Florida Senate - 2023 CS for CS for CS for SB 418 By the Committees on Rules; Military and Veterans Affairs, Space, and Domestic Security; and Banking and Insurance; and Senator Perry 595-03700-23 2023418c3 1 A bill to be entitled 2 An act relating to insurance; amending s. 624.4621, 3 F.S.; specifying a qualification for a local 4 governmental entitys representative on a self 5 insurers governing body; amending s. 627.062, F.S.; 6 authorizing residential property insurance rate 7 filings to use a specified modeling indication; 8 amending s. 627.0628, F.S.; revising membership 9 requirements for specified members of the Florida 10 Commission on Hurricane Loss Projection Methodology; 11 amending s. 627.0629, F.S.; authorizing insurers to 12 file with the Office of Insurance Regulation personal 13 lines residential property insurance rating plans 14 providing rate differentials based on certain 15 windstorm mitigation construction standards; providing 16 requirements for such plans; amending s. 627.0665, 17 F.S.; revising the timeframe for advance notices from 18 insurers to insureds of automatic bank withdrawal 19 increases; specifying the increase threshold for such 20 notices; amending s. 627.421, F.S.; revising the types 21 of documents and kinds of insurance for which 22 electronic transmission constitutes delivery to the 23 insured or person entitled to delivery; deleting a 24 requirement to include a certain notice to an insured 25 electing to receive policy documents electronically; 26 deleting a requirement to provide a paper copy of the 27 policy upon request by such person; amending s. 28 627.701, F.S.; revising and specifying alternative 29 hurricane deductible amounts for personal lines 30 residential property insurance policies covering risks 31 with specified dwelling limits; amending s. 627.712, 32 F.S.; providing that a policyholders written 33 exclusion from residential windstorm coverage or 34 contents coverage may be typed rather than 35 handwritten; amending s. 627.7276, F.S.; revising the 36 requirements for the notice of limited coverage under 37 certain automobile policies; amending s. 634.041, 38 F.S.; specifying the manner in which a contractual 39 liability insurance policy of a service agreement 40 company may pay claims; providing an effective date. 41 42 Be It Enacted by the Legislature of the State of Florida: 43 44 Section 1.Subsection (12) is added to section 624.4621, 45 Florida Statutes, to read: 46 624.4621Group self-insurance funds. 47 (12)For any local governmental entity that is a member of 48 a self-insurer established under this section, only an elected 49 official of the local governmental entity may be the local 50 governmental entitys representative on the self-insurers 51 governing body. 52 Section 2.Paragraph (j) of subsection (2) of section 53 627.062, Florida Statutes, is amended to read: 54 627.062Rate standards. 55 (2)As to all such classes of insurance: 56 (j)With respect to residential property insurance rate 57 filings, the rate filing: 58 1.Must account for mitigation measures undertaken by 59 policyholders to reduce hurricane losses. 60 2.May use a modeling indication that is the weighted or 61 straight average of two or more hurricane loss projection models 62 found by the Florida Commission on Hurricane Loss Projection 63 Methodology to be accurate or reliable pursuant to s. 627.0628. 64 65 The provisions of this subsection do not apply to workers 66 compensation, employers liability insurance, and motor vehicle 67 insurance. 68 Section 3.Paragraph (b) of subsection (2) of section 69 627.0628, Florida Statutes, is amended to read: 70 627.0628Florida Commission on Hurricane Loss Projection 71 Methodology; public records exemption; public meetings 72 exemption. 73 (2)COMMISSION CREATED. 74 (b)The commission shall consist of the following 12 75 members: 76 1.The insurance consumer advocate. 77 2.The senior employee of the State Board of Administration 78 responsible for operations of the Florida Hurricane Catastrophe 79 Fund. 80 3.The Executive Director of the Citizens Property 81 Insurance Corporation or the executive directors designee. The 82 executive directors designee must be a full-time employee of 83 the corporation and have actuarial science experience. 84 4.The Director of the Division of Emergency Management or 85 the directors designee. The directors designee must be a full 86 time employee of the division. 87 5.The actuary member of the Florida Hurricane Catastrophe 88 Fund Advisory Council. 