July 28, 2016
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       CS for CS for SB 1950                            First Engrossed
       
       
       
       
       
       
       
       
       20091950e1
       
    1                        A bill to be entitled                      
    2         An act relating to property insurance; amending s.
    3         215.555, F.S.; revising the dates of an insurer’s
    4         contract year for purposes of calculating the
    5         insurer’s retention; requiring the State Board of
    6         Administration to offer an additional amount of
    7         reimbursement coverage to certain insurers that
    8         purchased coverage during a certain calendar year;
    9         requiring an insurer that purchases certain coverage
   10         to retain an amount equal to a percentage of the
   11         insurer’s surplus on a certain date; providing that an
   12         insurer’s retention will apply along with a mandatory
   13         coverage after an optional coverage is exhausted;
   14         revising an expiration date on the requirement for the
   15         State Board of Administration to offer certain
   16         optional coverage to insurers; requiring the State
   17         Board of Administration to publish a statement of the
   18         estimated claims-paying capacity of the Hurricane
   19         Catastrophe Fund; authorizing the State Board of
   20         Administration to reimburse insurers based on a
   21         formula related to the claims-paying capacity of the
   22         Hurricane Catastrophe Fund; requiring the formula to
   23         determine an actuarially indicated premium to include
   24         specified cash build-up factors; authorizing the State
   25         Board of Administration to require insurers to
   26         notarize documents submitted to the board; authorizing
   27         insurers to purchase temporary increased coverage
   28         limit for certain future hurricane seasons; providing
   29         that a cash build-up factor does not apply to
   30         temporary increased coverage limit premiums; providing
   31         dates on which the claims-paying capacity of the fund
   32         will increase; deleting authority for the State Board
   33         of Administration to increase the claims-paying
   34         capacity of the Hurricane Catastrophe Fund; amending
   35         s. 215.5586, F.S.; revising legislative intent;
   36         revising criteria for hurricane mitigation
   37         inspections; revising criteria for eligibility for a
   38         mitigation grant; expanding the list of improvements
   39         for which grants may be used; correcting a reference
   40         to the Florida Division of Emergency Management;
   41         deleting provisions relating to no-interest loans;
   42         requiring that contracts valued at or greater than a
   43         specified amount be subject to review and approval of
   44         the Legislative Budget Commission; amending s.
   45         626.854, F.S.; prohibiting a public adjuster from
   46         accepting referrals for compensation from a person
   47         with whom the public adjuster conducts business;
   48         prohibiting a public adjuster from compensating a
   49         person other than a public adjuster for referrals;
   50         amending s. 627.7011, F.S.; providing that an insurer
   51         may repair damaged property in compliance with its
   52         policy; amending s. 626.865, F.S.; deleting a
   53         requirement that an applicant for a license as a
   54         public adjuster pass a written examination as a
   55         prerequisite to licensure; amending s. 626.8651, F.S.;
   56         requiring an applicant for a public adjuster
   57         apprentice license to pass a written exam and receive
   58         an Accredited Claims Adjuster designation and related
   59         training before licensure; limiting the number of
   60         public adjuster apprentices that may be maintained by
   61         a single public adjusting firm or supervised by a
   62         public adjuster; amending s. 627.062, F.S.; extending
   63         the period for which an insurer seeking a residential
   64         property insurance rate that is greater than the rate
   65         most recently approved by the Office of Insurance
   66         Regulation must make a “file and use” filing;
   67         authorizing an insurer to make a separate filing
   68         limited solely to an adjustment of its rates for
   69         reinsurance or financing costs to replace or finance
   70         payment of amounts covered by the Florida Hurricane
   71         Catastrophe Fund under certain circumstances;
   72         providing that certain insurers are not eligible to
   73         file for certain additional rate increases during a
   74         specified period after implementation of a limited
   75         filing; preserving the authority of the office to
   76         disapprove a rate filing as excessive, inadequate, or
   77         unfairly discriminatory; providing for the
   78         applicability of certain provisions of state law;
   79         amending s. 627.0621, F.S.; requiring that the Office
   80         of Insurance Regulation provide certain information
   81         regarding any residential property rate filing on a
   82         publicly accessible Internet website; requiring that
   83         the office provide a means on its website for certain
   84         persons to submit e-mail regarding any rate filing;
   85         requiring that such e-mail be accessible by the
   86         actuary assigned to review the subject rate filing;
   87         deleting a limitation on the application of the
   88         attorney-client privilege and work product doctrine in
   89         challenges to actions by the Office of Insurance
   90         Regulation relating to rate filings; repealing s.
   91         627.0612, F.S., relating to administrative proceedings
   92         in rating determinations; amending s. 627.0629, F.S.;
   93         authorizing an insurer to include in its rates the
   94         actual cost of certain reinsurance; amending s.
