SUMMARY OF SENATE BILL 2A – 2022 SPECIAL LEGISLATIVE SESSION
Senate Bill 2A was passed on December 14, 2022, during the Legislative Special Session and signed by Governor DeSantis on December 16, 2022. Our office is in the process of reviewing the specifics of the law changes and will be updating our website with detailed information over the next several weeks.
Shown below is a summary of the primary changes that may affect your property claim or eligibility for coverage with Citizens Property Insurance Corporation (Citizens).
The primary purpose of the legislation is to address the affordability and availability of residential property insurance in Florida. The bill also requires insurers to communicate, investigate, and pay valid claims more promptly. Some of the bill’s provisions can have an immediate impact on future claims, depending on the date of loss and/or when the policy was issued or renewed. Most of the law changes were effective December 16, 2022, upon signature of the Governor.
Claim Filing Deadline
Reduces the deadline for you to report a claim under your policy from 2 years to 1 year for a new or reopened claim, and from 3 years to 18 months for a supplemental claim.
Prompt Pay Laws for Property Insurance
Amends the prompt pay laws effective March 1, 2023, to encourage expedited payments of claims, as follows:
- Reduces the time for insurers to pay or deny the claim from 90 to 60 days.
- Reduces the time for insurers to review and acknowledge a claim communication from 14 days to 7 days.
- Reduces the time for insurer to begin an investigation from 14 days to 7 days.
- Reduces the time for insurer to conduct a physical inspection from 45 days to 30 days and applies this requirement to hurricane claims.
- Requires insurers to send any adjuster’s report estimating the loss to you within 7 days after it is created.
- Amends the Unfair Insurance Trade Practices Act to conform to changes made to the prompt pay laws by reducing the requirement to pay undisputed amounts of benefits from 90 days to 60 days and revising the factors that excuse failure to perform.
Assignments of Benefits
Prohibits the assignment, in whole or in part, of any post-loss insurance benefit under any residential property insurance policy or under any commercial property insurance policy issued on or after January 1, 2023.
Amends the mandatory flood insurance notice by requiring it to be part of the declarations page and revises the content of notice to encourage purchase of flood insurance.
Provides conditions whereby an insurer may include mandatory binding arbitration in its policies. The insurer may not require you to participate in mandatory binding arbitration unless specified conditions are met, including that the insurer also offer a policy that does not have a mandatory binding arbitration clause. Insurers must also provide an appropriate premium discount in exchange for the rights ceded by you.
Citizens Property Insurance Corporation (Citizens)
The legislation includes several provisions addressing the growth and exposure of Citizens as well as providing phased-in flood requirements. Changes affecting current and potential policyholders are effective January 1, 2023, except the flood insurance requirement will be phased in beginning March 1, 2023 for new policies.
Examples of some of eligibility changes are:
- Policyholders are ineligible for Citizens coverage at renewal upon receiving an offer of comparable coverage from an authorized insurer for a premium that is not more than 20 percent greater than the Citizens renewal premium.
- Increases the eligibility threshold for Citizens new policies for commercial residential coverage from 15 percent to 20 percent, which is consistent with the threshold for new policies of personal residential coverage.
- Requires that Citizens’ rate be non-competitive with the approved rates charged in the admitted market, in addition to being actuarially sound.
- Increases the potential rates charged for coverage on risks that are not primary residences.
- Provides that Citizens personal lines residential policyholders must secure and maintain flood insurance that meets certain requirements as a condition of eligibility for Citizens coverage.