Florida 2024 Regular Session

Florida House Bill H0889 Compare Versions

Only one version of the bill is available at this time.

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10	10	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	14	A bill to be entitled 1
15	15	An act relating to coverage by Citizens Property 2
16	16	Insurance Corporation; amending s. 627.351, F.S.; 3
17	17	revising certain minimum replacement costs as risk 4
18	18	amounts ineligible for coverage by Citizens Property 5
19	19	Insurance Corporation for personal lines residential 6
20	20	structures; providing exceptions to rate increase 7
21	21	limitations on single policies issued by the 8
22	22	corporation; requiring surcharges for policies 9
23	23	covering certain personal lines residential structures 10
24	24	for a specified purpose; prohibiting coverage for 11
25	25	certain dwelling structures and single condominium 12
26	26	units under certain circumstances; providing an 13
27	27	effective date. 14
28	28	15
29	29	Be It Enacted by the Legislature of the State of Florida: 16
30	30	17
31	31	Section 1. Paragraphs (a) and (n) of subsection (6) of 18
32	32	section 627.351, Florida Statutes, are amended to read: 19
33	33	627.351 Insurance risk apportionment plans. — 20
34	34	(6) CITIZENS PROPERTY INSURANCE CORPORATION. — 21
35	35	(a) The public purpose o f this subsection is to ensure 22
36	36	that there is an orderly market for property insurance for 23
37	37	residents and businesses of this state. 24
38	38	1. The Legislature finds that private insurers are 25
39	39
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47	47	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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49	49
50	50
51	51	unwilling or unable to provide affordable property insurance 26
52	52	coverage in this state to the extent sought and needed. The 27
53	53	absence of affordable property insurance threatens the public 28
54	54	health, safety, and welfare and likewise threatens the economic 29
55	55	health of the state. The state therefore has a compelling public 30
56	56	interest and a public purpose to assist in assuring that 31
57	57	property in the state is insured and that it is insured at 32
58	58	affordable rates so as to facilitate the remediation, 33
59	59	reconstruction, and replacement of damaged or destroyed property 34
60	60	in order to reduce or avoid the negati ve effects otherwise 35
61	61	resulting to the public health, safety, and welfare, to the 36
62	62	economy of the state, and to the revenues of the state and local 37
63	63	governments which are needed to provide for the public welfare. 38
64	64	It is necessary, therefore, to provide afforda ble property 39
65	65	insurance to applicants who are in good faith entitled to 40
66	66	procure insurance through the voluntary market but are unable to 41
67	67	do so. The Legislature intends, therefore, that affordable 42
68	68	property insurance be provided and that it continue to be 43
69	69	provided, as long as necessary, through Citizens Property 44
70	70	Insurance Corporation, a government entity that is an integral 45
71	71	part of the state, and that is not a private insurance company. 46
72	72	To that end, the corporation shall strive to increase the 47
73	73	availability of affordable property insurance in this state, 48
74	74	while achieving efficiencies and economies, and while providing 49
75	75	service to policyholders, applicants, and agents which is no 50
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84	84	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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88	88	less than the quality generally provided in the voluntary 51
89	89	market, for the achievement of the foregoing public purposes. 52
90	90	Because it is essential for this government entity to have the 53
91	91	maximum financial resources to pay claims following a 54
92	92	catastrophic hurricane, it is the intent of the Legislature that 55
93	93	the corporation continue to be an integr al part of the state and 56
94	94	that the income of the corporation be exempt from federal income 57
95	95	taxation and that interest on the debt obligations issued by the 58
96	96	corporation be exempt from federal income taxation. 59
97	97	2. The Residential Property and Casualty Joint 60
98	98	Underwriting Association originally created by this statute 61
99	99	shall be known as the Citizens Property Insurance Corporation. 62
100	100	The corporation shall provide insurance for residential and 63
101	101	commercial property, for applicants who are entitled, but, in 64
102	102	good faith, are unable to procure insurance through the 65
103	103	voluntary market. The corporation shall operate pursuant to a 66
104	104	plan of operation approved by order of the Financial Services 67
