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 1A 2022A
1 A bill to be entitled
2 An act relating to property insurance; creating s.
3 215.5552, F.S.; creating the Florida Optional
4 Reinsurance Assistance program (FORA), to be
5 administered by the State Board of Administration;
6 defining terms; authorizing eligible insurers to
7 purchase reinsurance coverage under FORA; requiring
8 the board to provide specified coverage layers;
9 specifying coverage limits for each option; specifying
10 requirements for reimbursement contracts between the
11 board and FORA insurers; specifying the calculation of
12 payout multiples and layer retentions; authorizing the
13 board to inspect, examine, and verify certain records;
14 specifying the calculation of premiums and
15 requirements for the payment of premiums; providing
16 construction relating to the claims-paying capacity of
17 the Florida Hurricane Catastrophe Fund; specifying
18 requirements and procedures if a FORA insurer becomes
19 insolvent; providing construction relating to
20 violations; authorizing the board to take legal
21 actions and adopt rules, including emergency rules;
22 providing legislative findings; specifying
23 requirements and procedures for the appropriation of
24 funds from the General Revenue Fund to provide
25 reimbursements; requiring the board to submit annual
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26 reports to the Governor and the Legislature; providing
27 for contingent expiration; amending s. 624.1551, F.S.;
28 revising conditions that must be met for a claim for
29 extracontractual damages in a civil remedy action
30 against a property insurer; providing construction;
31 amending s. 624.3161, F.S.; providing that property
32 insurers may be subject to an additional market
33 conduct examination by the Office of Insurance
34 Regulation after a hurricane under certain
35 circumstances; providing requirements for such
36 examination; amending s. 624.418, F.S.; adding
37 specified grounds on which the office may suspend or
38 revoke a property insurer's certificate of authority;
39 amending s. 624.424, F.S.; adding information required
40 to be reported by property insurers in their quarterly
41 supplemental reports; amending s. 626.9373, F.S.;
42 deleting a right to attorney fees for judgments or
43 decrees against surplus lines insurers in suits
44 arising under residential or commercial property
45 insurance policies; amending s. 626.9541, F.S.;
46 revising conditions for a certain unfair claim
47 settlement practice by a property insurer; amending s.
48 627.351, F.S.; authorizing Citizens Property Insurance
49 Corporation, if certain conditions are met, to
50 consolidate its three separate accounts into a single
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51 Citizens account for all revenues, assets,
52 liabilities, losses, and expenses of the corporation;
53 specifying the corporation's authority, and
54 requirements for and prohibited acts by the
55 corporation, under the Citizens account; providing
56 applicability; specifying requirements and procedures
57 with respect to a deficit in the Citizens account;
58 defining terms; providing requirements for the Florida
59 Surplus Lines Service Office; revising requirements
60 for the corporation's plan of operation; revising
61 eligibility requirements for renewing coverage with
62 the corporation for personal lines residential and
63 commercial lines residential risks; providing
64 construction; providing requirements relating to
65 certain excess premium and investment income in the
66 Citizens account; authorizing specified insurers to
67 petition the office to qualify as limited
68 apportionment companies; providing requirements for
69 such companies; specifying disclosure requirements to
70 applicants for coverage from the corporation if the
71 Citizens account is established; providing that, for
72 certain purposes, the corporation's rates for coverage
73 may not be competitive with approved rates charged in
74 the admitted voluntary market; requiring the office to
75 provide certain information to the corporation;
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76 specifying annual rate increase limits for personal
77 lines policies written on or after a specified date
78 which do not cover a primary residence; defining the
79 term "primary residence"; requiring the corporation to
80 require the securing and maintenance of flood
81 insurance as a condition of personal lines residential
82 coverage; specifying requirements for such flood
83 insurance coverage; specifying deadlines by which
84 policyholders must secure and maintain flood
85 insurance; revising eligibility requirements for
86 coverage with the corporation when take-out offers are
87 received by policyholders; specifying a burden of
88 proof for corporation policyholders making claims for
89 water damage; making technical changes; conforming
90 provisions to changes made by the act; amending s.
91 627.3511, F.S.; conforming cross-references; amending
92 s. 627.3518, F.S.; deleting a provision construing the
93 eligibility for coverage with the corporation for
94 certain applicants; conforming a provision to changes
95 made by the act; amending s. 627.410, F.S.; requiring
96 the office to reexamine certain policy forms of a
97 property insurer under certain circumstances;
98 specifying actions the office may take; amending s.
99 627.428, F.S.; deleting a right to attorney fees for
100 judgments or decrees against insurers in suits arising
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101 under residential or commercial property insurance
102 policies; amending s. 627.7011, F.S.; revising
103 disclosure requirements relating to flood insurance
104 for insurers issuing homeowners' policies; amending s.
