The Home Insurance Guru

FLOOD INSURANCE BILL ADVANCES TO SENATE FLOORSenate Bill 542 by Senator Brandes was heard by the Full Senate this week. The senate adopted an amendment making clear that insurers offering flood coverage could provide coverage’s beyond those specified in the bill, including a wrap policy available to National Flood Insurance Program insureds to supplement coverage available in that policy. The Senate has removed provisions allowing insurers with surplus of at least $35 million to avoid filing a three year pro forma and reinsurance plan prior to writing, effectively requiring all insurers to file such a plan before entering the flood market. The biggest point of contention between the house and senate involves the senate bill provision allowing policyholders to only purchase enough flood insurance coverage to pay the mortgage holder. While this would provide lower cost options to policyholders, it would leave many without the means to repair their houses after a flood. In addition, it would place greater pressure on wind insurers by policyholders attempting to get their homes fixed by claiming wind, not flood, caused the damage. Bryan Nelson, House Insurance Committee Chairman is dead set against this mortgage coverage limit approach. Some in the legislature question why any bill is needed at all, in light of the Federal pushback of the provisions of Biggert Waters. The House will be hearing its bill in the House Governmental Operations Subcommittee this week.SENATE PASSES UNDERWRITING CRITERIA FOR PERSONAL LINES PROPERTY INSURANCE REGARDING FIREARMSSB 424 by Senator Tom Lee passed the Senate this week. HB 255 by Representative Gaetz has been added to the House calendar; however, it is similar to SB 424 and the House could take up the Senate-passed measure which would expedite this legislation reaching the Governor’s desk. This legislation prohibits a property and casualty insurer or automobile insurer from refusing to underwrite, issue, reissue, or renew a policy, cancel or otherwise terminate a policy, or change a discriminatory rate based on an insured’s household member’s lawful use, possession, or ownership of a firearm or ammunition. The inclusion of ammunition was added by the Appropriations Committee. Additionally, the bill prohibits an insurer from disclosing the insured’s ownership of a firearm to a third party unless the insurer discloses to the insured a specific need to disclose the information and the insured consents to the disclosure. An insurer may charge a supplemental premium for a separate rider voluntarily requested by an applicant to insure a firearm or firearm collection that exceeds the standard policy coverage, so long as it is not unfairly discriminatory. For underwriting purposes, an insurer is not prohibited from sharing such information with its licensed insurance agent when a separate rider has been voluntarily requested by an applicant.FLORIDA HURRICANE CATASTROPHE FUND LEGISLATION IS MOVINGSB 391 by Senator Hager passed the Insurance and Banking Subcommittee and is scheduled to be heard by the Government Operations Appropriations Subcommittee this week. The bill reduces the mandatory coverage limit of the Florida Hurricane Catastrophe Fund (“CAT Fund”) from $17 billion to $14 billion over three years beginning June 1, 2015. The bill allows insurers to purchase coverage above the $14 billion limit in $1 billion increments up to $17 billion to cover potential shortfalls in the CAT Fund.Other bills, including SB 610 by Senator Lee, and SB 228 by Senator Ring, also seek to reduce the mandatory coverage level of the CAT Fund.  Lee’s bill would reduce it by $5.2 billion, and Ring’s bill which lowers it even further, have not been heard.
 

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