Getting ready for session
Today marks the beginning of the final two weeks of legislative committee meetings leading to the start of the Florida Legislature’s 60-day session on Tuesday, January 9. We see that the Senate President is focusing on health care access, including addressing a potential shortage of doctors and nurses in the future. We are awaiting the legislative agenda of the House of Representatives. We continue to monitor each chamber’s position on further property insurance reform and will report information as we receive it.
In the meantime, we and others continue to beat the drum to suggest a broader state-backed reinsurance program to help lower homeowners insurance rates for Floridians. The media continues to cover the hardship stories. Consumer advocate Paul Handerhan of the Federal Association for Insurance Reform appeared in a WFLA-TV story last week in support of the state funding more accessible reinsurance to insurance companies. “The legislature could create a program to provide public reinsurance capacity,” said Handerhan. “Any savings that they would inure through that program, they would have to pass those savings onto customers in their next rate filing.” I’m a fan of the proposed Florida Insurance Rate Reduction Mechanism (FIRRM) to build upon the 2022 reforms, by creating more state backed reinsurance at about 10-15 cents of every dollar we pay versus private reinsurance at 35-40 cents of every dollar we pay. The growing inflation in everything (look at the value of your own home today vs. three years ago) is also making homeowners’ rate increases more severe.
Interestingly, the Senate Banking and Insurance Committee has not met once this fall, nor is it meeting tomorrow (December 5) on its scheduled day. We’ll see if it meets next Tuesday, December 12 – the last opportunity before the session begins. Its counterpart in the House, the Insurance & Banking Subcommittee, has had just one meeting which was a general presentation by the insurance commissioner. It is not meeting this week as scheduled either, but is scheduled to meet next Wednesday, December 13.
Here are some of the committee meetings of interest this week:
(Today) Monday, December 4
3:30pm – House Select Committee on Hurricane Resiliency & Recovery will be hearing presentations on contractor fraud and on agriculture.
Tuesday, December 5
4pm – The House Agriculture, Conservation & Resiliency Subcommittee will be hearing presentations on issues related to resilience.
Wednesday, December 6
11am – The Senate Environment and Natural Resources Committee will consider bills on mangrove replanting and restoration in storm surge resistance and on saltwater intrusion vulnerability assessments and will hear a presentation by the Department of Environmental Protection on its proposed stormwater rules.
The Governor this week will also be rolling out his proposed budget for the fiscal year beginning July 1, 2024.
The past two weeks saw a furry of new bills being filed in advance of the regular session. Here is an initial list of the legislative bills we’re following so far. Many of the bills on this current Bill Watch are sponsored by Democrats. Last history has shown that bills with democratic sponsors have a low probability of passage. At LMA we work both sides of the aisle and will engage with all sponsors who take an interest in property insurance public policy. Updates within each bill are noted in blue font:
Property Insurance:
Property Insurance Coverage ̶ HB 625 by Rep. James Buchanan (R-Osprey) addresses some of the current issues facing condominium associations in finding affordable and adequate coverage. The bill removes the current prohibition on condo complexes from wind-only coverage by Citizens Property Insurance if 50% or more of the units are rented more than eight times in a calendar year for rentals of less than 30 days. The bill also increases the property loss assessment coverage from $2,000 to $5,000 that is included in an individual unit owner’s policy for all assessments made as a result of the same direct loss to the condo complex’s collective property. The bill also addressed ongoing roofing fraud by requiring an authorized inspector use the Commercial Roof Condition Inspection Form (CL-RCF-1 07 17). The inspector may provide an appendix to this form which includes pictures or other documentation to demonstrate the remaining useful life of the roof. The bill currently has no Senate companion. It is awaiting its first hearing before the House Insurance & Banking Subcommittee.
Citizens Property Insurance Corp. ̶ SB 604 and the similar HB 565 by Senator Ana Maria Rodriguez (R-Miami-Dade) and Rep. Jim Mooney, Jr. (R-Islamorada) and Rep. Vicki Lopez (R-Miami) would make a slight change to the legislatively-created rate glide path for Citizens with its annual mandatory rate increases and also the requirements that Citizens policyholders carry flood insurance. It seems specially tailored to Monroe County (the Florida Keys) policyholders who have complained for years about what they say is higher than appropriate premiums. The bill requires in those counties where there is not a reasonable degree of competition that Citizens implement annual rate increases of up to 10%. This in keeping with the legislature’s intent that Citizens be “non-competitive” with admitted companies’ market rates while keeping capped rates until each individual policy rate is actuarially-sound. The bill also further relaxes the flood insurance requirement by exempting policies for structures that are elevated at least 1 foot above the flood zone’s minimum base flood elevation. The Senate bill is awaiting committee referrals; the House bill is awaiting its first hearing before the Insurance & Banking Subcommittee.
