The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Banking and Insurance
BILL: SB 594
INTRODUCER: Senator Martin
SUBJECT: Residential Property Insurance Rates
DATE: March 14, 2023
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Thomas Knudson BI Favorable
2. CA
3. FP
I. Summary:
SB 594 adds wind uplift prevention to the list of windstorm mitigation measures undertaken by
policyholders to reduce hurricane losses that must be evaluated for purposes of mitigation
discounts on residential property insurance rate filings. Wind uplift occurs if the air pressure
below the roofing system is higher than the air pressure above the roofing system.
II. Present Situation:
Regulation of Property Insurance Rates
Part I of ch. 627, F.S., the Rating Law,
1
governs property, casualty, and surety insurance
covering the subjects of insurance resident, located, or to be performed in this state.
2
The rating
law provides that the rates for all classes of insurance it governs may not be excessive,
inadequate, or unfairly discriminatory.
3
Though the terms “rate” and “premium” are often used
interchangeably, the rating law specifies that “rate” is the unit charge that is multiplied by the
measure of exposure or amount of insurance specified in the policy to determine the premium,
which is the consideration paid by the consumer.
4
All insurers or rating organizations must file rates with the Office of Insurance Regulation (OIR)
either 90 days before the proposed effective date of a new rate, which is considered a “file and
use” rate filing, or 30 days after the effective date of a new rate, which is considered a “use and
file” rate filing.
5
1
Section 627.011, F.S.
2
Section 627.021(1), F.S.
3
Section 627.062(1), F.S.
4
Section 627.041, F.S.
5
Section 627.062, F.S.
REVISED: BILL: SB 594 Page 2
Upon receiving a rate filing, the OIR reviews the filing to determine if the rate is excessive,
inadequate, or unfairly discriminatory. The OIR makes that determination in accordance with
generally acceptable actuarial techniques and considers the following:
Past and prospective loss experience;
Past and prospective expenses;
The degree of competition among insurers for the risk insured;
Investment income reasonably expected by the insurer;
The reasonableness of the judgment reflected in the rate filing;
Dividends, savings, or unabsorbed premium deposits returned to policyholders;
The adequacy of loss reserves;
The cost of reinsurance;
Trend factors, including trends in actual losses per insured unit for the insurer;
Conflagration and catastrophe hazards;
Projected hurricane losses;
Projected flood losses, if the policy covers the risk of flood;
The cost of medical services, if applicable;
A reasonable margin for underwriting profit and contingencies; and
Other relevant factors that affect the frequency or severity of claims or expenses.
6
Florida Commission on Hurricane Loss Projection Methodology
Projected hurricane losses in a rate filing must be estimated using a model or method found to be
acceptable or reliable by the Florida Commission on Hurricane Loss Projection Methodology
(Commission).
7
The Commission consists of 12 members with expertise in the elements used to
develop computer models to estimate hurricane and flood loss. Members of the Commission
include State University System faculty experts in insurance finance, statistics, computer system
design, meteorology, and structural engineering; three actuaries; the insurance consumer
advocate; the Director of the Florida Hurricane Catastrophe Fund; the Executive Director of
Citizens Property Insurance Corporation; and the Director of the Division of Emergency
Management.
8
Residential Property Insurance Mitigation Credits, Discounts, or Other Rate Differentials
Residential property insurance rate filings must account for mitigation measures undertaken by
policyholders to reduce hurricane losses.
9
Specifically, the rate filings must include actuarially
reasonable discounts, credits, or other rate differentials or appropriate reductions in deductibles
to consumers who implement windstorm damage mitigation techniques to their properties.
10
Upon their filing by an insurer or rating organization, the OIR determines the discounts, credits,
other rate differentials and appropriate reductions in deductibles that reflect the full actuarial
value of such revaluation,
11
which in turn may be used in rate filings under the rating law.
6
Section 627.062(2)(b), F.S.
7
Section 627.062(2)(b)11., F.S.
8
Section 627.0628(2)(b), F.S.
9
Section 627.062(2)(j), F.S.
10
Section 627.0629(1), F.S.
11
Id. BILL: SB 594 Page 3
Windstorm mitigation measures that must be evaluated for purposes of mitigation discounts
include fixtures or construction techniques that enhance roof strength, roof covering
performance, roof-to-wall strength, wall-to-floor-to-foundation strength, opening protection, and
window, door, and skylight strength.
