Florida P&C Study Guide

No state’s P&C exam is as dominated by catastrophe-market law as Florida’s. The residual market, the state reinsurance fund, percentage hurricane deductibles and a mandatory-versus-optional coverage pair that sounds like one peril and is two — that is where the 2-20 exam concentrates. Add the regulatory-structure questions, which are free marks once you know Florida splits its regulator in a way almost no other state does.

Who regulates what — Florida’s split, and why it is tested

Florida has no Department of Insurance. Producer licensing sits with the Department of Financial Services (DFS) under an elected Chief Financial Officer, a member of the Cabinet. Insurer solvency, rate filings and policy forms sit with the separate Office of Insurance Regulation (OIR), headed by a Commissioner appointed by the Financial Services Commission — the Governor and Cabinet sitting together (F.S. § 20.121).

The insurance law itself is the Florida Insurance Code, statutes chapters 624–632, 634, 635, 636, 641, 642, 648 and 651 (F.S. § 624.01), with rules in the Florida Administrative Code at Title 69O (OIR) and Title 69B (DFS agent licensing).

The catastrophe market — Citizens, the Cat Fund, and the deductible menu

Florida has no traditional FAIR Plan. Its insurer of last resort is Citizens Property Insurance Corporation, created by F.S. § 627.351(6). Wind-prone coastal risk is written through Citizens’ Coastal Account, which absorbed the former windstorm pool, and the whole structure is backed by the Florida Hurricane Catastrophe Fund (FHCF) — a state reinsurance fund under F.S. § 215.555.

Hurricane exposure also shows up in policy design. Under F.S. § 627.701 a residential property insurer must offer hurricane deductibles of $500, 2%, 5% or 10% — the percentage ones being calculated against the dwelling limit rather than the loss, which is the part that surprises policyholders and shows up in scenario questions.

Ground cover collapse vs. sinkhole loss — one mandatory, one optional

This pair is the sharpest distinction in Florida property law, and the two are constantly conflated because they describe similar-looking damage. Under F.S. § 627.706, catastrophic ground cover collapse is mandatory coverage in a residential property policy. Sinkhole loss is an optional endorsement that the insurer must make available but the policyholder must buy.

Rates, credit, and surplus lines

Florida uses a dual filing regime under F.S. § 627.062(2): an insurer may file rates at least 90 days before use (file-and-use) or within 30 days after use (use-and-file). Either way rates may not be excessive, inadequate, or unfairly discriminatory — the three-part standard the exam expects verbatim.

Insurance credit scoring is permitted but restricted in personal auto and residential property: an insurer may not take an adverse action based solely on credit (F.S. § 626.9741).

Surplus lines has a two-license prerequisite. You must hold an active 2-20 General Lines license plus a separate 1-20 Surplus Lines license (F.S. § 626.914 et seq.), and a diligent effort search of the admitted market — declinations from admitted insurers — is required before a risk may be placed in the surplus market (§ 626.916). Remember the consequence that connects to your guaranty material: surplus lines placements have no guaranty association backstop.

When a P&C insurer fails — FIGA

The Florida Insurance Guaranty Association (FIGA) covers claims of insolvent admitted P&C insurers under F.S. § 631.57: covered claims to $300,000, with an additional $200,000 available for the structure and contents portion of a homeowners claim, and workers’ compensation claims paid in full. As with the life and health association, using FIGA’s existence to induce a sale is prohibited (F.S. § 631.735).

Workers’ compensation — three thresholds, indexed on industry

Most states publish one employee count. Florida publishes three, under F.S. § 440.02(17): coverage is required at 4 or more employees generally, 1 or more in the construction industry, and 6 regular or 12 seasonal employees in agriculture. The construction threshold of one is the fact most often answered wrong.

Benefits and deadlines: temporary total disability pays 66⅔% of the average weekly wage, capped at the statewide average weekly wage and limited to 104 weeks (§ 440.15(2)). An injured worker must report to the employer within 30 days (§ 440.185) and file a petition for benefits within 2 years (§ 440.19). The program is administered by the Division of Workers’ Compensation, inside DFS — the same department that licenses you.