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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
A bill to be entitled 1
An act relating to coverage by Citizens Property 2
Insurance Corporation; amending s. 627.351, F.S.; 3
revising certain minimum replacement costs as risk 4
amounts ineligible for coverage by Citizens Property 5
Insurance Corporation for personal lines residential 6
structures; providing exceptions to rate increase 7
limitations on single policies issued by the 8
corporation; requiring surcharges for policies 9
covering certain personal lines residential structures 10
for a specified purpose; prohibiting coverage for 11
certain dwelling structures and single condominium 12
units under certain circumstances; providing an 13
effective date. 14
15
Be It Enacted by the Legislature of the State of Florida: 16
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Section 1. Paragraphs (a) and (n) of subsection (6) of 18
section 627.351, Florida Statutes, are amended to read: 19
627.351 Insurance risk apportionment plans. — 20
(6) CITIZENS PROPERTY INSURANCE CORPORATION. — 21
(a) The public purpose o f this subsection is to ensure 22
that there is an orderly market for property insurance for 23
residents and businesses of this state. 24
1. The Legislature finds that private insurers are 25
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unwilling or unable to provide affordable property insurance 26
coverage in this state to the extent sought and needed. The 27
absence of affordable property insurance threatens the public 28
health, safety, and welfare and likewise threatens the economic 29
health of the state. The state therefore has a compelling public 30
interest and a public purpose to assist in assuring that 31
property in the state is insured and that it is insured at 32
affordable rates so as to facilitate the remediation, 33
reconstruction, and replacement of damaged or destroyed property 34
in order to reduce or avoid the negati ve effects otherwise 35
resulting to the public health, safety, and welfare, to the 36
economy of the state, and to the revenues of the state and local 37
governments which are needed to provide for the public welfare. 38
It is necessary, therefore, to provide afforda ble property 39
insurance to applicants who are in good faith entitled to 40
procure insurance through the voluntary market but are unable to 41
do so. The Legislature intends, therefore, that affordable 42
property insurance be provided and that it continue to be 43
provided, as long as necessary, through Citizens Property 44
Insurance Corporation, a government entity that is an integral 45
part of the state, and that is not a private insurance company. 46
To that end, the corporation shall strive to increase the 47
availability of affordable property insurance in this state, 48
while achieving efficiencies and economies, and while providing 49
service to policyholders, applicants, and agents which is no 50
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less than the quality generally provided in the voluntary 51
market, for the achievement of the foregoing public purposes. 52
Because it is essential for this government entity to have the 53
maximum financial resources to pay claims following a 54
catastrophic hurricane, it is the intent of the Legislature that 55
the corporation continue to be an integr al part of the state and 56
that the income of the corporation be exempt from federal income 57
taxation and that interest on the debt obligations issued by the 58
corporation be exempt from federal income taxation. 59
2. The Residential Property and Casualty Joint 60
Underwriting Association originally created by this statute 61
shall be known as the Citizens Property Insurance Corporation. 62
The corporation shall provide insurance for residential and 63
commercial property, for applicants who are entitled, but, in 64
good faith, are unable to procure insurance through the 65
voluntary market. The corporation shall operate pursuant to a 66
plan of operation approved by order of the Financial Services 67
Commission. The plan is subject to continuous review by the 68
commission. The commission may, by order, withdraw approval of 69
all or part of a plan if the commission determines that 70
conditions have changed since approval was granted and that the 71
purposes of the plan require changes in the plan. For the 72
purposes of this subsection, residential c overage includes both 73
personal lines residential coverage, which consists of the type 74
of coverage provided by homeowner, mobile home owner, dwelling, 75
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tenant, condominium unit owner, and similar policies; and 76
commercial lines residential coverage, which con sists of the 77
type of coverage provided by condominium association, apartment 78
building, and similar policies. 79
3. With respect to coverage for personal lines residential 80
structures,: 81
a. effective July 1, 2024 January 1, 2014, a structure 82
that has a dwelling replacement cost of $1 million or more, or a 83
single condominium unit that has a combined dwelling and 84
contents replacement cost of $1 million or more, is not eligible 85
for coverage by the corporation. Such dwellings insured by the 86
corporation on Decembe r 31, 2013, may continue to be covered by 87
