House Staff Analysis: PCS for HB 1503 Citizens Property Insurance Corporation (Insurance & Banking)

Issuer: Congressional materials
Document type: 2024 3228 Insurance Banking Subcommittee Proposed Committee Bill Analyses Fn Pcs1503 Ibs
Case: 2024 3228 Insurance Banking Subcommittee Proposed Committee Bill Analyses Fn Pcs1503 Ibs

Summary

A House of Representatives staff analysis of the PCS for HB 1503, Citizens Property Insurance Corporation, sponsored by the Insurance & Banking Subcommittee and dated January 30, 2024. The analysis states that the bill raises the maximum home value eligible for Citizens coverage from $700,000 to $1 million statewide, with homes between those values charged an actuarially sound rate except in counties lacking a reasonable degree of competition. It also describes surplus lines take-outs of commercial residential policies, a dwelling-only flood coverage requirement, removal of language made obsolete by Citizens combining its accounts as of January 1, 2024, and operational changes. The section list cites amendments to s. 627.351, F.S., and the fiscal analysis reports no state or local government impact. The bill is effective July 1, 2024 except as otherwise provided.

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Cite this document

“House Staff Analysis: PCS for HB 1503 Citizens Property Insurance Corporation (Insurance & Banking).” Original at www.flhouse.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-3228-insurance-banking-subcommittee-proposed-committee-bill-analyses-fn-pcs1503-ibs/, SHA-256 5a2598974ed3da4c45363397a7ca6d44ab61c23b22e26ab55ec271bb10c4efd9.

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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 1503 Citizens Property Insurance Corporation
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
The bill makes various changes to Citizens Property Insurance Corporation (Citizens), including:

 Eligibility: increases the maximum home value eligible for Citizens coverage from $700,000 to $1
million throughout the state; with the exception of homes in counties that lack a reasonable degree of
competition (currently Miami-Dade and Monroe), policyholders with homes between $700,000 and $1
million will be charged a rate that is actuarially sound and noncompetitive; properties in Miami-Dade
and Monroe counties, and any others in counties that the Office of Insurance Regulation determines
lack a reasonable degree of competition, will continue to be charged a premium within the glidepath.

 Surplus Lines: permits surplus lines insurers to take out commercial residential policies from Citizens;
provides definitions to accomplish these take outs; establishes that new and renewal commercial lines
residential risks are not eligible for Citizens’ coverage if the risk is offered coverage by a surplus lines
insurer at the insurer’s approved rate under a policy including wind coverage.

 Flood coverage: effective upon becoming law, requires Citizens’ policyholders who must purchase
flood insurance as a condition of eligibility for Citizens’ coverage to purchase only dwelling coverage for
a flood loss rather than dwelling and contents coverage.

 Combining Accounts: eliminates a significant amount of statutory language that is no longer needed
because Citizens has combined the Personal Lines Account, the Commercial Lines Account, and the
Coastal Account, into one Citizens Account, as of January 1, 2024.

 Operations and Management: allows Citizens’ executive director to appoint a designee to act as its
agency head; allows Citizens to share information with NICB to assist in efforts to fight insurance fraud;
allows Citizens to obtain patents, copyrights, and trademarks, and to enforce related rights.

The bill has no impact on local or state government revenues or expenditures. It has a likely indeterminate
positive and negative direct economic impact on the private sector.

Except as otherwise expressly provided, 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 .
STORAGE NAME: pcs1503.IBS
DATE: 1/30/2024
FULL ANALYSIS

I. SUBSTANTIVE ANALYSIS

A. EFFECT OF PROPOSED CHANGES:
General Background

Citizens Property Insurance Corporation (Citizens) is a not-for-profit, tax-exempt government entity that
provides property insurance to those who are unable to find affordable coverage in the private market.
Citizens was created to serve as Florida’s property insurer of last resort.1 Applicants are eligible for
coverage if no admitted private carrier2 will write them a policy for a premium that is within 20 percent
greater than what Citizens would offer for comparable coverage. 3

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.4

Citizens’ Rates

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, did 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 to 15 percent, as follows: 5
 11 percent for 2022.
 12 percent for 2023.
 13 percent for 2024.
 14 percent for 2025.
 15 percent for 2026 and all subsequent years.

