Bill Text: FL S0258 | 2015 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Property and Casualty Insurance
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2015-04-22 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 165 (Ch. 2015-135), CS/HB 273 (Ch. 2015-170) [S0258 Detail]
Download: Florida-2015-S0258-Introduced.html
Bill Title: Property and Casualty Insurance
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2015-04-22 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 165 (Ch. 2015-135), CS/HB 273 (Ch. 2015-170) [S0258 Detail]
Download: Florida-2015-S0258-Introduced.html
Florida Senate - 2015 SB 258 By Senator Brandes 22-00261B-15 2015258__ 1 A bill to be entitled 2 An act relating to property and casualty insurance; 3 amending s. 627.062, F.S.; requiring the Office of 4 Insurance Regulation to use certain models or methods, 5 or a straight average of model results or output 6 ranges, to estimate hurricane losses when determining 7 whether the rates in a rate filing are excessive, 8 inadequate, or unfairly discriminatory; amending s. 9 627.0628, F.S.; increasing the length of time during 10 which an insurer is not required to adhere to certain 11 models found by the Commission on Hurricane Loss 12 Projection Methodology to be accurate or reliable in 13 determining probable maximum loss levels with respect 14 to certain rate filings; providing that the 15 requirement to adhere to such findings does not 16 prohibit an insurer from using a straight average of 17 model results or output ranges under specified 18 circumstances; amending s. 627.0651, F.S.; revising 19 provisions for the making and use of rates for motor 20 vehicle insurance; amending s. 627.3518, F.S.; 21 conforming a cross-reference; amending s. 627.4133, 22 F.S.; increasing the amount of prior notice required 23 with respect to the nonrenewal, cancellation, or 24 termination of certain insurance policies; deleting 25 certain provisions that require extended periods of 26 prior notice with respect to the nonrenewal, 27 cancellation, or termination of certain insurance 28 policies; prohibiting the cancellation of certain 29 policies that have been in effect for a specified 30 amount of time except under certain circumstances; 31 amending s. 627.421, F.S.; authorizing a policyholder 32 of personal lines insurance to affirmatively elect 33 delivery of policy documents by electronic means; 34 amending s. 627.7074, F.S.; revising notification 35 requirements for participation in the neutral 36 evaluation program; amending s. 627.736, F.S.; 37 revising the period for applicability of certain 38 Medicare fee schedules or payment limitations; 39 amending s. 627.744, F.S.; revising preinsurance 40 inspection requirements for private passenger motor 41 vehicles; providing an effective date. 42 43 Be It Enacted by the Legislature of the State of Florida: 44 45 Section 1. Paragraph (b) of subsection (2) of section 46 627.062, Florida Statutes, is amended to read: 47 627.062 Rate standards.— 48 (2) As to all such classes of insurance: 49 (b) Upon receiving a rate filing, the office shall review 50 the filing to determine whetherifa rate is excessive, 51 inadequate, or unfairly discriminatory. In making that 52 determination, the office shall, in accordance with generally 53 accepted and reasonable actuarial techniques, consider the 54 following factors: 55 1. Past and prospective loss experience within and without 56 this state. 57 2. Past and prospective expenses. 58 3. The degree of competition among insurers for the risk 59 insured. 60 4. Investment income reasonably expected by the insurer, 61 consistent with the insurer’s investment practices, from 62 investable premiums anticipated in the filing, plus any other 63 expected income from currently invested assets representing the 64 amount expected on unearned premium reserves and loss reserves. 65 The commission may adopt rules using reasonable techniques of 66 actuarial science and economics to specify the manner in which 67 insurers calculate investment income attributable to classes of 68 insurance written in this state and the manner in which 69 investment income is used to calculate insurance rates. Such 70 manner must contemplate allowances for an underwriting profit 71 factor and full consideration of investment income that produces 72 a reasonable rate of return; however, investment income from 73 invested surplus may not be considered. 74 5. The reasonableness of the judgment reflected in the 75 filing. 76 6. Dividends, savings, or unabsorbed premium deposits 77 allowed or returned to policyholders, members, or subscribers in 78 this state. 79 7. The adequacy of loss reserves. 80 8. The cost of reinsurance. The office may not disapprove a 81 rate as excessive solely due to the insurer having obtained 82 catastrophic reinsurance to cover the insurer’s estimated 250 83 year probable maximum loss or any lower level of loss. 84 9. Trend factors, including trends in actual losses per 85 insured unit for the insurer making the filing. 86 10. Conflagration and catastrophe hazards, if applicable. 87 11. Projected hurricane losses, if applicable, which must 88 be estimated using a model or method, or a straight average of 89 model results or output ranges, independently found to be 90 acceptable or reliable by the Florida Commission on Hurricane 91 Loss Projection Methodology, and as further provided in s. 92 627.0628. 