105	105	Commission. The plan is subject to continuous review by the 68
106	106	commission. The commission may, by order, withdraw approval of 69
107	107	all or part of a plan if the commission determines that 70
108	108	conditions have changed since approval was granted and that the 71
109	109	purposes of the plan require changes in the plan. For the 72
110	110	purposes of this subsection, residential c overage includes both 73
111	111	personal lines residential coverage, which consists of the type 74
112	112	of coverage provided by homeowner, mobile home owner, dwelling, 75
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121	121	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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125	125	tenant, condominium unit owner, and similar policies; and 76
126	126	commercial lines residential coverage, which con sists of the 77
127	127	type of coverage provided by condominium association, apartment 78
128	128	building, and similar policies. 79
129	129	3. With respect to coverage for personal lines residential 80
130	130	structures,: 81
131	131	a. effective July 1, 2024 January 1, 2014, a structure 82
132	132	that has a dwelling replacement cost of $1 million or more, or a 83
133	133	single condominium unit that has a combined dwelling and 84
134	134	contents replacement cost of $1 million or more, is not eligible 85
135	135	for coverage by the corporation. Such dwellings insured by the 86
136	136	corporation on Decembe r 31, 2013, may continue to be covered by 87
137	137	the corporation until the end of the policy term. The office 88
138	138	shall approve the method used by the corporation for valuing the 89
139	139	dwelling replacement cost for the purposes of this subparagraph. 90
140	140	If a policyholder is in sured by the corporation before being 91
141	141	determined to be ineligible pursuant to this subparagraph and 92
142	142	such policyholder files a lawsuit challenging the determination, 93
143	143	the policyholder may remain insured by the corporation until the 94
144	144	conclusion of the litigati on. 95
145	145	b. Effective January 1, 2015, a structure that has a 96
146	146	dwelling replacement cost of $900,000 or more, or a single 97
147	147	condominium unit that has a combined dwelling and contents 98
148	148	replacement cost of $900,000 or more, is not eligible for 99
149	149	coverage by the corpo ration. Such dwellings insured by the 100
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158	158	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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160	160
161	161
162	162	corporation on December 31, 2014, may continue to be covered by 101
163	163	the corporation only until the end of the policy term. 102
164	164	c. Effective January 1, 2016, a structure that has a 103
165	165	dwelling replacement cost of $800,000 or mor e, or a single 104
166	166	condominium unit that has a combined dwelling and contents 105
167	167	replacement cost of $800,000 or more, is not eligible for 106
168	168	coverage by the corporation. Such dwellings insured by the 107
169	169	corporation on December 31, 2015, may continue to be covered by 108
170	170	the corporation until the end of the policy term. 109
171	171	d. Effective January 1, 2017, a structure that has a 110
172	172	dwelling replacement cost of $700,000 or more, or a single 111
173	173	condominium unit that has a combined dwelling and contents 112
174	174	replacement cost of $700,000 or mo re, is not eligible for 113
175	175	coverage by the corporation. Such dwellings insured by the 114
176	176	corporation on December 31, 2016, may continue to be covered by 115
177	177	the corporation until the end of the policy term. 116
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179	179	The requirements of sub -subparagraphs b.-d. do not apply in 118
180	180	counties where the office determines there is not a reasonable 119
181	181	degree of competition. In such counties a personal lines 120
182	182	residential structure that has a dwelling replacement cost of 121
183	183	less than $1 million, or a single condominium unit that has a 122
184	184	combined dwelling and contents replacement cost of less than $1 123
185	185	million, is eligible for coverage by the corporation. 124
186	186	4. It is the intent of the Legislature that policyholders, 125
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195	195	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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197	197
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199	199	applicants, and agents of the corporation receive service and 126
200	200	treatment of the highest possible level but never less than that 127
201	201	generally provided in the voluntary market. It is also intended 128
