Bill Watch

Recap of Week 1 & Preview of Week 2 of Session

Last week concluded the first week of the 2024 nine week regular session of the Florida Legislature.  Last Monday, I had the pleasure of talking to about a dozen legislators about what they see as solutions to reducing the sticker shock faced by Floridians for the past few years.  The good news is that many 2024 rates may be flat or even slightly decreased but one legislator made the point that the slight decrease is from rates that doubled in 3 years.  Of course we talked about why rates are so high…inflation, litigation, the horrible weather, and the cost of reinsurance.  Many talked about the My Safe Florida Home (MSFH) Program and its effort to encourage Floridians to strengthen their homes, particularly roofs and windows. 

I often talk to consumers about the vulnerabilities of their homes and why they should take the lead in fortifying their largest asset!  You would be surprised when consumers say that they are “waiting for a storm” to get a new roof.  Ouch!  I immediately respond to this remark by asking if they have ever felt the pain of an insurance claim, with all their belongings scattered, wet, and destroyed.  Since the MSFH program funding isn’t sufficient to fortify all of Floridian’s housing that need strengthening, Floridians must take personal responsibility to protect themselves against Mother Nature.  An insurance policy is not a warranty policy!

In reviewing this week’s legislative committee agendas, there are two bills we’re following in Bill Watch that are being considered by the Senate Banking Committee tomorrow (Tuesday, January 16 at 11am).  They are SB 1066 “Consumer Protection” and SB 1106 “Coverage by Citizens Property Insurance Corp.”  The committee is also scheduled to hear SB 846 (Risk Retention Group) and SB 7028 (My Safe Florida Home Program), which is a slightly different version than SB 1098 “Department of Financial Services” bill below.  The rest of our Bill Watch below remains largely unchanged from last Monday’s edition.

As for potential further property insurance market reforms in this session, both Senate President Kathleen Passidomo (R-Naples) and House Speaker Paul Renner (R-Palm Coast) expressed patience last week in watching last year’s further reforms fully take effect.  You can watch Passidomo’s remarks here (beginning at timecode 1:10) and Renner’s remarks here (beginning at timecode 2:19).

I also had the pleasure of presenting a webinar about this session’s insurance bills to over 100 agent members of the Professional Insurance Agents of Florida.  If you are not a current supporter of that organization, please click here and join or get in touch with me for further details.  

After this Bill Watch we have some great tidbits for you to get your week started!  We look forward to engaging with you.

Here is the updated list of legislative bills we’re following.  You can click the bill link in the list below to go directly to the bill and its details further below.  “New” and “Updated” bills are so noted.  Updates within each bill are noted in blue font:

Florida Hurricane Catastrophe Fund and Reinsurance Assistance
Policy Cancellations and Nonrenewals by Property Insurers
Personal Lines Residential Property Insurance
Department of Financial Services
Access by Insureds to Claim-related Documents
Insurance
Financial Strength of Property Insurers
Litigation Financing
Condominium Windstorm Pilot Program
Hurricane Protections for Homeowners’ Associations
My Safe Florida Condominium Pilot Program
My Safe Florida Home Program Updated
Citizens Property Insurance Corp.
Coverage by Citizens Property Insurance Corp. Updated
Windstorm Coverage by Citizens Property Insurance Corporation
Other filed property insurance bills
Motor Vehicle Insurance
Insurance Claims
Flood Damage Prevention
Flood Disclosure in the Sale of Real Property
Flood Zone Disclosures for Dwelling Units
Consumer Protection Updated

Property Insurance – Reinsurance:

Florida Hurricane Catastrophe Fund and Reinsurance Assistance  ̶  HB 1293 by Rep. Hillary Cassel (D-Dania Beach) eliminates the rapid cash buildup factor for one year; resets the attachment point at the 2023 contract year figure of $8.5 billion; reauthorizes the RAP and FORA programs; requires the Cat Fund to pay actual loss adjustment expense; allows insurance companies an option to purchase 100% coverage; requires the Cat Fund rates to be based on an average of all seven approved catastrophe models; requires cat fund rates to be filed with the Florida Office of Insurance Regulation (OIR); and clarifies the statute that the Cat Fund’s claims-paying capacity limit is $17 billion.  A similar bill has been filed in the Senate (SB 1668) by Senator Nick DiCeglie (R-St. Petersburg).  (Return to Top of List)

