Bill Text: FL S1622 | 2013 | Regular Session | Introduced
Bill Title: Establishment of a Clearinghouse Diversion Program Within the Citizens Property Insurance Corporation
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2013-05-03 - Died in Banking and Insurance, companion bill(s) passed, see CS/SB 1770 (Ch. 2013-60), SB 1850 (Ch. 2013-61) [S1622 Detail]
Download: Florida-2013-S1622-Introduced.html
Florida Senate - 2013 SB 1622
By Senator Richter
23-01409A-13 20131622__
1 A bill to be entitled
2 An act relating to the establishment of a
3 clearinghouse diversion program within the Citizens
4 Property Insurance Corporation; creating s. 627.3518,
5 F.S.; authorizing the creation of a clearinghouse
6 diversion program within the corporation for
7 identifying and diverting insurance coverage to
8 private insurers; providing definitions; providing
9 requirements and duties of the corporation, insurers,
10 and agents; providing for an alternative to submitting
11 risks to the corporation; providing an effective date.
12
13 Be It Enacted by the Legislature of the State of Florida:
14
15 Section 1. Section 627.3518, Florida Statutes, is created
16 to read:
17 627.3518 Citizens Property Insurance Corporation
18 clearinghouse.—The Legislature recognizes that Citizens Property
19 Insurance Corporation has authority to establish a clearinghouse
20 as a separate organizational unit within the corporation for the
21 purpose of determining the eligibility of new and renewal risks
22 seeking coverage through the corporation and facilitating the
23 identification and diversion of ineligible applicants and
24 current policyholders from the corporation into the voluntary
25 insurance market. The purpose of this section is to augment that
26 authority by providing a framework for the corporation to
27 implement such program by July 1, 2013.
28 (1) DEFINITIONS.—As used in this section, the term:
29 (a) “Clearinghouse” means the clearinghouse diversion
30 program created under this section.
31 (b) “Corporation” means Citizens Property Insurance
32 Corporation.
33 (c) “Exclusive agent” means any licensed insurance agent
34 who has, by contract, agreed to act exclusively for one company
35 or group of affiliated insurance companies, and who is
36 disallowed by that contract to directly write for any other
37 unaffiliated insurer absent express consent from the company or
38 group of affiliated companies.
39 (d) “Independent agent” means a licensed insurance agent
40 who is not required by contract to act only on behalf of one
41 company or group of affiliated insurance companies.
42 (2) The clearinghouse shall have all the rights and
43 responsibilities in carrying out its duties as a licensed
44 general lines agent, but is not required to employ or engage a
45 licensed general lines agent or maintain an insurance agency
46 license in order to solicit and place insurance coverage. In
47 establishing the clearinghouse the corporation:
48 (a) Shall require all new applications for coverage and all
49 policies up for renewal to be submitted to the clearinghouse to
50 facilitate obtaining an offer of coverage from an authorized
51 insurer before binding or renewing coverage with the
52 corporation.
53 (b) Shall develop an enhanced application for obtaining
54 information that will assist private insurers in determining
55 whether or not to make an offer of coverage through the
56 clearinghouse.
57 (c) Shall require all new applications for coverage to be
58 subject to a 48-hour period that allows a private insurer
59 participating in the clearinghouse to select applicants for
60 coverage before the application is submitted to the corporation
61 for coverage. The insurer may issue a binder to a selected
62 applicant for at least 30 days, but not more than 60 days.
63 (d) Notwithstanding s. 626.916(1), if an applicant for new
64 or renewal coverage from the corporation does not receive an
65 offer of coverage from admitted insurers, may allow the
66 applicant to accept an offer from a surplus lines insurer
67 eligible under ss. 626.913-626.937.
68 (e) Shall provide funds to operate the clearinghouse. The
69 corporation may charge a reasonable fee as a percentage of an
70 agent’s commission to offset, or partially offset the costs of
71 the clearinghouse. However, insurers participating in the
72 clearinghouse are not required to pay a fee or use the
73 clearinghouse to renew policies initially written through the
74 clearinghouse.
75 (f) Shall enter into contracts with licensed property
76 insurance companies operating in this state to participate in
77 the clearinghouse and accept appointments from voluntary market
78 insurers.
79 (g) May employ or otherwise contract with individuals or
80 other entities to provide administrative or professional
81 services in accordance with purchasing requirements set forth in
82 the corporation’s plan under s. 627.351(6)(c).
