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 1213 2024
1 A bill to be entitled
2 An act relating to windstorm coverage by Citizens
3 Property Insurance Corporation; amending s. 627.351,
4 F.S.; removing provisions relating to windstorm risk
5 apportionment plan agreements among property insurers;
6 revising legislative findings; revising the purpose of
7 the Citizens Property Insurance Corporation; requiring
8 the corporation to make windstorm coverage available
9 to homeowners for any residential structures;
10 providing requirements for the windstorm coverage;
11 providing construction; removing obsolete language;
12 authorizing homeowners to obtain windstorm coverage
13 from certain insurance agents; providing underwriting
14 and administering requirements for the windstorm
15 coverage portion of insurance; providing
16 administrative fees; providing requirements for claims
17 settlement payments; removing obsolete dates;
18 conforming provisions to changes made by the act;
19 requiring the corporation to make windstorm coverage
20 available for commercial lines residential structures;
21 providing requirements for the windstorm coverage;
22 providing construction; providing definitions;
23 revising certain statements obtained by agents from
24 applicants for coverage from the corporation; amending
25 ss. 215.555, 215.5595, 624.805, 627.062, 627.0628,
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26 627.06281, 627.0629, 627.4025, 627.701, 627.7018,
27 627.711, 627.712, 627.713, 631.54, 718.111, 719.104,
28 and 720.303, F.S.; conforming provisions to changes
29 made by the act; amending ss. 395.1061, 458.320,
30 459.0085, 464.0123, 624.424, 624.462, 625.317, and
31 627.0655, F.S.; conforming cross-references; amending
32 s. 627.3511, F.S.; conforming cross-references;
33 conforming provisions to changes made by the act;
34 amending ss. 627.3512, 627.3513, 627.3515, 627.3517,
35 and 627.3518, F.S.; conforming cross-references;
36 amending s. 627.4133, F.S.; conforming a cross-
37 reference; conforming a provision to changes made by
38 the act; amending ss. 627.945, 628.6017, and 766.105,
39 F.S.; conforming cross-references; providing an
40 effective date.
41
42 Be It Enacted by the Legislature of the State of Florida:
43
44 Section 1. Subsections (3) through (7) of section 627.351,
45 Florida Statutes, are renumbered as subsections (2) through (6),
46 respectively, and present subsections (2) and (5) and paragraphs
47 (a), (b), (c), and (v) of present subsection (6) of that section
48 are amended to read:
49 627.351 Insurance risk apportionment plans.—
50 (2) WINDSTORM INSURANCE RISK APPORTIONMENT.—
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51 (a) Agreements may be made among property insurers with
52 respect to the equitable apportionment among them of insurance
53 which may be afforded applicants who are in good faith entitled
54 to, but are unable to procure, such insurance through ordinary
55 methods; and such insurers may agree among themselves on the use
56 of reasonable rate modifications for such insurance. Such
57 agreements and rate modifications shall be subject to the
58 applicable provisions of this chapter.
59 (b) The department shall require all insurers holding a
60 certificate of authority to transact property insurance on a
61 direct basis in this state, other than joint underwriting
62 associations and other entities formed pursuant to this section,
63 to provide windstorm coverage to applicants from areas
64 determined to be eligible pursuant to paragraph (c) who in good
65 faith are entitled to, but are unable to procure, such coverage
66 through ordinary means; or it shall adopt a reasonable plan or
67 plans for the equitable apportionment or sharing among such
68 insurers of windstorm coverage, which may include formation of
69 an association for this purpose. As used in this subsection, the
70 term "property insurance" means insurance on real or personal
71 property, as defined in s. 624.604, including insurance for
72 fire, industrial fire, allied lines, farmowners multiperil,
73 homeowners multiperil, commercial multiperil, and mobile homes,
74 and including liability coverages on all such insurance, but
75 excluding inland marine as defined in s. 624.607(3) and
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76 excluding vehicle insurance as defined in s. 624.605(1)(a) other
77 than insurance on mobile homes used as permanent dwellings. The
78 department shall adopt rules that provide a formula for the
79 recovery and repayment of any deferred assessments.
80 1. For the purpose of this section, properties eligible
81 for such windstorm coverage are defined as dwellings, buildings,
82 and other structures, including mobile homes which are used as
83 dwellings and which are tied down in compliance with mobile home
84 tie-down requirements prescribed by the Department of Highway
85 Safety and Motor Vehicles pursuant to s. 320.8325, and the
86 contents of all such properties. An applicant or policyholder is
87 eligible for coverage only if an offer of coverage cannot be
88 obtained by or for the applicant or policyholder from an
89 admitted insurer at approved rates.
