In the closing days of the 2010 regular session of the Florida Legislature, the House and Senate reached agreement on a wide range of insurance issues. Some of the more ambitious initiatives, such as rate deregulation for residential property insurance, did not survive, but the Legislature did pass several important proposals. Now that the dust has settled and all of the insurance bills passed during the session have either been signed by the governor or await his decision, here is a quick summary.
Property Insurance Senate Bill 2044 includes several issues that were sought by the Florida Office of Insurance Regulation (OIR), including increased surplus requirements and increased regulatory authority over managing general agents and other affiliates. The bill also contains provisions sought by insurers, including restrictions on public adjusters. Among the more important provisions:

• The bill gives OIR more authority over insurer affiliates and managing general agents, including the power to examine any MGA as if it were an insurer, even if the MGA represents more than one insurer. The bill also increases minimum surplus requirements for residential property insurers.
• Public adjusters will be subject to new limits on commissions, solicitations of business, and contract terms, and will not be able to deny insurers access to claimants or damaged property. In addition, windstorm and hurricane claims will have to be filed within three years after the date of the storm.
• When a policyholder makes a claim under a replacement cost policy, the insurer will be able to hold back a portion of payment for dwelling losses and pay the remainder as work is performed. The insurer will still have to pay the full replacement costs for contents coverage without any holdbacks.
• The bill sets standards for the inspections that determine whether a property qualifies for a hurricane loss mitigation discount, including the requirement that the person who signs the inspection form must personally inspect the property. It also provides that a base rate increase may be justified when the total value of all mitigation discounts exceeds the aggregate expected reduction in losses.
• The mandated reduction in the area in which Citizens Property Insurance Corp. writes windstorm-only policies is delayed for another two years, enabling insurers to continue to write ex-wind policies in that area.
• The bill also makes several changes to how rates are made for property insurance, including an expansion of the types of costs that an insurer can include in a rate filing that is subject to expedited review. The prohibition on implementing rates before they are approved by the Insurance Commissioner ("use and file" ratemaking), which was scheduled to expire on Dec. 31, 2010, is extended for another year.

Gov. Charlie Crist has until June 1 to sign SB 2044, veto it, or allow it to become law without his signature. If it becomes a law, it will take effect on July 1.

Senate Bill 1460 revises the Florida Hurricane Catastrophe Fund (Cat Fund) contract year. The 2010 bill was enacted in response to the unintended consequences of 2009 legislation that changed the start date of the fund's contract year from June 1 to January 1 and provided for a contract period of seven months, beginning on June 1, 2010, and ending on Dec. 31, 2010, to provide for a transitional period. The accounting consequences of the transitional contract "year" resulted in a reduction to insurers' surplus. SB 1460 restores the June 1-May 31 contract year and does away with the transitional period.