Senate Bill 1108e1
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 A bill to be entitled
2 An act relating to insurance; amending s.
3 627.021, F.S.; providing that the provisions of
4 ch. 627, F.S., do not apply to commercial
5 inland marine insurance; amending ss. 627.0651,
6 627.410, F.S.; making conforming changes to
7 requirements for filing underwriting rules and
8 forms; amending s. 627.311, F.S.; revising the
9 composition of the workers' compensation joint
10 underwriting plan; prohibiting insurers from
11 providing workers' compensation to certain
12 employers; amending ss. 627.7013 and 627.7014,
13 F.S.; providing findings relating to the
14 moratorium on hurricane-related cancellations
15 and nonrenewals of personal lines residential
16 policies and condominium association policies,
17 respectively; deleting provisions relating to
18 accelerated exposure reduction plans; providing
19 circumstances under which the sections are
20 inoperative; delaying the future repeal date of
21 the sections; amending s. 627.7295, F.S.,
22 relating to minimum down payments for motor
23 vehicle insurance; amending s. 627.351, F.S.;
24 prohibiting further geographical expansion of
25 Florida Windstorm Underwriting Association
26 eligibility; creating s. 626.9543, F.S.;
27 providing a short title; providing legislative
28 intent and purpose; requiring the Department of
29 Insurance to provide certain assistance to
30 Holocaust victims; providing requirements for
31 insurers relating to insurance claims from
1
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 beneficiaries, descendants, or heirs of
2 Holocaust victims; limiting certain statutes of
3 limitation under certain circumstances;
4 requiring insurers to report certain
5 information to the department; requiring the
6 department to report to the Legislature;
7 providing penalties; providing requirements for
8 bringing certain causes of action; providing
9 severability; providing an effective date.
10
11 Be It Enacted by the Legislature of the State of Florida:
12
13 Section 1. Subsection (2) of section 627.021, Florida
14 Statutes, is amended to read:
15 627.021 Scope of this part.--
16 (2) This chapter does not apply to:
17 (a) Reinsurance, except joint reinsurance as provided
18 in s. 627.311.
19 (b) Insurance against loss of or damage to aircraft,
20 their hulls, accessories, or equipment, or against liability,
21 other than workers' compensation and employer's liability,
22 arising out of the ownership, maintenance, or use of aircraft.
23 (c) Insurance of vessels or craft, their cargoes,
24 marine builders' risks, marine protection and indemnity, or
25 other risks commonly insured under marine, as distinguished
26 from inland marine, insurance policies.
27 (d) Commercial inland marine insurance.
28 (e)(d) Surplus lines insurance placed under the
29 provisions of ss. 626.913-626.937.
30 Section 2. Subsection (13) of section 627.0651,
31 Florida Statutes, is amended to read:
2
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 627.0651 Making and use of rates for motor vehicle
2 insurance.--
3 (13)(a) Underwriting rules not contained in rating
4 manuals shall be filed for private passenger automobile
5 insurance and homeowners' insurance.
6 (b) The submission of rates, rating schedules, and
7 rating manuals to the department by a licensed rating
8 organization of which an insurer is a member or subscriber
9 will be sufficient compliance with this subsection for any
10 insurer maintaining membership or subscribership in such
11 organization, to the extent that the insurer uses the rates,
12 rating schedules, and rating manuals of such organization.
13 All such information shall be available for public inspection,
14 upon receipt by the department, during usual business hours.
15 (c) The filing requirements of this subsection do not
16 apply to commercial inland marine risks.
17 Section 3. Subsection (4) of section 627.311, Florida
18 Statutes, is amended to read:
19 627.311 Joint underwriters and joint reinsurers.--
20 (4)(a) Effective upon this act becoming a law, the
21 department shall, after consultation with insurers, approve a
22 joint underwriting plan of insurers which shall operate as a
23 nonprofit entity. For the purposes of this subsection, the
24 term "insurer" includes group self-insurance funds authorized
25 by s. 624.4621, commercial self-insurance funds authorized by
26 s. 624.462, assessable mutual insurers authorized under s.
27 628.6011, and insurers licensed to write workers' compensation
28 and employer's liability insurance in this state. The purpose
29 of the plan is to provide workers' compensation and employer's
30 liability insurance to applicants who are required by law to
31 maintain workers' compensation and employer's liability
3
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 insurance and who are in good faith entitled to but who are
2 unable to purchase such insurance through the voluntary
3 market. The joint underwriting plan shall issue policies
4 beginning January 1, 1994. The plan must have actuarially
5 sound rates that assure that the plan is self-supporting.
6 (b) The operation of the plan is subject to the
7 supervision of a 13-member board of governors. The board of
8 governors shall be comprised of:
9 1. Five of the 20 domestic insurers, as defined in s.
10 624.06(1), having the largest voluntary direct premiums
11 written in this state for workers' compensation and employer's
12 liability insurance, which shall be elected by those 20
13 domestic insurers;
14 2. Five of the 20 foreign insurers as defined in s.
15 624.06(2) having the largest voluntary direct premiums written
16 in this state for workers' compensation and employer's
17 liability insurance, which shall be elected by those 20
18 foreign insurers;
19 3. One person, who shall serve as the chair, appointed
20 by the Insurance Commissioner;
21 4. One person appointed by the largest property and
22 casualty insurance agents' association in this state; and
23 5. The consumer advocate appointed under s. 627.0613
24 or the consumer advocate's designee. 5 domestic insurers, 1 of
25 whom shall be the assessable mutual insurer or other domestic
26 insurer which has the largest voluntary written premium for
27 workers' compensation and employer's liability insurance as of
28 December 31, 1993, 1 of whom shall be the commercial
29 self-insurance fund which has the largest voluntary written
30 premium for workers' compensation and employer's liability
31 insurance, as of December 31, 1993, and 3 of whom shall be the
4
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 3 of the 5 group self-insurers' funds, authorized by s.
2 440.57, which have the largest voluntary written premium for
3 workers' compensation and employer's liability insurance, as
4 of December 31, 1993; and 5 of the 20 foreign insurers which
5 are defined in s. 624.06(2) with the largest voluntary written
6 premium in this state for workers' compensation and employer's
7 liability insurance, for the latest year for which data are
8 available, as selected by those 20 foreign insurers. If the
9 assessable mutual insurer or the commercial self-insurance
10 fund, described in this paragraph, decline to serve on, or
11 resign from, the board of governors, such position on the
12 board of governors shall be filled by appointment by a
13 committee comprised of the 10 assessable mutual insurers,
14 commercial self-insurance funds, and group self-insurers'
15 funds, authorized by s. 440.57, which have the largest
16 voluntary written premium for workers' compensation and
17 employer's liability insurance, as of December 31, 1993.
