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Amendment CaShTmL-095560.HTM
    Florida Senate - 2005                        SENATOR AMENDMENT
    Bill No. HB 1937, 2nd Eng.
                        Barcode 095560
                            CHAMBER ACTION
              Senate                               House
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11  Senator Garcia moved the following amendment to amendment
12  (435620):
13  
14         Senate Amendment (with title amendment) 
15         On page 24, between lines 23 and 24,
16  
17  insert:  
18         (d)1.  It is the intent of the Legislature that the
19  rates for coverage provided by the corporation be actuarially
20  sound and not competitive with approved rates charged in the
21  admitted voluntary market, so that the corporation functions
22  as a residual market mechanism to provide insurance only when
23  the insurance cannot be procured in the voluntary market.
24  Rates shall include an appropriate catastrophe loading factor
25  that reflects the actual catastrophic exposure of the
26  corporation.
27         2.  For each county, the average rates of the
28  corporation for each line of business for personal lines
29  residential policies excluding rates for wind-only policies
30  shall be no lower than the average rates charged by the
31  insurer that had the highest average rate in that county among
                                  1
    11:39 AM   05/06/05                          h193704e2c-40-j08

Florida Senate - 2005 SENATOR AMENDMENT Bill No. HB 1937, 2nd Eng. Barcode 095560 1 the 20 insurers with the greatest total direct written premium 2 in the state for that line of business in the preceding year, 3 except that with respect to mobile home coverages, the average 4 rates of the corporation shall be no lower than the average 5 rates charged by the insurer that had the highest average rate 6 in that county among the 5 insurers with the greatest total 7 written premium for mobile home owner's policies in the state 8 in the preceding year. 9 3. Rates for personal lines residential wind-only 10 policies must be actuarially sound and not competitive with 11 approved rates charged by authorized insurers. However, for 12 personal lines residential wind-only policies issued or 13 renewed between July 1, 2002, and June 30, 2003, the maximum 14 premium increase must be no greater than 10 percent of the 15 Florida Windstorm Underwriting Association premium for that 16 policy in effect on June 30, 2002, as adjusted for coverage 17 changes and seasonal occupancy surcharges. For personal lines 18 residential wind-only policies issued or renewed between July 19 1, 2003, and June 30, 2004, the corporation shall use its 20 existing filed and approved wind-only rating and 21 classification plans, provided, however, that the maximum 22 premium increase must be no greater than 20 percent of the 23 premium for that policy in effect on June 30, 2003, as 24 adjusted for coverage changes and seasonal occupancy 25 surcharges. Corporation rate manuals shall include a rate 26 surcharge for seasonal occupancy. To ensure that personal 27 lines residential wind-only rates effective on or after July 28 1, 2004, are not competitive with approved rates charged by 29 authorized insurers, the corporation, in conjunction with the 30 office, shall develop a wind-only ratemaking methodology, 31 which methodology shall be contained in a rate filing made by 2 11:39 AM 05/06/05 h193704e2c-40-j08
Florida Senate - 2005 SENATOR AMENDMENT Bill No. HB 1937, 2nd Eng. Barcode 095560 1 the corporation with the office by January 1, 2004. If the 2 office thereafter determines that the wind-only rates or 3 rating factors filed by the corporation fail to comply with 4 the wind-only ratemaking methodology provided for in this 5 subsection, it shall so notify the corporation and require the 6 corporation to amend its rates or rating factors to come into 7 compliance within 90 days of notice from the office. The 8 office shall report to the Speaker of the House of 9 Representatives and the President of the Senate on the 10 provisions of the wind-only ratemaking methodology by January 11 31, 2004. 12 4. For the purposes of establishing a pilot program to 13 evaluate issues relating to the availability and affordability 14 of insurance in an area where historically there has been 15 little market competition, the provisions of subparagraph 2. 16 do not apply to coverage provided by the corporation in Monroe 17 County if the office determines that a reasonable degree of 18 competition does not exist for personal lines residential 19 policies. The provisions of subparagraph 3. do not apply to 20 coverage provided by the corporation in Monroe County if the 21 office determines that a reasonable degree of competition does 22 not exist for personal lines residential policies in the area 23 of that county which is eligible for wind-only coverage. In 24 this county, the rates for personal lines residential coverage 25 shall be actuarially sound and not excessive, inadequate, or 26 unfairly discriminatory and are subject to the other 27 provisions of this paragraph and s. 627.062. The commission 28 shall adopt rules establishing the criteria for determining 29 whether a reasonable degree of competition exists for personal 30 lines residential policies in Monroe County. By March 1, 2006, 31 the office shall submit a report to the Legislature providing 3 11:39 AM 05/06/05 h193704e2c-40-j08
