July 28, 2016
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       Florida Senate - 2010                       CS for CS for SB 876
       
       
       
       By the Committees on General Government Appropriations; and
       Banking and Insurance; and Senators Bennett, Dockery, and Hill
       
       
       
       601-04794-10                                           2010876c2
    1                        A bill to be entitled                      
    2         An act relating to residential property insurance;
    3         amending s. 627.062, F.S.; authorizing certain
    4         insurers to use a rate different from otherwise
    5         applicable filed rates; prohibiting the consideration
    6         of certain policies when making a specified
    7         calculation; limiting the maximum average statewide
    8         increase for certain rate filings; preserving the
    9         authority of the Office of Insurance Regulation to
   10         disapprove rates as inadequate or disapprove a rate
   11         filing for using certain rating factors; authorizing
   12         the office to direct an insurer to make a specified
   13         type of rate filing under certain circumstances;
   14         amending s. 627.351, F.S.; providing requirements for
   15         the levy of the Citizens policyholder surcharge;
   16         prohibiting the corporation from levying certain
   17         regular assessments until after levying the full
   18         amount of a Citizens policyholder surcharge; requiring
   19         the corporation’s plan of operation to require agents
   20         to obtain an acknowledgement of potential surcharge
   21         and assessment liability from applicants and
   22         policyholders; requiring the corporation to
   23         permanently retain a copy of such acknowledgments;
   24         specifying that the acknowledgement creates a
   25         conclusive presumption of understanding and acceptance
   26         by the policyholder; creating s. 627.7031, F.S.;
   27         authorizing certain insurers to offer or renew
   28         policies at rates established under certain
   29         circumstances; prohibiting certain insurers from
   30         purchasing TICL option coverage from the Florida
   31         Hurricane Catastrophe Fund under certain
   32         circumstances; requiring that certain policies contain
   33         a specified rate notice; requiring insurers to offer
   34         applicants or insureds an estimate of the premium for
   35         a policy from Citizens Property Insurance Corporation
   36         reflecting similar coverage, limits, and deductibles;
   37         requiring applicants or insureds to provide a signed
   38         premium comparison acknowledgement; specifying
   39         criteria for insurer compliance with certain
   40         requirements; specifying acknowledgement contents;
   41         requiring insurers and agents to retain a copy of the
   42         acknowledgement for a specified time; specifying a
   43         presumption created by a signed acknowledgement;
   44         specifying types of residential property insurance
   45         policies that are not eligible for certain rates or
   46         subject to other requirements; requiring written
   47         notice of certain nonrenewals; preserving insurer
   48         authority to cancel policies; specifying a criterion
   49         for what constitutes an offer to renew a policy;
   50         providing an effective date.
   51  
   52  Be It Enacted by the Legislature of the State of Florida:
   53  
   54         Section 1. Paragraph (l) is added to subsection (2) of
   55  section 627.062, Florida Statutes, to read:
   56         627.062 Rate standards.—
   57         (2) As to all such classes of insurance:
   58         (l)1. An insurer complying with the requirements of s.
   59  627.7031 may use a rate for residential property insurance, as
   60  defined in s. 627.4025, different from the otherwise applicable
   61  filed rate as provided in this paragraph.
   62         2. Policies subject to this paragraph may not be counted in
   63  the calculation under s. 627.171(2).
   64         3. Such rates shall be filed with the office as a separate
   65  filing. The filing must be accompanied by an actuary’s
   66  certification stating that the filing was prepared in accordance
   67  with current actuarial standards of practice of the Actuarial
   68  Standards Board and that the rates are within a range consistent
   69  with applicable actuarial principles or, when the percentage
   70  limitations of this paragraph do not allow for a rate within a
   71  range consistent with applicable actuarial principles, the
   72  certification must state that the rates are below such range.
   73  The initial rates used by an insurer under this paragraph may
   74  not provide for rates that represent more than a 10 percent
   75  statewide average rate increase over the most recently filed and
   76  approved rate. A rate filing made pursuant to this paragraph
   77  submitted in any year following the implementation of such
   78  initial rates may not provide for rates that represent more than
   79  a 10 percent statewide average rate increase in any one year
   80  over the rates in effect under this paragraph at the time of the
   81  filing. A rate filing made pursuant to this paragraph may not
   82  provide for a percentage rate increase as to any one
   83  policyholder which exceeds two times the statewide average rate
   84  increase provided in the filing.
   85         4. This paragraph does not affect the authority of the
   86  office to disapprove a rate as inadequate or to disapprove a
   87  rate filing for charging any insured or applicant a higher
   88  premium solely because of the insured’s or applicant’s race,
   89  color, creed, marital status, sex, or national origin. Upon
   90  finding that an insurer has used any such factor in charging an
   91  insured or applicant a higher premium, the office may direct the
   92  insurer to make a new filing for a new rate that does not use
   93  such factor.
   94  
   95  The provisions of this subsection shall not apply to workers’
   96  compensation and employer’s liability insurance and to motor
   97  vehicle insurance.
   98         Section 2. Paragraphs (b) and (c) of subsection (6) of
   99  section 627.351, Florida Statutes, are amended, present
  100  paragraphs (g) through (ff) of subsection (6) of that section
  101  are redesignated as paragraphs (f) through (ee), respectively,
  102  and present paragraph (f) of that subsection is redesignated as
  103  paragraph (ff) of that subsection, to read:
  104         627.351 Insurance risk apportionment plans.—
  105         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
  106         (b)1. All insurers authorized to write one or more subject
  107  lines of business in this state are subject to assessment by the
  108  corporation and, for the purposes of this subsection, are
  109  referred to collectively as “assessable insurers.” Insurers
  110  writing one or more subject lines of business in this state
  111  pursuant to part VIII of chapter 626 are not assessable
  112  insurers, but insureds who procure one or more subject lines of
  113  business in this state pursuant to part VIII of chapter 626 are
  114  subject to assessment by the corporation and are referred to
  115  collectively as “assessable insureds.” An authorized insurer’s
  116  assessment liability shall begin on the first day of the
  117  calendar year following the year in which the insurer was issued
  118  a certificate of authority to transact insurance for subject
  119  lines of business in this state and shall terminate 1 year after
  120  the end of the first calendar year during which the insurer no
  121  longer holds a certificate of authority to transact insurance
  122  for subject lines of business in this state.
