EXHIBIT D NOTICE. Hurricane Charley; State of Emergency; Extension of Grace, Claims Filing,

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1 OFFICE OF INSURANCE REGULATION EXHIBIT D NOTICE RULE TITLE: RULE NO.: 69OER04-05 Hurricane Charley; State of Emergency; Extension of Grace, Claims Filing, Reinstatement, and Miscellaneous Periods; Limitation on Cancellations and Nonrenewals. SPECIFIC REASONS FOR FINDING AN IMMEDIATE DANGER TO THE PUBLIC HEALTH, SAFETY OR WELFARE: The Office of Insurance Regulation hereby states that the following circumstances constitute an immediate danger to the public health, safety, and welfare: This emergency rule is necessitated by the damage in Southwest, Central and Northeast, Florida, rendered by Hurricane Charley, which devastated the area on August 13, Preliminary estimates indicate damages in excess of 15 billion dollars. The hurricane damage has resulted in the closing of businesses and financial institutions, the suspension of mail service, the displacement of hundreds of thousands of persons from their homes, loss of personal belongings and corresponding temporary loss of employment. The catastrophic extent of the damage has virtually eliminated the benefit of these statutes which allow insureds specific periods of time to act or respond and has greatly increased the time necessary to make repairs to dwellings, all properties, vehicles, machinery, appliances, equipment, and vessels, in Brevard, Charlotte, DeSoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, and Volusia Counties. The storm victims are currently unable to timely act or respond and need additional time to obtain alternative coverage. Some insurers and premium finance companies may 1

2 attempt to cancel or nonrenew homeowner s insurance policies on homes and insurance on other property, which have suffered partial losses. This action would leave the insured uncovered and virtually uninsurable until the dwellings, all properties, vehicles, machinery, appliances, equipment and vessels are repaired. This rule provides temporary emergency relief to the insured so that he is not left uninsured during the remainder of this crisis. Given the responsibility of the Office to protect the consumer, an emergency rule is necessary to immediately address the emergency. REASONS FOR CONCLUDING THAT THE PROCEDURE USED IS FAIR UNDER THE CIRCUMSTANCES: The Office of Insurance Regulation believes that adopting an emergency rule is the fairest method to establish procedures and provide guidance to the insurance community because the nature of the destruction caused by Hurricane Charley requires an immediate and massive response from insurers and other regulated entities. An Office bulletin addressed to all insurers would reach all insurers but would not be legally binding. Office responses to individual requests for information would not make the information generally available. Also immediate protection is needed to prevent further devastation to innocent insureds. SUMMARY OF THE RULE: Emergency Rule 69OER04-05 establishes limits on cancellation and nonrenewal of insurance coverage for victims of Hurricane Charley and alternative procedures for the cancellation and nonrenewal of policies under certain circumstances. THE PERSON TO BE CONTACTED REGARDING THE EMERGENCY RULE IS: Lisa Miller, Deputy Commissioner, Office of Insurance Regulation, Larson Building, Tallahassee, FL ; millerl3@dfs.state.fl.us 2

3 THE FULL TEXT OF THE EMERGENCY RULE IS: OFFICE OF INSURANCE REGULATION Emergency Rule: 69OER04-05 Effective Date: OER04-05 Hurricane Charley; State of Emergency; Extension of Grace, Claims Filing, Reinstatement, and Miscellaneous Periods; Limitation on Cancellations and Nonrenewals. (1) This emergency rule supersedes and replaces the Emergency Order issued by the Office of Insurance Regulation, dated August 18, (2) 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 Chapter 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; (d) Premium Finance Company contracts; issued, delivered, or covering a risk located in Brevard, Charlotte, DeSoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, and Volusia Counties, which are subject to a state of emergency due to Hurricane Charley, shall be subject to the provisions of this emergency rule. Reference herein to "policy" or "contract of insurance" includes all agreements regulated under the Insurance Code. 3

4 (e) Reinsurance contracts are not subject to this rule, however, reinsurers and ceding insurers must immediately notify the Office, in writing, regarding cancellation or nonrenewal of any insurance contract concerning property risks in the State of Florida. Such notice should be directed to the Bureau of Property and Casualty Solvency. (3) The primary purpose of this emergency rule is to provide temporary and emergency relief to persons and property located in Brevard, Charlotte, DeSoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, and Volusia Counties, who have been displaced by the loss of their home or premises, or damage thereto which has caused them to reside elsewhere on a temporary basis or persons who have become temporarily unemployed, unable to receive or respond to notices or obtain replacement coverage as the result of Hurricane Charley. Specifically, those persons residing in the following counties are presumed to be qualified under this subsection: Brevard, Charlotte, DeSoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, and Volusia Counties. Any person located outside of the designated counties, who, due to Hurricane Charley, has been displaced by the loss of their home or premises or damage thereto, which has caused them to reside elsewhere on a temporary basis, or who have become unemployed, unable to receive or respond to notices or obtain replacement coverage may petition an insurer or premium finance company for relief from a cancellation or nonrenewal and such insurer or premium finance company shall not unreasonably refuse to reinstate the policy. (4) As to any policy provision, notice, correspondence, or law that imposes a time limit upon an insured under an insurance policy covering persons or property located in Brevard, Charlotte, Desoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, 4

