Florida Senate - 2023 CS for SB 418 By the Committee on Banking and Insurance; and Senator Perry 597-02158-23 2023418c1 1 A bill to be entitled 2 An act relating to insurance; amending s. 627.062, 3 F.S.; authorizing residential property insurance rate 4 filings to use a specified modeling indication; 5 amending s. 627.0628, F.S.; revising membership 6 requirements for specified members of the Florida 7 Commission on Hurricane Loss Projection Methodology; 8 amending s. 627.0629, F.S.; authorizing insurers to 9 file with the Office of Insurance Regulation personal 10 lines residential property insurance rating plans 11 providing rate differentials based on certain 12 windstorm mitigation construction standards; providing 13 requirements for such plans; amending s. 627.0665, 14 F.S.; revising the timeframe for notices from insurers 15 to insureds of automatic bank withdrawal increases; 16 specifying the increase threshold for such notices; 17 amending s. 627.421, F.S.; revising the types of 18 documents and kinds of insurance for which electronic 19 transmission constitutes delivery to the insured or 20 person entitled to delivery; deleting a requirement to 21 include a certain notice to an insured electing to 22 receive policy documents electronically; deleting a 23 requirement to provide a paper copy of the policy upon 24 request by such person; amending s. 627.701, F.S.; 25 specifying limitations on personal lines residential 26 property insurance deductibles on policies covering 27 risks with specified dwelling limits; authorizing 28 insurers to make an additional filing within a certain 29 timeframe to implement changes; amending s. 627.712, 30 F.S.; providing that a policyholders written 31 exclusion from residential windstorm coverage or 32 contents coverage may be typed rather than 33 handwritten; amending s. 627.7276, F.S.; revising the 34 requirements for the notice of limited coverage under 35 certain automobile policies; providing an effective 36 date. 37 38 Be It Enacted by the Legislature of the State of Florida: 39 40 Section 1.Paragraph (j) of subsection (2) of section 41 627.062, Florida Statutes, is amended to read: 42 627.062Rate standards. 43 (2)As to all such classes of insurance: 44 (j)With respect to residential property insurance rate 45 filings, the rate filing: 46 1.Must account for mitigation measures undertaken by 47 policyholders to reduce hurricane losses. 48 2.May use a modeling indication that is the weighted or 49 straight average of two or more hurricane loss projection models 50 found by the Florida Commission on Hurricane Loss Projection 51 Methodology to be accurate or reliable pursuant to s. 627.0628. 52 53 The provisions of this subsection do not apply to workers 54 compensation, employers liability insurance, and motor vehicle 55 insurance. 56 Section 2.Paragraph (b) of subsection (2) of section 57 627.0628, Florida Statutes, is amended to read: 58 627.0628Florida Commission on Hurricane Loss Projection 59 Methodology; public records exemption; public meetings 60 exemption. 61 (2)COMMISSION CREATED. 62 (b)The commission shall consist of the following 12 63 members: 64 1.The insurance consumer advocate. 65 2.The senior employee of the State Board of Administration 66 responsible for operations of the Florida Hurricane Catastrophe 67 Fund. 68 3.The Executive Director of the Citizens Property 69 Insurance Corporation or the executive directors designee. The 70 executive directors designee must be a full-time employee of 71 the corporation. 72 4.The Director of the Division of Emergency Management or 73 the directors designee. The directors designee must be a full 74 time employee of the division. 75 5.The actuary member of the Florida Hurricane Catastrophe 76 Fund Advisory Council. 77 6.An employee of the office who is an actuary responsible 78 for property insurance rate filings and who is appointed by the 79 director of the office. 80 7.Five members appointed by the Chief Financial Officer, 81 as follows: 82 a.An actuary who is employed full time by a property and 83 casualty insurer that was responsible for at least 1 percent of 84 the aggregate statewide direct written premium for homeowner 85 insurance in the calendar year preceding the members 86 appointment to the commission. 87 b.An expert in insurance finance who is a full-time member 88 of the faculty of the State University System and who has a 89 background in actuarial science. 