  123         2.a. All revenues, assets, liabilities, losses, and
  124  expenses of the corporation shall be divided into three separate
  125  accounts as follows:
  126         (I) A personal lines account for personal residential
  127  policies issued by the corporation or issued by the Residential
  128  Property and Casualty Joint Underwriting Association and renewed
  129  by the corporation that provide comprehensive, multiperil
  130  coverage on risks that are not located in areas eligible for
  131  coverage in the Florida Windstorm Underwriting Association as
  132  those areas were defined on January 1, 2002, and for such
  133  policies that do not provide coverage for the peril of wind on
  134  risks that are located in such areas;
  135         (II) A commercial lines account for commercial residential
  136  and commercial nonresidential policies issued by the corporation
  137  or issued by the Residential Property and Casualty Joint
  138  Underwriting Association and renewed by the corporation that
  139  provide coverage for basic property perils on risks that are not
  140  located in areas eligible for coverage in the Florida Windstorm
  141  Underwriting Association as those areas were defined on January
  142  1, 2002, and for such policies that do not provide coverage for
  143  the peril of wind on risks that are located in such areas; and
  144         (III) A high-risk account for personal residential policies
  145  and commercial residential and commercial nonresidential
  146  property policies issued by the corporation or transferred to
  147  the corporation that provide coverage for the peril of wind on
  148  risks that are located in areas eligible for coverage in the
  149  Florida Windstorm Underwriting Association as those areas were
  150  defined on January 1, 2002. The corporation may offer policies
  151  that provide multiperil coverage and the corporation shall
  152  continue to offer policies that provide coverage only for the
  153  peril of wind for risks located in areas eligible for coverage
  154  in the high-risk account. In issuing multiperil coverage, the
  155  corporation may use its approved policy forms and rates for the
  156  personal lines account. An applicant or insured who is eligible
  157  to purchase a multiperil policy from the corporation may
  158  purchase a multiperil policy from an authorized insurer without
  159  prejudice to the applicant’s or insured’s eligibility to
  160  prospectively purchase a policy that provides coverage only for
  161  the peril of wind from the corporation. An applicant or insured
  162  who is eligible for a corporation policy that provides coverage
  163  only for the peril of wind may elect to purchase or retain such
  164  policy and also purchase or retain coverage excluding wind from
  165  an authorized insurer without prejudice to the applicant’s or
  166  insured’s eligibility to prospectively purchase a policy that
  167  provides multiperil coverage from the corporation. It is the
  168  goal of the Legislature that there would be an overall average
  169  savings of 10 percent or more for a policyholder who currently
  170  has a wind-only policy with the corporation, and an ex-wind
  171  policy with a voluntary insurer or the corporation, and who then
  172  obtains a multiperil policy from the corporation. It is the
  173  intent of the Legislature that the offer of multiperil coverage
  174  in the high-risk account be made and implemented in a manner
  175  that does not adversely affect the tax-exempt status of the
  176  corporation or creditworthiness of or security for currently
  177  outstanding financing obligations or credit facilities of the
  178  high-risk account, the personal lines account, or the commercial
  179  lines account. The high-risk account must also include quota
  180  share primary insurance under subparagraph (c)2. The area
  181  eligible for coverage under the high-risk account also includes
  182  the area within Port Canaveral, which is bordered on the south
  183  by the City of Cape Canaveral, bordered on the west by the
  184  Banana River, and bordered on the north by Federal Government
  185  property.
  186         b. The three separate accounts must be maintained as long
  187  as financing obligations entered into by the Florida Windstorm
  188  Underwriting Association or Residential Property and Casualty
  189  Joint Underwriting Association are outstanding, in accordance
  190  with the terms of the corresponding financing documents. When
  191  the financing obligations are no longer outstanding, in
  192  accordance with the terms of the corresponding financing
  193  documents, the corporation may use a single account for all
  194  revenues, assets, liabilities, losses, and expenses of the
  195  corporation. Consistent with the requirement of this
  196  subparagraph and prudent investment policies that minimize the
  197  cost of carrying debt, the board shall exercise its best efforts
  198  to retire existing debt or to obtain approval of necessary
  199  parties to amend the terms of existing debt, so as to structure
  200  the most efficient plan to consolidate the three separate
  201  accounts into a single account. By February 1, 2007, the board
  202  shall submit a report to the Financial Services Commission, the
  203  President of the Senate, and the Speaker of the House of
  204  Representatives which includes an analysis of consolidating the
  205  accounts, the actions the board has taken to minimize the cost
  206  of carrying debt, and its recommendations for executing the most
  207  efficient plan.
  208         c. Creditors of the Residential Property and Casualty Joint
  209  Underwriting Association and of the accounts specified in sub
  210  sub-subparagraphs a.(I) and (II) may have a claim against, and
  211  recourse to, the accounts referred to in sub-sub-subparagraphs
  212  a.(I) and (II) and shall have no claim against, or recourse to,
  213  the account referred to in sub-sub-subparagraph a.(III).
  214  Creditors of the Florida Windstorm Underwriting Association
  215  shall have a claim against, and recourse to, the account
  216  referred to in sub-sub-subparagraph a.(III) and shall have no
  217  claim against, or recourse to, the accounts referred to in sub
  218  sub-subparagraphs a.(I) and (II).
  219         d. Revenues, assets, liabilities, losses, and expenses not
  220  attributable to particular accounts shall be prorated among the
  221  accounts.
  222         e. The Legislature finds that the revenues of the
  223  corporation are revenues that are necessary to meet the
  224  requirements set forth in documents authorizing the issuance of
  225  bonds under this subsection.
  226         f. No part of the income of the corporation may inure to
  227  the benefit of any private person.
  228         3. With respect to a deficit in an account:
  229         a. After accounting for the Citizens policyholder surcharge
  230  imposed under sub-subparagraph i., when the remaining projected
  231  deficit incurred in a particular calendar year is not greater
  232  than 6 percent of the aggregate statewide direct written premium
  233  for the subject lines of business for the prior calendar year,
  234  the entire deficit shall be recovered through regular
  235  assessments of assessable insurers under paragraph (p) and
  236  assessable insureds.
  237         b. After accounting for the Citizens policyholder surcharge
  238  imposed under sub-subparagraph i., when the remaining projected
  239  deficit incurred in a particular calendar year exceeds 6 percent
  240  of the aggregate statewide direct written premium for the
  241  subject lines of business for the prior calendar year, the
  242  corporation shall levy regular assessments on assessable
  243  insurers under paragraph (p) and on assessable insureds in an
  244  amount equal to the greater of 6 percent of the deficit or 6
  245  percent of the aggregate statewide direct written premium for
  246  the subject lines of business for the prior calendar year. Any
  247  remaining deficit shall be recovered through emergency
  248  assessments under sub-subparagraph d.
