Omnibus Senate Package, Including Select Senate Committee Recommendations
Reviewed and amended by Senate on April 10. Expected to get a final vote on April 16. Nothing comparable in the House.
Section 1: Insurance Capital Build-Up Incentive Program
Extends the program for another year (requires insurers to apply for the loan by 10/1/08). $250 million in funding
comes from Citizens under certain circumstances. Revises eligibility requirements.
Section 2: Antitrust
Applies the state antitrust laws to 'the business of insurance' with exceptions and qualifications. Any action for penalties or
damages must be brought by the Attorney General or a state attorney. Does not prohibit the collection of claims, loss, or expense
data by rating organizations or advisory organizations, or to the filing of rates or advisory rates by rating
organizations or advisory organizations.
Section 3: Market conduct examinations
Allows OIR to require an insurer to file its claims-handling practices and procedures, based on the findings of a market conduct exam
that an insurer has exhibited a pattern or practice of willful unfair insurance trade practices violations as
prohibited by 626.9541(1)(i) (unfair claims settlement practices).
Section 4: Administrative fines
Nonwillful violations: increases the maximum fine to $25,000 per violation (instead of $2,500), and replaces the $10,000 aggregate cap on
all fines for all nonwillful violations arising out of the same action with a cap equal to 1% of the insurer's surplus. Willful violations:
increases the maximum fine to $100,000 per violation (instead of $20,000), and replaces the $100,000 aggregate cap on all fines for all
willful violations arising out of the same action with a cap equal to 5% of the insurer's surplus. Allows OIR to impose a fine of up to
$25,000 for each day that an insurer is not in compliance with the Insurance Code, beginning with the 10th day of noncompliance,
and caps these fines at 5% of the insurer's surplus.
Section 5: Trade secret documents
Provides a process for an insurer to defend the trade secret status of its documents. OIR will notify the insurer of a public records
request, and the insurer has 30 days to file an action in circuit court seeking a determination of the trade secret status of the documents.
Section 6: Residential nonrenewals
Requires OIR approval of insurer plans to nonrenew more than 10,000 residential policies within a 12-month period.
Section 7: Unfair insurance trade practices; fines
Nonwillful violations: increases the maximum fine to $25,000 per violation (instead of $2,500), and replaces the $10,000
aggregate cap on all fines for all nonwillful violations arising out of the same action with a cap equal to 1% of the insurer's surplus.
Willful violations: increases the maximum fine to $100,000 per violation (instead of $20,000), and replaces the
$100,000 aggregate cap on all fines for all willful violations arising out of the same action with a cap equal to 5%
of the insurer's surplus.
Section 8: Unfair insurance trade practices; new violations
-Prohibits an insurer from giving consideration to age, race, income level, education, credit score, or any other personal
characteristic of a policyholder in evaluating, adjusting, settling, or attempting to settle a property claim.
-Prohibits an insurer from failing to pay undisputed amounts of partial or full benefits under property policies within 90 days after
determining the amount of benefits and agreeing to coverage.
Section 9: Ratemaking
-Permanently repeals use-and-file for property insurance (except for filings requesting rate decreases).
-Permanently repeals rate arbitration.
-Provides that OIR may not disapprove a rate as excessive solely because the insurer obtained catastrophic
reinsurance to cover its 250-year probable maximum loss or a lower level of loss.
-Projected hurricane losses must be estimated using a commission-approved model.
-Repeals the provision allowing a reasonable rate of return commensurate with risk for companies that expose
their surplus to catastrophic losses in lieu of reinsurance.
-Allows an immediate review of an approved rate based on the insurer's nonrenewal activity.
-Amends the certification under oath to, among other things, require an acknowledgment that the actuary who prepared
the filing reviewed OIR's rate indications from the previous rate filing, and has identified the factors used in
the current filing that conflict with OIR's factors.
-Provides for expedited DOAH review of OIR rate filing actions and expedited appellate review of DOAH rate filing actions.
-When a party submits information in a DOAH or judicial review of OIR action on a rate filing, other than the information that was in OIR's possession as of the issuance of the Notice of Intent to Disapprove, and other than expert opinion, the other party has a right to a continuance of at least 30 days.
Section 11: Hurricane Loss Projection Methodology Commission
Requires insurers to use, without modification, commission-approved models in determining hurricane loss factors and PMLs.
(Current law allows, but does not require, use of commission-approved models and does not address calculation of PMLs.)
Removes provision relating to the admissibility and relevance of modeled findings and factors and requirement for OIR and Consumer
Advocate access to a model's assumptions and factors.
Section 12: Residential property rate filings
Requires OIR to develop a methodology for mitigation discounts and credits correlated to the numerical mitigation score on the
uniform home grading scale.
Section 14: Notices of cancellation or nonrenewal
Requires 180 days' advance notice of nonrenewal, cancellation, or termination of a personal lines or commercial residential
policy (except for nonpayment or for cancellations during the first 90 days after initial issuance).
Section 17: Criminal penalties
Provides felony penalties for a person who willfully files with or OIR, or willfully signs for filing with OIR, a 'materially false or
materially misleading rate filing.'
Section 18: Funding for Insurance Capital Build-Up Incentive Program
Requires Citizens to transfer $250 million of its surplus to the General Revenue Fund, provided the combined losses from the Commercial
Lines and Personal Lines Accounts for the 2008 hurricane season do not exceed $750 million. If the transfer is made,
appropriates $250 million from General Revenue to fund the Insurance Capital Build-Up Incentive Program.