FL
Florida House Bill H0799

Florida 2023 Regular Session

Florida House Bill H0799 Compare Versions

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1010 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
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14+A bill to be entitled 1
1515 An act relating to property insurance; amending s. 2
1616 627.062, F.S.; requiring residential property 3
1717 insurance rate filings to account for windstorm 4
1818 mitigation measures undertaken by policyholders; 5
1919 amending s. 627.0629, F.S.; requiring wind uplift 6
2020 prevention to be included in windstorm damage 7
2121 mitigation techniques for residential property 8
2222 insurance rate filings; amending s. 627.351, F.S.; 9
2323 revising rate change lim itations for specified 10
2424 policies written by the Citizens Property Insurance 11
2525 Corporation; revising the applicability of flood 12
2626 coverage requirements for personal lines residential 13
2727 policyholders of the corporation; authorizing the 14
2828 corporation to adopt policy f orms that provide for the 15
2929 resolution of certain disputes in proceedings before 16
3030 the Division of Administrative Hearings; providing 17
3131 that such policies are not subject to mandatory 18
3232 binding arbitration provisions; specifying applicable 19
3333 requirements, procedures , and restrictions relating to 20
3434 such proceedings; creating s. 627.7155, F.S.; 21
3535 prohibiting a property insurer that requires flood 22
3636 coverage as a condition for wind coverage from denying 23
3737 certain claims except under certain circumstances; 24
3838 specifying a type of a cceptable proof of coverage; 25
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4747 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
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5151 providing an appropriation; requiring a wind -loss 26
5252 mitigation study conducted by the Office of Insurance 27
5353 Regulation; providing requirements for the study; 28
5454 providing reporting requirements; providing effective 29
5555 dates. 30
5656 31
5757 Be It Enacted by the Legislature of the State of Florida: 32
5858 33
5959 Section 1. Paragraph (j) of subsection (2) of section 34
6060 627.062, Florida Statutes, is amended to read: 35
6161 627.062 Rate standards. — 36
6262 (2) As to all such classes of insurance: 37
6363 (j) With respect to residen tial property insurance rate 38
6464 filings, the rate filing must account for mitigation measures 39
6565 undertaken by policyholders to reduce hurricane losses and 40
6666 windstorm losses. 41
6767 42
6868 The provisions of this subsection do not apply to workers' 43
6969 compensation, employer's lia bility insurance, and motor vehicle 44
7070 insurance. 45
7171 Section 2. Subsection (1) of section 627.0629, Florida 46
7272 Statutes, is amended to read: 47
7373 627.0629 Residential property insurance; rate filings. — 48
7474 (1) It is the intent of the Legislature that insurers 49
7575 provide savings to consumers who install or implement windstorm 50
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8484 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
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8888 damage mitigation techniques, alterations, or solutions to their 51
8989 properties to prevent windstorm losses. A rate filing for 52
9090 residential property insurance must include actuarially 53
9191 reasonable discounts, credits, or other rate differentials, or 54
9292 appropriate reductions in deductibles, for properties on which 55
9393 fixtures or construction techniques demonstrated to reduce the 56
9494 amount of loss in a windstorm have been installed or 57
9595 implemented. The fixtures or cons truction techniques must 58
9696 include, but are not limited to, fixtures or construction 59
9797 techniques that enhance wind uplift prevention, roof strength, 60
9898 roof covering performance, roof -to-wall strength, wall-to-floor-61
9999 to-foundation strength, opening protection, an d window, door, 62
100100 and skylight strength. Credits, discounts, or other rate 63
101101 differentials, or appropriate reductions in deductibles, for 64
102102 fixtures and construction techniques that meet the minimum 65
103103 requirements of the Florida Building Code must be included in 66
104104 the rate filing. The office shall determine the discounts, 67
105105 credits, other rate differentials, and appropriate reductions in 68
106106 deductibles that reflect the full actuarial value of such 69
107107 revaluation, which may be used by insurers in rate filings. 70
108108 Section 3. Effective upon becoming a law, paragraphs (n) 71
109109 and (aa) of subsection (6) of section 627.351, Florida Statutes, 72
110110 are amended, and paragraph (ll) is added to that subsection, to 73
111111 read: 74