the corporation until the end of the policy term. The office 88
shall approve the method used by the corporation for valuing the 89
dwelling replacement cost for the purposes of this subparagraph. 90
If a policyholder is in sured by the corporation before being 91
determined to be ineligible pursuant to this subparagraph and 92
such policyholder files a lawsuit challenging the determination, 93
the policyholder may remain insured by the corporation until the 94
conclusion of the litigati on. 95
b. Effective January 1, 2015, a structure that has a 96
dwelling replacement cost of $900,000 or more, or a single 97
condominium unit that has a combined dwelling and contents 98
replacement cost of $900,000 or more, is not eligible for 99
coverage by the corpo ration. Such dwellings insured by the 100
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corporation on December 31, 2014, may continue to be covered by 101
the corporation only until the end of the policy term. 102
c. Effective January 1, 2016, a structure that has a 103
dwelling replacement cost of $800,000 or mor e, or a single 104
condominium unit that has a combined dwelling and contents 105
replacement cost of $800,000 or more, is not eligible for 106
coverage by the corporation. Such dwellings insured by the 107
corporation on December 31, 2015, may continue to be covered by 108
the corporation until the end of the policy term. 109
d. Effective January 1, 2017, a structure that has a 110
dwelling replacement cost of $700,000 or more, or a single 111
condominium unit that has a combined dwelling and contents 112
replacement cost of $700,000 or mo re, is not eligible for 113
coverage by the corporation. Such dwellings insured by the 114
corporation on December 31, 2016, may continue to be covered by 115
the corporation until the end of the policy term. 116
117
The requirements of sub -subparagraphs b.-d. do not apply in 118
counties where the office determines there is not a reasonable 119
degree of competition. In such counties a personal lines 120
residential structure that has a dwelling replacement cost of 121
less than $1 million, or a single condominium unit that has a 122
combined dwelling and contents replacement cost of less than $1 123
million, is eligible for coverage by the corporation. 124
4. It is the intent of the Legislature that policyholders, 125
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applicants, and agents of the corporation receive service and 126
treatment of the highest possible level but never less than that 127
generally provided in the voluntary market. It is also intended 128
that the corporation be held to service standards no less than 129
those applied to insurers in th e voluntary market by the office 130
with respect to responsiveness, timeliness, customer courtesy, 131
and overall dealings with policyholders, applicants, or agents 132
of the corporation. 133
5.a. Effective January 1, 2009, a personal lines 134
residential structure that is located in the "wind -borne debris 135
region," as defined in s. 1609.2, International Building Code 136
(2006), and that has an insured value on the structure of 137
$750,000 or more is not eligible for coverage by the corporation 138
unless the structure has opening protections as required under 139
the Florida Building Code for a newly constructed residential 140
structure in that area. A residential structure is deemed to 141
comply with this sub -subparagraph if it has shutters or opening 142
protections on all openings and if such opening protections 143
complied with the Florida Building Code at the time they were 144
installed. 145
b. Any major structure, as defined in s. 161.54(6)(a), 146
that is newly constructed, or rebuilt, repaired, restored, or 147
remodeled to increase the total square foot age of finished area 148
by more than 25 percent, pursuant to a permit applied for after 149
July 1, 2015, is not eligible for coverage by the corporation if 150
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the structure is seaward of the coastal construction control 151
line established pursuant to s. 161.053 or is within the Coastal 152
Barrier Resources System as designated by 16 U.S.C. ss. 3501 -153
3510. 154
6. With respect to wind -only coverage for commercial lines 155
residential condominiums, effective July 1, 2014, a condominium 156
shall be deemed ineligible for coverage if 5 0 percent or more of 157
the units are rented more than eight times in a calendar year 158
for a rental agreement period of less than 30 days. 159
(n)1. Rates for coverage provided by the corporation must 160
be actuarially sound pursuant to s. 627.062 and not competiti ve 161
with approved rates charged in the admitted voluntary market so 162
that the corporation functions as a residual market mechanism to 163
provide insurance only when insurance cannot be procured in the 164
voluntary market, except as otherwise provided in this 165
paragraph. The office shall provide the corporation such 166
information as would be necessary to determine whether rates are 167
competitive. The corporation shall file its recommended rates 168
with the office at least annually. The corporation shall provide 169
any additional information regarding the rates which the office 170
requires. The office shall consider the recommendations of the 171
