Surplus lines carriers can start taking out secondary home policies from Citizens Property Insurance Corp. on July 1, under a bill signed by Florida Gov. Ron DeSantis.
H.B. 1503 is one of several bills changing impacting insurers that were approved to largely take effect at the start of July.
The surplus lines carriers may submit takeout offers to Citizens for secondary, or vacation, residences if they: hold an A – (Excellent) or better Best’s Financial Strength Rating, have a personal lines residential risk program managed by a Florida resident surplus lines broker, receive approval from the Florida Office of Insurance Regulation for a takeout plan and rates and more.
The office will review whether premium with a surplus lines insurer exceeds the premium for comparable coverage from Citizens by more than 20%. If they don’t, policyholders are no longer eligible for a Citizens policy.
Between 45,000-60,000 of Citizens’ policies are for secondary homes, a representative previously said.
Under a provision that took effect on May 13, Citizens policyholders who are required to carry flood insurance no longer need flood coverage for personal contents. They still must acquire flood insurance for their dwellings.
The bill further allows Citizens, as part of an effort to reduce insurance fraud, to share claims data with the National Insurance Crime Bureau, provided the bureau maintains confidentiality of shared documents.
Personal and commercial residential property Insurers increase policy and claims reporting to monthly from quarterly, under H.B. 1611. They also will delineate information by ZIP code instead of county.
The bill blocks Citizens’ ability to charge new policyholders higher rates — up to 50% more — if they were previously covered by a carrier deemed unsound or that was placed into receivership.
And the Financial Services Commission gains authority to regulate how carriers provide notice to the OIR when nonrenewing 10,000 or more residential property policies within a 12-month period.
Carriers gain the ability from H.B. 1611 to use roofing contractors to decide if a roof at least 15 years old must be replaced before a policy is bound.
The bill has other provisions regulating reciprocal insurers, notably for information supplied with applications and rules around an attorney in fact — and surplus insurers — restricting cancellations and nonrenewals.
H.B. 7073 gives homeowners and flood insurance policyholders a one-year reduction on their insurance premiums tax and State Fire Marshal regulatory assessment.
Carriers must reduce homeowners and personal or commercial flood policies 1.75% on 12-month policies effective between Oct. 1 this year and Sept. 30 next year. Residential policies will also decline by an amount equal to the fire marshal assessment.
Insurance providers can claim a credit equal to the policyholders’ deductions against their insurance premium tax liability.
The top five writers of homeowners multiperil insurance in Florida in 2022, based on direct premiums written, were: Citizens Property Insurance Corp., with 15.62% market share; Universal Insurance Holdings Group, 10%; State Farm Group, 6.68%; Florida Peninsula Group, 4.53%; and Tower Hill Group, 4.44%, according to BestLink.