Florida Senate - 2013                        COMMITTEE AMENDMENT
       Bill No. CS for SB 1046
                                Barcode 728946                          
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/22/2013           .                                

       The Committee on Appropriations (Richter) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete lines 1097 - 1115
    4  and insert:
    5  premium for employers that have exposure in more than one state,
    6  an estimated annual standard premium in this state of $175,000,
    7  and an estimated annual countrywide standard premium of $1
    8  million or more for workers’ compensation.
    9         Section 28. Subsection (2) of section 627.281, Florida
   10  Statutes, is amended to read:
   11         627.281 Appeal from rating organization; workers’
   12  compensation and employer’s liability insurance filings.—
   13         (2) If such appeal is based upon the failure of the rating
   14  organization to make a filing on behalf of such member or
   15  subscriber which is based on a system of expense provisions
   16  which differs, in accordance with the right granted in s.
   17  627.072(3) 627.072(2), from the system of expense provisions
   18  included in a filing made by the rating organization, the office
   19  shall, if it grants the appeal, order the rating organization to
   20  make the requested filing for use by the appellant. In deciding
   21  such appeal, the office shall apply the applicable standards set
   22  forth in ss. 627.062 and 627.072.
   23         Section 29. Paragraphs (gg), (hh), and (ii) are added to
   24  subsection (6) of section 627.351, Florida Statutes, to read:
   25         627.351 Insurance risk apportionment plans.—
   27         (gg)At least once every 6 months, the corporation shall
   28  submit a report to the office and the Insurance Consumer
   29  Advocate disclosing:
   30         1. The total number of requests received for residential
   31  sinkhole loss coverage;
   32         2. The total number of policies issued for residential
   33  sinkhole loss coverage;
   34         3.The total number of requests declined for residential
   35  sinkhole loss coverage; and
   36         4. The reasons for declining the requests for residential
   37  sinkhole loss coverage.
   38         (hh)The Legislature finds that it is in the public
   39  interest that sinkhole loss claims are resolved by stabilizing
   40  the land and structure and making repairs to the foundation of
   41  the damaged structure. Therefore, a Citizens Sinkhole
   42  Stabilization Repair Program is established by the corporation.
   43  By March 31, 2014, any claim against a corporation policy that
   44  covers residential sinkhole loss for which it is determined that
   45  such loss has occurred must be included in and governed by the
   46  repair program for the purpose of stabilizing the land and
   47  structure and making repairs to the foundation.
   48         1. As used in this paragraph, the terms:
   49         a. “Engineering report” means the report issued pursuant to
   50  s. 627.7073(1).
   51         b. “Recommendation of the engineer” means the
   52  recommendation of the engineer engaged by the corporation
   53  pursuant to s. 627.7073(1)(a)5.
   54         c. “Stabilization repairs” means stabilizing the land and
   55  structure and making repairs to the foundation.
   56         d. “Stabilization repair contractor” means a contractor who
   57  stabilizes the land and structure and makes repairs to the
   58  foundation of the damaged structure.
   59         2. The repair program may be managed by the corporation or
   60  a third-party administrator and, at a minimum, must include the
   61  following components:
   62         a.The corporation may not require the policyholder to
   63  advance payment for repairs.
   64         b.Stabilization repairs shall be conducted by
   65  stabilization repair contractors selected from an approved
   66  stabilization repair contractor pool procured by the corporation
   67  pursuant to an open and transparent process. Each stabilization
   68  repair contractor within the pool must be qualified and approved
   69  by the corporation based upon criteria including the following
   70  minimum requirements:
   71         (I)The stabilization repair contractor must be certified
   72  as a contractor pursuant s. 489.113(1).
   73         (II)The stabilization repair contractor corporate entity
   74  must demonstrate experience in stabilization of sinkhole
   75  activity pursuant to requirements to be established by the
   76  corporation.
   77         (III)The stabilization repair contractor must demonstrate
   78  capacity to be bonded and provide performance, surety, or other
   79  bonds as described in this section which may be supplemented by
   80  additional requirements as determined by the corporation.