  249         c. Each assessable insurer’s share of the amount being
  250  assessed under sub-subparagraph a. or sub-subparagraph b. shall
  251  be in the proportion that the assessable insurer’s direct
  252  written premium for the subject lines of business for the year
  253  preceding the assessment bears to the aggregate statewide direct
  254  written premium for the subject lines of business for that year.
  255  The assessment percentage applicable to each assessable insured
  256  is the ratio of the amount being assessed under sub-subparagraph
  257  a. or sub-subparagraph b. to the aggregate statewide direct
  258  written premium for the subject lines of business for the prior
  259  year. Assessments levied by the corporation on assessable
  260  insurers under sub-subparagraphs a. and b. shall be paid as
  261  required by the corporation’s plan of operation and paragraph
  262  (p). Assessments levied by the corporation on assessable
  263  insureds under sub-subparagraphs a. and b. shall be collected by
  264  the surplus lines agent at the time the surplus lines agent
  265  collects the surplus lines tax required by s. 626.932 and shall
  266  be paid to the Florida Surplus Lines Service Office at the time
  267  the surplus lines agent pays the surplus lines tax to the
  268  Florida Surplus Lines Service Office. Upon receipt of regular
  269  assessments from surplus lines agents, the Florida Surplus Lines
  270  Service Office shall transfer the assessments directly to the
  271  corporation as determined by the corporation.
  272         d. Upon a determination by the board of governors that a
  273  deficit in an account exceeds the amount that will be recovered
  274  through regular assessments under sub-subparagraph a. or sub
  275  subparagraph b., plus the amount that is expected to be
  276  recovered through surcharges under sub-subparagraph i., as to
  277  the remaining projected deficit the board shall levy, after
  278  verification by the office, emergency assessments, for as many
  279  years as necessary to cover the deficits, to be collected by
  280  assessable insurers and the corporation and collected from
  281  assessable insureds upon issuance or renewal of policies for
  282  subject lines of business, excluding National Flood Insurance
  283  policies. The amount of the emergency assessment collected in a
  284  particular year shall be a uniform percentage of that year’s
  285  direct written premium for subject lines of business and all
  286  accounts of the corporation, excluding National Flood Insurance
  287  Program policy premiums, as annually determined by the board and
  288  verified by the office. The office shall verify the arithmetic
  289  calculations involved in the board’s determination within 30
  290  days after receipt of the information on which the determination
  291  was based. Notwithstanding any other provision of law, the
  292  corporation and each assessable insurer that writes subject
  293  lines of business shall collect emergency assessments from its
  294  policyholders without such obligation being affected by any
  295  credit, limitation, exemption, or deferment. Emergency
  296  assessments levied by the corporation on assessable insureds
  297  shall be collected by the surplus lines agent at the time the
  298  surplus lines agent collects the surplus lines tax required by
  299  s. 626.932 and shall be paid to the Florida Surplus Lines
  300  Service Office at the time the surplus lines agent pays the
  301  surplus lines tax to the Florida Surplus Lines Service Office.
  302  The emergency assessments so collected shall be transferred
  303  directly to the corporation on a periodic basis as determined by
  304  the corporation and shall be held by the corporation solely in
  305  the applicable account. The aggregate amount of emergency
  306  assessments levied for an account under this sub-subparagraph in
  307  any calendar year may, at the discretion of the board of
  308  governors, be less than but may not exceed the greater of 10
  309  percent of the amount needed to cover the deficit, plus
  310  interest, fees, commissions, required reserves, and other costs
  311  associated with financing of the original deficit, or 10 percent
  312  of the aggregate statewide direct written premium for subject
  313  lines of business and for all accounts of the corporation for
  314  the prior year, plus interest, fees, commissions, required
  315  reserves, and other costs associated with financing the deficit.
  316         e. The corporation may pledge the proceeds of assessments,
  317  projected recoveries from the Florida Hurricane Catastrophe
  318  Fund, other insurance and reinsurance recoverables, policyholder
  319  surcharges and other surcharges, and other funds available to
  320  the corporation as the source of revenue for and to secure bonds
  321  issued under paragraph (p), bonds or other indebtedness issued
  322  under subparagraph (c)3., or lines of credit or other financing
  323  mechanisms issued or created under this subsection, or to retire
  324  any other debt incurred as a result of deficits or events giving
  325  rise to deficits, or in any other way that the board determines
  326  will efficiently recover such deficits. The purpose of the lines
  327  of credit or other financing mechanisms is to provide additional
  328  resources to assist the corporation in covering claims and
  329  expenses attributable to a catastrophe. As used in this
  330  subsection, the term “assessments” includes regular assessments
  331  under sub-subparagraph a., sub-subparagraph b., or subparagraph
  332  (p)1. and emergency assessments under sub-subparagraph d.
  333  Emergency assessments collected under sub-subparagraph d. are
  334  not part of an insurer’s rates, are not premium, and are not
  335  subject to premium tax, fees, or commissions; however, failure
  336  to pay the emergency assessment shall be treated as failure to
  337  pay premium. The emergency assessments under sub-subparagraph d.
  338  shall continue as long as any bonds issued or other indebtedness
  339  incurred with respect to a deficit for which the assessment was
  340  imposed remain outstanding, unless adequate provision has been
  341  made for the payment of such bonds or other indebtedness
  342  pursuant to the documents governing such bonds or other
  343  indebtedness.
  344         f. As used in this subsection for purposes of any deficit
  345  incurred on or after January 25, 2007, the term “subject lines
  346  of business” means insurance written by assessable insurers or
  347  procured by assessable insureds for all property and casualty
  348  lines of business in this state, but not including workers’
  349  compensation or medical malpractice. As used in the sub
  350  subparagraph, the term “property and casualty lines of business”
  351  includes all lines of business identified on Form 2, Exhibit of
  352  Premiums and Losses, in the annual statement required of
  353  authorized insurers by s. 624.424 and any rule adopted under
  354  this section, except for those lines identified as accident and
  355  health insurance and except for policies written under the
  356  National Flood Insurance Program or the Federal Crop Insurance
  357  Program. For purposes of this sub-subparagraph, the term
  358  “workers’ compensation” includes both workers’ compensation
  359  insurance and excess workers’ compensation insurance.
  360         g. The Florida Surplus Lines Service Office shall determine
  361  annually the aggregate statewide written premium in subject
  362  lines of business procured by assessable insureds and shall
  363  report that information to the corporation in a form and at a
  364  time the corporation specifies to ensure that the corporation
  365  can meet the requirements of this subsection and the
  366  corporation’s financing obligations.