   95         627.351, F.S.; deleting a provision requiring a seller
   96         of certain residential property to disclose the
   97         structure’s windstorm mitigation rating to the
   98         prospective purchaser of the property; providing for
   99         members of the board of governors of Citizens Property
  100         Insurance Corporation to serve staggered terms;
  101         requiring Citizen’s Property Insurance Corporation to
  102         implement rate increases until the implementation of
  103         actuarially sound rates; requiring the corporation to
  104         transfer a portion of the funds received from the rate
  105         increase into the General Revenue Fund; revising the
  106         date after which the State Board of Administration is
  107         required to reduce the boundaries of high-risk areas
  108         eligible for wind-only coverages under certain
  109         circumstances; amending s. 627.3512, F.S.; providing
  110         legislative findings; providing for the recoupment of
  111         residual market assessments paid by insurers or
  112         insurer groups; limiting the amount of a recoupment
  113         factor; authorizing an insurer to apply recalculated
  114         recoupment factors to policies issued or renewed
  115         during specified periods under certain circumstances;
  116         requiring that insurers or insurer groups file a
  117         statement setting forth certain information; providing
  118         for the application of recoupment factors to certain
  119         policies upon issuance or renewal; requiring that
  120         insurers or insurer groups file a supplemental
  121         statement under certain circumstances; requiring that
  122         such entities file a final accounting report
  123         documenting certain information within a specified
  124         period after the completion of the recoupment process;
  125         requiring that such report provide certain
  126         information; amending s. 627.711, F.S.; requiring that
  127         an insurer accept as valid a uniform mitigation
  128         verification form certified by the Department of
  129         Financial Services or signed by certain individuals or
  130         entities; providing a criminal penalty for knowingly
  131         submitting a false or fraudulent mitigation form with
  132         the intent to receive an undeserved discount; amending
  133         s. 627.712, F.S.; revising the properties for which an
  134         insurer must make policies available which exclude
  135         windstorm coverage; amending s. 631.65, F.S.;
  136         providing that an insurance agent is not prohibited
  137         from explaining the existence or function of the
  138         insurance guaranty association; providing for the
  139         appropriation of certain transferred funds to the
  140         Insurance Regulatory Trust Fund for purposes of the My
  141         Safe Florida Home Program; providing an effective
  142         date.
  143  
  144  Be It Enacted by the Legislature of the State of Florida:
  145  
  146         Section 1. Paragraph (e) of subsection (2), subsection (4),
  147  paragraph (b) of subsection (5), and subsections (7) and (17) of
  148  section 215.555, Florida Statutes, are amended to read:
  149         215.555 Florida Hurricane Catastrophe Fund.—
  150         (2) DEFINITIONS.—As used in this section:
  151         (e) “Retention” means the amount of losses below which an
  152  insurer is not entitled to reimbursement from the fund. An
  153  insurer’s retention shall be calculated as follows:
  154         1. The board shall calculate and report to each insurer the
  155  retention multiples for that year. For the contract year
  156  beginning June 1, 2005, the retention multiple shall be equal to
  157  $4.5 billion divided by the total estimated reimbursement
  158  premium for the contract year; for subsequent years, the
  159  retention multiple shall be equal to $4.5 billion, adjusted
  160  based upon the reported exposure from the prior contract year to
  161  reflect the percentage growth in exposure to the fund for
  162  covered policies since 2004, divided by the total estimated
  163  reimbursement premium for the contract year. Total reimbursement
  164  premium for purposes of the calculation under this subparagraph
  165  shall be estimated using the assumption that all insurers have
  166  selected the 90-percent coverage level. In 2010, the contract
  167  year begins June 1 and ends December 31, 2010. In 2011 and
  168  thereafter, the contract year begins January 1 and ends December
  169  31.
  170         2. The retention multiple as determined under subparagraph
  171  1. shall be adjusted to reflect the coverage level elected by
  172  the insurer. For insurers electing the 90-percent coverage
  173  level, the adjusted retention multiple is 100 percent of the
  174  amount determined under subparagraph 1. For insurers electing
  175  the 75-percent coverage level, the retention multiple is 120
  176  percent of the amount determined under subparagraph 1. For
  177  insurers electing the 45-percent coverage level, the adjusted
  178  retention multiple is 200 percent of the amount determined under
  179  subparagraph 1.
  180         3. An insurer shall determine its provisional retention by
  181  multiplying its provisional reimbursement premium by the
  182  applicable adjusted retention multiple and shall determine its
  183  actual retention by multiplying its actual reimbursement premium
  184  by the applicable adjusted retention multiple.
  185         4. For insurers who experience multiple covered events
  186  causing loss during the contract year, beginning June 1, 2005,
  187  each insurer’s full retention shall be applied to each of the
  188  covered events causing the two largest losses for that insurer.
  189  For each other covered event resulting in losses, the insurer’s
  190  retention shall be reduced to one-third of the full retention.
  191  The reimbursement contract shall provide for the reimbursement
  192  of losses for each covered event based on the full retention
  193  with adjustments made to reflect the reduced retentions on or
  194  after January 1 of the contract year provided the insurer
  195  reports its losses as specified in the reimbursement contract.
  196         (4) REIMBURSEMENT CONTRACTS.—
  197         (a) The board shall enter into a contract with each insurer
  198  writing covered policies in this state to provide to the insurer
  199  the reimbursement described in paragraphs (b) and (d), in
  200  exchange for the reimbursement premium paid into the fund under
  201  subsection (5). As a condition of doing business in this state,
  202  each such insurer shall enter into such a contract.
  203         (b)1. The contract shall contain a promise by the board to
  204  reimburse the insurer for 45 percent, 75 percent, or 90 percent
  205  of its losses from each covered event in excess of the insurer’s
  206  retention, plus 5 percent of the reimbursed losses to cover loss
  207  adjustment expenses.
  208         2. The insurer must elect one of the percentage coverage
  209  levels specified in this paragraph and may, upon renewal of a
  210  reimbursement contract, elect a lower percentage coverage level
  211  if no revenue bonds issued under subsection (6) after a covered
  212  event are outstanding, or elect a higher percentage coverage
  213  level, regardless of whether or not revenue bonds are
  214  outstanding. All members of an insurer group must elect the same
  215  percentage coverage level. Any joint underwriting association,
  216  risk apportionment plan, or other entity created under s.
  217  627.351 must elect the 90-percent coverage level.
  218         3. The contract shall provide that reimbursement amounts
  219  shall not be reduced by reinsurance paid or payable to the
  220  insurer from other sources.
  221         4. Notwithstanding any other provision contained in this
  222  section, the board shall make available to insurers that
  223  purchased coverage provided by this subparagraph in 2008 2007,
  224  insurers qualifying as limited apportionment companies under s.
