Bill Text: FL S0594 | 2023 | Regular Session | Comm Sub


Bill Title: Property Insurance

Spectrum: Slight Partisan Bill (? 2-1)

Status: (Introduced - Dead) 2023-05-01 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 799 (Ch. 2023-175), CS/CS/SB 154 (Ch. 2023-203), SB 2502 (Ch. 2023-240) [S0594 Detail]

Download: Florida-2023-S0594-Comm_Sub.html
       Florida Senate - 2023                       CS for CS for SB 594
       
       
        
       By the Committees on Fiscal Policy; and Community Affairs; and
       Senator Martin
       
       
       
       
       594-03815-23                                           2023594c2
    1                        A bill to be entitled                      
    2         An act relating to property insurance; amending s.
    3         627.0629, F.S.; adding wind uplift prevention to a
    4         list of fixtures or construction techniques for which
    5         a residential property insurance rate filing must
    6         include actuarially reasonable rate differentials or
    7         appropriate deductible reductions; amending s.
    8         627.351, F.S.; revising rate change limitations for
    9         specified policies written by the Citizens Property
   10         Insurance Corporation; revising the applicability of
   11         flood coverage requirements for personal lines
   12         residential policyholders of the corporation;
   13         authorizing the corporation to adopt policy forms that
   14         provide for the resolution of certain disputes in
   15         proceedings before the Division of Administrative
   16         Hearings; providing that such policies are not subject
   17         to mandatory binding arbitration provisions;
   18         authorizing the corporation to contract with the
   19         division to conduct proceedings; providing an
   20         appropriation; requiring the Office of Insurance
   21         Regulation to conduct a wind-loss mitigation study in
   22         consultation with the Department of Business and
   23         Professional Regulation and the Florida Building
   24         Commission or competitively procure the study;
   25         specifying requirements for the study; requiring that
   26         study findings be reported to certain entities by a
   27         specified date; authorizing the office to use a
   28         portion of appropriated funds to contract separately
   29         with building code experts for certain purposes;
   30         providing effective dates.
   31          
   32  Be It Enacted by the Legislature of the State of Florida:
   33  
   34         Section 1. Effective July 1, 2023, subsection (1) of
   35  section 627.0629, Florida Statutes, is amended to read:
   36         627.0629 Residential property insurance; rate filings.—
   37         (1) It is the intent of the Legislature that insurers
   38  provide savings to consumers who install or implement windstorm
   39  damage mitigation techniques, alterations, or solutions to their
   40  properties to prevent windstorm losses. A rate filing for
   41  residential property insurance must include actuarially
   42  reasonable discounts, credits, or other rate differentials, or
   43  appropriate reductions in deductibles, for properties on which
   44  fixtures or construction techniques demonstrated to reduce the
   45  amount of loss in a windstorm have been installed or
   46  implemented. The fixtures or construction techniques must
   47  include, but are not limited to, fixtures or construction
   48  techniques that enhance wind uplift prevention, roof strength,
   49  roof covering performance, roof-to-wall strength, wall-to-floor
   50  to-foundation strength, opening protection, and window, door,
   51  and skylight strength. Credits, discounts, or other rate
   52  differentials, or appropriate reductions in deductibles, for
   53  fixtures and construction techniques that meet the minimum
   54  requirements of the Florida Building Code must be included in
   55  the rate filing. The office shall determine the discounts,
   56  credits, other rate differentials, and appropriate reductions in
   57  deductibles that reflect the full actuarial value of such
   58  revaluation, which may be used by insurers in rate filings.
   59         Section 2. Paragraphs (n) and (aa) of subsection (6) of
   60  section 627.351, Florida Statutes, are amended, and paragraph
   61  (ll) is added to that subsection, to read:
   62         627.351 Insurance risk apportionment plans.—
   63         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
   64         (n)1. Rates for coverage provided by the corporation must
   65  be actuarially sound pursuant to s. 627.062 and not competitive
   66  with approved rates charged in the admitted voluntary market so
   67  that the corporation functions as a residual market mechanism to