Property Insurance – Regulation & Claims:

Policy Cancellations and Nonrenewals by Property Insurers  ̶  SB 1104 and the similar HB 1149 by Senator Jennifer Bradley (R-Fleming Island) and Rep. Adam Botana (R-Bonita Springs) would put new restrictions on insurance companies cancelling or nonrenewing policies, with a focus on flood damage – regardless of whether an insurance policy provides coverage for the damage or not.  Specifically the bill:

• Prohibits admitted and surplus lines insurance companies from cancelling or nonrenewing commercial policies (including commercial residential, such as condominium complexes) until 90 days after the property has been repaired from a wind loss or hurricane, including flood damage, if the property was covered by any flood insurance policy. If the property wasn’t covered for flood, the company must wait until the property is repaired or one year after the loss (or one year after a final claim payment) – whichever is earlier.
• If a company chooses to cancel or nonrenew one of the above policies, it must provide at least 90 days’ notice of its intent to do so, which can coincide with the above 90 day requirement.
• If a policy is extended or renewed, it must contain the same policy terms as the original policy.
• The only exceptions to the above: if the insurance company has paid policy limits for a personal residential policy loss, or policy limits for a loss to each insured structure under a commercial residential policy; for nonpayment of premium; material misstatement or fraud related to the claim; or if the carrier determines that the policyholder unreasonably caused a delay in the repairs.  (Return to Top of List)

Personal Lines Residential Property Insurance  ̶  HB 809 and the identical SB 1070 by Rep. Alina Garcia (R-Miami) and Senator Ileana Garcia (R-Miami) requires insurance companies before writing a traditional personal lines residential property insurance policy to offer instead a policy that covers losses equal to only the unpaid principal balance of all mortgage loans on the property.  It requires a signed statement by the purchaser acknowledging “the significant financial losses” they may incur for damage that exceeds such coverage.  The bill also prohibits insurance companies from requiring a coverage limit that includes the value of the land upon which the dwelling sits. (Return to Top of List)

Department of Financial Services  ̶  HB 989 by Rep. Chip LaMarca (R-Lighthouse Point) is a 115-page annual omnibus bill that touches on the many regulations and responsibilities of the Florida Department of Financial Services (DFS), including insurance.  Here’s what we’re watching:

• Section 11: Requires insurance companies to designate a contact person for escalated consumer complaints.
• Section 16: Requires adjusters to identify the type of adjuster appointment held in any written document or advertising; and prohibits an adjuster who has lost their state license from participating in any part of the claims process.
• Section 19: Requires insurance companies to put the notice of change in policy terms in a one-page summary with any policy renewal sent to the consumer.
• Section 22: Requires insurance companies subject to Florida Insurance Guaranty Association (FIGA) requirements to prepare and maintain a policy data transfer plan to be sent to FIGA in the event of liquidation to reduce the burden on the receiver.

There is a similar bill in the Senate (SB 1098) by Senator Nick DiCeglie (R-St. Petersburg). (Return to Top of List)

Access by Insureds to Claim-related Documents  ̶  SB 1726 and the identical HB 1287 by Senator Jonathan Martin (R-Fort Myers) and Rep. Hillary Cassel (D-Dania Beach) defines the term “claim-related documents” and requires insurance companies notify policyholders and certain parties that they may obtain copies of all claim-related documents upon request.  It also requires companies provide to policyholders, their agents and attorneys, copies of all claim-related documents within a specified timeframe after receiving requests, among other provisions.  (Return to Top of List)

Insurance  ̶  SB 1622 by Senator Jay Trumbull (R-Panama City) increases regulation of reciprocal insurance exchanges, which are a form of insurance organization in which individuals and businesses exchange insurance contracts and spread the risks associated with those contracts among themselves.  The beginning of the bill strengthens regulators’ control over nonrenewal and cancellations (gives the Financial Services Commission authority to write rules on the topic) and changes decades-old insurance company quarterly reporting of financial and company operations  to monthly.  This appears to be an Office of Insurance Regulation backed bill.  The bill also has a section that is comparable to the Citizens Insurance bills SB 1106 and HB 1015 in this Bill Watch. (Return to Top of List)