  225  627.351(6)(c), and insurers that have been approved to
  226  participate in the Insurance Capital Build-Up Incentive Program
  227  pursuant to s. 215.5595 a contract or contract addendum that
  228  provides an additional amount of reimbursement coverage of up to
  229  $10 million. The premium to be charged for this additional
  230  reimbursement coverage shall be 50 percent of the additional
  231  reimbursement coverage provided, which shall include one prepaid
  232  reinstatement. The minimum retention level that an eligible
  233  participating insurer must retain associated with this
  234  additional coverage layer is 30 percent of the insurer’s surplus
  235  as of December 31, 2008, for the 2009 contract year; as of
  236  December 31, 2009, for the 2010 contract year; and as of
  237  December 31, 2010, for the 2011 contract year December 31, 2007.
  238  This coverage shall be in addition to all other coverage that
  239  may be provided under this section. The coverage provided by the
  240  fund under this subparagraph shall be in addition to the claims
  241  paying capacity as defined in subparagraph (c)1., but only with
  242  respect to those insurers that select the additional coverage
  243  option and meet the requirements of this subparagraph. The
  244  claims-paying capacity with respect to all other participating
  245  insurers and limited apportionment companies that do not select
  246  the additional coverage option shall be limited to their
  247  reimbursement premium’s proportionate share of the actual
  248  claims-paying capacity otherwise defined in subparagraph (c)1.
  249  and as provided for under the terms of the reimbursement
  250  contract. The optional coverage retention as specified shall be
  251  accessed before the mandatory coverage under the reimbursement
  252  contract, but once the limit of coverage selected under this
  253  option is exhausted, the insurer’s retention under the mandatory
  254  coverage will apply. This coverage will apply and be paid
  255  concurrently with mandatory coverage. Coverage provided in the
  256  reimbursement contract shall not be affected by the additional
  257  premiums paid by participating insurers exercising the
  258  additional coverage option allowed in this subparagraph. This
  259  subparagraph expires on December 31, 2011 May 31, 2009.
  260         (c)1. The contract shall also provide that the obligation
  261  of the board with respect to all contracts covering a particular
  262  contract year shall not exceed the actual claims-paying capacity
  263  of the fund up to a limit of $15 billion for that contract year
  264  adjusted based upon the reported exposure from the prior
  265  contract year to reflect the percentage growth in exposure to
  266  the fund for covered policies since 2003, provided the dollar
  267  growth in the limit may not increase in any year by an amount
  268  greater than the dollar growth of the balance of the fund as of
  269  December 31, less any premiums or interest attributable to
  270  optional coverage, as defined by rule which occurred over the
  271  prior calendar year.
  272         2. In May before the start of the upcoming contract year
  273  and in October of during the contract year, the board shall
  274  publish in the Florida Administrative Weekly a statement of the
  275  fund’s estimated borrowing capacity, the fund’s estimated
  276  claims-paying capacity, and the projected balance of the fund as
  277  of December 31. After the end of each calendar year, the board
  278  shall notify insurers of the estimated borrowing capacity,
  279  estimated claims-paying capacity, and the balance of the fund as
  280  of December 31 to provide insurers with data necessary to assist
  281  them in determining their retention and projected payout from
  282  the fund for loss reimbursement purposes. In conjunction with
  283  the development of the premium formula, as provided for in
  284  subsection (5), the board shall publish factors or multiples
  285  that assist insurers in determining their retention and
  286  projected payout for the next contract year. For all regulatory
  287  and reinsurance purposes, an insurer may calculate its projected
  288  payout from the fund as its share of the total fund premium for
  289  the current contract year multiplied by the sum of the projected
  290  balance of the fund as of December 31 and the estimated
  291  borrowing capacity for that contract year as reported under this
  292  subparagraph.
  293         (d)1. For purposes of determining potential liability and
  294  to aid in the sound administration of the fund, the contract
  295  shall require each insurer to report such insurer’s losses from
  296  each covered event on an interim basis, as directed by the
  297  board. The contract shall require the insurer to report to the
  298  board no later than December 31 of each year, and quarterly
  299  thereafter, its reimbursable losses from covered events for the
  300  year. The contract shall require the board to determine and pay,
  301  as soon as practicable after receiving these reports of
  302  reimbursable losses, the initial amount of reimbursement due and
  303  adjustments to this amount based on later loss information. The
  304  adjustments to reimbursement amounts shall require the board to
  305  pay, or the insurer to return, amounts reflecting the most
  306  recent calculation of losses.
  307         2. In determining reimbursements pursuant to this
  308  subsection, the contract shall provide that the board shall pay
  309  to each insurer such insurer’s projected payout, which is the
  310  amount of reimbursement it is owed, up to an amount equal to the
  311  insurer’s share of the actual premium paid for that contract
  312  year, multiplied by the actual claims-paying capacity available
  313  for that contract year.
  314         3.The board may reimburse insurers for amounts up to the
  315  published factors or multiples for determining each
  316  participating insurer’s retention and projected payout derived
  317  as a result of the development of the premium formula in those
  318  situations in which the total reimbursement of losses to such
  319  insurers would not exceed the estimated claims-paying capacity
  320  of the fund. Otherwise, such factors or multiples shall be
  321  reduced uniformly among all insurers to reflect the estimated
  322  claims-paying capacity.
  323         (e)1. Except as provided in subparagraphs 2. and 3., the
  324  contract shall provide that if an insurer demonstrates to the
  325  board that it is likely to qualify for reimbursement under the
  326  contract, and demonstrates to the board that the immediate
  327  receipt of moneys from the board is likely to prevent the
  328  insurer from becoming insolvent, the board shall advance the
  329  insurer, at market interest rates, the amounts necessary to
  330  maintain the solvency of the insurer, up to 50 percent of the
  331  board’s estimate of the reimbursement due the insurer. The
  332  insurer’s reimbursement shall be reduced by an amount equal to
  333  the amount of the advance and interest thereon.
