Florida Senate - 2023 CS for CS for SB 418 By the Committees on Military and Veterans Affairs, Space, and Domestic Security; and Banking and Insurance; and Senator Perry 583-02356-23 2023418c2 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 revising and specifying alternative hurricane 26 deductible amounts for personal lines residential 27 property insurance policies covering risks with 28 specified dwelling limits; amending s. 627.712, F.S.; 29 providing that a policyholders written exclusion from 30 residential windstorm coverage or contents coverage 31 may be typed rather than handwritten; amending s. 32 627.7276, F.S.; revising the requirements for the 33 notice of limited coverage under certain automobile 34 policies; providing an effective date. 35 36 Be It Enacted by the Legislature of the State of Florida: 37 38 Section 1.Paragraph (j) of subsection (2) of section 39 627.062, Florida Statutes, is amended to read: 40 627.062Rate standards. 41 (2)As to all such classes of insurance: 42 (j)With respect to residential property insurance rate 43 filings, the rate filing: 44 1.Must account for mitigation measures undertaken by 45 policyholders to reduce hurricane losses. 46 2.May use a modeling indication that is the weighted or 47 straight average of two or more hurricane loss projection models 48 found by the Florida Commission on Hurricane Loss Projection 49 Methodology to be accurate or reliable pursuant to s. 627.0628. 50 51 The provisions of this subsection do not apply to workers 52 compensation, employers liability insurance, and motor vehicle 53 insurance. 54 Section 2.Paragraph (b) of subsection (2) of section 55 627.0628, Florida Statutes, is amended to read: 56 627.0628Florida Commission on Hurricane Loss Projection 57 Methodology; public records exemption; public meetings 58 exemption. 59 (2)COMMISSION CREATED. 60 (b)The commission shall consist of the following 12 61 members: 62 1.The insurance consumer advocate. 63 2.The senior employee of the State Board of Administration 64 responsible for operations of the Florida Hurricane Catastrophe 65 Fund. 66 3.The Executive Director of the Citizens Property 67 Insurance Corporation or the executive directors designee. The 68 executive directors designee must be a full-time employee of 69 the corporation and have actuarial science experience. 70 4.The Director of the Division of Emergency Management or 71 the directors designee. The directors designee must be a full 72 time employee of the division. 73 5.The actuary member of the Florida Hurricane Catastrophe 74 Fund Advisory Council. 75 6.An employee of the office who is an actuary responsible 76 for property insurance rate filings and who is appointed by the 77 director of the office. 78 7.Five members appointed by the Chief Financial Officer, 79 as follows: 80 a.An actuary who is employed full time by a property and 81 casualty insurer that was responsible for at least 1 percent of 82 the aggregate statewide direct written premium for homeowner 83 insurance in the calendar year preceding the members 84 appointment to the commission. 85 b.An expert in insurance finance who is a full-time member 86 of the faculty of the State University System and who has a 87 background in actuarial science. 88 c.An expert in statistics who is a full-time member of the 89 faculty of the State University System and who has a background 90 in insurance. 91 d.An expert in computer system design who is a full-time 92 member of the faculty of the State University System. 93 e.An expert in meteorology who is a full-time member of 94 the faculty of the State University System and who specializes 95 in hurricanes. 96 8.A licensed professional structural engineer who is a 97 full-time faculty member in the State University System and who 98 has expertise in wind mitigation techniques. This appointment 99 shall be made by the Governor. 100 Section 3.Subsection (9) is added to section 627.0629, 101 Florida Statutes, to read: 102 627.0629Residential property insurance; rate filings. 103 (9)An insurer may file with the office a personal lines 104 residential property insurance rating plan that provides 105 justified premium discounts, credits, or other rate 106 differentials based on windstorm mitigation construction 107 standards developed by an independent, nonprofit scientific 108 research organization, if such standards meet the requirements 109 of this section. Such plan must describe the manner in which the 110 insurer will document the existence of the mitigation features 111 and premium discounts, credits, or other rate differentials 112 created under such plan. 113 Section 4.Section 627.0665, Florida Statutes, is amended 114 to read: 115 627.0665Automatic bank withdrawal agreements; notification 116 required.Any insurer licensed to issue insurance in the state 117 who has an automatic bank withdrawal agreement with an insured 118 party for the payment of insurance premiums for any type of 119 insurance shall give the named insured at least 10 15 days 120 advance written notice of any increase in policy premiums which 121 results in the next automatic bank withdrawal being increased by 122 more than $10. Such notice must be provided before prior to any 123 automatic bank withdrawal containing the of an increased 124 premium. 125 Section 5.Subsection (1) of section 627.421, Florida 126 Statutes, is amended to read: 127 627.421Delivery of policy. 128 (1)Subject to the insurers requirement as to payment of 129 premium, every policy shall be mailed, delivered, or 130 electronically transmitted to the insured or to the person 131 entitled thereto not later than 60 days after the effectuation 132 of coverage. Notwithstanding any other provision of law, an 133 insurer may allow a policyholder of personal lines insurance to 134 affirmatively elect delivery of the policy documents, including, 135 but not limited to, policies, endorsements, notices, or 136 documents, by electronic means in lieu of delivery by mail. 137 Electronic transmission of a policy, related notices, and other 138 documents for individual and group health insurance policies or 139 certificates of coverage pursuant to parts VI and VII of this 140 chapter, respectively; health maintenance contracts or 141 certificates of coverage pursuant to part I of chapter 641; 142 prepaid limited health service contracts pursuant to part I of 143 chapter 636; and for commercial risks, including, but not 144 limited to, workers compensation and employers liability, 145 commercial automobile liability, commercial automobile physical 146 damage, commercial lines residential property, commercial 147 nonresidential property, farmowners insurance, and the types of 148 commercial lines risks set forth in s. 627.062(3)(d), 149 constitutes delivery to the insured or to the person entitled to 150 delivery, unless the insured or the person entitled to delivery 151 communicates to the insurer in writing or electronically that he 152 or she does not agree to delivery by electronic means. 