Florida Senate - 2015                                     SB 842
       
       
        
       By Senator Benacquisto
       
       
       
       
       
       30-01118A-15                                           2015842__
    1                        A bill to be entitled                      
    2         An act relating to Citizens Property Insurance
    3         Corporation eligibility for coverage; amending s.
    4         627.351, F.S.; removing the prohibition against
    5         permits for substantial improvements from being
    6         eligible for coverage; authorizing coverage for major
    7         structures built before a certain date and
    8         subsequently rebuilt, repaired, restored, or remodeled
    9         to a specified percentage less than the major
   10         structure’s original square footage; reenacting s.
   11         627.712(1), F.S., to incorporate the amendment made by
   12         this act to s. 627.351, F.S.; providing an effective
   13         date.
   14          
   15  Be It Enacted by the Legislature of the State of Florida:
   16  
   17         Section 1. Paragraph (a) of subsection (6) of section
   18  627.351, Florida Statutes, is amended to read:
   19         627.351 Insurance risk apportionment plans.—
   20         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
   21         (a) The public purpose of this subsection is to ensure that
   22  there is an orderly market for property insurance for residents
   23  and businesses of this state.
   24         1. The Legislature finds that private insurers are
   25  unwilling or unable to provide affordable property insurance
   26  coverage in this state to the extent sought and needed. The
   27  absence of affordable property insurance threatens the public
   28  health, safety, and welfare and likewise threatens the economic
   29  health of the state. The state therefore has a compelling public
   30  interest and a public purpose to assist in assuring that
   31  property in the state is insured and that it is insured at
   32  affordable rates so as to facilitate the remediation,
   33  reconstruction, and replacement of damaged or destroyed property
   34  in order to reduce or avoid the negative effects otherwise
   35  resulting to the public health, safety, and welfare, to the
   36  economy of the state, and to the revenues of the state and local
   37  governments which are needed to provide for the public welfare.
   38  It is necessary, therefore, to provide affordable property
   39  insurance to applicants who are in good faith entitled to
   40  procure insurance through the voluntary market but are unable to
   41  do so. The Legislature intends, therefore, that affordable
   42  property insurance be provided and that it continue to be
   43  provided, as long as necessary, through Citizens Property
   44  Insurance Corporation, a government entity that is an integral
   45  part of the state, and that is not a private insurance company.
   46  To that end, the corporation shall strive to increase the
   47  availability of affordable property insurance in this state,
   48  while achieving efficiencies and economies, and while providing
   49  service to policyholders, applicants, and agents which is no
   50  less than the quality generally provided in the voluntary
   51  market, for the achievement of the foregoing public purposes.
   52  Because it is essential for this government entity to have the
   53  maximum financial resources to pay claims following a
   54  catastrophic hurricane, it is the intent of the Legislature that
   55  the corporation continue to be an integral part of the state and
   56  that the income of the corporation be exempt from federal income
   57  taxation and that interest on the debt obligations issued by the
   58  corporation be exempt from federal income taxation.
   59         2. The Residential Property and Casualty Joint Underwriting
   60  Association originally created by this statute shall be known as
   61  the Citizens Property Insurance Corporation. The corporation
   62  shall provide insurance for residential and commercial property,
   63  for applicants who are entitled, but, in good faith, are unable
   64  to procure insurance through the voluntary market. The
   65  corporation shall operate pursuant to a plan of operation
   66  approved by order of the Financial Services Commission. The plan
   67  is subject to continuous review by the commission. The
   68  commission may, by order, withdraw approval of all or part of a
   69  plan if the commission determines that conditions have changed
   70  since approval was granted and that the purposes of the plan
   71  require changes in the plan. For the purposes of this
   72  subsection, residential coverage includes both personal lines
   73  residential coverage, which consists of the type of coverage
   74  provided by homeowner, mobile home owner, dwelling, tenant,
   75  condominium unit owner, and similar policies; and commercial
   76  lines residential coverage, which consists of the type of
   77  coverage provided by condominium association, apartment
   78  building, and similar policies.
   79         3. With respect to coverage for personal lines residential
   80  structures:
   81         a. Effective January 1, 2014, a structure that has a
   82  dwelling replacement cost of $1 million or more, or a single
   83  condominium unit that has a combined dwelling and contents
   84  replacement cost of $1 million or more is not eligible for
   85  coverage by the corporation. Such dwellings insured by the
   86  corporation on December 31, 2013, may continue to be covered by
   87  the corporation until the end of the policy term. The office