  334         2. With respect only to an entity created under s. 627.351,
  335  the contract shall also provide that the board may, upon
  336  application by such entity, advance to such entity, at market
  337  interest rates, up to 90 percent of the lesser of:
  338         a. The board’s estimate of the amount of reimbursement due
  339  to such entity; or
  340         b. The entity’s share of the actual reimbursement premium
  341  paid for that contract year, multiplied by the currently
  342  available liquid assets of the fund. In order for the entity to
  343  qualify for an advance under this subparagraph, the entity must
  344  demonstrate to the board that the advance is essential to allow
  345  the entity to pay claims for a covered event and the board must
  346  determine that the fund’s assets are sufficient and are
  347  sufficiently liquid to allow the board to make an advance to the
  348  entity and still fulfill the board’s reimbursement obligations
  349  to other insurers. The entity’s final reimbursement for any
  350  contract year in which an advance has been made under this
  351  subparagraph must be reduced by an amount equal to the amount of
  352  the advance and any interest on such advance. In order to
  353  determine what amounts, if any, are due the entity, the board
  354  may require the entity to report its exposure and its losses at
  355  any time to determine retention levels and reimbursements
  356  payable.
  357         3. The contract shall also provide specifically and solely
  358  with respect to any limited apportionment company under s.
  359  627.351(2)(b)3. that the board may, upon application by such
  360  company, advance to such company the amount of the estimated
  361  reimbursement payable to such company as calculated pursuant to
  362  paragraph (d), at market interest rates, if the board determines
  363  that the fund’s assets are sufficient and are sufficiently
  364  liquid to permit the board to make an advance to such company
  365  and at the same time fulfill its reimbursement obligations to
  366  the insurers that are participants in the fund. Such company’s
  367  final reimbursement for any contract year in which an advance
  368  pursuant to this subparagraph has been made shall be reduced by
  369  an amount equal to the amount of the advance and interest
  370  thereon. In order to determine what amounts, if any, are due to
  371  such company, the board may require such company to report its
  372  exposure and its losses at such times as may be required to
  373  determine retention levels and loss reimbursements payable.
  374         (f) In order to ensure that insurers have properly reported
  375  the insured values on which the reimbursement premium is based
  376  and to ensure that insurers have properly reported the losses
  377  for which reimbursements have been made, the board shall
  378  inspect, examine, and verify the records of each insurer’s
  379  covered policies at such times as the board deems appropriate
  380  and according to standards established by rule for the specific
  381  purpose of validating the accuracy of exposures and losses
  382  required to be reported under the terms and conditions of the
  383  reimbursement contract. The costs of the examinations shall be
  384  borne by the board. However, in order to remove any incentive
  385  for an insurer to delay preparations for an examination, the
  386  board shall be reimbursed by the insurer for any examination
  387  expenses incurred in addition to the usual and customary costs
  388  of the examination, which additional expenses were incurred as a
  389  result of an insurer’s failure, despite proper notice, to be
  390  prepared for the examination or as a result of an insurer’s
  391  failure to provide requested information while the examination
  392  is in progress. If the board finds any insurer’s records or
  393  other necessary information to be inadequate or inadequately
  394  posted, recorded, or maintained, the board may employ experts to
  395  reconstruct, rewrite, record, post, or maintain such records or
  396  information, at the expense of the insurer being examined, if
  397  such insurer has failed to maintain, complete, or correct such
  398  records or deficiencies after the board has given the insurer
  399  notice and a reasonable opportunity to do so. Any information
  400  contained in an examination report, which information is
  401  described in s. 215.557, is confidential and exempt from the
  402  provisions of s. 119.07(1) and s. 24(a), Art. I of the State
  403  Constitution, as provided in s. 215.557. Nothing in this
  404  paragraph expands the exemption in s. 215.557.
  405         (g) The contract shall provide that in the event of the
  406  insolvency of an insurer, the fund shall pay directly to the
  407  Florida Insurance Guaranty Association for the benefit of
  408  Florida policyholders of the insurer the net amount of all
  409  reimbursement moneys owed to the insurer. As used in this
  410  paragraph, the term “net amount of all reimbursement moneys”
  411  means that amount which remains after reimbursement for:
  412         1. Preliminary or duplicate payments owed to private
  413  reinsurers or other inuring reinsurance payments to private
  414  reinsurers that satisfy statutory or contractual obligations of
  415  the insolvent insurer attributable to covered events to such
  416  reinsurers; or
  417         2. Funds owed to a bank or other financial institution to
  418  cover obligations of the insolvent insurer under a credit
  419  agreement that assists the insolvent insurer in paying claims
  420  attributable to covered events.
  421  
  422  The private reinsurers, banks, or other financial institutions
  423  shall be reimbursed or otherwise paid prior to payment to the
  424  Florida Insurance Guaranty Association, notwithstanding any law
  425  to the contrary. The guaranty association shall pay all claims
  426  up to the maximum amount permitted by chapter 631; thereafter,
  427  any remaining moneys shall be paid pro rata to claims not fully
  428  satisfied. This paragraph does not apply to a joint underwriting
  429  association, risk apportionment plan, or other entity created
  430  under s. 627.351.
  431         (5) REIMBURSEMENT PREMIUMS.—
  432         (b) The State Board of Administration shall select an
  433  independent consultant to develop a formula for determining the
  434  actuarially indicated premium to be paid to the fund. The
  435  formula shall specify, for each zip code or other limited
  436  geographical area, the amount of premium to be paid by an
  437  insurer for each $1,000 of insured value under covered policies
  438  in that zip code or other area. In establishing premiums, the
  439  board shall consider the coverage elected under paragraph (4)(b)
  440  and any factors that tend to enhance the actuarial
  441  sophistication of ratemaking for the fund, including
  442  deductibles, type of construction, type of coverage provided,
  443  relative concentration of risks, and other such factors deemed
  444  by the board to be appropriate. The formula must provide for a
  445  cash build-up factor. For the 2009-2010 contract year, the
  446  factor is 5 percent. For the contract year beginning June 1,
  447  2010, and ending December 31, 2010, the factor is 10 percent.
