FPCA Legislative Update: House Economic Affairs Committee Report — April 7, 2011
Apr 7, 2011
Florida Property and Casualty Association Homeowners Division Members:
Today, April 7, 2011, the House Economic Affairs Committee considered several insurance related bills.
HB 1087 Relating to Persons Designated to Receive Insurer Notifications, sponsored by Rep. Doug Holder (R-Sarasota), was temporarily postponed.
HB 535, a repealer bill relating to the Hurricane Loss Mitigation Program, sponsored by Rep. Jim Frishe (R-Belleair Bluffs) and cosponsored by Rep. Peter Nehr (R-Tarpon Springs), passed favorably with no amendments, questions, or debate.
CS/HB 885 Relating to Residential Property Insurance, sponsored by Rep. John Wood (R-Haines City) and cosponsored by the Insurance & Banking Subcommittee, passed favorably without questions or debate. The bill provides for an expedited filing process for reinsurance costs and no longer contains any rate deregulation provisions for residential property insurers.
CS/HB 1243 Relating to Citizens Property Insurance Corporation (“Citizens”) is sponsored by Rep. Jim Boyd (R-Bradenton) and cosponsored by Rep. Charles E. Van Zant (R-Palatka) and the Committee Substitute is sponsored by the Insurance & Banking Subcommittee, passed favorably as amended after the adoption of one amendment today.
Rep. Boyd opened by discussing a few key provisions of the bill, which included, but was not limited to, the following:
- Limiting the eligibility for Citizens based on premium amount charged by a private market insurer;
- Limiting the eligibility for Citizens based on the value of the property insured;
- Requiring flood insurance for certain Citizens’ policyholders;
- Providing policyholders of Citizens assumed by a private market insurer are ineligible for insurance in Citizens until the end of the assumption agreement;
- Allowing surplus lines insurers to remove policies from Citizens under specified conditions;
- Repealing a reduction of Citizens’ wind-only zones;
- Requiring a report on outsourcing Citizens’ claims functions;
- Amending the appointment requirements for insurance agents selling insurance in Citizens;
- Preventing Citizens from insuring attached or detached screen enclosures;
- Increasing the Citizens’ rate cap from 10% to 20% per rating territory or 25% per policyholder;
- Exempting sinkhole coverage and the cost of reinsurance from the rate caps;
- Requiring an industry expense equalization factor in Citizens’ rates;
- Requiring Citizens’ applicants and policyholders be apprised of and acknowledge the assessment potential of an insurance policy written by Citizens;
- Amending the levy of and responsibility for a Citizens’ Policyholder Surcharge;
- Increasing the amount of an emergency assessment levied against policyholders of Citizens;
- Specifying Citizens cannot be liable for bad faith or extra-contractual damages; and,
- Prohibiting Citizens from covering losses to appurtenant structures, driveways, sidewalks, decks, or patios caused by sinkholes.
One amendment was adopted that amended the provision originally increasing the Citizens’ rate cap from 10% to 20% per rating territory or, 25% per policyholder by limiting Citizens’ rate increases to 15% per policy.
The Committee returned to the bill as amended and after questions, public testimony in support of and against the bill, and some debate, the bill passed favorably.
Should you have any questions or comments, please contact Katie Webb (kwebb@cftlaw.com) at Colodny Fass.