89 6.An employee of the office who is an actuary responsible 90 for property insurance rate filings and who is appointed by the 91 director of the office. 92 7.Five members appointed by the Chief Financial Officer, 93 as follows: 94 a.An actuary who is employed full time by a property and 95 casualty insurer that was responsible for at least 1 percent of 96 the aggregate statewide direct written premium for homeowner 97 insurance in the calendar year preceding the members 98 appointment to the commission. 99 b.An expert in insurance finance who is a full-time member 100 of the faculty of the State University System and who has a 101 background in actuarial science. 102 c.An expert in statistics who is a full-time member of the 103 faculty of the State University System and who has a background 104 in insurance. 105 d.An expert in computer system design who is a full-time 106 member of the faculty of the State University System. 107 e.An expert in meteorology who is a full-time member of 108 the faculty of the State University System and who specializes 109 in hurricanes. 110 8.A licensed professional structural engineer who is a 111 full-time faculty member in the State University System and who 112 has expertise in wind mitigation techniques. This appointment 113 shall be made by the Governor. 114 Section 4.Subsection (9) is added to section 627.0629, 115 Florida Statutes, to read: 116 627.0629Residential property insurance; rate filings. 117 (9)An insurer may file with the office a personal lines 118 residential property insurance rating plan that provides 119 justified premium discounts, credits, or other rate 120 differentials based on windstorm mitigation construction 121 standards developed by an independent, nonprofit scientific 122 research organization, if such standards meet the requirements 123 of this section. Such plan must describe the manner in which the 124 insurer will document the existence of the mitigation features 125 and premium discounts, credits, or other rate differentials 126 created under such plan. 127 Section 5.Section 627.0665, Florida Statutes, is amended 128 to read: 129 627.0665Automatic bank withdrawal agreements; notification 130 required.Any insurer licensed to issue insurance in the state 131 who has an automatic bank withdrawal agreement with an insured 132 party for the payment of insurance premiums for any type of 133 insurance shall give the named insured at least 10 15 days 134 advance written notice of any increase in policy premiums which 135 results in the next automatic bank withdrawal being increased by 136 more than $10. Such notice must be provided before prior to any 137 automatic bank withdrawal containing the of an increased 138 premium. 139 Section 6.Subsection (1) of section 627.421, Florida 140 Statutes, is amended to read: 141 627.421Delivery of policy. 142 (1)Subject to the insurers requirement as to payment of 143 premium, every policy shall be mailed, delivered, or 144 electronically transmitted to the insured or to the person 145 entitled thereto not later than 60 days after the effectuation 146 of coverage. Notwithstanding any other provision of law, an 147 insurer may allow a policyholder of personal lines insurance to 148 affirmatively elect delivery of the policy documents, including, 149 but not limited to, policies, endorsements, notices, or 150 documents, by electronic means in lieu of delivery by mail. 151 Electronic transmission of a policy, related notices, and other 152 documents for individual and group health insurance policies or 153 certificates of coverage pursuant to parts VI and VII of this 154 chapter, respectively; health maintenance contracts or 155 certificates of coverage pursuant to part I of chapter 641; 156 prepaid limited health service contracts pursuant to part I of 157 chapter 636; and for commercial risks, including, but not 158 limited to, workers compensation and employers liability, 159 commercial automobile liability, commercial automobile physical 160 damage, commercial lines residential property, commercial 161 nonresidential property, farmowners insurance, and the types of 162 commercial lines risks set forth in s. 627.062(3)(d), 163 constitutes delivery to the insured or to the person entitled to 164 delivery, unless the insured or the person entitled to delivery 165 communicates to the insurer in writing or electronically that he 166 or she does not agree to delivery by electronic means. 