  448  For the 2011 contract year, the factor is 15 percent. For the
  449  2012 contract year, the factor is 20 percent. For the 2013
  450  contract year and thereafter, the factor is 25 percent. The
  451  formula may provide for a procedure to determine the premiums to
  452  be paid by new insurers that begin writing covered policies
  453  after the beginning of a contract year, taking into
  454  consideration when the insurer starts writing covered policies,
  455  the potential exposure of the insurer, the potential exposure of
  456  the fund, the administrative costs to the insurer and to the
  457  fund, and any other factors deemed appropriate by the board. The
  458  formula must be approved by unanimous vote of the board. The
  459  board may, at any time, revise the formula pursuant to the
  460  procedure provided in this paragraph.
  461         (7) ADDITIONAL POWERS AND DUTIES.—
  462         (a) The board may procure reinsurance from reinsurers
  463  acceptable to the Office of Insurance Regulation for the purpose
  464  of maximizing the capacity of the fund and may enter into
  465  capital market transactions, including, but not limited to,
  466  industry loss warranties, catastrophe bonds, side-car
  467  arrangements, or financial contracts permissible for the board’s
  468  usage under s. 215.47(10) and (11), consistent with prudent
  469  management of the fund.
  470         (b) In addition to borrowing under subsection (6), the
  471  board may also borrow from, or enter into other financing
  472  arrangements with, any market sources at prevailing interest
  473  rates.
  474         (c) Each fiscal year, the Legislature shall appropriate
  475  from the investment income of the Florida Hurricane Catastrophe
  476  Fund an amount no less than $10 million and no more than 35
  477  percent of the investment income based upon the most recent
  478  fiscal year-end audited financial statements for the purpose of
  479  providing funding for local governments, state agencies, public
  480  and private educational institutions, and nonprofit
  481  organizations to support programs intended to improve hurricane
  482  preparedness, reduce potential losses in the event of a
  483  hurricane, provide research into means to reduce such losses,
  484  educate or inform the public as to means to reduce hurricane
  485  losses, assist the public in determining the appropriateness of
  486  particular upgrades to structures or in the financing of such
  487  upgrades, or protect local infrastructure from potential damage
  488  from a hurricane. Moneys shall first be available for
  489  appropriation under this paragraph in fiscal year 1997-1998.
  490  Moneys in excess of the $10 million specified in this paragraph
  491  shall not be available for appropriation under this paragraph if
  492  the State Board of Administration finds that an appropriation of
  493  investment income from the fund would jeopardize the actuarial
  494  soundness of the fund.
  495         (d) The board may allow insurers to comply with reporting
  496  requirements and reporting format requirements by using
  497  alternative methods of reporting if the proper administration of
  498  the fund is not thereby impaired and if the alternative methods
  499  produce data which is consistent with the purposes of this
  500  section.
  501         (e) In order to assure the equitable operation of the fund,
  502  the board may impose a reasonable fee on an insurer to recover
  503  costs involved in reprocessing inaccurate, incomplete, or
  504  untimely exposure data submitted by the insurer.
  505         (f)The board may require insurers to notarize documents
  506  submitted to the board.
  507         (17) TEMPORARY INCREASE IN COVERAGE LIMIT OPTIONS.—
  508         (a) Findings and intent.—
  509         1. The Legislature finds that:
  510         a. Because of temporary disruptions in the market for
  511  catastrophic reinsurance, many property insurers were unable to
  512  procure sufficient amounts of reinsurance for the 2006 hurricane
  513  season or were able to procure such reinsurance only by
  514  incurring substantially higher costs than in prior years.
  515         b. The reinsurance market problems were responsible, at
  516  least in part, for substantial premium increases to many
  517  consumers and increases in the number of policies issued by
  518  Citizens Property Insurance Corporation.
  519         c. It is likely that the reinsurance market disruptions
  520  will not significantly abate prior to the 2007 hurricane season.
  521         2. It is the intent of the Legislature to create options
  522  for insurers to purchase a temporary increased coverage limit
  523  above the statutorily determined limit in subparagraph (4)(c)1.,
  524  applicable for the 2007, 2008, and 2009, 2010, 2011, 2012, and
  525  2013 hurricane seasons, to address market disruptions and enable
  526  insurers, at their option, to procure additional coverage from
  527  the Florida Hurricane Catastrophe Fund.
  528         (b) Applicability of other provisions of this section.—All
  529  provisions of this section and the rules adopted under this
  530  section apply to the coverage created by this subsection unless
  531  specifically superseded by provisions in this subsection.
  532         (c) Optional coverage.—For the contract year commencing
  533  June 1, 2007, and ending May 31, 2008, the contract year
  534  commencing June 1, 2008, and ending May 31, 2009, and the
  535  contract year commencing June 1, 2009, and ending May 31, 2010,
  536  the contract year commencing June 1, 2010, and ending December
  537  31, 2010, the contract year commencing January 1, 2011, and
  538  ending December 31, 2011, the contract year commencing January
  539  1, 2012, and ending December 31, 2012, and the contract year
  540  commencing January 1, 2013, and ending December 31, 2013, the
  541  board shall offer, for each of such years, the optional coverage
  542  as provided in this subsection.
  543         (d) Additional definitions.—As used in this subsection, the
  544  term:
  545         1. “FHCF” means Florida Hurricane Catastrophe Fund.