Citizens’ rate cap, also known as the “glidepath,” is not closing the gap between Citizens rates and
private market rates. Instead, because of the rate cap and the increasing rates of private property
insurance, the gap is growing and making Citizens more like a competitor to private insurers than an
insurer of last resort. Because Citizens’ rates are often well below those of private carriers, Citizens
may be more competitive than otherwise intended. Due to Citizens’ structure, its rates do not contain
certain elements that the rates of private insurers contain. Citizens does not pay taxes like private
insurers and does not need to purchase as much reinsurance as private insurers because of Citizens’
higher levels of capital and surplus.6

1 Citizens Property Insurance Corporation (Citizens), Programs, https://www.citizensfla.com/programs (last visited Jan. 30, 2024).

2 The admitted market is comprised of insurance companies licenses to transact insurance in Florida.
3 S. 627.351(6)(c)5.a, F.S.
4 S. 627.351(6)(c)1., F.S.
5 S. 627.351(6)(n)5., F.S.
6 S. 627.351(6)(t), F.S. See also s. 627.351(6)(c)9. for information regarding Citizens purchase of reinsurance.

STORAGE NAME: pcs1503.IBS PAGE: 2
DATE: 1/30/2024
The implementation of this increase ceases when Citizens has achieved actuarially sound rates. 7 In
addition to the overall glidepath rate increase, Citizens can increase its rates to recover the additional
reimbursement premium it pays to the Florida Hurricane Catastrophe Fund (FHCF) as a result of the
annual cash build-up factor added to the price of the mandatory layer of the FHCF coverage, pursuant
to s. 215.555(5)(b), F.S.8

In addition to eventually being actuarially sound, Citizens’ rates must not be competitive with approved
rates charged by admitted insurers so that Citizens functions as a residual market to provide insurance
only when it cannot be obtained from admitted insurers. 9 This eliminates localized rate reductions
among Citizens policies. Additionally, OIR must provide Citizens with the information necessary to
determine whether Citizens’ rates are competitive.10

Until Special Session 2022A, in December 2022, Citizens’ rates did not differ based upon whether the
property insured is a policyholders’ primary residence, a policyholder’s second home (e.g. a vacation
home,) or occupied by a long-term tenant.11 However, the Legislature removed the glidepath rate
limitations for any new or renewal personal lines policy for non-primary residences written on or after
November 1, 2023.12 The rate for these residences rate must be no more than 50% above, but not less
than, the established rate for Citizens which was in effect one year before the date of the application for
coverage.13

Eligibility for Coverage

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. Risks not meeting the statutory eligibility
requirements cannot be insured by Citizens. Citizens also has additional eligibility requirements set out
in their underwriting rules. These rules are approved by OIR and set out in Citizens’ underwriting
manuals.14

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 the Office of Insurance Regulation (OIR) continues to determine that these
counties are not competitive.15

Eligibility for Personal and Commercial Lines Residential Coverage at Renewal

When Citizens’ personal lines residential or commercial lines residential policyholders receive offers of
coverage at renewal from authorized insurers, the risks are not eligible for coverage from Citizens
unless the premiums from the authorized insurers are more than 20 percent greater than the rate for
comparable coverage from Citizens, inclusive of surcharges and assessments being levied on the
policy by Citizens.16 The bill also establishes that policies removed from Citizens under an assumption
agreement may remain on Citizen’s policy forms through the end of the policy term, but policy
administration and liability transfers to the assuming insurer.17

7 S. 627.351(6)(n)7., F.S.
8 S. 627.351(6)(n)6., F.S.
9 S. 627.351(6)(n)1., F.S.
10
Id.
11 Citizens would not issue a personal lines policy to someone using a home as a short-term vacation rental as that is considered a

business use of the home. Citizens is currently prohibited from issuing wind-only policies to commercial lines residential condominiums
when 50 percent or more of the units in the condominium are rented more than eight times per calendar year for less th an 30 days in
each rental period. S. 627.351(6)(a)6., F.S.
12 S. 627.351(6)(n)8., F.S.
13 Id.
14 See Citizens, Revised Underwriting Manuals, https://www.citizensfla.com/-/20160329-revised-underwriting-manuals (last visited Jan.

28, 2024).
15 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 prop erties up

to $1 million in value in those counties, as well.
16 S. 627.351(6)(c)5., F.S.
17 Id.