167 Electronic transmission shall include a notice to the insured or 168 to the person entitled to delivery of a policy of his or her 169 right to receive the policy via United States mail rather than 170 via electronic transmission. A paper copy of the policy shall be 171 provided to the insured or to the person entitled to delivery at 172 his or her request. 173 Section 7.Paragraph (d) of subsection (3) of section 174 627.701, Florida Statutes, is amended, and paragraph (a) of that 175 subsection is republished, to read: 176 627.701Liability of insureds; coinsurance; deductibles. 177 (3)(a)Except as otherwise provided in this subsection, 178 prior to issuing a personal lines residential property insurance 179 policy, the insurer must offer alternative deductible amounts 180 applicable to hurricane losses equal to $500, 2 percent, 5 181 percent, and 10 percent of the policy dwelling limits, unless 182 the specific percentage deductible is less than $500. The 183 written notice of the offer shall specify the hurricane 184 deductible to be applied in the event that the applicant or 185 policyholder fails to affirmatively choose a hurricane 186 deductible. The insurer must provide such policyholder with 187 notice of the availability of the deductible amounts specified 188 in this subsection in a form approved by the office in 189 conjunction with each renewal of the policy. The failure to 190 provide such notice constitutes a violation of this code but 191 does not affect the coverage provided under the policy. 192 (d)For the following policies, the following alternative 193 deductible amounts are authorized: 194 1.With respect to a policy covering a risk with dwelling 195 limits of $250,000 or more, the insurer need not offer the $500 196 hurricane deductible as required by paragraph (a), but must, 197 except as otherwise provided in this subsection, offer the other 198 hurricane deductibles as required by paragraph (a). 199 2.With respect to a policy covering a risk with dwelling 200 limits of $1 million or more, but less than $3 million, the 201 insurer may, in lieu of offering the 2 percent deductible as 202 required by paragraph (a), offer a deductible amount applicable 203 to hurricane losses equal to 3 percent of the policy dwelling 204 limits. 205 3.With respect to a policy covering a risk with dwelling 206 limits of $3 million or more, the insurer need not offer the 2 207 percent deductible as required by paragraph (a), but must, 208 except as otherwise provided by this subsection, offer the other 209 hurricane deductibles as required by paragraph (a). 210 Section 8.Paragraph (a) of subsection (2) and subsection 211 (3) of section 627.712, Florida Statutes, are amended to read: 212 627.712Residential windstorm coverage required; 213 availability of exclusions for windstorm or contents. 214 (2)A property insurer must make available, at the option 215 of the policyholder, an exclusion of windstorm coverage. 216 (a)The coverage may be excluded only if: 217 1.When the policyholder is a natural person, the 218 policyholder personally writes or types and provides to the 219 insurer the following statement in his or her own handwriting 220 and signs his or her name, which must also be signed by every 221 other named insured on the policy, and dated: I do not want the 222 insurance on my (home/mobile home/condominium unit) to pay for 223 damage from windstorms. I will pay those costs. My insurance 224 will not. 225 2.When the policyholder is other than a natural person, 226 the policyholder provides to the insurer on the policyholders 227 letterhead the following statement that must be signed by the 228 policyholders authorized representative and dated: ...(Name of 229 entity)... does not want the insurance on its ...(type of 230 structure)... to pay for damage from windstorms. ...(Name of 231 entity)... will be responsible for these costs. ...(Name of 232 entitys)... insurance will not. 233 (3)An insurer issuing a residential property insurance 234 policy, except for a condominium unit owner policy or a tenant 235 policy, must make available, at the option of the policyholder, 236 an exclusion of coverage for the contents. The coverage may be 237 excluded only if the policyholder personally writes or types and 238 provides to the insurer the following statement in his or her 239 own handwriting and signs his or her signature, which must also 240 be signed by every other named insured on the policy, and dated: 241 I do not want the insurance on my (home/mobile home) to pay for 242 the costs to repair or replace any contents that are damaged. I 243 will pay those costs. My insurance will not. 244 Section 9.Section 627.7276, Florida Statutes, is amended 245 to read: 246 627.7276Notice of limited coverage. 