Florida Senate Banking and Insurance Committee Report: April 7

The Florida Senate Committee on Banking and Insurance (“Committee”) met on April 7, 2010, during which it considered various insurance-related bills.  Below is a brief summary of the meeting:

 

Senate Bill 2108 relating to Insurance by Senator Garrett Richter

During the Committee meeting, five amendments had been adopted to SB 2108, which would relate to property insurance after being amended.   However, the bill was temporarily postponed after a Rules challenge by Senate Democratic Leader Al Lawson that was precipitated by the introduction of a Personal Injury Protection (“PIP”)-related amendment to SB 2108 by Senator Mike Fasano.  The amendment was later determined to be inappropriate by Senate Rules Chairman Alex Villalobos.  

Senator Fasano’s PIP amendment would have afforded premium discounts to auto insurance policyholders for using a preferred provider network to receive PIP benefits.  To view a copy of the amendment, click here.

Because the final votes and amendments to SB 2108 were negated by the challenge to Senator Fasano’s amendment during the meeting, the bill has been referred back to the Committee for reconsideration.

If ultimately passed, SB 2108 would change Florida insurance laws relating primarily to residential property as follows:

• A provision requiring the Florida Office of Insurance Regulation (“OIR”) to develop a method of correlating mitigation discounts to the Uniform Home Grading Scale would be repealed;
• Insurers would be allowed to provide written notice of policy changes to policyholders without having to non-renew an entire insurance policy due to a change in policy terms;
• Procedures for insurers and policyholders relating to standards for sinkhole insurance claim investigations and repairs would be revised;
• Procedures pertaining to sinkhole reports by professional engineers or professional geologists would be changed;
• Criteria pertaining to the selection and qualifications of a neutral evaluator for disputed sinkhole insurance claims under the neutral evaluation procedure would be revised;
• Mitigation inspectors would not be able to commit misconduct in performing hurricane mitigation inspections of homes, or provide false or fraudulent information on mitigation inspection forms; and
• Insurers would be allowed to accept hurricane mitigation inspection forms from persons possessing qualifications and experience acceptable to the insurer.

Prior to SB 2108 being temporarily passed, the following amendments were adopted to the proposed committee substitute 561904: 

• Amendment 233682, which would allow the Florida Division of Insurance Fraud to send copies of investigative reports to certain entities;
• Amendment 424188, which states that insurers are not liable for attorney fees under 627.428, F.S. unless the judgment is more favorable than a neutral evaluator;
• Amendment 505712, which would reduce the length of time that than an insurer may use the same accountant for preparing annual statements from seven to five years;
• Amendment 642788, which would authorize an insurer to use financial contracts other than reinsurance to provide catastrophic funding;
• Amendment 357214, a technical amendment relating to recording reports with the county clerk of courts; and
• Amendment 316920 relating to automobile insurance and PIP.  This amendment was adopted, but ruled “Out of Order” because it was not germane to SB 2108.  

 

Senate Bill 2176 relating to commercial insurance rates by Senator Durrell Peaden Jr.

Amended and passed unanimously by the Committee, CS/SB 2176 exempts specified types of insurance and commercial lines risks from certain requirements of state law relating to the filing and review of rates.  At the request of the OIR, an amendment was adopted to SB 2176 that requires a rating organization to notify the OIR of any changes to loss costs within 30 days after the effective date of the change.  The bill must be heard by two additional committees of reference before proceeding to the Senate floor for consideration.

 

Senate Bill 2232 relating to Guaranty Associations by Senator Garrett Richter  

CS/SB 2232, which was amended and passed unanimously by the Committee, would change state laws relating to the Florida Insurance Guaranty Association (“FIGA”) and the Florida Workers’ Compensation Insurance Guaranty Association. 

The bill implements several policies adopted by the National Association of Insurance Commissioners Property and Casualty Insurance Guaranty Association Model Act.  For example, the bill expands an exemption from the applicability of certain provisions of state law to include workers’ compensation claims under employer liability coverage.  The bill also revises FIGA’s structure by consolidating its auto liability and auto physical damage accounts into one account. 

Further, CS/SB 2232 removes the requirement that an insurer must submit a rate filing to pass through an assessment to the policyholders.  Instead, companies would be allowed to apply a recoupment factor to the premium of the policies subject to the FIGA assessment. 

CS/SB 2232 has one additional committee of reference.

 

Senate Bill 1658 relating to Open Government Sunset Review/Hurricane Loss Projection Methodology by the Senate Committee on Banking and Insurance

SB 1658, which was passed unanimously by the Committee, continues the current exemption from public records requirements for trade secrets submitted by private companies to the Florida Commission on Hurricane Loss Projection Methodology, the OIR, or the Florida Insurance Consumer Advocate.  It also provides an exemption from public meetings requirements for portions of meetings or rate proceedings in which trade secrets are discussed.  SB 1658 has one additional committee of reference. 

 

Senate Bill 1662 relating to the Florida Self-Insurers Guaranty Association by the Senate Committee on Banking and Insurance

SB 1662, which was passed unanimously by the Committee, saves from repeal a provision relating to an exemption from public records requirements for certain records of the Florida Self-Insurers Guaranty Association (“FSIGA”).  It also provides an exemption from public meetings requirements for certain meetings of FSIGA’s board of directors or board subcommittees.  

SB 1662 has two additional committees of reference. 

 

Senate Bill 1664 relating to Open Government Sunset Review/Hurricane Loss/Associated Exposure Data by the Senate Committee on Banking and Insurance

SB 1664, which was passed unanimously by the Committee, continues the current exemption from public records requirements for reports of hurricane loss data and associated exposure data that are specific to a particular insurance company.  It also requires Florida International University to annually publish a report summarizing loss and associated exposure data collected from residential property insurers and licensed rating and advisory organizations. 

SB 1662 has two additional committees of reference.

During the Committee meeting, Florida Insurance Consumer Advocate Sean Shaw gave a presentation on the consumer protection provision that he would like addressed in a property insurance bill.  That provision would clarify that the Florida Insurance Consumer Advocate could intervene in a rate filing before the OIR, as well as have full access to hurricane modeling data.  Mr. Shaw also said that the OIR should be required respond to the Florida Insurance Consumer Advocate in writing about concerns raised by the agency in rate filings.  He added that the OIR should be required to publish these concerns on a Web site.

 

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

 

To unsubscribe from this newsletter, please send an email to bellis@cftlaw.com.