   68  provide insurance only when insurance cannot be procured in the
   69  voluntary market, except as otherwise provided in this
   70  paragraph. The office shall provide the corporation such
   71  information as would be necessary to determine whether rates are
   72  competitive. The corporation shall file its recommended rates
   73  with the office at least annually. The corporation shall provide
   74  any additional information regarding the rates which the office
   75  requires. The office shall consider the recommendations of the
   76  board and issue a final order establishing the rates for the
   77  corporation within 45 days after the recommended rates are
   78  filed. The corporation may not pursue an administrative
   79  challenge or judicial review of the final order of the office.
   80         2. In addition to the rates otherwise determined pursuant
   81  to this paragraph, the corporation shall impose and collect an
   82  amount equal to the premium tax provided in s. 624.509 to
   83  augment the financial resources of the corporation.
   84         3. After the public hurricane loss-projection model under
   85  s. 627.06281 has been found to be accurate and reliable by the
   86  Florida Commission on Hurricane Loss Projection Methodology, the
   87  model shall be considered when establishing the windstorm
   88  portion of the corporation’s rates. The corporation may use the
   89  public model results in combination with the results of private
   90  models to calculate rates for the windstorm portion of the
   91  corporation’s rates. This subparagraph does not require or allow
   92  the corporation to adopt rates lower than the rates otherwise
   93  required or allowed by this paragraph.
   94         4. The corporation must make a recommended actuarially
   95  sound rate filing for each personal and commercial line of
   96  business it writes.
   97         5. Notwithstanding the board’s recommended rates and the
   98  office’s final order regarding the corporation’s filed rates
   99  under subparagraph 1., the corporation shall annually implement
  100  a rate increase which, except for sinkhole coverage, does not
  101  exceed the following for any single policy issued by the
  102  corporation, excluding coverage changes and surcharges:
  103         a. Twelve percent for 2023.
  104         b. Thirteen percent for 2024.
  105         c. Fourteen percent for 2025.
  106         d. Fifteen percent for 2026 and all subsequent years.
  107         6. The corporation may also implement an increase to
  108  reflect the effect on the corporation of the cash buildup factor
  109  pursuant to s. 215.555(5)(b).
  110         7. The corporation’s implementation of rates as prescribed
  111  in subparagraphs 5. and 8. shall cease for any line of business
  112  written by the corporation upon the corporation’s implementation
  113  of actuarially sound rates. Thereafter, the corporation shall
  114  annually make a recommended actuarially sound rate filing that
  115  is not competitive with approved rates in the admitted voluntary
  116  market for each commercial and personal line of business the
  117  corporation writes.
  118         8. The following For any new or renewal personal lines
  119  policies policy written on or after November 1, 2023, are which
  120  does not cover a primary residence, the rate to be applied in
  121  calculating premium is not subject to the rate increase
  122  limitations in subparagraph 5., but However, the policyholder
  123  may not be charged more than 50 percent above, and may not be
  124  charged less than, the established rate for the corporation
  125  which was in effect 1 year before the date of the application:
  126         a.Policies that do not cover a primary residence; or
  127         b.Policies where coverage for the insured risk, prior to
  128  the date of application with the corporation, was last provided
  129  by an insurer determined by the office to be unsound or an
  130  insurer placed in receivership under chapter 631.
  131         9. As used in this paragraph, the term “primary residence”
  132  means the dwelling that is the policyholder’s primary home or is
  133  a rental property that is the primary home of the tenant, and
  134  which the policyholder or tenant occupies for more than 9 months
  135  of each year.
  136         (aa) Except as otherwise provided in this paragraph, the
  137  corporation shall require the securing and maintaining of flood
  138  insurance as a condition of coverage of a personal lines
  139  residential risk. The insured or applicant must execute a form
  140  approved by the office affirming that flood insurance is not
  141  provided by the corporation and that if flood insurance is not
  142  secured by the applicant or insured from an insurer other than
