HB 1171 Florida House of Representatives Staff Analysis

This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1171b.GGPC.doc
DATE: 4/8/2009
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1171 Residential Property Insurance
SPONSOR(S): Insurance, Business & Financial Affairs Policy Committee, Proctor and others
TIED BILLS: IDEN./SIM. BILLS: SB 2036 REFERENCE ACTION ANALYST STAFF DIRECTOR
1)
Insurance, Business & Financial Affairs Policy Committee
17 Y, 0 N, As CS
Callaway
Cooper
2)
General Government Policy Council
Callaway
Hamby
3)
Government Operations Appropriations Committee
4)
5)
SUMMARY ANALYSIS
This bill permits insurers to sell a new type of property insurance policy, a “nonassessable residential property insurance policy.” This type of policy is not subject to a determination by the Office of Insurance Regulation (OIR) that the rate is excessive or unfairly discriminatory. The OIR is only authorized to disapprove a rate for this type of policy if the rate is inadequate or contains rating factors contrary to the unfair trade practices statute. The policy is not subject to assessments by Citizens Property Insurance Corporation (Citizens). The bill also requires notice to the consumer in the application for the policy and in the notice of policy renewal that the policy is subject to rate regulation for adequacy only and not subject to Citizens’ assessments. Residential properties covered by nonassessable residential property insurance policies will be relieved of any assessments for deficits in Citizens. Nonassessable policies are likely to have higher premiums than those that are assessable and are fully regulated by the OIR, but some homeowners may be willing to pay the higher premium in exchange for not being subject to assessment by Citizens. The bill will reduce the assessment base of Citizens through the removal of some residential property insurance policies. If the Citizens assessment base is reduced, then insurance policies that remain in each assessment base will be subject to higher assessment costs than currently. The degree to which the assessment base will be reduced cannot be determined because it is unknown how many homeowners will choose to purchase the new nonassessable coverage. The bill has no fiscal impact on state or local government.
The bill is effective July 1, 2009.