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 Judiciary
BILL: SB 1104
INTRODUCER: Senator Bradley
SUBJECT: Policy Cancellations and Nonrenewals by Property Insurers
DATE: February 2, 2024
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Thomas Knudson BI Favorable
2. Bond Cibula JU Pre-meeting
3. RC
I. Summary:
SB 1104 amends s. 627.4133, F.S., relating to cancellation and nonrenewal of property insurance
policies.
If a commercial property was damaged by any covered peril, the insurer (whether authorized
lines or surplus lines) may not cancel or nonrenew the property insurance policy until the earlier
of completion of repairs or 1 year after the insurer issues the final claim payment. However:
If flood is not a covered peril and the property has been damaged by flood, the insurer may
not cancel or nonrenew until the earlier of completion of repairs or 1 year after the date of
loss.
The insurer may cancel or nonrenew on 10 days’ notice for nonpayment of premium; or on
45 days notice for material misstatement, fraud, unreasonable delay by the insured, or if the
insurer has paid policy limits.
Any nonrenewal after damage requires at least 90 days notice that the policy will be not
renewed and that the nonrenewal must not take effect until at least 90 days after completion
of repairs.
If a personal residential or commercial residential property has been damaged as a result of
hurricane or wind loss (declared emergency), the current law prohibition on cancellation or
nonrenewal until 90 days after the property is repaired is expanded from solely applying to
authorized insurers to also apply to surplus lines. The 90 days is extended to 1 year where the
damage was caused by flood related to a hurricane. Also, the bill clarifies that, for the purpose of
determining when a residential property is "repaired," it is repaired when it is insurable by a like-
kind insurer (authorized or surplus lines).
The bill does not appear to have a significant fiscal impact on state or local government.
The bill provides an effective date of July 1, 2024.
REVISED: BILL: SB 1104 Page 2
II. Present Situation:
Notice of Cancellation or Nonrenewal of Insurance Policies
The requirements for an insurer to provide notice of cancellation or nonrenewal of a policy are
set forth in s. 627.4133, F.S. The specific notice depends on the type of insurance provided and
the particular circumstances of the subject policy.
For coverage of property, casualty (except for mortgage guaranty), surety, or marine insurance
(except for certain motor vehicle insurance), an insurer must inform the first-named policyholder
with 45 days’ advance written notice of the cancellation or nonrenewal.
1
When cancellation is
due to failure to pay a premium, at least 10 days’ written notice of cancellation and the reason for
the cancellation must be provided to the insured.
2
When cancellation occurs during the first
60 days and is not a result of nonpayment of premium, at least 20 days’ written notice and the
reason for cancellation must be given to the insured except where there has been a material
misstatement, misrepresentation, or failure to comply with the policy’s underwriting
requirements.
3
After 60 days, no such policy may be cancelled by the insurer unless there has
been a material misstatement, a failure to pay the premium, a failure to comply with the policy’s
underwriting requirements within a specified time, or a substantial change in the risk covered by
the policy or when cancellation is given for a class of insureds.
4
If an insurer fails to provide the
45-day or 20-day written notice, the coverage provided remains in effect until 45 days after the
notice is given or until the effective date of replacement coverage obtained by the named insured,
whichever occurs first.
5
With respect to personal lines or commercial residential property insurance policies, such as any
homeowner, mobile home owner, farm owner, condominium association, condominium unit
owner, or apartment building, the insurer must give the first-named insured written notice at least
120 days before the effective date of the cancellation or nonrenewal.
6
Such insureds must receive
10 days’ advance notice of cancellation for a failure to pay a premium, or 20 days’ notice for a
reason other than nonpayment if cancellation occurs within the first 90 days of coverage.
7
An
insurer may not cancel the policy after it has been in effect for 60 days unless there has been a
material misstatement, nonpayment, a failure to comply with the policy’s underwriting
requirements within a specified time, a substantial change in the risk covered by the policy or
unless the cancellation is for a given class of insureds.
8
An authorized insurer may not cancel or nonrenew a residential property insurance policy:
For a period of 90 days after the property has been repaired, if such property has been
damaged as a result of a hurricane or wind loss that is the subject of the declaration of
emergency and the filing of an order by the Commissioner of Insurance Regulation.
1
Section 627.4133(1)(a) and (b), F.S.
2
Section 627.4133(1)(b)1., F.S.
3
Section 627.4133(1)(b)2., F.S.
4
Section 627.4133(1)(b), F.S.
5
Section 627.4133(1)(c), F.S.
6
Section 627.4133(2)(b), F.S.
7
Section 627.4133(2)(b)1. and 2., F.S.
8
Section 627.4133(2)(b)3., F.S. BILL: SB 1104 Page 3
Until the earlier of when property has been repaired or 1 year after the insurer issues the final
claim payment, if such property was damaged by a covered peril, but was not damaged as a
result of a hurricane or wind loss that is the subject of the declaration of emergency and the
filing of an order by the Commissioner of Insurance Regulation.
9
A structure is deemed repaired when substantially completed and restored to the extent that it is
insurable by another authorized insurer.
10
An insurer or agent may cancel or nonrenew such a
policy prior to the repair of the dwelling or residential property upon 10 days’ notice for
nonpayment of premium; or upon 45 days’ notice:
For a material misstatement or fraud related to the claim;
If the insurer determines that the insured has unreasonably caused a delay in the repair of the
dwelling; or
If the insurer has paid policy limits.
11
If the insurer elects to nonrenew a policy covering a property that has been damaged, the insurer
must provide at least 90 days’ notice to the insured that the insurer intends to nonrenew the
policy 90 days after the dwelling or residential property has been repaired.
12
This requirement
does not prevent the insurer from canceling or nonrenewing the policy 90 days after the repairs
are complete for the same reasons the insurer would otherwise have canceled or nonrenewed the
policy but for the limitations.
