Sunday, February 27, 2011

Big property insurance bill S408 approved by Senate insurance committee -- finally

Third time's the charm.  After three meetings, the Senate Banking and Insurance Committee finally voted its approval of the big property bill, SB 408.  The current text of the bill is at this link: S 0408 c1.  A staff analysis is found at this link: Bill Analysis, S 0408, 02/24/2011.

The Senate staff analysis provides the following summary of S 408:

  • Modifies current replacement cost coverage and actual cash value provisions relating to dwellings and personal property.
  • Requires windstorm and hurricane claims to be brought within three years and sinkhole loss claims to be brought within two years.
  • Requires the Florida Hurricane Catastrophe Fund to provide reimbursement for ―all incurred losses including amounts paid as legal fees on behalf of the policyholder.
  • Increases the minimum surplus requirements for residential property insurers to $15 million.
  • Allows insurers offering personal lines property insurance to provide written notice of policy changes to their policyholders without having to non-renew an entire insurance policy due to a change in policy terms.
  • Reduces the insurer’s written notice of nonrenewal, cancellation, or termination of a personal lines or commercial residential property insurance policy to 90 days.
  • Modifies provisions related to windstorm damage mitigation discounts for residential property insurance and repeals the provision requiring the OIR to develop a method correlating mitigation discounts to the uniform home grading scale.
  • Repeals the requirement that the Consumer Advocate prepare an annual report card for personal residential property insurers.
  • Renames the Citizens High Risk Account the Coastal Account and repeals the requirement to reduce the boundaries of the Citizens’ High Risk Account (wind-only coverages).
  • Allows an insurer seeking to take policies out of Citizens to do so in 45 days.
  • Clarifies the ethics requirements for specified board members of the Citizens Property Insurance Corp., and provides that Board members abstain from voting under certain circumstances.
  • Allows an insurer to cancel or nonrenew a property insurance policy upon a minimum of 45 days’ notice based on a finding that the insurer lacks adequate reinsurance coverage for hurricane risk and other financial factors.
  • Revises the regulation of public adjusters by placing limits on public adjuster compensation, prohibiting certain statements in public adjuster advertising, and revising the contents of the public adjuster contract.
  • Removes the requirement that a property insurer must offer sinkhole coverage and eliminates application of statutes governing catastrophic ground cover collapse and sinkhole loss coverage from commercial property insurance policies.
  • Revises what constitutes a sinkhole loss.
  • Revises procedures for insurers and policyholders relating to standards for sinkhole insurance claim investigations and revises the neutral evaluation process for sinkhole disputes.
  • Provides changes to the procedures pertaining to sinkhole reports by professional engineers or professional geologists and repeals the sinkhole database.
Bill Analysis, S 0408, 02/24/2011

Property insurance legislation has a long way to go before it becomes law.  The bill is set to be heard by two other Senate committees, Budget and Rules.  The House has not yet scheduled a meeting on its big property bill, HB 803.  The 2011 Legislative Session formally opens on March 8 and ends eight weeks later, on May 6.

Here are a few media articles following the Senate insurance committee's vote on SB 408:
This summary was prepared by Perry Cone and is posted at

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