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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
A bill to be entitled 1
An act relating to property insurance; amending s. 2
627.062, F.S.; requiring residential property 3
insurance rate filings to account for windstorm 4
mitigation measures undertaken by policyholders; 5
amending s. 627.0629, F.S.; requiring wind uplift 6
prevention to be included in windstorm damage 7
mitigation techniques for residential property 8
insurance rate filings; amending s. 627.351, F.S.; 9
revising rate change limitations for specified 10
policies written by the Citizens Property Insurance 11
Corporation; revising the applicability of flood 12
coverage requirements for personal lines residential 13
policyholders of the corporation; authorizing the 14
corporation to adopt policy forms that provide for the 15
resolution of certain disputes in proceedings before 16
the Division of Admin istrative Hearings; providing 17
that such policies are not subject to mandatory 18
binding arbitration provisions; authorizing the 19
corporation to contract with the division to conduct 20
proceedings; creating s. 627.7155, F.S.; requiring 21
property insurers to verif y coverage for the peril of 22
flood in certain circumstances; prohibiting issuance 23
of coverage for the peril of wind in certain 24
circumstances; requiring an acknowledgement; 25
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specifying a type of acceptable proof of coverage; 26
providing an appropriation; requir ing a wind-loss 27
mitigation study conducted by the Office of Insurance 28
Regulation; providing requirements for the study; 29
providing reporting requirements; providing effective 30
dates. 31
32
Be It Enacted by the Legislature of the State of Florida: 33
34
Section 1. Paragraph (j) of subsection (2) of section 35
627.062, Florida Statutes, is amended to read: 36
627.062 Rate standards. — 37
(2) As to all such classes of insurance: 38
(j) With respect to residential property insurance rate 39
filings, the rate filing must acco unt for mitigation measures 40
undertaken by policyholders to reduce hurricane losses and 41
windstorm losses. 42
43
The provisions of this subsection do not apply to workers' 44
compensation, employer's liability insurance, and motor vehicle 45
insurance. 46
Section 2. Subsection (1) of section 627.0629, Florida 47
Statutes, is amended to read: 48
627.0629 Residential property insurance; rate filings. — 49
(1) It is the intent of the Legislature that insurers 50
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provide savings to consumers who install or implement windstorm 51
damage mitigation techniques, alterations, or solutions to their 52
properties to prevent windstorm losses. A rate filing for 53
residential property insurance must include actuarially 54
reasonable discounts, credits, or other rate differentials, or 55
appropriate reductions in deductibles, for properties on which 56
fixtures or construction techniques demonstrated to reduce the 57
amount of loss in a windstorm have been installed or 58
implemented. The fixtures or construction techniques must 59
include, but are not limited to, fixtu res or construction 60
techniques that enhance wind uplift prevention, roof strength, 61
roof covering performance, roof -to-wall strength, wall-to-floor-62
to-foundation strength, opening protection, and window, door, 63
and skylight strength. Credits, discounts, or o ther rate 64
differentials, or appropriate reductions in deductibles, for 65
fixtures and construction techniques that meet the minimum 66
requirements of the Florida Building Code must be included in 67
the rate filing. The office shall determine the discounts, 68
credits, other rate differentials, and appropriate reductions in 69
deductibles that reflect the full actuarial value of such 70
revaluation, which may be used by insurers in rate filings. 71
Section 3. Effective upon becoming a law, paragraphs (n) 72
and (aa) of subsection (6) of section 627.351, Florida Statutes, 73
are amended, and paragraph (ll) is added to that subsection, to 74
read: 75
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627.351 Insurance risk apportionment plans. — 76
(6) CITIZENS PROPERTY INSURANCE CORPORATION. — 77
(n)1. Rates for coverage provided by the corporation must 78
be actuarially sound pursuant to s. 627.062 and not competitive 79
with approved rates charged in the admitted voluntary market so 80
that the corporation functions as a residual market mechanism to 81
provide insurance only when insurance cannot b e procured in the 82
voluntary market, except as otherwise provided in this 83
paragraph. The office shall provide the corporation such 84
information as would be necessary to determine whether rates are 85
competitive. The corporation shall file its recommended rates 86
with the office at least annually. The corporation shall provide 87
any additional information regarding the rates which the office 88
requires. The office shall consider the recommendations of the 89
board and issue a final order establishing the rates for the 90
corporation within 45 days after the recommended rates are 91
filed. The corporation may not pursue an administrative 92
challenge or judicial review of the final order of the office. 93