18
19 Each board member shall serve 4-year terms and may serve
20 consecutive terms. No board member shall be an insurer which
21 provides service to the plan or which has an affiliate which
22 provides services to the plan or which is serviced by a
23 service company or third-party administrator which provides
24 services to the plan or which has an affiliate which provides
25 services to the plan. The board of governors shall have a
26 chair, who shall be named by the Insurance Commissioner. The
27 board of governors shall include one representative appointed
28 by the largest property and casualty insurance agents'
29 association in this state. The consumer advocate appointed
30 under s. 627.0613 shall be a member of the board of governors.
31
5
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 The minutes, audits, and procedures of the board of governors
2 are subject to chapter 119.
3 (c)(b) The operation of the plan shall be governed by
4 a plan of operation that is prepared at the direction of the
5 board of governors. The plan of operation may be changed at
6 any time by the board of governors or upon request of the
7 department. The plan of operation and all changes thereto are
8 subject to the approval of the department. The plan of
9 operation shall:
10 1. Authorize the board to engage in the activities
11 necessary to implement this subsection, including, but not
12 limited to, borrowing money.
13 2. Develop criteria for eligibility for coverage by
14 the plan, including, but not limited to, documented rejection
15 by at least two insurers which reasonably assures that
16 insureds covered under the plan are unable to acquire coverage
17 in the voluntary market. Any insured may voluntarily elect to
18 accept coverage from an insurer for a premium equal to or
19 greater than the plan premium if the insurer writing the
20 coverage adheres to the provisions of s. 627.171.
21 3. Require notice from the agent to the insured at the
22 time of the application for coverage that the application is
23 for coverage with the plan and that coverage may be available
24 through an insurer, group self-insurers' fund, commercial
25 self-insurance fund, or assessable mutual insurer through
26 another agent at a lower cost.
27 4. Establish programs to encourage insurers to provide
28 coverage to applicants of the plan in the voluntary market and
29 to insureds of the plan, including, but not limited to:
30 a. Establishing procedures for an insurer to use in
31 notifying the plan of the insurer's desire to provide coverage
6
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 to applicants to the plan or existing insureds of the plan and
2 in describing the types of risks in which the insurer is
3 interested. The description of the desired risks must be on a
4 form developed by the plan.
5 b. Developing forms and procedures that provide an
6 insurer with the information necessary to determine whether
7 the insurer wants to write particular applicants to the plan
8 or insureds of the plan.
9 c. Developing procedures for notice to the plan and
10 the applicant to the plan or insured of the plan that an
11 insurer will insure the applicant or the insured of the plan,
12 and notice of the cost of the coverage offered; and developing
13 procedures for the selection of an insuring entity by the
14 applicant or insured of the plan.
15 d. Provide for a market-assistance plan to assist in
16 the placement of employers. All applications for coverage in
17 the plan received 45 days before the effective date for
18 coverage shall be processed through the market-assistance
19 plan. A market-assistance plan specifically designed to serve
20 the needs of small good policyholders as defined by the board
21 must be finalized by January 1, 1994.
22 5. Provide for policy and claims services to the
23 insureds of the plan of the nature and quality provided for
24 insureds in the voluntary market.
25 6. Provide for the review of applications for coverage
26 with the plan for reasonableness and accuracy, using any
27 available historic information regarding the insured.
28 7. Provide for procedures for auditing insureds of the
29 plan which are based on reasonable business judgment and are
30 designed to maximize the likelihood that the plan will collect
31 the appropriate premiums.
7
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 8. Authorize the plan to terminate the coverage of and
2 refuse future coverage for any insured that submits a
3 fraudulent application to the plan or provides fraudulent or
4 grossly erroneous records to the plan or to any service
5 provider of the plan in conjunction with the activities of the
6 plan.
7 9. Establish service standards for agents who submit
8 business to the plan.
9 10. Establish criteria and procedures to prohibit any
10 agent who does not adhere to the established service standards
11 from placing business with the plan or receiving, directly or
12 indirectly, any commissions for business placed with the plan.
13 11. Provide for the establishment of reasonable safety
14 programs for all insureds in the plan. At the direction of the
15 board, the Division of Safety shall provide inspection to
16 insureds and applicants for coverage in the plan identified as
17 high-risk insureds by the board or its designee.
18 12. Authorize the plan to terminate the coverage of
19 and refuse future coverage to any insured who fails to pay
20 premiums or surcharges when due; who, at the time of
21 application, is delinquent in payments of workers'
22 compensation or employer's liability insurance premiums or
23 surcharges owed to an insurer, group self-insurers' fund,
24 commercial self-insurance fund, or assessable mutual insurer
25 licensed to write such coverage in this state; or who refuses
26 to substantially comply with any safety programs recommended
27 by the plan.
28 13. Authorize the board of governors to provide the
29 services required by the plan through staff employed by the
30 plan, through reasonably compensated service providers who
31 contract with the plan to provide services as specified by the
8
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 board of governors, or through a combination of employees and
2 service providers.
3 14. Provide for service standards for service
4 providers, methods of determining adherence to those service
5 standards, incentives and disincentives for service, and
6 procedures for terminating contracts for service providers
7 that fail to adhere to service standards.
8 15. Provide procedures for selecting service providers
9 and standards for qualification as a service provider that
10 reasonably assure that any service provider selected will
11 continue to operate as an ongoing concern and is capable of
12 providing the specified services in the manner required.
13 16. Provide for reasonable accounting and
14 data-reporting practices.
15 17. Provide for annual review of costs associated with
16 the administration and servicing of the policies issued by the
17 plan to determine alternatives by which costs can be reduced.
18 18. Authorize the acquisition of such excess insurance
19 or reinsurance as is consistent with the purposes of the plan.
20 19. Provide for an annual report to the department on
21 a date specified by the department and containing such
22 information as the department reasonably requires.
23 20. Establish multiple rating plans for various
24 classifications of risk which reflect risk of loss, hazard
25 grade, actual losses, size of premium, and compliance with
26 loss control. At least one of such plans must be a
27 preferred-rating plan to accommodate small-premium
28 policyholders with good experience as defined in
29 sub-subparagraph 22.a.
30 21. Establish agent commission schedules.
31 22. Establish three subplans as follows:
9
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 a. Subplan "A" must include those insureds whose
2 annual premium does not exceed $2,500 and who have neither
3 incurred any lost-time claims nor incurred medical-only claims
4 exceeding 50 percent of their premium for the immediate 2
5 years.
6 b. Subplan "B" must include insureds that are
7 employers identified by the board of governors as high-risk
8 employers due solely to the nature of the operations being
9 performed by those insureds and for whom no market exists in
10 the voluntary market, and whose experience modifications are
11 less than 1.00.
12 c. Subplan "C" must include all other insureds within
13 the plan.
14 (d)(c) The plan must be funded through actuarially
15 sound premiums charged to insureds of the plan. The plan may
16 issue assessable policies only to those insureds in subplan
17 "C." Those assessable policies must be clearly identified as
18 assessable by containing, in contrasting color and in not less
19 than 10-point type, the following statements: "This is an
20 assessable policy. If the plan is unable to pay its
21 obligations, policyholders will be required to contribute on a
22 pro rata earned premium basis the money necessary to meet any
23 assessment levied." The plan may issue assessable policies
24 with differing terms and conditions to different groups within
25 the plan when a reasonable basis exists for the
26 differentiation. The plan may offer rating, dividend plans,
27 and other plans to encourage loss prevention programs.