93 12. Projected flood losses for personal residential 94 property insurance, if applicable, which may be estimated using 95 a model or method, or a straight average of model results or 96 output ranges, independently found to be acceptable or reliable 97 by the Florida Commission on Hurricane Loss Projection 98 Methodology and as further provided in s. 627.0628. 99 13. A reasonable margin for underwriting profit and 100 contingencies. 101 14. The cost of medical services, if applicable. 102 15. Other relevant factors that affect the frequency or 103 severity of claims or expenses. 104 105The provisions ofThis subsection doesdonot apply to workers’ 106 compensation, employer’s liability insurance, and motor vehicle 107 insurance. 108 Section 2. Paragraph (d) of subsection (3) of section 109 627.0628, Florida Statutes, is amended to read: 110 627.0628 Florida Commission on Hurricane Loss Projection 111 Methodology; public records exemption; public meetings 112 exemption.— 113 (3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.— 114 (d) With respect to a rate filing under s. 627.062, an 115 insurer shall employ and may not modify or adjust actuarial 116 methods, principles, standards, models, or output ranges found 117 by the commission to be accurate or reliable in determining 118 hurricane loss factors for use in a rate filing under s. 119 627.062. An insurer shall employ and may not modify or adjust 120 models found by the commission to be accurate or reliable in 121 determining probable maximum loss levels pursuant to paragraph 122 (b) with respect to a rate filing under s. 627.062 made more 123 than 18060days after the commission has made such findings. 124 This paragraph does not prohibit an insurer from using a 125 straight average of model results or output ranges for the 126 purposes of a rate filingfor personal lines residential flood127insurance coverageunder s. 627.062. 128 Section 3. Subsection (8) of section 627.0651, Florida 129 Statutes, is amended to read: 130 627.0651 Making and use of rates for motor vehicle 131 insurance.— 132 (8) Rates are not unfairly discriminatory if averaged 133 broadly among members of a group; nor are rates unfairly 134 discriminatory even though they are lower than rates for 135 nonmembers of the group. However, such rates are unfairly 136 discriminatory if they are not actuarially measurable and 137 credible and sufficiently related to actual or expected loss and 138 expense experience of the group so as to ensureassurethat 139 nonmembers of the group are not unfairly discriminated against. 140 Use of a single United States Postal Service zip code as a 141 rating territory shall be deemed unfairly discriminatory unless 142 filed pursuant to paragraph (1)(a) and such territory 143 incorporates sufficient actual or expected loss and loss 144 adjustment expense experience so as to be actuarially measurable 145 and credible. 146 Section 4. Subsection (9) of section 627.3518, Florida 147 Statutes, is amended to read: 148 627.3518 Citizens Property Insurance Corporation 149 policyholder eligibility clearinghouse program.—The purpose of 150 this section is to provide a framework for the corporation to 151 implement a clearinghouse program by January 1, 2014. 152 (9) The 45-day notice of nonrenewal requirement set forth 153 in s. 627.4133(2)(b)5.s. 627.4133(2)(b)5.b.applies when a 154 policy is nonrenewed by the corporation because the risk has 155 received an offer of coverage pursuant to this section which 156 renders the risk ineligible for coverage by the corporation. 157 Section 5. Paragraph (b) of subsection (2) of section 158 627.4133, Florida Statutes, is amended to read: 159 627.4133 Notice of cancellation, nonrenewal, or renewal 160 premium.— 161 (2) With respect to any personal lines or commercial 162 residential property insurance policy, including, but not 163 limited to, any homeowner, mobile home owner, farmowner, 164 condominium association, condominium unit owner, apartment 165 building, or other policy covering a residential structure or 166 its contents: 167 (b) The insurer shall give the first-named insured written 168 notice of nonrenewal, cancellation, or termination at least 120 169100days before the effective date of the nonrenewal, 170 cancellation, or termination.However, the insurer shall give at171least 100 days’ written notice, or written notice by June 1,172whichever is earlier, for any nonrenewal, cancellation, or173termination that would be effective between June 1 and November17430.The notice must include the reason for the nonrenewal, 175 cancellation, or termination, except that: 1761. The insurer shall give the first-named insured written177notice of nonrenewal, cancellation, or termination at least 120178days before the effective date of the nonrenewal, cancellation,179or termination for a first-named insured whose residential180structure has been insured by that insurer or an affiliated181insurer for at least 5 years before the date of the written182notice.183 1.2.If cancellation is for nonpayment of premium, at least 184 10 days’ written notice of cancellation accompanied by the 185 reason therefor must be given. As used in this subparagraph, the 186 term “nonpayment of premium” means failure of the named insured 187 to discharge