2. In addition to the rates otherwise determined pursuant 94
to this paragraph, t he corporation shall impose and collect an 95
amount equal to the premium tax provided in s. 624.509 to 96
augment the financial resources of the corporation. 97
3. After the public hurricane loss -projection model under 98
s. 627.06281 has been found to be accurate and reliable by the 99
Florida Commission on Hurricane Loss Projection Methodology, the 100
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model shall be considered when establishing the windstorm 101
portion of the corporation's rates. The corporation may use the 102
public model results in combination with the resu lts of private 103
models to calculate rates for the windstorm portion of the 104
corporation's rates. This subparagraph does not require or allow 105
the corporation to adopt rates lower than the rates otherwise 106
required or allowed by this paragraph. 107
4. The corporation must make a recommended actuarially 108
sound rate filing for each personal and commercial line of 109
business it writes. 110
5. Notwithstanding the board's recommended rates and the 111
office's final order regarding the corporation's filed rates 112
under subparagraph 1., the corporation shall annually implement 113
a rate increase which, except for sinkhole coverage, does not 114
exceed the following for any single policy issued by the 115
corporation, excluding coverage changes and surcharges: 116
a. Twelve percent for 2023. 117
b. Thirteen percent for 2024. 118
c. Fourteen percent for 2025. 119
d. Fifteen percent for 2026 and all subsequent years. 120
6. The corporation may also implement an increase to 121
reflect the effect on the corporation of the cash buildup factor 122
pursuant to s. 215.555(5)(b). 123
7. The corporation's implementation of rates as prescribed 124
in subparagraphs 5. and 8. shall cease for any line of business 125
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written by the corporation upon the corporation's implementation 126
of actuarially sound rates. Thereafter, the corporation shall 127
annually make a recommended actuarially sound rate filing that 128
is not competitive with approved rates in the admitted voluntary 129
market for each commercial and personal line of business the 130
corporation writes. 131
8. The following For any new or renewal personal lines 132
policies policy written on or after November 1, 2023, are which 133
does not cover a primary residence, the rate to be applied in 134
calculating premium is not subject to the rate increase 135
limitations in subparagraph 5. , but However, the policyho lder 136
may not be charged more than 50 percent above, nor less than, 137
the prior year's and may not be charged less than, the 138
established rate for the corporation : which was in effect 1 year 139
before the date of the application 140
a. Policies that do not cover a primary residence; 141
b. New policies under which the coverage for the insured 142
risk, before the date of application with the corporation, was 143
last provided by an insurer determined by the office to be 144
unsound or an insurer placed in receivership under chapt er 631; 145
or 146
c. Subsequent renewals of those policies, including the 147
new policies in sub-subparagraph b., under which the coverage 148
for the insured risk, before the date of application with the 149
corporation, was last provided by an insurer determined by the 150
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office to be unsound or an insurer placed in receivership under 151
chapter 631. 152
9. As used in this paragraph, the term "primary residence" 153
means the dwelling that is the policyholder's primary home or is 154
a rental property that is the primary home of the ten ant, and 155
which the policyholder or tenant occupies for more than 9 months 156
of each year. 157
(aa) Except as otherwise provided in this paragraph, the 158
corporation shall require the securing and maintaining of flood 159
insurance as a condition of coverage of a per sonal lines 160
residential risk. The insured or applicant must execute a form 161
approved by the office affirming that flood insurance is not 162
provided by the corporation and that if flood insurance is not 163
secured by the applicant or insured from an insurer other than 164
the corporation and in addition to coverage by the corporation, 165
the risk will not be eligible for coverage by the corporation. 166
The corporation may deny coverage of a personal lines 167
residential risk to an applicant or insured who refuses to 168
secure and maintain flood insurance. The requirement to purchase 169
flood insurance shall be implemented as follows: 170
1. Except as provided in subparagraphs 2. and 3., all 171
personal lines residential policyholders must have flood 172
coverage in place for policies effectiv e on or after: 173
a. January 1, 2024, for a structure or unit that has a 174
dwelling replacement cost of property valued at $600,000 or 175
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more. 176
b. January 1, 2025, for a structure or unit that has a 177
dwelling replacement cost of property valued at $500,000 or 178
more. 179
c. January 1, 2026, for a structure or unit that has a 180
dwelling replacement cost of property valued at $400,000 or 181
