PCS for HB 1149 (2024): An act relating to policy cancellations and nonrenewals by property insurers
Summary
Proposed committee substitute PCS for HB 1149, marked ORIGINAL (2024), a bill to be entitled An act relating to policy cancellations and nonrenewals by property insurers. It adds a paragraph to section 626.9201, Florida Statutes, headed Notice of cancellation or nonrenewal. The title says it prohibits eligible surplus lines insurers from canceling and nonrenewing, within certain timeframes, policies covering dwellings and residential properties damaged by hurricanes and wind losses. It applies the cancellation prohibitions to flood damage caused by hurricanes under certain circumstances and revises the definition of insurer to include eligible surplus lines insurers. The act takes effect July 1, 2024.
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“PCS for HB 1149 (2024): An act relating to policy cancellations and nonrenewals by property insurers.”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-3228-insurance-banking-subcommittee-proposed-committee-bills-pcbs-1e84b616f6/
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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
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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PCS for HB 1149 ORIGINAL 2024
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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PCS for HB 1149 ORIGINAL 2024
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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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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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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