Florida legislation that could perhaps make life a little easier for insurance agents and for snowbirds and others with second homes passed major hurdles this week, moving them closer to approval by the full Legislature.

But an effort to allow the state-created Citizens Property Insurance Corp. to take on more condominium coverage in the midst of an extra-hard market has been left out of bills, thanks to opposition from Citizens officials.

Senate Bill 1716 and House Bill 1503 would allow surplus lines carriers to take out policies from Citizens on homes that are not primary residences. SB 1716, by Sen. Jim Boyd, was approved by the Senate Fiscal Policy Committee on Tuesday. HB 1503 sailed through the House Commerce Committee and is now awaiting a floor vote.

The bills address a long-standing concern among some lawmakers that Citizens, with its below-market rates in many cases, should not be writing vacation homes and second homes for out-of-state residents. Boyd told the Tampa Bay Times that the plan would help reduce the number of policies and exposure held by Citizens, which remains the largest property insurer in the state with about 1.2 million policies in force.

But others worried that surplus lines coverage would not have the backing of the Florida Insurance Guaranty Association in case of insolvency. HB 1503 would require surplus lines insurers to have an A.M. Best financial strength rating of “A-” or better and that residential policies be managed by a Florida broker. The measure also would modify the 2022 requirement that Citizens’ policyholders also must purchase flood insurance. If the bill becomes law, those insureds would have to buy flood coverage for a dwelling loss, not for contents.

The Florida Surplus Lines Association has said it supports the bills, as does Baldwin Risk Partners, the Times reported.

Also this week, what have been called “the agents’ bills,” SB 1104, and HB 1149, would bar cancellation or non-renewals of residential policies until 90 days after storm repairs have been completed. That would give some relief to insurance agents that have said they are often besieged by policyholders who have seen policies canceled while their homes are not fully restored after a hurricane, forcing agents to scramble to find new coverage.

HB 1149, by Rep. Adam Botana and Rep. Hillary Cassel, also would grant the state insurance commissioner the authority to bar insurers from canceling or nonrenewing policies in ZIP codes that have been hit by flooding after a hurricane, for up to 270 days.

“Such an order would apply regardless of whether flood is a covered peril under a personal residential or commercial residential property insurance policy in force at the time of loss,” a staff analysis of the bill explains.

The Florida Association of Insurance Agents and the Professional Insurance Agents of Florida have supported the bills, while the FSLA has raised concerns. “Many national carriers and large brokers believe (the change) will negatively impact capacity,” the FSLA said in a statement.

A bill that passed a House committee early in the session, HB 625, would have allowed Citizens to write condominiums that include rental properties, something now barred by law. But that bill has seen little action and an effort to include the language in SB 1716 and HB 1503 has not been successful, lobbyists have said.

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Florida
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Excess Surplus