SB 1058                                          First Engrossed
    1                        A bill to be entitled                      
    2         An act relating to property insurer reimbursements;
    3         amending s. 215.555, F.S.; defining the term “unsound
    4         insurer”; revising requirements for coverage under the
    5         Florida Hurricane Catastrophe Fund of certain policies
    6         assumed by authorized insurers or the Citizens
    7         Property Insurance Corporation; providing
    8         construction; amending s. 215.555, F.S.; revising the
    9         definition of the term “covered policy”; providing
   10         effective dates.
   12  Be It Enacted by the Legislature of the State of Florida:
   14         Section 1. Paragraph (e) of subsection (5) of section
   15  215.555, Florida Statutes, is amended, and paragraph (p) is
   16  added to subsection (2) of that section, to read:
   17         215.555 Florida Hurricane Catastrophe Fund.—
   18         (2) DEFINITIONS.—As used in this section:
   19         (p) “Unsound insurer” means an insurer determined by the
   20  Office of Insurance Regulation to be in unsound condition as
   21  defined in s. 624.80(2) or an insurer placed in receivership
   22  under chapter 631.
   23         (5) REIMBURSEMENT PREMIUMS.—
   24         (e)1. If an authorized insurer or the Citizens Property
   25  Insurance Corporation assumes or otherwise provides coverage for
   26  policies of an unsound insurer an insurer placed in liquidation
   27  under chapter 631 pursuant to s. 627.351(6), the authorized
   28  insurer or the Citizens Property Insurance Corporation may,
   29  pursuant to conditions mutually agreed to between the authorized
   30  insurer or the Citizens Property Insurance Corporation and the
   31  State Board of Administration, seek to obtain coverage for such
   32  policies under its contract with the fund or accept an
   33  assignment of the unsound liquidated insurer’s contract with the
   34  fund. However, if a covered event has occurred before the
   35  effective date of the transfer of the policies, the authorized
   36  insurer or the Citizens Property Insurance Corporation may only
   37  obtain coverage for such policies through an assignment as
   38  provided in subparagraph 3.
   39         2. If an authorized insurer or the Citizens Property
   40  Insurance Corporation assumes policies from an unsound insurer
   41  and elects to cover these policies under its the corporation’s
   42  contract with the fund, it shall notify the board of its insured
   43  values with respect to such policies within a specified time
   44  mutually agreed to between the authorized insurer or the
   45  Citizens Property Insurance Corporation and the board, after
   46  such assumption or other coverage transaction, and the fund
   47  shall treat such policies as having been in effect as of June 30
   48  of that year.
   49         3.If an authorized insurer or the Citizens Property
   50  Insurance Corporation accepts In the event of an assignment of
   51  an unsound insurer’s contract, the fund shall apply the unsound
   52  insurer’s that contract to such policies and treat the
   53  authorized insurer or the Citizens Property Insurance
   54  Corporation as if it the corporation were the unsound liquidated
   55  insurer for the remaining term of the contract, with and the
   56  corporation shall have all rights and duties of the unsound
   57  liquidated insurer beginning on the date it provides coverage
   58  for such policies. This subparagraph may not be construed to
   59  limit the fund’s right to receive the premium due under the
   60  unsound insurer’s contract, but the corporation is not subject
   61  to any preexisting rights, liabilities, or duties of the
   62  liquidated insurer. The assignment, including any unresolved
   63  issues between the liquidated insurer and Citizens Property
   64  Insurance Corporation under the contract, shall be provided for
   65  in the liquidation order or otherwise determined by the court.
   66  However, if a covered event occurs before the effective date of
   67  the assignment, the corporation may not obtain coverage for such
   68  policies under its contract with the fund and shall accept an
   69  assignment of the liquidated insurer’s contract as provided in
   70  this paragraph.
   71         Section 2. Effective June 1, 2023, paragraph (c) of
   72  subsection (2) of section 215.555, Florida Statutes, is amended
   73  to read:
   74         215.555 Florida Hurricane Catastrophe Fund.—
   75         (2) DEFINITIONS.—As used in this section:
   76         (c) “Covered policy” means any insurance policy covering
   77  residential property in this state, including, but not limited
   78  to, any homeowner, mobile home owner, farm owner, condominium
   79  association, condominium unit owner, tenant, or apartment
   80  building policy, or any other policy covering a residential
   81  structure or its contents issued by any authorized insurer,
   82  including a commercial self-insurance fund holding a certificate
   83  of authority issued by the Office of Insurance Regulation under
   84  s. 624.462, the Citizens Property Insurance Corporation, and any
   85  joint underwriting association or similar entity created under
   86  law. The term “covered policy” includes any collateral
   87  protection insurance policy covering personal residences which
   88  protects both the borrower’s and the lender’s financial
   89  interests, in an amount at least equal to the coverage amount
   90  for the dwelling in place under the lapsed homeowner’s policy,
   91  the coverage amount that the homeowner has been notified of by
   92  the collateral protection insurer, or the coverage amount that
   93  the homeowner requests from the collateral protection insurer,
   94  if such collateral protection insurance policy can be accurately
   95  reported as required in subsection (5). Additionally, covered
   96  policies include policies covering the peril of wind removed
   97  from the Florida Residential Property and Casualty Joint
   98  Underwriting Association or from the Citizens Property Insurance
   99  Corporation, created under s. 627.351(6), or from the Florida
  100  Windstorm Underwriting Association, created under s. 627.351(2),
  101  by an authorized insurer under the terms and conditions of an
  102  executed assumption agreement between the authorized insurer and
  103  such association or Citizens Property Insurance Corporation.
  104  Each assumption agreement between the association and such
  105  authorized insurer or Citizens Property Insurance Corporation
  106  must be approved by the Office of Insurance Regulation before
  107  the effective date of the assumption, and the Office of
  108  Insurance Regulation must provide written notification to the
  109  board within 15 working days after such approval. “Covered
  110  policy” does not include any policy that excludes wind coverage
  111  or hurricane coverage or any reinsurance agreement and does not
  112  include any policy otherwise meeting this definition which is
  113  issued by a surplus lines insurer or a reinsurer. All commercial
  114  residential excess policies and all deductible buy-back policies
  115  that, based on sound actuarial principles, require individual
  116  ratemaking shall be excluded by rule if the actuarial soundness
  117  of the fund is not jeopardized. For this purpose, the term
  118  “excess policy” means a policy that provides insurance
  119  protection for large commercial property risks and that provides
  120  a layer of coverage above a primary layer insured by another
  121  insurer.
  122         Section 3. Except as otherwise expressly provided in this
  123  act, this act shall take effect July 1, 2022.