Financial Strength of Property Insurers  ̶  SB 1724 and the similar HB 1661 by Senator Erin Grall (R-Fort Pierce) and Rep. Spencer Roach (R-North Fort Myers) sets up an independent rating agency for Florida’s domestic property insurance companies.  It defines a financial strength rating and an independent rating agency, among other qualifications.  The bill is awaiting committee assignments and currently has no House companion.  (Return to Top of List)

Litigation Financing  ̶  SB 1276 and the identical HB 1179 by Senator Jay Collins (R-Tampa) and Reps. Tommy Gregory (R-Lakewood Ranch) and Toby Overdorf (R-Palm City) picks up where past efforts in recent sessions made no progress in regulating third-party funding of lawsuits against businesses, including insurance companies.  To be called the  “Litigation Investment Safeguards and Transparency Act” the bill requires a court’s consideration of potential conflicts of interest which may arise from the existence of a litigation financing agreement in specified circumstances; prohibits specified acts by litigation financiers; requires certain disclosures related to litigation financing agreements and the involvement of foreign persons, foreign principals, or sovereign wealth funds; and requires the indemnification of specified fees, costs, and sanctions by a litigation financier in specified circumstances, among other provisions.  (Return to Top of List)

Property Insurance – Condominium & Homeowners Associations:

Condominium Windstorm Pilot Program  ̶  HB 655 and the identical SB 802 by Rep. Hillary Cassel (D-Dania Beach) and Senator Ana Maria Rodriguez (R-Miami-Dade) also attempts to provide help for condominium complexes seeking basic wind-only coverage.  The bill would require the Office of Insurance Regulation (OIR) to create a pilot program for commercial residential coverage with Citizens Property Insurance for actual cash value (ACV) coverage rather than replacement cost value.  A condominium association would have to receive a majority vote of its members in order to participate in the pilot program.  The Citizens policy would be required to ensure the ACV of the residential condominium association’s roof aligns with the reserves required under HB 5-D and passed under HB 4-D in the May 2022 special session.  The condo complex would also be required to have biannual roof inspections and submit those along with the most recent structural integrity reserve study to Citizens.  The program would begin July 1, 2024 and sunset five years later.  If passed, it is expected to increase the Citizens policy count.  Citizens Chairman Carlos Beruff at its Exposure Reduction Committee in December commented “I don’t want to be the Lloyd’s of London of Florida where we’re creating insurance products just because we can.”  (Return to Top of List)

Hurricane Protections for Homeowners’ Associations  ̶  SB 600 and the identical HB 293 by Senator Blaise Ingoglia (R-Spring Hill) and Rep. Tyler Sirois (R-Merritt Island) requires a homeowners association committee or board to adopt hurricane protection specifications that conform to applicable building codes.  It also prohibits the committee or board from denying an application to install or enhance certain hurricane protections and contains provisions for adhering to guidelines on the external appearance of buildings.  The House bill’s first hearing was temporarily postponed in December before the House Regulatory Reform & Economic Development Subcommittee.  (Return to Top of List)

My Safe Florida Condominium Pilot Program  ̶  SB 1366 and the identical HB 1029 by Senator Nick DiCeglie (R-St. Petersburg) and Reps. Vicki Lopez (R-Miami) and Rep. Christine Hunschofsky (D-Parkland) would apply the popular homeowners program of the same name to condo complexes & individual condo unit owners in an initial pilot program.  The program includes requirements on associations and unit owners that choose to participate, required inspections, and on the hurricane mitigation inspectors who perform the services.  (Return to Top of List)

My Safe Florida Home Program  ̶  HB 1263 and a comparable SB 1208 by Rep. Chip LaMarca (R-Lighthouse Point) and Senator Jonathan Martin (R-Fort Myers) revises provisions in this popular program that 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 re-established the program in 2023 but by mid-summer the number of applications exceeded the $100 million program funding.  The legislature in special session in November 2023 pumped another $176 million into the program, and this bill funds another $100 million in the upcoming fiscal year July 1.  Among other things it gives priority of grants to elderly and low income Floridians.  Also, SB 1208 and HB 1143 by Senator Jonathan Martin (R-Fort Myers) and Rep. Lindsay Cross (D-St. Petersburg) would add flood protection improvements, including elevating structures, to the existing program.  (Return to Top of List)

Property Insurance – Citizens Property Insurance Corporation:

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 create a special carve-out to the legislatively-created rate glide path for Citizens with its annual mandatory rate increase caps.  It also relaxes the requirements that Citizens policyholders carry flood insurance.  

