Florida Senate - 2009 CS for SB 2036
By the Committee on Banking and Insurance; and Senator Bennett
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.
20 Be It Enacted by the Legislature of the State of Florida:
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.
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:
45 627.7031 Residential 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
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:
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.
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:
92 1. I HAVE REVIEWED THE REQUIRED DISCLOSURES AND THE
93 REQUIRED PREMIUM QUOTE FROM CITIZENS PROPERTY INSURANCE
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.