Diligent Effort Exemption Expires for Flood Insurance
The Florida Department of Financial Services (DFS) advises surplus lines agents that a diligent effort exemption for personal residential flood insurance has expired. The Florida legislature previously adopted Section 627.715, Florida Statutes, to encourage the development of a private market for residential flood insurance. Among its provisions, the statute provided at subsection (4):
(4) A surplus lines agent may export a contract or endorsement providing flood coverage to an eligible surplus lines insurer without making a diligent effort to seek such coverage from three or more authorized insurers under s. 626.916(1)(a). This subsection expires July 1, 2019, or on the date on which the Commissioner of Insurance Regulation determines in writing that there is an adequate admitted market to provide coverage for the peril of flood consistent with this section, whichever date occurs first. If there are fewer than three admitted insurers on the date this subsection expires, the number of declinations necessary to meet the diligent-effort requirement shall be no fewer than the number of authorized insurers providing flood coverage. (Emphasis added).
DFS published a recap of the 2019 legislative session advising agents that the legislature did not extend this exemption. Therefore, surplus lines agents should comply with the diligent effort requirement as it relates to residential flood insurance.