627.7077 Florida Sinkhole Insurance Facility and other matters related to affordability and availability of sinkhole insurance; feasibility study. - Florida Statutes

627.7077 Florida Sinkhole Insurance Facility and other matters related to affordability and availability of sinkhole insurance; feasibility study.

   (1) The Florida State University College of Business Department of Risk Management and Insurance shall, under the direction of the office, conduct a feasibility and cost-benefit study of a potential Florida Sinkhole Insurance Facility and of other matters related to affordability and availability of sinkhole insurance. The study shall be conducted in consultation with the State Board of Administration and the Florida Geological Survey. The university shall provide a preliminary report of its analysis, findings, and recommendations to the Financial Services Commission and the presiding officers of the Legislature no later than February 1, 2005, and shall provide a final report no later than April 1, 2005.

   (2) The potential functions of the facility to be analyzed include:

   (a) Serving as the direct insurer or the reinsurer for all or some sinkhole losses.

   (b) Providing training, communication, and other educational services to the public, engineers, the construction industry, insurance professionals, or others.

   (c) Providing uniform standards for use by insurers in evaluating sinkhole loss claims.

   (d) Providing consulting services for insurers.

   (e) Maintaining a public database of all confirmed sinkholes and paid sinkhole loss claims, for use by consumers and by the insurance, building construction, banking, and real estate industries.

   (3) The feasibility study shall, at a minimum, address the following issues:

   (a) Where the facility should be housed, including, but not limited to, the options of creating a separate facility or using the Citizens Property Insurance Corporation or the Florida Hurricane Catastrophe Fund.

   (b) Federal income taxation implications.

   (c) Funding options and costs associated with operating the facility, including means of funding sinkhole insurance through premiums that are adequate to fund covered losses.

   (d) Applicability of the experience of similar facilities of other states.

   (e) Other economic impact considerations pertinent to a facility.

   (f) Alternative dispute resolution mechanisms.

   (g) The impact of all present requirements in the Florida Insurance Code on affordability and availability of sinkhole insurance and recommendations to address such impacts.

   (4) The study shall be funded from a budget of no more than $300,000, which will be funded by assessments on insurers issuing property insurance in this state. Such assessments shall be collected by the office and shall be prorated among such insurers according to a formula whereby each insurer shall pay a fraction of such budget, the numerator of which shall be such insurer’s direct earned premiums for property insurance in this state and the denominator of which shall be the total direct earned premiums for property insurance in this state for calendar year 2003.

History. s. 15, ch. 2004-370; s. 160, ch. 2004-390.