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