August 25, 2016
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       Florida Senate - 2009                             CS for SB 2036
       
       
       
       By the Committee on Banking and Insurance; and Senator Bennett
       
       
       
       
       597-04424-09                                          20092036c1
    1                        A bill to be entitled                      
    2         An act relating to residential property insurance;
    3         amending s. 627.062, F.S.; authorizing certain
    4         insurers to use a rate in excess of the otherwise
    5         applicable filed rate; prohibiting the consideration
    6         of certain policies when making a specified
    7         calculation; preserving the authority of the Office of
    8         Insurance Regulation to disapprove rates as inadequate
    9         or disapprove a rate filing for using an unlawful
   10         rating factor; authorizing the office to direct an
   11         insurer to make a specified type of rate filing under
   12         certain circumstances; creating s. 627.7031, F.S.;
   13         authorizing an insurer to offer or renew policies at
   14         rates established in accordance with specified
   15         provisions of state law if certain conditions are met;
   16         requiring that certain policies contain a specified
   17         notice; providing for applicability; providing an
   18         effective date.
   19  
   20  Be It Enacted by the Legislature of the State of Florida:
   21  
   22         Section 1. Paragraph (k) is added to subsection (2) of
   23  section 627.062, Florida Statutes, to read:
   24         627.062 Rate standards.—
   25         (2) As to all such classes of insurance:
   26         (k)1.Insurers complying with the requirements of s.
   27  627.7031 may use a rate in excess of the otherwise applicable
   28  filed rate.
   29         2.Policies subject to this paragraph may not be counted in
   30  the calculation under s. 627.171(2).
   31         3.Such rates shall be filed with the office. This
   32  paragraph does not affect the authority of the office to
   33  disapprove a rate as inadequate or to disapprove a rate filing
   34  for using a rating factor that is unlawful under s. 626.9541(1).
   35  Upon finding that an insurer has used a rating factor that is
   36  unlawful under s. 626.9541(1), the office may direct the insurer
   37  to make a filing for rates governed by this paragraph and which
   38  do not use such rating factor.
   39  
   40  The provisions of this subsection shall not apply to workers’
   41  compensation and employer’s liability insurance and to motor
   42  vehicle insurance.
   43         Section 2. Section 627.7031, Florida Statutes, is created
   44  to read:
   45         627.7031Residential property insurance option.—
   46         (1)An insurer may offer or renew policies at rates
   47  established in accordance with s. 627.062(2)(k) if all of the
   48  following conditions are met:
   49         (a)The insurer is authorized to write property insurance
   50  in this state.
   51         (b)1.The insurer has, at the time of issuance of the
   52  policy or at the time of first renewal at rates pursuant to s.
   53  627.062(2)(k), surplus as to policyholders equal to or greater
   54  than $500 million; or
   55         2.The ratio of the insurer’s net written premium to its
   56  surplus as to policyholders, as calculated based on the
   57  information in the insurer’s most recent annual statement, does
   58  not exceed two to one. For purposes of this subparagraph, the
   59  calculation of net written premium shall consider only
   60  reinsurance placed with reinsurers that have been given a
   61  financial strength rating of “A” or better by the A.M. Best
   62  Company, or have been given a comparable rating by another
   63  rating agency which is generally considered accurate or
   64  acceptable.
   65         (c)The insurer may not purchase coverage relating to
   66  temporary increase in coverage limit options under s.
   67  215.555(17) from the Florida Hurricane Catastrophe Fund.
   68         (d)Before the issuance or renewal of a policy at rates
   69  established in accordance with s. 627.062(2)(k), the applicant
   70  or insured must be given the following notice, printed in at
   71  least 12-point boldfaced type:
   72  
   73         THE RATE FOR THIS POLICY IS NOT REGULATED BY THE FLORIDA
   74  OFFICE OF INSURANCE REGULATION AND MAY BE HIGHER THAN THE RATE
   75  APPROVED BY THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT
   76  TO FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE FROM THIS
   77  INSURER, ANOTHER INSURER, OR CITIZENS PROPERTY INSURANCE
   78  CORPORATION. PLEASE DISCUSS YOUR POLICY OPTIONS WITH YOUR
   79  INSURANCE AGENT.
   80  
   81         (e)Before the issuance of a policy at a rate established
   82  in accordance with s. 627.062(2)(k), or before the first renewal
   83  at such rate of a policy originally before the effective date of
   84  this section, the applicant or insured must:
   85         1.For purposes of comparison, be given a premium quote for
   86  a policy from Citizens Property Insurance Corporation,
   87  reflecting comparable coverages, limits, and deductibles to the
   88  extent available from the corporation.
   89         2.Sign the following acknowledgement form, which must be
   90  retained by the insurer or agent for at least 3 years:
   91                           ACKNOWLEDGEMENT                         
   92         1.I HAVE REVIEWED THE REQUIRED DISCLOSURES AND THE
   93  REQUIRED PREMIUM QUOTE FROM CITIZENS PROPERTY INSURANCE
   94  CORPORATION.
   95         2.I UNDERSTAND THAT THE RATE FOR THIS RESIDENTIAL PROPERTY
   96  INSURANCE POLICY IS NOT REGULATED BY THE FLORIDA OFFICE OF
   97  INSURANCE REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY
   98  THAT OFFICE.
   99         3.I UNDERSTAND THAT A RESIDENTIAL PROPERTY INSURANCE
  100  POLICY SUBJECT TO FULL RATE REGULATION REQUIREMENTS MAY BE
  101  AVAILABLE FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
  102  PROPERTY INSURANCE CORPORATION.
  103         (2)For policies renewed at a rate established in
  104  accordance with s. 627.062(2)(k), the notice described in
  105  paragraph (1)(d) must be furnished in writing at the same time
  106  as the renewal notice on a document separate from the renewal
  107  notice, but may be contained within the same mailing as the
  108  renewal notice.
  109         (3)This section does not apply to residential property
  110  insurance policies that exclude coverage for the perils of
  111  windstorm or hurricane.
  112         Section 3. This act shall take effect upon becoming a law.

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