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DATE: 1/30/2024
Effect of the Bill – Eligibility

The bill increases the maximum home value eligible for Citizens coverage from $700,000 to $1 million
throughout the state. With the exception of homes in counties that lack a reasonable degree of
competition (currently Miami-Dade and Monroe), policyholders with homes between $700,000 and $1
million will be charged a rate that is actuarially sound and noncompetitive. Policyholders with properties
in Miami-Dade and Monroe counties, and any others in counties that OIR determines lack a reasonable
degree of competition, will continue to be charged a premium within the glidepath.

Eligibility after a Take-out Offer

Florida law requires that Citizens create programs to help return its policyholders to the private property
insurance market and to reduce the risk of additional assessments for all Floridians in the event that
Citizens is unable to meet its obligations.18 In 2016, the Legislature passed requirements that by
January 1, 2017, Citizens amend its operations relating to take-out agreements, whereby private
insurers remove policies from Citizens.19 As part of these requirements, a policy may not be taken out
of Citizens, unless Citizens:
 Publishes a periodic schedule of cycles during which an insurer may identify, and notify Citizens
of, policies the insurer requests to take out;20
 Maintains and makes available to the agent of record a consolidated list of all insurers
requesting to take out a policy; the list must include a description of the coverage offered and
the estimated premium for each take-out request;
 Provides written notice to the policyholder and the agent of record regarding all insurers
requesting to take-out the policy and regarding the policyholder’s option to accept a take-out
offer or to reject all take-out offers and to remain with Citizens. The notice must be in a format
prescribed by Citizens and include, for each take-out offer:
o The amount of the estimated premium;
o A description of coverage; and
o A comparison of the estimated premium and coverage offered by the insurer to the
estimated premium and coverage provided by Citizens. 21

When Citizens’ policyholders receive take-out offers from authorized insurers that include premiums
that are not more than 20 percent greater than Citizens’ renewal premium for comparable coverage,
inclusive of surcharges and assessments being levied on the policy by Citizens, they are no longer
eligible for Citizens’ coverage.22 Citizens’ must notify policyholders that they have received a take-out
offer and that the offer renders their risks ineligible for Citizens’ coverage. 23

Effect of the Bill – Surplus Lines

The bill permits surplus lines insurers to take out commercial residential policies from Citizens .24 The
bill includes various definitions to assist Citizens with these take outs. While surplus lines insurers do
not ordinarily have their rates approved by OIR, the definition of approved rate in the bill requires these
insurers to have rates approved for the purposes of their planned Citizens’ take outs.

The bill also establishes that new and renewal commercial lines residential risks are not eligible for
Citizens’ coverage if the risk is offered coverage by a surplus lines insurer at the insurer’s approved
rate under a policy including wind coverage.

18 S. 627.351(6)(q)3.a., F.S.
19 Ch. 2016-229, Laws of Fla.
20 These requests from insurers must include a description of the coverage offered and an estimated premium for it and must be

submitted to Citizens in a form prescribed by Citizens.
21 S. 627.351(6)(ii), F.S.
22 Id.
23 Id.
24 Surplus lines insurance refers to a category of insurance for which the admitted market is unable or unwilling to provide coverage.

The administration of surplus lines insurance business is managed by the Florida Surplus Lines Service Office. S. 626.921, F.S.
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DATE: 1/30/2024
Flood Coverage Requirements

Until Special Session 2022A, in December 2022, Citizens could not require a policyholder or applicant
to obtain flood insurance as a condition of coverage from Citizens if a policyholder or applicant signs a
form affirming that Citizens does not provide flood insurance coverage, and that, if the policyholder or
applicant does not obtain flood coverage in addition to a policy from Citizens, the risk is not covered for
flood damage.25 A Citizens policyholder who did not obtain flood coverage and executed such a form,
and who made a claim for water damage against Citizens, had the burden of proving the damage was
not caused by flooding.26

Under s. 627.715, F.S., authorized insurers may issue personal lines residential flood coverage. Such
coverage includes, but is not limited to, standard flood insurance, which is equivalent to that provided
by the National Flood Insurance Program (NFIP), and preferred and customized flood insurance, which
provide additional coverage from that provided by standard flood coverage. 27