112112 627.351 Insurance risk apportionment plans. — 75
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121121 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
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125125 (6) CITIZENS PROPERTY INSURANCE CORPORATION. — 76
126126 (n)1. Rates for coverage provided by the corporation must 77
127127 be actuarially sound pursuant to s. 627.062 and not competitive 78
128128 with approved rates charged in the admitted voluntary market so 79
129129 that the corporation functions as a residual market mechanism to 80
130130 provide insurance only when insurance cannot be procured in the 81
131131 voluntary market, except as otherwise provided in this 82
132132 paragraph. The office shall provide the corporation such 83
133133 information as would be necessary to determine whether rate s are 84
134134 competitive. The corporation shall file its recommended rates 85
135135 with the office at least annually. The corporation shall provide 86
136136 any additional information regarding the rates which the office 87
137137 requires. The office shall consider the recommendations of the 88
138138 board and issue a final order establishing the rates for the 89
139139 corporation within 45 days after the recommended rates are 90
140140 filed. The corporation may not pursue an administrative 91
141141 challenge or judicial review of the final order of the office. 92
142142 2. In addition to the rates otherwise determined pursuant 93
143143 to this paragraph, the corporation shall impose and collect an 94
144144 amount equal to the premium tax provided in s. 624.509 to 95
145145 augment the financial resources of the corporation. 96
146146 3. After the public hurricane loss -projection model under 97
147147 s. 627.06281 has been found to be accurate and reliable by the 98
148148 Florida Commission on Hurricane Loss Projection Methodology, the 99
149149 model shall be considered when establishing the windstorm 100
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158158 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
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162162 portion of the corporation's rates. The corpor ation may use the 101
163163 public model results in combination with the results of private 102
164164 models to calculate rates for the windstorm portion of the 103
165165 corporation's rates. This subparagraph does not require or allow 104
166166 the corporation to adopt rates lower than the rate s otherwise 105
167167 required or allowed by this paragraph. 106
168168 4. The corporation must make a recommended actuarially 107
169169 sound rate filing for each personal and commercial line of 108
170170 business it writes. 109
171171 5. Notwithstanding the board's recommended rates and the 110
172172 office's final order regarding the corporation's filed rates 111
173173 under subparagraph 1., the corporation shall annually implement 112
174174 a rate increase which, except for sinkhole coverage, does not 113
175175 exceed the following for any single policy issued by the 114
176176 corporation, excluding coverage changes and surcharges: 115
177177 a. Twelve percent for 2023. 116
178178 b. Thirteen percent for 2024. 117
179179 c. Fourteen percent for 2025. 118
180180 d. Fifteen percent for 2026 and all subsequent years. 119
181181 6. The corporation may also implement an increase to 120
182182 reflect the effect on the corporation of the cash buildup factor 121
183183 pursuant to s. 215.555(5)(b). 122
184184 7. The corporation's implementation of rates as prescribed 123
185185 in subparagraphs 5. and 8. shall cease for any line of business 124
186186 written by the corporation upon the corporation's imp lementation 125
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195195 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
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199199 of actuarially sound rates. Thereafter, the corporation shall 126
200200 annually make a recommended actuarially sound rate filing that 127
201201 is not competitive with approved rates in the admitted voluntary 128
202202 market for each commercial and personal line of busine ss the 129
203203 corporation writes. 130
204204 8. The following For any new or renewal personal lines 131
205205 policies policy written on or after November 1, 2023, are which 132
206206 does not cover a primary residence, the rate to be applied in 133
207207 calculating premium is not subject to the rate increase 134
208208 limitations in subparagraph 5. , but However, the policyholder 135
209209 may not be charged more than 50 percent above, nor less than, 136
210210 the prior year's and may not be charged less than, the 137
211211 established rate for the corporation : which was in effect 1 year 138
212212 before the date of the application 139
213213 a. Policies that do not cover a primary residence; 140