12
Wind Uplift
Wind load is an important consideration when designing a structure. Wind load is the load, in
pounds per square foot, placed on the exterior of a structure by wind. This will depend on:
The angle at which the wind strikes the structure; and
The shape of the structure (height, width, etc.).
13
Wind can exert three types of force on a structure—shear load, lateral load, and uplift load.
Although all three forces can damage a structure, the uplift load has the greatest effect on the
roofing system.
14
Wind uplift occurs if the air pressure below the roofing system
15
is higher than
the air pressure above the roofing system. Whenever the wind blows over a roof’s surface, the air
pressure directly above the roof decreases, creating “negative” pressure. Wind infiltration below
the roof materials through openings creates “positive” pressure. The combination results in a
“push-pull” force that can lead to the separation of roofing materials from the roof deck.
16
Wind uplift is affected by:
Building height: Higher roofs experience stronger wind velocities.
Geographical location: Wind maps for any region can identify the local basic wind
speed gust exposures to determine typical wind conditions for your home.
Surrounding terrain: Neighboring buildings and other obstructions can break wind
flow and reduce the wind effect in suburban and urban locations. Stronger wind
resistance is required for roofs near large bodies of water or open terrain.
Building openings: Openings in the building design can create higher internal
pressures in a wind event.
17
During strong wind events such as hurricanes, roofs will be subject to high wind uplift forces,
which often leads to severe roofing component damage. The loss of roofing components could
lead to rainwater intrusion and further substantial damage to the interior. Reducing wind uplift
during such strong wind events by implementing targeted mitigation techniques
18
can
12
Id.
13
Wind Loads of Structures, Extension Disaster Education Network, Wind Loads of Structures (last accessed on March 9,
2023). Wind Loads, Structural Engineering Design, Fall 2003, Wind Loads (last accessed on March 9, 2023).
14
What Is Wind Uplift?, What Is Wind Uplift (last accessed on March 9, 2023).
15
The term roof system refers to the air barrier or vapor retarder (if present), roof insulation (if present), and the roof
membrane, flashing, and accessories. Roofing Systems, Tom Smith, May 10, 2016, Roofing Systems (last accessed on March
9, 2023).
16
Id.
17
Understanding Wind Uplift Ratings for Roofing, Mark Gallant, May, 31 2021, Understanding Wind Uplift (last accessed
on March 9, 2023).
18
There are multiple products that are promoted as valuable in mitigating wind uplift, for example: Pavers tiletechpavers,
Adhesives Certainteed, Fasteners Nitterhouse, Clamps S-5, Underlayments Epilayroofing, and Spray Foam Insulation
huntsman building solutions (all last accessed on March 9, 2023). BILL: SB 594 Page 4
significantly reduce wind effects on buildings' roofs.
19
Engineers and builders follow the
applicable building code for each jurisdiction to attempt to prevent wind uplift.
20
The standards
vary based on building location and likelihood of exposure to high winds.
21
III. Effect of Proposed Changes:
The bill amends. s. 627.0629, F.S., to add wind uplift prevention to list of windstorm mitigation
measures undertaken by policyholders to reduce hurricane losses that must be evaluated for
purposes of mitigation discounts on residential property insurance rate filings.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
19
Aerodynamic Mitigation of Wind Uplift on Low-Rise Building Roof Using Large-Scale Testing, Frontiers in Built
Environments, January 15, 2020, Frontiersin.org (last accessed on March 9, 2023).
20
How Wind Uplift can Affect a Commercial Building’s Roof, Certified Commercial Property Inspectors Association,
https://ccpia.org/how-wind-uplift-can-affect-a-commercial-buildings-roof/ (last accessed on March 9, 2023).
21
Id. Changes to Florida’s treatment of wind load were made in the 7th edition of the Florida Building Code in 2020. See
Wind Loads- Impacts from ASCE 7-16 (June 2020), https://floridabuilding.org/fbc/thecode/2020_7edition/ASCE_7-
16_Fact_Sheet_final_2_column_format052820final.pdf (last accessed on March 9, 2023). BILL: SB 594 Page 5
B. Private Sector Impact:
The addition of wind uplift prevention measures to the list of windstorm mitigation
measures undertaken by policyholders to reduce hurricane losses that must be evaluated
for purposes of mitigation discounts on residential property insurance rate filings may
lead to greater use of these measures by property owners. This could lead to less damage
from windstorms and lower insurance premiums.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 627.0629.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.