FPCA Homeowners Division: Member Feedback Needed on Florida Insurance Legislative Outlook–February

ATTORNEY CLIENT COMMUNICATION
PRIVILEGED AND CONFIDENTIAL

FPCA Homeowners Division Members:

Below is a summary of recently gathered intelligence on pending 2010 insurance-related Florida legislation.  This information is for consideration in conjunction with the information already provided on bills that have actually been filed to date.  As the Florida Property and Casualty Association (“FPCA”) further develops its legislative strategy, FPCA Counsel, Colodny Fass, looks forward to discussing these and other legislative proposals in more detail with our members.

Note:  Due to the politically sensitive nature of this information, please do not forward the content of this email outside of your organization, otherwise those advocacy groups opposing certain goals outlined in the summary below may use the information to thwart FPCA’s efforts to pass beneficial legislation.  Additionally, while the information below is current as of the date of this publication, the status of these proposals could change quickly and substantially. 

 

Representative Nelson To File House Omnibus Insurance Bill

State Representative Bryan Nelson plans to file a bill in the House of Representatives that is somewhat similar to the Senate’s pending “omnibus” property insurance-related bill.  While Representative Nelson’s proposed bill is anticipated to develop and change throughout the legislative process, it is also expected to be amended even before being filed as a bill.   As it is currently drafted, the legislation would:

Increase capital requirements to $15 million for new companies. All existing companies would be grandfathered.

• Require newly formed companies to maintain a surplus of $12 million. Existing companies would not be subject to this new requirement.
• Expedite filing for reinsurance or products to replace reinsurance. The increase in the inflation trend factor (which would be set by the Florida Office of Insurance Regulation (“OIR”)) would not exceed 10 percent per policyholder.
• Specifically allow an insurer to amend a pending filing, as long as the filing has not been rejected by the OIR. Recertification would be required for these types of amendments.
• Delete portions of the law that require the OIR to make online postings of certain findings on rate filings
• Include provisions relating to mitigation credits
• Increase the insurer eligibility threshold for limited apportionment status from $25 million to $35 million
• Delete existing provisions for the Citizens Property Insurance Corporation High-Risk Account “choke-down” (wind-map area decrease)
• Allow insurers to change the terms of a policy without non-renewing all policies, as long as certain notices are given
• Replace roofs over 15 years old using actual cash valuation (“ACV”)
• Allow a hold-back for replacement cash value. Insurers would be required to pay the greater of 40 percent of the replacement cost or the ACV
• Create a standard repair cost itemization form for use during alternative dispute resolution of claims
• Repeal the sinkhole database statute

Representative Nelson may add a further sinkhole-related provision to the bill (although the Senate version does not contain any similar information). 

• Representative Nelson’s draft omnibus insurance bill is attached for review, along with the proposed sinkhole amendment.  Please forward comments and suggestions to Katie Webb at kwebb@cftlaw.com.

 

Additional Notes:

• During the week of February 15, both the Senate Banking and Insurance committee and the House Committee on Insurance, Business and Financial Affairs are scheduled to consider SB 1460 and HB 949, respectively. These bills would serve tocorrect the accounting problem caused by the previous legislative change in the Florida Hurricane Catastrophe Fund contract year. To view bill information, click here and here.
• State Representative Janet Long is in process of drafting a public adjuster-related bill, a draft of which is also attached. Forthcoming companion legislation could be sponsored by Senator Mike Bennett.
• Senator Durell Peaden Jr. and State Representative Brad Drake may sponsor a bill relating to commercial insurance that would allow for some rate flexibility.
• In order for insurers to keep their rating, Demotech may begin requiring companies to reinsure using results from a near-term model.

 

Summary of attachments and documents issued for FPCA member comment:

The aforementioned draft documents and hyperlinked bills have been included with this bulletin for FPCA member feedback.  This feedback is critical in helping to guide the FPCA in forming legislative strategy and developing appropriate legislative support. Please forward comments and suggestions to Katie Webb at kwebb@cftlaw.com.

• Representative Nelson’s draft omnibus insurance bill
  • Proposed sinkhole amendment
• Representative Long’s draft public adjuster-related bill
• Florida Hurricane Catastrophe Fund-related bills, SB 1460 and HB 949

 

Warmly,

Katherine Scott Webb, Esq.,
FPCA Counsel and Lobbyist