Florida Senate - 2011                        COMMITTEE AMENDMENT
       Bill No. SB 408
                                Barcode 812700                          
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                   Comm: WD            .                                
                  02/22/2011           .                                

       The Committee on Banking and Insurance (Fasano) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete lines 1216 - 1290
    4  and insert:
    5         (1)(a) It is the intent of the Legislature that insurers
    6  must provide the most accurate pricing signals available in
    7  order savings to encourage consumers to who install or implement
    8  windstorm damage mitigation techniques, alterations, or
    9  solutions to their properties to prevent windstorm losses. It is
   10  also the intent of the Legislature that implementation of
   11  mitigation discounts not result in a loss of income to the
   12  insurers granting the discounts, so that the aggregate of such
   13  discounts not exceed the aggregate of the expected reduction in
   14  loss attributable to the mitigation efforts for which discounts
   15  are granted. A rate filing for residential property insurance
   16  must include actuarially reasonable discounts, credits, debits,
   17  or other rate differentials, or appropriate reductions in
   18  deductibles, which provide the proper pricing for all
   19  properties. The rate filing must take into account the presence
   20  or absence of on which fixtures or construction techniques
   21  demonstrated to reduce the amount of loss in a windstorm which
   22  have been installed or implemented. The fixtures or construction
   23  techniques must shall include, but need not be limited to,
   24  fixtures or construction techniques that which enhance roof
   25  strength, roof covering performance, roof-to-wall strength,
   26  wall-to-floor-to-foundation strength, opening protection, and
   27  window, door, and skylight strength. Credits, debits, discounts,
   28  or other rate differentials, or appropriate reductions or
   29  increases in deductibles, which recognize the presence or
   30  absence of for fixtures and construction techniques that which
   31  meet the minimum requirements of the Florida Building Code must
   32  be included in the rate filing. If an insurer demonstrates that
   33  the aggregate of its mitigation discounts results in a reduction
   34  to revenue which exceeds the reduction of the aggregate loss
   35  that is expected to result from the mitigation, the insurer may
   36  recover the lost revenue through an increase in its base rates.
   37  All insurance companies must make a rate filing which includes
   38  the credits, discounts, or other rate differentials or
   39  reductions in deductibles by February 28, 2003. By July 1, 2007,
   40  the office shall reevaluate the discounts, credits, other rate
   41  differentials, and appropriate reductions in deductibles for
   42  fixtures and construction techniques that meet the minimum
   43  requirements of the Florida Building Code, based upon actual
   44  experience or any other loss relativity studies available to the
   45  office. The office shall determine the discounts, credits,
   46  debits, other rate differentials, and appropriate reductions or
   47  increases in deductibles that reflect the full actuarial value
   48  of such revaluation, which may be used by insurers in rate
   49  filings.
   50         (b) By February 1, 2011, the Office of Insurance
   51  Regulation, in consultation with the Department of Financial
   52  Services and the Department of Community Affairs, shall develop
   53  and make publicly available a proposed method for insurers to
   54  establish discounts, credits, or other rate differentials for
   55  hurricane mitigation measures which directly correlate to the
   56  numerical rating assigned to a structure pursuant to the uniform
   57  home grading scale adopted by the Financial Services Commission
   58  pursuant to s. 215.55865, including any proposed changes to the
   59  uniform home grading scale. By October 1, 2011, the commission
   60  shall adopt rules requiring insurers to make rate filings for
   61  residential property insurance which revise insurers’ discounts,
   62  credits, or other rate differentials for hurricane mitigation
   63  measures so that such rate differentials correlate directly to
   64  the uniform home grading scale. The rules may include such
   65  changes to the uniform home grading scale as the commission
   66  determines are necessary, and may specify the minimum required
   67  discounts, credits, or other rate differentials. Such rate
   68  differentials must be consistent with generally accepted
   69  actuarial principles and wind-loss mitigation studies. The rules
   70  must shall allow a period of at least 2 years after the
   71  effective date of the revised mitigation discounts, credits, or
   72  other rate differentials for a property owner to obtain an
   73  inspection or otherwise qualify for the revised credit, during
   74  which time the insurer shall continue to apply the mitigation
   75  credit that was applied immediately before prior to the
   76  effective date of the revised credit. Discounts, credits, and
   77  other rate differentials established for rate filings under this
   78  paragraph shall supersede, after adoption, the discounts,
   79  credits, and other rate differentials included in rate filings
   80  under paragraph (a).
   82  ================= T I T L E  A M E N D M E N T ================
   83         And the title is amended as follows:
   84         Delete lines 90 - 96
   85  and insert:
   86         reduction in expected losses;