Florida Senate - 2023 CS for SB 594
By the Committee on Community Affairs; and Senator Martin
578-03263-23 2023594c1
1 A bill to be entitled
2 An act relating to property insurance; amending s.
3 627.0629, F.S.; adding wind uplift prevention to a
4 list of fixtures or construction techniques for which
5 a residential property insurance rate filing must
6 include actuarially reasonable rate differentials or
7 appropriate deductible reductions; amending s.
8 627.351, F.S.; revising rate change limitations for
9 specified policies written by the Citizens Property
10 Insurance Corporation; revising the applicability of
11 flood coverage requirements for personal lines
12 residential policyholders of the corporation;
13 providing effective dates.
14
15 Be It Enacted by the Legislature of the State of Florida:
16
17 Section 1. Effective July 1, 2023, subsection (1) of
18 section 627.0629, Florida Statutes, is amended to read:
19 627.0629 Residential property insurance; rate filings.—
20 (1) It is the intent of the Legislature that insurers
21 provide savings to consumers who install or implement windstorm
22 damage mitigation techniques, alterations, or solutions to their
23 properties to prevent windstorm losses. A rate filing for
24 residential property insurance must include actuarially
25 reasonable discounts, credits, or other rate differentials, or
26 appropriate reductions in deductibles, for properties on which
27 fixtures or construction techniques demonstrated to reduce the
28 amount of loss in a windstorm have been installed or
29 implemented. The fixtures or construction techniques must
30 include, but are not limited to, fixtures or construction
31 techniques that enhance wind uplift prevention, roof strength,
32 roof covering performance, roof-to-wall strength, wall-to-floor
33 to-foundation strength, opening protection, and window, door,
34 and skylight strength. Credits, discounts, or other rate
35 differentials, or appropriate reductions in deductibles, for
36 fixtures and construction techniques that meet the minimum
37 requirements of the Florida Building Code must be included in
38 the rate filing. The office shall determine the discounts,
39 credits, other rate differentials, and appropriate reductions in
40 deductibles that reflect the full actuarial value of such
41 revaluation, which may be used by insurers in rate filings.
42 Section 2. Paragraphs (n) and (aa) of subsection (6) of
43 section 627.351, Florida Statutes, are amended to read:
44 627.351 Insurance risk apportionment plans.—
45 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
46 (n)1. Rates for coverage provided by the corporation must
47 be actuarially sound pursuant to s. 627.062 and not competitive
48 with approved rates charged in the admitted voluntary market so
49 that the corporation functions as a residual market mechanism to
50 provide insurance only when insurance cannot be procured in the
51 voluntary market, except as otherwise provided in this
52 paragraph. The office shall provide the corporation such
53 information as would be necessary to determine whether rates are
54 competitive. The corporation shall file its recommended rates
55 with the office at least annually. The corporation shall provide
56 any additional information regarding the rates which the office
57 requires. The office shall consider the recommendations of the
58 board and issue a final order establishing the rates for the
59 corporation within 45 days after the recommended rates are
60 filed. The corporation may not pursue an administrative
61 challenge or judicial review of the final order of the office.
62 2. In addition to the rates otherwise determined pursuant
63 to this paragraph, the corporation shall impose and collect an
64 amount equal to the premium tax provided in s. 624.509 to
65 augment the financial resources of the corporation.
66 3. After the public hurricane loss-projection model under
67 s. 627.06281 has been found to be accurate and reliable by the
68 Florida Commission on Hurricane Loss Projection Methodology, the
69 model shall be considered when establishing the windstorm
70 portion of the corporation’s rates. The corporation may use the
71 public model results in combination with the results of private
72 models to calculate rates for the windstorm portion of the
73 corporation’s rates. This subparagraph does not require or allow
74 the corporation to adopt rates lower than the rates otherwise
75 required or allowed by this paragraph.
76 4. The corporation must make a recommended actuarially
77 sound rate filing for each personal and commercial line of
78 business it writes.