202	202	that the corporation be held to service standards no less than 129
203	203	those applied to insurers in th e voluntary market by the office 130
204	204	with respect to responsiveness, timeliness, customer courtesy, 131
205	205	and overall dealings with policyholders, applicants, or agents 132
206	206	of the corporation. 133
207	207	5.a. Effective January 1, 2009, a personal lines 134
208	208	residential structure that is located in the "wind -borne debris 135
209	209	region," as defined in s. 1609.2, International Building Code 136
210	210	(2006), and that has an insured value on the structure of 137
211	211	$750,000 or more is not eligible for coverage by the corporation 138
212	212	unless the structure has opening protections as required under 139
213	213	the Florida Building Code for a newly constructed residential 140
214	214	structure in that area. A residential structure is deemed to 141
215	215	comply with this sub -subparagraph if it has shutters or opening 142
216	216	protections on all openings and if such opening protections 143
217	217	complied with the Florida Building Code at the time they were 144
218	218	installed. 145
219	219	b. Any major structure, as defined in s. 161.54(6)(a), 146
220	220	that is newly constructed, or rebuilt, repaired, restored, or 147
221	221	remodeled to increase the total square foot age of finished area 148
222	222	by more than 25 percent, pursuant to a permit applied for after 149
223	223	July 1, 2015, is not eligible for coverage by the corporation if 150
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232	232	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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236	236	the structure is seaward of the coastal construction control 151
237	237	line established pursuant to s. 161.053 or is within the Coastal 152
238	238	Barrier Resources System as designated by 16 U.S.C. ss. 3501 -153
239	239	3510. 154
240	240	6. With respect to wind -only coverage for commercial lines 155
241	241	residential condominiums, effective July 1, 2014, a condominium 156
242	242	shall be deemed ineligible for coverage if 5 0 percent or more of 157
243	243	the units are rented more than eight times in a calendar year 158
244	244	for a rental agreement period of less than 30 days. 159
245	245	(n)1. Rates for coverage provided by the corporation must 160
246	246	be actuarially sound pursuant to s. 627.062 and not competiti ve 161
247	247	with approved rates charged in the admitted voluntary market so 162
248	248	that the corporation functions as a residual market mechanism to 163
249	249	provide insurance only when insurance cannot be procured in the 164
250	250	voluntary market, except as otherwise provided in this 165
251	251	paragraph. The office shall provide the corporation such 166
252	252	information as would be necessary to determine whether rates are 167
253	253	competitive. The corporation shall file its recommended rates 168
254	254	with the office at least annually. The corporation shall provide 169
255	255	any additional information regarding the rates which the office 170
256	256	requires. The office shall consider the recommendations of the 171
257	257	board and issue a final order establishing the rates for the 172
258	258	corporation within 45 days after the recommended rates are 173
259	259	filed. The corporatio n may not pursue an administrative 174
260	260	challenge or judicial review of the final order of the office. 175
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269	269	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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273	273	2. In addition to the rates otherwise determined pursuant 176
274	274	to this paragraph, the corporation shall impose and collect an 177
275	275	amount equal to the premium tax pro vided in s. 624.509 to 178
276	276	augment the financial resources of the corporation. 179
277	277	3. After the public hurricane loss -projection model under 180
278	278	s. 627.06281 has been found to be accurate and reliable by the 181
279	279	Florida Commission on Hurricane Loss Projection Methodolog y, the 182
280	280	model shall be considered when establishing the windstorm 183
281	281	portion of the corporation's rates. The corporation may use the 184
282	282	public model results in combination with the results of private 185
283	283	models to calculate rates for the windstorm portion of the 186
284	284	corporation's rates. This subparagraph does not require or allow 187
285	285	the corporation to adopt rates lower than the rates otherwise 188
286	286	required or allowed by this paragraph. 189
287	287	4. The corporation must make a recommended actuarially 190
288	288	sound rate filing for each personal a nd commercial line of 191
289	289	business it writes. 192
290	290	5. Notwithstanding the board's recommended rates and the 193