28 (e)(d) The plan shall establish and use its rates and
29 rating plans, and the plan may establish and use changes in
30 rating plans at any time, but no more frequently than two
31 times per any rating class for any calendar year. By December
10
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 1, 1993, and December 1 of each year thereafter, the board
2 shall establish and use actuarially sound rates for use by the
3 plan to assure that the plan is self-funding while those rates
4 are in effect. Such rates and rating plans must be filed with
5 the department within 30 calendar days after their effective
6 dates, and shall be considered a "use and file" filing. Any
7 disapproval by the department must have an effective date that
8 is at least 60 days from the date of disapproval of the rates
9 and rating plan and must have prospective effect only. The
10 plan may not be subject to any order by the department to
11 return to policyholders any portion of the rates disapproved
12 by the department. The department may not disapprove any rates
13 or rating plans unless it demonstrates that such rates and
14 rating plans are excessive, inadequate, or unfairly
15 discriminatory.
16 (f)(e) No later than June 1 of each year, the plan
17 shall obtain an independent actuarial certification of the
18 results of the operations of the plan for prior years, and
19 shall furnish a copy of the certification to the department.
20 If, after the effective date of the plan, the projected
21 ultimate incurred losses and expenses and dividends for prior
22 years exceed collected premiums, accrued net investment
23 income, and prior assessments for prior years, the
24 certification is subject to review and approval by the
25 department before it becomes final.
26 (g)(f) Whenever a deficit exists, the plan shall,
27 within 90 days, provide the department with a program to
28 eliminate the deficit within a reasonable time. The deficit
29 may be funded both through increased premiums charged to
30 insureds of the plan for subsequent years and through
31
11
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 assessments on insureds in the plan if the plan uses
2 assessable policies.
3 (h)(g) Any premium or assessments collected by the
4 plan in excess of the amount necessary to fund projected
5 ultimate incurred losses and expenses of the plan and not paid
6 to insureds of the plan in conjunction with loss prevention or
7 dividend programs shall be retained by the plan for future
8 use.
9 (i)(h) The decisions of the board of governors do not
10 constitute final agency action and are not subject to chapter
11 120.
12 (j)(i) Policies for insureds shall be issued by the
13 plan.
14 (k)(j) The plan created under this subsection is
15 liable only for payment for losses arising under policies
16 issued by the plan with dates of accidents occurring on or
17 after January 1, 1994.
18 (l)(k) Plan losses are the sole and exclusive
19 responsibility of the plan, and payment for such losses must
20 be funded in accordance with this subsection and must not
21 come, directly or indirectly, from insurers or any guaranty
22 association for such insurers.
23 (m)(l) Each joint underwriting plan or association
24 created under this section is not a state agency, board, or
25 commission. However, for the purposes of s. 199.183(1) only,
26 the joint underwriting plan is a political subdivision of the
27 state and is exempt from the corporate income tax.
28 (n)(m) Each joint underwriting plan or association may
29 elect to pay premium taxes on the premiums received on its
30 behalf or may elect to have the member insurers to whom the
31 premiums are allocated pay the premium taxes if the member
12
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 insurer had written the policy. The joint underwriting plan or
2 association shall notify the member insurers and the
3 Department of Revenue by January 15 of each year of its
4 election for the same year. As used in this paragraph, the
5 term "premiums received" means the consideration for
6 insurance, by whatever name called, but does not include any
7 policy assessment or surcharge received by the joint
8 underwriting association as a result of apportioning losses or
9 deficits of the association pursuant to this section.
10 (o)(n) Effective midnight, December 31, 1993, the
11 Florida Workers' Compensation Insurance Plan, administered by
12 the National Council on Compensation Insurance, shall
13 terminate, except with respect to workers' compensation
14 policies issued pursuant to such Florida Workers' Compensation
15 Insurance Plan with inception dates on or before December 31,
16 1993.
17 (p)(o) Neither the plan nor any member of the board of
18 governors is liable for monetary damages to any person for any
19 statement, vote, decision, or failure to act, regarding the
20 management or policies of the plan, unless:
21 1. The member breached or failed to perform her or his
22 duties as a member; and
23 2. The member's breach of, or failure to perform,
24 duties constitutes:
25 a. A violation of the criminal law, unless the member
26 had reasonable cause to believe her or his conduct was
27 unlawful. A judgment or other final adjudication against a
28 member in any criminal proceeding for violation of the
29 criminal law estops that member from contesting the fact that
30 her or his breach, or failure to perform, constitutes a
31 violation of the criminal law; but does not estop the member
13
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 from establishing that she or he had reasonable cause to
2 believe that her or his conduct was lawful or had no
3 reasonable cause to believe that her or his conduct was
4 unlawful;
5 b. A transaction from which the member derived an
6 improper personal benefit, either directly or indirectly; or
7 c. Recklessness or any act or omission that was
8 committed in bad faith or with malicious purpose or in a
9 manner exhibiting wanton and willful disregard of human
10 rights, safety, or property. For purposes of this
11 sub-subparagraph, the term "recklessness" means the acting, or
12 omission to act, in conscious disregard of a risk:
13 (I) Known, or so obvious that it should have been
14 known, to the member; and
15 (II) Known to the member, or so obvious that it should
16 have been known, to be so great as to make it highly probable
17 that harm would follow from such act or omission.
18 (q)(p) The provisions of this subsection shall be
19 reviewed by the Legislature before July 1, 1996.
20 (r) No insurer shall provide workers' compensation and
21 employer's liability insurance to any person who is delinquent
22 in the payment of premiums, assessments, penalties, or
23 surcharges owed to the plan.
24 Section 4. Subsection (1) of section 627.410, Florida
25 Statutes, is amended to read:
26 627.410 Filing, approval of forms.--
27 (1) No basic insurance policy or annuity contract
28 form, or application form where written application is
29 required and is to be made a part of the policy or contract,
30 or group certificates issued under a master contract delivered
31 in this state, or printed rider or endorsement form or form of
14
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 renewal certificate, shall be delivered or issued for delivery
2 in this state, unless the form has been filed with the
3 department at its offices in Tallahassee by or in behalf of
4 the insurer which proposes to use such form and has been
5 approved by the department. This provision does not apply to
6 surety bonds or to specially rated inland marine risks, nor to
7 policies, riders, endorsements, or forms of unique character
8 which are designed for and used with relation to insurance
9 upon a particular subject (other than as to health insurance),
10 or which relate to the manner of distribution of benefits or
11 to the reservation of rights and benefits under life or health
12 insurance policies and are used at the request of the
13 individual policyholder, contract holder, or
14 certificateholder. As to group insurance policies effectuated
15 and delivered outside this state but covering persons resident
16 in this state, the group certificates to be delivered or
17 issued for delivery in this state shall be filed with the
18 department for information purposes only.
