The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Appropriations
BILL: CS/SB 2-D
INTRODUCER: Appropriations Committee and Senator Boyd
SUBJECT: Property Insurance
DATE: May 23, 2022 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Johnson/Schrader/
Shettle AP Fav/CS
Knudson
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 2-D provides the following changes to address access and affordability of property
insurance, and to mitigate insurance fraud in Florida’s property insurance market.
Reinsurance to Assist Policyholders (RAP) Program
 Authorizes a $2 billion dollar reimbursement layer of reinsurance for hurricane losses
directly below the mandatory layer of the Florida Hurricane Catastrophe Fund (FHCF). All
eligible insurers must participate in the program.
o The FHCF mandatory retention is $8.5 billion for the 2022-2023 contract year.
 Requires the RAP program to reimburse 90 percent of each insurer’s covered losses and 10
percent of their loss adjustment expenses up to each individual insurer’s limit of coverage for
the two hurricanes causing the largest losses for that insurer during the contract year.
 Specifies that each insurer’s limit of the $2 billion in RAP coverage is their pro-rata market
share among all insurers that participate in the RAP program. Thus, an insurer with five
percent of the risk reinsured by RAP coverage would have a limit of coverage of $100
million.
 Requires all eligible insurers to participate in the RAP program for one year. Insurers that do
not have private reinsurance within the RAP layer of coverage for the 2022-2023 contract
year must participate during the 2022-2023 contract year. Insurers that have private
reinsurance at the RAP layer for the 2022-2023 contract year must defer using RAP program
coverage until the 2023-2024 contract year. A RAP insurer that has any private reinsurance
that duplicates RAP coverage for the 2022-2023 contract year must notify the State Board of
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Administration of the private reinsurance and must defer participation in the RAP program
until the 2023-2024 contract year.
 Prohibits an insurer from obtaining RAP coverage if the Insurance Commissioner certifies it
is in “unsound financial condition.”
 Specifies that insurers do not pay premiums for RAP program coverage, but must reduce
rates to reflect savings. Insurers that participate in the RAP program for 2022-2023 must
reduce their rates by June 30, 2022, to reflect the savings from RAP coverage. Insurers that
defer using the RAP program until 2023-2024 must reduce rates to reflect savings by May 1,
2023.
 Provides funding for the RAP coverage through a $2 billion dollar appropriation from the
General Revenue Fund. Monies are only transferred to the State Board of Administration (the
program administrator) if the RAP program coverage must be paid because of a hurricane.
 Specifies that, if funds are transferred to the State Board of Administration (SBA) because of
a hurricane, the SBA may request funds for the administration of the program from the
General Revenue Fund, not to exceed $5 million.
 Provides the RAP program expires July 1, 2025, if no General Revenue funds have been
transferred to fund the RAP program. If such funds were transferred, the statute expires July
1, 2029, and all unencumbered RAP Program funds must be transferred back to the General
Revenue Fund.
My Safe Florida Home Program
 Appropriates $150 million from the General Revenue Fund to the Department of Financial
Services’ My Safe Florida Home Program to provide hurricane mitigation inspections and
matching grants for the performance of hurricane retrofitting on homestead single family
homes with a value of $500,000 or less located in the wind-borne debris region set forth in
the Florida Building Code. The My Safe Florida Home Program, which is administered by
the Department of Financial Services, will provide financial incentives for Florida residential
property owners to obtain free home inspections that would identify mitigation measures and
provide grants to retrofit such properties, thereby reducing their vulnerability to hurricane
damage and helping decrease the cost of residential property insurance.
 Establishes additional eligibility criteria:
o Requires that a homeowner who participates in the program must agree to make his or
her home available for inspection after the mitigation project is completed.
o Requires that a building permit for initial construction of the home must have been made
before January 1, 2008.
o Requires the home to have undergone an acceptable hurricane mitigation inspection after
July 1, 2008.
 Requires that grants awarded under the program provide $2 in grant funds for every $1
provided by the homeowner. Exceptions are provided for low-income homeowners.
Applicants may receive up to $10,000 in program money.
