Sunday, February 26, 2012

Omnibus insurance bill matures in week 7, 2012

A bill that was once a "hodgepodge" has become more of an "omnibus" and is ready for action by the full House. Considered "non-controversial" by insurance legislation standards, HB 1101 now encompasses 19 matters, including little bits and pieces on sinkholes, Citizens, and PIP, as well as the entire captive modernization measure.

Below is a summary of the current House bill, as voted out of its final House committee in week 7, 2012:

Property insurance:
  • Notice of policy change - sinkhole coverage. Allows a “Notice of Change in Policy Terms” to be used to remove sinkhole coverage from a property insurance policy. 
  • Sinkhole repairs. Provides a definition of “rebate” to be used in sinkhole repairs.
  • Mediation of property insurance claims. Limits who can request statutory property insurance mediation to policyholders (as first-party claimants) and insurers. If the Governor declares a state of emergency due to a hurricane, property insurance claims filed more than 36 months after the declaration would be ineligible for the property insurance mediation program.
  • Citizens HO-8 policy. Requires Citizens Property Insurance Corporation to offer a basic perils policy similar to an HO-8 policy.
  • Citizens replacement cost valuation. Specifies methods of replacement cost valuation to be used by Citizens.
  • Citizens depopulation - surplus lines. Allows surplus lines insurers with a Demotech Financial Strength Rating of A or better to participate in the Citizens’ depopulation program, if HB 245 or similar legislation is adopted in the 2012 Session. For more on HB 245, see Passed House or ready for House vote, end of week 5.
  • Limited apportionment companies. Conforms the definition of “limited apportionment company” to other changes in the Insurance Code.
Motor vehicle insurance:
  • Salvage. Exempts a salvage motor vehicle dealer from having to carry garage liability or PIP insurance on vehicles that have been issued a certificate of destruction and that cannot be operated on the road.
  • Taxicab and PIP. Prevents an insurer that provides PIP benefits to an occupant of a taxicab, or to someone struck by a taxicab, from having a right of reimbursement against the owner or registrant of the taxicab.
  • Cancellation of auto policies for non-payment. Allows cancellation of any private passenger motor vehicle insurance policy within the first 60 days for non-payment of premium, regardless of whether or not the first two months of premiums need to be paid up front, when the check or other method of payment presented is subsequently dishonored.
  • PIP interest. Would conform the interest on overdue PIP benefits to the rate of interest on judgments generally.
Agent and adjuster issues:
  • Certificate of insurance. Makes alteration of a certificate of insurance a violation of the unfair trade practices act.
  • Adjusters of portable electronics insurance. Exempts certain employees of licensed insurance agents or licensed insurance adjusters selling portable electronics insurance from having to be licensed as an insurance adjuster.
  • Spanish language testing for agents. Allows the Department of Financial Services (DFS) to give licensure examinations in Spanish, and requires license applicants requesting an examination in Spanish to pay the costs related to the examination.
Other Miscellaneous:
  • Travel insurance. Expands the coverage of travel insurance to include event cancellation and damage to travel accommodations, and lengthen the travel period that can be covered by a policy from 60 days to 90 days. Expands who can be licensed to sell travel insurance, to allow full-time salaried employees of general lines agents and business entities that do travel planning to sell travel insurance.
  • Captive insurers. Modernizes current law relating to captive insurance to create new provisions relating to formation, incorporation, coverage, capital and surplus, licensure, reporting, and reinsurance. These same provisions are contained in a stand-alone bill. See Passed House or ready for House vote, end of week 5.
  • Surplus lines/commercial - disclosure.  Changes the required disclosures for commercial insurance sold in the surplus lines market.
  • Reinsurance summary statements.  Clarifies current law relating to the filing of reinsurance summary statements by insurers with the Florida OIR.
  • Receivership interest payments. Allows the receiver of an insolvent insurer to pay interest on claims and specifies the priority of the interest payment.
For more detail, see Staff Analysis on HB 1101 (Feb. 23, 2012).

This summary was prepared by Perry Cone and posted at

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