  367         h. The Florida Surplus Lines Service Office shall verify
  368  the proper application by surplus lines agents of assessment
  369  percentages for regular assessments and emergency assessments
  370  levied under this subparagraph on assessable insureds and shall
  371  assist the corporation in ensuring the accurate, timely
  372  collection and payment of assessments by surplus lines agents as
  373  required by the corporation.
  374         i.(I) If a deficit is incurred in any account in 2008 or
  375  thereafter, the board of governors shall levy a Citizens
  376  policyholder surcharge against all policyholders of the
  377  corporation.
  378         (II) The Citizens policyholder surcharge for a 12-month
  379  period, which shall be levied collected at the time of issuance
  380  or renewal of a policy, as a uniform percentage of the premium
  381  for the policy of up to 15 percent of such premium, which funds
  382  shall be used to offset the deficit.
  383         (III) The Citizens policyholder surcharge is payable upon
  384  cancellation or termination of the policy, upon renewal of the
  385  policy, or upon issuance of a new policy by Citizens within the
  386  first 12 months after the date of the levy or the period of time
  387  necessary to fully collect the Citizens policyholder surcharge
  388  amount.
  389         (IV) The corporation may not levy any regular assessments
  390  under paragraph (q) pursuant to sub-subparagraph a. or sub
  391  subparagraph b. with respect to a particular year’s deficit
  392  until the corporation has first levied a Citizens policyholder
  393  surcharge under this sub-subparagraph in the full amount
  394  authorized by this sub-subparagraph.
  395         (V) Citizens policyholder surcharges under this sub
  396  subparagraph are not considered premium and are not subject to
  397  commissions, fees, or premium taxes. However, failure to pay
  398  such surcharges shall be treated as failure to pay premium.
  399         j. If the amount of any assessments or surcharges collected
  400  from corporation policyholders, assessable insurers or their
  401  policyholders, or assessable insureds exceeds the amount of the
  402  deficits, such excess amounts shall be remitted to and retained
  403  by the corporation in a reserve to be used by the corporation,
  404  as determined by the board of governors and approved by the
  405  office, to pay claims or reduce any past, present, or future
  406  plan-year deficits or to reduce outstanding debt.
  407         (c) The plan of operation of the corporation:
  408         1. Must provide for adoption of residential property and
  409  casualty insurance policy forms and commercial residential and
  410  nonresidential property insurance forms, which forms must be
  411  approved by the office prior to use. The corporation shall adopt
  412  the following policy forms:
  413         a. Standard personal lines policy forms that are
  414  comprehensive multiperil policies providing full coverage of a
  415  residential property equivalent to the coverage provided in the
  416  private insurance market under an HO-3, HO-4, or HO-6 policy.
  417         b. Basic personal lines policy forms that are policies
  418  similar to an HO-8 policy or a dwelling fire policy that provide
  419  coverage meeting the requirements of the secondary mortgage
  420  market, but which coverage is more limited than the coverage
  421  under a standard policy.
  422         c. Commercial lines residential and nonresidential policy
  423  forms that are generally similar to the basic perils of full
  424  coverage obtainable for commercial residential structures and
  425  commercial nonresidential structures in the admitted voluntary
  426  market.
  427         d. Personal lines and commercial lines residential property
  428  insurance forms that cover the peril of wind only. The forms are
  429  applicable only to residential properties located in areas
  430  eligible for coverage under the high-risk account referred to in
  431  sub-subparagraph (b)2.a.
  432         e. Commercial lines nonresidential property insurance forms
  433  that cover the peril of wind only. The forms are applicable only
  434  to nonresidential properties located in areas eligible for
  435  coverage under the high-risk account referred to in sub
  436  subparagraph (b)2.a.
  437         f. The corporation may adopt variations of the policy forms
  438  listed in sub-subparagraphs a.-e. that contain more restrictive
  439  coverage.
  440         2.a. Must provide that the corporation adopt a program in
  441  which the corporation and authorized insurers enter into quota
  442  share primary insurance agreements for hurricane coverage, as
  443  defined in s. 627.4025(2)(a), for eligible risks, and adopt
  444  property insurance forms for eligible risks which cover the
  445  peril of wind only. As used in this subsection, the term:
  446         (I) “Quota share primary insurance” means an arrangement in
  447  which the primary hurricane coverage of an eligible risk is
  448  provided in specified percentages by the corporation and an
  449  authorized insurer. The corporation and authorized insurer are
  450  each solely responsible for a specified percentage of hurricane
  451  coverage of an eligible risk as set forth in a quota share
  452  primary insurance agreement between the corporation and an
  453  authorized insurer and the insurance contract. The
  454  responsibility of the corporation or authorized insurer to pay
  455  its specified percentage of hurricane losses of an eligible
  456  risk, as set forth in the quota share primary insurance
  457  agreement, may not be altered by the inability of the other
  458  party to the agreement to pay its specified percentage of
  459  hurricane losses. Eligible risks that are provided hurricane
  460  coverage through a quota share primary insurance arrangement
  461  must be provided policy forms that set forth the obligations of
  462  the corporation and authorized insurer under the arrangement,
  463  clearly specify the percentages of quota share primary insurance
  464  provided by the corporation and authorized insurer, and
  465  conspicuously and clearly state that neither the authorized
  466  insurer nor the corporation may be held responsible beyond its
  467  specified percentage of coverage of hurricane losses.
  468         (II) “Eligible risks” means personal lines residential and
  469  commercial lines residential risks that meet the underwriting
  470  criteria of the corporation and are located in areas that were
  471  eligible for coverage by the Florida Windstorm Underwriting
  472  Association on January 1, 2002.
  473         b. The corporation may enter into quota share primary
  474  insurance agreements with authorized insurers at corporation
  475  coverage levels of 90 percent and 50 percent.
  476         c. If the corporation determines that additional coverage
  477  levels are necessary to maximize participation in quota share
  478  primary insurance agreements by authorized insurers, the
  479  corporation may establish additional coverage levels. However,
  480  the corporation’s quota share primary insurance coverage level
  481  may not exceed 90 percent.
  482         d. Any quota share primary insurance agreement entered into
  483  between an authorized insurer and the corporation must provide
  484  for a uniform specified percentage of coverage of hurricane
  485  losses, by county or territory as set forth by the corporation
  486  board, for all eligible risks of the authorized insurer covered
  487  under the quota share primary insurance agreement.
  488         e. Any quota share primary insurance agreement entered into
  489  between an authorized insurer and the corporation is subject to
  490  review and approval by the office. However, such agreement shall
  491  be authorized only as to insurance contracts entered into
  492  between an authorized insurer and an insured who is already
  493  insured by the corporation for wind coverage.