   81         (IV)The stabilization repair contractor must demonstrate
   82  insurance coverage requirements, including, but not limited to,
   83  commercial general liability coverage and workers’ compensation,
   84  to be established by the corporation.
   85         (V)The stabilization repair contractor must maintain a
   86  valid drug-free workplace program.
   87         (VI)Such other requirements as established by the
   88  corporation.
   89         c.Pursuant to the stabilization repair program, qualified
   90  stabilization repair contractors shall be selected from the
   91  approved stabilization repair contractor pool to stabilize the
   92  land and structure and repair the foundation of the damaged
   93  structure pursuant to a fixed-price contract between the
   94  contractor and the corporation. Such contracts are not subject
   95  to paragraph (6)(e) or s. 287.057. Pursuant to the terms of the
   96  contract, the selected stabilization repair contractor is solely
   97  responsible for the performance of all necessary stabilization
   98  repairs specified in the engineering report and recommendations
   99  of the engineer.
  100         d.The corporation shall develop a standard stabilization
  101  repair contract for the purpose of stabilizing the land and
  102  structure and repairing the foundation of all properties within
  103  the program. The contract must include the following minimum
  104  requirements:
  105         (I)The assigned stabilization repair contractor must agree
  106  to make all stabilization repairs identified in the engineering
  107  report based upon a fixed price.
  108         (II)Each stabilization repair contractor must post a
  109  payment bond in favor of the corporation as obligee for each
  110  project assigned and must post a performance bond, secured by a
  111  third-party surety, in favor of the corporation as obligee, in a
  112  principal amount equal to the total cost of all fixed-price
  113  contracts annually awarded to that contractor.
  114         (III)In addition to the required performance bond, each
  115  stabilization repair contractor must also provide a warranty,
  116  secured by a third-party surety, to the policyholder which
  117  covers all repairs provided by the stabilization repair
  118  contractor for at least 5 years after completion of the
  119  stabilization repairs.
  120         (IV)Throughout the course of the stabilization repairs
  121  performed by the contractor, the engineer shall monitor the
  122  property and confirm that stabilization has been satisfactorily
  123  completed and that no further stabilization is necessary to
  124  remedy the damage identified in the engineering report and
  125  recommendation of the engineer.
  126         (V)If the engineer concludes that additional stabilization
  127  repair is necessary to complete the repairs specified in the
  128  engineering report and recommendations of the engineer, the
  129  stabilization repair contractor must perform the additional
  130  stabilization repairs at no cost to the corporation or the
  131  policyholder. The contract between the corporation and the
  132  contractor must contain provisions specifying the remedy and
  133  sanctions for failing to perform such additional repairs.
  134         e.The corporation shall enter into contracts to perform
  135  repairs pursuant to a process that includes, but is not limited
  136  to, the following requirements:
  137         (I)Within 30 days after the completion of the engineering
  138  report, the report shall be identified on a list which shall be
  139  made available to all stabilization contractors.
  140         (II)The corporation shall establish a selection process
  141  for assigning stabilization repair contractors to perform
  142  repairs for each property within the program. The selection
  143  process must include:
  144         (A) All stabilization repair contractors within the
  145  stabilization repair contractor pool shall be provided with an
  146  opportunity to submit an offer, that includes an itemized
  147  statement of work, to perform the stabilization repairs
  148  recommended in the engineering report.
  149         (B) The corporation shall review the offers and provide the
  150  policyholder with a list of stabilization repair contractors
  151  from which the policyholder shall be provided a reasonable time,
  152  not to exceed 30 days, to participate in the selection by
  153  choosing the stabilization repair contractor from among those
  154  qualified contractors on the list provided by the corporation.
  155         (C) If the policyholder has not made such a selection
  156  within the 30-day period described herein, the corporation may
  157  make the selection.
  158         (D) The corporation may reserve the right to include any or
  159  all contractors on the list provided to the policyholder based
  160  upon quality, cost-effectiveness, and such other criteria as the
  161  corporation shall determine.
