Florida's Citizens Insurance: Understanding Sb 1770'S Impact

The Citizens Property Insurance Corporation policyholder eligibility clearinghouse program, also known as SB 1770 627.3518, is a Florida law that provides a framework for the Citizens Property Insurance Corporation to implement a clearinghouse program. This program aims to enhance access for new applicants and existing policyholders by requiring all new applications and policies up for renewal to obtain an offer of coverage from an authorized insurer before binding or renewing coverage. The law also defines exclusive and independent agents and outlines requirements for rates and rating organizations for insurers and rating organizations.

The Citizens Property Insurance Corporation policyholder eligibility clearinghouse program

The program helps policyholders find private-market policy options that may provide comparable or better coverage with premiums equal to or less than those offered by Citizens. All private-market companies participating in the clearinghouse must be authorized to do business in Florida by the Florida Office of Insurance Regulation.

The clearinghouse program helps agents establish eligibility prior to placing or renewing a policy with Citizens. Agents should submit applications and quick quotes directly to PolicyCenter®. To comply with the clearinghouse program, agents should use one of the following to determine if the new-business risk is eligible for coverage with a private-market insurer:

• No private market insurer is willing to offer coverage at its approved rates.
• The premium for coverage offered by private-market insurers is more than 20% higher than the premium for comparable coverage from Citizens.
• The applicant is ineligible for a Citizens policy.

The program may require all new applications and all policies due for renewal to be submitted for coverage. However, submission of an application for coverage by the corporation to the program does not constitute the binding of coverage by the corporation. The program may not include commercial non-residential policies.

Requirements for new applications and policy renewals

The Citizens Property Insurance Corporation policyholder eligibility clearinghouse program was established to provide a framework for the Citizens Property Insurance Corporation to implement a clearinghouse program by 1 January 2014. The program is designed to confirm eligibility and enhance access for new applicants and existing policyholders.

All new applications and policies due for renewal must be submitted to the program to obtain an offer of coverage from an authorized insurer before binding or renewing coverage by the Citizens Property Insurance Corporation.

If an applicant for new coverage is provided an offer of coverage from an authorized insurer through the program at a premium that is at or below the eligibility threshold, they are not eligible for coverage from the Citizens Property Insurance Corporation.

If an offer of coverage for a personal lines risk is received for a policyholder at renewal from an authorized insurer through the program, and the offer is equal to or less than the Citizens Property Insurance Corporation's renewal premium for comparable coverage, the risk is not eligible for coverage with the Citizens Property Insurance Corporation.

If an applicant for coverage was declared ineligible for coverage at renewal by the Citizens Property Insurance Corporation in the previous 36 months due to an offer of coverage, they shall be considered a renewal under this section if the authorized insurer continues to insure the applicant and increased the rate on the policy in excess of the increase allowed.

Insurers and agents participating in the program are not required to pay a fee to offset or partially offset the cost of the program or for the renewal of policies initially written through the clearinghouse.

Contracting with individuals or entities for administrative services

SB 1770 refers to a bill relating to property insurance in Florida. It amends several sections of the Florida Statutes, including sections 627.3518, 627.352, and 627.410.

Section 627.3518 of the Florida Statutes outlines the Citizens Property Insurance Corporation policyholder eligibility clearinghouse program. This program was to be implemented by January 1, 2014, and aims to enhance access for new applicants and existing policyholders.

Regarding contracting with individuals or entities for administrative services, section 627.3518(2)(b) states that the Citizens Property Insurance Corporation may:

> "Employ or otherwise contract with individuals or other entities for appropriate administrative or professional services to effectuate the plan within the corporation in accordance with the applicable purchasing requirements under s. 627.351."

This provision allows the corporation to seek external support for administrative tasks related to the implementation of the clearinghouse program. By contracting with individuals or entities with relevant expertise, the corporation can ensure that it has the necessary resources and skills to effectively manage the program.

The specific administrative services required may include tasks such as data management, customer service, claims processing, and policy administration. The contracted individuals or entities would work within the corporation to help streamline and improve these processes, ensuring that the clearinghouse program runs efficiently and effectively.

It is important to note that the corporation must adhere to the applicable purchasing requirements outlined in section 627.351 when entering into these contracts. This includes ensuring a transparent and competitive procurement process, as well as considering factors such as cost, qualifications, and experience when selecting contractors.

Entering into contracts with authorised insurers

Chapter 627 Section 3518 of the 2020 Florida Statutes outlines the Citizens Property Insurance Corporation policyholder eligibility clearinghouse program. This program was to be implemented by January 1, 2014, and aims to confirm eligibility and enhance access for new applicants and existing policyholders of the Citizens Property Insurance Corporation.

The statute mandates that all new applications and policies due for renewal must be submitted to the program to obtain an offer of coverage from an authorized insurer. This process must occur before binding or renewing coverage by the Citizens Property Insurance Corporation.

To achieve this, the statute empowers the Citizens Property Insurance Corporation to enter into contracts with any authorized insurer to participate in the program. These authorized insurers are then able to make offers of coverage to applicants, and if these offers are accepted, the applicants are considered policyholders of the Citizens Property Insurance Corporation.

The statute further clarifies that authorized insurers participating in the program are not required to pay any fees to offset the program's costs. Additionally, it outlines the commission structure that must be followed when working with producing agents.

Overall, the Citizens Property Insurance Corporation policyholder eligibility clearinghouse program, outlined in Chapter 627 Section 3518 of the 2020 Florida Statutes, provides a framework for the corporation to manage applications and renewals efficiently, while also delineating the role of authorized insurers in the process.

Funding the program

The Citizens Property Insurance Corporation (CPIC) policyholder eligibility clearinghouse program is a framework for the corporation to implement a clearinghouse program. The program was to be implemented by January 1, 2014.

The program is funded by the CPIC, which is a government-owned insurer of last resort. The CPIC is funded through a variety of mechanisms, including policyholder premiums, investment income, and assessments on insurance policies across the state.

To facilitate the implementation of the program, the CPIC is required to provide funds to cover the operational costs. This includes employing or contracting individuals or entities for administrative and professional services. However, insurers and agents participating in the program are not mandated to contribute financially through fees.

The CPIC's funding structure, including its reliance on policyholder premiums and investment income, is outlined in the Florida Statutes. The statutes also provide details on the CPIC's authority to enter into contracts and the requirements for establishing rates and rating schedules.

The program's funding is further supported by the creation of the Catastrophe Risk Capital Access Facility, which facilitates insurer access to global risk capital markets and risk-transfer mechanisms. This facility is not an insurer or reinsurer but provides mechanisms to access additional capital and manage risk.

Additionally, the CPIC's funding is impacted by legislative actions, such as SB 1770, which relate to property insurance and can influence the corporation's financial obligations and protections.

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