291	291	office's final order regarding the corporation's filed rates 194
292	292	under subparagraph 1., the corporation shall annually implement 195
293	293	a rate increase which, except for sinkhole coverage, does not 196
294	294	exceed the following for any single policy issued by the 197
295	295	corporation, excluding coverage changes and surcharges: 198
296	296	a. Twelve percent for 2023. 199
297	297	b. Thirteen percent for 2024. 200
298	298
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306	306	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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310	310	c. Fourteen percent for 2025. 201
311	311	d. Fifteen percent for 2026 and all subsequent years. 202
312	312	203
313	313	This subparagraph does not apply to a personal lines residential 204
314	314	structure that has a dwelling replacement cost of $700,000 or 205
315	315	more or a single condominium unit that has a combined dwelling 206
316	316	and contents replacement c ost of $700,000 or more. 207
317	317	6. The corporation may also implement an increase to 208
318	318	reflect the effect on the corporation of the cash buildup factor 209
319	319	pursuant to s. 215.555(5)(b). 210
320	320	7. The corporation's implementation of rates as prescribed 211
321	321	in subparagraph subparagraphs 5. and 9. 8. shall cease for any 212
322	322	line of business written by the corporation upon the 213
323	323	corporation's implementation of actuarially sound rates. 214
324	324	Thereafter, the corporation shall annually make a recommended 215
325	325	actuarially sound rate filing that is not competitive with 216
326	326	approved rates in the admitted voluntary market for each 217
327	327	commercial and personal line of business the corporation writes. 218
328	328	8. Effective July 1, 2024, for the purpose of ensuring 219
329	329	that the corporation's rates are not competitive with appro ved 220
330	330	rates charged in the admitted voluntary market as required by 221
331	331	subparagraph 1., a surcharge equal to the lesser of $2,500 or 25 222
332	332	percent of the corporation's rate for each policy applies to 223
333	333	personal lines residential structures that have a dwelling 224
334	334	replacement cost of $700,000 or more and single condominium 225
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343	343	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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347	347	units that have a combined dwelling and contents replacement 226
348	348	cost of $700,000 or more. Notwithstanding any other provision of 227
349	349	this subsection, effective July 1, 2024, a personal lines 228
350	350	residential structure that has a dwelling replacement cost of 229
351	351	$700,000 or more and a single condominium unit that has a 230
352	352	combined dwelling and contents replacement cost of $700,000 or 231
353	353	more are not eligible for coverage by the corporation if the 232
354	354	risk is offered comparable co verage from an authorized insurer 233
355	355	at the insurer's approved rate under a standard policy including 234
356	356	wind coverage. 235
357	357	9.8. The following new or renewal personal lines policies 236
358	358	written on or after November 1, 2023, are not subject to the 237
359	359	rate increase limitat ions in subparagraph 5., but may not be 238
360	360	charged more than 50 percent above, nor less than, the prior 239
361	361	year's established rate for the corporation: 240
362	362	a. Policies that do not cover a primary residence; 241
363	363	b. New policies under which the coverage for the insure d 242
364	364	risk, before the date of application with the corporation, was 243
365	365	last provided by an insurer determined by the office to be 244
366	366	unsound or an insurer placed in receivership under chapter 631; 245
367	367	or 246
368	368	c. Subsequent renewals of those policies, including the 247
369	369	new policies in sub-subparagraph b., under which the coverage 248
370	370	for the insured risk, before the date of application with the 249
371	371	corporation, was last provided by an insurer determined by the 250
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380	380	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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384	384	office to be unsound or an insurer placed in receivership under 251
385	385	chapter 631. 252
386	386	10.9. As used in this paragraph, the term "primary 253
387	387	residence" means the dwelling that is the policyholder's primary 254
388	388	home or is a rental property that is the primary home of the 255
389	389	tenant, and which the policyholder or tenant occupies for more 256
390	390	than 9 months of each year. 257
391	391	Section 2. This act shall take effect July 1, 2024. 258