   88  shall approve the method used by the corporation for valuing the
   89  dwelling replacement cost for the purposes of this subparagraph.
   90  If a policyholder is insured by the corporation before being
   91  determined to be ineligible pursuant to this subparagraph and
   92  such policyholder files a lawsuit challenging the determination,
   93  the policyholder may remain insured by the corporation until the
   94  conclusion of the litigation.
   95         b. Effective January 1, 2015, a structure that has a
   96  dwelling replacement cost of $900,000 or more, or a single
   97  condominium unit that has a combined dwelling and contents
   98  replacement cost of $900,000 or more, is not eligible for
   99  coverage by the corporation. Such dwellings insured by the
  100  corporation on December 31, 2014, may continue to be covered by
  101  the corporation only until the end of the policy term.
  102         c. Effective January 1, 2016, a structure that has a
  103  dwelling replacement cost of $800,000 or more, or a single
  104  condominium unit that has a combined dwelling and contents
  105  replacement cost of $800,000 or more, is not eligible for
  106  coverage by the corporation. Such dwellings insured by the
  107  corporation on December 31, 2015, may continue to be covered by
  108  the corporation until the end of the policy term.
  109         d. Effective January 1, 2017, a structure that has a
  110  dwelling replacement cost of $700,000 or more, or a single
  111  condominium unit that has a combined dwelling and contents
  112  replacement cost of $700,000 or more, is not eligible for
  113  coverage by the corporation. Such dwellings insured by the
  114  corporation on December 31, 2016, may continue to be covered by
  115  the corporation until the end of the policy term.
  116  
  117  The requirements of sub-subparagraphs b.-d. do not apply in
  118  counties where the office determines there is not a reasonable
  119  degree of competition. In such counties a personal lines
  120  residential structure that has a dwelling replacement cost of
  121  less than $1 million, or a single condominium unit that has a
  122  combined dwelling and contents replacement cost of less than $1
  123  million, is eligible for coverage by the corporation.
  124         4. It is the intent of the Legislature that policyholders,
  125  applicants, and agents of the corporation receive service and
  126  treatment of the highest possible level but never less than that
  127  generally provided in the voluntary market. It is also intended
  128  that the corporation be held to service standards no less than
  129  those applied to insurers in the voluntary market by the office
  130  with respect to responsiveness, timeliness, customer courtesy,
  131  and overall dealings with policyholders, applicants, or agents
  132  of the corporation.
  133         5.a. Effective January 1, 2009, a personal lines
  134  residential structure that is located in the “wind-borne debris
  135  region,” as defined in s. 1609.2, International Building Code
  136  (2006), and that has an insured value on the structure of
  137  $750,000 or more is not eligible for coverage by the corporation
  138  unless the structure has opening protections as required under
  139  the Florida Building Code for a newly constructed residential
  140  structure in that area. A residential structure is deemed to
  141  comply with this sub-subparagraph if it has shutters or opening
  142  protections on all openings and if such opening protections
  143  complied with the Florida Building Code at the time they were
  144  installed.
  145         b. Any major structure as defined in s. 161.54(6)(a) for
  146  which a permit is applied on or after July 1, 2015, for new
  147  construction or substantial improvement as defined in s.
  148  161.54(12) is not eligible for coverage by the corporation if
  149  the structure is seaward of the coastal construction control
  150  line established pursuant to s. 161.053 or is within the Coastal
  151  Barrier Resources System as designated by 16 U.S.C. ss. 3501
  152  3510. This sub-subparagraph does not apply to any major
  153  structure built before July 1, 2015, and subsequently rebuilt,
  154  repaired, restored, or remodeled to a size less than 125 percent
  155  of the major structure’s original square footage.
  156         6. With respect to wind-only coverage for commercial lines
  157  residential condominiums, effective July 1, 2014, a condominium
  158  shall be deemed ineligible for coverage if 50 percent or more of
  159  the units are rented more than eight times in a calendar year
  160  for a rental agreement period of less than 30 days.
  161         Section 2. For the purpose of incorporating the amendment
  162  made by this act to section 627.351, Florida Statutes, in a
  163  reference thereto, subsection (1) of section 627.712, Florida
  164  Statutes, is reenacted to read:
  165         627.712 Residential windstorm coverage required;
  166  availability of exclusions for windstorm or contents.—
  167         (1) An insurer issuing a residential property insurance
  168  policy must provide windstorm coverage. Except as provided in
  169  paragraph (2)(c), this section does not apply to risks that are
  170  eligible for wind-only coverage from Citizens Property Insurance
  171  Corporation under s. 627.351(6), and risks that are not eligible
  172  for coverage from Citizens Property Insurance Corporation under
  173  s. 627.351(6)(a)3. or 5. A risk ineligible for coverage by the
  174  corporation under s. 627.351(6)(a)3. or 5. is exempt from this
  175  section only if the risk is located within the boundaries of the
  176  coastal account of the corporation.
  177         Section 3. This act shall take effect July 1, 2015.