board and issue a final order establishing the rates for the 172
corporation within 45 days after the recommended rates are 173
filed. The corporatio n may not pursue an administrative 174
challenge or judicial review of the final order of the office. 175
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2. In addition to the rates otherwise determined pursuant 176
to this paragraph, the corporation shall impose and collect an 177
amount equal to the premium tax pro vided in s. 624.509 to 178
augment the financial resources of the corporation. 179
3. After the public hurricane loss -projection model under 180
s. 627.06281 has been found to be accurate and reliable by the 181
Florida Commission on Hurricane Loss Projection Methodolog y, the 182
model shall be considered when establishing the windstorm 183
portion of the corporation's rates. The corporation may use the 184
public model results in combination with the results of private 185
models to calculate rates for the windstorm portion of the 186
corporation's rates. This subparagraph does not require or allow 187
the corporation to adopt rates lower than the rates otherwise 188
required or allowed by this paragraph. 189
4. The corporation must make a recommended actuarially 190
sound rate filing for each personal a nd commercial line of 191
business it writes. 192
5. Notwithstanding the board's recommended rates and the 193
office's final order regarding the corporation's filed rates 194
under subparagraph 1., the corporation shall annually implement 195
a rate increase which, except for sinkhole coverage, does not 196
exceed the following for any single policy issued by the 197
corporation, excluding coverage changes and surcharges: 198
a. Twelve percent for 2023. 199
b. Thirteen percent for 2024. 200
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c. Fourteen percent for 2025. 201
d. Fifteen percent for 2026 and all subsequent years. 202
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This subparagraph does not apply to a personal lines residential 204
structure that has a dwelling replacement cost of $700,000 or 205
more or a single condominium unit that has a combined dwelling 206
and contents replacement c ost of $700,000 or more. 207
6. The corporation may also implement an increase to 208
reflect the effect on the corporation of the cash buildup factor 209
pursuant to s. 215.555(5)(b). 210
7. The corporation's implementation of rates as prescribed 211
in subparagraph subparagraphs 5. and 9. 8. shall cease for any 212
line of business written by the corporation upon the 213
corporation's implementation of actuarially sound rates. 214
Thereafter, the corporation shall annually make a recommended 215
actuarially sound rate filing that is not competitive with 216
approved rates in the admitted voluntary market for each 217
commercial and personal line of business the corporation writes. 218
8. Effective July 1, 2024, for the purpose of ensuring 219
that the corporation's rates are not competitive with appro ved 220
rates charged in the admitted voluntary market as required by 221
subparagraph 1., a surcharge equal to the lesser of $2,500 or 25 222
percent of the corporation's rate for each policy applies to 223
personal lines residential structures that have a dwelling 224
replacement cost of $700,000 or more and single condominium 225
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units that have a combined dwelling and contents replacement 226
cost of $700,000 or more. Notwithstanding any other provision of 227
this subsection, effective July 1, 2024, a personal lines 228
residential structure that has a dwelling replacement cost of 229
$700,000 or more and a single condominium unit that has a 230
combined dwelling and contents replacement cost of $700,000 or 231
more are not eligible for coverage by the corporation if the 232
risk is offered comparable co verage from an authorized insurer 233
at the insurer's approved rate under a standard policy including 234
wind coverage. 235
9.8. The following new or renewal personal lines policies 236
written on or after November 1, 2023, are not subject to the 237
rate increase limitat ions in subparagraph 5., but may not be 238
charged more than 50 percent above, nor less than, the prior 239
year's established rate for the corporation: 240
a. Policies that do not cover a primary residence; 241
b. New policies under which the coverage for the insure d 242
risk, before the date of application with the corporation, was 243
last provided by an insurer determined by the office to be 244
unsound or an insurer placed in receivership under chapter 631; 245
or 246
c. Subsequent renewals of those policies, including the 247
new policies in sub-subparagraph b., under which the coverage 248
for the insured risk, before the date of application with the 249
corporation, was last provided by an insurer determined by the 250
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office to be unsound or an insurer placed in receivership under 251
chapter 631. 252
10.9. As used in this paragraph, the term "primary 253
residence" means the dwelling that is the policyholder's primary 254
home or is a rental property that is the primary home of the 255
tenant, and which the policyholder or tenant occupies for more 256
than 9 months of each year. 257
Section 2. This act shall take effect July 1, 2024. 258