The Home Insurance Guru

by Tim Meenan,

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

PROPERTY

1.     Property Insurer Reimbursement SB 1058/HB 695

by Sen. Hutson and Rep. Stevenson

This bill is supported by OIR. The Senate version passed its second committee February 2 by a vote of 9-0 and the House version is scheduled to be heard in its second committee February 7.

The bill authorizes the State Board of Administration (SBA) to provide Florida Hurricane Catastrophe Fund (Cat Fund) coverage to authorized insurers or Citizens Property Insurance Corporation (Citizens) for the policies of unsound insurers that Citizens or the authorized insurer assumes or otherwise provides coverage. The authorized insurer or Citizens may obtain Cat Fund coverage for such policies either through the authorized insurer’s or Citizens reimbursement contract with the Cat Fund, or by accepting an assignment of the unsound insurer’s contract with the Fund.

The bill defines “unsound insurer” to mean an insurer determined by the Office of Insurance Regulation to be in unsound condition as defined s. 624.80(2), F.S., or placed in receivership under ch. 631, F.S.

Under current law, these options for obtaining Cat Fund coverage are only available to Citizens and only apply to the policies of liquidated insurers.

2.     Surplus Lines Tax on Flood Insurance Premiums HB 1149

by Rep. Giallombardo

The bill provides that premiums charged for surplus lines coverages for peril of flood are not subject to specified premium receipts tax. The bill has been referred to three house committees but has not yet been heard.  There is no Senate companion measure.

3.     Property and Citizens Property Insurance Corporation SB 1728/HB 1307

by Sen. Boyd and Rep. Gregory

The Senate version moved out of its first committee on February 2, by a vote of 9-2. The House version also moved out if its first committee on February 2, by a vote of 17-0. 

• Increases the citizens policyholder surcharge to:

*15% of premium if citizens have fewer than 1 million policies.

*20% if the citizens have between 1-1.5 million policies.

• Requires the citizens Executive Director to meet minimum experience levels.
• Increases the threshold a policyholder has to refuse a “take-out” offer to 20% greater than the renewed premium for comparable coverage. This applies to both personal and commercial lines.
• Removes the eligibility for policyholder removed through an assumption agreement to remain in citizens.
• Allows qualified surplus lines insurers to “take-out” citizens policies. Policies with replacement cost above $700,000 and a premium offer of 15% or less will no longer be eligible for citizens coverage. For policies with a replacement cost less than $700,000 remains eligible if it receives an offer of coverage from a surplus lines insurer.
• Requires underwriting and claims files to be confidential by assuming carriers.
• Makes technical changes to the citizens clearinghouse statute. 

Contained in Senate Version Only (House bill is limited to Citizens changes)

• Requires roofers to include specific language on advertising about the insurance deductible and fraud. 
• Allows insurers to use roof surface reimbursement schedules and roof sub-limits for personal lines. 

*Policies with roof schedules can depreciate roofs only up to 4% unless more is actuarially justified. 

*A roof reimbursement schedule can be included in the policy with a Notice of Change of Policy Terms.

*Policies with roof schedules or roof sub-limits must provide full replacement coverage for roofs less than 10 years old, total losses, and roof losses due to hurricanes.

House Amendments:

• Three amendments were adopted and one was withdrawn because it accidently struck the wrong language. 

*Makes sure coverage stays with the Citizens until the end of the assumption period.  

*Revises eligibility for the corporation when insurers request to take out a policy.

Senate Amendment:

·        Removed provisions relating to surplus line sand public records exemptions.

Senate President Wilton Simpson has made several remarks in the last two weeks stating that if the Legislature doesn’t fix the roof problem, then they are letting the policyholders of Florida down. However, the House does not currently have a bill to address the roof issue.

4.     Domestic Surplus Lines Insurance SB 1402/HB 951

by Sen. Burgess and Rep. Gregory

The Senate version passed the Appropriations Subcommittee on Agriculture, Environment, and General Government on January 21 and has only the Appropriations Committee remaining.  The House version passed its first committee on January 27^th.

• Creates a definition of a “Domestic surplus lines insurer”
• If a domestic insurer possesses a surplus of $15 million, they may after board approval and approval of OIR, be made eligible as domestic surplus lines insurer.
• The domestic surplus lines insurer is subject to all financial and solvency requirements imposed upon domestic admitted insurers.
• Surplus lines insurance policies issued by a domestic surplus lines insurer are exempt from all requirements relating to insurance rating and rating plans; policy forms; premiums charged to insureds, policy cancellation; nonrenewal; and renewal.
• Policies issued by the domestic surplus lines insurer are subject to taxes assessed upon surplus lines policies, but exempt from other taxes levied upon domestic and foreign admitted insurers.
• Policies are not subject to part II, III or V of chapter 631

AUTO

1.     PIP REPEAL SB 150/HB 1525

by Sen. Burgess and Rep. Grall

The Senate version passed its first of three committees on February 2, by a vote of 10-1. The House version will be heard in its first of two committees on February 7.  Last year’s PIP repeal bill was vetoed by the Governor due, in part, to an OIR commissioned study received after Session ended that showed last year’s bill resulted in an overall price increase in premiums of 13.3% for all coverages. Neither bill has been heard.

HB 1525 was filed by Rep. Erin Grall (R) who is the Chair of the House Judiciary Committee. Grall announced this week that she is running for Senate with the support of Senate leadership. 

SB 150 was filed by Sen. Danny Burgess (R), who is Chair of the Senate Judiciary Committee.

The House and Senate PIP repeal bills pretty much line up – except for bad faith. The Senate bill contains the same bad faith language that was in the PIP repeal bill that passed last year. The Senate continues to push this language which is problematic for many insurers. The bad faith language in the Senate bill only applies to failure to settle auto claims and is found at lines 1771-2092.

The House PIP repeal bill does not contain any bad faith reform which was the House starting position last year, though they eventually went to the Senate bad faith position in the final bill.

The biggest change in the PIP bills this year is on medical payments: The bill that passed last year automatically included $10,000 of med pay benefits unless a signed rejection was received (i.e., opt out).

This year, the House and Senate bills flip their med pay position and only require a mandatory offer of med pay (i.e., opt in). Opt in med pay has historically been opposed by the doctors, hospitals, and health insurers as a cost shift to them.

A summary of the high points of this year’s PIP repeal bill in the House and Senate follows:

• Repeals PIP and replace with mandatory BI coverage of $25K/$50k and $5k death benefit. PD coverage remains at $10k – contained in both House and Senate bills.
• This is the same as the bill that passed last year.
• Requires opt-in med: med pay offer of $5k and $10k (can offer any med pay amount over $5k); $0 deductible for med pay ($500 max deductible) – contained in both House and Senate bills.
• This is basically the opposite of the bill that passed last year which has opt-out med pay.
• Contains a limited “no pay no play” provision which requires a mandatory $10k set-off for recovery by an uninsured driver – – contained in both House and Senate bills.
• This is the same as the bill that passed last year.
• Contains bad faith reform (though problematic for many insurers) – only in Senate bill.