214214 b. New policies under which the coverage for the insured 141
215215 risk, before the date of application with the corporation, was 142
216216 last provided by an insurer determined by the of fice to be 143
217217 unsound or an insurer placed in receivership under chapter 631; 144
218218 or 145
219219 c. Subsequent renewals of those policies, including the 146
220220 new policies in sub-subparagraph b., under which the coverage 147
221221 for the insured risk, before the date of application with the 148
222222 corporation, was last provided by an insurer determined by the 149
223223 office to be unsound or an insurer placed in receivership under 150
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232232 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
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236236 chapter 631. 151
237237 9. As used in this paragraph, the term "primary residence" 152
238238 means the dwelling that is the policyholder's prima ry home or is 153
239239 a rental property that is the primary home of the tenant, and 154
240240 which the policyholder or tenant occupies for more than 9 months 155
241241 of each year. 156
242242 (aa) Except as otherwise provided in this paragraph, the 157
243243 corporation shall require the securing and maintaining of flood 158
244244 insurance as a condition of coverage of a personal lines 159
245245 residential risk. The insured or applicant must execute a form 160
246246 approved by the office affirming that flood insurance is not 161
247247 provided by the corporation and that if flood insuran ce is not 162
248248 secured by the applicant or insured from an insurer other than 163
249249 the corporation and in addition to coverage by the corporation, 164
250250 the risk will not be eligible for coverage by the corporation. 165
251251 The corporation may deny coverage of a personal lines 166
252252 residential risk to an applicant or insured who refuses to 167
253253 secure and maintain flood insurance. The requirement to purchase 168
254254 flood insurance shall be implemented as follows: 169
255255 1. Except as provided in subparagraphs 2. and 3., all 170
256256 personal lines residential po licyholders must have flood 171
257257 coverage in place for policies effective on or after: 172
258258 a. January 1, 2024, for a structure that has a dwelling 173
259259 replacement cost of property valued at $600,000 or more. 174
260260 b. January 1, 2025, for a structure that has a dwelling 175
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269269 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
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273273 replacement cost of property valued at $500,000 or more. 176
274274 c. January 1, 2026, for a structure that has a dwelling 177
275275 replacement cost of property valued at $400,000 or more. 178
276276 d. January 1, 2027, for all other personal lines 179
277277 residential property insured by th e corporation. 180
278278 2. All personal lines residential policyholders whose 181
279279 property insured by the corporation is located within the 182
280280 special flood hazard area defined by the Federal Emergency 183
281281 Management Agency must have flood coverage in place: 184
282282 a. At the time of initial policy issuance for all new 185
283283 personal lines residential policies issued by the corporation on 186
284284 or after April 1, 2023. 187
285285 b. By the time of the policy renewal for all personal 188
286286 lines residential policies renewing on or after July 1, 2023. 189
287287 3. Policyholders whose policies issued by the corporation 190
288288 do not provide coverage for the peril of wind are not required 191
289289 to purchase flood insurance as a condition for maintaining the 192
290290 following their policies issued by with the corporation: 193
291291 a. Policies that do not provide coverage for the peril of 194
292292 wind. 195
293293 b. Policies that provide coverage under a condominium unit 196
294294 owners form. 197
295295 198
296296 The flood insurance required under this paragraph must meet, at 199
297297 a minimum, the coverage available from the National Flood 200
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306306 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
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310310 Insurance Program or the requirements of subparagraphs s. 201
311311 627.715(1)(a)1., 2., and 3. 202
312312 (ll) In addition to any other method of alternative 203
313313 dispute resolution authorized by state law, the corporation may 204
314314 adopt policy forms that provide for the resolution of disputes 205
315315 regarding its claim determinations, including disputes regarding 206
316316 coverage for, or the scope and value of, a claim, in a 207
317317 proceeding before the Division of Administrative Hearings. Any 208