  546         2. “FHCF reimbursement premium” means the premium paid by
  547  an insurer for its coverage as a mandatory participant in the
  548  FHCF, but does not include additional premiums for optional
  549  coverages.
  550         3. “Payout multiple” means the number or multiple created
  551  by dividing the statutorily defined claims-paying capacity as
  552  determined in subparagraph (4)(c)1. by the aggregate
  553  reimbursement premiums paid by all insurers estimated or
  554  projected as of calendar year-end.
  555         4. “TICL” means the temporary increase in coverage limit.
  556         5. “TICL options” means the temporary increase in coverage
  557  options created under this subsection.
  558         6. “TICL insurer” means an insurer that has opted to obtain
  559  coverage under the TICL options addendum in addition to the
  560  coverage provided to the insurer under its FHCF reimbursement
  561  contract.
  562         7. “TICL reimbursement premium” means the premium charged
  563  by the fund for coverage provided under the TICL option.
  564         8. “TICL coverage multiple” means the coverage multiple
  565  when multiplied by an insurer’s reimbursement premium that
  566  defines the temporary increase in coverage limit.
  567         9. “TICL coverage” means the coverage for an insurer’s
  568  losses above the insurer’s statutorily determined claims-paying
  569  capacity based on the claims-paying limit in subparagraph
  570  (4)(c)1., which an insurer selects as its temporary increase in
  571  coverage from the fund under the TICL options selected. A TICL
  572  insurer’s increased coverage limit options shall be calculated
  573  as follows:
  574         a. The board shall calculate and report to each TICL
  575  insurer the TICL coverage multiples based on 12 options for
  576  increasing the insurer’s FHCF coverage limit. Each TICL coverage
  577  multiple shall be calculated by dividing $1 billion, $2 billion,
  578  $3 billion, $4 billion, $5 billion, $6 billion, $7 billion, $8
  579  billion, $9 billion, $10 billion, $11 billion, or $12 billion by
  580  the total estimated aggregate FHCF reimbursement premiums for
  581  the 2007-2008 contract year, and the 2008-2009 contract year,
  582  and the 2009-2010 contract year.
  583         b.For the 2009-2010 contract year, the board shall
  584  calculate and report to each TICL insurer the TICL coverage
  585  multiples based on 10 options for increasing the insurer’s FHCF
  586  coverage limit. Each TICL coverage multiple shall be calculated
  587  by dividing $1 billion, $2 billion, $3 billion, $4 billion, $5
  588  billion, $6 billion, $7 billion, $8 billion, $9 billion, and $10
  589  billion by the total estimated aggregate FHCF reimbursement
  590  premiums for the 2009-2010 contract year.
  591         c.For the contract year beginning June 1, 2010, and ending
  592  December 31, 2010, the board shall calculate and report to each
  593  TICL insurer the TICL coverage multiples based on eight options
  594  for increasing the insurer’s FHCF coverage limit. Each TICL
  595  coverage multiple shall be calculated by dividing $1 billion, $2
  596  billion, $3 billion, $4 billion, $5 billion, $6 billion, $7
  597  billion, and $8 billion by the total estimated aggregate FHCF
  598  reimbursement premiums for the contract year.
  599         d.For the 2011 contract year, the board shall calculate
  600  and report to each TICL insurer the TICL coverage multiples
  601  based on six options for increasing the insurer’s FHCF coverage
  602  limit. Each TICL coverage multiple shall be calculated by
  603  dividing $1 billion, $2 billion, $3 billion, $4 billion, $5
  604  billion, and $6 billion by the total estimated aggregate FHCF
  605  reimbursement premiums for the 2011 contract year.
  606         e.For the 2012 contract year, the board shall calculate
  607  and report to each TICL insurer the TICL coverage multiples
  608  based on four options for increasing the insurer’s FHCF coverage
  609  limit. Each TICL coverage multiple shall be calculated by
  610  dividing $1 billion, $2 billion, $3 billion, and $4 billion by
  611  the total estimated aggregate FHCF reimbursement premiums for
  612  the 2012 contract year.
  613         f.For the 2013 contract year, the board shall calculate
  614  and report to each TICL insurer the TICL coverage multiples
  615  based on two options for increasing the insurer’s FHCF coverage
  616  limit. Each TICL coverage multiple shall be calculated by
  617  dividing $1 billion and $2 billion by the total estimated
  618  aggregate FHCF reimbursement premiums for the 2013 contract
  619  year.
  620         g.b. The TICL insurer’s increased coverage shall be the
  621  FHCF reimbursement premium multiplied by the TICL coverage
  622  multiple. In order to determine an insurer’s total limit of
  623  coverage, an insurer shall add its TICL coverage multiple to its
  624  payout multiple. The total shall represent a number that, when
  625  multiplied by an insurer’s FHCF reimbursement premium for a
  626  given reimbursement contract year, defines an insurer’s total
  627  limit of FHCF reimbursement coverage for that reimbursement
  628  contract year.
  629         10. “TICL options addendum” means an addendum to the
  630  reimbursement contract reflecting the obligations of the fund
  631  and insurers selecting an option to increase an insurer’s FHCF
  632  coverage limit.
  633         (e) TICL options addendum.—
  634         1. The TICL options addendum shall provide for
  635  reimbursement of TICL insurers for covered events occurring
  636  between June 1, 2007, and May 31, 2008, and between June 1,
  637  2008, and May 31, 2009, or between June 1, 2009, and May 31,
  638  2010, between June 1, 2010, and December 31, 2010, between
  639  January 1, 2011, and December 31, 2011, between January 1, 2012,
  640  and December 31, 2012, or between January 1, 2013, and December
  641  31, 2013, in exchange for the TICL reimbursement premium paid
  642  into the fund under paragraph (f). Any insurer writing covered
  643  policies has the option of selecting an increased limit of
  644  coverage under the TICL options addendum and shall select such
  645  coverage at the time that it executes the FHCF reimbursement
  646  contract.
