Meeting Packet — Insurance & Banking Subcommittee, Florida House of Representatives (February 6, 2024)

Summary

The meeting packet for the Insurance & Banking Subcommittee of the Florida House of Representatives Commerce Committee covers the Tuesday, February 6, 2024 meeting at Morris Hall (17 HOB). The agenda lists HB 543 (Boards of Directors of Banks), HB 731 (Insurance Claims) and a proposed committee substitute for HB 1149, plus a discussion of windstorm coverage by Citizens Property Insurance Corporation. The staff analysis says HB 543 disqualifies a person who previously served on the board of a bank doing business in Florida that became insolvent from serving on another bank's board for 5 years after the insolvency, effective July 1, 2024. The analysis of HB 731 says the bill adds factors the Office of Insurance Regulation must consider when reviewing motor vehicle insurance rate filings.

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“Meeting Packet — Insurance & Banking Subcommittee, Florida House of Representatives (February 6, 2024).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-02-06-3228-insurance-banking-subcommittee-meeting-packets-mtg1431-27b8f579e5/, SHA-256 2da1efbb1ff07e6ba2062dddebca0c83cfa8d14146a836deeb445773a4073be5.

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Insurance & Banking Subcommittee
Tuesday, February 6, 2024
8:00 AM - 11:00 AM
Morris Hall (17 HOB)

Meeting Packet

Paul Renner Wyman Duggan
Speaker Chair
The Florida House of Representatives
Commerce Committee
Insurance & Banking Subcommittee
Paul Renner Wyman Duggan
Speaker Chair

Meeting Agenda

Tuesday, February 6, 2024
8:00 am – 11:00 am
Morris Hall (17 HOB)

I. Call to Order

II. Roll Call

III. Welcome and Opening Remarks

IV. Consideration of the following bill(s):

HB 543 Boards of Directors of Banks by Black

HB 731 Insurance Claims by Botana

HB 851 Nonprofit Agricultural Organization Health Coverage by Anderson

HB 893 Coverage by Citizens Property Insurance Corporation by Lopez, V.

V. Consideration of the following proposed committee substitute(s):

PCS for HB 1149 -- Policy Cancellations and Nonrenewals by Property Insurers

VI. Discussion on Windstorm Coverage by Citizens Property Insurance Corporation:

Representatives Roach and Cassel

Tim Cerio, Citizens Property Insurance Corporation

Discussion

VII. Closing Remarks

VIII. Adjournment

303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 543
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 543 Boards of Directors of Banks
SPONSOR(S): Black
TIED BILLS: IDEN./SIM. BILLS:

REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF

1) Insurance & Banking Subcommittee Fletcher Lloyd

2) State Administration & Technology
Appropriations Subcommittee

3) Commerce Committee

SUMMARY ANALYSIS

A bank failure is the closing of a bank by a federal or state banking regulatory agency, generally due to
insolvency issues caused by the bank’s inability to meet its obligations to depositors and others. According to
the Federal Deposit Insurance Corporation (FDIC), there have been 566 bank failures from 2001 through 2023.

To accept deposits, an institution must have a federal or state charter. Banks are chartered and regulated as
national banks by the Office of the Comptroller of the Currency within the U.S. Department of the Treasury, or
as state banks by a state regulator. A major component of both federal and state bank regulation is known as
“safety and soundness” regulation, which is designed to promote bank profitability and avoid bank failures,
thereby protecting the taxpayers and the stability of the financial system.

Under federal law, a bank must notify the appropriate federal agency of the proposed appointment of a director
at least 30 days before such addition under certain circumstances. The agency must issue a notice of
disapproval of the addition if the competence, experience, character, or integrity of such individual indicates it
would not be in the best interests of the institution’s depositors or the public to have such individual as a
director. Moreover, a federal bank’s regulator may serve upon a current director written notice of the regulator’s
decision to remove such director from office if it is determined the director has engaged in certain activity.

Similar to federal laws, Florida law authorizes Office of Financial Regulation (OFR) to disapprove the proposed
appointment of a director if the financial institution meets specified criteria. OFR is also authorized to issue and
serve a complaint to remove a director of a financial institution if OFR has reason to believe such party is
engaging in any specified conduct.

The bill provides that a person who has previously served on a board of directors of a bank doing business in
Florida that has become insolvent is disqualified from serving on the board of directors of another bank for 5
years after the date the previous bank became insolvent.

The bill has no impact on state or local government revenues and expenses. It has an indeterminate negative
and positive impact on the private sector.

The bill provides an effective date of July 1, 2024.

This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS

I. SUBSTANTIVE ANALYSIS

A. EFFECT OF PROPOSED CHANGES:

Background

Bank Failures

A bank failure is the closing of a bank by a federal or state banking regulatory agency. 1 Generally, a
bank is closed when it is unable to meet its obligations to depositors and others. 2 According to the
Federal Deposit Insurance Corporation (FDIC), there have been 566 bank failures from 2001 through
2023,3 five of which were in 2023.4

Dual Regulatory Oversight of Depository Institutions

To accept deposits, an institution must have a federal or state charter.5 Banks are chartered and
regulated as national banks by the Office of the Comptroller of the Currency within the U.S.
Department of the Treasury, or as state banks by a state regulator.6 A major component of bank
regulation is known as “safety and soundness” regulation, which is designed to promote bank
profitability and avoid bank failures, thereby protecting the taxpayers and the stability of the financial
system.7

Florida’s Financial Institutions Codes 8 apply to all state-authorized or state-chartered financial banks,
trust companies, credit unions and related entities.9 The Office of Financial Regulation (OFR) licenses
and regulates 200 financial entities, including 69 state-chartered banks as of January 2023.10 There are
also 26 nationally-chartered banks and 3 nationally-chartered savings institutions operating in Florida
as of September 2023.11

Banks chartered by OFR must become members of the Federal Reserve or obtain insurance from the
FDIC.12 Thus, state-chartered banks are subject to a dual-regulatory system.13 Similarly, nationally-
chartered banks are subject to certain regulatory authority by OFR when they are licensed to operate in
Florida.14

Laws Relating to Directors

1 Federal Deposit Insurance Corporation, When a Bank Fails – Facts for Depositors, Creditors, and Borrowers,
https://www.fdic.gov/consumers/banking/facts/ (last visited Feb. 1, 2024).
2 Id.
3 Federal Deposit Insurance Corporation, Bank Failures in Brief – Summary 2001 through 2023,

https://www.fdic.gov/bank/historical/bank/ (last visited Feb. 1, 2024).
4 See Federal Deposit Insurance Corporation, Failed Bank List, https://www.fdic.gov/resources/resolutions/bank-

failures/failed-bank-list/ (last visited Feb. 1, 2024).
5 Congressional Research Service, An Analysis of Bank Charters and Selected Policy Issues (Jan. 21, 2022),

https://crsreports.congress.gov/product/pdf/R/ R47014 (last visited Feb. 1, 2024).
6 Congressional Research Service, Introduction to Financial Services: Bank ing (updated Jan. 5, 2023,

https://crsreports.congress.gov/product/pdf/IF/ IF10035 (last visited Feb. 1, 2024).
7 Id.
8 The Financial Institutions Codes include chs. 655, 657, 658, 660, 662, 663, 665, and 667, F.S. See s. 655.005(k), F.S.
9 S. 655.001(1), F.S.
10 Office of Financial Regulation, Fast Facts: 2023 Edition, https://flofr.gov/sitePages/documents/FastFacts.pdf (last visited

Feb. 1, 2024).
11 Federal Deposit Insurance Corporation, FDIC State Tables, https://state-tables.fdic.gov/ (last visited Feb. 1, 2024).
12 Ss. 658.22 and 658.38, F.S.
13 Office of the Comptroller of the Currency, Who Regulates My Bank ? https://www.helpwithmybank.gov/who -regulates-

my-bank/index-who-regulates-bank.html (last visited Feb. 1, 2024).
14 12 C.F.R. § 7.4000(a)(1).
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Under federal law, a depository institution holding company must notify the appropriate federal
regulatory authority of the proposed appointment of a director at least 30 days before such addition
under certain circumstances.15 The regulatory authority must issue a notice of disapproval of the
addition if the competence, experience, character, or integrity of the individual indicates it would not be
in the best interests of the institution’s depositors or the public to have such individual as the bank’s
director.16 Moreover, a bank’s federal regulator may serve upon a current director written notice of the
regulator’s decision to remove such director from office if it is determined the director has engaged in
certain activity.17

Similar to federal laws, Florida law authorizes OFR to:
 Disapprove the proposed appointment of a director if the financial institution meets specified
criteria, such as noncompliance with minimum capital requirements or otherwise operating in
an unsafe and unsound condition;18 and
 Issue and serve a complaint to remove a director of a financial institution if OFR has reason to
believe that such party is engaging or has engaged in any specified conduct, including, but not
limited to, an unsafe or unsound practice, a prohibited act or practice, or a willful violation of
any law relating to financial institutions.19

Under Florida law, any director removed from office pursuant to OFR’s authority is not eligible for
reelection to such position or to any official position with any financial institution in Florida, except with
the written consent of OFR.20

Effect of the Bill

The bill provides that a person who has previously served on a board of directors of a bank doing
business in Florida that has become insolvent is disqualified from serving on the board of directors of
another bank for 5 years after the date the previous bank became insolvent.

B. SECTION DIRECTORY:

Section 1. Amends s. 658.33, F.S., relating to directors, number, qualifications; officers.

Section 2. Provides an effective date of July 1, 2024.

II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT

A. FISCAL IMPACT ON STATE GOVERNMENT:

1. Revenues:

None.

2. Expenditures:

None.

B. FISCAL IMPACT ON LOCAL GOVERNMENTS:

1. Revenues:

None.

15 12 U.S.C. § 1831i(a).
16 12 U.S.C. § 1831i(e).
17 12 U.S.C. § 1831i(b).
18 S. 655.0385, F.S.
19 S. 655.037, F.S.
20 S. 655.037(7), F.S.
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2. Expenditures:

None.

C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:

The bill has an indeterminate positive impact on the private sector to the extent the bill benefits banks
and consumers from not having directors that held a similar position at a bank that went insolvent.

The bill has an indeterminate negative impact on the private sector to the extent the bill prevents
individuals from serving on a bank’s board of directors when the individual was an innocent actor and
did not contribute to a bank’s insolvency (i.e., directors who, but for the bill, would serve as a director of
a bank may have lost compensation). Further, banks may incur replacement costs to the extent that
any current directors are disqualified under the provisions of the bill.

D. FISCAL COMMENTS:

None.

III. COMMENTS

A. CONSTITUTIONAL ISSUES:

1. Applicability of Municipality/County Mandates Provision:

Not applicable. The bill does not appear to affect county or municipal governments.

2. Other:

None.

B. RULE-MAKING AUTHORITY:

The bill does not confer rulemaking authority nor require the promulgation of rules.

C. DRAFTING ISSUES OR OTHER COMMENTS:

Lines 15-17: As currently drafted, the language could have an unintended consequence of preventing
innocent actors from serving on a bank’s board of directors. An amendment could address this
possibility by making clear that the prohibition against a former director serving applies only if the
former director had an active role in contributing to the bank’s insolvency.

IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES

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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

HB 543 2024

1 A bill to be entitled
2 An act relating to boards of directors of banks;
3 amending s. 658.33, F.S.; disqualifying certain
4 persons from serving on the board of directors of a
5 bank under certain circumstances; providing an
6 effective date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Present subsections (2) through (5) of section
11 658.33, Florida Statutes, are redesignated as subsections (3)
12 through (6), respectively, and a new subsection (2) is added to
13 that section, to read:
14 658.33 Directors, number, qualifications; officers.—
15 (2) If a person has previously served on a board of
16 directors of a bank doing business in this state which became
17 insolvent, such person is disqualified from serving on the board
18 of directors of another bank for 5 years after the date the
19 previous bank became insolvent.
20 Section 2. This act shall take effect July 1, 2024.

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HB 731
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 731 Insurance Claims
SPONSOR(S): Botana
TIED BILLS: IDEN./SIM. BILLS: SB 1024

REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF

1) Insurance & Banking Subcommittee Fortenberry Lloyd

2) State Administration & Technology
Appropriations Subcommittee

3) Commerce Committee

SUMMARY ANALYSIS

In general, insurance rates in Florida may not be excessive, inadequate, or unfairly discriminatory. Section
627.0651, F.S., provides specific requirements for rates charged for motor vehicle insurance. Insurers must
establish and use rates, rating schedules, and rating manuals that allow the them a reasonable rate of return.

Florida law provides criminal penalties for any person who commits insurance fraud by engaging in certain acts
with intent to injure, defraud, or deceive any insurer. An insurer that has been damaged as a result of a
violation of the statute providing for criminal penalties has a cause of action to recover compensatory
damages, plus reasonable investigation and litigation expenses, including attorney fees, at a trial or appellate
court, if the insurer has reported the possible fraudulent insurance act to the Division of Investigative and
Forensic Services within the Department of Financial Services (DFS) and the violation has resulted in a
criminal adjudication of guilt.

The bill adds additional factors that OIR must consider when determining whether a rate filing or rate change
for motor vehicle insurance policies is excessive, inadequate, or unfairly discriminatory. In addition to the other
factors, OIR must also consider the recovery of funds by judgement or settlement and attorney fees and costs
awarded or returned for payments recovered as a result of: claimed violations of certain statutory chapter parts
and sections relating to activities such as kickbacks, fraudulent insurance claims, and patient brokering; and
repayment of claims paid for pursuant to actions or allegations of common law fraud, civil conspiracy, unjust
enrichment, or unlawful conduct.

The bill also requires that, if an insurer that has been damaged as a result of a violation of one of the above
statutory chapter parts or sections and obtains a repayment or refund of claims paid pursuant to PIP insurance
coverage, the insurer must report the amount of funds received as a result of a claim, settlement, or judgment,
including attorney fees and costs to DFS.