In April 2023, Citizens began to require personal lines residential policyholders and applicants purchase
and maintain flood insurance coverage that is at least equivalent to the coverage provided by the
NFIP.28 The policyholder or applicant must execute a form affirming that Citizens does not provide flood
insurance and that if the policyholder or applicant does not obtain flood insurance, his or her risk will not
be eligible for coverage from Citizens.29 Citizens may deny coverage to a personal lines residential
policyholder or applicant who refuses to purchase and maintain flood insurance. 30

The purchase of flood coverage by personal lines residential policyholders and applicants has been
implemented as follows:31
 The following Citizens’ policyholders are not required to purchase flood overage as a condition
of maintain their Citizens policies:
o policyholders whose Citizens policies do not provide wind coverage; and
o policyholders whose Citizens policies provide coverage under a condominium unit
owners form.
 All policyholders whose Citizens-insured property is located within the special flood hazard area
defined by the Federal Emergency Management Agency must have flood coverage in place:
o At the time of initial policy issuance for all new policies issued by Citizens on or after
April 1, 2023.
o By the time of policy renewal for all personal lines residential policies renewing on or
after July 1, 2023.
 All other policyholders must have flood coverage in place for policies effective on or after:
o January 1, 2024, for property valued at $600,000 or more.
o January 1, 2025, for property valued at $500,000 or more.
o January 1, 2026, for property valued at $400,000 or more.
o January 1, 2027, for all other personal lines residential property insured by Citizens.

The law requiring certain Citizens’ policyholders to purchase flood coverage has been interpreted to
require the purchase of both dwelling and contents coverage for flood losses. When policyholders with
existing flood policies have added contents coverage to policies that covered the dwelling only, this has
triggered huge premium increases under the NFIP’s newly-implemented Risk Rating 2.0 pricing
approach.32

Effect of the Bill – Flood Coverage Requirements

25 See ch. 2022-271, Laws of Fla.
26 Id.
27 Current NFIP personal lines flood policies have limits of $250,000 per claim.
28 S. 627.351(6)(aa), F.S.
29 Id.
30 Id.
31 Id.
32 See Federal Emergency Management Agency, NFIP’s Pricing Approach, https://www.fema.gov/flood-insurance/risk-rating (last

visited Jan. 29, 2024).
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DATE: 1/30/2024
The bill requires Citizens’ policyholders who must purchase flood insurance as a condition of eligibility
for Citizens’ coverage to purchase only dwelling coverage for a flood loss rather than dwelling and
contents coverage. This will eliminate or avoid flood insurance rate increases triggered solely by the
purchase of contents coverage under a flood insurance policy in order to maintain eligibility for Citizens’
coverage.

Combining of Accounts

Three Accounts

Until very recently, Citizens had three different accounts through which it offered property insurance: a
personal lines account (PLA), a commercial lines account (CLA), and a Coastal Account. The PLA
offered personal lines residential policies that provide comprehensive, multi-peril coverage statewide,
except for those areas contained in the Coastal Account. The PLA also wrote policies that exclude
coverage for wind in areas contained within the Coastal Account. Personal lines residential coverage
consists of the types of coverage provided to homeowners’, mobile home owners’, dwellings, tenants’,
and condominium unit owners’ policies.33

The CLA offered commercial lines residential and non-residential policies that provide basic perils
coverage statewide, except for those areas contained in the Coastal Account. The CLA also wrote
policies that exclude coverage for wind in areas contained within the Coastal Account. Commercial
lines coverage includes commercial residential policies covering condominium associations,
homeowners’ associations, and apartment buildings. The coverage also includes commercial non-
residential policies covering business properties.34

The Coastal Account offered personal residential, commercial residential, and commercial non-
residential policies in coastal areas of the state. Citizens must offer policies that solely cover the peril of
wind (wind only policies) and may offer multi-peril policies.35

Financial Resources

Citizens’ financial resources include:
 Insurance premiums
 Investment income and operating surplus from prior years
 FHCF reimbursements
 Private reinsurance
 Policyholder surcharges
 Regular assessments
 Emergency assessments

Non-weather water losses, reinsurance costs and litigation are currently the major determinants of
insurance rates.36 In the event of a catastrophic storm or series of smaller storms, reserves could be
exhausted, leaving Citizens unable to pay all claims. 37 Under Florida law, if the Citizens’ Board of
Directors determines a Citizens’ account has a projected deficit, Citizens is authorized to levy
assessments 38 on its policyholders and on each line of property and casualty line of business other