The carve-out is specially tailored to Monroe County (the Florida Keys) policyholders who have complained for years about what they say is higher than appropriate premiums.  But it also includes the densely populated Miami-Dade County, home to some of the highest insured values in Florida.  The bill requires that in those two counties and in counties where there is not a reasonable degree of competition that Citizens cap annual rate increases to 10% compared to the graduated cap for the rest of the state that will be 13% in 2024.  Citizens Board of Governors in December 2023 expressed concern that the bill represents backward progress on growing the rate cap glide path and will make Citizens the only insurer in Monroe and Miami-Dade counties.  It also increases Citizens’ Coverage A limit from $1 million to $1.5 million in counties that have been designated as areas with no competition (Miami-Dade and Monroe Counties).  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.  (Return to Top of List)

Coverage by Citizens Property Insurance Corp.  ̶  HB 889 by Rep. Kim Berfield (R-Pinellas County) broadens the eligibility to qualify for a Citizens policy, removes the rate cap glide path and adds a surcharge on higher value policies, and prohibits some higher value policies from Citizens coverage if a comparable private market policy is available – regardless of price.  Specifically the bill:

• Expands Citizens by allowing it to write policies with a dwelling replacement cost (houses) or dwelling and contents replacement cost (condo units) of up to $1 million (up from the current limit of up to $700,000 coverage) which in LMA’s opinion does not contribute to a healthy private market.
• Eliminates the legislatively-set glide path cap on rate increases for policies with dwelling replacement cost (houses) or dwelling and contents replacement cost (condo units) of $700,000 or more.
• Requires a surcharge on the above homes and condo units of $700,000 or more coverage that is equal to the lesser of $2,500 or 25% of the Citizens’ rate to ensure Citizens’ rates are not competitive with the private market.
• Removes eligibility for a Citizens policy for the above homes and condo units of $700,000 or more coverage if there is comparable coverage offered from a private market company under a standard policy that includes wind coverage.

Senator Ed Hooper (R-Palm Harbor) has filed a similar bill (SB 1106) that we are closely watching as well and is scheduled to have its first hearing tomorrow (January 16) at 11am before the Senate Banking and Insurance Committee.  HB 1015 is comparable to SB 1106. (Return to Top of List)

Windstorm Coverage by Citizens Property Insurance Corporation  ̶  HB 1213 by Rep. Spencer Roach (R-North Fort Myers) requires Citizens to make windstorm coverage available to homeowners of any residential and commercial residential structures.  It provides underwriting & administering requirements for the windstorm coverage portion of policies and also removes provisions relating to windstorm risk apportionment plan agreements among property insurance companies.  The bill currently has no direct Senate companion bill.

There is a comparable bill in HB 893 and its similar Senate bill SB 1428 by Rep. Vicki Lopez (R-Miami) and Senator Nick DiCeglie (R-St. Petersburg).  The Senate bill allows Citizens to amend areas it deems eligible for wind-only coverage and develop new criteria and rates for personal residential, commercial residential, and commercial nonresidential policy coverages.  

Also comparable to HB 1213 is SB 1716 by Senator Jim Boyd (R-Bradenton) who chairs the Senate Banking and Insurance Committee.  His bill has some of the elements of HB 889 above in expanding Citizens dwelling replacement cost limits to up to $1 million.  It also makes needed reference changes reflecting that combining Citizens three accounts into one will make it much less likely that Citizens policyholders will face a future surcharge and even more unlikely that non-Citizen policyholders will face an emergency assessment from a future catastrophe.  The bill also authorizes surplus lines companies to do takeouts of Citizens’ non-homesteaded residential properties, such as second homes.  (Return to Top of List) 

There are other filed property insurance bills that we are watching but will only report on if they show signs of movement.  You can fully review them here.  They include:

HB 1191, Assignment of Benefits for Surplus Lines Insurers by Rep. Tom Fabricio (R-Miami Lakes)

HB 625, Property Insurance Coverage by Rep. James Buchanan (R-Osprey

HB 41, Mortgage Loans and Insurance Payments Grant Program by Rep. Jervonte “Tae” Edmonds (D-Palm Beach)

HB 329 / SB 860, Financial Assistance for Homeowners by Rep. Jervonte “Tae” Edmonds (D-Palm Beach), Rep. Jennifer “Rita” Harris (D-Orlando), Rep. Michelle Rayner (D-St. Petersburg) and Senator Shevrin “Shev” Jones (D-Miami Gardens)

SB 348, Insurance Rebate Program for Low-Income Seniors by Senator Lauren Book (D-Davie)

HM 371, Federal Catastrophe Pool by Rep. Kelly Skidmore (D-Boca Raton)

SB 102 / HB 1017, Property Insurance by Senator Shevrin “Shev” Jones (D-Miami Gardens) and Rep. Tae Edmonds (D-West Palm Beach)

SB 178, Resolution of Disputed Property Insurance Claims by Senator Tina Polsky (D-Boca Raton)

SB 500, Surplus Requirements for Residential Property Insurers by Senator Linda Stewart (D-Orlando)  (Return to Top of List)

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 by Governor DeSantis, 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.  (Return to Top of List)

Insurance Claims  ̶  HB 731 by Rep. Adam Botana (R-Bonita Springs) requires insurance companies to report to the Office of Insurance Regulation (OIR) the recovery of funds from automobile claim judgments, settlements, and attorney fees and costs, as well as repayment of claims paid from unlawful acts.  OIR, in turn, would be required to consider recovery of those funds in reviewing companies’ rates.  The bill also specifies that a policyholder’s payment of a deductible or copayment is not a condition of a carrier’s payment obligations.  There is a similar bill in the Senate (SB 1024) by Senator Erin Grall (R-Fort Pierce). (Return to Top of List) 

Flood Insurance:

Flood Damage Prevention  ̶  SB 1766 and the identical HB 749 by Senator Ana Maria Rodriguez (R-Miami) and Rep. Fabián Basabe (R-Miami Beach) is a significant bill covering building regulation and flood mitigation.  To be titled the “Flood Damage Prevention Act of 2024,” it specifies a maximum voluntary freeboard requirement of 10 feet for new construction and substantial improvements to existing construction.  The bill also prohibits voluntary freeboard from being used in the calculation of the maximum allowable height for certain construction; and requires the Florida Building Commission to develop and adopt by rule minimum freeboard requirements by a specified date and to incorporate such requirements into the next edition of the Florida Building Code, among other provisions.  (Return to Top of List) 

Consumer Protections:

Flood Disclosure in the Sale of Real Property  ̶  SB 484 and the similar HB 1049 by Senator Jennifer Bradley (R-Fleming Island) and Rep. Christine Hunschofsky (D-Parkland) 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.
• 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.
• Whether a Federal Emergency Management Agency elevation certificate is available for the property.

Similar bills in the 2023 session never received a hearing.   (Return to Top of List)

Flood Zone Disclosures for Dwelling Units  ̶  SB 38 is Senator Linda Stewart’s (D-Orlando) refiled bill from the 2023 session.  It and the identical HB 1119 in the House by Rep. Bruce Antone (D-Orlando) 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.  (Return to Top of List)

Consumer Protection  ̶  SB 1066 and the identical HB 939 by Senator Colleen Burton (R-Lakeland) and Rep. Griff Griffitts, Jr. (R-Panama City Beach) is a multi-part bill.  Its property insurance parts include requiring contractors put in big letters on their contracts that a homeowner has 10 days to rescind repair/replacement of their roof after a hurricane; and (on lines 440-444) puts public adjusters on the hook now for condominium associations and apartment complexes for various solicitation and contractual requirements previously just applied to single-family homes and condo units.  The Senate bill is scheduled to have its first hearing tomorrow (January 16) at 11am before the Senate Banking and Insurance Committee.  (Return to Top of List)

LMA Newsletter of 1-15-24