HB 1171 on House Special Order Calendar for April 21; Strike-All Filed to Bill Would Remove Non-Assessable Reference

A strike-everything amendment has been filed to HB 1171, which is on the Florida House of Representatives’ Special Order calendar for April 21, 2009.  The House is scheduled to begin Session at 1:00 p.m.

The amendment, which is attached for your review, is very similar to the Senate version of the bill (CS/SB 2036) and accomplishes the following: 

1.  Removes references to “non-assessable policies;”

2.  States that insurers meeting the following standards may use a rate in excess of the otherwise-filed rate:

1. insurer is authorized to write property insurance in Florida; AND

•  
  • i. insurer has surplus-to-policyholder ratio equal to, or greater than $500 million as calculated, based on the insurer’s most recent annual statement at the time of the issuance or renewal of the policy; OR
  • ii. surplus-to-policyholder ratio equal to $200 million (this is an increase from $150 million that was in the most recent committee substitute); AND
  • iii. a net written premium to its surplus-to-policyholder ratio not exceeding two to one (2:1), as calculated based on the insurer’s most recent annual statement. This calculation shall only consider Florida Hurricane Catastrophe Fund reinsurance, and reinsurance from an “A-” rated carrier, or better.

3.  Companies offering these policies will not be able to purchase Temporary Increase in Coverage Limits coverage, and will be required to give an insured a notice stating that the product is not subject to full rate regulation from Florida Office of Insurance Regulation (“OIR”);

4.  States that policies under this section may not be counted in the statutory calculation regarding excess rates (627.171(2)F.S.)

5.  States that these rates will be filed with the OIR, and the OIR may disapprove a rate as either inadequate, or for using an unlawful rating factor under 626.9541(1)F.S. (this is the first paragraph of the unfair and deceptive trade practices section of Florida law);

6.  Before a policy is issued, the insured must be given a quote from Citizens Property Insurance Corporation, or another fully rate-regulated carrier willing to insure the risk, and the insured must sign an acknowledgement form;

7.  (This will not apply to policies excluding wind coverage);

8.  If the carrier terminates, non-renews or cancels a policy, the insurer must give notice 180 days in advance.

 

Along with a copy of the strike-everything amendment, the most recent committee substitute for HB 1171 is also attached.

The strike-everything amendment to HB 1171 is supported by State Farm, its agents, and many other insurers.

 

For additional information on Florida’s legislative process and terminology, click here.

 

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

 

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