19 Section 5. Paragraph (c) is added to subsection (1) of
20 section 627.7013, Florida Statutes, and subsection (2) of said
21 section is amended, to read:
22 627.7013 Orderly markets for personal lines
23 residential property insurance.--
24 (1) FINDINGS AND PURPOSE.--
25 (a) The Legislature finds that personal lines
26 residential property insurers, as a condition of doing
27 business in this state, have a responsibility to contribute to
28 an orderly market for personal lines residential property
29 insurance and that there is a compelling state interest in
30 maintaining an orderly market for personal lines residential
31 property insurance. The Legislature further finds that
15
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 Hurricane Andrew, which caused over $15 billion of insured
2 losses in South Florida, has reinforced the need of consumers
3 to have reliable homeowner's insurance coverage; however, the
4 enormous monetary impact to insurers of Hurricane Andrew
5 claims has prompted insurers to propose substantial
6 cancellation or nonrenewal of their homeowner's insurance
7 policyholders. The Legislature further finds that the massive
8 cancellations and nonrenewals announced, proposed, or
9 contemplated by certain insurers constitute a significant
10 danger to the public health, safety, and welfare, and
11 destabilize the insurance market. In furtherance of the
12 overwhelming public necessity for an orderly market for
13 property insurance, the Legislature, in chapter 93-401, Laws
14 of Florida, imposed, for a limited time, a moratorium on
15 cancellation or nonrenewal of personal lines residential
16 property insurance policies. The Legislature further finds
17 that upon expiration of the moratorium, additional actions are
18 required to maintain an orderly market for personal lines
19 residential property insurance in this state. The purposes of
20 this section are to provide for a phaseout of the moratorium
21 and to require advance planning and approval for programs of
22 exposure reduction.
23 (b) The Legislature finds, as of the beginning of the
24 1996 Regular Session of the Legislature, that:
25 1. The conditions described in paragraph (a) remain
26 applicable to the property insurance market in this state in
27 1996 and are likely to remain applicable for several years
28 thereafter.
29 2. The Residential Property and Casualty Joint
30 Underwriting Association, a residual market mechanism created
31 to alleviate temporary unavailability of property insurance
16
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 coverage, remains the primary or exclusive source of new
2 property insurance coverage in significant portions of the
3 state.
4 3. Recent enactments intended to restore a
5 competitive, private sector property insurance market,
6 including creation and enhancement of the Florida Hurricane
7 Catastrophe Fund, incentives for depopulation of the
8 Residential Property and Casualty Joint Underwriting
9 Association, incentives for hurricane loss mitigation and
10 prevention, creation of the Florida Commission on Hurricane
11 Loss Projection Methodology, and revisions of laws relating to
12 rates and coverages, are beginning to have their intended
13 effects; however, the market instability that persists could
14 frustrate these efforts to restore the market.
15 4. The moratorium completion provided in this section
16 is the least intrusive method for maintaining an orderly
17 market, insofar as it applies only to hurricane-related
18 cancellations and nonrenewals of personal lines residential
19 policies that were in force on the effective date, and insofar
20 as it allows an insurer annually to nonrenew up to 5 percent
21 of the total number of such policies as of the effective date.
22 (c) The Legislature finds, as of January 1, 1998,
23 that:
24 1. The conditions described in paragraphs (a) and (b)
25 remain applicable to the property insurance market in this
26 state in 1998 and are likely to remain applicable for several
27 years thereafter.
28 2. The general instability of the market is reflected
29 by the following facts:
30 a. In spite of depopulation efforts under which
31 approximately 600,000 policies have been transferred from the
17
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 Residential Property and Casualty Joint Underwriting
2 Association to the voluntary market, the joint underwriting
3 association, with approximately 500,000 policies in force,
4 remains the primary or exclusive source of new property
5 insurance coverage in significant portions of the state.
6 b. The Florida Windstorm Underwriting Association is
7 growing rapidly, with more than 400,000 policies in force,
8 approximately half of which were initially issued in 1997.
9 3. A further extension of the operation of this
10 section until June 1, 2001, will provide an opportunity for
11 the market to stabilize and for continuation of residual
12 market depopulation efforts.
13 (2) MORATORIUM COMPLETION.--
14 (a) As used in this subsection, the term "total number
15 of policies" means the number of an insurer's policies of a
16 specified type that were in force on June 1, 1996, or the date
17 on which this section became law, whichever was later.
18 (b) The following restrictions apply only to
19 cancellation or nonrenewal of personal lines residential
20 property insurance policies that were in force on June 1,
21 1996, or the date on which this section became law, whichever
22 was later.
23 1. In any 12-month period, an insurer may not cancel
24 or nonrenew more than 5 percent of such insurer's total number
25 of homeowner's policies, 5 percent of such insurer's total
26 number of mobile home owner's policies, or 5 percent of such
27 insurer's total number of personal lines residential policies
28 of all types and classes in the state for the purpose of
29 reducing the insurer's exposure to hurricane claims and may
30 not, with respect to any county, cancel or nonrenew more than
31 10 percent of its total number of homeowner's policies, 10
18
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 percent of its total number of mobile home owner's policies,
2 or 10 percent of its total number of personal lines
3 residential policies of all types and classes in the county
4 for the purpose of reducing the insurer's exposure to
5 hurricane claims. This subparagraph does not prohibit any
6 cancellations or nonrenewals of such policies for any other
7 lawful reason unrelated to the risk of loss from hurricane
8 exposure.
9 2.a. If, for any 12-month period, an insurer proposes
10 to cancel or nonrenew personal lines residential policies to
11 an extent not authorized by subparagraph 1. for the purpose of
12 reducing exposure to hurricane claims, the insurer must file a
13 phaseout plan with the department at least 90 days prior to
14 the effective date of the plan. In the plan, the insurer must
15 demonstrate to the department that the insurer is protecting
16 market stability and the interests of its policyholders. The
17 plan may not be implemented unless it is approved by the
18 department. In developing the plan, the insurer must consider
19 policyholder longevity, the use of voluntary incentives to
20 accomplish the reduction, and geographic distribution. The
21 insurer must demonstrate that under the plan the insurer will
22 not cancel or nonrenew more policies in the 12-month period
23 than the largest number of similar policies the insurer
24 canceled or nonrenewed for any reason in any 12-month period
25 between August 24, 1989, and August 24, 1992.
26 b. If the insurer considers the number of
27 cancellations and nonrenewals under sub-subparagraph a. to be
28 insufficient, the insurer may apply for approval of additional
29 cancellations or nonrenewals on the basis of an unreasonable
30 risk of insolvency. In evaluating a request under this
31 sub-subparagraph, the department shall consider and shall
19
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 require the insurer to provide information relevant to: the
2 insurer's size, market concentration, and general financial
3 condition; the portion of the insurer's business in this state
4 represented by personal lines residential property insurance;
5 the reasonableness of assumptions with respect to size,
6 frequency, severity, and path of hurricanes; the reinsurance
7 available to the insurer and potential recoveries from the
8 Florida Hurricane Catastrophe Fund; and the extent to which
9 the insurer's assets have been voluntarily transferred by
10 dividend or otherwise from the insurer to its stockholders,
11 parent companies, or affiliated companies since June 1, 1996,
12 or the date on which this section became law, whichever was
13 later. In the implementation of exposure reductions under this
14 sub-subparagraph, the department and the insurer shall
15 consider such factors as policyholder longevity, the use of
16 voluntary incentives to accomplish the exposure reduction, and
17 geographic distribution.