90 c.An expert in statistics who is a full-time member of the 91 faculty of the State University System and who has a background 92 in insurance. 93 d.An expert in computer system design who is a full-time 94 member of the faculty of the State University System. 95 e.An expert in meteorology who is a full-time member of 96 the faculty of the State University System and who specializes 97 in hurricanes. 98 8.A licensed professional structural engineer who is a 99 full-time faculty member in the State University System and who 100 has expertise in wind mitigation techniques. This appointment 101 shall be made by the Governor. 102 Section 3.Subsection (9) is added to section 627.0629, 103 Florida Statutes, to read: 104 627.0629Residential property insurance; rate filings. 105 (9)An insurer may file with the office a personal lines 106 residential property insurance rating plan that provides 107 justified premium discounts, credits, or other rate 108 differentials based on windstorm mitigation construction 109 standards developed by an independent, nonprofit scientific 110 research organization, if such standards meet the requirements 111 of this section. Such plan must describe the manner in which the 112 insurer will document the existence of the mitigation features 113 and premium discounts, credits, or other rate differentials 114 created under such plan. 115 Section 4.Section 627.0665, Florida Statutes, is amended 116 to read: 117 627.0665Automatic bank withdrawal agreements; notification 118 required.Any insurer licensed to issue insurance in the state 119 who has an automatic bank withdrawal agreement with an insured 120 party for the payment of insurance premiums for any type of 121 insurance shall give the named insured at least 10 15 days 122 advance written notice of any increase in policy premiums which 123 results in the next automatic bank withdrawal being increased by 124 more than $10. Such notice must be provided before prior to any 125 automatic bank withdrawal containing the of an increased 126 premium. 127 Section 5.Subsection (1) of section 627.421, Florida 128 Statutes, is amended to read: 129 627.421Delivery of policy. 130 (1)Subject to the insurers requirement as to payment of 131 premium, every policy shall be mailed, delivered, or 132 electronically transmitted to the insured or to the person 133 entitled thereto not later than 60 days after the effectuation 134 of coverage. Notwithstanding any other provision of law, an 135 insurer may allow a policyholder of personal lines insurance to 136 affirmatively elect delivery of the policy documents, including, 137 but not limited to, policies, endorsements, notices, or 138 documents, by electronic means in lieu of delivery by mail. 139 Electronic transmission of a policy, related notices, and other 140 documents for individual and group health insurance policies or 141 certificates of coverage pursuant to parts VI and VII of this 142 chapter, respectively; health maintenance contracts or 143 certificates of coverage pursuant to part I of chapter 641; 144 prepaid limited health service contracts pursuant to part I of 145 chapter 636; and for commercial risks, including, but not 146 limited to, workers compensation and employers liability, 147 commercial automobile liability, commercial automobile physical 148 damage, commercial lines residential property, commercial 149 nonresidential property, farmowners insurance, and the types of 150 commercial lines risks set forth in s. 627.062(3)(d), 151 constitutes delivery to the insured or to the person entitled to 152 delivery, unless the insured or the person entitled to delivery 153 communicates to the insurer in writing or electronically that he 154 or she does not agree to delivery by electronic means. 155 Electronic transmission shall include a notice to the insured or 156 to the person entitled to delivery of a policy of his or her 157 right to receive the policy via United States mail rather than 158 via electronic transmission. A paper copy of the policy shall be 159 provided to the insured or to the person entitled to delivery at 160 his or her request. 161 Section 6.Paragraphs (e) and (f) are added to subsection 162 (3) of section 627.701, Florida Statutes, and paragraph (a) of 163 that subsection is republished, to read: 164 627.701Liability of insureds; coinsurance; deductibles. 