The bill has no impact on local or state government revenues or expenditures. The bill may have an
indeterminate positive direct economic impact on the private sector.

The bill is effective on July 1, 2024.

This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS

I. SUBSTANTIVE ANALYSIS

A. EFFECT OF PROPOSED CHANGES:
Background

Motor Vehicle Insurance Rates

In general, insurance rates in Florida may not be excessive, inadequate, or unfairly discriminatory. 1
Section 627.0651, F.S., provides specific requirements for rates charged for motor vehicle insurance.
Insurers must establish and use rates, rating schedules, and rating manuals that allow the them a
reasonable rate of return.2

Upon receiving notice of a rate filing or rate change, the Office of Insurance Regulation (OIR), must
review the rate or rate change to determine if it is excessive, inadequate, or unfairly discriminatory by
considering the following factors using generally accepted and reasonable actuarial techniques:
 Past and prospective loss experience in and out of Florida.
 Past and prospective expenses.
 Degree of competition among insurers for the risk insured.
 Investment income reasonably expected by the insurer, subject to certain limitations .
 Reasonableness of the judgment reflected in the filing.
 Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida
policyholders, members, or subscribers.
 Cost of repairs to motor vehicles.
 Cost of medical services, if applicable.
 Adequacy of loss reserves.
 Cost of reinsurance.
 Trend factors,.
 Other relevant factors which impact the frequency or severity of claims or expenses.

Recovery of Costs by Insurers

Florida law provides criminal penalties for any person who commits insurance fraud by engaging in
certain acts with intent to injure, defraud, or deceive any insurer. 3 An insurer that has been damaged as
a result of a violation of the statute providing for criminal penalties has a cause of action to recover
compensatory damages, plus reasonable investigation and litigation expenses, including attorney fees,
at a trial or appellate court, if the insurer has reported the possible fraudulent insurance act to the
Division of Investigative and Forensic Services within the Department of Financial Services (DFS) and
the violation has resulted in a criminal adjudication of guilt.4

Effect of the Bill

The bill adds additional factors that OIR must consider when determining whether a rate filing or rate
change for motor vehicle insurance policies is excessive, inadequate, or unfairly discriminatory. In
addition to the other factors, OIR must also consider the recovery of funds by judgement or settlement
and attorney fees and costs awarded or returned for payments recovered as a result of:
 claimed violations of the following statutory chapter parts or statutory sections:
o s. 456.054, F.S., which prohibits kickbacks by healthcare providers;
o part X, of ch. 400, F.S., which pertains to health care clinics;
o part II, of ch. 501, F.S., which is the Florida Deceptive and Unfair Trade Practices Act;

1 S. 627.062(1), F.S.
2 S. 627.0651(1), F.S.
3 S. 817.234, F.S.
4 S. 817.234(5), F.S.
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o s. 627.732, F.S., which provides definitions related to motor vehicle insurance;
o s. 627.736(17), F.S., which provides personal injury protection (PIP) insurance
requirements;
o s. 817.234, F.S., which provides criminal penalties for false and fraudulent insurance
claims; and
o s. 817.505, F.S., which prohibits patient brokering.
 repayment of claims paid for pursuant to actions or allegations of common law fraud, civil
conspiracy, unjust enrichment, or unlawful conduct.

The bill also requires that, if an insurer that has been damaged as a result of a violation of one of the
above statutory chapter parts or sections and obtains a repayment or refund of claims paid pursuant to
PIP insurance coverage, the insurer must report the amount of funds received as a result of a claim,
settlement, or judgment, including attorney fees and costs to DFS.5

B. SECTION DIRECTORY:

Section 1. Creates the “Transparency in Recoveries Act.”

Section 2. Amends s. 627.0651, F.S., relating to making and use of rates for motor vehicle insurance.

Section 3. Amends s. 817.234, F.S., relating to false and fraudulent insurance claims.

Section 4. Provides an effective date of July 1, 2024.

II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT

A. FISCAL IMPACT ON STATE GOVERNMENT:

1. Revenues:

None.

2. Expenditures:

None.

B. FISCAL IMPACT ON LOCAL GOVERNMENTS:

1. Revenues:

None.

2. Expenditures:

None.

C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:

The bill may have a positive direct economic impact on motor vehicle insurance policyholders if the
recovery of funds by insurers for judgments, settlements, attorney fees and costs, or recovered
payments results in lower premiums.

D. FISCAL COMMENTS:

5 The bill places this new requirement
adjacent to the others in s. 817.234(5), F.S., which provide for an insurer’s cause of
action to recover compensatory damages due to insurance fraud for which there has been a criminal adjudication of guilt.
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None.
III. COMMENTS

A. CONSTITUTIONAL ISSUES:

1. Applicability of Municipality/County Mandates Provision:

Not applicable. This bill does not appear to affect county or municipal governments.

2. Other:

None.

B. RULE-MAKING AUTHORITY:

The bill neither authorizes nor requires administrative rulemaking.

C. DRAFTING ISSUES OR OTHER COMMENTS:

None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES

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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

HB 731 2024

1 A bill to be entitled
2 An act relating to insurance claims; providing a short
3 title; amending s. 627.0651, F.S.; requiring the
4 Office of Insurance Regulation to consider the
5 recovery of funds under specified provisions in
6 reviewing rates; amending s. 817.234, F.S.; requiring
7 insurers to report the recovery of funds under
8 specified provisions; specifying that an insured's
9 payment of a deductible or copayment is not a
10 condition of an insurer's payment obligations;
11 providing an effective date.
12
13 Be It Enacted by the Legislature of the State of Florida:
14
15 Section 1. This act may be cited as the "Transparency in
16 Recoveries Act."
17 Section 2. Paragraphs (g) through (l) of subsection (2) of
18 section 627.0651, Florida Statutes, are redesignated as
19 paragraphs (h) through (m), respectively, a new paragraph (g) is
20 added to that subsection, and paragraphs (d) and (e) of
21 subsection (14) of that section are amended, to read:
22 627.0651 Making and use of rates for motor vehicle
23 insurance.—
24 (2) Upon receiving notice of a rate filing or rate change,
25 the office shall review the rate or rate change to determine if

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HB 731 2024

26 the rate is excessive, inadequate, or unfairly discriminatory.
27 In making that determination, the office shall in accordance
28 with generally accepted and reasonable actuarial techniques
29 consider the following factors:
30 (g) Recovery of funds by judgment or settlement and
31 attorney fees and costs awarded or returned for payments
32 recovered as a result of claimed violations of s. 456.054, part
33 X of chapter 400, part II of chapter 501, s. 627.732, s.
34 627.736(17), s. 817.234, or s. 817.505 or repayment of claims
35 paid for pursuant to actions or allegations of common law fraud,
36 civil conspiracy, unjust enrichment, or unlawful conduct.
37 (14)
38 (d) An insurer must notify the office of any changes to
39 rates for type of insurance described in this subsection no
40 later than 30 days after the effective date of the change. The
41 notice shall include the name of the insurer, the type or kind
42 of insurance subject to rate change, and the average statewide
43 percentage change in rates. Actuarial data with regard to rates
44 for risks described in this subsection shall be maintained by
45 the insurer for 2 years after the effective date of changes to
46 those rates and are subject to examination by the office. The
47 office may require the insurer to incur the costs associated
48 with an examination. Upon examination, the office shall, in
49 accordance with generally accepted and reasonable actuarial
50 techniques, consider the factors in paragraphs (2)(a)-(m)

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HB 731 2024

51 (2)(a)-(l) and apply subsections (3)-(8) to determine if the
52 rate is excessive, inadequate, or unfairly discriminatory.
53 (e) A rating organization must notify the office of any
54 changes to loss cost for the type of insurance described in this
55 subsection no later than 30 days after the effective date of the
56 change. The notice shall include the name of the rating
57 organization, the type or kind of insurance subject to a loss
58 cost change, loss costs during the immediately preceding year
59 for the type or kind of insurance subject to the loss cost
60 change, and the average statewide percentage change in loss
61 cost. Actuarial data with regard to changes to loss cost for
62 risks not subject to subsection (1), subsection (2), or
63 subsection (9) shall be maintained by the rating organization
64 for 2 years after the effective date of the change and are
65 subject to examination by the office. The office may require the
66 rating organization to incur the costs associated with an
67 examination. Upon examination, the office shall, in accordance
68 with generally accepted and reasonable actuarial techniques,
69 consider the rate factors in paragraphs (2)(a)-(m) (2)(a)-(l)
70 and apply subsections (3)-(8) to determine if the rate is
71 excessive, inadequate, or unfairly discriminatory.
72 Section 3. Paragraph (c) is added to subsection (5) of
73 section 817.234, Florida Statutes, and subsection (7) of that
74 section is amended, to read:
75 817.234 False and fraudulent insurance claims.—

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76 (5)
77 (c) If an insurer damaged as a result of a violation of
78 any provision of this section or s. 456.054, part X of chapter
79 400, part II of chapter 501, s. 627.732, s. 627.736(17), s.
80 817.234, or s. 817.505 and the insurer obtains repayment or a
81 refund of claims paid pursuant to s. 627.736, the insurer shall
82 report to the department the amount of funds received as a
83 result of a claim, settlement, or judgment, inclusive of
84 attorney fees and costs, of such repayment of funds.
85 (7)(a) It shall constitute a material omission and
86 insurance fraud, punishable as provided in subsection (11), for
87 any service provider, other than a hospital, to engage in a
88 general business practice of billing amounts as its usual and
89 customary charge, if such provider has agreed with the insured
90 or intends to waive deductibles or copayments, or does not for
91 any other reason intend to collect the total amount of such
92 charge. With respect to a determination as to whether a service
93 provider has engaged in such general business practice,
94 consideration shall be given to evidence of whether the
95 physician or other provider made a good faith attempt to collect
96 such deductible or copayment. This paragraph does not apply to
97 physicians or other providers who defer collection of waive
98 deductibles or copayments or reduce their bills as part of a
99 bodily injury settlement or verdict. Payment by an insured of a
100 deductible or copayment is not a condition of an insurer's

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101 payment obligations.
102 (b) The provisions of this section shall also apply as to
103 any insurer or adjusting firm or its agents or representatives
104 who, with intent, injure, defraud, or deceive any claimant with
105 regard to any claim. The claimant shall have the right to
106 recover the damages provided in this section.
107 (c) An insurer, or any person acting at the direction of
108 or on behalf of an insurer, may not change an opinion in a
109 mental or physical report prepared under s. 627.736(7) or direct
110 the physician preparing the report to change such opinion;
111 however, this paragraph provision does not preclude the insurer
112 from calling to the attention of the physician errors of fact in
113 the report based upon information in the claim file. Any person
114 who violates this paragraph commits a felony of the third
115 degree, punishable as provided in s. 775.082, s. 775.083, or s.
116 775.084.
117 (d) A contractor, or a person acting on behalf of a
118 contractor, may not knowingly or willfully and with intent to
119 injure, defraud, or deceive, pay, waive, or rebate all or part
120 of an insurance deductible applicable to payment to the
121 contractor, or a person acting on behalf of a contractor, for
122 repairs to property covered by a property insurance policy. A
123 person who violates this paragraph commits a third degree felony
124 of the third degree, punishable as provided in s. 775.082, s.
125 775.083, or s. 775.084.

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hb0731-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

HB 731 2024

126 Section 4. This act shall take effect July 1, 2024.

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hb0731-00
HB 851
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 851 Nonprofit Agricultural Organization Health Coverage
SPONSOR(S): Anderson
TIED BILLS: IDEN./SIM. BILLS: SB 876

REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF

1) Insurance & Banking Subcommittee Herrera Lloyd

2) Select Committee on Health Innovation

3) Commerce Committee

SUMMARY ANALYSIS
Health insurance is vital for protecting individuals from financial strain due to accidents, illnesses, or
disabilities. Managed care, such as preferred provider organizations (PPOs) and health maintenance
organizations (HMOs), integrates healthcare delivery and financing, ensuring cost-effective medical services
within controlled networks.

An association health plan (AHP) is a group purchasing arrangement in which members of a trade group or
professional association jointly obtain health insurance for employees. These arrangements differ from
traditional group insurance by their unique structure, since they involve the purchase of insurance products
across multiple employers.

The Office of Insurance Regulation (OIR), supervises and examines insurers ensuring compliance with
applicable regulations, including performing market conduct examinations and monitoring insurer solvency.
This includes the oversight of authorized insurers providing health insurance. A guaranty association is
typically a nonprofit corporation established by law to safeguard policyholders against financial losses and
delays in claim payment and settlement resulting from the insolvency of an insurance company. Every insurer
licensed to sell direct life insurance policies, health insurance policies, annuity contracts, and supplemental
contracts in the state must participate in the Florida Life and Health Insurance Guaranty Association (FLHIGA).

The bill exempts the health coverage provided by a nonprofit agricultural organization from the regulation of
insurance and insolvency guaranties provided by law to the consumers of such organizations under the Florida
Insurance Code.

The bill may have a negative fiscal impact on state government revenues. It has no fiscal impact on state
government expenses or local government revenues or expenses. It may have a positive economic impact on
the private sector.

The bill provides an effective date of July 1, 2024.

This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0851.IBS
DATE: 2/4/2024
FULL ANALYSIS

I. SUBSTANTIVE ANALYSIS

A. EFFECT OF PROPOSED CHANGES:
Health Insurance

Health insurance is the insurance of human beings against bodily injury or disablement by accident or
sickness, including the expenses associated with such injury, disablement, or sickness. 1 Individuals
purchase health insurance coverage with the purpose of managing anticipated expenses related to
health or protecting themselves from unexpected medical bills or large health care costs. Managed
care is the most common delivery system for medical care today by health insurers. 2 Managed care
systems combine the delivery and financing of health care services by limiting the choice of doctors
and hospitals.3 In return for this limited choice, however, medical care is less costly due to the managed
care network’s ability to control health care services. Some common forms of managed care are
preferred provider organizations 4 (PPO) and health maintenance organizations 5 (HMO).

