F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 565 2024
1 A bill to be entitled
2 An act relating to coverage by Citizens Property
3 Insurance Corporation; amending s. 627.351, F.S.;
4 revising eligibility for coverage of residential
5 structures in certain counties by Citizens Property
6 Insurance Corporation; requiring the corporation to
7 annually implement certain rate increases in such
8 counties for single policies issued by the
9 corporation; providing additional policies issued by
10 the corporation that do not require policyholders to
11 purchase flood insurance as a condition for
12 maintaining the policies; specifying a requirement for
13 flood insurance; providing an effective date.
14
15 Be It Enacted by the Legislature of the State of Florida:
16
17 Section 1. Paragraphs (a), (n), and (aa) of subsection (6)
18 of section 627.351, Florida Statutes, are amended to read:
19 627.351 Insurance risk apportionment plans.—
20 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
21 (a) The public purpose of this subsection is to en sure
22 that there is an orderly market for property insurance for
23 residents and businesses of this state.
24 1. The Legislature finds that private insurers are
25 unwilling or unable to provide affordable property insurance
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26 coverage in this state to the extent sought and needed. The
27 absence of affordable property insurance threatens the public
28 health, safety, and welfare and likewise threatens the economic
29 health of the state. The state therefore has a compelling public
30 interest and a public purpose to assist in assuring that
31 property in the state is insured and that it is insured at
32 affordable rates so as to facilitate the remediation,
33 reconstruction, and replacement of damaged or destroyed property
34 in order to reduce or avoid the negative effects otherwise
35 resulting to the public health, safety, and welfare, to the
36 economy of the state, and to the revenues of the state and local
37 governments which are needed to provide for the public welfare.
38 It is necessary, therefore, to provide affordable property
39 insurance to applicants who are in good faith entitled to
40 procure insurance through the voluntary market but are unable to
41 do so. The Legislature intends, therefore, that affordable
42 property insurance be provided and that it continue to be
43 provided, as long as necessary, through Citizens Property
44 Insurance Corporation, a government entity that is an integral
45 part of the state, and that is not a private insurance company.
46 To that end, the corporation shall strive to increase the
47 availability of affordable property insurance in this state,
48 while achieving efficiencies and economies, and while providing
49 service to policyholders, applicants, and agents which is no
50 less than the quality generally provided in the voluntary
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51 market, for the achievement of the foregoing public purposes.
52 Because it is essential for this government entity to have the
53 maximum financial resources to pay claims following a
54 catastrophic hurricane, it is the intent of the Legislature that
55 the corporation continue to be an integral part of the state and
56 that the income of the corporation be exempt from federal income
57 taxation and that interest on the debt obligations issued by the
58 corporation be exempt from federal income taxation.
59 2. The Residential Property and Casualty Joint
60 Underwriting Association originally created by this statute
61 shall be known as the Citizens Property Insurance Corporation.
62 The corporation shall provide insurance for residential and
63 commercial property, for applicants who are entitled, but, in
64 good faith, are unable to procure insurance through the
65 voluntary market. The corporation shall operate pursuant to a
66 plan of operation approved by order of the Financial Services
67 Commission. The plan is subject to continuous review by the
68 commission. The commission may, by order, withdraw ap proval of
69 all or part of a plan if the commission determines that
70 conditions have changed since approval was granted and that the
71 purposes of the plan require changes in the plan. For the
72 purposes of this subsection, residential coverage includes both
73 personal lines residential coverage, which consists of the type
74 of coverage provided by homeowner, mobile home owner, dwelling,
75 tenant, condominium unit owner, and similar policies; and
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76 commercial lines residential coverage, which consists of the
77 type of coverage provided by condominium association, apartment
78 building, and similar policies.
79 3. With respect to coverage for personal lines residential
80 structures:
81 a. Effective January 1, 2014, a structure that has a
82 dwelling replacement cost of $1 million or more, or a single
83 condominium unit that has a combined dwelling and contents
84 replacement cost of $1 million or more, is not eligible for
85 coverage by the corporation. Such dwellings insured by the
86 corporation on December 31, 2013, may continue to be covered by
87 the corporation until the end of the policy term. The office
88 shall approve the method used by the corporation for valuing the
89 dwelling replacement cost for the purposes of this subparagraph.
90 If a policyholder is insured by the corporation before being
91 determined to be ineligible pursuant to this subparagraph and
92 such policyholder files a lawsuit challenging the determination,
93 the policyholder may remain insured by the corporation until the
94 conclusion of the litigation.
95 b. Effective January 1, 2015, a structure that has a
96 dwelling replacement cost of $900,000 or more, or a single
97 condominium unit that has a combined dwelling and contents
98 replacement cost of $900,000 or more, is not eligible for
99 coverage by the corporation. Such dwellings insured by the
100 corporation on December 31, 2014, may continue to be covered by
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101 the corporation only until the end of the policy term.
102 c. Effective January 1, 2016, a structure that has a
103 dwelling replacement cost of $800,000 or more, or a single
104 condominium unit that has a combined dwelling and contents
105 replacement cost of $800,000 or more, is not eligible for
106 coverage by the corporation. Such dwellings insured by the
107 corporation on December 31, 2015, may continue to be covered by
108 the corporation until the end of the policy term.
