions hereof and s. 119.07(1)(d)-(f), the court reporter's |
348 | notes of any closed meeting shall be retained by the corporation |
349 | for a minimum of 5 years. A copy of the transcript, less any |
350 | exempt matters, of any closed meeting wherein claims are |
351 | discussed shall become public as to individual claims after |
352 | settlement of the claim. |
353 | Section 2. This act shall take effect upon becoming a law. |
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