  494         f. For all eligible risks covered under quota share primary
  495  insurance agreements, the exposure and coverage levels for both
  496  the corporation and authorized insurers shall be reported by the
  497  corporation to the Florida Hurricane Catastrophe Fund. For all
  498  policies of eligible risks covered under quota share primary
  499  insurance agreements, the corporation and the authorized insurer
  500  shall maintain complete and accurate records for the purpose of
  501  exposure and loss reimbursement audits as required by Florida
  502  Hurricane Catastrophe Fund rules. The corporation and the
  503  authorized insurer shall each maintain duplicate copies of
  504  policy declaration pages and supporting claims documents.
  505         g. The corporation board shall establish in its plan of
  506  operation standards for quota share agreements which ensure that
  507  there is no discriminatory application among insurers as to the
  508  terms of quota share agreements, pricing of quota share
  509  agreements, incentive provisions if any, and consideration paid
  510  for servicing policies or adjusting claims.
  511         h. The quota share primary insurance agreement between the
  512  corporation and an authorized insurer must set forth the
  513  specific terms under which coverage is provided, including, but
  514  not limited to, the sale and servicing of policies issued under
  515  the agreement by the insurance agent of the authorized insurer
  516  producing the business, the reporting of information concerning
  517  eligible risks, the payment of premium to the corporation, and
  518  arrangements for the adjustment and payment of hurricane claims
  519  incurred on eligible risks by the claims adjuster and personnel
  520  of the authorized insurer. Entering into a quota sharing
  521  insurance agreement between the corporation and an authorized
  522  insurer shall be voluntary and at the discretion of the
  523  authorized insurer.
  524         3. May provide that the corporation may employ or otherwise
  525  contract with individuals or other entities to provide
  526  administrative or professional services that may be appropriate
  527  to effectuate the plan. The corporation shall have the power to
  528  borrow funds, by issuing bonds or by incurring other
  529  indebtedness, and shall have other powers reasonably necessary
  530  to effectuate the requirements of this subsection, including,
  531  without limitation, the power to issue bonds and incur other
  532  indebtedness in order to refinance outstanding bonds or other
  533  indebtedness. The corporation may, but is not required to, seek
  534  judicial validation of its bonds or other indebtedness under
  535  chapter 75. The corporation may issue bonds or incur other
  536  indebtedness, or have bonds issued on its behalf by a unit of
  537  local government pursuant to subparagraph (p)2., in the absence
  538  of a hurricane or other weather-related event, upon a
  539  determination by the corporation, subject to approval by the
  540  office, that such action would enable it to efficiently meet the
  541  financial obligations of the corporation and that such
  542  financings are reasonably necessary to effectuate the
  543  requirements of this subsection. The corporation is authorized
  544  to take all actions needed to facilitate tax-free status for any
  545  such bonds or indebtedness, including formation of trusts or
  546  other affiliated entities. The corporation shall have the
  547  authority to pledge assessments, projected recoveries from the
  548  Florida Hurricane Catastrophe Fund, other reinsurance
  549  recoverables, market equalization and other surcharges, and
  550  other funds available to the corporation as security for bonds
  551  or other indebtedness. In recognition of s. 10, Art. I of the
  552  State Constitution, prohibiting the impairment of obligations of
  553  contracts, it is the intent of the Legislature that no action be
  554  taken whose purpose is to impair any bond indenture or financing
  555  agreement or any revenue source committed by contract to such
  556  bond or other indebtedness.
  557         4.a. Must require that the corporation operate subject to
  558  the supervision and approval of a board of governors consisting
  559  of eight individuals who are residents of this state, from
  560  different geographical areas of this state. The Governor, the
  561  Chief Financial Officer, the President of the Senate, and the
  562  Speaker of the House of Representatives shall each appoint two
  563  members of the board. At least one of the two members appointed
  564  by each appointing officer must have demonstrated expertise in
  565  insurance. The Chief Financial Officer shall designate one of
  566  the appointees as chair. All board members serve at the pleasure
  567  of the appointing officer. All members of the board of governors
  568  are subject to removal at will by the officers who appointed
  569  them. All board members, including the chair, must be appointed
  570  to serve for 3-year terms beginning annually on a date
  571  designated by the plan. However, for the first term beginning on
  572  or after July 1, 2009, each appointing officer shall appoint one
  573  member of the board for a 2-year term and one member for a 3
  574  year term. Any board vacancy shall be filled for the unexpired
  575  term by the appointing officer. The Chief Financial Officer
  576  shall appoint a technical advisory group to provide information
  577  and advice to the board of governors in connection with the
  578  board’s duties under this subsection. The executive director and
  579  senior managers of the corporation shall be engaged by the board
  580  and serve at the pleasure of the board. Any executive director
  581  appointed on or after July 1, 2006, is subject to confirmation
  582  by the Senate. The executive director is responsible for
  583  employing other staff as the corporation may require, subject to
  584  review and concurrence by the board.
  585         b. The board shall create a Market Accountability Advisory
  586  Committee to assist the corporation in developing awareness of
  587  its rates and its customer and agent service levels in
  588  relationship to the voluntary market insurers writing similar
  589  coverage. The members of the advisory committee shall consist of
  590  the following 11 persons, one of whom must be elected chair by
  591  the members of the committee: four representatives, one
  592  appointed by the Florida Association of Insurance Agents, one by
  593  the Florida Association of Insurance and Financial Advisors, one
  594  by the Professional Insurance Agents of Florida, and one by the
  595  Latin American Association of Insurance Agencies; three
  596  representatives appointed by the insurers with the three highest
  597  voluntary market share of residential property insurance
  598  business in the state; one representative from the Office of
  599  Insurance Regulation; one consumer appointed by the board who is
  600  insured by the corporation at the time of appointment to the
  601  committee; one representative appointed by the Florida
  602  Association of Realtors; and one representative appointed by the
  603  Florida Bankers Association. All members must serve for 3-year
  604  terms and may serve for consecutive terms. The committee shall
  605  report to the corporation at each board meeting on insurance
  606  market issues which may include rates and rate competition with
  607  the voluntary market; service, including policy issuance, claims
  608  processing, and general responsiveness to policyholders,
  609  applicants, and agents; and matters relating to depopulation.