109 d. Effective January 1, 2017, a structure that has a
110 dwelling replacement cost of $700,000 or more, or a single
111 condominium unit that has a combined dwelling and contents
112 replacement cost of $700,000 or more, is not eligible for
113 coverage by the corporation. Such dwellings insured by the
114 corporation on December 31, 2016, may continue to be covered by
115 the corporation until the end of the policy term.
116
117 The requirements of sub-subparagraphs b.-d. do not apply in
118 counties where the office determines there is not a reasonable
119 degree of competition. In such counties a personal lines
120 residential structure that has a dwelling replacement cost of
121 less than $1.5 $1 million, or a single condominium unit that
122 has a combined dwelling and contents replacement cost of less
123 than $1 million, is eligible for coverage by the corporation.
124 4. It is the intent of the Legislature that policyholders,
125 applicants, and agents of the corporation receive service and
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126 treatment of the highest possible level but never less than that
127 generally provided in the voluntary market. It is also intended
128 that the corporation be held to service standards no less than
129 those applied to insurers in the voluntary market by the office
130 with respect to responsiveness, timeliness, customer courtesy,
131 and overall dealings with policyholders, applicants, or agents
132 of the corporation.
133 5.a. Effective January 1, 2009, a personal lines
134 residential structure that is located in the "wind-borne debris
135 region," as defined in s. 1609.2, International Building Code
136 (2006), and that has an insured value on the structure of
137 $750,000 or more is not eligible for coverage by the corporation
138 unless the structure has opening protections as required under
139 the Florida Building Code for a newly constructed residential
140 structure in that area. A residential structure is deemed to
141 comply with this sub-subparagraph if it has shutters or opening
142 protections on all openings and if such opening protections
143 complied with the Florida Building Code at the time they were
144 installed.
145 b. Any major structure, as defined in s. 161.54(6)(a),
146 that is newly constructed, or rebuilt, repaired, restored, or
147 remodeled to increase the total square footage of finished area
148 by more than 25 percent, pursuant to a permit applied for after
149 July 1, 2015, is not eligible for coverage by the corporation if
150 the structure is seaward of the coastal construction control
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151 line established pursuant to s. 161.053 or is within the Coastal
152 Barrier Resources System as designated by 16 U.S.C. ss. 3501 -
153 3510.
154 6. With respect to wind-only coverage for commercial lines
155 residential condominiums, effective July 1, 2014, a condominium
156 shall be deemed ineligible for coverage if 50 percent or more of
157 the units are rented more than eight times in a calendar year
158 for a rental agreement period of less than 30 days.
159 (n)1. Rates for coverage provided by the corporation must
160 be actuarially sound pursuant to s. 627.062 and not com petitive
161 with approved rates charged in the admitted voluntary market so
162 that the corporation functions as a residual market mechanism to
163 provide insurance only when insurance cannot be procured in the
164 voluntary market, except as otherwise provided in this
165 paragraph. The office shall provide the corporation such
166 information as would be necessary to determine whether rates are
167 competitive. The corporation shall file its recommended rates
168 with the office at least annually. The corporation shall provide
169 any additional information regarding the rates which the office
170 requires. The office shall consider the recommendations of the
171 board and issue a final order establishing the rates for the
172 corporation within 45 days after the recommended rates are
173 filed. The corporation may not pursue an administrative
174 challenge or judicial review of the final order of the office.
175 2. In addition to the rates otherwise determined pursuant
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176 to this paragraph, the corporation shall impose and collect an
177 amount equal to the premium tax provided in s. 624.509 to
178 augment the financial resources of the corporation.
179 3. After the public hurricane loss-projection model under
180 s. 627.06281 has been found to be accurate and reliable by the
181 Florida Commission on Hurricane Loss Projection Methodology, the
182 model shall be considered when establishing the windstorm
183 portion of the corporation's rates. The corporation may use the
184 public model results in combination with the results of private
185 models to calculate rates for the windstorm portion of the
186 corporation's rates. This subparagraph does not require or allow
187 the corporation to adopt rates lower than the rates otherwise
188 required or allowed by this paragraph.
189 4. The corporation must make a recommended actuarially
190 sound rate filing for each personal and commercial line of
191 business it writes.
192 5. Notwithstanding the board's recommended rates and the
193 office's final order regarding the corporation's filed rates
194 under subparagraph 1., the corporation shall annually implement
195 a rate increase which, except for sinkhole coverage, does not
196 exceed the following for any single policy issued by the
197 corporation, excluding coverage changes and surcharges:
198 a. Twelve percent for 2023.
199 b. Thirteen percent for 2024.
200 c. Fourteen percent for 2025.
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201 d. Fifteen percent for 2026 and all subsequent years.
202 6. In a county where the office determines there is not a
203 reasonable degree of competition, the corporation shall annually
204 implement a rate increase that does not exceed 10 percent for
205 any single policy issued by the corporation, excluding coverage
206 changes and surcharges.
207 7.6. The corporation may also implement an increase to
208 reflect the effect on the corporation of the cash buildup factor
209 pursuant to s. 215.555(5)(b).
210 8.7. The corporation's impl