McCarty Issues Order Prohibiting Cancellation Of Insurance Policies For Victims Of Tornados
TALLAHASSEE (02/03/2007) Florida Insurance Commissioner Kevin McCarty has issued an emergency order prohibiting insurance companies from canceling personal lines insurance policies for victims of Friday night's tornados in central Florida. The order also prohibits insurers from canceling or non-renewing a policy solely because of claims resulting from the February tornados and extends deadlines for payment of insurance premiums and other required correspondence.
"The victims of the tornados have had their property destroyed and their lives turned upside down," said McCarty. "The last thing I want them to have to worry about is whether they have insurance to cover damage to their property." Gov. Charlie Crist has declared a state of emergency in the affected counties, which enables the insurance commissioner to issue general orders to help cope with the emergency situation.
Pursuant to the order an insurer may not cancel or non-renew a personal residential or commercial residential property insurance policy covering property damaged as a result of the Florida Tornadoes located in Lake, Seminole, Sumter, and Volusia Counties, for a period of 90 days after the dwelling has been repaired. The prohibition also affects other personal lines insurance policies for those who sustained property damage from the tornadoes.
The order also allows storm victims to delay any required correspondence with insurers until April 15, 2007, this includes premium payments which become due after February 1, 2007. This section of the order was issued to assist those whose homes have been damaged or destroyed and who could be expected to have a difficult time finding documents, checkbooks and credit cards or whose mail service has been disrupted.
A copy of the emergency Order is attached below:
TO: All Property and Casualty Insurers and Surplus Lines Insurers.
THIS CAUSE having come before the Commissioner of the Office of Insurance Regulation as a result of the State of Emergency created by the February Tornadoes, and being fully informed in the premises,
NOW THEREFORE, the Commissioner hereby FINDS as follows:
JURISDICTION AND FINDINGS OF FACT IN THE MATTER OF:
Emergency Order; Prohibition on Cancellation
or Nonrenewal of Residential Property
Insurance Covering Property Damaged
by February Tornadoes in Specified Counties CASE NO.: 89152-07-EO
1. The Office of Insurance Regulation (the "Office") has the duty, pursuant to Section 624.307, Florida Statutes, to enforce the provisions of the Insurance Code (Chapters 624-632, 634,635, 636, 641, 642, 648, and 651, henceforth, the "Code"). The Office shall have the powers and authority expressly conferred upon it by, or reasonably implied from, the provisions of the Code, specifically Section 624.307, Florida Statutes, and as further authorized by Section 252.46, Florida Statutes.
2. Section 252.63, Florida Statutes, provides that, "When the Governor declares a state of emergency pursuant to s. 252.36, Florida Statutes, the commissioner may issue one or more general orders applicable to all insurance companies, entities, and persons, as defined in s. 624.04, that are subject to the Florida Insurance Code and that serve any portion of the area of the state under the state of emergency."
3. On February 2, 2007, Florida Governor Charlie Crist issued Executive Order 07-21, declaring a state of emergency to exist in Lake, Seminole, Sumter, and Volusia Counties because of the wind damage resulting from the severe thunder storms and tornadoes (collectively referred to herein as the "February Tornadoes") which had ravished these four counties. Executive Order 07-21 is attached as Exhibit 1.
4. Section 627.4133(2)(d)1., Florida Statutes, provides that, "Upon a declaration of an emergency pursuant to s. 252.36 and the filing of an order by the Commissioner of Insurance Regulation, an insurer may not cancel or nonrenew a personal residential or commercial residential property insurance policy covering a dwelling or residential property located in this state which has been damaged as a result of a hurricane or wind loss that is the subject of the declaration of emergency for a period of 90 days after the dwelling or residential property has been repaired. A structure is deemed to be repaired when substantially completed and restored to the extent that it is insurable by another authorized insurer that is writing policies in this state."
5. Damage sustained in the four counties as a result of the Florida Tornadoes is "wind loss" within the purview of Section 627.4133(2)(d)1., Florida Statutes.
WHEREFORE, the Commissioner of the Office of Insurance Regulation finds that as a result of the direct effects of the Florida Tornadoes the issuance of an Order pursuant to Sections 252.63 and 624.307, Florida Statutes, is required in order to protect the public health, safety and welfare.
Accordingly, IT IS HEREBY ORDERED:
The following applies to the listed insurance set forth below in paragraph (2), for all persons who suffered wind damage in Lake, Seminole, Sumter, and Volusia Counties as a result of the Florida Tornadoes:
(1) An insurer may not cancel or nonrenew a personal residential or commercial residential property insurance policy covering property damaged as a result of the Florida Tornadoes located in Lake, Seminole, Sumter, and Volusia Counties, for a period of 90 days after the dwelling has been repaired, except as provided in Section 627.4133(2)(d), Florida Statutes, and in accordance with all other applicable statutes and rules of the commission.
(2) In addition, this order applies to all contracts of insurance and other contracts that are subject to regulation under the Florida Insurance Code including, but not limited to:
(a) All policies referenced in Chapters 440, 624, 626, and 627, Florida Statutes;
(b) All policies or contracts issued pursuant to Chapters 641 and 651, Florida Statutes;
(c) Contracts issued by Multiple Employer Welfare Arrangements and Commercial Self-Insurance Trusts; and
(d) Premium Finance Company contracts insuring persons who sustained property damage in the February Tornadoes shall be subject to the provisions of this Emergency Order.
References herein to "policy" or "contract of insurance" include all agreements regulated under the Insurance Code.
(3) As to any policy provision, notice, correspondence, or law which imposes a time limit upon an insured to perform any act or transmit information or funds with respect to a contract of insurance, which act was to have been performed on or after February 2, 2007, the time limit shall be extended to April 15, 2007. This extension of time shall not relieve a policyholder who has a claim resulting from the February Tornadoes from compliance with his or her obligations to provide information and cooperate in the claim adjustment process relative to his property damage claim. This extension of time shall also not apply to new policies issued on or after February 3, 2007. No interest, penalties, or other charges, shall accrue or be assessed, as the result of the extensions required herein. Interest that is owed pursuant to premium financing plans with premium finance companies or insurers or their affiliates may be assessed.
(4) Between February 2, 2007 and April 15, 2007, no insurer or regulated entity shall cancel or nonrenew a policy or contract of insurance or issue a notice of cancellation or nonrenewal, covering a person, property or risk damaged as a result of the February Tornadoes unless requested by the insured. Furthermore, no such policy may be cancelled or nonrenewed solely because of claims resulting from the February Tornadoes.
(5) All notices of cancellation issued or mailed the week preceding February 2, 2007, affecting an insured who sustained damage in the February Tornadoes, shall be withdrawn and reissued to insureds on or after April 15, 2007.
(6) Any insurer who receives a claim from an insured owing premium may offset the premium due from any claim payment made under the policy.
(7) The Commissioner of the Office of Insurance Regulation may, by written Order, narrow the scope of this order, based upon a determination that it is necessary.
DONE and ORDERED this 2nd day of February, 2007.
Kevin M. McCarty
Office of Insurance Regulation
1. Executive Order 07-21
NOTICE OF RIGHTS
Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Fla.R.App.P. Review proceedings must be instituted by filing a petition or notice of appeal with the General Counsel, acting as the agency clerk, at 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333, and a copy of the same with the appropriate district court of appeal, within thirty (30) days of rendition of this Order.
Bob Prentiss, Esquire
Office of Insurance Regulation
200 East Gaines Street, 6th Floor
Tallahassee, Florida 32399-4206
All Property and Casualty Insurers
and Surplus Lines Insurers