  610         5. Must provide a procedure for determining the eligibility
  611  of a risk for coverage, as follows:
  612         a. Subject to the provisions of s. 627.3517, with respect
  613  to personal lines residential risks, if the risk is offered
  614  coverage from an authorized insurer at the insurer’s approved
  615  rate under either a standard policy including wind coverage or,
  616  if consistent with the insurer’s underwriting rules as filed
  617  with the office, a basic policy including wind coverage, for a
  618  new application to the corporation for coverage, the risk is not
  619  eligible for any policy issued by the corporation unless the
  620  premium for coverage from the authorized insurer is more than 15
  621  percent greater than the premium for comparable coverage from
  622  the corporation. If the risk is not able to obtain any such
  623  offer, the risk is eligible for either a standard policy
  624  including wind coverage or a basic policy including wind
  625  coverage issued by the corporation; however, if the risk could
  626  not be insured under a standard policy including wind coverage
  627  regardless of market conditions, the risk shall be eligible for
  628  a basic policy including wind coverage unless rejected under
  629  subparagraph 8. However, with regard to a policyholder of the
  630  corporation or a policyholder removed from the corporation
  631  through an assumption agreement until the end of the assumption
  632  period, the policyholder remains eligible for coverage from the
  633  corporation regardless of any offer of coverage from an
  634  authorized insurer or surplus lines insurer. The corporation
  635  shall determine the type of policy to be provided on the basis
  636  of objective standards specified in the underwriting manual and
  637  based on generally accepted underwriting practices.
  638         (I) If the risk accepts an offer of coverage through the
  639  market assistance plan or an offer of coverage through a
  640  mechanism established by the corporation before a policy is
  641  issued to the risk by the corporation or during the first 30
  642  days of coverage by the corporation, and the producing agent who
  643  submitted the application to the plan or to the corporation is
  644  not currently appointed by the insurer, the insurer shall:
  645         (A) Pay to the producing agent of record of the policy, for
  646  the first year, an amount that is the greater of the insurer’s
  647  usual and customary commission for the type of policy written or
  648  a fee equal to the usual and customary commission of the
  649  corporation; or
  650         (B) Offer to allow the producing agent of record of the
  651  policy to continue servicing the policy for a period of not less
  652  than 1 year and offer to pay the agent the greater of the
  653  insurer’s or the corporation’s usual and customary commission
  654  for the type of policy written.
  655  
  656  If the producing agent is unwilling or unable to accept
  657  appointment, the new insurer shall pay the agent in accordance
  658  with sub-sub-sub-subparagraph (A).
  659         (II) When the corporation enters into a contractual
  660  agreement for a take-out plan, the producing agent of record of
  661  the corporation policy is entitled to retain any unearned
  662  commission on the policy, and the insurer shall:
  663         (A) Pay to the producing agent of record of the corporation
  664  policy, for the first year, an amount that is the greater of the
  665  insurer’s usual and customary commission for the type of policy
  666  written or a fee equal to the usual and customary commission of
  667  the corporation; or
  668         (B) Offer to allow the producing agent of record of the
  669  corporation policy to continue servicing the policy for a period
  670  of not less than 1 year and offer to pay the agent the greater
  671  of the insurer’s or the corporation’s usual and customary
  672  commission for the type of policy written.
  673  
  674  If the producing agent is unwilling or unable to accept
  675  appointment, the new insurer shall pay the agent in accordance
  676  with sub-sub-sub-subparagraph (A).
  677         b. With respect to commercial lines residential risks, for
  678  a new application to the corporation for coverage, if the risk
  679  is offered coverage under a policy including wind coverage from
  680  an authorized insurer at its approved rate, the risk is not
  681  eligible for any policy issued by the corporation unless the
  682  premium for coverage from the authorized insurer is more than 15
  683  percent greater than the premium for comparable coverage from
  684  the corporation. If the risk is not able to obtain any such
  685  offer, the risk is eligible for a policy including wind coverage
  686  issued by the corporation. However, with regard to a
  687  policyholder of the corporation or a policyholder removed from
  688  the corporation through an assumption agreement until the end of
  689  the assumption period, the policyholder remains eligible for
  690  coverage from the corporation regardless of any offer of
  691  coverage from an authorized insurer or surplus lines insurer.
  692         (I) If the risk accepts an offer of coverage through the
  693  market assistance plan or an offer of coverage through a
  694  mechanism established by the corporation before a policy is
  695  issued to the risk by the corporation or during the first 30
  696  days of coverage by the corporation, and the producing agent who
  697  submitted the application to the plan or the corporation is not
  698  currently appointed by the insurer, the insurer shall:
  699         (A) Pay to the producing agent of record of the policy, for
  700  the first year, an amount that is the greater of the insurer’s
  701  usual and customary commission for the type of policy written or
  702  a fee equal to the usual and customary commission of the
  703  corporation; or
  704         (B) Offer to allow the producing agent of record of the
  705  policy to continue servicing the policy for a period of not less
  706  than 1 year and offer to pay the agent the greater of the
  707  insurer’s or the corporation’s usual and customary commission
  708  for the type of policy written.
  709  
  710  If the producing agent is unwilling or unable to accept
  711  appointment, the new insurer shall pay the agent in accordance
  712  with sub-sub-sub-subparagraph (A).
  713         (II) When the corporation enters into a contractual
  714  agreement for a take-out plan, the producing agent of record of
  715  the corporation policy is entitled to retain any unearned
  716  commission on the policy, and the insurer shall:
  717         (A) Pay to the producing agent of record of the corporation
  718  policy, for the first year, an amount that is the greater of the
  719  insurer’s usual and customary commission for the type of policy
  720  written or a fee equal to the usual and customary commission of
  721  the corporation; or
  722         (B) Offer to allow the producing agent of record of the
  723  corporation policy to continue servicing the policy for a period
  724  of not less than 1 year and offer to pay the agent the greater
  725  of the insurer’s or the corporation’s usual and customary
  726  commission for the type of policy written.
  727  
  728  If the producing agent is unwilling or unable to accept
  729  appointment, the new insurer shall pay the agent in accordance
  730  with sub-sub-sub-subparagraph (A).
  731         c. For purposes of determining comparable coverage under
  732  sub-subparagraphs a. and b., the comparison shall be based on
  733  those forms and coverages that are reasonably comparable. The
  734  corporation may rely on a determination of comparable coverage
  735  and premium made by the producing agent who submits the
  736  application to the corporation, made in the agent’s capacity as
  737  the corporation’s agent. A comparison may be made solely of the
  738  premium with respect to the main building or structure only on
  739  the following basis: the same coverage A or other building
  740  limits; the same percentage hurricane deductible that applies on
  741  an annual basis or that applies to each hurricane for commercial
  742  residential property; the same percentage of ordinance and law
  743  coverage, if the same limit is offered by both the corporation
  744  and the authorized insurer; the same mitigation credits, to the
  745  extent the same types of credits are offered both by the
  746  corporation and the authorized insurer; the same method for loss
  747  payment, such as replacement cost or actual cash value, if the
  748  same method is offered both by the corporation and the
  749  authorized insurer in accordance with underwriting rules; and
  750  any other form or coverage that is reasonably comparable as
  751  determined by the board. If an application is submitted to the
  752  corporation for wind-only coverage in the high-risk account, the
  753  premium for the corporation’s wind-only policy plus the premium
  754  for the ex-wind policy that is offered by an authorized insurer
  755  to the applicant shall be compared to the premium for multiperil
  756  coverage offered by an authorized insurer, subject to the
  757  standards for comparison specified in this subparagraph. If the
  758  corporation or the applicant requests from the authorized
  759  insurer a breakdown of the premium of the offer by types of
  760  coverage so that a comparison may be made by the corporation or
  761  its agent and the authorized insurer refuses or is unable to
  762  provide such information, the corporation may treat the offer as
  763  not being an offer of coverage from an authorized insurer at the
  764  insurer’s approved rate.
