The Senate Banking & Insurance Committee passed
Sb 1346 relating to Citizens
Assessments, by Senator Oelrich. The bill currently
calls for the elimination of the regular assessment
for Citizens' Personal Lines Account, and Citizens
Commercial Lines Account, and reduces the maximum
regular assessment authority for Citizens Coastal
Account from 6% to 2%. The effect would be that
Citizens would then rely more on its 'Policyholder
Surcharge' and its 'Emergency Assessments'. The OIR,
Citizens CFO, and the insurance industry advocate
this proposal to help offset the problems that could
occur should an insurer take on a significant hit on
their surplus following a major hurricane. This is
one of the main reasons out of state insurers are
hesitant to come to Florida according to OIR.
Further, there was testimony that pointed out there
is no longer a need to rely on Citizens regular
assessment because Citizens has a good amount of
cash on hand ($10 billion), and a good credit rating
now which enables it to issue post-event bonds;
options not previously available when Citizens
began. A 2% 'regular assessment' for the Coastal
Account would be retained in order to 'not'
jeopardize Citizens' outstanding pre-event bonds.
In the House Insurance subcommittee this week, they
work-shopped the companion bill,
HB 1127 by Rep. Albritton, without
voting on it. The bill will most likely be voted on by
committee next week.
In a related note, during the Cabinet meeting, Citizens
Property Insurance Corporation President (Now former
President, *see below) Scott Wallace outlined to the
Cabinet their initiatives to generate "takeouts" from
private insurers. These options include eliminating the
'ceding commission' which can be up to 16% of the
insured value of the takeout package, and said there is
significant new interest in potential takeout type
programs.
Citizens will be implementing a 17,000 policy takeout on
February 14, and talks continue with other interested
groups according to Citizens.
This week in the Florida Legislature:
Citizens Property Insurance Corporation President Scott
Wallace resigns.
After 6 years in charge, Scott Wallace is done as
President and CEO. John Rollins and J. John Wortman have
been appointed by the Governor to the Citizens Board of
Governors. Mr. Rollins previously served as vice
president of AIR Worldwide Corporation from 2007 to
2009, director of corporate analytics at Florida's
Citizens Property Insurance Corporation from 2006 to
2007, consulting actuary at Watson Wyatt Worldwide from
2004 to 2006 and chief actuary and manager, strategic
planning at Florida Farm Bureau Insurance from 1999 to
2004. Mr. Wortman has been the CEO of Wortman Capital
Associates since 1997. Previously, he served as CEO of
Louisiana Citizens Property Insurance Corporation( 2007-
2010).
House
"Omnibus" Insurance bill, HB 1101 summary.
The Omnibus
"Insurance Train" bill is out now and the following
summarizes the major provisions in the bill as filed:
Exempts a salvage motor vehicle dealer from the requirement of carrying
garage liability insurance coverage or PIP coverage on
vehicles that have been issued a certificate of
destruction and the vehicle cannot be operated on roads,
highways, streets.
Amends 624.610(11) (c) and provides for an exemption from 624.610(11) for
contracts of facultative reinsurance or to any ceding
insurers with surplus as to policyholders that exceeds
$100 million; it further provides exemption from this
subsection for ceding insurers with diminutive business
in Florida and removes an ambiguity in the law as to the
diminutive exemption.
Permits the Department of Financial Services to offer, at its discretion,
agent licensing exams, and applicants requesting the
exams in Spanish will bear the cost on a prorated basis,
of making the Spanish exam available. The department is
to consider the percentage of the population speaking
Spanish in determining whether to make it available in
Spanish.
Corrects contradictory language in the commercial surplus lines
disclosure form by removing the terms "superior" and "at
a lesser cost" from the surplus lines disclosure.
Changes the definition of limited apportionment benefits from a surplus
amount of $20 million to the $25 million surplus found
in section 627.351(6)(c), F.S. This change corrects a
glitch in the definition of limited apportionment
benefits in this cross reference which removes any
potential confusion in the standard definition.
Clarifies the legislative intent of the sinkhole
provisions passed last year in Senate Bill 408 by
ensuring that the definition of a change in policy terms
includes those changes related to sinkhole coverage.
This ensures that the policyholder will receive a notice
of at least 45 days for changes to sinkhole coverage.
Establishes that the procedures for alternative dispute
resolution with regard to property insurance claims may
only be requested by the policyholder as a first-party
claimant or the insurer. This specifically excludes
third-party vendors and will prevent these vendors from
incurring additional expenses by using the mediation
process which was established as a protection for
policyholder consumers. This will also stop vendors
from circumventing the appraisal process and proceeding
to litigation which contradicts the intent of the
statute. This section also states that claims resulting
from hurricane damage must be noticed as a loss to the
insurer within 36 months of a hurricane making landfall.
Corrects a glitch from HB-1087 passed during the 2011 session and allows
cancellation for any type of nonpayment, including fraud
or misrepresentation, or failure to meet basic
underwriting guidelines, as opposed to the current
language passed in 2011 which permits cancelation solely
for a bounced check. The section was not intended to
prohibit cancellation for any of the other valid reasons
allowed by statute.
Insurance Agents and Adjusters- Hb 725 by Rep. Hager/ Sb
938 by Sen. Richter
The CFO's package which focuses on streamlining agent and agency
licensing has one committee left in each chamber before
it heads to the House and Senate floors respectively.
The proposal collapses 49 of the 137 license types into only 7. Changes
CE requirements, eliminates county tax paid by local
insurance agencies for additional business locations
outside of their county of residence. Changes the date
when appointment renewal is required. Requires
licensee to notify the department in writing within 30
days instead of 60 days of change of contact
information. Deletes the requirement that an insurer
pay an agent tax for each county in which an agent
represents the insurer and has a place of business.
Revises the definitions of "adjuster" and "home state".
Session resumes Tuesday, January 23rd.
Regular Legislative Session Ends March 9th, 2012
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