Office of Insurance Regulation

The Office of Insurance Regulation (OIR) regulates specified insurance products, insurers and other
risk bearing entities in Florida.6 The Financial Services Commission (FSC), composed of the
Governor, the Attorney General, the Chief Financial Officer, and the Commissioner of Agriculture,
serves as the OIR agency head for purposes of rulemaking. Further, the FSC appoints the OIR
Commissioner.

As part of their regulatory oversight, the OIR may suspend or revoke an insurer’s certificate of authority
under certain conditions.7 The OIR is responsible for examining the affairs, transactions, accounts,
records, and assets of each insurer that holds a certificate of authority to transact insurance business in
Florida.8 As part of the examination process, all persons being examined must make available to the
OIR the accounts, records, documents, files, information, assets, and matters in their possession or
control that relate to the subject of the examination.9 The OIR is also authorized to conduct market
conduct examinations to determine compliance with applicable provisions of the Insurance Code
(FIC).10

Health Maintenance Organizations

Health Maintenance Organizations (HMOs) in Florida operate within a regulatory framework overseen
by OIR. To offer health insurance plans in Florida, HMOs must obtain a license from the OIR. 11
Managed care plans are the primary offerings of HMOs in Florida. These plans provide comprehensive
healthcare services to members for a fixed monthly premium.12 Members typically select a primary care
physician from within the HMO's network, who serves as the main point of contact for all healthcare
needs and referrals to specialists.13

1 S. 624.603, F.S.
2
Florida Department of Financial Services , Health Insurance and Health Maintenance Organizations, A Guide for Consumers, available
at: https://www.myfloridacfo.com/docs-sf/consumer-services-libraries/ (last visited Jan. 26, 2024).
3 Id.
4 S. 627.6471, F.S.
5 Part I of ch. 641, F.S.
6 S. 20.121(3)(a), F.S.
7 S. 624.418, F.S
8 S. 624, 316(1)(a), F.S.
9 S. 624.318(2), F.S.
10 See S. 624.3161, F.S. The Code is comprised of chs. 624-632, 634-636, 641, 642, 648, and 651, F.S. S. 624.01, F.S.
11 S. 641.21(1), F.S.
12 Medicare, What’s an HMO? https://www.medicare.gov/health-drug-plans/health-plans/. (last visited Jan. 26, 2024).
13 Id.

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HMOs maintain networks of healthcare providers, including primary care physicians, specialists,
hospitals, and other healthcare facilities.14 Members are generally required to receive care from within
the HMO's network, with exceptions for emergencies or authorized out-of-network care.15

Florida law provides various consumer protections for individuals enrolled in HMO plans, including
guaranteed access to emergency services, coverage for essential health benefits mandated by the
Affordable Care Act, and the right to appeal coverage decisions made by the HMO. 16

Association Health Plans (AHPs)

An association health plan (AHP) is a group purchasing arrangement in which members of a trade
group or professional association jointly obtain health insurance for employees. These arrangements
differ from traditional group insurance by their unique structure, since they involve the purchase of
insurance products across multiple employers.

On June 21, 2018, the Employee Benefits Security Administration within the federal Department of
Labor (DOL) issued a final rule amending the parameters for association health plans (AHPs),17
consistent with the directives of a 2017 Presidential Executive Order. 18 The revised regulations were
intended to give an employer greater flexibility to participate in an AHP. The new federal rule, among
other things, permitted establishing an AHP for the explicit purpose of providing health coverage, so
long as the association has another legitimate purpose for members and allowed the self-employed
and sole proprietors to participate in an AHP.19 Overall, the federal rule was designed to offer an
expanded pathway for the establishment of an AHP.

In July 2018, eleven states 20 and the District of Columbia sued the DOL, alleging the final rule, and
particularly the rule’s provisions on bona fide association and working owner provisions, conflicted with
the text and purpose of Employee Retirement Income Security Act (ERISA) and Patient Portability and
Affordable Care Act (PPACA), and exceeded DOL’s statutory authority. 21 On March 28, 2019, the U.S.
District Court for the District of Columbia agreed with the states, finding that the DOL unreasonably
expanded ERISA’s definition of “employers” as an end run around the requirements of PPACA. 22 The
court struck down the portions of the DOL’s AHP rule that expanded the ability of small businesses and
owners to buy health insurance on the large group market that was not subject to PPACA requirements
that apply to the small group market.23

State Regulation of AHPs

The regulatory oversight of health insurance is generally reserved to the states, except when explicitly
preempted by federal law. In Florida, OIR is responsible for all activities concerning insurers and other
risk bearing entities, including licensing, rates, policy forms, market conduct, claims, issuing certificates
of authority, solvency, viatical settlements, premium financing, and administrative supervision, as
provided under the FIC.24

14 S. 641.19(12), F.S.
15
Medicare, What’s an HMO?, https://www.medicare.gov/health-drug-plans/health-plans/. (last visited Jan. 26, 2024).
16 Consumer Services, Health Insurance & HMO Overview, https://www.myfloridacfo.com/division/consumers/understanding-

insurance/health-insurance-and-hmo-overview (last visited Jan. 26, 2024).
17 Definition of “Employer” Under Section 3(5) of ERISA-Association Health Plans, 83 FR 28912. June 21, 2018.
18 Promoting Healthcare Choice and Competition Across the United States, 82 FR 48385. October 21, 2017.
19 Milliman, Inc., “Association health plans after the final rule”, August 22, 2018, available at

http://www.milliman.com/insight/2018/Association-health-plans-after-the-final-rule/ (last viewed on Jan. 30, 2024).
20 California, Delaware, Kentucky, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Virginia, and Washington .
21 State of New York, et al. v. U.S. Department of Labor, et al., No. 1:18 -cv-01747 (D.D.C. Mar. 28, 2019).
22 Id.
23 Id.
24 S. 20.121(3)(a)1., F.S. The OIR’s commissioner is the agency head for purposes of final agency action, and its rulemaking bo dy is

the Financial Services Commission (the Governor and the Cabinet).
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DATE: 2/4/2024
All health insurance policies issued in Florida, with the exception of certain self-insured policies,25 must
meet certain requirements that are detailed throughout the FIC. Ch. 627, F.S., sets parameters and
requirements for health insurance policies and ch. 641, F.S., provides requirements for health plans
issued by HMOs. At a minimum, insurance policies must specify premium rates, services covered, and
effective dates. Insurers must document the time when a policy takes effect and the period during
which the policy remains in effect.26

Florida Life and Health Insurance Guaranty Association

A guaranty association is typically a nonprofit corporation established by law to safeguard policyholders
against financial losses and delays in claim payment and settlement resulting from the insolvency of an
insurance company. In the event of an insolvency of a member, the guaranty association takes over the
servicing of claims on eligible policies. Authorized insurers in Florida are typically required to participate
in the applicable guaranty association for the relevant line of insurance as a condition of eligibility to
transact insurance in the state.

Section 631.715, F.S., establishes the Florida Life and Health Insurance Guaranty Association
(FLHIGA). Every insurer licensed to sell direct life insurance policies, health insurance policies, annuity
contracts, and supplemental contracts in the state must participate in FLHIGA as a requirement for
conducting business in Florida.27 FLHIGA functions as a nonprofit corporation, governed by a Board of
Directors consisting of nine to eleven members appointed by member insurers. 28

Farm Bureau Health Plan

In a number of states, Farm Bureau Plans (FBPs) have been provide an exemption from regulation by
the state’s insurance regulatory authority to provide health coverage that is not regulated as an
insurance product. The FBPs operate as healthcare options provided by a state's Farm Bureau to its
members, typically catering to individuals and families within rural communities, including farmers and
agricultural workers. To access FBPs, individuals must join their state's Farm Bureau organization.
Membership often entails paying dues to support the Farm Bureau's advocacy and community
initiatives. FBPs operate under a unique exemption from state insurance regulations, distinguishing
them from traditional health insurance offerings. This exemption allows FBPs to be considered
separately from standard health insurance products. Unlike typical health insurance, FBPs, which
predate the Affordable Care Act (ACA), utilize medical underwriting and are not subject to state or
federal insurance mandates. Consequently, they can decline applicants based on medical history or
impose waiting periods for pre-existing conditions without having to comply with essential health benefit
requirements or maximum out-of-pocket limits mandated for ACA-compliant plans. While FBPs aren't
classified as insurance, they still provide comprehensive benefits. In every state with FBPs, they
typically offer options for comprehensive coverage at reasonable monthly costs, including free or low-
cost preventative care, prescription drug coverage, telehealth services, dental and vision care options,
and health savings accounts for qualified High Deductible Health Plans, with most plans having no
annual or lifetime limits. Unlike individual market plans, participants can enroll in FBPs at any time. 29

Effect of the Bill

The bill exempts the health coverage provided by a nonprofit agricultural organization from the
regulation of insurance and insolvency guaranties provided by law to the consumers of such
organizations under the Florida Insurance Code.

25 29 U.S.C. 18 § 1001 et seq. ERISA regulates certain self-insured plans, which represent approximately 50 percent of the insureds in

Florida. These plans cannot be regulated by state law.
26
S. 627.413(1)(d), F.S.
27 S. 631.716(1), F.S.
28 Id.
29 The states are Tennessee, Iowa, Kansas, Indiana, and Texas. The Foundation for Government Accountability, Farm Bureau
Health Coverage Plans, https://thefga.org/wp-content/uploads/2021/01/Farm -Bureau-Plans-FAQ.pdf (last visited Jan. 30, 2024).
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B. SECTION DIRECTORY:
Section 1: Creates the “Nonprofit Agricultural Organization Health Coverage Act of 2024.”
Section 2: Retitles the “Fraternal Benefit Societies” to the “Fraternal Benefit Societies and
Nonprofit Agricultural Organizations.”
Section 3: Redesignates ss. 632.601 through 632.638, F.S. as part I of Ch. 632.
Section 4: Creates s. 624.4032, F.S., relating to nonprofit agricultural organization health
coverage.
Section 5: Providing an effective date of July 1, 2024.

II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT

A. FISCAL IMPACT ON STATE GOVERNMENT:

1. Revenues:
Insurance premium tax revenues may be reduced to the extent that purchasers of health coverage
shift their business from health insurance to the exempt health coverage proposed by the bill.

2. Expenditures:
None.

B. FISCAL IMPACT ON LOCAL GOVERNMENTS:

1. Revenues:
None.

2. Expenditures:
None.

C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Members of eligible nonprofit agricultural organizations may realize savings on health coverage to the
extent that health coverage products offered by such organizations are priced lower that insurance
products that they may already purchase.

D. FISCAL COMMENTS:
The bill makes no provision for solvency guaranties similar to that currently provided under the FIC. In
the event of an insolvency, it is unclear if there will be any guaranty of payment of the health coverage
purchased under the operable health coverage agreements at the time of any insolvency.

III. COMMENTS

A. CONSTITUTIONAL ISSUES:

1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to affect county or municipal governments.

2. Other:
None.

B. RULE-MAKING AUTHORITY:
None.

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C. DRAFTING ISSUES OR OTHER COMMENTS:
None.

IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES

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DATE: 2/4/2024
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

HB 851 2024

1 A bill to be entitled
2 An act relating to nonprofit agricultural organization
3 health coverage; providing a short title; retitling
4 ch. 632, F.S.; designating part I of ch. 632, F.S.;
5 creating part II of ch. 632, F.S., entitled "Nonprofit
6 Agricultural Organizations"; providing purpose;
7 defining the term "nonprofit agricultural
8 organization"; providing that the health coverage
9 provided by nonprofit agricultural organizations is
10 not insurance for purposes of the Florida Insurance
11 Code; providing an effective date.
12
13 Be It Enacted by the Legislature of the State of Florida:
14
15 Section 1. This act may be cited as the "Nonprofit
16 Agricultural Organization Health Coverage Act of 2024."
17 Section 2. Chapter 632, Florida Statutes, entitled
18 "Fraternal Benefit Societies," is retitled "Fraternal Benefit
19 Societies and Nonprofit Agricultural Organizations."
20 Section 3. Sections 632.601 through 632.638, Florida
21 Statutes, are designated as part I of chapter 632, Florida
22 Statutes" and entitled "Fraternal Benefit Societies."
23 Section 4. Part II of chapter 632, Florida Statutes,
24 consisting of section 632.701, Florida Statutes, is created to
25 read:

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hb0851-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

HB 851 2024

26 PART II
27 NONPROFIT AGRICULTURAL ORGANIZATIONS
28 624.4032 Nonprofit agricultural organization health
29 coverage.—
30 (1) The purpose of this section is to allow nonprofit
31 agriculture organizations to offer health coverage options to
32 their members.
33 (2) As used in this section, the term "nonprofit
34 agricultural organization" means an organization that:
35 (a) Is domiciled in this state.
36 (b) Is exempt from federal income tax under s. 501(c) of
37 the Internal Revenue Code.
38 (c) Was created primarily to promote programs for the
39 development of rural communities and the economic stability and
40 sustainability of farmers in this state.
41 (d) Exists to serve its members beyond only offering
42 health coverage.
43 (e) Collects annual dues from its members.
44 (f) Was in existence before 1945.
45 (g) Is composed of members who are residents of the
46 majority of counties in this state.
47 (3) Notwithstanding any law to the contrary, the health
48 coverage provided by a nonprofit agricultural organization is
49 not insurance for purposes of the Florida Insurance Code.
50 Section 5. This act shall take effect July 1, 2024.