105 627.70131, F.S.; revising requirements for insurers
106 relating to acknowledging communications regarding
107 claims, investigating claims, sending estimates of
108 losses to policyholders, recordkeeping, and paying or
109 denying claims; authorizing insurers to use specified
110 methods in investigating losses; authorizing insurers
111 to void insurance policies under certain
112 circumstances; defining the term "factors beyond the
113 control of the insurer"; specifying circumstances
114 under which certain requirements are tolled; providing
115 construction; amending s. 627.70132, F.S.; revising
116 timeframes under which notices of claims, reopened
117 claims, and supplemental claims under property
118 insurance policies must be given to insurers or be
119 barred; amending s. 627.70152, F.S.; revising
120 applicability; deleting the definition of the term
121 "amount obtained"; providing that certain
122 prelitigation notices and documentation are not
123 admissible as evidence in any proceeding; deleting
124 provisions relating to the calculation of attorney
125 fees; creating s. 627.70154, F.S.; specifying
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126 conditions that must be met for a property insurance
127 policy to require mandatory binding arbitration;
128 amending s. 627.7074, F.S.; deleting the right to
129 attorney fees payable by insurers in the alternative
130 procedure for resolution of disputed sinkhole
131 insurance claims; conforming a provision to changes
132 made by the act; amending s. 627.7142, F.S.;
133 conforming provisions to changes made by the act;
134 amending s. 627.7152, F.S.; prohibiting policyholders
135 from assigning post-loss insurance benefits under
136 residential or commercial property insurance policies
137 issued on or after a specified date; providing
138 construction; amending s. 627.7154, F.S.; revising
139 duties of the office's Property Insurer Stability
140 Unit; amending s. 631.252, F.S.; providing that a
141 coverage continuation period for policies of an
142 insolvent property insurer may be extended by the
143 office under specified circumstances; amending s.
144 768.79, F.S.; authorizing a property insurer in a
145 breach of contract action to make a joint offer of
146 judgment or settlement that is conditioned on the
147 mutual acceptance of all joint offerees; providing an
148 appropriation; providing an effective date.
149
150 Be It Enacted by the Legislature of the State of Florida:
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151
152 Section 1. Section 215.5552, Florida Statutes, is created
153 to read:
154 215.5552 Florida Optional Reinsurance Assistance program. —
155 (1) CREATION OF THE FLORIDA OPTIONAL REINSURANCE
156 ASSISTANCE PROGRAM.—There is created the Florida Optional
157 Reinsurance Assistance program to be administered by the State
158 Board of Administration.
159 (2) DEFINITIONS.—As used in this section, the term:
160 (a) "Board" means the State Board of Administration.
161 (b) "Contract year" has the same meaning as in s.
162 215.555(2)(o).
163 (c) "Covered event" has the same meaning as in s.
164 215.555(2)(b).
165 (d) "Covered policy" has the same meaning as in s.
166 215.555(2)(c).
167 (e) "FHCF" means the Florida Hurricane Catastrophe Fund
168 created under s. 215.555.
169 (f) "Final FORA premium" means the premium due no later
170 than March 1, 2024, paid by a FORA insurer after the actual 2023
171 FHCF premiums are calculated.
172 (g) "FORA" means the Florida Optional Reinsurance
173 Assistance program created under this section.
174 (h) "FORA eligible insurer" means a FHCF participating
175 insurer as of November 30, 2022. New FHCF participants after
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176 that date are ineligible for FORA coverage. In addition, any
177 joint underwriting association, risk apportionment plan, or
178 other entity created under s. 627.351 is not considered a FORA
179 insurer and may not obtain coverage under FORA.
180 (i) "FORA insurer" means a FORA eligible insurer that
181 executes a FORA reimbursement contract pursuant to this section.
182 (j) "FORA layer limit" means, for the 2023-2024 contract
183 year, a FORA insurer's maximum payout for its FORA layer.
184 (k) "FORA layer retention" means the amount of losses
185 below which a FORA insurer is not entitled to reimbursement for
186 the selected layer under FORA.
187 (l) "FORA payout multiple" means the factors by FHCF
188 coverage and FORA layer that are multiplied by a FORA insurer's
189 FHCF premium to calculate the FORA insurer's FORA layer limits.
190 (m) "FORA reimbursement contract" means the reimbursement
191 contract reflecting the obligations of a FORA insurer and the
192 board.
193 (n) "FORA retention multiple" means the factors by FHCF
194 coverage and FORA layer that are multiplied by a FORA insurer's
195 FHCF premium to calculate the FORA insurer's FORA layer
196 retentions.
197 (o) "Initial FORA premium" means the premium paid by a
198 FORA insurer by July 1, 2023, for coverage under the FORA
199 program.
200 (p) "Losses" has the same meaning as in s. 215.555(2)(d).
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201 (q) "RAP insurer" has the same meaning as in s.
202 215.5551(2)(h).
203 (r) "Unsound insurer" means a FORA insurer determined by
204 the Office of Insurance Regulation to be in unsound condition as
205 defined in s. 624.80(2) or a FORA insurer placed in receivership
206 under chapter 631.
207 (3) COVERAGE.—
208 (a) Each FORA eligible insurer may purchase coverage under
209 FORA. The board shall provide four optional layers below the
210 FHCF retention prior to the third event dropdown of the FHCF
211 retention set forth in s. 215.555(2)(e)4. Only RAP insurers
212 required to participate in the 2022-2023 contract year may
213 select FORA layers 1 through 3. All FORA eligible insurers may
214 purchase FORA layer 4. If a RAP insurer required to participate
215 in the 2022-2023 cont