Senate Banking and Insurance Committee Report–April 8

On Tuesday, April 8, 2008, the Florida Senate Banking and Insurance Committee (“Committee”) met and discussed two insurance-related bills as part of its regularly-scheduled agenda.

• Senate Bill 2338 by Senator Dave Aronberg (D- Greenacres) relating to Motor Vehicle and Casualty Insurance Contracts
• Senate Bill 2086 by Senator Dennis Jones (R- Seminole) relating to the Florida Department of Business and Professional Regulation.

Below is a brief review of those bills and the Committee’s actions upon them:

Senate Bill 2338

Senate Bill 2338 passed the Committee unanimously. The bill would require motor vehicle insurers who condition the renewal of a motor vehicle policy on a change of limits, elimination of coverage, or an increase in premium, to provide the named insured and his or her insurance agent with written notice at least 45 days prior to the renewal date. The notice must be mailed or delivered to the named insured and to the insurance agent’s business address and must include specific reasons for the conditional renewal or the increase in premium.

Senate Bill 2086

Senate Bill 2086 passed the Committee unanimously with two amendments. The bill, which is excess of 100 pages in length, revises the insurance rights and obligations of condominium associations and unit owners, including the duty to obtain adequate hazard insurance.

SB 2086 provides that adequate hazard insurance is based upon the replacement cost of the property and requires that the full insurable value must be determined at least every 36 months.

It maintains the current provision that permits three or more communities to obtain insurance for an amount equal to the probable maximum loss for a 250-year windstorm event, but requires that the Florida Office of Insurance Regulation (“OIR”) review and approve rates and policy forms, that unit owners obtain accurate disclosures and that hurricane loss models are accurate and appropriately applied to the insured condominium structures.

The bill provides the procedures for a board meeting to establish the amount of deductibles. It specifies the property that must be excluded from the association’s insurance coverage, and specifies the provisions that must be contained in every hazard insurance policy issued or renewed on or after January 1, 2009 to an individual unit owner.

Various interested parties provided public testimony including representatives from the Association of Insurance Agents, the OIR, the Florida Bankers, and several condominium associations.

At this time, the interested parties are not in full agreement with all of the provisions in SB 2086. The OIR representatives expressed minor concerns, but noted that the bill provides it with adequate regulatory authority.

Please feel free to contact this office should you have any questions regarding the above matters.

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