  765         6. Must include rules for classifications of risks and
  766  rates therefor.
  767         7. Must provide that if premium and investment income for
  768  an account attributable to a particular calendar year are in
  769  excess of projected losses and expenses for the account
  770  attributable to that year, such excess shall be held in surplus
  771  in the account. Such surplus shall be available to defray
  772  deficits in that account as to future years and shall be used
  773  for that purpose prior to assessing assessable insurers and
  774  assessable insureds as to any calendar year.
  775         8. Must provide objective criteria and procedures to be
  776  uniformly applied for all applicants in determining whether an
  777  individual risk is so hazardous as to be uninsurable. In making
  778  this determination and in establishing the criteria and
  779  procedures, the following shall be considered:
  780         a. Whether the likelihood of a loss for the individual risk
  781  is substantially higher than for other risks of the same class;
  782  and
  783         b. Whether the uncertainty associated with the individual
  784  risk is such that an appropriate premium cannot be determined.
  785  
  786  The acceptance or rejection of a risk by the corporation shall
  787  be construed as the private placement of insurance, and the
  788  provisions of chapter 120 shall not apply.
  789         9. Must provide that the corporation shall make its best
  790  efforts to procure catastrophe reinsurance at reasonable rates,
  791  to cover its projected 100-year probable maximum loss as
  792  determined by the board of governors.
  793         10. The policies issued by the corporation must provide
  794  that, if the corporation or the market assistance plan obtains
  795  an offer from an authorized insurer to cover the risk at its
  796  approved rates, the risk is no longer eligible for renewal
  797  through the corporation, except as otherwise provided in this
  798  subsection.
  799         11. Corporation policies and applications must include a
  800  notice that the corporation policy could, under this section, be
  801  replaced with a policy issued by an authorized insurer that does
  802  not provide coverage identical to the coverage provided by the
  803  corporation. The notice shall also specify that acceptance of
  804  corporation coverage creates a conclusive presumption that the
  805  applicant or policyholder is aware of this potential.
  806         12. May establish, subject to approval by the office,
  807  different eligibility requirements and operational procedures
  808  for any line or type of coverage for any specified county or
  809  area if the board determines that such changes to the
  810  eligibility requirements and operational procedures are
  811  justified due to the voluntary market being sufficiently stable
  812  and competitive in such area or for such line or type of
  813  coverage and that consumers who, in good faith, are unable to
  814  obtain insurance through the voluntary market through ordinary
  815  methods would continue to have access to coverage from the
  816  corporation. When coverage is sought in connection with a real
  817  property transfer, such requirements and procedures shall not
  818  provide for an effective date of coverage later than the date of
  819  the closing of the transfer as established by the transferor,
  820  the transferee, and, if applicable, the lender.
  821         13. Must provide that, with respect to the high-risk
  822  account, any assessable insurer with a surplus as to
  823  policyholders of $25 million or less writing 25 percent or more
  824  of its total countrywide property insurance premiums in this
  825  state may petition the office, within the first 90 days of each
  826  calendar year, to qualify as a limited apportionment company. A
  827  regular assessment levied by the corporation on a limited
  828  apportionment company for a deficit incurred by the corporation
  829  for the high-risk account in 2006 or thereafter may be paid to
  830  the corporation on a monthly basis as the assessments are
  831  collected by the limited apportionment company from its insureds
  832  pursuant to s. 627.3512, but the regular assessment must be paid
  833  in full within 12 months after being levied by the corporation.
  834  A limited apportionment company shall collect from its
  835  policyholders any emergency assessment imposed under sub
  836  subparagraph (b)3.d. The plan shall provide that, if the office
  837  determines that any regular assessment will result in an
  838  impairment of the surplus of a limited apportionment company,
  839  the office may direct that all or part of such assessment be
  840  deferred as provided in subparagraph (p)4. However, there shall
  841  be no limitation or deferment of an emergency assessment to be
  842  collected from policyholders under sub-subparagraph (b)3.d.
  843         14. Must provide that the corporation appoint as its
  844  licensed agents only those agents who also hold an appointment
  845  as defined in s. 626.015(3) with an insurer who at the time of
  846  the agent’s initial appointment by the corporation is authorized
  847  to write and is actually writing personal lines residential
  848  property coverage, commercial residential property coverage, or
  849  commercial nonresidential property coverage within the state.
  850         15. Must provide, by July 1, 2007, a premium payment plan
  851  option to its policyholders which allows at a minimum for
  852  quarterly and semiannual payment of premiums. A monthly payment
  853  plan may, but is not required to, be offered.
  854         16. Must limit coverage on mobile homes or manufactured
  855  homes built prior to 1994 to actual cash value of the dwelling
  856  rather than replacement costs of the dwelling.
  857         17. May provide such limits of coverage as the board
  858  determines, consistent with the requirements of this subsection.
  859         18. May require commercial property to meet specified
  860  hurricane mitigation construction features as a condition of
  861  eligibility for coverage.
  862         19.a. Shall require the agent to obtain from any applicant
  863  for coverage the following acknowledgement, signed by the
  864  applicant, and shall require the agent of record to obtain the
  865  following acknowledgment from each corporation policyholder,
  866  signed by the policyholder, prior to the policy’s first renewal
  867  after the effective date of this act:
  868  
  869        ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT      
  870                             LIABILITY:                            
  871         1. I UNDERSTAND, AS A CITIZENS PROPERTY INSURANCE
  872         CORPORATION POLICYHOLDER, THAT IF THE CORPORATION
  873         SUSTAINS A DEFICIT AS A RESULT OF HURRICANE LOSSES OR
  874         FOR ANY OTHER REASON, MY POLICY COULD BE SUBJECT TO
  875         CITIZENS POLICYHOLDER SURCHARGES, WHICH WOULD BE DUE
  876         AND PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION
  877         OF THE POLICY, AND THAT THE SURCHARGES COULD BE AS
  878         HIGH AS 15 PERCENT OF MY PREMIUM FOR DEFICITS IN EACH
  879         OF THREE CITIZENS ACCOUNTS, OR A DIFFERENT AMOUNT AS
  880         ESTABLISHED BY THE FLORIDA LEGISLATURE.
  881         2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
  882         EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
  883         POLICYHOLDERS OF OTHER INSURANCE COMPANIES.
  884  
  885         b. The corporation shall permanently maintain a signed copy
  886  of the signed acknowledgement required by this subparagraph, and
  887  the agent may also retain a copy.
