Before the start of the 2024 Legislative Session, the governor, House speaker, and Senate president set expectations that there would not be much interest in pursuing additional insurance reforms. Following four years of significant insurance reforms, Florida’s legislative and executive leadership wanted to take a step back to audit how recent reforms have impacted the insurance marketplace. Despite the limited appetite for additional reforms, Florida legislators filed nearly 100 insurance-related bills.
Leading into the final days of the 2024 Legislative Session, while many insurance bills had failed to be considered, several insurance bills were still in play. Most notably was FAIA’s priority legislation, SB 1104 by Sen. Bradley and HB 1149 by Rep. Botana, that sought to provide clarification to existing statutes and codify long-standing industry practices regarding cancellations/nonrenewals of insurance policies on residential properties damaged by a hurricane.
The need for the legislation arose a few months after Hurricane lan left a trail of destruction in SW Florida. For the first time, FAIA began receiving questions from agents who were experiencing new challenges resulting from differing interpretations of long standing Florida laws (§627.4133(2)(e), F.S.) and regulatory orders prohibiting insurers from canceling/nonrenewing policies of a residential property damaged by a hurricane.
Section 627.4133(2)(e), Florida Statutes, says:
(e)1. An authorized insurer may not cancel or nonrenew a personal residential or commercial residential property insurance policy covering a dwelling or residential property located in this state: a. For a period of 90 days after the dwelling or residential property has been repaired, if such property has been damaged as a result of a hurricane or wind loss that is the subject of the declaration of emergency pursuant to s. 252.36 and the filing of an order by the Commissioner of Insurance Regulation.
b. Until the earlier of when the dwelling or residential property has been repaired or 1 year after the insurer issues the final claim payment, if such property was damaged by any covered peril and sub- subparagraph a. does not apply.
The three primary questions FAIA received from member agencies were:
1. Can an insurer nonrenew a policy of a property with hurricane damage if the damage was caused by a peril that is excluded (flood) from coverage?
2. Can an insurer alter the terms and conditions of a property insurance policy for a property damaged by a hurricane if the repair requires the insurer to offer an extension or renewal?
3. Are surplus line insurers required to follow the same requirements as admitted insurers?
The first two questions were new to FAIA as we had never seen examples of insurers canceling/nonrenewing coverage as the hurricane damage was caused by an excluded peril (flood). Following conversations with industry stakeholders, FAIA contacted the Office of Insurance Regulation (OIR) for assistance. After reviewing the statutes with the regulator, it was determined that statutory clarifications were needed to address the new interpretations. As for surplus line insurers, this was a question we had received before. The prohibitions of cancellations/nonrenewals of policies where a hurricane damaged the property have long been applied to surplus line insurers through the Commissioner’s order.
Despite both bills passing unanimously through three committees, and the Senate bill passing off the floor unanimously, the bill’s momentum stopped when the House bill failed to make the final House floor agenda. Fortunately, the provision requiring surplus line insurers to comply with the laws prohibiting the cancellation or nonrenewal of residential property insurance policies covering properties with hurricane damage was included in another bill, the Insurance Commissioner’s priority Legislation HB 1611 – Insurance by Rep. Stevenson, which passed.
Among the other insurance legislation filed this year, several bills made it across the finish line, including:
HB 215: Risk Retention Groups (RRGs) by Rep. Truenow
Establishes that motor vehicle insurance coverage issued by RRGS operating under federal law and registered to do business in this state satisfies the financial responsibility requirements of state motor vehicle law.
HB 939: Consumer Protection by Rep. Griffitts
The CFO’s priority legislation provides several consumer protections, including: providing additional authority to consumers to cancel roofing contracts during a state of emergency; requiring contractors to notify consumers of their right to cancel contracted services; and,
revising the claims filing deadline for loss assessment claims. While the loss assessment provision was intended to assist with varying interpretations of current law, the new language will likely need to be revisited in the upcoming session.
HB 1021: Community Associations by Rep. Lopez
Provides that a condominium association management company must disclose any conflicts of interest or any agreement where consideration is provided to them for the recommendation of a good or service to be utilized by the condominium association.
HB 1029: My Safe Florida Condominium Pilot Program by Rep. Lopez
Provides condominium associations with a program similar to that of the My Safe Florida Home (MSFH) Program, including participation requirements, hurricane mitigation inspectors and inspections, eligibility for mitigation grants, contract management by the Department of Financial Services (DFS), and required annual reports.
HB 1503: Citizens Property Insurance Corporation by Rep. Esposito
Authorizes certain surplus line insurers to participate in takeouts of policies covering secondary residences, but maintains consumer choice and the 20 percent eligibility threshold; provides that homesteaded properties cannot be considered secondary homes; and, provides that the Citizens’ flood requirement does not require the insured to include contents coverage on the flood policy.
HB 1611: Insurance by Rep. Stevenson
Prohibits surplus line insurers from canceling and nonrenewing residential property insurance policies due to unrepaired damage after a hurricane or wind loss following a declared emergency; eliminates the ability for Citizens to charge up to 50 percent above the established Citizens rate for policyholders whose coverage was last provided by an insurer determined to be unsound or placed into receivership; and, updates the statutory chapter regarding reciprocal insurers to align it with the OIR’s existing authority to license and regulate other types of insurers, including significant changes to the application and acquisition processes.
SB 7028: My Safe Florida Home (MSFH) Program by Sen. Boyd
Provides several administrative changes to the MSFH program, requires the DFS to prioritize applications starting with low-income seniors, and provides an appropriation of $100 million to fund the program during fiscal year 24/25.
HB 7073: Taxation by Ways and Means Committee
Requires insurers to give homesteaded property owners a deduction of 1.75 percent of the policyholder’s total premium on their residential property insurance premiums.
Over the coming days and weeks, Florida’s Legislature will send these bills and others to the governor for final consideration. In the meantime, the FAIA will finalize the 2024 Legislative bill summaries and post them on the Advocacy page.
Stay tuned for additional updates!
*This blog was originally written and published by the FAIA. www.faia.com