13
Any cancellation or nonrenewal subject to these limitations that
is set to become effective during a hurricane, the effective date is extended until the end of the
duration of the hurricane.
14
Insurers may not cancel or nonrenew a property insurance policy based on the policyholder
making a claim based on the result of an act of God, unless the insurer can demonstrate that the
insured failed to take action reasonably necessary as requested by the insurer to prevent
recurrence of damage to the insured property.
15
III. Effect of Proposed Changes:
The bill amends s. 627.4133(1), F.S., to provide that an insurer may not cancel or nonrenew a
property insurance policy covering a commercial property located in this state:
For a period of 90 days after the property has been repaired, if such property has been
damaged as a result of a hurricane or wind loss that is the subject of the declaration of
emergency pursuant to s. 252.36, F.S., and the filing of an order by the Commissioner of
Insurance Regulation. Damage includes flood damage caused by a hurricane if flood is a
covered peril under the commercial property policy or under a separate flood insurance
policy. If flood is not a covered peril and the property has been damaged as a result of flood
caused by a hurricane, an insurer may not cancel or nonrenew the commercial property
9
Section 627.4133(2)(e)1., F.S.
10
Section 627.4133(2)(e)5.a., F.S.
11
Section 627.4133(2)(e)2., F.S.
12
Section 627.4133(2)(e)3., F.S.
13
Id.
14
Section 627.4133(2)(f), F.S.
15
Section 627.4133(3), F.S. BILL: SB 1104 Page 4
policy until the earlier of when the property has been repaired or 1 year after the date of loss;
or
Until the earlier of when the commercial property is been repaired or 1 year after the insurer
issues the final claim payment, if such property was damaged by any covered peril other than
a hurricane or wind loss that is the subject of a declaration of emergency.
The bill authorizes an insurer or agent to cancel or nonrenew a policy prior to the repair of the
commercial property upon 10 days’ notice for nonpayment of premium; or upon 45 days’ notice:
For a material misstatement or fraud related to the claim;
If the insurer determines that the insured has unreasonably caused a delay in the repair of the
dwelling; or
If the insurer has paid the policy limits for a loss to each insured structure that was damaged.
If the insurer elects to nonrenew a policy covering a commercial property that has been damaged,
the insurer must provide at least 90 days’ notice to the insured that the insurer intends to
nonrenew the policy 90 days after the property has been repaired. This requirement does not
prevent the insurer from canceling or nonrenewing the policy 90 days after the repairs are
complete for the same reasons the insurer would otherwise have canceled or nonrenewed the
policy but for these limitations. The bill grants rulemaking authority to the Financial Services
Commission necessary to implement these provisions and gives the Commissioner of Insurance
Regulation authority to issue orders necessary to implement the provisions.
The bill provides that a commercial property structure is deemed to be repaired when
substantially completed and restored to the extent that it is insurable by another authorized
insurer. A structure insured by a surplus lines insurer is deemed to be repaired when substantially
completed and restored to the extent that it is insurable by another authorized insurer or eligible
surplus lines insurer. Such a policy extended or renewed must contain the same policy terms as
the policy being extended or renewed.
With respect to any personal lines or commercial residential property insurance policy,
including, but not limited to, any homeowner, mobile home owner, farmowner, condominium
association, condominium unit owner, apartment building, or other policy covering a residential
structure or its contents, the bill amends s. 627.4133(2)(e), F.S., to include flood damage caused
by a hurricane if flood is a covered peril under the policy or a separate flood insurance policy. If
flood is not a covered peril and the property is damaged as a result of flood caused by a
hurricane, the insurer may not cancel or nonrenew the policy until the earlier of when the
property has been repaired or 1 year after the date of loss.
The bill amends s. 627.4133(2)(e)2., F.S., to provide that an insurer or agent may cancel or
nonrenew such a policy prior to the repair of the dwelling or residential property upon 10 days’
notice for nonpayment of premium; or upon 45 days’ notice:
For a material misstatement or fraud related to the claim;
If the insurer determines that the insured has unreasonably caused a delay in the repair of the
dwelling; or BILL: SB 1104 Page 5
If the insurer has paid policy limits for a loss to the insured dwelling under a personal
residential policy, or policy limits for a loss to each insured structure that was damaged under
a commercial residential policy.
The bill amends s. 627.4133(2)(e)5., F.S., to provide, with respect to any personal lines or
commercial residential property insurance policy, including, but not limited to, any homeowner,
mobile home owner, farmowner, condominium association, condominium unit owner, apartment
building, or other policy covering a residential structure or its contents, that a structure insured
by an authorized insurer is deemed to be repaired when substantially completed and restored to
the extent that it is insurable by another authorized insurer. The bill provides that a structure
insured by a surplus lines insurer is deemed to be repaired when substantially completed and
restored to the extent that it is insurable by another authorized insurer or eligible surplus lines
insurer. The bill provides that the term “insurer” means an authorized insurer or an eligible
surplus lines insurer. Finally, the bill provides that if a policy is extended or renewed to comply
with these provisions, the policy must contain the same policy terms as the policy being extended
or renewed.
The bill provides an effective date of July 1, 2024.
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. BILL: SB 1104 Page 6
B. Private Sector Impact:
The bill should benefit commercial property owners affected by hurricanes or windstorm
damage by assuring they can maintain insurance coverage while having property damage
repaired. Insurers will be affected by ensuring the provisions of the bill are implemented
and followed.
C. Government Sector Impact:
The bill does not appear to have a significant fiscal impact on state or local government.
The bill gives rulemaking authority to the Financial Services Commission. The
Commission may incur some costs if it does adopt any rules pursuant to this authority.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends section 627.4133 of the Florida Statutes.
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.