83 (3) A licensed insurer may participate in the
84 clearinghouse. Insurers making offers of coverage to new
85 applicants or renewing policyholders through the clearinghouse:
86 (a) Are not required to individually appoint an agent whose
87 customer is bound and underwritten through the clearinghouse for
88 as long as that policy remains with the insurer. Notwithstanding
89 s. 626.112, an insurer is not required to appoint an agent on a
90 policy underwritten through the clearinghouse as long as that
91 policy remains with the insurer. Insurers may appoint an agent
92 whose customer is initially underwritten and bound through the
93 clearinghouse. If an insurer accepts a policy from an agent who
94 is not appointed and thereafter elects to accept a policy from
95 that agent which was not submitted through the program, the
96 provisions of s. 626.112 requiring appointment apply to that
97 agent.
98 (b) Shall enter into a limited agency agreement with each
99 agent whose customer is underwritten and bound through the
100 clearinghouse and who is not appointed in accordance with this
101 subsection.
102 (c) Shall enter into its standard agency agreement with
103 each agent whose customer is underwritten and bound through the
104 clearinghouse if that agent has been appointed by the insurer
105 pursuant to s. 626.112.
106 (d) Must comply with the s. 627.4133(2).
107 (4) Notwithstanding section 627.3157, if an applicant for
108 new coverage from the corporation is offered coverage from an
109 admitted insurer through the clearinghouse or through an
110 alternative option under subsection (7) at a rate that is at or
111 below the eligibility threshold established in s. 627.351(c)5.,
112 the risk is not eligible for coverage with the corporation.
113 Notwithstanding any other provisions of law, if a policyholder
114 at renewal is provided an offer of coverage from an admitted
115 insurer through the program or through an alternative option
116 under subsection (7), and the offer is no more than 15 percent
117 above the policyholder’s premium for comparable coverage through
118 the corporation, the risk is not eligible for coverage with the
119 corporation.
120 (5) Independent insurance agents submitting new
121 applications for coverage or who are the agent of record on a
122 renewal policy submitted to the clearinghouse:
123 (a) Notwithstanding s. 626.112, are not required to be
124 appointed by an insurer participating in the clearinghouse for
125 policies written solely through the clearinghouse.
126 (b) May accept an appointment from an insurer participating
127 in the clearinghouse.
128 (c) Must enter into a standard or limited agency agreement
129 with the insurer, at the insurer’s option.
130 (d) Must maintain the exclusive use of expirations,
131 records, or other written or electronic information directly
132 related to such applications or renewals written through the
133 corporation or through an insurer participating in the
134 clearinghouse. Such expirations, records, or other written or
135 electronic information may be used to review an application,
136 issue a policy, or for any other purpose necessary for placing
137 such business through the clearinghouse.
138 (6) Exclusive agents submitting new applications for
139 coverage or that are the agent of record on a renewal policy
140 submitted to the program:
141 (a) Notwithstanding s. 626.112, are not required to be
142 appointed by an insurer participating in the clearinghouse for
143 policies written solely through the clearinghouse.
144 (b) Must provide the new applicant or renewing policyholder
145 the opportunity to accept an offer of coverage from an insurer
146 whose limited servicing agreement is approved by that agent’s
147 exclusive insurer as eligible to participate in the
148 clearinghouse with that insurer’s exclusive agents.
149 (c) Must enter into only a limited servicing agreement with
150 the insurer making an offer of coverage.
151 (d) Must maintain the exclusive use of expirations,
152 records, or other written or electronic information directly
153 related to such applications or renewals written through the
154 corporation or through an insurer participating in the program,
155 notwithstanding s. 627.351(6)(c)5.a.(I)(B) and (II)(B). Such
156 expirations, records, or other written or electronic information
157 may be used to review an application, issue a policy, or for any
158 other purpose necessary for placing such business through the
159 clearinghouse.
160 (7) The corporation may recognize private entities that the
161 independent agent elects to use as an alternative to submitting
162 a risk to the clearinghouse. An alternative option allowed under
163 this subsection shall obtain offers of coverage from authorized
164 insurers for new applicants seeking coverage from the
165 corporation and for corporation policyholders on renewal. The
166 alternative option may not be used as a replacement for the
167 clearinghouse. Neither the clearinghouse nor a private entity
168 operating under this subsection may prohibit insurers from
169 electing to participate in more than one program or alternative,
170 and an insurer participating in the private entity alternative
171 must also participate in the clearinghouse.
172 (8) Submission of an application for coverage by the
173 corporation to the clearinghouse does not constitute the binding
174 of coverage by the corporation, and failure of the clearinghouse
175 to obtain an offer of coverage by an insurer is not considered
176 acceptance of coverage of the risk by the corporation.
177 Section 2. This act shall take effect July 1, 2013.