  143  the corporation and in addition to coverage by the corporation,
  144  the risk will not be eligible for coverage by the corporation.
  145  The corporation may deny coverage of a personal lines
  146  residential risk to an applicant or insured who refuses to
  147  secure and maintain flood insurance. The requirement to purchase
  148  flood insurance shall be implemented as follows:
  149         1. Except as provided in subparagraphs 2. and 3., all
  150  personal lines residential policyholders must have flood
  151  coverage in place for policies effective on or after:
  152         a. January 1, 2024, for a structure that has a dwelling
  153  replacement cost of property valued at $600,000 or more.
  154         b. January 1, 2025, for a structure that has a dwelling
  155  replacement cost of property valued at $500,000 or more.
  156         c. January 1, 2026, for a structure that has a dwelling
  157  replacement cost of property valued at $400,000 or more.
  158         d. January 1, 2027, for all other personal lines
  159  residential property insured by the corporation.
  160         2. All personal lines residential policyholders whose
  161  property insured by the corporation is located within the
  162  special flood hazard area defined by the Federal Emergency
  163  Management Agency must have flood coverage in place:
  164         a. At the time of initial policy issuance for all new
  165  personal lines residential policies issued by the corporation on
  166  or after April 1, 2023.
  167         b. By the time of the policy renewal for all personal lines
  168  residential policies renewing on or after July 1, 2023.
  169         3. Policyholders whose policies issued by the corporation
  170  do not provide coverage for the peril of wind are not required
  171  to purchase flood insurance as a condition for maintaining the
  172  following their policies issued by with the corporation:
  173         a.Policies that do not provide coverage for the peril of
  174  wind.
  175         b.Policies that provide coverage under a condominium unit
  176  owners form.
  177  
  178  The flood insurance required under this paragraph must meet, at
  179  a minimum, the coverage available from the National Flood
  180  Insurance Program or the requirements of subparagraphs s.
  181  627.715(1)(a)1., 2., and 3.
  182         (ll)1.In addition to any other method of alternative
  183  dispute resolution authorized by state law, the corporation may
  184  adopt policy forms that provide for the resolution of disputes
  185  regarding its claim determinations, including disputes regarding
  186  coverage for, or the scope and value of, a claim, in a
  187  proceeding before the Division of Administrative Hearings. Any
  188  such policies are not subject to s. 627.70154.
  189         2.The corporation may contract with the Division of
  190  Administrative Hearings to conduct proceedings to resolve
  191  disputes regarding its claim determinations as may be provided
  192  for in the applicable policies of insurance.
  193         Section 3. (1)For the 2023-2024 fiscal year, the sum of
  194  $750,000 in nonrecurring funds is appropriated from the
  195  Insurance Regulatory Trust Fund to the Office of Insurance
  196  Regulation for a wind-loss mitigation study. The office shall
  197  either conduct the study in consultation with the Department of
  198  Business and Professional Regulation and the Florida Building
  199  Commission or competitively procure the study.
  200         (2)The study must:
  201         (a)Evaluate windstorm loss relativities for construction
  202  features, including, but not limited to, wind uplift prevention
  203  and those which enhance roof strength, roof covering
  204  performance, roof-to-wall strength, wall-to-floor-to-foundation
  205  strength, opening protections, and window, door, and skylight
  206  strength;
  207         (b)Include single-family and multifamily homes, mobile
  208  homes, and manufactured housing; and
  209         (c)Include, but need not be limited to, an analysis of
  210  developed hurricane loss data for hurricanes since June 1, 2018.
  211         (3)By July 1, 2024, the findings of the study must be
  212  reported to the Governor, the President of the Senate, the
  213  Speaker of the House of Representatives, the Chief Financial
  214  Officer, and the Commissioner of Insurance Regulation.
  215         (4)The office may use a portion of the funds appropriated
  216  to contract separately with building code experts in order to
  217  effectuate this act and develop rules to be adopted by the
  218  Financial Services Commission.
  219         Section 4. Except as otherwise expressly provided in this
  220  act, this act shall take effect upon becoming a law.

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