Page 2 of 2

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hb0851-00
HB 893
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 893 Coverage by Citizens Property Insurance Corporation
SPONSOR(S): Lopez, V. and others
TIED BILLS: IDEN./SIM. BILLS: SB 1428

REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF

1) Insurance & Banking Subcommittee Fortenberry Lloyd

2) Commerce Committee

SUMMARY ANALYSIS
Citizens is a state-created, not-for-profit, tax-exempt governmental entity whose public purpose is to provide
property insurance coverage to those unable to find affordable coverage in the voluntary admitted market. It is
traditionally considered the property insurer of last resort. Citizens is not a private insurance company. Citizens was
statutorily created in 2002 when the Florida Legislature combined the state’s two insurers of last resort, the Florida
Residential Property and Casualty Joint Underwriting Association (RPCJUA) and the Florida Winds torm
Underwriting Association (FWUA).

From 2007 until 2010, Citizens’ rates were frozen by statute at the level that had been established in 2006. In 2010,
the Legislature established a “glidepath” to impose annual rate increases up to a level that is act uarially sound.
Under the original established glidepath, Citizens had to implement an annual rate increase which, except for
sinkhole coverage, does not exceed 10 percent above the previous year for any individual policyholder, adjusted for
coverage changes and surcharges. In 2021, the Legislature revised this glidepath to increase it one percent age
point per year until it reaches 15 percent.

Current law requires Citizens to provide a procedure for determining the eligibility of a potential risk for coverage
from Citizens, and specific eligibility requirements based on premium amounts, value of the property insured, and
the location of the property. The policies that Citizens writes include standard comprehensive multiperil policies;
basic personal lines policies which are similar to dwelling fire policies; commercial lines residential and
nonresidential policies which are generally similar to the basic perils of full coverage obtainable for commercial
residential structures and commercial nonresidential structures in the private market; and personal lines, commercial
lines residential, and commercial lines nonresidential property insurance polic ies that cover the peril of wind only.

The bill instructs Citizens to reevaluate the area in which it offers policies that provide wind -only coverage. Citizens
may amend the wind-eligible areas, subject to legislative approval, by developing new eligibility criteria and rates for
such policies. In developing the eligibility and rates, Citizens may consider:
 The market for wind-only coverage in the areas in which such coverage is to be offered.
 The resulting impact to Citizens’ overall exposure by offering such coverage in those areas.
 The reasonably prudent measures for limiting its exposure upon offering wind -only coverage in those
areas.

The bill establishes that rates for coverage offered in wind-eligible areas are subject to both the insurance
ratemaking standard, i.e., that rates not be not be inadequate, excessive, or unfairly discriminatory, and the
“glidepath.”

The bill requires that, by December 1 of each year, beginning in 2025, Citizens submit to the Legislature the
eligibility criteria and rates that it has developed regarding wind -only coverage for review and approval. After the
Legislature has approved the eligibility criteria and rates, OIR shall implement them.

The bill has no impact on local or state government revenues or expenditures. The bill may have an indeterminate
positive or negative impact on the private sector.

The bill is effective July 1, 2024.

This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0893.IBS
DATE: 2/4/2024
FULL ANALYSIS

I. SUBSTANTIVE ANALYSIS

A. EFFECT OF PROPOSED CHANGES:
Background

APPROVAL OF INSURANCE RATE FILINGS

In general, insurers must file a copy of rates, rating schedules, rating manuals, premium credits or
discount schedules, and surcharge schedules, and changes to these documents, for approval by the
Office of Insurance Regulation (OIR).1 OIR must review insurers’ rate filings to determine whether rates
are excessive, inadequate, or unfairly discriminatory.2 In doing so, OIR must consider factors including,
but not limited to, the following:
 Past and prospective loss experience in and out of Florida.
 Past and prospective expenses.
 Degree of competition among insurers for particular risk to be insured.
 Investment income reasonably expected by the insurer.
 Reasonableness of the judgment reflected in the filing.
 Dividends, savings, or unabsorbed premium deposits allowed or returns to policyholders,
members or subscribers in Florida.
 Adequacy of loss reserves.
 Cost of reinsurance.
 Trend factors.
 Conflagration and catastrophe hazards, if applicable.
 Projected hurricane losses.
 Projected flood losses.
 Reasonable margin for underwriting profit and contingencies. 3

CITIZENS PROPERTY INSURANCE CORPORATION (CITIZENS)

Citizens is a state-created, not-for-profit, tax-exempt governmental entity whose public purpose is to
provide property insurance coverage to those unable to find affordable coverage in the voluntary
admitted market.4 It is traditionally considered the property insurer of last resort. Citizens is not a private
insurance company.5 Citizens was statutorily created in 2002 when the Florida Legislature combined
the state’s two insurers of last resort, the Florida Residential Property and Casualty Joint Underwriting
Association (RPCJUA) and the Florida Windstorm Underwriting Association (FWUA).6

Applicants are eligible for coverage if no admitted private carrier will write them a policy for a premium
that is within 20 percent greater than what Citizens would offer for comparable coverage. 7 Citizens may
cover homes if the cost of replacing the dwelling, or the dwelling and its’ contents, is no more than
$700,000. In Miami-Dade and Monroe counties, Citizens may insure structures valued up to $1 million
as long as OIR continues to determine that these counties do not have a reasonable degree of
competition in the personal lines residential market.8

1 S. 627.062(2)(a), F.S.
2 S. 627.062(1), F.S.
3 S. 627.062(2)(b), F.S.
4 The term “admitted market” means insurance companies licensed to transact insurance in Florida.
5 Section 627.351(6)(a)1., F.S.
6 Section 2, ch. 2002-240, Laws of Fla.
7 S. 627.351(6)(c)5.a, F.S.
8 S. 627.351(6)(a)3, F.S. If OIR makes a finding that other counties are not competitive, Citizens would be able to insure

properties up to $1 million in value in those counties, as well.
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From 2007 until 2010, Citizens’ rates were frozen by statute at the level that had been established in
2006. In 2010, the Legislature established a “glidepath” to impose annual rate increases up to a level
that is actuarially sound. Under the original established glidepath, Citizens had to implement an annual
rate increase which, except for sinkhole coverage, does not exceed 10 percent above the previous year
for any individual policyholder, adjusted for coverage changes and surcharges. In 2021, the Legislature
revised this glidepath to increase it one percentage point per year until it reaches 15 percent, as
follows: 9
 11 percent for 2022.
 12 percent for 2023.
 13 percent for 2024.
 14 percent for 2025.
 15 percent for 2026 and all subsequent years.

The policies that Citizens writes include the following:
 Standard Personal Lines Policies – comprehensive multiperil policies providing full coverage of
residential property equivalent to the coverage provided in the private insurance market;
 Basic Personal Lines Policies – similar to dwelling fire policies that provide coverage meeting
the requirements of the secondary mortgage market, but are more limited in coverage than
under a standard policy;
 Commercial Lines Residential and Nonresidential Policies – generally similar to the basic perils
of full coverage obtainable for commercial residential structures and commercial nonresidential
structures in the private market;
 Personal Lines and Commercial Lines Residential Property Insurance Policies – cover the peril
of wind only;
 Commercial Lines Nonresidential Property Insurance Policies – cover the peril of wind only.10

Effect of the Bill

The bill instructs Citizens to reevaluate the area in which it offers policies that provide wind-only
coverage. Citizens may amend the wind-eligible areas, subject to legislative approval, by developing
new eligibility criteria and rates for such policies. In developing the eligibility and rates, Citizens may
consider:
 The market for wind-only coverage in the areas in which such coverage is to be offered.
 The resulting impact to Citizens’ overall exposure by offering such coverage in those areas.
 The reasonably prudent measures for limiting its exposure upon offering wind-only coverage in
those areas.

The bill establishes that rates for coverage offered in wind-eligible areas are subject to s. 627.351(6)(n),
F.S., which provides for OIR review and approval of Citizens rates, consistent with the rate-making
standard in s. 627.062, F.S., which requires rates to not be inadequate, excessive, or unfairly
discriminatory, and subjects these rates to the glidepath limitation.

The bill requires that, by December 1 of each year, beginning in 2025, Citizens submit to the
Legislature the eligibility criteria and rates that it has developed regarding wind-only coverage for
review and approval. After the Legislature has approved the eligibility criteria and rates, OIR shall
implement them.

9 S. 627.351(6)(n)5., F.S.
10 S. 627.351(6)(c)1., F.S.
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The bill also defines “wind-eligible area” as the area that is eligible for coverage by the Florida
Windstorm Underwriting Association, as those areas were defined on January 1, 2002. The purpose of
this definition is to differentiate between the areas currently eligible for wind-only coverage and those
that may be eligible after Citizens reevaluates the area in which it offers wind-only policies.

B. SECTION DIRECTORY:

Section 1. Amends s. 627.351, F.S., relating to insurance risk apportionment plans.

Section 2. Provides an effective date of July 1, 2024.

II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT

A. FISCAL IMPACT ON STATE GOVERNMENT:

1. Revenues:

None.

2. Expenditures:

None.

B. FISCAL IMPACT ON LOCAL GOVERNMENTS:

1. Revenues:

None.

2. Expenditures:

None.

C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:

The bill may have an indeterminate positive or negative impact on the private sector. A reevaluation of
the wind-eligible areas could have a positive or negative impact on rates for wind-only policies issued
by Citizens.

D. FISCAL COMMENTS:

None.
III. COMMENTS

A. CONSTITUTIONAL ISSUES:

1. Applicability of Municipality/County Mandates Provision:

Not applicable. This bill does not appear to affect county or municipal governments.

2. Other:

None.

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DATE: 2/4/2024
B. RULE-MAKING AUTHORITY:

The bill neither authorizes nor requires administrative rulemaking.

C. DRAFTING ISSUES OR OTHER COMMENTS:

The bill contains an internal inconsistency. It says that the rates for wind-eligible areas are subject to s.
627.351(6)(n), F.S., which provides for OIR review and approval of Citizens rates, consistent with the
rate-making standard in s. 627.062, F.S., which requires rates to not be inadequate, excessive, or
unfairly discriminatory, and subjects these rates to the glidepath limitation. However, the bill also says
that the that rate would be submitted to the Legislature for approval prior to OIR implementation. This
appears to both require OIR approval of rates and deprive OIR of approval authority.

Consideration should be given to amending the bill so that the Legislature is not approving Citizens
rates. OIR is ordinarily responsible for approval of insurance rates, including those for wind coverage,
because it has the actuarial staff with expertise in rate review and approval.

IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES

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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

HB 893 2024

1 A bill to be entitled
2 An act relating to coverage by the Citizens Property
3 Insurance Corporation; amending s. 627.351, F.S.;
4 revising the types of policies that go to specified
5 accounts of the Citizens Property Insurance
6 Corporation; revising the requirements for areas that
7 are eligible for certain personal residential and
8 commercial residential and commercial nonresidential
9 policy coverages by the corporation; authorizing the
10 corporation to amend wind-eligible areas under certain
11 circumstances; authorizing the corporation to consider
12 certain factors in developing new eligibility criteria
13 and rates for policies that provide wind-only
14 coverage; providing that such rates are subject to
15 specified provisions; requiring such eligibility
16 criteria and rates to be reported to the Legislature
17 for review and approval; requiring the Office of
18 Insurance Regulation to implement eligibility
19 criterial and rates under certain circumstances;
20 defining the term "wind-eligible area"; providing an
21 effective date.
22
23 Be It Enacted by the Legislature of the State of Florida:
24
25 Section 1. Subsection (7) of section 627.351, Florida

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26 Statutes, is renumbered as subsection (8), paragraph (b) of
27 subsection (6) and present subsection (7) are amended, and a new
28 subsection (7) is added to that section, to read:
29 627.351 Insurance risk apportionment plans.—
30 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
31 (b)1. All insurers authorized to write one or more subj ect
32 lines of business in this state are subject to assessment by the
33 corporation and, for the purposes of this subsection, are
34 referred to collectively as "assessable insurers." Insurers
35 writing one or more subject lines of business in this state
36 pursuant to part VIII of chapter 626 are not assessable
37 insurers; however, insureds who procure one or more subject
38 lines of business in this state pursuant to part VIII of chapter
39 626 are subject to assessment by the corporation and are
40 referred to collectively as "assessable insureds." An insurer's
41 assessment liability begins on the first day of the calendar
42 year following the year in which the insurer was issued a
43 certificate of authority to transact insurance for subject lines
44 of business in this state and terminates 1 year after the end of
45 the first calendar year during which the insurer no longer holds
46 a certificate of authority to transact insurance for subject
47 lines of business in this state.
48 2.a. All revenues, assets, liabilities, losses, and
49 expenses of the corporation shall be divided into three separate
50 accounts as follows:

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51 (I) A personal lines account for personal residential
52 policies issued by the corporation which provides comprehensive,
53 multiperil coverage on risks that are not located in areas
54 eligible for coverage by the Florida Windstorm Underwriting
55 Association as those areas were defined on January 1, 2002, or
56 included as eligible for coverage by the corporation and for
57 policies that do not provide coverage for the peril of wind on
58 risks that are located in such areas;
59 (II) A commercial lines account for commercial residential
60 and commercial nonresidential policies issued by the corporation
61 which provides coverage for basic property perils on risks that
62 are not located in areas eligible for coverage by the Florida
63 Windstorm Underwriting Association as those areas were defined
64 on January 1, 2002, or included as eligible for coverage by the
65 corporation and for policies that do not provide coverage for
66 the peril of wind on risks that are located in such areas; and
67 (III) A coastal account for personal residential policies
68 and commercial residential and commercial nonresidential
69 property policies issued by the corporation which provides
70 coverage for the peril of wind on risks that are located in
71 areas eligible for coverage by the Florida Windstorm
72 Underwriting Association as those areas were defined on January
73 1, 2002, or included as eligible for coverage by the
74 corporation. The corporation may offer policies that provide
75 multiperil coverage and shall offer policies that provide