33 See s. 627.351(6)(b)2.a., F.S., and Account History and Characteristics, Citizens Property Insurance Corporation,

https://www.citizensfla.com/documents/20702/1183352/20160315+05A+C itizens+Account+History.pdf/31f51358-7105-40e9-aa75-
597f51a99563 (March 2016) (last visited Jan. 28, 2024).
34 Id.
35 Id.
36 Citizens Property Insurance Corporation, 2022 Rate Kit, Citizens 2021 Rates, Frequently Asked Questions,

https://www.citizensfla.com/documents/20702/15725518/20211213+2022+Rate+Kit.pdf/328181e5-1c41-a28d-76ea-
b7d911462c6a?t=1639433573548 (last visited Jan. 28, 2024).
37 Citizens Property Insurance Corporation, Insurance/Insurance 101/Assessments, https://www.citizensfla.com/assessments (last

visited Jan. 28, 2024).
38 Assessments are charges that Citizens and non-Citizens policyholders can be required to pay, in addition to their regular policy

premiums.
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DATE: 1/30/2024
than workers’ compensation insurance and medical malpractice insurance.39 Citizens could impose
three assessment tiers.40

A surcharge of up to 15 percent of premium on all Citizens’ policies, collected upon issuance or
renewal. When Citizens had three separate accounts, this 15 percent assessment could be levied for
each of the three Citizens’ accounts—the CLA, the PLA, and the Coastal Account— that project a
deficit. Thus, the total maximum premium surcharge a policyholder could be assessed is 45 percent.41

If the Citizens’ surcharge was insufficient to cure the deficit for the Coastal Account, Citizens could
require an assessment against all other insurers except medical malpractice and workers’
compensation. The assessment may be recouped from policyholders through a rate filing process of up
to two percent of premium or two percent of the deficit, whichever is greater. 42 This assessment is not
levied against Citizens’ policyholders.

An emergency assessment provision requires any remaining deficit for Citizens’ three accounts be
funded by multi-year emergency assessments on all insurance policyholders, except medical
malpractice and workers’ compensation, but including Citizens’ policyholders. This assessment may not
exceed the greater of 10 percent of the amount needed to cover the deficit, plus interest, fees,
commissions, required reserves, and other costs associated with financing the original deficit, or
10 percent of the aggregate statewide direct written premium for subject lines of business and all
accounts of the corporation for the prior year, plus interest, fees, commissions, required reserves, and
other costs associated with financing the deficit. 43 The assessments may be cumulative.

During Special Session 2022A, the Legislature gave Citizens the authority to combine its three
accounts into a single account upon Citizens eliminating all outstanding financing obligations. 44 A single
account structure allows Citizens to access its entire surplus to pay claims. Previously, surplus in a
particular account could only be used to pay claims in that account.

OIR approved changes to “Citizens’ underwriting guidelines and application statements regarding
possible assessment and surcharge amounts to support the merging of Citizens’ three accounts. . .”
into the Citizens Account.45 The Citizens policyholder surcharge imposed in the event of a deficit has
been revised from 15 percent per account (maximum 45 percent total) to 25 percent for the single
account (an initial assessment of up to 15 percent plus a potential emergency assessment of up to 10
percent).46 Effective January 1, 2024, Citizens combined the three accounts into the Citizens Account. 47

Effect of the Bill – Combining Accounts

The bill eliminates a significant amount of statutory language that is no longer needed because Citizens
has combined its three accounts into one account. These statutory deletions include references to the
PLA, CLA, and Coastal Account. Citizens is now permitted to use its entire surplus to pay claims. The
bill does not make any additional changes regarding assessments beyond those that were enacted
during Special Session 2022A.