 Requires the Department of Financial Services to include in the annual report of program
activities the average annual amount of insurance premium discounts and the total of such
discounts received from insurers.
 Allocates appropriated funds as follows:
o $25 million for hurricane mitigation inspections.
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o $115 million for hurricane mitigation grants.
o $4 million for education and consumer awareness.
o $1 million for public outreach to contractors, real estate brokers, and sales associates.
o $5 million for administrative costs.
 Provides that any unexpended balance of appropriated funds remaining on June 30, 2023,
reverts and is appropriated to the Department of Financial Services for the 2023-2024 fiscal
year for the My Safe Florida Home program.
Contractor Solicitation of Roof Claims
 Prohibits contractors from making written or electronic communications that encourage or
induce a consumer to contact a contractor or public adjuster for the purposes of making a
property insurance claim for roof damage unless such solicitation provides notice that:
o The consumer is responsible for the payment of any deductible.
o It is insurance fraud punishable as a third-degree felony for a contractor to pay or waive
an insurance deductible.
o It is insurance fraud punishable as a third-degree felony to intentionally file an insurance
claim containing false, fraudulent, or misleading information.
Separate Roof Deductibles
 Allows property insurers to include in the policy a separate roof deductible of up to two
percent of the Coverage A limit of the policy or 50 percent of the cost to replace the roof.
The policyholder must also be offered the option to decline the roof deductible by signing a
form approved by the Office of Insurance Regulation (OIR). If a roof deductible is added to
the policy at renewal, the insurer must provide a notice of change in policy terms and allow
the policyholder to decline the separate roof deductible.
 Requires that policyholders that select a roof deductible must receive an actuarially sound
premium credit or discount.
 Provides that the roof deductible does not apply to:
o A total loss to the primary structure in accordance with the valued policy law under
s. 627.702, F.S., which is caused by a covered peril.
o A loss caused by a hurricane.
o A roof loss resulting from a tree fall or other hazard that damages the roof and punctures
the roof deck.
o A roof loss requiring the repair of less than 50 percent of the roof.
 Specifies that when a roof deductible is applied, no other deductibles under the policy may be
applied.
 Specifies that a roof deductible only applies to a claim adjusted on a replacement cost basis.
 Authorizes an insurer to limit the claim payment for a roof to the actual cash value of the loss
to the roof until the insurer receives reasonable proof of payment by the policyholder of the
roof deductible.
 Requires a roof deductible provision to be clear and unambiguous.
 Requires the inclusion of the following disclosures:
o On the page immediately behind the declarations page, notice that a roof deductible may
result in high out-of-pocket expenses to the policyholder.
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o On the policy declarations page, prominent display of the actual dollar value of the roof
deductible at issuance and renewal. Allows an insurer to limit payment on a roof claim to
actual cash value until the policyholder pays the roof deductible.
Roofs – Insurer Underwriting
 Prohibits an insurer from refusing to issue or refusing to renew a homeowner’s insurance
policy insuring a residential structure with a roof that is less than 15 years old solely because
of the age of the roof.
 Requires that, if the roof is at least 15 years old, an insurer must allow a homeowner to have
a roof inspection performed by an authorized inspector at the homeowner’s expense before
requiring the replacement of the roof as a condition of issuing or renewing a homeowner’s
insurance policy. The insurer may not refuse to issue or refuse to renew a homeowner’s
insurance policy solely because of roof age if an inspection of the roof of the residential
structure performed by an authorized inspector indicates that the roof has five years or more
of useful life.
Insurer Claims Handling
 Requires property insurers to conduct any physical inspection of the property related to a
claim within 45 days of receiving proof of loss statements. Does not apply to hurricane
claims.
 Requires insurers to notify policyholders of their right to receive any detailed report
generated by an insurer’s adjuster that estimates the amount of the loss. The report must be
provided to the requesting policyholder within the later of seven days after the policyholder
requests the report or the completion of the report.
 Specifies insurers must provide a reasonable explanation of the claim decision in relation to
the insurance policy, facts, and law. If the insurer makes a claim payment that is less than
contained in the insurer’s adjuster estimate of the loss, the insurer must explain the
discrepancy.