18 c. A policy shall not be counted as having been
19 canceled or nonrenewed for purposes of this subsection if any
20 of the following apply:
21 (I) The policy was canceled or nonrenewed for an
22 underwriting reason unrelated to the risk of loss from
23 hurricane exposure, nonpayment of premium, or any other lawful
24 reason that is unrelated to the risk of loss from hurricane
25 exposure. The department shall consider the reason specified
26 in the notice of cancellation or nonrenewal to be the reason
27 for the cancellation or nonrenewal unless the department finds
28 by a preponderance of the evidence that the stated reason was
29 not the insurer's actual reason for the cancellation or
30 nonrenewal.
31
20
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 (II) The cancellation or nonrenewal was initiated by
2 the insured.
3 (III) The insurer has offered the policyholder
4 replacement or alternative coverage at approved rates, which
5 coverage meets the requirements of the secondary mortgage
6 market.
7 d. In addition to any other cancellations or
8 nonrenewals subject to the limitations in this subsection, a
9 policy shall be considered as having been canceled or
10 nonrenewed for purposes of this subsection if:
11 (I) The insurer implements a rate increase under the
12 use-and-file provisions of s. 627.062(2)(a)2., which rate
13 increase exceeds 150 percent of the increase ultimately
14 approved by the department, and, while the rate filing was
15 pending, the policyholder voluntarily canceled or nonrenewed
16 the policy and obtained replacement coverage from another
17 insurer, including the Residential Property and Casualty Joint
18 Underwriting Association; or
19 (II) The insurer reduces the commission to an agent by
20 more than 25 percent and the agent thereafter places the risk
21 with another insurer, including the Residential Property and
22 Casualty Joint Underwriting Association, or the Florida
23 Windstorm Underwriting Association, or the Coastal Zone
24 Insurance Plan.
25 e. The department must approve or disapprove an
26 application for a waiver within 90 days after the department
27 receives the application for waiver.
28 3. In addition to the cancellations or nonrenewals
29 authorized under this section, an insurer may cancel or
30 nonrenew policies to the extent authorized by an exemption
31 from or waiver of either the moratorium created by chapter
21
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 93-401, Laws of Florida, or the moratorium phaseout under
2 former s. 627.7013(2).
3 4. Notwithstanding any provisions of this section to
4 the contrary, this section does not apply to any insurer that,
5 prior to August 24, 1992, filed notice of such insurer's
6 intent to discontinue writing insurance in this state under s.
7 624.430, and for which a finding has been made by the
8 department, the Division of Administrative Hearings of the
9 Department of Management Services, or a court that such notice
10 satisfied all requirements of s. 624.430. Nothing in this
11 section shall be construed to authorize an insurer to withdraw
12 from any line of property insurance business for the purpose
13 of reducing exposure to risk of hurricane loss if such
14 withdrawal commenced at any time that the moratorium under
15 chapter 93-401, Laws of Florida, or the moratorium phaseout
16 under this section is in effect.
17 5. The following actions by an insurer do not
18 constitute cancellations or nonrenewals for purposes of this
19 subsection:
20 a. The transfer of a risk from one admitted insurer to
21 another admitted insurer, unless the terms of the new or
22 replacement policy place the policyholder in default of a
23 mortgage obligation.
24 b. An increase in the hurricane deductible applicable
25 to the policy, unless the new deductible places the
26 policyholder in default of a mortgage obligation or the
27 deductible exceeds the limits specified in s. 627.701.
28 c. Any other lawful change in coverage that does not
29 place the policyholder in default of a mortgage obligation.
30 d. A cancellation or nonrenewal that is part of the
31 same action as the removal of a policy including windstorm or
22
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 hurricane coverage from the Residential Property and Casualty
2 Joint Underwriting Association.
3 6. In order to assure fair and effective enforcement
4 of this subsection, each insurer shall, no later than October
5 1, 1996, report to the department the policy number of each
6 policy subject to this subsection, arranged by county. The
7 report shall include the policy number for each personal lines
8 residential policy that was in force on June 1, 1996, or the
9 date this section became law, whichever was later. Beginning
10 October 1, 1996, each insurer shall also report, on a monthly
11 basis, all cancellations and nonrenewals of policies included
12 in such policy list and the reasons for the cancellations and
13 nonrenewals.
14 7. An insurer that has an overconcentration of wind
15 risk in areas eligible for coverage under the Florida
16 Windstorm Underwriting Association may submit to the
17 department for approval an accelerated exposure reduction
18 plan. The plan, if approved, shall allow the insurer to
19 nonrenew additional policies for reasons of reducing hurricane
20 loss, beyond the amounts authorized elsewhere in this
21 paragraph, subject to the following conditions:
22 a. All additional nonrenewals under this subparagraph
23 shall consist of nonrenewals of only the windstorm portion of
24 a policy, and shall be allowed only if the Florida Windstorm
25 Underwriting Association provides windstorm coverage to
26 replace the nonrenewed windstorm coverage.
27 b. At the conclusion of the accelerated exposure
28 reduction plan, which shall be no later than 12 months after
29 the date of the first nonrenewal under such plan, the insurer
30 is prohibited from any further nonrenewals for purposes of
31
23
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 reducing hurricane loss until the expiration of this
2 subsection.
3 c. The total number of nonrenewals statewide for
4 purposes of reduction of hurricane loss, under this
5 subparagraph taken together with the other provisions of this
6 paragraph, shall not exceed the total number of nonrenewals
7 that would have been allowed statewide under subparagraph 1.
8 between June 1, 1996, and the expiration of this subsection.
9 d. Notwithstanding the provisions of s. 627.4133, the
10 insurer must give the policyholder 45 days' advance notice of
11 the nonrenewal of windstorm coverage under this subparagraph
12 and the availability of such coverage through the Florida
13 Windstorm Underwriting Association.
14 e. The first nonrenewal under an accelerated exposure
15 reduction program under this subparagraph may not take effect
16 earlier than February 1, 1997.
17 f. In reviewing the proposed accelerated exposure
18 reduction plan, the department shall consider:
19 (I) The degree to which the exposure reduction plan is
20 necessary to address the insurer's overconcentration.
21 (II) Prior levels of participation in writing
22 voluntary wind coverage in areas eligible for coverage through
23 the Florida Windstorm Underwriting Association.
24 (III) The availability of wind coverage in the
25 voluntary market for the subject risks.
26 (IV) The capacity of the Florida Windstorm
27 Underwriting Association to absorb the risks proposed to be
28 covered by the association.
29 (c) The department may adopt rules to implement this
30 subsection.