  647         2. The TICL addendum shall contain a promise by the board
  648  to reimburse the TICL insurer for 45 percent, 75 percent, or 90
  649  percent of its losses from each covered event in excess of the
  650  insurer’s retention, plus 5 percent of the reimbursed losses to
  651  cover loss adjustment expenses. The percentage shall be the same
  652  as the coverage level selected by the insurer under paragraph
  653  (4)(b).
  654         3. The TICL addendum shall provide that reimbursement
  655  amounts shall not be reduced by reinsurance paid or payable to
  656  the insurer from other sources.
  657         4. The priorities, schedule, and method of reimbursements
  658  under the TICL addendum shall be the same as provided under
  659  subsection (4).
  660         (f) TICL reimbursement premiums.—Each TICL insurer shall
  661  pay to the fund, in the manner and at the time provided in the
  662  reimbursement contract for payment of reimbursement premiums, a
  663  TICL reimbursement premium determined as specified in subsection
  664  (5), except that a cash build-up factor does not apply to the
  665  TICL reimbursement premiums. However, the TICL reimbursement
  666  premium shall be increased in contract year 2009-2010 by a
  667  factor of two, in the contract year beginning June 1, 2010, and
  668  ending December 31, 2010, by a factor of three, in the 2011
  669  contract year by a factor of four, in the 2012 contract year by
  670  a factor of five, and in the 2013 contract year by a factor of
  671  six.
  672         (g) Effect on claims-paying capacity of the fund.—For the
  673  contract terms commencing June 1, 2007, June 1, 2008, and June
  674  1, 2009, June 1, 2010, January 1, 2011, January 1, 2012, and
  675  January 1, 2013, the program created by this subsection shall
  676  increase the claims-paying capacity of the fund as provided in
  677  subparagraph (4)(c)1. by an amount not to exceed $12 billion and
  678  shall depend on the TICL coverage options selected and the
  679  number of insurers that select the TICL optional coverage. The
  680  additional capacity shall apply only to the additional coverage
  681  provided under the TICL options and shall not otherwise affect
  682  any insurer’s reimbursement from the fund if the insurer chooses
  683  not to select the temporary option to increase its limit of
  684  coverage under the FHCF.
  685         (h)Increasing the claims-paying capacity of the fund.—For
  686  the contract years commencing June 1, 2007, June 1, 2008, and
  687  June 1, 2009, the board may increase the claims-paying capacity
  688  of the fund as provided in paragraph (g) by an amount not to
  689  exceed $4 billion in four $1 billion options and shall depend on
  690  the TICL coverage options selected and the number of insurers
  691  that select the TICL optional coverage. Each insurer’s TICL
  692  premium shall be calculated based upon the additional limit of
  693  increased coverage that the insurer selects. Such limit is
  694  determined by multiplying the TICL multiple associated with one
  695  of the four options times the insurer’s FHCF reimbursement
  696  premium. The reimbursement premium associated with the
  697  additional coverage provided in this paragraph shall be
  698  determined as specified in subsection (5).
  699         Section 2. Section 215.5586, Florida Statutes, as amended
  700  by section 1 of chapter 2009-10, Laws of Florida, is amended to
  701  read:
  702         215.5586 My Safe Florida Home Program.—There is established
  703  within the Department of Financial Services the My Safe Florida
  704  Home Program. The department shall provide fiscal
  705  accountability, contract management, and strategic leadership
  706  for the program, consistent with this section. This section does
  707  not create an entitlement for property owners or obligate the
  708  state in any way to fund the inspection or retrofitting of
  709  residential property in this state. Implementation of this
  710  program is subject to annual legislative appropriations. It is
  711  the intent of the Legislature that the My Safe Florida Home
  712  Program provide trained and certified inspectors to perform
  713  inspections for owners of for at least 400,000 site-built,
  714  single-family, residential properties and provide grants to
  715  eligible at least 35,000 applicants as funding allows before
  716  June 30, 2009. The program shall develop and implement a
  717  comprehensive and coordinated approach for hurricane damage
  718  mitigation that may shall include the following:
  719         (1) HURRICANE MITIGATION INSPECTIONS.
  720         (a) Certified inspectors to provide free home-retrofit
  721  inspections of site-built, single-family, residential property
  722  may shall be offered throughout the state to determine what
  723  mitigation measures are needed, what insurance premium discounts
  724  may be available, and what improvements to existing residential
  725  properties are needed to reduce the property’s vulnerability to
  726  hurricane damage. The Department of Financial Services shall
  727  contract with wind certification entities to provide free
  728  hurricane mitigation inspections. The inspections provided to
  729  homeowners, at a minimum, must include:
  730         1. A home inspection and report that summarizes the results
  731  and identifies recommended improvements a homeowner may take to
  732  mitigate hurricane damage.
  733         2. A range of cost estimates regarding the recommended
  734  mitigation improvements.
  735         3. Insurer-specific information regarding premium discounts
  736  correlated to the current mitigation features and the
  737  recommended mitigation improvements identified by the
  738  inspection.
  739         4. A hurricane resistance rating scale specifying the
  740  home’s current as well as projected wind resistance
  741  capabilities. As soon as practical, the rating scale must be the
  742  uniform home grading scale adopted by the Financial Services
  743  Commission pursuant to s. 215.55865.
  744         (b) To qualify for selection by the department as a wind
  745  certification entity to provide hurricane mitigation
  746  inspections, the entity shall, at a minimum, meet the following
  747  requirements:
  748         1. Use hurricane mitigation inspectors who:
  749         a. Are certified as a building inspector under s. 468.607;
  750         b. Are licensed as a general or residential contractor
  751  under s. 489.111;
  752         c. Are licensed as a professional engineer under s. 471.015
  753  and who have passed the appropriate equivalency test of the
  754  Building Code Training Program as required by s. 553.841;
  755         d. Are licensed as a professional architect under s.