318318 such policies are not subject to s. 627.70154. All proceedings 209
319319 in the Division of Administrative Hearings pursuant to such 210
320320 policies are subject to ss. 57.105 and 768.79 as if filed in the 211
321321 courts of this state and are not considered chapter 120 212
322322 administrative proceedings. Rule 1.442, Florida Rules of Civil 213
323323 Procedure, applies to any offer served pursuant to s. 768.79, 214
324324 except that, notwithstanding any provision in Rule 1.442, 215
325325 Florida Rules of Civil Procedure, to the contrary, an offer 216
326326 shall not be served earlier than 10 days after filing the 217
327327 request for hearing with the Division o f Administrative Hearings 218
328328 and shall not be served later than 10 days before the date set 219
329329 for the final hearing. The administrative law judge in such 220
330330 proceedings shall award attorney fees and other relief pursuant 221
331331 to ss. 57.105 and 768.79. The corporation m ay not seek, and the 222
332332 office may not approve, a maximum hourly rate for attorney fees. 223
333333 Section 4. Effective October 1, 2023, section 627.7155, 224
334334 Florida Statutes, is created to read: 225
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343343 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
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347347 627.7155 Wind and flood coverage in residential and 226
348348 commercial property insurance policies. —For residential and 227
349349 commercial property insurance policies issued or renewed on or 228
350350 after October 1, 2023: 229
351351 (1) If a residential or commercial property insurer 230
352352 requires that an insured or applicant have coverage for the 231
353353 peril of flood when the insurer issues a policy covering the 232
354354 peril of wind, unless the insurer verifies that the insured or 233
355355 applicant has coverage for the peril of flood at the time the 234
356356 policy was issued or renewed, the insurer may not deny a claim 235
357357 for wind solely because the insured does not have coverage for 236
358358 the peril of flood, unless flood coverage that was verified at 237
359359 the time of application or renewal, or equivalent coverage, is 238
360360 not in force at the time of the loss. 239
361361 (2) In addition to coverage for the peril of flood 240
362362 directly secured by the insured or applicant, a master flood 241
363363 policy that is issued to someone other than the insured or 242
364364 applicant and that includes the insured or applicant as an 243
365365 intended or third-party beneficiary under the master flood 244
366366 policy is acceptable proof of coverage for the peril of flood 245
367367 for the purposes of this section. 246
368368 Section 5. For the 2023-2024 fiscal year, the nonrecurring 247
369369 sum of $750,000 from the Insurance Regulatory Trust Fund is 248
370370 appropriated to the Office of Insurance Regul ation to 249
371371 competitively procure a wind -loss mitigation study. The office, 250
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380380 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
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384384 in consultation with the Department of Business and Professional 251
385385 Regulation and the Florida Building Commission, shall conduct a 252
386386 residential wind-loss mitigation study to evaluate the windstorm 253
387387 loss relativities for construction features, including, but not 254
388388 limited to, wind uplift prevention, methods and devices to 255
389389 prevent water intrusion through the tracks of sliding glass 256
390390 doors, and those that enhance roof strength; roof covering 257
391391 performance; roof-to-wall strength; wall-to-floor-to-foundation 258
392392 strength; opening protections; and window, door, and skylight 259
393393 strength. The study must include single -family and multifamily 260
394394 homes, mobile homes, and manufactured housing. In addition, the 261
395395 study must include, but need not be limited to, an analysis of 262
396396 developed hurricane loss data for hurricanes since June 1, 2018. 263
397397 The office may use a portion of the funds appropriated to 264
398398 contract separately with building code experts in order to 265
399399 implement this act and adopt rules. The findings of the study 266
400400 shall be reported to the Governor, the President of the Senate, 267
401401 the Speaker of the House of Representatives, the Chief Financial 268
402402 Officer, and the Commissioner of Insurance Regulation no later 269
403403 than July 1, 2024. 270
404404 Section 6. Except as otherwise expressly provided in this 271
405405 act and except for this section, which shall take effect upon 272
406406 this act becoming a law, this act shall take effect July 1, 273
407407 2023. 274