CS/CS/HB 1171

1	A bill to be entitled
2	An act relating to residential property insurance;
3	amending s. 627.062, F.S.; authorizing certain insurers to
4	use a rate in excess of the otherwise applicable filed
5	rate; prohibiting the consideration of certain policies
6	when making a specified calculation; preserving the
7	authority of the Office of Insurance Regulation to
8	disapprove rates as inadequate or disapprove a rate filing
9	for using an unlawful rating factor; authorizing the
10	office to direct an insurer to make a specified type of
11	rate filing under certain circumstances; creating s.
12	627.7031, F.S.; authorizing an insurer to offer or renew
13	policies at rates established in accordance with specified
14	provisions of state law if certain conditions are met;
15	requiring that certain policies contain a specified
16	notice; providing for applicability; requiring written
17	notice of nonrenewal, cancellation, or termination;
18	providing an effective date.
19
20	Be It Enacted by the Legislature of the State of Florida:
21	Section 1.  Paragraph (k) is added to subsection (2) of
22	section 627.062, Florida Statutes, to read:
23	627.062  Rate standards.--
24	(2)  As to all such classes of insurance:
25	(k)1.  Insurers complying with the requirements of s.
26	627.7031 may use a rate in excess of the otherwise applicable
27	filed rate.
28	2.  Policies subject to this paragraph may not be counted
29	in the calculation under s. 627.171(2).
30	3.  Such rates shall be filed with the office. This
31	paragraph does not affect the authority of the office to
32	disapprove a rate as inadequate or to disapprove a rate filing
33	for using a rating factor that is unlawful under s. 626.9541(1).
34	Upon finding that an insurer has used a rating factor that is
35	unlawful under s. 626.9541(1), the office may direct the insurer
36	to make a filing for rates governed by this paragraph and which
37	do not use such rating factor.
38
39	The provisions of this subsection shall not apply to workers'
40	compensation and employer's liability insurance and to motor
41	vehicle insurance.
42	Section 2.  Section 627.7031, Florida Statutes, is created
43	to read:
44	627.7031  Residential property insurance option.--
45	(1)  An insurer may offer or renew policies at rates
46	established in accordance with s. 627.062(2)(k) if all of the
47	following conditions are met:
48	(a)  The insurer is authorized to write property insurance
49	in this state.
50	(b)1.  The insurer has, at the time of issuance of the
51	policy or at the time of first renewal at rates pursuant to s.
52	627.062(2)(k), surplus as to policyholders equal to or greater
53	than $500 million as calculated based on the information in the
54	insurer's most recent annual statement;
55	2.  The insurer has, at the time of issuance of the policy
56	or at the time of first renewal at rates pursuant to s.
57	627.062(2)(k), a surplus as to policyholders equal to or greater
58	than $200 million and a ratio of net written premium to its
59	surplus as to policyholders, as calculated based on the
60	information in the insurer's most recent annual statement, not
61	exceeding two to one. For purposes of this subparagraph, the
62	calculation of net written premium shall consider only
63	reinsurance placed pursuant to s. 215.555(4) and with reinsurers
64	or direct insurers that have been given a superior, excellent,
65	exceptional, or equally comparable financial strength rating by
66	a rating agency that is generally considered accurate or
67	acceptable; or
68	3.  The insurer has, at the time of issuance of the policy
69	or at the time of first renewal at rates pursuant to s.
70	627.062(2)(k), a surplus as to policyholders equal to or greater
71	than $150 million, as calculated based on the information in the
72	insurer's most recent annual statement, and is an insurer whose
73	primary function is offering insurance as a service or member
74	benefit to members of a nonprofit corporation.
75	(c)  The insurer may not purchase coverage relating to
76	temporary increase in coverage limit options under s.
77	215.555(17) from the Florida Hurricane Catastrophe Fund.
78	(d)  Before the issuance or renewal of a policy at rates
79	established in accordance with s. 627.062(2)(k), the applicant
80	or insured must be given the following notice, printed in at
81	least 12-point boldfaced type:
82
83	THE RATE FOR THIS POLICY IS NOT REGULATED BY THE FLORIDA
84	OFFICE OF INSURANCE REGULATION AND MAY BE HIGHER THAN RATES
85	APPROVED BY THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT
86	TO FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE FROM
87	ANOTHER INSURER OR CITIZENS PROPERTY INSURANCE CORPORATION.
88	PLEASE DISCUSS YOUR POLICY OPTIONS WITH AN INSURANCE AGENT. YOU
89	MAY WISH TO VIEW THE OFFICE OF INSURANCE REGULATION'S WEBSITE
90	WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION ABOUT CHOICES
91	AVAILABLE TO YOU.
92
93	(e)  Before the issuance of a policy at a rate established
94	in accordance with s. 627.062(2)(k), or before the first renewal
95	at such rate of a policy originally issued before the effective
96	date of this section, the applicant or insured must:
97	1.  Be given a quote for a policy from Citizens Property
98	Insurance Corporation, or for a fully rate-regulated policy from
99	an admitted insurer willing to insure the risk, reflecting
100	substantially similar coverages, limits, and deductibles to the
101	extent available.
102	2.  Sign the following acknowledgement form, which must be
103	retained by the insurer or agent for at least 3 years. If the
104	acknowledgement form is signed by the insured, it is presumed
105	that the insured has been informed and understands the form:
106
107	ACKNOWLEDGEMENT
108	1.  I HAVE REVIEWED THE REQUIRED DISCLOSURES AND THE
109	REQUIRED PREMIUM COMPARISON.
110	2.  I UNDERSTAND THAT THE RATE FOR THIS RESIDENTIAL
111	PROPERTY INSURANCE POLICY IS NOT REGULATED BY THE FLORIDA OFFICE
112	OF INSURANCE REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY
113	THAT OFFICE.
114	3.  I UNDERSTAND THAT A RESIDENTIAL PROPERTY INSURANCE
115	POLICY SUBJECT TO FULL RATE REGULATION REQUIREMENTS MAY BE
116	AVAILABLE FROM ANOTHER INSURER OR CITIZENS PROPERTY INSURANCE
117	CORPORATION.
118	4.  I UNDERSTAND THAT THE FLORIDA OFFICE OF INSURANCE
119	REGULATION'S WEBSITE WWW.SHOPANDCOMPARERATES.COM CONTAINS
120	RESIDENTIAL PROPERTY INSURANCE RATE COMPARISON INFORMATION.
121	5.  I UNDERSTAND THAT SHOULD A HURRICANE CAUSE SEVERE
122	DAMAGE IN FLORIDA, A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
123	CORPORATION MAY BE REQUIRED TO PAY A HIGHER ASSESSMENT THAN THE
124	ASSESSMENT OTHERWISE APPLICABLE TO THIS RESIDENTIAL PROPERTY
125	INSURANCE POLICY.
126
127	(2)  For policies renewed at a rate established in
128	accordance with s. 627.062(2)(k), the notice described in
129	paragraph (1)(d) must be furnished in writing at the same time
130	as the renewal notice on a document separate from the renewal
131	notice, but may be contained within the same mailing as the
132	renewal notice.
133	(3)  This section does not apply to residential property
134	insurance policies that exclude coverage for the perils of
135	windstorm or hurricane.
136	(4)  Notwithstanding s. 627.4133, an insurer issuing a
137	policy under this section shall provide the named insured
138	written notice of nonrenewal, cancellation, or termination at
139	least 180 days before the effective date of the nonrenewal,
140	cancellation, or termination.
141	Section 3.  This act shall take effect upon becoming a law.
142

CODING: Words stricken are deletions; words underlined are additions.