Forms Relating to Insurance Premium Discounts for Hurricane Loss Mitigation: December 21 Rule Hearing Report
Dec 21, 2009
The Florida Office of Insurance Regulation (“OIR”) held a hearing today, December 21, 2009, to further discuss proposed amendments to Rule 69O-170.0155 regarding forms relating to insurance premium discounts for hurricane loss mitigation. The amendments would revise Form OIR-B1-1655, entitled “Notice of Premium Discounts for Hurricane Loss Mitigation” and Form OIR-B1-1802, entitled “Uniform Mitigation Verification Inspection Form.”
Form OIR-B1-1655 – Notice of Premium Discounts for Hurricane Loss Mitigation
OIR officials addressed the Premium Discounts for Hurricane Loss Mitigation Form, which is being revised to remove references to the free inspections and grants offered by the My Safe Florida Home program, since these are no longer available.
William Stander of the Property Casualty Insurer Association of America (“PCI”) pointed out that the Florida Commission on Hurricane Loss Projection Methodology is currently reviewing the State’s wind mitigation credit system and that legislation probably will be introduced that would change the method by which these discounts are applied.
Mr. Stander requested that the OIR delay adopting Form OIR-B1-1655 because of the aforementioned anticipated changes, as well as the resulting cost to insurers for revisions to each of the forms. Mr. Stander requested that, if the Form must be amended to reflect the change in status of the My Safe Florida Home program, then revisions should be limited to only those changes.
Mr. Stander also pointed out that certain aspects of the proposed Form are misleading, particularly the section that references discounts available to homes built under the 2001 Florida Building Code or later. Additionally, Mr. Stander stated that PCI objected to the inclusion of a specific discount amount under the “Description of Feature” column and that adding the word “minimum” in this column could lead consumers to believe that all companies will provide at least this discount amount.
Finally, Mr. Stander pointed out that the sentence “You may be eligible for greater discounts if other mitigation features are installed on your home” is unclear and also could be misleading, since it implies that mitigation discounts could be stacked.
Werner Kruck from Security First Insurance Company agreed with many of Mr. Stander’s comments and suggested that companies should be given an adequate time to file offsets for some of the adjustments that will be made under this new Form. Mr. Kruck also urged the OIR to clarify to policyholders that discounts are not automatic and that all may not qualify for a discount.
Form OIR-B1-1802 – Uniform Mitigation Verification Inspection Form
OIR officials addressed the Uniform Mitigation Verification Inspection Form, which is being revised to incorporate terminology commonly used in the construction industry to describe the construction features to be inspected, as well as to require verification that an inspector actually performed the inspection.
Many representatives of engineering firms and inspections firms were on hand to voice concerns about various portions of the Form. Their comments ranged from who could sign the Form, to specific verbiage contained in the Form regarding the inspection process.
OIR officials noted that the purpose of the Form is to attempt to properly verify mitigation features on homes.
OIR officials stated that they will review the comments and suggestions given at the hearing with OIR legal staff to determine if they can move forward with publication of this Form, or whether it needs to be revised, which would require additional workshops and hearings to be held.
The record will remain open for comments until the close of business on January 4, 2010.
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