2010 Insurer Solvency Legislation
Summary of Final Property Insurance Bill

Prepared by Floridian Partners & the Florida Insurance Council

ISSUE Senate Bill CS/CS/SB 2044
Managing General Agencies

Provides the Office of Insurance Regulation additional authority to monitor insurer funds going to affiliates when an insurer’s surplus falls below certain levels.

If the insurer’s risk based capital level drops below 200 or when an insurer loses 15% of its surplus, the OIR may require the insurer to file a detailed report identifying all remunerations paid to its affiliates.

Requires insurer to notify OIR of its intention to enter into contracts with its affiliates within 30 days of such contracts being executed.
Minimum Cap. & Surplus Increase from $5 million to $15 million for new and existing insurers. Existing insurers increase from $4 million to $10 million by 2015, and $15 million by 2020
Solvency 45-day Cancelation Allows an insurer to file a plan with OIR to cancel policies in 45 days if they need to reduce exposure for solvency purposes.
Non-renewals in Citizens Takeouts Shortens notice of non-renewals to 45 days for Citizens takeouts.
Claims Pay Deadline
Clarifies that the same time frame in which to pay or deny a claim applies to both initial and supplemental claims. The greater of 90 days or 15 days after which there are no longer factors beyond the control of the insurer which reasonably prevented such payment.

Expedited Rate Filing

Expands the Expedited Rate Filing statute created in HB 1495 to include all reinsurance increases as well as an inflation trend factor developed by the OIR. The filing must be certified by company’s actuary.

Consumer Website

Allows the OIR to develop or contract for development of a website that will allow insurers to compare prices, complaints, financial information and other useful data regarding insurers.  Includes $320,000 appropriation.

Wind Mitigation Credits

(Recommendations of HLMC Study)

Allows insurers to apply debits as well as credits to base rates for the purposes of reflecting mitigated and non-mitigated features in rates.


Establishes intent of the Legislature that mitigation discounts “not result in a loss of income to the insurers…so that the aggregate of mitigation discounts should not exceed the aggregate of the expected reduction in loss that is attributable to the mitigation efforts.” If there is loss revenue, an insurer may recover it in its rate base.
Mitigation Verification Inspectors

Mitigation inspectors certified by My Safe Florida Home would no longer be allowed to complete the verification forms. Licensed home inspectors who pass an exam and who have 2 hours of continuing education on windstorm mitigation may sign the form.  A person signing a mitigation inspection form must inspect the structure personally, unless they are an in-house employee of an engineer or general contractor. If that employee submits a false report, sanctions may be brought against the licensee. Provides penalties for misconduct in mitigation inspections.

ACV RCV  Dwelling Allows insurer to pay ACV and holdback RCV until there is a written contract. Requires an insurer to pay amounts necessary to perform repairs as work is performed on a structure. Requires an insurer to provide incidental expenses so that an insurer may mitigate further damages without any holdback.  An insurer may also waive the requirement for a written contract if the insured can make repairs without a contract. Valued Policy Law is in effect for total losses.

Change in Coverage

Allows an insurer provide a “Notice” of change in coverages as opposed to non-renew and re-write a policy if coverages change
Additional Information in Rate Filings Amends certification requirements to allow an insurer to submit supplemental information in a rate filing without having to withdraw and re-file.
Uniform Home Grading Scale (FHLM) Repeals the Uniform Home Grading Scale.
Insurer Rate Filings Allows an insurer to include in its rate filing the costs of replacing the Cat Fund TICL coverage with re-insurance without removing expenses and profit load.
Citizens High Risk Account Reduction Postpones until 2012 reduction in Citizens’ HRA Account
Insurance Community Representation on Citizens Board Ethics The requirement that at least one of the two board members appointed by each appointing officer must have demonstrated expertise in insurance is expanded to include, “and is deemed to be within the scope of the exemption provided in s. 112.313(7)(b).” Clarifies conditions for board members to abstain when an issue “would inure to his or her special private gain or loss.”

Citizens Policy Surcharge

Provides a date of attachment of surcharge, ensures that assessments are fully collected from Citizens policyholders.
Agent Commissions Prohibits OIR from requiring an insurer to remove “acquisition costs” in a rate filing.
Use & File Continues the prohibition of “use & file” to 2011
Insurer Report Card

Moves the date for implementation to prior to June 1, 2012.

Requires consumer advocate to use only “valid” complaints in grading carriers. Defines “valid”.
Med Mal Assessments Continues the exemption for med mal for Cat Fund assessments for three years.

Crop Insurance

Provides that gross written premiums for federal multiple-peril crop insurance ceded to the Federal Crop Insurance Corporation or authorized reinsurers may not be included in the calculation of an insurer’s gross writing ratio. There are related provisions as well.
Citizens HRA Account Re-names the Citizens HRA Account to the Citizens Coastal Account. Financial advisors requested this change to help receive more favorable bond rates.
Customer Service Representative Exempts National Association of Christian Catastrophe Insurance Adjusters from examination for customer service representative licensure.
Public Adjuster Reform

Prohibits a public adjuster from advertising to a policyholder that there is “no risk” to file a claim, or to induce a reopened claim when an initial claim was handled properly.


Prohibits using a logo implying the PA is affiliated with a state agency.


Requires disclosure on PA ads that says “this is a solicitation for business, if you are satisfied with your insurers claim you can disregard this ad…”


Limits PA fees on reopened claims to 20%.


Prohibits PA’s from obstructing insurers from reviewing property damaged by a loss to process a claim.


Requires prompt notice of a claim by a PA.


Prohibits PA’s from interfering with an insurer in their communicating with policyholders.


Requires 8 hours of PA CE for apprentices, with 2 hours in ethics.


Prohibits licenses contractors from adjusting claims without a PA license.


Institutes a 3 year claims filing deadline for new and reopened claims from the date of a hurricane or windstorm.