Florida House of Representatives Economic Affairs Committee Amends, Passes Omnibus Insurance Bill (PCS/HB 1101)

 

The Florida House of Representatives Economic Affairs Committee met this morning, February 22, 2012, during which it heard Proposed Committee Substitute (“PCS”) for House Bill 1101 by State Representative Mike Horner.

Commonly known as the “omnibus insurance bill,” PCS/HB 1101 addresses a variety of issues, including insurance agent and adjuster licensure, insurance required for salvage motor vehicle dealers, travel insurance, portable electronics insurance, the filing of reinsurance statements, disclosure for surplus lines insurance, dividends for crop insurance, changes to insurance policy terms, mediation program for property insurance claims, cancellation of auto insurance, and interest owed on Personal Injury Protection (“PIP”) insurance benefits.

The PCS contains the following provisions that were not part of the initial version of the bill:

• A statement that altering a certificate of insurance after it has been issued is evidence of an unfair and deceptive trade practice
• Requires, as of January 1, 2013, that Citizens Property Insurance Corporation (“Citizens”) offer an HO-8 policy
• Applicants for coverage in Citizens’ Personal and Commercial Lines accounts will be required to furnish Citizens a sworn affidavit executed by their insurance agent attesting that they were declined by at least three authorized insurers for coverage
• As of January 1, 2013, applicants for Personal Residential Coverage must register with the Florida Market Assistance Plan (“FMAP”) for a period of 10 days before they can submit an application to Citizens
• Prohibits Citizens from paying agent commissions until it achieves actuarial soundness
• Requires Citizens to accept certain replacement cost valuations
• States that, if a policyholder accepts a rebate for sinkhole repairs, the rebate voids the insurance policy and the policyholder must return the rebate to the insurer; additionally states that the person performing the repairs who offers a rebate has committed insurance fraud; and
• Essentially amends HB 379 relating to Captive Insurers into the PCS. 

The following eight amendments were adopted to PCS/HB 1101 during the Committee meeting:

• Amendment 1 by Chairman Dorothy Hukill, which removed section 5 of the PCS that relates to continuing education requirements for agents.
• Amendment 2 by Chairman Hukill, which removed the requirement that applicants for coverage in Citizens’ Personal and Commercial Lines accounts be required to provide an affidavit that they were denied coverage from three different insurers.  The amendment also removed the language requiring that applicants register with FMAP prior to submitting an application to Citizens, as well as removed the language that would have prohibited Citizens from paying commissions until it achieved actuarial soundness. 
• Amendments 3 and 4 by State Representatives Brad Drake and Evan Jenne, which removed provisions of PCS/HB 1101 that addressed patronage dividends for crop insurance.
• Amendment 5 by State Representative Mike Horner, which clarified language relating to the prohibition against altering a certificate of insurance.
• Amendment 7 by Representative Horner, which clarified that taxi cabs are not required to have PIP insurance.
• Amendment 8 by Representative Horner, which amends the language in CS/CS/HB 245 to add an additional rating agency for surplus lines insurers that are removing policies from Citizens.
• Amendment 9 by Representative Horner, which would allow interest to be paid on claims of insurance companies that are in liquidation.

There were no questions or debate on the bill or the amendments.  The Committee passed the bill as a Committee Substitute (“CS”).

The Committee also passed CS/CS/HB 725 relating to Insurance Agents and Adjusters by State Representative Bill Hager.  The Committee adopted seven amendments to this bill, all of which were technical or clarifying in nature.

CS/CS/HB 725 makes numerous changes to Florida’s agent and adjuster licensure laws.  Major changes made by the bill would include consolidation of current law relating to the examination and continuing education of all licensees of the Florida Department of Financial Services (“DFS”) and the merging of various types of licenses for agents and adjusters issued by the DFS into larger license classes.  CS/CS/HB 725 also would reduce the number of types of licenses that can be issued by DFS.  Other provisions of the bill would make current law relating to the licensure of insurance agents also apply to insurance adjusters.

 

Should you have any questions or comments, please contact Colodny Fass.

 

 

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