Florida Senate - 2005 SENATOR AMENDMENT Bill No. HB 1937, 2nd Eng. Barcode 095560 1 an evaluation of the implementation of the pilot program 2 affecting Monroe County. 3 5.4. Rates for commercial lines coverage shall not be 4 subject to the requirements of subparagraph 2., but shall be 5 subject to all other requirements of this paragraph and s. 6 627.062. 7 6.5. Nothing in this paragraph shall require or allow 8 the corporation to adopt a rate that is inadequate under s. 9 627.062. 10 7.6. The corporation shall certify to the office at 11 least twice annually that its personal lines rates comply with 12 the requirements of subparagraphs 1. and 2. If any adjustment 13 in the rates or rating factors of the corporation is necessary 14 to ensure such compliance, the corporation shall make and 15 implement such adjustments and file its revised rates and 16 rating factors with the office. If the office thereafter 17 determines that the revised rates and rating factors fail to 18 comply with the provisions of subparagraphs 1. and 2., it 19 shall notify the corporation and require the corporation to 20 amend its rates or rating factors in conjunction with its next 21 rate filing. The office must notify the corporation by 22 electronic means of any rate filing it approves for any 23 insurer among the insurers referred to in subparagraph 2. 24 8.7. In addition to the rates otherwise determined 25 pursuant to this paragraph, the corporation shall impose and 26 collect an amount equal to the premium tax provided for in s. 27 624.509 to augment the financial resources of the corporation. 28 9.8.a. To assist the corporation in developing 29 additional ratemaking methods to assure compliance with 30 subparagraphs 1. and 5. 4., the corporation shall appoint a 31 rate methodology panel consisting of one person recommended by 4 11:39 AM 05/06/05 h193704e2c-40-j08
Florida Senate - 2005 SENATOR AMENDMENT Bill No. HB 1937, 2nd Eng. Barcode 095560 1 the Florida Association of Insurance Agents, one person 2 recommended by the Professional Insurance Agents of Florida, 3 one person recommended by the Florida Association of Insurance 4 and Financial Advisors, one person recommended by the insurer 5 with the highest voluntary market share of residential 6 property insurance business in the state, one person 7 recommended by the insurer with the second-highest voluntary 8 market share of residential property insurance business in the 9 state, one person recommended by an insurer writing commercial 10 residential property insurance in this state, one person 11 recommended by the Office of Insurance Regulation, and one 12 board member designated by the board chairman, who shall serve 13 as chairman of the panel. 14 b. By January 1, 2004, the rate methodology panel 15 shall provide a report to the corporation of its findings and 16 recommendations for the use of additional ratemaking methods 17 and procedures, including the use of a rate equalization 18 surcharge in an amount sufficient to assure that the total 19 cost of coverage for policyholders or applicants to the 20 corporation is sufficient to comply with subparagraph 1. 21 c. Within 30 days after such report, the corporation 22 shall present to the President of the Senate, the Speaker of 23 the House of Representatives, the minority party leaders of 24 each house of the Legislature, and the chairs of the standing 25 committees of each house of the Legislature having 26 jurisdiction of insurance issues, a plan for implementing the 27 additional ratemaking methods and an outline of any 28 legislation needed to facilitate use of the new methods. 29 d. The plan must include a provision that producer 30 commissions paid by the corporation shall not be calculated in 31 such a manner as to include any rate equalization surcharge. 5 11:39 AM 05/06/05 h193704e2c-40-j08
Florida Senate - 2005 SENATOR AMENDMENT Bill No. HB 1937, 2nd Eng. Barcode 095560 1 However, without regard to the plan to be developed or its 2 implementation, producer commissions paid by the corporation 3 for each account, other than the quota share primary program, 4 shall remain fixed as to percentage, effective rate, 5 calculation, and payment method until January 1, 2004. 6 10.9. By January 1, 2004, the corporation shall 7 develop a notice to policyholders or applicants that the rates 8 of Citizens Property Insurance Corporation are intended to be 9 higher than the rates of any admitted carrier and providing 10 other information the corporation deems necessary to assist 11 consumers in finding other voluntary admitted insurers willing 12 to insure their property. 13 14 15 ================ T I T L E A M E N D M E N T =============== 16 And the title is amended as follows: 17 On page 61, line 21, after the semicolon, 18 19 insert: 20 establishing a pilot program; specifying 21 nonapplication of certain policy requirements 22 in a county lacking reasonable degrees of 23 competition for certain policies under certain 24 circumstances; requiring the commission to 25 adopt rules; 26 27 28 29 30 31 6 11:39 AM 05/06/05 h193704e2c-40-j08
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