90 2.a.(I) All insurers required to be members of such
91 association shall participate in its writings, expenses, and
92 losses. Surplus of the association shall be retained for the
93 payment of claims and shall not be distributed to the member
94 insurers. Such participation by member insurers shall be in the
95 proportion that the net direct premiums of each member insurer
96 written for property insurance in this state during the
97 preceding calendar year bear to the aggregate net direct
98 premiums for property insurance of all member insurers, as
99 reduced by any credits for voluntary writings, in this state
100 during the preceding calendar year. For the purposes of this
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101 subsection, the term "net direct premiums" means direct written
102 premiums for property insurance, reduced by premium for
103 liability coverage and for the following if included in allied
104 lines: rain and hail on growing crops; livestock; association
105 direct premiums booked; National Flood Insurance Program direct
106 premiums; and similar deductions specifically authorized by the
107 plan of operation and approved by the department. A member's
108 participation shall begin on the first day of the calendar year
109 following the year in which it is issued a certificate of
110 authority to transact property insurance in the state and shall
111 terminate 1 year after the end of the calendar year during which
112 it no longer holds a certificate of authority to transact
113 property insurance in the state. The commissioner, after review
114 of annual statements, other reports, and any other statistics
115 that the commissioner deems necessary, shall certify to the
116 association the aggregate direct premiums written for property
117 insurance in this state by all member insurers.
118 (II) Effective July 1, 2002, the association shall operate
119 subject to the supervision and approval of a board of governors
120 who are the same individuals that have been appointed by the
121 Treasurer to serve on the board of governors of the Citizens
122 Property Insurance Corporation.
123 (III) The plan of operation shall provide a formula
124 whereby a company voluntarily providing windstorm coverage in
125 affected areas will be relieved wholly or partially from
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126 apportionment of a regular assessment pursuant to sub-sub-
127 subparagraph d.(I) or sub-sub-subparagraph d.(II).
128 (IV) A company which is a member of a group of companies
129 under common management may elect to have its credits applied on
130 a group basis, and any company or group may elect to have its
131 credits applied to any other company or group.
132 (V) There shall be no credits or relief from apportionment
133 to a company for emergency assessments collected from its
134 policyholders under sub-sub-subparagraph d.(III).
135 (VI) The plan of operation may also provide for the award
136 of credits, for a period not to exceed 3 years, from a regular
137 assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
138 subparagraph d.(II) as an incentive for taking policies out of
139 the Residential Property and Casualty Joint Underwriting
140 Association. In order to qualify for the exemption under this
141 sub-sub-subparagraph, the take-out plan must provide that at
142 least 40 percent of the policies removed from the Residential
143 Property and Casualty Joint Underwriting Association cover risks
144 located in Miami-Dade, Broward, and Palm Beach Counties or at
145 least 30 percent of the policies so removed cover risks located
146 in Miami-Dade, Broward, and Palm Beach Counties and an
147 additional 50 percent of the policies so removed cover risks
148 located in other coastal counties, and must also provide that no
149 more than 15 percent of the policies so removed may exclude
150 windstorm coverage. With the approval of the department, the
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151 association may waive these geographic criteria for a take -out
152 plan that removes at least the lesser of 100,000 Residential
153 Property and Casualty Joint Underwriting Association policies or
154 15 percent of the total number of Residential Property and
155 Casualty Joint Underwriting Association policies, provided the
156 governing board of the Residential Property and Casualty Joint
157 Underwriting Association certifies that the take-out plan will
158 materially reduce the Residential Property and Casualty Joint
159 Underwriting Association's 100-year probable maximum loss from
160 hurricanes. With the approval of the department, the board may
161 extend such credits for an additional year if the insurer
162 guarantees an additional year of renewability for all policies
163 removed from the Residential Property and Casualty Joint
164 Underwriting Association, or for 2 additional years if the
165 insurer guarantees 2 additional years of renewability for all
166 policies removed from the Residential Property and Casualty
167 Joint Underwriting Association.
168 b. Assessments to pay deficits in the association under
169 this subparagraph shall be included as an appropriate factor in
170 the making of rates as provided in s. 627.3512.
171 c. The Legislature finds that the potential for unlimited
172 deficit assessments under this subparagraph may induce insurers
173 to attempt to reduce their writings in the voluntary market, and
174 that such actions would worsen the availability problems that
175 the association was created to remedy. It is the intent of the
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176 Legislature that insurers remain fully responsible for paying
177 regular assessments and collecting emergency assessments for any
178 deficits of the association; however, it is also the intent of
179 the Legislature to provide a means by which assessment
180 liabilities may be amortized over a period of years.
181 d.(I) When the deficit incurred in a particular calendar
182 year is 10 percent or less of the aggregate statewide direct
183 written premium for property insurance for the prior calendar
184 year for all member insurers, the association shall levy an
185 assessment on member insurers in an amount equal to the deficit.
186 (II) When the deficit incurred in a particular calendar
187 year exceeds 10 percent of the aggregate statewide direct
188 written premium for property insurance for the prior calendar
189 year for all member insurers, the association shall levy an
190 assessment on member insurers in an amount equal to the greater
191 of 10 percent of the deficit or 10 percent of the aggregate
192 statewide direct written premium for property insurance for the
193 prior calendar year for member insurers. Any remaining deficit
194 shall be recovered through emergency assessments under sub-sub-
195 subparagraph (III).
196 (III) Upon a determination by the board of directors that
197 a deficit exceeds the amount that will be recovered through
198 regular assessments on member insurers, pursuant to sub -sub-
199 subparagraph (I) or sub-sub-subparagraph (II), the board shall
200 levy, after verification by the department, emergency
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201 assessments to be collected by member insurers and by
202 underwriting associations created pursuant to this section which
203 write property insurance, upon issuance or renewal of property
204 insurance policies other than National Flood Insurance policies
205 in the year or years following levy of the regular assessments.
206 The amount of the emergency assessment collected