• Rating Bills Highlight Florida House and Senate Insurance Committee Action Today--February 17, 2015
  • February 26, 2015
  • Law Firm: Colodny Fass P.A. - Fort Lauderdale Office
  • Florida Senate Committee Approves Use of Hurricane Loss Modeling Straight Average in Rate Filings

    The Florida Senate Committee on Banking and Insurance Committee ("Committee") agenda included a bill sponsored by Senator Jeff Brandes relating to hurricane loss modeling in property and casualty rate filing. The proposal, SB 258, would make changes to a number of Florida insurance-related statutes, including:

    • Allowing property insurers to use a straight average of models in rate filings;
    • Allowing insurers to use to use the previous version of a model for up to 180 days after the new version is approved;
    • Allowing the use of a single ZIP code as a rating territory in motor vehicle insurance rating under certain circumstances;
    • Establishing a uniform 120-day advance written notice of nonrenewal, cancellation, or termination for personal and commercial lines residential property insurance policies;
    • Allowing a personal lines policyholder to elect electronic delivery of policy documents;
    • Clarifying that neutral evaluation is available for a sinkhole claim only if sinkhole insurance coverage is provided under the insurance policy;
    • Clarifying the use of the Medicare fee schedule in Personal Injury Protection insurance benefits; and
    • Creating an exemption to pre-insurance inspection requirements for private passenger automobiles

    Five amendments were adopted to SB 258 at today's meeting, three of which were technical in nature. One of the more substantive amendments, Barcode 975754, removed the provision from the bill that would have allowed insurers to use an average of models in rate filings.

    Additionally, Barcode 875536 repealed a provision in current law that prohibits advertising that insurance policies are backed by coverage from guaranty associations. This amendment effectively created the lone difference between SB 258 and its counterpart in the Florida House of Representatives, HB 165.

    SB 258 was approved unanimously as a Committee Substitute.

    SB 600, a bill relating to the Florida Insurance Guaranty Association ("FIGA") sponsored by Senator Garrett Richter was also on the agenda. It clarifies the accounting treatment of regular FIGA assessments and would allow insures to treat certain assessments as an admissible asset. Approved unanimously by the Committee, SB 600 also clarifies the Florida Life and Health Insurance Guaranty Association's statutory duty to review policies, contracts, and claims of insolvent life and health insurers following either domestic or foreign liquidations or rehabilitations.

    The Committee also heard SB 520 by Senator Denise Grimsley, which would allow insurers to offer a nonforfeiture provision in a long-term care insurance policy that returns premium if the policyholder dies, or the policy is completely surrendered or cancelled. SB 520 was also approved unanimously after being revised with two technical amendments.

    Committee Chair Lizbeth Benacquisto presented several bills relating to the creation of the Florida ABLE program, which would assist individuals with disabilities in saving money without losing their eligibility for state and federal benefits. All were approved.

    Florida House Insurance Subcommittee Approves Self-Insurance, Property and Casualty Rate Filing Bills

    The Florida House Insurance and Banking Subcommittee ("Subcommittee") also met today on an agenda that consisted of two insurance-related bills.

    HB 165, sponsored by State Representative David Santiago was presented as Proposed Committee Substitute that would make the same changes to property and casualty insurance-related statutes as its aforementioned Senate counterpart, SB 258.

    As noted above, SB 258 was amended today to repeal a provision in current law that prohibits advertising that insurance policies are backed by coverage from guaranty associations. This provision is not contained in the version of HB 165 that was amended and approved as a Committee Substitute today.

    The second bill on the agenda, HB 405 sponsored by State Representative Mike LaRosa, would expand the types of nonprofit corporations that can qualify to become members of a nonprofit self-insurance fund.

    A representative of an insurance trade association spoke in opposition of the bill, raising concerns of solvency of these types of funds.

    However, a representative of a nonprofit self-insurance fund was on hand to point out that such funds retain little risk, most of which is exported to A-rated insurers. Both sides agreed to meet to work through their differences on the bill.

    Yet another representative from a nonprofit organization that would benefit from HB 405's passage spoke in favor of it, noting the savings in premium costs that would be realized.

    HB 405 passed the Subcommittee unanimously.