Mortgage Loans and Insurance Payments Grant Program ̶ HB 41 by Rep. Jervonte “Tae” Edmonds (D-Palm Beach) would provide state grants to Florida residents to help make mortgage, homeowners insurance, and auto insurance payments. It would provide a one-time grant of up to $1,500 ($2,500 for a senior citizen) for a mortgage or homeowners insurance payment and a one-time grant of up to $1,500 ($2,500 for a senior citizen) to help make a motor vehicle insurance payment. The program would be funded and administered by the Florida Office of Insurance Regulation. The bill currently has no Senate companion. It is awaiting its first hearing before the House Insurance & Banking Subcommittee.
Financial Assistance for Homeowners ̶ HB 329 by Rep. Jervonte “Tae” Edmonds (D-Palm Beach), Rep. Jennifer “Rita” Harris (D-Orlando), and Rep. Michelle Rayner (D-St. Petersburg) is similar to the above bill HB 41. It creates a “Homeowners Assistance Fund” under the Department of Commerce for those facing financial hardships paying their mortgage, utilities, homeowners and flood insurance, and homeowners or condominium association fees. It would also reimburse funds spent by local governments for the same purpose. Qualifying criteria for the funds include unemployment, minority status, and income of up to 100% of median income for the locality. It applies to one-family to four-family dwellings. The bill has no Senate companion and is awaiting its first hearing before the House Local Administration, Federal Affairs & Special Districts Subcommittee.
Insurance Rebate Program for Low-Income Seniors ̶ SB 348 by Senator Lauren Book (D-Davie) creates the above-named program within the Department of Financial Services (DFS). It would reimburse Florida homeowners age 65 or older 10% of their homeowners insurance premium for their primary dwelling after proof of payment. The program would be paid for with unallocated general revenue. The bill currently has no House companion and is awaiting its first hearing in the Senate Banking and Insurance Committee.
Federal Catastrophe Pool ̶ HM 371, by Rep. Kelly Skidmore (D-Boca Raton) is a House Memorial urging the U.S. Congress to establish a federal catastrophe pool “to spread the risk and reduce the cost of insurance premiums and assist insurance companies and residents of the State of Florida and this nation when catastrophic natural disasters strike.” This type of federal backstop has been discussed before to provide a more available and reliable option to the private reinsurance market. The bill currently has no Senate companion. It is awaiting its first hearing before the House Insurance & Banking Subcommittee.
Property Insurance ̶ SB 102 by Senator Shevrin “Shev” Jones (D-Miami Gardens) would make major structural changes in property insurance regulation. It calls for the insurance commissioner to become an elected position; prohibits the commissioner from engaging in certain activities or employment for seven years after leaving office; creates a six-member Property Insurance Commission to review and evaluate the insurance marketplace, including commenting on market data and reserve requirements for insurance companies; requires interest earned on insurance proceeds be paid to the policyholder; prohibits property insurance companies from claiming insolvency if they’re still operating in another state; requires companies release all information relating to an inspection or an underwriting report upon the homeowner’s request; and requires agents provide a written notice to be signed by every applicant advising the applicant of flood risk.
The bill would also prevent an insurance company from using a property’s preexisting condition, a date of loss that predates the date of a claim, or faulty installation or workmanship as a defense for denying a claim. It also seeks to require the Governor and Cabinet sitting as the Financial Services Commission to require any future property reforms come with a rate reduction by insurance companies. The Department of Financial Services (DFS) would be required to investigate all allegations of insurance fraud made by an insurance company or contractor and if DFS determined there was no fraud, companies could be fined up to $100,000. The Office of Program Policy Analysis and Government Accountability (OPPAGA), the legislature’s accountability arm, would be required to conduct a study to evaluate the effectiveness of the DFS property insurance mediation program.
The bill includes a $300 million appropriation to boost funding for the My Safe Florida Home Program which offers free home inspections and grants of up to $10,000 on a $2 to $1 match to incentivize homeowners to harden their homes from future hurricanes. The legislature in special session last month provided another $176 million in current fiscal year funding for the program after it ran out of money this past summer. The bill currently has no House companion and is awaiting its first hearing in the Senate Banking and Insurance Committee.