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76 coverage only for the peril of wind for risks located in areas
77 eligible for coverage in the coastal account. Effective July 1,
78 2014, the corporation shall cease offering new commercial
79 residential policies providing multiperil coverage and shall
80 instead continue to offer commercial residential wind -only
81 policies, and may offer commercial residential policies
82 excluding wind. The corporation may, however, continue to renew
83 a commercial residential multiperil policy on a building that is
84 insured by the corporation on June 30, 2014, under a multiperil
85 policy. In issuing multiperil coverage, the corporation may use
86 its approved policy forms and rates for the personal lines
87 account. An applicant or insured who is eligible to purchase a
88 multiperil policy from the corporation may purchase a multiperil
89 policy from an authorized insurer without prejudice to the
90 applicant's or insured's eligibility to prospectively purchase a
91 policy that provides coverage only for the peril of wind from
92 the corporation. An applicant or insured who is eligible for a
93 corporation policy that provides coverage only for the peril of
94 wind may elect to purchase or retain such policy and also
95 purchase or retain coverage excluding wind from an authorized
96 insurer without prejudice to the applicant's or insured's
97 eligibility to prospectively purchase a policy that provides
98 multiperil coverage from the corporation. It is the goal of the
99 Legislature that there be an overall average savings of 10
100 percent or more for a policyholder who currently has a wind-only

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101 policy with the corporation, and an ex-wind policy with a
102 voluntary insurer or the corporation, and who obtains a
103 multiperil policy from the corporation. It is the intent of the
104 Legislature that the offer of multiperil coverage in the coastal
105 account be made and implemented in a manner that does not
106 adversely affect the tax-exempt status of the corporation or
107 creditworthiness of or security for currently outstanding
108 financing obligations or credit facilities of the coastal
109 account, the personal lines account, or the commercial lines
110 account. The coastal account must also include quota share
111 primary insurance under subparagraph (c)2. The area eligible for
112 coverage under the coastal account also includes the area within
113 Port Canaveral, which is bordered on the south by the City of
114 Cape Canaveral, bordered on the west by the Banana River, and
115 bordered on the north by Federal Government property.
116 b. The three separate accounts must be maintained as long
117 as financing obligations entered into by the Florida Windstorm
118 Underwriting Association or Residential Property and Casualty
119 Joint Underwriting Association are outstanding, in accordance
120 with the terms of the corresponding financing documents. If no
121 such financing obligations remain outstanding or if the
122 financing documents allow for combining of accounts, the
123 corporation may consolidate the three separate accounts into a
124 new account, to be known as the Citizens account, for all
125 revenues, assets, liabilities, losses, and expenses of the

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126 corporation. The Citizens account, if established by the
127 corporation, is authorized to provide coverage to the same
128 extent as provided under each of the three separate accounts.
129 The authority to provide coverage under the Citizens account is
130 set forth in subparagraph 4. Consistent with this subparagraph
131 and prudent investment policies that minimize the cost of
132 carrying debt, the board shall exercise its best efforts to
133 retire existing debt or obtain the approval of necessary parties
134 to amend the terms of existing debt, so as to structure the most
135 efficient plan for consolidating the three separate accounts
136 into a single account. Once the accounts are combined into one
137 account, this subparagraph and subparagraph 3. shall be replaced
138 in their entirety by subparagraphs 4. and 5.
139 c. Creditors of the Residential Property and Casualty
140 Joint Underwriting Association and the accounts specified in
141 sub-sub-subparagraphs a.(I) and (II) may have a claim against,
142 and recourse to, those accounts and no claim against, or
143 recourse to, the account referred to in sub-sub-subparagraph
144 a.(III). Creditors of the Florida Windstorm Underwriting
145 Association have a claim against, and recourse to, the account
146 referred to in sub-sub-subparagraph a.(III) and no claim
147 against, or recourse to, the accounts referred to in sub -sub-
148 subparagraphs a.(I) and (II).
149 d. Revenues, assets, liabilities, losses, and expenses not
150 attributable to particular accounts shall be prorated among the

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151 accounts.
152 e. The Legislature finds that the revenues of the
153 corporation are revenues that are necessary to meet the
154 requirements set forth in documents authorizing the issuance of
155 bonds under this subsection.
156 f. The income of the corporation may not inure to the
157 benefit of any private person.
158 3. With respect to a deficit in an account:
159 a. After accounting for the Citizens policyholder
160 surcharge imposed under sub-subparagraph j., if the remaining
161 projected deficit incurred in the coastal account in a
162 particular calendar year:
163 (I) Is not greater than 2 percent of the aggregate
164 statewide direct written premium for the subject lines of
165 business for the prior calendar year, the entire deficit shall
166 be recovered through regular assessments of assessable insurers
167 under paragraph (q) and assessable insureds.
168 (II) Exceeds 2 percent of the aggregate statewide direct
169 written premium for the subject lines of business for the prior
170 calendar year, the corporation shall levy regular assessments on
171 assessable insurers under paragraph (q) and on assessable
172 insureds in an amount equal to the greater of 2 percent of the
173 projected deficit or 2 percent of the aggregate statewide direct
174 written premium for the subject lines of business for the prior
175 calendar year. Any remaining projected deficit shall be

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176 recovered through emergency assessments under sub-subparagraph
177 e.
178 b. Each assessable insurer's share of the amount being
179 assessed under sub-subparagraph a. must be in the proportion
180 that the assessable insurer's direct written premium for the
181 subject lines of business for the year preceding the assessment
182 bears to the aggregate statewide direct written premium for the
183 subject lines of business for that year. The assessment
184 percentage applicable to each assessable insured is the ratio of
185 the amount being assessed under sub-subparagraph a. to the
186 aggregate statewide direct written premium for the subject lines
187 of business for the prior year. Assessments levied by the
188 corporation on assessable insurers under sub-subparagraph a.
189 must be paid as required by the corporation's plan of operation
190 and paragraph (q). Assessments levied by the corporation on
191 assessable insureds under sub-subparagraph a. shall be collected
192 by the surplus lines agent at the time the surplus lines agent
193 collects the surplus lines tax required by s. 626.932, and paid
194 to the Florida Surplus Lines Service Office at the time the
195 surplus lines agent pays the surplus lines tax to that office.
196 Upon receipt of regular assessments from surplus lines agents,
197 the Florida Surplus Lines Service Office shall transfer the
198 assessments directly to the corporation as determined by the
199 corporation.
200 c. The corporation may not levy regular assessments under

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201 paragraph (q) pursuant to sub-subparagraph a. or sub-
202 subparagraph b. if the three separate accounts in sub -sub-
203 subparagraphs 2.a.(I)-(III) have been consolidated into the
204 Citizens account pursuant to sub-subparagraph 2.b. However, the
205 outstanding balance of any regular assessment levied by the
206 corporation before establishment of the Citizens account remains
207 payable to the corporation.
208 d. After accounting for the Citizens policyholder
209 surcharge imposed under sub-subparagraph j., the remaining
210 projected deficits in the personal lines account and in the
211 commercial lines account in a particular calendar year shall be
212 recovered through emergency assessments under sub-subparagraph
213 e.
214 e. Upon a determination by the board of governors that a
215 projected deficit in an account exceeds the amount that is
216 expected to be recovered through regular assessments under sub-
217 subparagraph a., plus the amount that is expected to be
218 recovered through surcharges under sub-subparagraph j., the
219 board, after verification by the office, shall levy emergency
220 assessments for as many years as necessary to cover the
221 deficits, to be collected by assessable insurers and the
222 corporation and collected from assessable insureds upon issuance
223 or renewal of policies for subject lines of business, excluding
224 National Flood Insurance policies. The amount collected in a
225 particular year must be a uniform percentage of that year's

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226 direct written premium for subject lines of business and all
227 accounts of the corporation, excluding National Flood Insurance
228 Program policy premiums, as annually determined by the board and
229 verified by the office. The office shall verify the arithmetic
230 calculations involved in the board's determination within 30
231 days after receipt of the information on which the determination
232 was based. The office shall notify assessable insurers and the
233 Florida Surplus Lines Service Office of the date on which
234 assessable insurers shall begin to collect and assessable
235 insureds shall begin to pay such assessment. The date must be at
236 least 90 days after the date the corporation levies emergency
237 assessments pursuant to this sub-subparagraph. Notwithstanding
238 any other provision of law, the corporation and each assessable
239 insurer that writes subject lines of business shall collect
240 emergency assessments from its policyholders without such
241 obligation being affected by any credit, limitation, exemption,
242 or deferment. Emergency assessments levied by the corporation on
243 assessable insureds shall be collected by the surplus lines
244 agent at the time the surplus lines agent collects the surplus
245 lines tax required by s. 626.932 and paid to the Florida Surplus
246 Lines Service Office at the time the surplus lines agent pays
247 the surplus lines tax to that office. The emergency assessments
248 collected shall be transferred directly to the corporation on a
249 periodic basis as determined by the corporation and held by the
250 corporation solely in the applicable account. The aggregate

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251 amount of emergency assessments levied for an account in any
252 calendar year may be less than but may not exceed the greater of
253 10 percent of the amount needed to cover the deficit, plus
254 interest, fees, commissions, required reserves, and other costs
255 associated with financing the original deficit, or 10 percent of
256 the aggregate statewide direct written premium for subject lines
257 of business and all accounts of the corporation for the prior
258 year, plus interest, fees, commissions, required reserves, and
259 other costs associated with financing the deficit.
260 f. The corporation may pledge the proceeds of assessments,
261 projected recoveries from the Florida Hurricane Catastrophe
262 Fund, other insurance and reinsurance recoverables, policyholder
263 surcharges and other surcharges, and other funds available to
264 the corporation as the source of revenue for and to secure bonds
265 issued under paragraph (q), bonds or other indebtedness issued
266 under subparagraph (c)3., or lines of credit or other financing
267 mechanisms issued or created under this subsection, or to retire
268 any other debt incurred as a result of deficits or events giving
269 rise to deficits, or in any other way that the board determines
270 will efficiently recover such deficits. The purpose of the lines
271 of credit or other financing mechanisms is to provide additional
272 resources to assist the corporation in covering claims and
273 expenses attributable to a catastrophe. As used in this
274 subsection, the term "assessments" includes regular assess ments
275 under sub-subparagraph a. or subparagraph (q)1. and emergency

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276 assessments under sub-subparagraph e. Emergency assessments
277 collected under sub-subparagraph e. are not part of an insurer's
278 rates, are not premium, and are not subject to premium tax,
279 fees, or commissions; however, failure to pay the emergency
280 assessment shall be treated as failure to pay premium. The
281 emergency assessments shall continue as long as any bonds issued
282 or other indebtedness incurred with respect to a deficit for
283 which the assessment was imposed remain outstanding, unless
284 adequate provision has been made for the payment of such bonds
285 or other indebtedness pursuant to the documents governing such
286 bonds or indebtedness.
287 g. As used in this subsection for purposes of any deficit
288 incurred on or after January 25, 2007, the term "subject lines
289 of business" means insurance written by assessable insurers or
290 procured by assessable insureds for all property and casualty
291 lines of business in this state, but not including workers'
292 compensation or medical malpractice. As used in this sub-
293 subparagraph, the term "property and casualty lines of business"
294 includes all lines of business identified on Form 2, Exhibit of
295 Premiums and Losses, in the annual statement required of
296 authorized insurers under s. 624.424 and any rule adopted under
297 this section, except for those lines identified as accident and
298 health insurance and except for policies written under the
299 National Flood Insurance Program or the Federal Crop Insurance
300 Program. For purposes of this sub-subparagraph, the term

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301 "workers' compensation" includes both workers' compensation
302 insurance and excess workers' compensation insurance.
303 h. The Florida Surplus Lines Service Office shall
304 determine annually the aggregate statewide written premium in
305 subject lines of business procured by assessable insureds and
306 report that information to the corporation in a form and at a
307 time the corporation specifies to ensure that the corporation
308 can meet the requirements of this subsection and the
309 corporation's financing obligations.
310 i. The Florida Surplus Lines Service Office shall verify
311 the proper application by surplus lines agents of assessment
312 percentages for regular assessments and emergency assessments
313 levied under this subparagraph on assessable insureds and assist
314 the corporation in ensuring the accurate, timely collection and
315 payment of assessments by surplus lines agents as required by
316 the corporation.
317 j. Upon determination by the board of governors that an
318 account has a projected deficit, the board shall levy a Citizens
319 policyholder surcharge against all policyholders of the
320 corporation.
321 (I) The surcharge shall be levied as a uniform percentage
322 of the premium for the policy of up to 15 percent of such
323 premium, which funds shall be used to offset the deficit.
324 (II) The surcharge is payable upon cancellation or
325 termination of the policy, upon renewal of the policy, or upon

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326 issuance of a new policy by the corporation within the first 12
327 months after the date of the levy or the period of time
328 necessary to fully collect the surcharge amount.
329 (III) The corporation may not levy any regular assessments
330 under paragraph (q) pursuant to sub-subparagraph a. or sub-
331 subparagraph b. with respect to a particular year's deficit
332 until the corporation has first levied the full amount of the
333 surcharge authorized by this sub-subparagraph.
334 (IV) The surcharge is not considered premium and is not
335 subject to commissions, fees, or premium taxes. However, failure
336 to pay the surcharge shall be treated as failure to pay prem ium.
337 k. If the amount of any assessments or surcharges
338 collected from corporation policyholders, assessable insurers or
339 their policyholders, or assessable insureds exceeds the amount
340 of the deficits, such excess amounts shall be remitted to and
341 retained by the corporation in a reserve to be used by the
342 corporation, as determined by the board of governors and
343 approved by the office, to pay claims or reduce any past,
344 present, or future plan-year deficits or to reduce outstanding
345 debt.
346 4. The Citizens account, if established by the corporation
347 pursuant to sub-subparagraph 2.b., is authorized to provide:
348 a. Personal residential policies that provide
349 comprehensive, multiperil coverage on risks that are not located
350 in areas eligible for coverage by the Florida Windstorm