5 Seminole, or Volusia Counties to perform any act or transmit information or funds, which act was to have been performed between August 10, 2004, and October 15, 2004, the time limit is hereby extended to October 15, This extension of time shall not relieve a policyholder from compliance with any obligations to provide information and cooperate in the claim adjustment process with respect to the claim. No interest, penalties, or other charges shall accrue or be assessed solely as a result of the extensions required by this paragraph, but a policyholder is liable for additional premiums for any extended coverage and a policyholder may be liable for additional interest under premium financing plans with premium finance companies, insurers, or their affiliates. (5) No cancellation or nonrenewal of a policy covering persons or property located in Brevard, Charlotte, Desoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, or Volusia Counties may take effect between August 10, 2004, and October 15, (6) No notice of cancellation or nonrenewal may be issued with respect to a policy covering persons or property located in Brevard, Charlotte, Desoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, or Volusia Counties, between August 10, 2004, and October 15, (7) A cancellation or nonrenewal may occur prior to October 15, 2004, at the written request or written concurrence of the policyholder. (8) Except as provided in subsections (6), (7), and (12), with respect to a notice of cancellation or nonrenewal which, but for this rule, would have taken effect between 5

6 August 10, 2004, and October 15, 2004, such notice is not made invalid by this rule; however: a. The insurer shall extend the term of the policy through October 15, 2004, or a later date specified by the insurer. b. The premium for the extended term of coverage shall be the appropriate pro rata portion of the premium for the entire term of the policy. (9) No policy shall be canceled or nonrenewed solely because of a claim resulting from Hurricane Charley. (10) An insurer s offer of replacement coverage, which is voluntarily accepted in an affiliated company, or made pursuant to a depopulation program, assumption or other arrangement approved by the Office does not constitute a nonrenewal or cancellation for purposes of this rule. (11) Nothing in this rule applies to any policy issued or renewed on or after August 15, 2004, except that for such policies a notice of cancellation or nonrenewal may be issued between September 15, 2004, and October 15, 2004, which may only take effect at the end of the applicable notice period provided in the Insurance Code, but no sooner than October 15, 2004, but only if: a. The policyholder provides a signed written acknowledgement of receipt of notice of cancellation or nonrenewal to an agent or company representative; or b. The policyholder acknowledges receipt of the notice of cancellation or nonrenewal by providing a signature on a postal return receipt; or c. Such notice is in response to material misrepresentation or fraud; 6

7 (12) All notices of cancellation issued or mailed August 1, 2004, to August 10, 2004, affecting an insured located in Brevard, Charlotte, DeSoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, and Volusia Counties, shall be withdrawn and reissued to insureds on or after October 15, (13) Any insurer who receives a claim from an insured owing premium may offset the premium due to the insurer or a premium finance company from any claim payment made under the policy. (14) Nothing in this rule shall be construed to exempt or excuse an insured from liability for premiums otherwise due for actual coverage provided. (15) On or after August 10, 2004, if the contract of insurance was financed by a premium finance company, the following provisions apply: (a) Premium finance companies will issue 10-day notices of intent to cancel and cancellation notices in accordance with the terms of the premium finance agreement signed by the insured. In addition, the premium finance company shall be responsible to obtain proof of receipt of each such notice by the insured, which may be accomplished through mailing by certified mail, return receipt requested, or through any other legally admissible method in a court of law. In addition, each such notice shall prominently contain the following statement: If you have been displaced through the loss of your home or damage to your home which has caused you to reside elsewhere on a temporary basis, or if you have temporarily become unemployed due to the destruction caused by Hurricane Charley, please contact this office at once. 7

8 Victims of Hurricane Charley will receive an automatic extension of time to October 15, 2004, to bring their accounts up to date and no late charges will be applied to any late payments received which were due on their accounts during the period of August 10, 2004, through October 15, Therefore, if you are a victim of Hurricane Charley, please contact us at once at the number provided at the bottom of this notice so that we may advise you of the status of your account. If you decide that you no longer need or desire to keep the coverage provided by the insurance policy financed by your contract with us, please contact us at once so that we may instruct you on how to effect cancellation with your insurer." (b) Upon receipt of a notice of cancellation from the premium finance company, the insurer will process the cancellation requests in accordance with current law, and in accordance with the notice provisions contained in this rule. (c) The insurer will hold all refunds until October 15, 2004, and proceed as follows: 1. If the insurer receives notice of a claim that occurred on or before October 15, 2004, on the cancelled policy, the coverage that would have been available had the policy not been cancelled shall be extended for that claim. 2. If the premium finance company receives payment from the insured or the insured's agent on behalf of the insured to bring the account up-to-date on or before October 15, 2004, the premium finance company will send a request for reinstatement to the insurer. Upon receipt of same, the insurer will immediately reinstate the policy with no lapse in coverage. 8

9 3. No late charges shall be assessed for any insured who qualifies for protection under this emergency rule. 4. If the insurer does not receive a claim of loss on a policy for which it has received a notice of cancellation under subparagraph 1. above, nor a request for reinstatement from the premium finance company pursuant to subparagraph 2. above, the insurer will issue the return premium checks to the premium finance company no later than October 23, 2004, based upon the requested cancellation date. (16) The Commissioner of the Office of Insurance Regulation is hereby delegated and granted temporary and limited authority for the next sixty (60) days to issue supplemental emergency rules that: narrow the scope of this rule to alleviate unintended consequences arising from the application of this rule that are consistent with the purpose, scope and intent of this rule; and to issue such emergency rules deemed necessary to address unforeseen circumstances that have arisen as the result of Hurricane Charley. (17) The provisions of this rule shall be liberally construed to effectuate the intent and purposes expressed therein and to afford maximum consumer protection. Specific Authority (4), , FS. Law Implemented , , (1)(i), , , , , , , , , , , , , , , , , , , , , , , , , , , , FS. History - New. THIS RULE TAKES EFFECT UPON BEING FILED WITH THE DEPARTMENT OF STATE UNLESS A LATER TIME AND DATE IS SPECIFIED IN THE RULE. 9