when due her or his obligations for paying the 188 premium on a policy or an installment of such premium, whether 189 the premium is payable directly to the insurer or its agent or 190 indirectly under a premium finance plan or extension of credit, 191 or failure to maintain membership in an organization if such 192 membership is a condition precedent to insurance coverage. The 193 term also means the failure of a financial institution to honor 194 an insurance applicant’s check after delivery to a licensed 195 agent for payment of a premium even if the agent has previously 196 delivered or transferred the premium to the insurer. If a 197 dishonored check represents the initial premium payment, the 198 contract and all contractual obligations are void ab initio 199 unless the nonpayment is cured within the earlier of 5 days 200 after actual notice by certified mail is received by the 201 applicant or 15 days after notice is sent to the applicant by 202 certified mail or registered mail. If the contract is void, any 203 premium received by the insurer from a third party must be 204 refunded to that party in full. 205 2.3.If cancellation or termination occurs during the first 206 90 days the insurance is in force and the insurance is canceled 207 or terminated for reasons other than nonpayment of premium, at 208 least 20 days’ written notice of cancellation or termination 209 accompanied by the reason therefor must be given unless there 210 has been a material misstatement or misrepresentation or a 211 failure to comply with the underwriting requirements established 212 by the insurer. 213 3. After the policy has been in effect for 90 days, the 214 policy may not be canceled by the insurer unless there has been 215 a material misstatement, a nonpayment of premium, a failure to 216 comply with underwriting requirements established by the insurer 217 within 90 days after the date of effectuation of coverage, or a 218 substantial change in the risk covered by the policy or unless 219 the cancellation is for all insureds under such policies for a 220 given class of insureds. This subparagraph does not apply to 221 individually rated risks that have a policy term of less than 90 222 days. 223 4. After a policy or contract has been in effect for more 224 than 90 days, the insurer may not cancel or terminate the policy 225 or contract based on credit information available in public 226 records. 2275. The requirement for providing written notice by June 1228of any nonrenewal that would be effective between June 1 and229November 30 does not apply to the following situations, but the230insurer remains subject to the requirement to provide such231notice at least 100 days before the effective date of232nonrenewal:233a. A policy that is nonrenewed due to a revision in the234coverage for sinkhole losses and catastrophic ground cover235collapse pursuant to s. 627.706.236 5.b.A policy that is nonrenewed by Citizens Property 237 Insurance Corporation, pursuant to s. 627.351(6), for a policy 238 that has been assumed by an authorized insurer offering 239 replacement coverage to the policyholder is exempt from the 240 notice requirements of paragraph (a) and this paragraph. In such 241 cases, the corporation must give the named insured written 242 notice of nonrenewal at least 45 days before the effective date 243 of the nonrenewal. 244 245After the policy has been in effect for 90 days, the policy may246not be canceled by the insurer unless there has been a material247misstatement, a nonpayment of premium, a failure to comply with248underwriting requirements established by the insurer within 90249days after the date of effectuation of coverage, a substantial250change in the risk covered by the policy, or the cancellation is251for all insureds under such policies for a given class of252insureds. This paragraph does not apply to individually rated253risks that have a policy term of less than 90 days.254 6. Notwithstanding any other provision of law, an insurer 255 may cancel or nonrenew a property insurance policy after at 256 least 45 days’ notice if the office finds that the early 257 cancellation of some or all of the insurer’s policies is 258 necessary to protect the best interests of the public or 259 policyholders and the office approves the insurer’s plan for 260 early cancellation or nonrenewal of some or all of its policies. 261 The office may base such finding upon the financial condition of 262 the insurer, lack of adequate reinsurance coverage for hurricane 263 risk, or other relevant factors. The office may condition its 264 finding on the consent of the insurer to be placed under 265 administrative supervision pursuant to s. 624.81 or to the 266 appointment of a receiver under chapter 631. 267 7. A policy covering both a home and a motor vehicle may be 268 nonrenewed for any reason applicable to the property or motor 269 vehicle insurance after providing 90 days’ notice. 270 Section 6. Subsection (1) of section 627.421, Florida 271 Statutes, is amended to read: 272 627.421 Delivery of policy.