more. 182
d. January 1, 2027, for all other personal lines 183
residential property insured by the corporation. 184
2. All personal lines resi dential policyholders whose 185
property insured by the corporation is located within the 186
special flood hazard area defined by the Federal Emergency 187
Management Agency must have flood coverage in place: 188
a. At the time of initial policy issuance for all new 189
personal lines residential policies issued by the corporation on 190
or after April 1, 2023. 191
b. By the time of the policy renewal for all personal 192
lines residential policies renewing on or after July 1, 2023. 193
3. Policyholders whose policies issued by the cor poration 194
do not provide coverage for the peril of wind are not required 195
to purchase flood insurance as a condition for maintaining their 196
policies with the corporation. 197
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The flood insurance required under this paragraph must meet, at 199
a minimum, the coverage available from the National Flood 200
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Insurance Program or the requirements of subparagraphs s. 201
627.715(1)(a)1., 2., and 3. 202
(ll)1. In addition to any other method of alternative 203
dispute resolution authorized by state law, the corporation may 204
adopt policy forms that provide for the resolution of disputes 205
regarding its claim determinations, including disputes regarding 206
coverage for, or the scope and value of, a claim, in a 207
proceeding before the Division of Administrative Hearings. Any 208
such policies are not sub ject to s. 627.70154. 209
2. The corporation may contract with the Division of 210
Administrative Hearings to conduct proceedings to resolve 211
disputes regarding its claim determinations as may be provided 212
for in the applicable policies of insurance. 213
Section 4. Effective October 1, 2023, section 627.7155, 214
Florida Statutes, is created to read: 215
627.7155 Wind and flood coverage in residential and 216
commercial property insurance policies .—For residential and 217
commercial property insurance policies issued or renewed on or 218
after October 1, 2023: 219
(1) If a residential or commercial property insurer 220
requires that an insured or applicant have coverage for the 221
peril of flood when the insurer issues a policy covering the 222
peril of wind, the insurer must verify that the insu red or 223
applicant has coverage for the peril of flood at the time the 224
policy is issued or renewed. If the insurer fails to verify that 225
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the insured or applicant has coverage for the peril of flood, 226
the insurer may not issue or renew a policy containing cover age 227
for the peril of wind. Before issuance of coverage for the peril 228
of wind under this subsection and upon verification of coverage 229
for the peril of flood, the insurer must obtain a written 230
acknowledgment from the insured or applicant that the insured or 231
applicant understands that the policy covering the peril of wind 232
requires that coverage for the peril of flood must be maintained 233
by the insured or applicant. 234
(2) In addition to coverage for the peril of flood 235
directly secured by the insured or applicant , a master flood 236
policy that is issued to someone other than the insured or 237
applicant and that includes the insured or applicant as an 238
intended or third-party beneficiary under the master flood 239
policy is acceptable proof of coverage for the peril of flood 240
for the purposes of this section. 241
Section 5. For the 2023-2024 fiscal year, the nonrecurring 242
sum of $750,000 from the Insurance Regulatory Trust Fund is 243
appropriated to the Office of Insurance Regulation to 244
competitively procure a wind -loss mitigation study. The office, 245
in consultation with the Department of Business and Professional 246
Regulation and the Florida Building Commission, shall conduct a 247
residential wind-loss mitigation study to evaluate the windstorm 248
loss relativities for construction features , including, but not 249
limited to, wind uplift prevention and those that enhance roof 250
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strength; roof covering performance; roof -to-wall strength; 251
wall-to-floor-to-foundation strength; opening protections; and 252
window, door, and skylight strength. The study mu st include 253
single-family and multifamily homes, mobile homes, and 254
manufactured housing. In addition, the study must include, but 255
need not be limited to, an analysis of developed hurricane loss 256
data for hurricanes since June 1, 2018. The office may use a 257
portion of the funds appropriated to contract separately with 258
building code experts in order to implement this act and adopt 259
rules. The findings of the study shall be reported to the 260
Governor, the President of the Senate, the Speaker of the House 261
of Representatives, the Chief Financial Officer, and the 262
Commissioner of Insurance Regulation no later than July 1, 2024. 263
Section 6. Except as otherwise expressly provided in this 264
act and except for this section, which shall take effect upon 265
this act becoming a l aw, this act shall take effect July 1, 266
2023. 267