CORRECTION: Florida Senate Committee on Banking and Insurance Amends, Approves Comprehensive Property Insurance, Citizens Bill (SPB 7018)

Mar 7, 2013

CORRECTION:  Please note that 13 of the 18 amendments filed to SPB 7018 were adopted today (not five, as previously reported).


Comprehensive property insurance legislation was approved as a committee bill today, March 7, 2013 by the Florida Senate Committee on Banking and Insurance.   Passed by a vote of 11 to 1, with Vice Chair Jeff Clemens as the lone dissenter, SPB 7018 would effect a host of changes to Florida property insurance law, including statutes relating to Citizens Property Insurance Corporation (“Citizens”).

To view complete bill information on SPB 7018, click here.

Thirteen of the 18 amendments filed to the bill were adopted during today’s meeting.  Several of these were late-filed to Amendment 609336, which relates to Citizens.

Senator Garrett Richter filed two of these amendments (249714 and 703668) to 609336, but both were withdrawn. To 609336, Senator Alan Hays filed Amendment 889978, and Senator Gwen Margolis filed 464096, both of which were adopted.   

Senator Richter also filed technical amendment 536748 to SPB 7018, which was also approved.

A chart below lists the amendments filed to the bill, along with a description of each and the action taken today. 

If enacted, SPB 7018 would assist insurers in identifying global capital available for additional coverage options surrounding the various layers of the Florida Hurricane Catastrophe Fund (“FHCF”) by creating a Florida Catastrophe Risk Capital Access Facility within the State Board of Administration.  It would permit insurance companies to include reinsurance that is acquired to cover potential shortfalls in the FHCF in their rate filings.  

The bill also mandates the Florida Commission on Hurricane Loss Projection Methodology to examine the precision of wind mitigation discounts that are established by hurricane models.

SPB 7018 would obligate the Florida Office of Insurance Regulation (“OIR”) to annually publish a property insurance inflation factor when the OIR considers rates below the inflation factor to be non-excessive.  Further, the OIR would be required to conduct public hearings when rate filings exceed 15 percent.  The legislation gives insurers permission to rate up to 10 percent of commercial policies and up to five percent for personal policies in areas where there is not a reasonable amount of competition.

Insofar as Citizens, SPB 7018 redefines its original task of being an insurer of last resort and includes language relating to Citizens’ use of a clearinghouse.  Specifically, the bill encourages the operations of a clearinghouse by relieving Citizens from “exchange of business” restrictions.  It also subjects Citizens to bad faith claims, reduces the maximum policy limit and prohibits Citizens from covering new construction that is seaward of the coastal construction control line.

For Citizens, SPB 7018 mandates an Auditor General, actuarially sound rates and permits risk-sharing agreements with private insurers. The bill includes provisions that require agent documentation to seek private market placement and forbids agent commission on ineligible policies.

(Click on a “barcode” hyperlink to view the amendment)









Requires Citizens to provide coverage for mobile or manufactured homes; requires the coverage to be for sale amount or appraisal amount; requires Citizens to offer coverage regardless of the value.




Changes the name of the Florida Hurricane Catastrophe Fund Finance Corporation to the State Board of Administration Finance Corporation



Temporarily Passed

Requires Citizens and insurers participating in risk-sharing agreements to report percentage exposures to the FHCF.



Replaced by Substitute Amendment

Limits Citizens coverage to $600,000 for personal lines residential risks or a single condominium unit, except for wind-only coverage; limits the coverage for wind-only coverage for personal lines residential or a single condominium unit to no more than $1 million beginning July 1, 2013, $800,000 beginning January 1, 2014, and $600,000 beginning January 1, 2015.


(Substitute Amendment to 671744)


Temporarily Passed

Limits Citizens coverage to $1 million for personal lines residential risks or a single condominium unit, reducing the amount of coverage available to $500,000 by January 1, 2019. 




Limits the 10 percent cap on Citizens rate increases to personal lines residential wind-only policies that have a homestead exemption with a dwelling replacement cost of $1 million on July 1, 2013, $800,000 on January 1, 2014, and $600,000 on January 1, 2015.




Corrects a statute references (technical)




Allows insurers to consent to rate for commercial policies in counties where the OIR has determined there is no competition.




Specifies that Citizens 10 percent rate cap applies to policies insured continuously since July 1, 2013 and is limited to personal lines residential policies and personal lines residential wind-only policies with dwelling replacement cost of less than $300,000 on homestead properties and commercial lines residential policies.  Allows Citizens to increase rates up to 3 percent for reinsurance. 




Excludes commercial residential from Citizens clearinghouse




Prohibits coverage from Citizens in certain areas unless the structure meets coastal code-plus building code requirements; establishes risk-sharing criteria; requires Senate confirmation of certain board members; restricts commissions paid on certain policies in Citizens; requires an independent audit of Citizens every two years; allows for depopulation.




Subjects Citizens to the requirements s. 287.057, F.S. relating to public procurement




Sets forth criteria for establishing noncompetitive rates for personal and commercial lines residential policies, mobile home policies, and commercial nonresidential policies.




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