House Insurance Committee Passes Nelson-Amended Cat Fund Reduction Bill

On April 3, 2009, the Florida House of Representatives Insurance, Business and Financial Affairs Policy Committee (“Committee”) passed an amended version of House Bill 1495 relating to Insurance by State Representative Bryan Nelson.

As originally filed, HB 1495 extends the Florida Hurricane Catastrophe Fund Temporary Increase in Coverage Limit (“TICL”) operations and provides additional reimbursement requirements for TICL addenda for additional FHCF contract years.  With an effective date of July 1, 2009, the bill defines term “actuarially-sound rates” for purposes of coverage by Citizens Property Insurance Corporation (“Citizens”) and requires Citizens to implement specified rate increases each year. 

The following is a brief summary of the discussions that took place, including actions on the amendments that were filed to a strike-everything amendment filed by Representative Nelson.  HB 1495 was the only bill taken up by the Committee during the meeting.

Representative Nelson explained his strike-everything amendment, noting it is intended to reduce the FHCF, reduce fraud and reduce Citizens exposure.  Following this explanation, Committee Chairman Pat Patterson moved into considering the amendments to the strike-everything amendment.  Below is a brief recap of those amendments:

• An amendment by Representative Nelson that would clarify residential rate filing language was adopted without objection or discussion.
• An amendment by Representative Nelson that would remove disclosure requirements related to windstorm mitigation rating was adopted without objection or discussion.
• An amendment by State Representative Richard Steinberg that would extend the date that Citizens is required to transfer rate increases to the My Safe Florida Home Program was withdrawn.
• An amendment by Representative Steinberg that would clarify the application of mitigation grants to homestead property only was adopted.
• An amendment by Representative Steinberg regarding condominium mitigation was withdrawn.
• An amendment by Representative Nelson clarifying mitigation measures was adopted without objection or discussion.
• An amendment by Representative Steinberg relating to condominiums was withdrawn.
• An amendment by Representatives Janet Long and Nelson that would add the Florida Cabinet to the required recipients of a Florida Commission on Hurricane Loss Projection Methodology study on mitigation discounts was adopted without objection or discussion.
• An amendment by Representative Nelson clarifying a drafting error in his strike-all amendment relating to a multi-line discount provision for policies issued or renewed before January 1, 2010 was adopted without objection or discussion (the strike-all amendment incorrectly says January 1, 2020).
• An amendment by Representative Nelson that would prohibit public adjusters from opening or re-opening a claim after three years was withdrawn after much discussion and debate.  Noting that the current five-year statute of limitations requirement is sufficient, representatives from the Florida Justice Association and Florida Association of Public Insurance Adjusters spoke in opposition to the amendment.
• An amendment by Representatives Long and Nelson that would subject public adjusters to examinations under oath was adopted.  The FJA and FAPIA spoke against the amendment and suggested it be amended to subject all adjusters to the same.
• A late-filed amendment by Representative John Wood relating to the rating law was adopted, however, because of the late filing, the opportunity for public review of the amendment prior to the meeting was limited.  Florida Deputy Insurance Commissioner Belinda Miller expressed concern regarding the broadness of the amendment’s language, but Representative Wood explained that the amendment was intended to protect the contractual relationship between an agent and an insured.
• Another late-filed amendment failed that would have extended the Citizens rate freeze for an additional year.

Following consideration of the amendments, the Committee briefly debated the bill and public testimony was taken.  Several groups supported the bill as amended, including Associated Industries of Florida, the Florida Chamber, and several insurance industry trade associations.

To view the meeting packet, click here.

For additional information on Florida’s Legislative Process and terminology, click here.

The above information is a brief summary of the activities that took place during the meeting.  If you would like specific details on any matter addressed above, please contact Colodny Fass.

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