— 273 (1) Subject to the insurer’s requirement as to payment of 274 premium, every policy shall be mailed, delivered, or 275 electronically transmitted to the insured or to the person 276 entitled thereto not later than 60 days after the effectuation 277 of coverage. Notwithstanding any other provision of law, an 278 insurer may allow a policyholder of personal lines insurance to 279 affirmatively elect delivery of the policy documents, including, 280 but not limited to, policies, endorsements, notices, or 281 documents, by electronic means in lieu of delivery by mail. 282 Electronic transmission of a policy for commercial risks, 283 including, but not limited to, workers’ compensation and 284 employers’ liability, commercial automobile liability, 285 commercial automobile physical damage, commercial lines 286 residential property, commercial nonresidential property, 287 farmowners insurance, and the types of commercial lines risks 288 set forth in s. 627.062(3)(d), constitutesshall constitute289 delivery to the insured or to the person entitled to delivery,290 unless the insured or the person entitled to delivery 291 communicates to the insurer in writing or electronically that he 292 or she does not agree to delivery by electronic means. 293 Electronic transmission shall include a notice to the insured or 294 to the person entitled to delivery of a policy of his or her 295 right to receive the policy via United States mail rather than 296 via electronic transmission. A paper copy of the policy shall be 297 provided to the insured or to the person entitled to delivery at 298 his or her request. 299 Section 7. Subsection (3) of section 627.7074, Florida 300 Statutes, is amended to read: 301 627.7074 Alternative procedure for resolution of disputed 302 sinkhole insurance claims.— 303 (3) Following the receipt of the report provided under s. 304 627.7073 or the denial of a claim for a sinkhole loss, the 305 insurer shall notify the policyholder of his or her right to 306 participate in the neutral evaluation program under this section 307 if there is coverage available under the policy and the claim 308 was submitted within the timeframe provided in s. 627.706(5). 309 Neutral evaluation supersedes the alternative dispute resolution 310 process under s. 627.7015 but does not invalidate the appraisal 311 clause of the insurance policy. The insurer shall provide to the 312 policyholder the consumer information pamphlet prepared by the 313 department pursuant to subsection (1) electronically or by 314 United States mail. 315 Section 8. Paragraph (a) of subsection (5) of section 316 627.736, Florida Statutes, is amended to read: 317 627.736 Required personal injury protection benefits; 318 exclusions; priority; claims.— 319 (5) CHARGES FOR TREATMENT OF INJURED PERSONS.— 320 (a) A physician, hospital, clinic, or other person or 321 institution lawfully rendering treatment to an injured person 322 for a bodily injury covered by personal injury protection 323 insurance may charge the insurer and injured party only a 324 reasonable amount pursuant to this section for the services and 325 supplies rendered, and the insurer providing such coverage may 326 pay for such charges directly to such person or institution 327 lawfully rendering such treatment if the insured receiving such 328 treatment or his or her guardian has countersigned the properly 329 completed invoice, bill, or claim form approved by the office 330 upon which such charges are to be paid for as having actually 331 been rendered, to the best knowledge of the insured or his or 332 her guardian. However, such a charge may not exceed the amount 333 the person or institution customarily charges for like services 334 or supplies. In determining whether a charge for a particular 335 service, treatment, or otherwise is reasonable, consideration 336 may be given to evidence of usual and customary charges and 337 payments accepted by the provider involved in the dispute, 338 reimbursement levels in the community and various federal and 339 state medical fee schedules applicable to motor vehicle and 340 other insurance coverages, and other information relevant to the 341 reasonableness of the reimbursement for the service, treatment, 342 or supply. 343 1. The insurer may limit reimbursement to 80 percent of the 344 following schedule of maximum charges: 345 a. For emergency transport and treatment by providers 346 licensed under chapter 401, 200 percent of Medicare. 347 b. For emergency services and care provided by a hospital 348 licensed under chapter 395, 75 percent of the hospital’s usual 349 and customary charges. 350 c. For emergency services and care as defined by s. 395.002 351 provided in a facility licensed under chapter 395 rendered by a 352 physician or dentist, and related hospital inpatient services 353 rendered by a physician or dentist, the usual and customary 354 charges in the community. 355 d. For hospital inpatient services, other than emergency 356 services and care, 200 percent of the Medicare Part A 357 prospective payment applicable to the specific hospital 358 providing the inpatient services. 359 e. For hospital outpatient services, other than emergency 360 services and care, 200 percent of the Medicare Part A Ambulatory 361 Payment Classification for the specific hospital providing the 362 outpatient services. 363 f. For all other medical services, supplies, and care, 200 364 percent of the allowable amount under: 365 (I) The participating physicians fee schedule of Medicare 366 Part B, except as provided in sub-sub-subparagraphs (II) and 367 (III). 