247 (1)An automobile policy that does not contain coverage for 248 bodily injury and property damage must include a notice be 249 clearly stamped or printed to the effect that such coverage is 250 not included in the policy in the following manner: 251 252 THIS POLICY DOES NOT PROVIDE BODILY INJURY AND 253 PROPERTY DAMAGE LIABILITY INSURANCE OR ANY OTHER 254 COVERAGE FOR WHICH A SPECIFIC PREMIUM CHARGE IS NOT 255 MADE, AND DOES NOT COMPLY WITH ANY FINANCIAL 256 RESPONSIBILITY LAW. 257 258 (2)This notice legend must appear on the policy 259 declaration page and on the filing back of the policy and be 260 printed in bold type a contrasting color from that used on the 261 policy and in type larger than the largest type used in the text 262 thereof, as an overprint or by a rubber stamp impression. 263 Section 10.Paragraph (b) of subsection (8) of section 264 634.041, Florida Statutes, is amended to read: 265 634.041Qualifications for license.To qualify for and hold 266 a license to issue service agreements in this state, a service 267 agreement company must be in compliance with this part, with 268 applicable rules of the commission, with related sections of the 269 Florida Insurance Code, and with its charter powers and must 270 comply with the following: 271 (8) 272 (b)A service agreement company does not have to establish 273 and maintain an unearned premium reserve if it secures and 274 maintains contractual liability insurance in accordance with the 275 following: 276 1.Coverage of 100 percent of the claim exposure is 277 obtained from an insurer approved by the office, which holds a 278 certificate of authority under s. 624.401 to do business within 279 this state, or secured through a risk retention group, which is 280 authorized to do business within this state under s. 627.943 or 281 s. 627.944. Such insurer or risk retention group must maintain a 282 surplus as regards policyholders of at least $15 million. 283 2.If the service agreement company does not meet its 284 contractual obligations, the contractual liability insurance 285 policy binds its issuer to pay or cause to be paid to the 286 service agreement holder all legitimate claims and cancellation 287 refunds for all service agreements issued by the service 288 agreement company while the policy was in effect. This 289 requirement also applies to those service agreements for which 290 no premium has been remitted to the insurer. 291 3.If the issuer of the contractual liability policy is 292 fulfilling the service agreements covered by the contractual 293 liability policy and the service agreement holder cancels the 294 service agreement, the issuer must make a full refund of 295 unearned premium to the consumer, subject to the cancellation 296 fee provisions of s. 634.121(3). The sales representative and 297 agent must refund to the contractual liability policy issuer 298 their unearned pro rata commission. 299 4.The policy may not be canceled, terminated, or 300 nonrenewed by the insurer or the service agreement company 301 unless a 90-day written notice thereof has been given to the 302 office by the insurer before the date of the cancellation, 303 termination, or nonrenewal. 304 5.The service agreement company must provide the office 305 with the claims statistics. 306 6.A policy issued in compliance with this paragraph may 307 either pay 100 percent of claims as they are incurred or pay 100 308 percent of claims due in the event of the failure of the service 309 agreement company to pay such claims when due. 310 311 All funds or premiums remitted to an insurer by a motor vehicle 312 service agreement company under this part shall remain in the 313 care, custody, and control of the insurer and shall be counted 314 as an asset of the insurer; provided, however, this requirement 315 does not apply when the insurer and the motor vehicle service 316 agreement company are affiliated companies and members of an 317 insurance holding company system. If the motor vehicle service 318 agreement company chooses to comply with this paragraph but also 319 maintains a reserve to pay claims, such reserve shall only be 320 considered an asset of the covered motor vehicle service 321 agreement company and may not be simultaneously counted as an 322 asset of any other entity. 323 Section 11.This act shall take effect July 1, 2023.