31
24
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 (d) This section shall cease to operate at such time
2 as the department determines that the insured value of all
3 residential properties insured by the Florida Windstorm
4 Underwriting Association and all properties insured by the
5 Residential Property and Casualty Joint Underwriting
6 Association under policies providing wind coverage, combined,
7 has remained below $25 billion for 3 consecutive months, based
8 on exposure data reported to the department by the
9 associations.
10 (e)(d) This subsection is repealed on June 1, 2001
11 1999.
12 Section 6. Section 627.7014, Florida Statutes, is
13 amended to read:
14 627.7014 Orderly markets for condominium association
15 residential property insurance.--
16 (1) FINDINGS AND PURPOSE.--
17 (a) The Legislature finds:
18 1. That residential property insurers providing
19 condominium association coverage, as a condition of doing
20 business in this state, have a responsibility to contribute to
21 an orderly market for condominium association residential
22 property insurance and that there is a compelling state
23 interest in maintaining an orderly market for condominium
24 association residential property insurance.
25 2. That Hurricane Andrew, which caused over $15
26 billion of insured losses in South Florida, has reinforced the
27 need of consumers to have reliable condominium association
28 insurance coverage; however, even more than 3 years after
29 Hurricane Andrew, the hurricane's enormous monetary impact is
30 causing insurers to propose substantial cancellation or
31
25
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 nonrenewal of their condominium association insurance
2 policyholders.
3 3. That the massive cancellations and nonrenewals
4 announced, proposed, or contemplated by certain insurers
5 constitute a significant danger to the public health, safety,
6 and welfare and destabilize the insurance market.
7 4. That the Residential Property and Casualty Joint
8 Underwriting Association, a residual market mechanism created
9 to alleviate temporary unavailability of property insurance
10 coverage, remains the primary or exclusive source of new
11 property insurance in significant portions of the state.
12 5. That recent enactments intended to restore a
13 competitive, private sector property insurance market,
14 including creation and enhancement of the Florida Hurricane
15 Catastrophe Fund, incentives for depopulation of the
16 Residential Property and Casualty Joint Underwriting
17 Association, incentives for hurricane loss mitigation and
18 prevention, creation of the Florida Commission on Hurricane
19 Loss Projection Methodology, and revisions of laws relating to
20 rates and coverages, are beginning to have their intended
21 effects; however, the market remains unstable.
22 6. That the moratorium created by this section is the
23 least intrusive method for maintaining an orderly market for
24 condominium association insurance, insofar as it applies only
25 to hurricane-related cancellations and nonrenewals of personal
26 lines residential policies that were in force on the effective
27 date of this section, and insofar as it allows an insurer
28 annually to nonrenew up to 5 percent of the total number of
29 such policies as of the effective date of this section.
30 (b) The Legislature finds, as of January 1, 1998,
31 that:
26
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 1. The conditions described in paragraph (a) remain
2 applicable to the commercial residential property insurance
3 market in this state in 1998 and are likely to remain
4 applicable for several years thereafter.
5 2. The general instability of the market is reflected
6 by the recent rapid growth of the Florida Windstorm
7 Underwriting Association, which had more than 9,500 commercial
8 residential policies in force as of December 31, 1997,
9 representing a 58 percent increase over the number of
10 commercial residential policies in force on December 31, 1996.
11 3. An extension of the operation of this section until
12 June 1, 2001, will provide an opportunity for the market to
13 stabilize and for continuation of residual market depopulation
14 efforts.
15 (c)(b) The purposes of this section are to provide for
16 a temporary moratorium on hurricane-related cancellations and
17 nonrenewals of condominium association coverage and to require
18 advance planning and approval for programs of condominium
19 association exposure reduction.
20 (2) MORATORIUM.--
21 (a) As used in this subsection, the term "total number
22 of policies" means the number of an insurer's condominium
23 association policies providing windstorm or hurricane coverage
24 that were in force on the effective date of this section. The
25 following restrictions apply to the cancellation or nonrenewal
26 of condominium association residential property insurance
27 policies that were in force on the effective date of this
28 section:
29 1. In any 12-month period, an insurer may not cancel
30 or nonrenew more than 5 percent of its total number of
31 condominium association policies in the state for the purpose
27
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 of reducing the insurer's exposure to hurricane claims and may
2 not, with respect to any county, cancel or nonrenew more than
3 10 percent of its total number of condominium association
4 policies in the county for the purpose of reducing the
5 insurer's exposure to hurricane claims. This subparagraph does
6 not prohibit any cancellations or nonrenewals of such policies
7 for any other lawful reason unrelated to the risk of loss from
8 hurricane exposure.
9 2.a. If, for any 12-month period, an insurer proposes
10 to cancel or nonrenew condominium association policies to an
11 extent not authorized by subparagraph 1. for the purpose of
12 reducing exposure to hurricane claims, the insurer must file a
13 phaseout plan with the department at least 90 days prior to
14 the effective date of the plan. In the plan, the insurer must
15 demonstrate to the department that the insurer is protecting
16 market stability and the interests of its policyholders. The
17 plan may not be implemented unless it is approved by the
18 department. In developing the plan, the insurer must consider
19 policyholder longevity, the use of voluntary incentives to
20 accomplish the reduction, and geographic distribution. The
21 insurer must demonstrate that under the plan the insurer will
22 not cancel or nonrenew more policies in the 12-month period
23 than the largest number of similar policies the insurer
24 canceled or nonrenewed for any reason in any 12-month period
25 between August 24, 1989, and August 24, 1992.
26 b. If the insurer considers the number of
27 cancellations and nonrenewals under sub-subparagraph a. to be
28 insufficient, the insurer may apply for approval of additional
29 cancellations or nonrenewals on the basis of an unreasonable
30 risk of insolvency. In evaluating a request under this
31 sub-subparagraph, the department shall consider, and shall
28
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 require the insurer to provide information relevant to: the
2 insurer's size, market concentration, and general financial
3 condition; the portion of the insurer's business in this state
4 represented by condominium association residential property
5 insurance; the reasonableness of assumptions with respect to
6 size, frequency, severity, and path of hurricanes; and the
7 reinsurance available to the insurer and potential recoveries
8 from the Florida Hurricane Catastrophe Fund. In the
9 implementation of exposure reductions under this
10 sub-subparagraph, the department and the insurer shall
11 consider such factors as policyholder longevity, the use of
12 voluntary incentives to accomplish the exposure reduction, and
13 geographic distribution.
14 c. A policy shall not be counted as having been
15 canceled or nonrenewed for purposes of this subsection if any
16 of the following apply:
17 (I) The policy was canceled or nonrenewed for an
18 underwriting reason unrelated to the risk of loss from
19 hurricane exposure, nonpayment of premium, or any other lawful
20 reason that is unrelated to the risk of loss from hurricane
21 exposure. The department shall consider the reason specified
22 in the notice of cancellation or nonrenewal to be the reason
23 for the cancellation or nonrenewal unless the department finds
24 by a preponderance of the evidence that the stated reason was
25 not the insurer's actual reason for the cancellation or
26 nonrenewal.