  888         c. The signed acknowledgement form creates a conclusive
  889  presumption that the policyholder understood and accepted his or
  890  her potential surcharge and assessment liability as a Citizens
  891  policyholder.
  892         Section 3. Section 627.7031, Florida Statutes, is created
  893  to read:
  894         627.7031 Residential property insurance option.—
  895         (1) An insurer holding a certificate of authority to write
  896  property insurance in this state may offer or renew policies at
  897  rates established in accordance with s. 627.062(2)(l), subject
  898  to all of the requirements and prohibitions of this section.
  899         (2) An insurer offering or renewing policies at rates
  900  established in accordance with s. 627.062(2)(l) may not purchase
  901  coverage from the Florida Hurricane Catastrophe Fund under the
  902  temporary increase in coverage limit option under s.
  903  215.555(17).
  904         (3)(a) Before the effective date of a newly issued or
  905  renewal policy at rates established in accordance with s.
  906  627.062(2)(l), the applicant or insured must be given the
  907  following notice, printed in at least 12-point boldfaced type:
  908  
  909         THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
  910         REGULATION BY THE FLORIDA OFFICE OF INSURANCE
  911         REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY
  912         THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT TO
  913         FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE
  914         FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
  915         PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR
  916         POLICY OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE
  917         A CITIZENS QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF
  918         INSURANCE REGULATION’S WEBSITE AT
  919         WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION ABOUT
  920         CHOICES AVAILABLE TO YOU.
  921  
  922         (b) For policies renewed at a rate established in
  923  accordance with s. 627.062(2)(l), the notice described in
  924  paragraph (a) must be provided in writing at the same time as
  925  the renewal notice on a document separate from the renewal
  926  notice, but may be contained within the same mailing as the
  927  renewal notice.
  928         (4) Before the effective date of a newly issued policy at
  929  rates established in accordance with s. 627.062(2)(l), or before
  930  the effective date of the first renewal at rates established in
  931  accordance with s. 627.062(2)(l) of a policy originally issued
  932  before the effective date of this section, the applicant or
  933  insured must:
  934         (a) Be provided or offered, for comparison purposes, an
  935  estimate of the premium for a policy from Citizens Property
  936  Insurance Corporation reflecting substantially similar
  937  coverages, limits, and deductibles to the extent available.
  938         (b) Provide the insurer or agent with a signed copy of the
  939  following acknowledgement form, which must be retained by the
  940  insurer or agent for at least 3 years. If the acknowledgement
  941  form is signed by the insured or if the insured remits payment
  942  in the amount of the rate established in accordance with s.
  943  627.062(2)(l) after being mailed or otherwise provided the
  944  acknowledgement form specified in this paragraph, and after
  945  being mailed, otherwise provided, or offered the comparison
  946  specified in paragraph (a), an insurer renewing a policy at such
  947  rate shall be deemed to comply with this section, and it is
  948  presumed that the insured has been informed and understands the
  949  information contained in the comparison and acknowledgement
  950  forms:
  951  
  952                           ACKNOWLEDGEMENT                         
  953         1. I HAVE REVIEWED THE REQUIRED DISCLOSURES AND
  954         THE REQUIRED PREMIUM COMPARISON.
  955         2. I UNDERSTAND THAT THE RATE FOR THIS
  956         RESIDENTIAL PROPERTY INSURANCE POLICY IS NOT SUBJECT
  957         TO FULL RATE REGULATION BY THE FLORIDA OFFICE OF
  958         INSURANCE REGULATION AND MAY BE HIGHER THAN RATES
  959         APPROVED BY THAT OFFICE.
  960         3. I UNDERSTAND THAT A RESIDENTIAL PROPERTY
  961         INSURANCE POLICY SUBJECT TO FULL RATE REGULATION
  962         REQUIREMENTS MAY BE AVAILABLE FROM CITIZENS PROPERTY
  963         INSURANCE CORPORATION.
  964         4. I UNDERSTAND THAT THE FLORIDA OFFICE OF
  965         INSURANCE REGULATION’S WEBSITE
  966         WWW.SHOPANDCOMPARERATES.COM CONTAINS RESIDENTIAL
  967         PROPERTY INSURANCE RATE COMPARISON INFORMATION.
  968         5. I UNDERSTAND THAT IF CITIZENS PROPERTY
  969         INSURANCE CORPORATION INCURS A DEFICIT BECAUSE OF
  970         HURRICANE LOSSES OR OTHER LOSSES, I MAY BE REQUIRED TO
  971         PAY AN ASSESSMENT BASED UPON THE PREMIUM FOR THIS
  972         POLICY AND THAT A POLICYHOLDER OF CITIZENS PROPERTY
  973         INSURANCE CORPORATION MAY BE REQUIRED TO PAY A
  974         DIFFERENT ASSESSMENT.
  975  
  976         (5) The following types of residential property insurance
  977  policies are not eligible for rates established in accordance
  978  with s. 627.062(2)(l) and are not subject to the other
  979  provisions of this section:
  980         (a) Residential property insurance policies that exclude
  981  coverage for the perils of windstorm or hurricane.
  982         (b) Residential property insurance policies that are
  983  subject to a consent decree, agreement, understanding, or other
  984  arrangement between the insurer and the office relating to rates
  985  or premiums for policies removed from Citizens Property
  986  Insurance Corporation.
  987         (6) Notwithstanding s. 627.4133, an insurer that has issued
  988  a policy under this section shall provide the named insured
  989  written notice of nonrenewal at least 180 days before the
  990  effective date of the nonrenewal as to subsequent nonrenewals.
  991  However, this subsection does not prohibit an insurer from
  992  cancelling a policy as permitted under s. 627.4133. The offer of
  993  a policy at rates authorized by this section constitutes an
  994  offer to renew the policy at the rates specified in the offer
  995  and does not constitute a nonrenewal.
  996         Section 4. This act shall take effect January 1, 2011.

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