Florida Insurance Bills Among 44 Signed by Florida Governor Rick Scott Yesterday, May 21, 2015

 

Florida Governor Rick Scott signed 44 bills into law yesterday, May 21, 2015, among which there were various insurance-related measures. 

There are now 21 bills on the Governor’s desk awaiting action and 126 House bills that have yet to be presented to him.

Below is a summary of each of the insurance-related bills signed yesterday:

 

SB 252 relating to Insurance by Senator Chris Smith

Effective July 1, 2015, SB 252 provides that the absence of a countersignature does not affect the validity of a property, casualty, or surety insurance policy or contract.  This could reduce the risk that an insured loses coverage due to events the insured cannot control.  Current law provides that no property, casualty, or surety insurer shall assume direct liability unless the policy or contract of insurance is countersigned by a licensed agent.

The bill amends the definition of “financial guaranty insurance” to provide that financial guaranty insurance does not include guarantees of higher education loans unless they are written by a financial guaranty insurance corporation.

Further, SB 252 allows a foreign or alien insurer applying for a certificate of authority to submit a copy of the report of the most recent examination that is up to five years old as of the date of the insurer’s application.

It also changes the due date for certain annual and biennial reports to the President of the Senate and Speaker of the House of Representatives from January 1 to January 15.

 

SB 836 relating to the Florida Insurance Guaranty Association by Senator Jack Latvala

Effective July 1, 2015,  SB 836 revises provisions of law governing the Florida Insurance Guaranty Association (“FIGA”), which provides a mechanism for the payment of covered claims, including unearned premiums, of insolvent property and casualty insurance companies. After an insolvency occurs, FIGA determines if an assessment is needed to pay claims, administrative costs, or bonds issued by FIGA and certifies the need for an assessment levy to the Florida Office of Insurance Regulation (“OIR”).  The OIR then reviews the certification, and if it is sufficient, issues an order to all insurance companies to pay their assessment to FIGA. Generally, insurers must pay regular assessments within 30 days of the levy, and emergency assessments can be paid in a single payment, or over 12 months, at the option of FIGA.  For both types of assessments, once an insurance company pays the assessment to FIGA, it may begin to recoup the assessment from its policyholders at policy issuance or renewal.

SB 836 makes the following changes:

• Creates a uniform assessment percentage to be collected from policyholders
• Authorizes FIGA to use a monthly installment method for the collection of emergency or regular assessments from insurers in addition to the current pay and recoup method or a combination of both
• Streamlines the reconciliation of collections and eliminates a regulatory filing with OIR
• Codifies the OIR’s interpretation of an admissible asset for purposes of statutory accounting treatment of FIGA assessments
• Exempts regular assessments from the insurance premium tax.  Currently, emergency assessments are exempt from the insurance premium tax.

 

SB 1094 Relating to Peril of Flood by Senator Jeff Brandes

Effective July 1, 2015, SB 1094 allows insurers to issue flood insurance policies, contracts, or endorsements on a “flexible flood insurance” basis.  Flexible flood insurance coverage is defined as coverage for the peril of flood that may include water intrusion coverage and differs from standard or preferred coverage by including one or more of the following:

• An agreed-upon amount of coverage between the insurer and policyholder
• A deductible as authorized in s. 627.701, F.S.
• Adjustment in accordance with s. 627.7011(3), F.S., or adjustment only on the basis of the actual cash value of the property
• Limitation of coverage to only the principal building, as defined in the policy
• Provisions including or excluding coverage for additional living expenses
• Provisions excluding coverage for personal property or contents

SB 1094 also revises other provisions of law related to flood insurance.  It deletes the prohibition against supplemental flood insurance, including excess flood coverage over other flood insurance.  It requires an insurer to provide an appropriate credit or discount to an insured whose rate is determined to be excessive or unfairly discriminatory by the OIR.

The bill allows an insurer to request from the OIR a certification that acknowledges that the insurer provides a policy, contract, or endorsement for the flood insurance that provides coverage equaling or exceeding the flood coverage offered by the National Flood Insurance Program (“NFIP”).  A certified policy must be in compliance with 42 U.S.C. s. 1042a(b), which requires federally regulated lending institutions to accept private flood insurance that insures the building and personal property securing the loan for the term of the loan in an amount not less than the outstanding principal balance of the loan or the limit of NFIP flood insurance coverage, whichever is less.  An insurer or its agent may reference or include such certification in advertising and communications with an agent, a lending institution, an insured and a potential insured.  

The authorized insurer may also include a statement that notifies an insured of the certification on the declarations page or other policy documentation related to flood coverage.  Knowingly misrepresenting that a flood insurance policy is certified is an unfair or deceptive act.

The bill requires local governments, when drafting their comprehensive coastal management plans, to include development and redevelopment principles, strategies and engineering solutions that reduce the flood risk in coastal areas.  Such plans must encourage the use of best practices development and redevelopment principles, strategies, and engineering solutions that will result in the removal of coastal real property from flood zone designations established by the Federal Emergency Management Agency.  

Plans should also identify site development techniques and best practices that may reduce losses due to flooding and claims made under flood insurance policies issued in Florida. The plan must be consistent with, or more stringent than the flood-resistant construction requirements in the Florida Building Code and applicable flood plain management regulations set forth in 44 C.F.R. part 60.

The plan must require that any construction activities seaward of the Coastal Construction Control Lines established pursuant to s. 161.053, F.S. be consistent with chapter 161.  They must also encourage local governments to participate in the NFIP Community Rating System administered by the Federal Emergency Management Agency in order to achieve flood insurance premium discounts for their residents.

SB 1094 requires surveyors and mappers to submit elevation certificates to the Florida Division of Emergency Management.  It defines an “elevation certificate” as the certificate used to demonstrate the elevation of property that has been developed by Federal Emergency Management Agency under federal floodplain management regulation or which is completed by a surveyor and mapper.

Beginning January 1, 2017, a surveyor and mapper who completes an elevation certificate must, within 30 days of completion, submit a copy of the certificate to the Florida Division of Emergency Management.

 

SB 158 relating to Civil Liability of Farmers by Senators Greg Evers and Jack Latvala

Effective July 1, 2015, SB 158 expands and clarifies a Florida farmer’s protection from civil liability in negligence actions brought by a person the farmer gratuitously allows upon the farmer’s land to remove farm produce or crops.

Under existing Florida law, if a farmer allows a person onto a farm without charge to harvest crops or produce leftover after the farm is harvested, the farmer is not liable for damages caused by the condition of the crops or produce or the condition of the land.  Under the bill, a farmer may allow a person to harvest crops or produce at any time without being liable for the condition of the crops or produce or the condition of the land.

Under existing law, a farmer may be liable for damages caused by dangerous conditions not disclosed by the farmer to a person who is allowed to harvest leftover crops or produce.  Under SB 158, the farmer is liable for those damages that result from the failure of the farmer to warn of a dangerous condition of which the farmer has “actual knowledge” unless the dangerous condition would be obvious to a person entering upon the farmer’s land.  The farmer, however, as under existing law, remains liable for injury or death directly resulting from the farmer’s gross negligence or intentional acts.

 

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