153 Electronic transmission shall include a notice to the insured or 154 to the person entitled to delivery of a policy of his or her 155 right to receive the policy via United States mail rather than 156 via electronic transmission. A paper copy of the policy shall be 157 provided to the insured or to the person entitled to delivery at 158 his or her request. 159 Section 6.Paragraph (d) of subsection (3) of section 160 627.701, Florida Statutes, is amended, and paragraph (a) of that 161 subsection is republished, to read: 162 627.701Liability of insureds; coinsurance; deductibles. 163 (3)(a)Except as otherwise provided in this subsection, 164 prior to issuing a personal lines residential property insurance 165 policy, the insurer must offer alternative deductible amounts 166 applicable to hurricane losses equal to $500, 2 percent, 5 167 percent, and 10 percent of the policy dwelling limits, unless 168 the specific percentage deductible is less than $500. The 169 written notice of the offer shall specify the hurricane 170 deductible to be applied in the event that the applicant or 171 policyholder fails to affirmatively choose a hurricane 172 deductible. The insurer must provide such policyholder with 173 notice of the availability of the deductible amounts specified 174 in this subsection in a form approved by the office in 175 conjunction with each renewal of the policy. The failure to 176 provide such notice constitutes a violation of this code but 177 does not affect the coverage provided under the policy. 178 (d)For the following policies, the following alternative 179 deductible amounts are authorized: 180 1.With respect to a policy covering a risk with dwelling 181 limits of $250,000 or more, but less than $1 million, the 182 insurer need not offer the $500 hurricane deductible as required 183 by paragraph (a), but must, except as otherwise provided in this 184 subsection, offer the other hurricane deductibles as required by 185 paragraph (a). 186 2.With respect to a policy covering a risk with dwelling 187 limits of $1 million or more, but less than $3 million, the 188 insurer may, in lieu of offering the $500 and 2 percent 189 deductibles as required by paragraph (a), offer a deductible 190 amount applicable to hurricane losses equal to 3 percent of the 191 policy dwelling limits. 192 3.With respect to a policy covering a risk with dwelling 193 limits of $3 million or more, the insurer need not offer the 194 $500 or 2 percent deductibles as required by paragraph (a), but 195 must, except as otherwise provided by this subsection, offer the 196 other hurricane deductibles as required by paragraph (a). 197 Section 7.Paragraph (a) of subsection (2) and subsection 198 (3) of section 627.712, Florida Statutes, are amended to read: 199 627.712Residential windstorm coverage required; 200 availability of exclusions for windstorm or contents. 201 (2)A property insurer must make available, at the option 202 of the policyholder, an exclusion of windstorm coverage. 203 (a)The coverage may be excluded only if: 204 1.When the policyholder is a natural person, the 205 policyholder personally writes or types and provides to the 206 insurer the following statement in his or her own handwriting 207 and signs his or her name, which must also be signed by every 208 other named insured on the policy, and dated: I do not want the 209 insurance on my (home/mobile home/condominium unit) to pay for 210 damage from windstorms. I will pay those costs. My insurance 211 will not. 212 2.When the policyholder is other than a natural person, 213 the policyholder provides to the insurer on the policyholders 214 letterhead the following statement that must be signed by the 215 policyholders authorized representative and dated: ...(Name of 216 entity)... does not want the insurance on its ...(type of 217 structure)... to pay for damage from windstorms. ...(Name of 218 entity)... will be responsible for these costs. ...(Name of 219 entitys)... insurance will not. 220 (3)An insurer issuing a residential property insurance 221 policy, except for a condominium unit owner policy or a tenant 222 policy, must make available, at the option of the policyholder, 223 an exclusion of coverage for the contents. The coverage may be 224 excluded only if the policyholder personally writes or types and 225 provides to the insurer the following statement in his or her 226 own handwriting and signs his or her signature, which must also 227 be signed by every other named insured on the policy, and dated: 228 I do not want the insurance on my (home/mobile home) to pay for 229 the costs to repair or replace any contents that are damaged. I 230 will pay those costs. My insurance will not. 231 Section 8.Section 627.7276, Florida Statutes, is amended 232 to read: 233 627.7276Notice of limited coverage. 234 (1)An automobile policy that does not contain coverage for 235 bodily injury and property damage must include a notice be 236 clearly stamped or printed to the effect that such coverage is 237 not included in the policy in the following manner: 238 239 THIS POLICY DOES NOT PROVIDE BODILY INJURY AND 240 PROPERTY DAMAGE LIABILITY INSURANCE OR ANY OTHER 241 COVERAGE FOR WHICH A SPECIFIC PREMIUM CHARGE IS NOT 242 MADE, AND DOES NOT COMPLY WITH ANY FINANCIAL 243 RESPONSIBILITY LAW. 244 245 (2)This notice legend must accompany appear on the policy 246 declarations declaration page and on the filing back of the 247 policy and must be printed in a contrasting color from that used 248 on the policy and in type size at least as large as larger than 249 the largest type size used on the declarations page in the text 250 thereof, as an overprint or by a rubber stamp impression. 251 Section 9.This act shall take effect July 1, 2023.