27 (II) The cancellation or nonrenewal was initiated by
28 the insured.
29 (III) The insurer has offered the policyholder
30 replacement or alternative coverage at approved rates.
31
29
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 (IV) The risk is transferred from one admitted insurer
2 to another admitted insurer, unless the terms of the new or
3 replacement policy place the policyholder in default of a
4 mortgage obligation.
5 (V) The hurricane deductible applicable to the policy
6 is increased unless the new deductible exceeds statutory
7 limits or places the policyholder in default of a mortgage
8 obligation.
9 (VI) Any other lawful change in coverage that does not
10 place the policyholder in default of a mortgage obligation is
11 made.
12 d. In addition to any other cancellations or
13 nonrenewals subject to the limitations in this subsection, a
14 policy shall be considered as having been canceled or
15 nonrenewed for purposes of this subsection if:
16 (I) The insurer implements a rate increase under the
17 use-and-file provisions of s. 627.062(2)(a)2., which rate
18 increase exceeds 150 percent of the increase ultimately
19 approved by the department, and, while the rate filing was
20 pending, the policyholder voluntarily canceled or nonrenewed
21 the policy and obtained replacement coverage from another
22 insurer, including the Residential Property and Casualty Joint
23 Underwriting Association; or
24 (II) The insurer reduces the commission to an agent by
25 more than 25 percent and the agent thereafter places the risk
26 with another insurer, including the Residential Property and
27 Casualty Joint Underwriting Association.
28 e. The department must approve or disapprove an
29 application for a waiver within 90 days after the department
30 receives the application for waiver.
31
30
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 3. Notwithstanding any provisions of this section to
2 the contrary, this section does not apply to any insurer that,
3 prior to August 24, 1992, filed notice of such insurer's
4 intent to discontinue writing insurance in this state under s.
5 624.430, and for which a finding has been made by the
6 department, the Division of Administrative Hearings of the
7 Department of Management Services, or a court that such notice
8 satisfied all requirements of s. 624.430. This section also
9 does not apply to any insurer that:
10 a. Collects at least 75 percent of its Florida
11 premiums from policies that include hurricane coverage
12 provided to condominium associations in coastal counties.
13 b. Collects at least 80 percent of its Florida
14 premiums from policies that include hurricane coverage
15 provided to condominium associations in Broward, Dade, and
16 Palm Beach Counties.
17 c. Has, annually since 1992:
18 (I) Increased its aggregate Florida premium volume
19 from policies that include hurricane coverage provided to
20 condominium associations in coastal counties.
21 (II) Increased its aggregate Florida premium volume
22 from policies that include hurricane coverage provided to
23 condominium associations in Broward, Dade, and Palm Beach
24 Counties.
25 (III) Increased its aggregate Florida exposure from
26 policies that include hurricane coverage provided to
27 condominium associations in coastal counties.
28 (IV) Increased its aggregate Florida exposure from
29 policies that include hurricane coverage provided to
30 condominium associations in Broward, Dade, and Palm Beach
31 Counties.
31
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 d. Has surplus as to policyholders of no more than
2 $200 million as reflected in its annual statement for 1995.
3 4. In order to assure fair and effective enforcement
4 of this subsection, each insurer shall, no later than October
5 1, 1996, report to the department the policy number of each
6 policy subject to this subsection, arranged by county. The
7 report shall include the policy number for each condominium
8 association policy that was in force on the effective date of
9 this section. Beginning October 1, 1996, each insurer shall
10 also report, on a monthly basis, all cancellations and
11 nonrenewals of policies included in such policy list and the
12 reasons for the cancellations and nonrenewals.
13 5. An insurer that has an overconcentration of wind
14 risk in areas eligible for coverage under the Florida
15 Windstorm Underwriting Association may submit to the
16 department for approval an accelerated exposure reduction
17 plan. The plan, if approved, shall allow the insurer to
18 nonrenew additional policies for reasons of reducing hurricane
19 loss, beyond the amounts authorized elsewhere in this
20 paragraph, subject to the following conditions:
21 a. All additional nonrenewals under this subparagraph
22 shall consist of nonrenewals of only the windstorm portion of
23 a policy, and shall be allowed only if the Florida Windstorm
24 Underwriting Association provides windstorm coverage to
25 replace the nonrenewed windstorm coverage.
26 b. At the conclusion of the accelerated exposure
27 reduction plan, which shall be no later than 12 months after
28 the date of the first nonrenewal under such plan, the insurer
29 is prohibited from any further nonrenewals for purposes of
30 reducing hurricane loss until the expiration of this
31 subsection.
32
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 c. The total number of nonrenewals statewide for
2 purposes of reduction of hurricane loss, under this
3 subparagraph taken together with the other provisions of this
4 paragraph, shall not exceed the total number of nonrenewals
5 that would have been allowed statewide under subparagraph 1.
6 between June 1, 1996, and the expiration of this subsection.
7 d. Notwithstanding the provisions of s. 627.4133, the
8 insurer must give the policyholder 45 days' advance notice of
9 the nonrenewal of windstorm coverage under this subparagraph
10 and the availability of such coverage through the Florida
11 Windstorm Underwriting Association.
12 e. The first nonrenewal under an accelerated exposure
13 reduction program under this subparagraph may not take effect
14 earlier than February 1, 1997.
15 f. In reviewing the proposed accelerated exposure
16 reduction plan, the department shall consider:
17 (I) The degree to which the exposure reduction plan is
18 necessary to address the insurer's overconcentration.
19 (II) Prior levels of participation in writing
20 voluntary wind coverage in areas eligible for coverage through
21 the Florida Windstorm Underwriting Association.
22 (III) The availability of wind coverage in the
23 voluntary market for the subject risks.
24 (IV) The capacity of the Florida Windstorm
25 Underwriting Association to absorb the risks proposed to be
26 covered by the association.
27 (b) The department may adopt rules to implement this
28 subsection.
29 (c) This section shall cease to operate at such time
30 as the department determines that the insured value of all
31 residential properties insured by the Florida Windstorm
33
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 Underwriting Association and all properties insured by the
2 Residential Property and Casualty Joint Underwriting
3 Association under policies providing wind coverage, combined,
4 has remained below $25 billion for 3 consecutive months, based
5 on exposure data reported to the department by the
6 associations.
7 (d)(c) This subsection is repealed on June 1, 2001
8 1999.
9 Section 7. Subsection (7) of section 627.7295, Florida
10 Statutes, is amended to read:
11 627.7295 Motor vehicle insurance contracts.--
12 (7) A policy of private passenger motor vehicle
13 insurance or a binder for such a policy may be initially
14 issued in this state only if the insurer or agent has
15 collected from the insured an amount equal to 2 months'
16 premium. An insurer, agent, or premium finance company may
17 not directly or indirectly take any action resulting in the
18 insured having paid from the insured's own funds an amount
19 less than the 2 months' premium required by this subsection.