Civil Remedy
 Requires a claimant to establish a property insurer breached the insurance contract in order
for the claimant to prevail in a bad faith claim for extracontractual damages under
s. 624.155(1)(b), F.S. Will apply to civil remedy actions based upon a property insurer:
o Not attempting in good faith to settle claims when, under all the circumstances, it could
and should have done so, had it acted fairly and honestly toward its insured and with due
regard for his or her interests;
o Making claims payments to insureds or beneficiaries not accompanied by a statement
setting forth the coverage under which payments are being made; or
o Except as to liability coverages, failing to settle claims promptly, when the obligation to
settle a claim has become reasonably clear, under one portion of the insurance policy
coverage in order to influence settlements under other portions of the insurance policy.
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Attorney Fees – Assignment of Benefits (AOB)
 Prohibits assignment of the right to obtain attorney fees in suits arising out of a property
insurance policy to persons other than a named or omnibus insured or a named beneficiary
under the policy. Result is that assignment agreements may occur, but the assignee vendor
will no longer be able to recover attorney fees in suits against an insurer. Applies to property
insurance lawsuits brought by vendor assignees against authorized insurers and surplus lines
insurers.
 Eliminates statutory language detailing the methodology for awarding attorney fees to
plaintiffs or defendants in litigation brought by an assignee of benefits under a property
insurance policy. The language is no longer necessary because the bill prohibits assignment
of the right to recover attorney fees in suits arising out of a property insurance policy.
Attorney Fees – Fee Multipliers
 Creates a new standard for the award of an attorney fee multiplier in property insurance
litigation. The bill creates a presumption that in property insurance cases, attorney fee awards
based on the Lodestar methodology are sufficient and reasonable. Attorney fee multipliers
may only be awarded under rare and exceptional circumstances with evidence that competent
counsel could not be hired in a reasonable manner.
 Allows a court to award attorney fees when a first-party claimant’s property insurance suit is
dismissed without prejudice for failure to provide a Notice of Intent to Initiate Litigation.
Attorney Fees – Dismissal for Failure to Provide Notice
 Provides that a defendant insurer may obtain attorney fees and costs associated with securing
a dismissal without prejudice for failure to provide the required Notice of Intent to Initiate
Litigation at least 10 days before filing a suit against a property insurer.
Assignment of Benefits (AOB)
 Revises the definition of “assignment agreement” to include assignments executed by a party
that inspects the property, clarifies that public adjuster fees are not an assignment agreement,
and clarifies the requirement to provide a Notice of Intent to Initiate Litigation before filing
suit.
 Requires that a valid AOB must specify that the assignee will hold harmless the assignor
from all liabilities, including attorney fees.
Regulation of Insurers and Insurer Transparency
 Requires the OIR to publish all orders, specified insurance industry data, and reports issued
by the newly created Property Insurance Stability Unit. The scope of the Property Insurance
Stability Unit is limited to matters related to homeowners’ and condominium unit owners’
insurance.
 Requires the OIR within the annual statistical report an analysis of the availability of
reinsurance to domestic insurers selling homeowners’ and condominium unit owners’
insurance in Florida.
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 Requires that the OIR include within its annual report additional data regarding property
insurers against which delinquency or similar proceedings were instituted, a concise
statement of the circumstances that led to each insurer’s delinquency, a summary of actions
taken by the insurer and the OIR to avoid delinquency, and that results or status of each
delinquency proceeding.
 Requires the OIR to maintain and make available upon request reports relating to the health
of the homeowners’ and condominium unit owners’ insurance market that include specified
information regarding market trends and the percentage of policies written by voluntary
carriers and Citizens Property Insurance Corporation.
 Directs the OIR to make data publicly available detailing the statewide number of policies,
amount of premium, number of cancellations, and other data for each property insurer.
Specifies such information is not a trade secret.
 Creates a Property Insurer Stability Unit within the OIR to aid in the detection and
prevention of insurer insolvencies in the homeowners’ and condominium unit owners’
insurance market. Insurers must be referred to the unit for enhanced monitoring upon the