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351 Underwriting Association, as those areas were defined on January
352 1, 2002, and for policies that do not provide coverage for the
353 peril of wind on risks that are located in such areas;
354 b. Commercial residential and commercial nonresidential
355 policies that provide coverage for basic property perils on
356 risks that are not located in areas eligible for coverage by the
357 Florida Windstorm Underwriting Association, as those areas were
358 defined on January 1, 2002, and for policies that do not provide
359 coverage for the peril of wind on risks that are located in such
360 areas; and
361 c. Personal residential policies and commercial
362 residential and commercial nonresidential property policies that
363 provide coverage for the peril of wind on risks that are located
364 in wind-eligible areas eligible for coverage by the Florida
365 Windstorm Underwriting Association, as those areas were defined
366 on January 1, 2002. The corporation may offer policies that
367 provide multiperil coverage and shall offer policies that
368 provide coverage only for the peril of wind for risks located in
369 wind-legible areas eligible for coverage by the Florida
370 Windstorm Underwriting Association, as those areas were defined
371 on January 1, 2002. The corporation may not offer new commercial
372 residential policies providing multiperil coverage. The
373 corporation, but shall continue to offer commercial residential
374 wind-only policies, and may offer commercial residential
375 policies excluding wind. However, the corporation may continue

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376 to renew a commercial residential multiperil policy on a
377 building that was insured by the corporation on June 30, 2014,
378 under a multiperil policy. In issuing multiperil coverage under
379 this sub-subparagraph, the corporation may use its approved
380 policy forms and rates for risks located in areas that are not
381 wind-eligible eligible for coverage by the Florida Windstorm
382 Underwriting Association as those areas were defined on January
383 1, 2002, and for policies that do not provide coverage for the
384 peril of wind on risks that are located in such areas. An
385 applicant or insured who is eligible to purchase a multiperil
386 policy from the corporation may purchase a multiperil policy
387 from an authorized insurer without prejudice to the applicant's
388 or insured's eligibility to prospectively purchase a policy that
389 provides coverage only for the peril of wind from the
390 corporation. An applicant or insured who is eligible for a
391 corporation policy that provides coverage only for the peril of
392 wind may elect to purchase or retain such policy and also
393 purchase or retain coverage excluding wind from an authorized
394 insurer without prejudice to the applicant's or insured's
395 eligibility to prospectively purchase a policy that provides
396 multiperil coverage from the corporation. The following
397 policies, which provide coverage only for the peril of wind,
398 must also include quota share primary insurance under
399 subparagraph (c)2.: Personal residential policies and commercial
400 residential and commercial nonresidential property policies that

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401 provide coverage for the peril of wind on risks that are located
402 in areas eligible for coverage by the Florida Windstorm
403 Underwriting Association, as those areas were defined on January
404 1, 2002; policies that provide multiperil coverage, if offered
405 by the corporation, and policies that provide coverage only f or
406 the peril of wind for risks located in areas eligible for
407 coverage by the Florida Windstorm Underwriting Association, as
408 those areas were defined on January 1, 2002; commercial
409 residential wind-only policies; commercial residential policies
410 excluding wind, if offered by the corporation; and commercial
411 residential multiperil policies on a building that was insured
412 by the corporation on June 30, 2014. The area eligible for
413 coverage with the corporation under this sub-subparagraph
414 includes the area within Port Canaveral, which is bordered on
415 the south by the City of Cape Canaveral, bordered on the west by
416 the Banana River, and bordered on the north by Federal
417 Government property.
418 5. With respect to a deficit in the Citizens account:
419 a. Upon a determination by the board of governors that the
420 Citizens account has a projected deficit, the board shall levy a
421 Citizens policyholder surcharge against all policyholders of the
422 corporation.
423 (I) The surcharge shall be levied as a uniform percentage
424 of the premium for the policy of up to 15 percent of such
425 premium, which funds shall be used to offset the deficit.

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426 (II) The surcharge is payable upon cancellation or
427 termination of the policy, upon renewal of the policy, or upon
428 issuance of a new policy by the corporation within the first 12
429 months after the date of the levy or the period of time
430 necessary to fully collect the surcharge amount.
431 (III) The surcharge is not considered premium and is not
432 subject to commissions, fees, or premium taxes. However, failure
433 to pay the surcharge shall be treated as failure to pay premium.
434 b. After accounting for the Citizens policyholder
435 surcharge imposed under sub-subparagraph a., the remaining
436 projected deficit incurred in the Citizens account in a
437 particular calendar year shall be recovered through emergency
438 assessments under sub-subparagraph c.
439 c. Upon a determination by the board of governors that a
440 projected deficit in the Citizens account exceeds the amount
441 that is expected to be recovered through surcharges under sub -
442 subparagraph a., the board, after verification by the office,
443 shall levy emergency assessments for as many years as necessary
444 to cover the deficits, to be collected by assessable insurers
445 and the corporation and collected from assessable insureds upon
446 issuance or renewal of policies for subject lines of business,
447 excluding National Flood Insurance Program policies. The amount
448 collected in a particular year must be a uniform percentage of
449 that year's direct written premium for subject lines of business
450 and the Citizens account, National Flood Insurance Program

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451 policy premiums, as annually determined by the board and
452 verified by the office. The office shall verify the arithmetic
453 calculations involved in the board's determination within 30
454 days after receipt of the information on which the determination
455 was based. The office shall notify assessable insurers and the
456 Florida Surplus Lines Service Office of the date on which
457 assessable insurers shall begin to collect and assessable
458 insureds shall begin to pay such assessment. The date must be at
459 least 90 days after the date the corporation levies emergency
460 assessments pursuant to this sub-subparagraph. Notwithstanding
461 any other law, the corporation and each assessable insurer that
462 writes subject lines of business shall collect emergency
463 assessments from its policyholders without such obligation being
464 affected by any credit, limitation, exemption, or deferment.
465 Emergency assessments levied by the corporation on assessable
466 insureds shall be collected by the surplus lines agent at the
467 time the surplus lines agent collects the surplus lines tax
468 required by s. 626.932 and paid to the Florida Surplus Lines
469 Service Office at the time the surplus lines agent pays the
470 surplus lines tax to that office. The emergency assessments
471 collected shall be transferred directly to the corporation on a
472 periodic basis as determined by the corporation and held by the
473 corporation solely in the Citizens account. The aggregate amount
474 of emergency assessments levied for the Citizens account in any
475 calendar year may be less than, but may not exceed the greater

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476 of, 10 percent of the amount needed to cover the deficit, plus
477 interest, fees, commissions, required reserves, and other costs
478 associated with financing the original deficit or 10 percent of
479 the aggregate statewide direct written premium for subject lines
480 of business and the Citizens accounts for the prior year, plus
481 interest, fees, commissions, required reserves, and other costs
482 associated with financing the deficit.
483 d. The corporation may pledge the proceeds of assessments,
484 projected recoveries from the Florida Hurricane Catastrophe
485 Fund, other insurance and reinsurance recoverables, policyholder
486 surcharges and other surcharges, and other funds available to
487 the corporation as the source of revenue for and to secure bonds
488 issued under paragraph (q), bonds or other indebtedness issued
489 under subparagraph (c)3., or lines of credit or other financing
490 mechanisms issued or created under this subsection; or to retire
491 any other debt incurred as a result of deficits or events giving
492 rise to deficits, or in any other way that the board determines
493 will efficiently recover such deficits. The purpose of the lines
494 of credit or other financing mechanisms is to provide additional
495 resources to assist the corporation in covering claims and
496 expenses attributable to a catastrophe. As used in this
497 subsection, the term "assessments" includes emergency
498 assessments under sub-subparagraph c. Emergency assessments
499 collected under sub-subparagraph c. are not part of an insurer's
500 rates, are not premium, and are not subject to premium tax,

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HB 893 2024

501 fees, or commissions; however, failure to pay the emergency
502 assessment shall be treated as failure to pay premium. The
503 emergency assessments shall continue as long as any bonds issued
504 or other indebtedness incurred with respect to a deficit for
505 which the assessment was imposed remain outstanding, unless
506 adequate provision has been made for the payment of such bonds
507 or other indebtedness pursuant to the documents gov erning such
508 bonds or indebtedness.
509 e. As used in this subsection and for purposes of any
510 deficit incurred on or after January 25, 2007, the term "subject
511 lines of business" means insurance written by assessable
512 insurers or procured by assessable insureds for all property and
513 casualty lines of business in this state, but not including
514 workers' compensation or medical malpractice. As used in this
515 sub-subparagraph, the term "property and casualty lines of
516 business" includes all lines of business identified o n Form 2,
517 Exhibit of Premiums and Losses, in the annual statement required
518 of authorized insurers under s. 624.424 and any rule adopted
519 under this section, except for those lines identified as
520 accident and health insurance and except for policies written
521 under the National Flood Insurance Program or the Federal Crop
522 Insurance Program. For purposes of this sub-subparagraph, the
523 term "workers' compensation" includes both workers' compensation
524 insurance and excess workers' compensation insurance.
525 f. The Florida Surplus Lines Service Office shall annually

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526 determine the aggregate statewide written premium in subject
527 lines of business procured by assessable insureds and report
528 that information to the corporation in a form and at a time the
529 corporation specifies to ensure that the corporation can meet
530 the requirements of this subsection and the corporation's
531 financing obligations.
532 g. The Florida Surplus Lines Service Office shall verify
533 the proper application by surplus lines agents of assessment
534 percentages for emergency assessments levied under this
535 subparagraph on assessable insureds and assist the corporation
536 in ensuring the accurate, timely collection and payment of
537 assessments by surplus lines agents as required by the
538 corporation.
539 h. If the amount of any assessments or surcharges
540 collected from corporation policyholders, assessable insurers or
541 their policyholders, or assessable insureds exceeds the amount
542 of the deficits, such excess amounts shall be remitted to and
543 retained by the corporation in a reserve to be used by the
544 corporation, as determined by the board of governors and
545 approved by the office, to pay claims or reduce any past,
546 present, or future plan-year deficits or to reduce outstanding
547 debt.
548 (7) DEVELOPMENT AND MODIFICATION OF WIND-ELIGIBLE AREAS.—
549 (a) The Citizens Property Insurance Corporation may amend
550 the wind-eligible areas, subject to approval by the Legislature

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551 under paragraph (c), by developing new eligibility criteria and
552 rates for policies that provide wind-only coverage. In
553 developing new eligibility criteria and rates, the corporation
554 may consider the market for wind-only coverage in the areas in
555 which wind-only coverage is to be offered, the resulting impact
556 to the corporation's overall exposure of offering such coverage
557 in those areas, as well as reasonably prudent measures for
558 limiting its exposure upon offering wind-only coverage in those
559 areas.
560 (b) Rates for coverage offered in wind-eligible areas are
561 subject to paragraph (6)(n).
562 (c) By December 1 of each year, beginning in 2025, the
563 corporation shall submit to the Legislature the eligibility
564 criteria and rates developed under paragraph (a) for review and
565 approval. The office shall implement the eligibility criteria
566 and rates only upon approval by the Legislature.
567 (8)(7) WIND-ELIGIBLE AREA DEFINED; COLLATERAL PROTECTION
568 INSURANCE.—
569 (a) Except as otherwise provided in subsection (7), the
570 term "wind-eligible area," as used in this section, means an
571 area that is eligible for coverage by the Florida Windstorm
572 Underwriting Association, as those areas were defined on January
573 1, 2002.
574 (b) As used in this section and ss. 215.555 and 627.311,
575 the term "collateral protection insurance" means commercial

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576 property insurance of which a creditor is the primary
577 beneficiary and policyholder and which protects or covers an
578 interest of the creditor arising out of a credit transaction
579 secured by real or personal property. Initiation of such
580 coverage is triggered by the mortgagor's failure to maintain
581 insurance coverage as required by the mortgage or other lending
582 document. Collateral protection insurance is not residential
583 coverage.
584 Section 2. This act shall take effect July 1, 2024.

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INSURANCE & BANKING SUBCOMMITTEE

HB 893 by Lopez, V.
Coverage by Citizens Property
Insurance Corporation

AMENDMENT SUMMARY
February 6, 2024

Amendment 1 by Rep. Lopez, V. (Line 550): The amendment makes the following changes to
the bill:
• Requires Citizens Property Insurance Corporation (Citizens) to seek approval of its
eligibility criteria for wind-only coverage every 5 years, beginning in 2030, rather than
every year as proposed in the bill; and
• Requires approval of the wind-only eligibility by the Legislature, but requires approval of
the wind-only rates by the Office of Insurance Regulation, rather than the Legislature.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 893 (2024)
Amendment No. 1

COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER

1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Lopez, V. offered the following:
4
5 Amendment (with title amendment)
6 Remove lines 550-566 and insert:
7 the wind-eligible areas, subject to approval by the office under
8 paragraph (b) and the Legislature under paragraph (c) by
9 developing new eligibility criteria and rates for policies that
10 provide wind-only coverage. In developing new eligibility
11 criteria and rates, the corporation may consider the market for
12 wind-only coverage in the areas in which wind-only coverage is
13 to be offered, the resulting impact to the corporation's overall
14 exposure of offering such coverage in those areas, as well as
15 reasonably prudent measures for limiting its exposure upon
16 offering wind-only coverage in those areas.
674781 - h0893-line 550.docx
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 893 (2024)
Amendment No. 1

17 (b) Rates for coverage offered in wind-eligible areas are
18 subject to paragraph (6)(n).
19 (c) By December 1 of every fifth year, beginning in 2030,
20 the corporation shall review and submit to the Legislature any
21 recommendations to revise the eligibility criteria developed
22 under paragraph (a) for review and approval. The office shall
23 implement the eligibility criteria only upon approval by t he
24 Legislature.
25
26 -----------------------------------------------------
27 T I T L E A M E N D M E N T
28 Remove lines 16-17 and insert:
29 criteria to be reported to the Legislature for review and
30 approval; requiring such rates to be reported to the Office of
31 Insurance Regulation for review and approval; requiring the
32 Office of

674781 - h0893-line 550.docx
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Page 2 of 2
PCS for HB 1149
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 1149 Policy Cancellations and Nonrenewals by Property Insurers
SPONSOR(S): Insurance & Banking Subcommittee
TIED BILLS: IDEN./SIM. BILLS:

REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF

Orig. Comm.: Insurance & Banking Subcommittee Fortenberry Lloyd

SUMMARY ANALYSIS
An authorized insurer may not cancel or nonrenew any personal residential or commercial residential property
insurance policy:
 For 90 days after the dwelling or residential property has been repaired, if the property has been damaged as a
result of a hurricane or wind loss.
 Until the earlier of when the dwelling or residential property has been repaired or one year after the insurer
issues the final claim payment, if the property was damaged by a covered peril, but not a hurricane or wind loss.