20 This subsection applies without regard to whether the premium
21 is financed by a premium finance company or is paid pursuant
22 to a periodic payment plan of an insurer or an insurance
23 agent. This subsection does not apply if an insured or member
24 of the insured's family is renewing or replacing a policy or a
25 binder for such policy written by the same insurer or a member
26 of the same insurer group. This subsection does not apply to
27 an insurer that issues private passenger motor vehicle
28 coverage primarily to active duty or former military personnel
29 or their dependents. This subsection does not apply if the
30 policy is paid pursuant to a payroll deduction plan or an
31 automatic electronic funds transfer payment plan. This
34
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 subsection and subsection (4) do not apply if an insured has
2 had a policy in effect for at least 6 months, the insured's
3 agent is terminated by the insurer that issued the policy, and
4 the insured obtains coverage on the policy's renewal date with
5 a new company through the terminated agent.
6 Section 8. Paragraph (e) of subsection (2) of section
7 627.351, Florida Statutes, is amended to read:
8 627.351 Insurance risk apportionment plans.--
9 (2) WINDSTORM INSURANCE RISK APPORTIONMENT.--
10 (e) Notwithstanding the provisions of subparagraph
11 (c)2. or paragraph (d), eligibility shall not be extended to
12 any area that was not eligible on March 1, 1997, except that
13 the department may act with respect to any petition on which a
14 hearing was held prior to May 9, 1997 the effective date of
15 this act. This paragraph is repealed on October 1, 1998.
16 Section 9. Section 626.9543, Florida Statutes, is
17 created to read:
18 626.9543 Holocaust victims.--
19 (1) SHORT TITLE.--This section may be cited as the
20 "Holocaust Victims Insurance Act."
21 (2) INTENT; PURPOSE.--It is the Legislature's intent
22 that the potential and actual insurance claims of Holocaust
23 victims and their heirs and beneficiaries be expeditiously
24 identified and properly paid and that Holocaust victims and
25 their families receive appropriate assistance in the filing
26 and payment of their rightful claims.
27 (3) DEFINITIONS.--For the purpose of this section:
28 (a) "Department" means the Department of Insurance.
29 (b) "Holocaust victim" means any person who lost his
30 or her life or property as a result of discriminatory laws,
31 policies, or actions targeted against discrete groups of
35
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 persons between 1920 and 1945, inclusive, in Nazi Germany,
2 areas occupied by Nazi German, or countries allied with Nazi
3 Germany.
4 (c) "Insurance policy" means, but is not limited to,
5 life insurance, property insurance, or education policies.
6 (d) "Legal relationship" means any parent, subsidiary,
7 or affiliated company with an insurer doing business in this
8 state.
9 (e) "Proceeds" means the face or other payout value of
10 policies and annuities plus reasonable interest to date of
11 payments without diminution for wartime or immediate postwar
12 currency devaluation.
13 (4) ASSISTANCE TO HOLOCAUST VICTIMS.--The department
14 shall establish a toll-free telephone number, available in
15 appropriate languages, to assist any person seeking to recover
16 proceeds from an insurance policy issued to a Holocaust
17 victim.
18 (5) PROOF OF A CLAIM.--Any insurer doing business in
19 this state, in receipt of a claim from a Holocaust victim or
20 from a beneficiary, descendent or heir of a Holocaust victim,
21 shall:
22 (a) Diligently and expeditiously investigate all such
23 claims.
24 (b) Allow such claimants to meet a reasonable, not
25 unduly restrictive, standard of proof to substantiate a claim,
26 pursuant to standards established by the department.
27 (c) Permit claims irrespective of any statute of
28 limitations or notice requirements imposed by any insurance
29 policy issued, provided the claim is submitted within 10 years
30 after effective date of this section.
31
36
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 (6) STATUTE OF LIMITATIONS.--Notwithstanding any law
2 or agreement among the parties to an insurance policy to the
3 contrary, any action brought by Holocaust victims or by a
4 beneficiary, heir, or descendent of a Holocaust victim seeking
5 proceeds of an insurance policy issued or in effect between
6 1920 and 1945, inclusive, shall not be dismissed for failure
7 to comply with the applicable statute of limitations or laches
8 provided the action is commenced within 10 years after the
9 effective date of this section.
10 (7) REPORTS FROM INSURERS.--Any insurer doing business
11 in this state shall have an affirmative duty to ascertain to
12 the extent possible and report to the department within 90
13 days after the effective date of this section and annually
14 thereafter all efforts made and results of such efforts to
15 ascertain:
16 (a) Any legal relationship with an international
17 insurer that issued an insurance policy to a Holocaust victim
18 between 1920 and 1945, inclusive.
19 (b) The number and total value of such policies.
20 (c) Any claim filed by a Holocaust victim, his or her
21 beneficiary, heir, or descendent that has been paid, denied
22 payment, or is pending.
23 (d) Attempts made by the insurer to locate the
24 beneficiaries of any such policies for which no claim of
25 benefits has been made.
26 (e) An explanation of any denial or pending payment of
27 a claim to a Holocaust victim, his or her beneficiary, heir,
28 or descendent.
29 (8) REPORTS TO THE LEGISLATURE.--The department shall
30 report to the Legislature one year after the effective date of
31 this section and annually thereafter:
37
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 (a) The number of insurers doing business in this
2 state which have a legal relationship with an international
3 insurer that could have issued a policy to a Holocaust victim
4 between 1920 and 1945, inclusive.
5 (b) A list of all claims paid, denied, or pending to a
6 Holocaust victim, his or her beneficiary, heir, or descendent.
7 (c) A summary of the length of time for the processing
8 and disposition of a claim by the insurer.
9 (9) PENALTIES.--In addition to any other penalty
10 provided under this chapter, any insurer or person who
11 violates the provisions of this section is subject to an
12 administrative penalty of $1,000 per day for each day such
13 violation continues.
14 (10) PRIVATE RIGHT OF ACTION.--An action to recover
15 damages caused by a violation of this section must be
16 commenced within 5 years after the cause of action has
17 accrued. Any person who shall sustain damages by the reason
18 of a violation of this section shall recover threefold the
19 actual damages sustained thereby, as well as costs not
20 exceeding $50,000, and reasonable attorneys' fees. At or
21 before the commencement of any civil action by a party, notice
22 thereof shall be served upon the department.
23 (11) RULES.--The department, by rule, shall provide
24 for the implementation of the provisions of this section by
25 establishing procedures and related forms for facilitating,
26 monitoring, and verifying compliance with this section and for
27 the establishment for a restitution program for Holocaust
28 victims, survivors, and their heirs and beneficiaries.
29 (12) SEVERABILITY.--If any provision of this section
30 or the application thereof to any person or circumstance is
31 held invalid, the invalidity shall not affect other provisions
38
CODING: Words stricken are deletions; words underlined are additions.
CS for SB 1108 First Engrossed
1 or applications of the section which can be given effect
2 without the invalid provision or application, and to this end
3 the provisions of this section are declared severable.
4 Section 10. This act shall take effect July 1, 1998.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
39