  162         (III)If no stabilization repair contractor submits an
  163  offer to perform the stabilization repairs for a property within
  164  the program or all offers are above the policyholder’s policy
  165  limit, the corporation may enter the property into the selection
  166  process again or the corporation may pay the policyholder an
  167  amount up to the policy limits on the structure.
  168         f.The corporation is not responsible for serving as a
  169  stabilization repair contractor. The corporation’s obligations
  170  pursuant to the repair program are not an election to repair by
  171  the corporation and therefore do not imply or result in a new
  172  contractual relationship with the policyholder.
  173         g.The corporation’s liability related to repair activity,
  174  including stabilization repairs pursuant to the sinkhole
  175  stabilization program and all other repairs to the structure in
  176  accordance with the terms of the policy, is no greater than the
  177  policy limits on the structure.
  178         h. This section does not prohibit the corporation from
  179  establishing a managed repair program for other repairs to the
  180  structure in accordance with the terms of the policy.
  181         i.If a dispute arises between the corporation and the
  182  policyholder as to the nature or extent of stabilization repairs
  183  to be conducted under the program, the sole remedy for resolving
  184  such disputes shall be specific performance.
  185         j. This section supersedes s. 627.707(5), except for
  186  paragraph (5)(e).
  187         3. The corporation shall pay for other repairs to the
  188  structure and contents in accordance with the terms of the
  189  policy.
  190         (ii)A policy for residential property insurance issued by
  191  the corporation must include a deductible amount applicable to
  192  sinkhole losses, offered in amounts equal to 2 percent, 5
  193  percent, and 10 percent of the policy dwelling limits, with
  194  appropriate premium discounts offered with each deductible
  195  amount.
  196         Section 30. Section 627.3519, Florida Statutes, is amended
  197  to read:
  198         627.3519 Annual report of aggregate net probable maximum
  199  losses, financing options, and potential assessments.—No later
  200  than February 1 of each year, the Florida Hurricane Catastrophe
  201  Fund and Citizens Property Insurance Corporation Financial
  202  Services Commission shall provide to the Legislature and the
  203  Financial Services Commission a report of their respective the
  204  aggregate net probable maximum losses, financing options, and
  205  potential assessments of the Florida Hurricane Catastrophe Fund
  206  and Citizens Property Insurance Corporation. The report of the
  207  fund and the corporation must include their the respective 50
  208  year, 100-year, and 250-year probable maximum losses of the fund
  209  and the corporation; analysis of all reasonable financing
  210  strategies for each such probable maximum loss, including the
  211  amount and term of debt instruments; specification of the
  212  percentage assessments that would be needed to support each of
  213  the financing strategies; and calculations of the aggregate
  214  assessment burden on Florida property and casualty policyholders
  215  for each of the probable maximum losses. The commission shall
  216  require the fund and the corporation to provide the commission
  217  with such data and analysis as the commission considers
  218  necessary to prepare the report.
  220  ================= T I T L E  A M E N D M E N T ================
  221         And the title is amended as follows:
  222         Delete lines 119 - 125
  223  and insert:
  224         conforming a cross-reference; amending s. 627.351,
  225         F.S.; requiring Citizens Property Insurance
  226         Corporation to submit a biannual report on the number
  227         of residential sinkhole policies issued and declined;
  228         providing legislative intent; establishing a Citizens
  229         Sinkhole Stabilization Repair Program for sinkhole
  230         claims; providing definitions; providing program
  231         components; specifying the corporation’s liability
  232         with respect to sinkhole claims; requiring the
  233         corporation to offer specified deductible amounts for
  234         sinkhole loss coverage; amending s. 627.3519, F.S.;
  235         requiring the Florida Hurricane Catastrophe Fund and
  236         Citizens Property Insurance Corporation to provide an
  237         annual report to the Legislature and the Financial
  238         Services Commission of their respective aggregate net
  239         probable maximum losses, financing options, and
  240         potential assessments; amending s. 627.4133, F.S.;
  241         increasing