368 (II) Medicare Part B, in the case of services, supplies, 369 and care provided by ambulatory surgical centers and clinical 370 laboratories. 371 (III) The Durable Medical Equipment Prosthetics/Orthotics 372 and Supplies fee schedule of Medicare Part B, in the case of 373 durable medical equipment. 374 375 However, if such services, supplies, or care is not reimbursable 376 under Medicare Part B, as provided in this sub-subparagraph, the 377 insurer may limit reimbursement to 80 percent of the maximum 378 reimbursable allowance under workers’ compensation, as 379 determined under s. 440.13 and rules adopted thereunder which 380 are in effect at the time such services, supplies, or care is 381 provided. Services, supplies, or care that is not reimbursable 382 under Medicare or workers’ compensation is not required to be 383 reimbursed by the insurer. 384 2. For purposes of subparagraph 1., the applicable fee 385 schedule or payment limitation under Medicare is the fee 386 schedule or payment limitation in effect on March 1 of the year 387 in which the services, supplies, or care is rendered and for the 388 area in which such services, supplies, or care is rendered, and 389 the applicable fee schedule or payment limitation applies from 390 March 1 until the last day of Februarythroughout the remainder391 of the followingthatyear, notwithstanding any subsequent 392 change made to the fee schedule or payment limitation, except 393 that it may not be less than the allowable amount under the 394 applicable schedule of Medicare Part B for 2007 for medical 395 services, supplies, and care subject to Medicare Part B. 396 3. Subparagraph 1. does not allow the insurer to apply any 397 limitation on the number of treatments or other utilization 398 limits that apply under Medicare or workers’ compensation. An 399 insurer that applies the allowable payment limitations of 400 subparagraph 1. must reimburse a provider who lawfully provided 401 care or treatment under the scope of his or her license, 402 regardless of whether such provider is entitled to reimbursement 403 under Medicare due to restrictions or limitations on the types 404 or discipline of health care providers who may be reimbursed for 405 particular procedures or procedure codes. However, subparagraph 406 1. does not prohibit an insurer from using the Medicare coding 407 policies and payment methodologies of the federal Centers for 408 Medicare and Medicaid Services, including applicable modifiers, 409 to determine the appropriate amount of reimbursement for medical 410 services, supplies, or care if the coding policy or payment 411 methodology does not constitute a utilization limit. 412 4. If an insurer limits payment as authorized by 413 subparagraph 1., the person providing such services, supplies, 414 or care may not bill or attempt to collect from the insured any 415 amount in excess of such limits, except for amounts that are not 416 covered by the insured’s personal injury protection coverage due 417 to the coinsurance amount or maximum policy limits. 418 5.Effective July 1, 2012,An insurer may limit payment as 419 authorized by this paragraph only if the insurance policy 420 includes a notice at the time of issuance or renewal that the 421 insurer may limit payment pursuant to the schedule of charges 422 specified in this paragraph. A policy form approved by the 423 office satisfies this requirement. If a provider submits a 424 charge for an amount less than the amount allowed under 425 subparagraph 1., the insurer may pay the amount of the charge 426 submitted. 427 Section 9. Paragraphs (a) and (b) of subsection (2) of 428 section 627.744, Florida Statutes, are amended to read: 429 627.744 Required preinsurance inspection of private 430 passenger motor vehicles.— 431 (2) This section does not apply: 432 (a) To a policy for a policyholder who has been insured for 433 2 years or longer, without interruption, under a private 434 passenger motor vehicle policy thatwhichprovides physical 435 damage coverage for any vehicle,if the agent of the insurer 436 verifies the previous coverage. 437 (b) To a new, unused motor vehicle purchased or leased from 438 a licensed motor vehicle dealer or leasing company., ifThe 439 insurer may requireis provided with: 440 1. A bill of sale,orbuyer’s order, or lease agreement 441 thatwhichcontains a full description of the motor vehicle,442including all options and accessories; or 443 2. A copy of the title or registration thatwhich444 establishes transfer of ownership from the dealer or leasing 445 company to the customer and a copy of the window stickeror the446dealer invoice showing the itemized options and equipment and447the total retail price of the vehicle. 448 449 For the purposes of this paragraph, the physical damage coverage 450 on the motor vehicle may not be suspended during the term of the 451 policy due to the applicant’s failure to provide or the 452 insurer’s option not to require therequireddocuments. However, 453 if the insurer requires a document under this paragraph at the 454 time the policy is issued, payment of a claim may beis455 conditioned upon the receipt by the insurer of the required 456 documents, and no physical damage loss occurring after the 457 effective date of the coverage may beispayable until the 458 documents are provided to the insurer. 459 Section 10. This act shall take effect July 1, 2015.