79 5. Notwithstanding the board’s recommended rates and the
80 office’s final order regarding the corporation’s filed rates
81 under subparagraph 1., the corporation shall annually implement
82 a rate increase which, except for sinkhole coverage, does not
83 exceed the following for any single policy issued by the
84 corporation, excluding coverage changes and surcharges:
85 a. Twelve percent for 2023.
86 b. Thirteen percent for 2024.
87 c. Fourteen percent for 2025.
88 d. Fifteen percent for 2026 and all subsequent years.
89 6. The corporation may also implement an increase to
90 reflect the effect on the corporation of the cash buildup factor
91 pursuant to s. 215.555(5)(b).
92 7. The corporation’s implementation of rates as prescribed
93 in subparagraphs 5. and 8. shall cease for any line of business
94 written by the corporation upon the corporation’s implementation
95 of actuarially sound rates. Thereafter, the corporation shall
96 annually make a recommended actuarially sound rate filing that
97 is not competitive with approved rates in the admitted voluntary
98 market for each commercial and personal line of business the
99 corporation writes.
100 8. The following For any new or renewal personal lines
101 policies policy written on or after November 1, 2023, are which
102 does not cover a primary residence, the rate to be applied in
103 calculating premium is not subject to the rate increase
104 limitations in subparagraph 5., but However, the policyholder
105 may not be charged more than 50 percent above, and may not be
106 charged less than, the established rate for the corporation
107 which was in effect 1 year before the date of the application:
108 a. Policies that do not cover a primary residence; or
109 b. Policies where coverage for the insured risk, prior to
110 the date of application with the corporation, was last provided
111 by an insurer determined by the office to be unsound or an
112 insurer placed in receivership under chapter 631.
113 9. As used in this paragraph, the term “primary residence”
114 means the dwelling that is the policyholder’s primary home or is
115 a rental property that is the primary home of the tenant, and
116 which the policyholder or tenant occupies for more than 9 months
117 of each year.
118 (aa) Except as otherwise provided in this paragraph, the
119 corporation shall require the securing and maintaining of flood
120 insurance as a condition of coverage of a personal lines
121 residential risk. The insured or applicant must execute a form
122 approved by the office affirming that flood insurance is not
123 provided by the corporation and that if flood insurance is not
124 secured by the applicant or insured from an insurer other than
125 the corporation and in addition to coverage by the corporation,
126 the risk will not be eligible for coverage by the corporation.
127 The corporation may deny coverage of a personal lines
128 residential risk to an applicant or insured who refuses to
129 secure and maintain flood insurance. The requirement to purchase
130 flood insurance shall be implemented as follows:
131 1. Except as provided in subparagraphs 2. and 3., all
132 personal lines residential policyholders must have flood
133 coverage in place for policies effective on or after:
134 a. January 1, 2024, for a structure that has a dwelling
135 replacement cost of property valued at $600,000 or more.
136 b. January 1, 2025, for a structure that has a dwelling
137 replacement cost of property valued at $500,000 or more.
138 c. January 1, 2026, for a structure that has a dwelling
139 replacement cost of property valued at $400,000 or more.
140 d. January 1, 2027, for all other personal lines
141 residential property insured by the corporation.
142 2. All personal lines residential policyholders whose
143 property insured by the corporation is located within the
144 special flood hazard area defined by the Federal Emergency
145 Management Agency must have flood coverage in place:
146 a. At the time of initial policy issuance for all new
147 personal lines residential policies issued by the corporation on
148 or after April 1, 2023.
149 b. By the time of the policy renewal for all personal lines
150 residential policies renewing on or after July 1, 2023.
151 3. Policyholders whose policies issued by the corporation
152 do not provide coverage for the peril of wind are not required
153 to purchase flood insurance as a condition for maintaining the
154 following their policies issued by with the corporation:
155 a. Policies that do not provide coverage for the peril of
156 wind.
157 b. Policies that provide coverage under a condominium unit
158 owners form.
159
160 The flood insurance required under this paragraph must meet, at
161 a minimum, the coverage available from the National Flood
162 Insurance Program or the requirements of subparagraphs s.
163 627.715(1)(a)1., 2., and 3.
164 Section 3. Except as otherwise expressly provided in this
165 act, this act shall take effect upon becoming a law.