Resolution of Disputed Property Insurance Claims ̶ SB 178 by Senator Tina Polsky (D-Boca Raton) herself a mediator and lawyer, has filed this bill requiring, rather than authorizing parties to a property insurance claims dispute to participate in mediation. It would apply to first-party personal and commercial lines claims before commencing the appraisal process and would be required before filing a lawsuit. Mediation would also be required of litigants referred by a county or circuit court. The bill deletes provisions relating to the eligibility of claims for mediation under various statutes and includes an appropriation of $1 million for its administration. The bill currently has no House companion and is awaiting its first hearing in the Senate Banking and Insurance Committee.
Surplus Requirements for Residential Property Insurers ̶ SB 500 by Senator Linda Stewart (D-Orlando) increases the minimum surplus requirement for new residential property insurance companies from its current $15 million to $20 million. It also increases the surplus requirement from $15 million to $20 million for existing companies that received their Certificate of Authority after July 1, 2011. Beginning July 1, 2031, and every 5 years thereafter, the minimum surplus as to policyholders would increase by $5 million. The bill currently has no House companion and is awaiting committee referrals.
Auto Insurance:
Motor Vehicle Insurance ̶ HB 653 and the identical SB 464 by Rep. Danny Alvarez (R-Brandon) and Senators Erin Grall (R-Fort Pierce) and Senator Darryl Rouson (D-St. Petersburg) is a perennial effort to do away with Personal Injury Protection (PIP) coverage under Florida’s No-Fault insurance law and replace it with bodily injury (BI) liability coverage. The primary difference between PIP and mandatory BI is that under PIP, someone injured in an auto accident seek coverage first under their own PIP policy, whereas under mandatory BI, someone injured in an auto accident would seek recovery from a responsible third-party’s (other driver’s) BI coverage. The bills are similar to the bill vetoed in 2021, and filed again in 2022 and 2023. Last spring’s bills were never heard by a committee and these aren’t expected to see much action either. SB 464 has been referred to the Senate Banking and Insurance, Judiciary, and Fiscal Policy committees but no hearing has yet been scheduled.
Consumer Protections:
Flood Disclosure in the Sale of Real Property ̶ SB 484 by Senator Jennifer Bradley (R-Fleming Island) would require a seller of real property to disclose in writing a variety of flood information to a prospective purchaser before executing a contract for the sale of the property. This includes:
- Whether the property has flooded before and if so, the frequency. This includes the overflow of inland or tidal waters, the unusual and rapid accumulation of runoff or surface waters from any established water source, and excessive rainfall;
- Whether the property owner has maintained flood insurance;
- Whether any portion of the property is located in a FEMA-designated Special Flood Hazard Area (SFHA) or moderate risk flood hazard zone;
- Whether the seller has ever received federal assistance for flood damage to the property;
- Whether the seller has ever filed a claim with the National Flood Insurance Program (NFIP) or any other insurance provider relating to flood damage; and
- Whether a Federal Emergency Management Agency elevation certificate is available for the property.
Similar bills in the 2023 session never received a hearing. The bill currently has no House companion and is awaiting its first hearing in the Senate Judiciary Committee.
Flood Zone Disclosures for Dwelling Units ̶ SB 38 is Senator Linda Stewart’s (D-Orlando) refiled bill from the 2023 session. It would require landlords to disclose whether an apartment is located in a designated flood zone prior to lease signing. The bill is intended to first inform all tenants throughout the state of their likelihood to flood, so that they can make an informed decision whether to purchase flood insurance. This push comes after Hurricane Ian did considerable damage to many parts of Stewart’s own Orange County district but this issue is close at home for many Floridians who’ve become aware of the true risk of flooding and those still unaware. This bill and SB 484 above together could protect residents across the state of Florida from the growing peril of floods. The bill currently has no House companion and is awaiting its first hearing in the Senate Judiciary Committee.
General:
Requiring Broader Public Support for Constitutional Amendments or Revisions ̶ HJR 335 by Rep. Rick Roth (R-West Palm Beach) is a House Joint Resolution that proposes an amendment to the State Constitution to require future amendments or revisions to the State Constitution pass with a two-thirds (66.67%) approval of voters, up from the current 60% threshold required for passage. The measure would require approval of the full legislature to then go before voters in the November 2024 election. The House passed a similar measure in the 2023 session but the Senate refused to take it up. The measure awaits its first hearing before the House Ethics, Elections & Open Government Subcommittee.
LMA Newsletter of 12-4-23