165 (3)(a)Except as otherwise provided in this subsection, 166 prior to issuing a personal lines residential property insurance 167 policy, the insurer must offer alternative deductible amounts 168 applicable to hurricane losses equal to $500, 2 percent, 5 169 percent, and 10 percent of the policy dwelling limits, unless 170 the specific percentage deductible is less than $500. The 171 written notice of the offer shall specify the hurricane 172 deductible to be applied in the event that the applicant or 173 policyholder fails to affirmatively choose a hurricane 174 deductible. The insurer must provide such policyholder with 175 notice of the availability of the deductible amounts specified 176 in this subsection in a form approved by the office in 177 conjunction with each renewal of the policy. The failure to 178 provide such notice constitutes a violation of this code but 179 does not affect the coverage provided under the policy. 180 (e)Notwithstanding paragraph (a), an insurer may offer a 181 deductible no greater than: 182 1.Ten percent for a policy covering a risk with dwelling 183 limits of at least $1 million, but less than $3 million. 184 2.Fifteen percent for a policy covering a risk with 185 dwelling limits greater than $3 million. 186 (f)Notwithstanding s. 627.062(2)(k)3., between July 1, 187 2023, and July 1, 2024, an insurer may make an additional filing 188 to implement changes under paragraph (e). 189 Section 7.Paragraph (a) of subsection (2) and subsection 190 (3) of section 627.712, Florida Statutes, are amended to read: 191 627.712Residential windstorm coverage required; 192 availability of exclusions for windstorm or contents. 193 (2)A property insurer must make available, at the option 194 of the policyholder, an exclusion of windstorm coverage. 195 (a)The coverage may be excluded only if: 196 1.When the policyholder is a natural person, the 197 policyholder personally writes or types and provides to the 198 insurer the following statement in his or her own handwriting 199 and signs his or her name, which must also be signed by every 200 other named insured on the policy, and dated: I do not want the 201 insurance on my (home/mobile home/condominium unit) to pay for 202 damage from windstorms. I will pay those costs. My insurance 203 will not. 204 2.When the policyholder is other than a natural person, 205 the policyholder provides to the insurer on the policyholders 206 letterhead the following statement that must be signed by the 207 policyholders authorized representative and dated: ...(Name of 208 entity)... does not want the insurance on its ...(type of 209 structure)... to pay for damage from windstorms. ...(Name of 210 entity)... will be responsible for these costs. ...(Name of 211 entitys)... insurance will not. 212 (3)An insurer issuing a residential property insurance 213 policy, except for a condominium unit owner policy or a tenant 214 policy, must make available, at the option of the policyholder, 215 an exclusion of coverage for the contents. The coverage may be 216 excluded only if the policyholder personally writes or types and 217 provides to the insurer the following statement in his or her 218 own handwriting and signs his or her signature, which must also 219 be signed by every other named insured on the policy, and dated: 220 I do not want the insurance on my (home/mobile home) to pay for 221 the costs to repair or replace any contents that are damaged. I 222 will pay those costs. My insurance will not. 223 Section 8.Section 627.7276, Florida Statutes, is amended 224 to read: 225 627.7276Notice of limited coverage. 226 (1)An automobile policy that does not contain coverage for 227 bodily injury and property damage must include a notice be 228 clearly stamped or printed to the effect that such coverage is 229 not included in the policy in the following manner: 230 231 THIS POLICY DOES NOT PROVIDE BODILY INJURY AND 232 PROPERTY DAMAGE LIABILITY INSURANCE OR ANY OTHER 233 COVERAGE FOR WHICH A SPECIFIC PREMIUM CHARGE IS NOT 234 MADE, AND DOES NOT COMPLY WITH ANY FINANCIAL 235 RESPONSIBILITY LAW. 236 237 (2)This notice legend must accompany appear on the policy 238 declarations declaration page and on the filing back of the 239 policy and must be printed in a contrasting color from that used 240 on the policy and in type size at least as large as larger than 241 the largest type size used on the declarations page in the text 242 thereof, as an overprint or by a rubber stamp impression. 243 Section 9.This act shall take effect July 1, 2023.