Citizens’ Operations and Management

39 Accident and health insurance and policies written under the NFIP or the Federal Crop Insurance Program are not assessable types

of property and casualty insurance. Surplus lines insurers are not assessable, but their policyholders are. S. 627.351.(6)(b)3.f.-h., F.S.
40
Citizens Property Insurance Corporation, Citizens Property Insurance Corporation: General Overview and Recent Issues, p. 14
7,https://myfloridahouse.gov/api/document/house?Leaf=HouseContent/Lists/LegislatorUResources/Attachments/75/Citizens%20Gener
al%20Overview%20and%20Recent%20Issues%20Presentation%2020221206.pdf (last visited Jan. 28, 2024).
41 Sections 627.351.(6)(b)3.i.(I) and 627.351.(6)(c)21., F.S. (2021).
42 S. 627.351(6)(b)3.a., F.S.
43 S. 627.351(6)(b)3.d., F.S.
44 S. 627.351(b)(b)2.b., F.S. The PLA, CLA, and coastal accounts combined to form one account known as the Citizens account.
45 Citizens, Comb ined Assessments and Surcharge Amounts, https://www.citizensfla.com/-/20231103-combined-assessments-and-

surcharge-amounts (last visited Jan. 28, 2024).
46 S. 627.351(6)b.5., F.S. While the text of SB 2-A (2022A) appeared to authorize Citizens to collect new, or additional surcharges, it did

not. Due to drafting requirements it establishes a new surcharge framework within the law to become effective upon the combining o f
the accounts, but does not actually authorize higher surcharges than those presently in law. See also Citizens, supra note 42.
47 Citizens, supra note 42.

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DATE: 1/30/2024
Citizens is overseen by a board and operated by an executive director. Citizens’ board consists of nine
individuals who must be residents of different geographical areas of Florida. 48 The Governor, Chief
Financial Officer, President of the Senate, and Speaker of the House, each appoint two members of the
board.49 The Governor appoints one additional member who serves solely to advocate on behalf of
consumers.50 At least one of the two members appointed by each appointing officer must have
demonstrated experience in insurance.51

Citizens’ executive director, often referred to as its president or chief executive officer, is engaged by
the board and serves “at the pleasure of the board.” 52 The executive director is subject to confirmation
by the Senate.53 He or she is responsible for employing other staff as Citizens requires, subject to
review and agreement by the board.54 However, current law does not specify the experience, character,
or qualifications that an individual must have in order to be qualified to serve as Citizens’ executive
director.

The special investigative units of private insurers typically share information with the National Insurance
Crime Bureau (NICB) to help fight insurance fraud.55 However, current law does not allow Citizens to
share information with NICB.

In addition, current law does not permit Citizens to obtain patents, copyrights, or trademarks, and to
enforce its related rights.

Effect of the Bill – Operations and Management

The bill makes the following changes regarding Citizens’ operations and management:
 Allows Citizens’ executive director to appoint a designee to act as its agency head.56
 Allows Citizens to share information with NICB to assist in efforts to fight insurance fraud.
 Allows Citizens to obtain patents, copyrights, and trademarks, and to enforce related rights
to the same.

B. SECTION DIRECTORY:

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

Section 2. Amends s. 627.3511, F.S., relating to depopulation of Citizens Property Insurance
Corporation.

Section 3. Amends s. 627.3518, F.S., relating to Citizens Property Insurance Corporation policyholder
eligibility clearinghouse program.

Section 4. Provides an effective date of July 1, 2024, except as otherwise provided.

II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT

A. FISCAL IMPACT ON STATE GOVERNMENT:

1. Revenues:

48 S. 627.351(6)(c)4., F.S.
49 Id.
50 Id.
51 Id.
52 Id.
53 Id.
54 Id.
55 See National Insurance Crime Bureau, Memb er Benefits, https://www.nicb.org/membership/member-benefits (last visited Jan. 28,

2024).
56 Allowing Citizens’ executive director to appoint a designee is consistent with the permission granted to state agency heads t o appoint

designees that is found throughout ch. 287, F.S.
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DATE: 1/30/2024
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 will likely have an indeterminate positive and negative effect on the private sector. Citizens’
policyholders who are required to purchase flood coverage will likely see a decrease in their flood
insurance premiums as a result of only having to buy dwelling coverage.

It may have a negative effect on commercial residential policyholders who must take an offer from a
surplus lines carrier and end up paying more in premium than they were paying for a Citizens policy.

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:

B. RULE-MAKING AUTHORITY:

The bill neither authorizes nor requires administrative rulemaking.

C. DRAFTING ISSUES OR OTHER COMMENTS:

None.

IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES

STORAGE NAME: pcs1503.IBS PAGE: 9
DATE: 1/30/2024

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House Staff Analysis: PCS for HB 1503 Citizens Property Insurance Corporation (Insurance & Banking)

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