However, an authorized insurer or agent may cancel or nonrenew a policy b efore the dwelling or residential property
has been repaired: upon 10 days’ notice (for nonpayment of premium); or upon 45 days’ notice (for: 1. a material
misstatement or fraud related to the claim, 2. if the insurer determines that the insured has unreasonably caused a
delay in the repair, or 3. if the insurer has paid policy limits).

If an insurer elects to nonrenew a policy covering a property that has been damaged, the insurer must provide at
least 90 days’ notice that the insurer intends to nonrenew the policy 90 days after the property has been repaired. A
structure is considered repaired when substantially completed and restored to the extent that it is insurable by
another authorized insurer writing policies in Florida.

Section 626.9201, F.S., governs a surplus lines insurer’s cancellation or nonrenewal of personal residential and
commercial residential property insurance policies. However, current law contains no specific language regarding
cancellation or nonrenewal of surplus lines policies issued on properties with unrepaired damage.

The bill changes when an authorized insurer may cancel or nonrenew personal residential or commercial residential
property insurance policies on properties with unrepaired damage. As a result, the standards for cancellation apply
to personal residential and commercial residential property insurance policies issued by both authorized insurers
and surplus lines insurers. An insurer may not cancel or nonrenew a personal residential or commercial
residential property policy covering a dwelling or residential property in Florida whi ch has been damaged by a
covered peril until the earlier of: the completion of repairs; or, the expiration of one subsequent renewal of the policy
that was in force at the time of the loss.

“Damage” includes flood damage related to a hurricane if flood is a covered peril under the personal residential or
commercial residential property insurance, or under a separate flood insurance policy, in effect at the time of the
loss for which the damage remains unrepaired. Additionally, if flood is not a covered peril under the policy or under a
separate flood insurance policy, and the property has been damaged as a result of flood related to a hurricane, an
insurer may not cancel or nonrenew the policy until the earlier of: the completion of repairs; or , the expiration of one
subsequent renewal of the policy that was in force at the time of the loss.

The bill specifies exceptions which will allow an insurer to cancel a policy when unrepaired damage remains. These
include failure to pay premium, a lack of insurable interest in the property, fraud, and failure to timely respond to
written inquiries by the insurer.

The bill has no impact on state or local revenues or expenditures. It may have indeterminate positive and negative
economic impacts on the private sector.

The bill is effective July 1, 2024.

This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: pcs1149.IBS
DATE: 2/4/2024
FULL ANALYSIS

I. SUBSTANTIVE ANALYSIS

A. EFFECT OF PROPOSED CHANGES:
Background

In general, with respect to any personal residential or commercial residential property insurance policy
covering a dwelling or residential property in Florida, including but not limited to, any homeowner,
mobile home owner, farmowner, condominium association, condominium unit owner, apartment
building, or other policy covering a residential structure or its contents, an authorized insurer must give
the first-named insured:
 At least 45 days’ advance written notice of the renewal premium. 1
 Written notice of nonrenewal, cancellation, or termination at least 120 days before the effective
date of the nonrenewal, cancellation, or termination. Such notice must contain the reason for the
nonrenewal, cancellation, or termination.2

However, an authorized insurer may not cancel or nonrenew any personal residential or commercial
residential property insurance policy:
 For 90 days after the dwelling or residential property has been repaired, if the property has been
damaged as a result of a hurricane or wind loss that is the subject of a declaration of emergency
and the filing of an order by the Insurance Commissioner. 3
 Until the earlier of when the dwelling or residential property has been repaired or one year after
the insurer issues the final claim payment, if the property was damaged by a covered peril, but
not a hurricane or wind loss.4

Additionally, an authorized insurer or agent may cancel or nonrenew a policy before the dwelling or
residential property has been repaired:
 Upon 10 days’ notice for nonpayment of premium; or
 Upon 45 days’ notice for:
o A material misstatement or fraud related to the claim;
o If the insurer determines that the insured has unreasonably caused a delay in the repair; or
o If the insurer has paid policy limits. 5

If an insurer elects to nonrenew a policy covering a property that has been damaged, the insurer must
provide at least 90 days’ notice that the insurer intends to nonrenew the policy 90 days after the
property has been repaired.6 A structure is considered repaired when substantially completed and
restored to the extent that it is insurable by another authorized insurer writing policies in Florida.7

Section 626.9201, F.S., governs the cancellation or nonrenewal of personal residential and commercial
residential property insurance policies issued by surplus lines insurers. Currently, a surplus lines
insurer issuing a policy for property insurance must give the first named insured at least 45 days’
advance written notice as to why the policy is not to be renewed. 8 A surplus lines insurer issuing a
policy providing covering property must give the named insured written notice of cancellation or
termination, including the reasons for the cancellation or termination, with certain exceptions. 9
However, current law contains no specific language regarding cancellation or nonrenewal of surplus
lines policies issued on properties with unrepaired damage.

1 S. 627.4133(2)(a), F.S.
2 S. 627.4133(2)(b), F.S.
3 S. 627.4133(2)(e)1.a., F.S.
4 S. 627.4133(2)(e)1.b., F.S.
5 S. 627.4133(2)(e)2., F.S.
6 S. 627.4133(2)(e)3., F.S.
7 S. 627.4133(2)(e)5., F.S.
8 S. 626.9201(1), F.S.
9 S. 626.9201(2), F.S
STORAGE NAME: pcs1149.IBS PAGE: 2
DATE: 2/4/2024
Effect of the Bill

The bill changes when an authorized insurer may cancel or nonrenew personal residential or
commercial residential property insurance policies on properties with unrepaired damage. It eliminates
the separate timeframes for authorized insurers to cancel or nonrenew personal residential or
commercial residential policies following losses due to hurricane and wind and all other covered perils.

The bill also establishes standards for cancellation and nonrenewal of such policies issued by surplus
lines insurers.

As a result, the following standards for cancellation apply to personal residential and commercial
residential property insurance policies issued by both authorized insurers and surplus lines
insurers. An insurer may not cancel or nonrenew a personal residential or commercial residential
property policy covering a dwelling or residential property in Florida which has been damaged by a
covered peril until the earlier of:
 The completion of repairs; or
 The expiration of one subsequent renewal of the policy that was in force at the time of the loss.

The bill states that the term “damage” includes flood damage related to a hurricane if flood is a covered
peril under the personal residential or commercial residential property insurance, or under a separate
flood insurance policy, in effect at the time of the loss for which the damage remains unrepaired.

Additionally, if flood is not a covered peril under the policy or under a separate flood insurance policy,
and the property has been damaged as a result of flood related to a hurricane, an insurer may not
cancel or nonrenew the policy until the earlier of:
 The completion of repairs; or
 The expiration of one subsequent renewal of the policy that was in force at the time of the loss.

An insurer or agent may cancel or nonrenew a personal residential and commercial residential policy
prior to the repair of the dwelling or residential property:
 Upon 10 days’ notice:
o For nonpayment of premium; or
o If the named insured no longer has an insurable interest in the property; or
 Upon 45 days’ notice:
o For a material misstatement or fraud related to the claim;
o If the insurer or its agent has made a reasonable written inquiry of the insured as to the
status of the repair and the insured fails to respond within 30 calendar days; or
o If the insurer has paid policy limits under a personal residential property insurance policy
for a loss to the insured dwelling that was damaged, or policy limits under a commercial
residential property insurance policy for a loss to each structure that was damaged.

If the insurer elects to nonrenew a policy after the expiration of one subsequent renewal of the policy in
force at the time of the loss, the insurer must comply with normal notice requirements in the statutes for
authorized and surplus lines insurers.10 Additionally, the provisions prohibiting cancellation or
nonrenewal of policies on properties with unrepaired damage do not prevent the insurers from
canceling or nonrenewing the policies after the repair is completed for the same reasons they would
have canceled if the unrepaired damage did not exist.

The bill provides that a structure is deemed to be repaired when substantially completed and restored
to the extent that it is insurable by:
 Another authorized insurer writing policies in Florida if the structure is currently insured by an
authorized insurer; or
 Another authorized or eligible surplus lines insurer writing policies in Florida if the structure is
currently insured by an eligible surplus lines insurer.

10 Ss. 627.4133(2) and 626.9201, F.S., respectively.
STORAGE NAME: pcs1149.IBS PAGE: 3
DATE: 2/4/2024
B. SECTION DIRECTORY:

Section 1. Amends s. 626.9201, F.S., relating to notice of cancellation or nonrenewal.

Section 2. Amends s. 627.4133, F.S., relating to notice of cancellation, nonrenewal, or renewal
premium.

Section 3. Provides an effective date of July 1, 2024.

II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT

A. FISCAL IMPACT ON STATE GOVERNMENT:

1. Revenues:

None.

2. Expenditures:

None.

B. FISCAL IMPACT ON LOCAL GOVERNMENTS:

1. Revenues:

None.

2. Expenditures:

None.

C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:

Personal residential and commercial residential policyholders may experience an indeterminate
economic impact as a result of the bill. Those policyholders who might have had to pay higher
premiums for force-placed insurance when their existing insurers canceled or nonrenewed them due to
unrepaired damage will remain insured by their current insurers for at least one subsequent renewal
period. Admitted and surplus lines insurers may experience a negative economic impact by being
forced to renew policies on properties with unrepaired damage that they otherwise would have
nonrenewed or canceled.

D. FISCAL COMMENTS:

None.

III. COMMENTS

A. CONSTITUTIONAL ISSUES:

1. Applicability of Municipality/County Mandates Provision:

Not applicable. This bill does not appear to affect county or municipal governments.

2. Other:

None.
STORAGE NAME: pcs1149.IBS PAGE: 4
DATE: 2/4/2024
B. RULE-MAKING AUTHORITY:

The Financial Services Commission is provided sufficient authority to and may adopt rules necessary to
implement the provisions within the bill.11

C. DRAFTING ISSUES OR OTHER COMMENTS:

None.

IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES

11 The Financial Services
Commission, composed of the Governor, the Attorney General, the Chief Financial Officer, and
the Commissioner of Agriculture, serves as agency head of the Office of Insurance Regulation for the purposes of
rulemaking.
STORAGE NAME: pcs1149.IBS PAGE: 5
DATE: 2/4/2024
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

PCS for HB 1149 ORIGINAL 2024

1 A bill to be entitled
2 An act relating to policy cancellations and
3 nonrenewals by property insurers; amending s.
4 626.9201, F.S.; prohibiting eligible surplus lines
5 insurers from canceling and nonrenewing within certain
6 timeframes policies covering dwellings and residential
7 properties damaged by hurricanes and wind losses;
8 amending s. 627.4133, F.S.; providing that
9 prohibitions on cancellation apply to flood damages
10 caused by hurricanes under certain circumstances;
11 providing exceptions to prohibitions against insurers'
12 policy cancellations and nonrenewals within certain
13 timeframes; revising conditions under which a
14 structure is deemed to be repaired; revising the
15 definition of the term "insurer" to include eligible
16 surplus lines insurers; providing an effective date.
17
18 Be It Enacted by the Legislature of the State of Florida:
19
20 Section 1. Paragraph (c) of subsection (2) of section
21 626.9201, Florida Statutes, is added to read:
22 626.9201 Notice of cancellation or nonrenewal.—
23 (2) An insurer issuing a policy providing coverage for
24 property, casualty, surety, or marine insurance must give the
25 named insured written notice of cancellation or termination

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26 other than nonrenewal at least 45 days before the effective date
27 of the cancellation or termination, including in the written
28 notice the reasons for the cancellation or termination, except
29 that:
30 (a) If cancellation is for nonpayment of premium, at least
31 10 days' written notice of cancellation accompanied by the
32 reason for cancellation must be given. As used in this
33 paragraph, the term "nonpayment of premium" means the failure of
34 the named insured to discharge when due any of his or her
35 obligations in connection with the payment of premiums on a
36 policy or an installment of such a premium, whether the premium
37 or installment is payable directly to the insurer or its agent
38 or indirectly under any plan for financing premiums or extension
39 of credit or the failure of the named insured to ma intain
40 membership in an organization if such membership is a condition
41 precedent to insurance coverage. The term also includes the
42 failure of a financial institution to honor the check of an
43 applicant for insurance which was delivered to a licensed agent
44 for payment of a premium, even if the agent previously delivered
45 or transferred the premium to the insurer. If a correctly
46 dishonored check represents payment of the initial premium, the
47 contract and all contractual obligations are void ab initio
48 unless the nonpayment is cured within the earlier of 5 days
49 after actual notice by certified mail is received by the
50 applicant or 15 days after notice is sent to the applicant by

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51 certified mail or registered mail, and, if the contract is void,
52 any premium received by the insurer from a third party shall be
53 refunded to that party in full; and
54 (b) If cancellation or termination occurs during the first
55 90 days during which the insurance is in force and if the
56 insurance is canceled or terminated for reasons other than
57 nonpayment, at least 20 days' written notice of cancellation or
58 termination accompanied by the reason for cancellation or
59 termination must be given, except if there has been a material
60 misstatement or misrepresentation or failure to comply with the
61 underwriting requirements established by the insurer.
62 (c)1. Notwithstanding subparagraph 2., an insurer may not
63 cancel or nonrenew a personal residential or commercial
64 residential property insurance policy covering a dwelling or
65 residential property located in this state which has been
66 damaged by a covered peril until the earlier of the completion
67 of repairs or the expiration of one subsequent renewal of the
68 policy that was in force at the time of the loss. If flood is
69 not a covered peril under the personal residential or commercial
70 residential property insurance policy or under a separate flood
71 insurance policy and the property has been damaged as a result
72 of flood related to a hurricane, an insurer may not cancel or
73 nonrenew the personal residential or commercial residential
74 property insurance policy until the earlier of the completion of
75 repairs or the expiration of one subsequent renewal of the

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76 policy that was in force at the time of the loss.
77 2. An insurer or agent may cancel or nonrenew such a
78 policy prior to the repair of the dwelling or residential
79 property:
80 a. Upon 10 days' notice:
81 (I) For nonpayment of premium; or
82 (II) If the named insured no longer has an insurable
83 interest in the property; or
84 b. Upon 45 days' notice:
85 (I) For a material misstatement or fraud related to the
86 claim;
87 (II) If the insurer or its agent has made a reasonable
88 written inquiry to the insured as to the status of the repair
89 and the insured has failed within 30 calendar days to provide
90 information that is responsive to the inquiry to either the
91 address or e-mail account designated by the insurer or its
92 agent; or
93 (III) If the insurer has paid policy limits under a
94 personal residential property insurance policy for a loss to the
95 insured dwelling that was damaged, or policy limits under a
96 commercial residential property insurance policy for a loss to
97 each structure that was damaged.
98 3. If the insurer elects to nonrenew a policy after the
99 expiration of the time in subparagraph 1., the insurer must
100 provide notice in accordance with subsection (1).

