Titular de Insurance Insights
Volume 6, No. 1- January 2017

In The Know

- Keeping you informed is what it's all about

Citizens' Maximum Coverage Limit Decreased Effective January 1, 2017

As required by Senate Bill 1770, enacted by the Florida Legislature in 2013, and by approval of Citizens’ Board of Governors, Citizens will decrease allowable maximum policy coverage limits.

Effective January 1, 2017, for new business and renewals, the following personal residential risks no longer are eligible for coverage under Florida law:

  • A structure that has a dwelling replacement cost (Coverage A) of $700,000 or more
  • A single condominium unit with a combined dwelling and contents replacement cost (Coverage A and C) of $700,000 or more
  • A tenant contents policy with a Coverage C limit of $700,000 or more

Note: The maximum coverage limit changes reflected above will not affect policy forms where lower maximum coverage limits already exist.

Because the Florida Office of Insurance Regulation (OIR) determined there is not a reasonable degree of competition in Miami-Dade and Monroe counties, these two counties are exempt from the decreased coverage limit of $700,000. The maximum coverage limit of less than $1 million will continue to apply to risks in these two counties.

Citizens will comply with the nonrenewal guidelines in Florida Statute 627.4133 and mail affected policyholders nonrenewal notices in advance of nonrenewal dates of 1 de enero de 2017, or later. The nonrenewal will be effective at the end of each policy’s current term.

Agency principals will receive a separate email soon containing a list of affected policyholders, in order to assist them with securing coverage elsewhere.

Citizens’ website, systems and manuals will be updated to reflect this change.

Click here to read the bulletin at Citizens' website>>

Depopulation: Policyholder Choice

Citizens Personal Lines Bulletin: December 21, 2016

Citizens is changing the depopulation process for all personal lines assumptions, beginning with the February 21, 2017, assumption. These changes are designed to increase policyholder choice and bring greater efficiency and transparency to the process for policyholders, agents, takeout companies and Citizens. The new process also integrates changes required by HB 931, passed in the 2016 legislative session.

Highlights of the changes are outlined below. Over the coming weeks, Citizens will provide training to agents who have customers selected to participate in this assumption, as well as details about website and system enhancements.

Policyholder Highlights

• Citizens will notify policyholders via U.S. mail of any available offers from participating companies interested in assuming their policies, starting January 4, 2017. The mailing will include a Policyholder Choice Form that includes all available offers and estimated renewal premiums for the assumption period. Policyholders will be able to choose their preferred insurance company or elect to remain with Citizens.
• Policyholders will have until February 3 (30 days) to return their Policyholder Choice Form to Citizens or contact their agent to register their choice.
• If a policyholder’s choice is not received by February 3, the policy will be assumed by one of the participating companies that made an assumption offer to the policyholder.
• Post assumption opt-outs no longer will be available.

Agent Highlights

• On January 4, Citizens will email agency principals a complete list of policies to which participating companies are extending offers for the February 21 assumption.
• On January 4, the agent of record will receive a PolicyCenter® activity notifying them of their customers’ policies that have been selected. Copies of all customer correspondence are available in PolicyCenter.
• Agents will be able to register policyholder choices in PolicyCenter.
Citizens encourages agents to reach out to affected policyholders to help them understand their options and ensure they complete the policyholder choice process.

Upcoming Agency Education and Support
If your agency has policyholders selected to participate in a personal lines assumption on or after February 21, you will receive an invitation to participate in webinars that outline the new process in more detail.

Florida Surplus Lines Services Office Fee - Decreased to 0.1% Effective April 1, 2017

BULLETIN: 2016-04

The purpose of this bulletin is to notify you that the service fee charged by the Florida Surplus Lines Service Office (FSLSO) will be decreased from 0.15% to 0.1% effective April 1, 2017.

All new and renewal policies with an effective date on or after April 1, 2017 will incur a service fee of 0.1% of the total gross premium as defined in Estatutos de la Florida 626.9325. The service fee percentage charged on the premium is based on the effective date of the policy; the FSLSO service fee is charged on all applicable Florida policies.

The service fee for all endorsements, audits, installments, cancellations or return premium transactions applicable to policies effective prior to 04/01/2017 will be the same percentage as the inception date of the policy being endorsed.

EXAMPLE ONE: The service fee for a policy with an effective date of 01/01/2017 is 0.15% of the total gross premium. An additional premium endorsement to the policy with an endorsement effective date of 06/01/2017 is 0.15%. If a cancellation takes place with an effective date of 8/01/2017, the service fee credit is 0.15%.

EXAMPLE TWO: The service fee for a policy with an effective date of 04/01/2017 is 0.1% of the total gross premium. An additional premium endorsement to the policy with an effective date of 06/01/2017 is 0.1%. If a cancellation takes place with an effective date of 08/01/2017, the service fee credit is 0.1%.

Again, the service fee percentage charged on the premium is based on the effective date of the policy. For an electronic copy of the bulletin, please visit:www.fslso.com/publications.

Business rules for calculating the correct service fee will be programmed into the FSLSO’s management system. No changes need be made for SLIP or XML batch filing, however, you may need to contact your agency’s information technology vendor or staff regarding needed revisions to your agency management system that may be necessary to calculate the revised service fee.

FSLSO’s Tax Estimator provides instant access to the most current tax rates and is available in a mobile application for Apple or Android devices. To use the Tax Estimator, visit www.fslso.com/estimate.

FSLSO also provides a free Tax Estimator web service application for businesses desiring to make the Tax Estimator available from their internal agency management system or third party website. Contact Tiffany Maruniak (tmaruniak@fslso.com) for more information.

As always FSLSO can be reached toll free at 800.562.4496, or email us at easy@fslso.com or visit our website at www.fslso.com.

The Florida Statutes Are Available Online

The Florida Statutes can be viewed at Online Sunshine - Title XXXVII Insurance.