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101 4. This paragraph does not prevent the insurer from
102 canceling or nonrenewing the policy after the repair is
103 completed for the same reasons the insurer would otherwise have
104 canceled or nonrenewed the policy but for subparagrap h 1.
105 5. For purposes of this paragraph:
106 a. A structure is deemed to be repaired when substantially
107 completed and restored to the extent that it is insurable by:
108 (I) Another authorized insurer writing policies in this
109 state if the structure is currently insured by an authorized
110 insurer; or
111 (II) Another authorized or eligible surplus lines insurer
112 writing policies in this state if the structure is currently
113 insured by an eligible surplus lines insurer.
114 b. The term "insurer" means an authorized insurer or an
115 eligible surplus lines insurer.
116 c. The term "damage” includes flood damage related to a
117 hurricane if flood is a covered peril under the personal
118 residential or commercial residential property insurance policy
119 or under a separate flood insurance policy.
120 6. The commission may adopt rules, and the commissioner
121 may issue orders, necessary to implement this paragraph.
122 Section 2. Paragraph (e) of subsection (2) of section
123 627.4133, Florida Statutes, is amended to read:
124 627.4133 Notice of cancellation, nonrenewal, or renewal
125 premium.—

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126 (2) With respect to any personal lines or commercial
127 residential property insurance policy, including, but not
128 limited to, any homeowner, mobile home owner, farmowner,
129 condominium association, condominium unit owner, apartment
130 building, or other policy covering a residential structure or
131 its contents:
132 (e)1. Notwithstanding subparagraph 2., an insurer may not
133 cancel or nonrenew a personal residential or commercial
134 residential property insurance policy covering a dwelling or
135 residential property located in this state which has been
136 damaged by a covered peril until the earlier of the completion
137 of repairs or the expiration of one subsequent renewal of the
138 policy that was in force at the time of the loss. If flood is
139 not a covered peril under the personal residential or commercial
140 residential property insurance policy or under a separate flood
141 insurance policy and the property has been damaged as a result
142 of flood related to a hurricane, an insurer may not cancel or
143 nonrenew the personal residential or commercial residential
144 property insurance policy until the earlier of the completion of
145 repairs or the expiration of one subsequent renewal of the
146 policy that was in force at the time of the loss. An authorized
147 insurer may not cancel or nonrenew a personal residential or
148 commercial residential property insurance policy coverin g a
149 dwelling or residential property located in this state:
150 a. For a period of 90 days after the dwelling or

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151 residential property has been repaired, if such property has
152 been damaged as a result of a hurricane or wind loss that is the
153 subject of the declaration of emergency pursuant to s. 252.36
154 and the filing of an order by the Commissioner of Insurance
155 Regulation.
156 b. Until the earlier of when the dwelling or residential
157 property has been repaired or 1 year after the insurer issues
158 the final claim payment, if such property was damaged by any
159 covered peril and sub-subparagraph a. does not apply.
160 2. However, An insurer or agent may cancel or nonrenew
161 such a policy prior to the repair of the dwelling or residential
162 property:
163 a. Upon 10 days' notice:
164 (I) For nonpayment of premium; or
165 (II) If the named insured no longer has an insurable
166 interest in the property; or
167 b. Upon 45 days' notice:
168 (I) For a material misstatement or fraud related to the
169 claim;
170 (II) If the insurer or its agent has made a reasonable
171 written inquiry to the insured as to the status of the repair
172 and the insured has failed within 30 calendar days to provide
173 information that is responsive to the inquiry to either the
174 address or e-mail account designated by the insurer or its
175 agent; If the insurer determines that the insured has

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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

PCS for HB 1149 ORIGINAL 2024

176 unreasonably caused a delay in the repair of the dwelling; or
177 (III) If the insurer has paid policy limits under a
178 personal residential property insurance policy for a loss to the
179 insured dwelling that was damaged, or policy limits under a
180 commercial residential property insurance policy for a loss to
181 each insured structure that was damaged.
182 3. If the insurer elects to nonrenew a policy after the
183 expiration of the time in subparagraph 1., the insurer must
184 provide notice in accordance with subsection (1).
185 4. Nothing in This paragraph does not shall prevent the
186 insurer from canceling or nonrenewing the policy after the
187 repair is completed 90 days after the repairs are complete for
188 the same reasons the insurer would otherwise have canceled or
189 nonrenewed the policy but for the limitations of subparagraph 1.
190 The Financial Services Commission may adopt rules, and the
191 Commissioner of Insurance Regulation may issue orders, necessary
192 to implement this paragraph.
193 5. 4. This paragraph shall also apply to personal
194 residential and commercial residential policies covering
195 property that was damaged as the result of Hurricane Ian or
196 Hurricane Nicole.
197 6. 5. For purposes of this paragraph:
198 a. A structure is deemed to be repaired when substantially
199 completed and restored to the extent that it is insurable by :
200 (I) Another authorized insurer writing policies in this

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PCS for HB 1149 ORIGINAL 2024

201 state if the structure is currently insured by an authorized
202 insurer; or
203 (II) Another authorized or eligible surplus lines insurer
204 writing policies in this state if the structure is currently
205 insured by an eligible surplus lines insurer.
206 b. The term "insurer" means an authorized insurer or an
207 eligible surplus lines insurer.
208 c. Except for sub-subparagraph 5., the term “damage”
209 includes flood damage related to a hurricane if flood is a
210 covered peril under the personal residential or commercial
211 residential property insurance policy or under a se parate flood
212 insurance policy.
213 7. The commission may adopt rules, and the commissioner may
214 issue orders, necessary to implement this paragraph.
215 Section 3. This act shall take effect July 1, 2024.

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INSURANCE & BANKING SUBCOMMITTEE

PCS for HB 1149 by Botana
Policy Cancellations and
Nonrenewals by Property Insurers

AMENDMENT SUMMARY
February 6, 2024

Amendment 1 by Rep. Botana (Line 184): corrects a cross-reference.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 1149 (2024)
Amendment No. 1

COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER

1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Botana offered the following:
4
5 Amendment
6 Remove line 184 and insert:
7 provide notice in accordance with subsection (2).

PCS for HB 1149 a1
Published On: 2/5/2024 6:21:24 PM
Page 1 of 1
Citizens Property
Insurance Corporation
Florida House of Representatives
Insurance and Banking Subcommittee
Windstorm Coverage
Tim Cerio – President, CEO & Executive
Director
February 6, 2024

~Ill~~~~
PROPERlY INSURA
Wind-Only Eligible Areas

Wind-Only Territories, Drawn to Scale
Valdosta
ile

&111 n 0
Tallahassee i
0 Jac?
\ onv,lle
1,000 Apale(hlCQlilll
0 NaOonal Forffl ~
I g \IIJl n

~
ICWl)IIJS
I 1 , □□ [J' ,, A1n ~ w,ln EIOII
City ol 1,Wll' 1.500' & Gainesville V. aim Coast
Gur Breeze 0
souu1or Barrier 151and9 plu!I 83
Hr,ys-6 Cffl e!I OI Ormond Bch,
DB'}'ttllllll Billi & S00.:11 fiJ, 'l'... 16l
D.'1)'1.0fllaBOfl "~ ,\
~
we:it cii Slloal Line Orlando
8. Dartez Road9 0

KEY - ELIGIBLE AREAS V-~ alUS Hwy i9 1\'lb 1, 000'

Tampa
Fa
0
ol Bay
Barrier Islands , Plus Portions of
Florida 7.6
Main land , Including Entire Cities
~?{!JI- St Lud e
D 1,000' _ 1,500' From Coastl ine 0

D Barrier Islands

D East of 195
East
D Entire County 011-~.a,,
A A 1A.

D Seaward of Designated Highway
East
Of 1-95
City Lim it Only

Areas Not to Scale
Descriptions are Only
General Representations
~ ITIZENS
Page 2 PROPERTY INSURANCE CORPORATION
Current Residential Market Share

Personal Residential Commercial Residential
Policy Private Carriers Private Carriers
Type Exposure Policy Market Writing Exposure Policy Market Writing
(In 000,000) Count Share Over 10K (In 000,000) Count Share at least $1M in
Policies Exposure
Multiperil $ 424,753 1,182,212 15% 58 $ 26,255 1,481 16% 18

X-Wind $ 8,795 34,848 5% 7 $ 1,728 93 21% 8

Wind-Only $ 43,008 90,038 80% 1 $ 43,640 2,628 100% 0

Total $ 476,556 1,307,098 15% 66 $ 71,623 4,202 39% 26

*Market Share is based on total exposure data.
Quarterly and Supplemental Reporting System Reports, 9/30/2023. Florida Office of Insurance Regulation
~ ITIZI~~
Page 3 PROPERTY INSURAN
Important Issues to Consider

1. Pricing

2. Wind claims settlement by the private industry

3. Reinsurance

4. Florida Hurricane Catastrophe Fund

5. Assessments

~ ITIZI~~
Page 4 PROPERTY INSURAN
Pricing
Personal Residential Commercial Residential
Homeowners Condominium Associations

Peril Rate Indication Peril Rate Indication

Wind 103.1% Wind 183.9%

Water (28.3%)
All Other (30.7%)
All Other (8.5%)
Sinkhole (18.0%)
Sinkhole (0.0%)
Total 87.2%
Total 40.5%

~ ITIZI~~
Page 5 PROPERTY INSURAN
Wind Claims Settlement by the Private Industry
Potential issues with private insurers adjusting wind claims on Citizens’ behalf:

1. Appropriate incentives require that the insurer adjusting the claim should be
responsible for paying a significant portion of it.

2. Part of reinsurance pricing is based on an insurer’s claims processes where
the reinsurer must have confidence in the insurer’s capability to settle claims
appropriately. Additionally, data quality impacts pricing.

3. Predicting trends in claims will be a challenge if not impossible.

4. Detecting and fighting fraud requires close coordination between Citizens’
analysts/actuaries and its claims adjusters.
~ ITIZI~~
Page 6 PROPERTY INSURAN
Reinsurance
Increase in
Reinsurance
Total Exposure Policy Reinsurance Cost
Cost
(In 000,000) Counts from Citizens’
(In $000,000)
9/30/23

Citizens 9/30/2023 Data $ 618,100 1,407,810 $ 650 -

FHCF 6/30/2023 Data $3,178,710 4,984,751 - -

Citizens’ Wind-Only 50% Growth $1,589,355 2,492,380 $2,810 333%

Citizens’ Wind-Only 75% Growth $2,384,032 3,738,560 $4,180 555%

Citizens’ Wind-Only 100% Growth $3,178,710 4,984,751 $5,600 645%

~ ITIZI~~
Page 7 PROPERTY INSURAN
Florida Hurricane Catastrophe Fund (FHCF)

If Citizens has the predominant share of wind policies in Florida, how would this
impact the FHCF?

Will the FHCF function in the way the Legislature intended?

~ ITIZI~~
Page 8 PROPERTY INSURAN
Assessments: Surplus Depletion Scenarios
($ in Millions) Hurricane Andrew
Scenario, 1: Hurricane Andrew
Cu rrent All FL Residential All FL Resid ential
Citizens Wind w/FHCF Wind w/out FHCF
IE sti mated Loss & LAIE $9j600 $70j300 $70 300 j

.Surplus. Rema ining $1593
J. $0 $01 ... .,,_

Surplus Exposed 67% 100% 100%
Assessment $0 .$48:,400 $65:,400
Great Miami Hurricane of 1926
Scenario 2: Great Miami Hurricane of 1926 -·
•-----,,...,_ ···~·-
Current All FL Residential All FL Resid ential l'""' '

Citizens Wind w/FHCF Wind w/out FHCF
Estimate d Loss & LAIE $18,. 900 $103,300 $103,300
.Surplus Remaining $0 $0 so
Surplus Exposed 100% 100% 100%
Assessm ent $3,274 $81,400 $'9 8,400

~ ITIZENS
Page 9 PROPERTY INSURANCE CORPORATION

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