  756  481.213; or
  757         e. Have at least 2 years of experience in residential
  758  construction or residential building inspection and have
  759  received specialized training in hurricane mitigation
  760  procedures. Such training may be provided by a class offered
  761  online or in person.
  762         2. Use hurricane mitigation inspectors who also:
  763         a. Have undergone drug testing and level 2 background
  764  checks pursuant to s. 435.04. The department may conduct
  765  criminal record checks of inspectors used by wind certification
  766  entities. Inspectors must submit a set of the fingerprints to
  767  the department for state and national criminal history checks
  768  and must pay the fingerprint processing fee set forth in s.
  769  624.501. The fingerprints shall be sent by the department to the
  770  Department of Law Enforcement and forwarded to the Federal
  771  Bureau of Investigation for processing. The results shall be
  772  returned to the department for screening. The fingerprints shall
  773  be taken by a law enforcement agency, designated examination
  774  center, or other department-approved entity; and
  775         b. Have been certified, in a manner satisfactory to the
  776  department, to conduct the inspections.
  777         3. Provide a quality assurance program including a
  778  reinspection component.
  779         (c) The department shall implement a quality assurance
  780  program that includes a statistically valid number of
  781  reinspections.
  782         (d) An application for an inspection must contain a signed
  783  or electronically verified statement made under penalty of
  784  perjury that the applicant has submitted only a single
  785  application for that home.
  786         (e) The owner of a site-built, single-family, residential
  787  property may apply for and receive an inspection without also
  788  applying for a grant pursuant to subsection (2) and without
  789  meeting the requirements of paragraph (2)(a).
  790         (2) MITIGATION GRANTS.—Financial grants shall be used to
  791  encourage single-family, site-built, owner-occupied, residential
  792  property owners to retrofit their properties to make them less
  793  vulnerable to hurricane damage.
  794         (a) For a homeowner to be eligible for a grant, the
  795  following criteria for persons who have obtained a completed
  796  inspection after May 1, 2007, a residential property must be
  797  met:
  798         1. The homeowner must have been granted a homestead
  799  exemption on the home under chapter 196.
  800         2. The home must be a dwelling with an insured value of
  801  $300,000 or less. Homeowners who are low-income persons, as
  802  defined in s. 420.0004(10), are exempt from this requirement.
  803         3. The home must have undergone an acceptable hurricane
  804  mitigation inspection after May 1, 2007.
  805         4. The home must be located in the “wind-borne debris
  806  region” as that term is defined in s. 1609.2, International
  807  Building Code (2006), or as subsequently amended.
  808         5. Be a home for which The building permit application for
  809  initial construction of the home must have been was made before
  810  March 1, 2002.
  811  
  812  An application for a grant must contain a signed or
  813  electronically verified statement made under penalty of perjury
  814  that the applicant has submitted only a single application and
  815  must have attached documents demonstrating the applicant meets
  816  the requirements of this paragraph.
  817         (b) All grants must be matched on a dollar-for-dollar basis
  818  up to for a total of $10,000 for the actual cost of the
  819  mitigation project with the state’s contribution not to exceed
  820  $5,000.
  821         (c) The program shall create a process in which contractors
  822  agree to participate and homeowners select from a list of
  823  participating contractors. All mitigation must be based upon the
  824  securing of all required local permits and inspections and must
  825  be performed by properly licensed contractors. Mitigation
  826  projects are subject to random reinspection of up to at least 5
  827  percent of all projects. Hurricane mitigation inspectors
  828  qualifying for the program may also participate as mitigation
  829  contractors as long as the inspectors meet the department’s
  830  qualifications and certification requirements for mitigation
  831  contractors.
  832         (d) Matching fund grants shall also be made available to
  833  local governments and nonprofit entities for projects that will
  834  reduce hurricane damage to single-family, site-built, owner
  835  occupied, residential property. The department shall liberally
  836  construe those requirements in favor of availing the state of
  837  the opportunity to leverage funding for the My Safe Florida Home
  838  Program with other sources of funding.
  839         (e) When recommended by a hurricane mitigation inspection,
  840  grants may be used for the following improvements only:
  841         1. Opening protection.
  842         2. Exterior doors, including garage doors.
  843         3. Brace gable ends.
  844         4.Reinforcing roof-to-wall connections.
  845         5.Improving the strength of roof-deck attachments.
  846         6.Upgrading roof covering from code to code plus.
  847         7.Secondary water barrier for roof.
  848  
  849  The department may require that improvements be made to all
  850  openings, including exterior doors and garage doors, as a
  851  condition of reimbursing a homeowner approved for a grant. The
  852  department may adopt, by rule, the maximum grant allowances for
  853  any improvement allowable under this paragraph.
  854         (f) Grants may be used on a previously inspected existing
  855  structure or on a rebuild. A rebuild is defined as a site-built,
  856  single-family dwelling under construction to replace a home that
  857  was destroyed or significantly damaged by a hurricane and deemed
  858  unlivable by a regulatory authority. The homeowner must be a
  859  low-income homeowner as defined in paragraph (g), must have had
  860  a homestead exemption for that home prior to the hurricane, and
  861  must be intending to rebuild the home as that homeowner’s
  862  homestead.
  863         (g) Low-income homeowners, as defined in s. 420.0004(10),
  864  who otherwise meet the requirements of paragraphs (a), (c), (e),
  865  and (f) are eligible for a grant of up to $5,000 and are not
  866  required to provide a matching amount to receive the grant.
  867  Additionally, for low-income homeowners, grant funding may be
  868  used for repair to existing structures leading to any of the
  869  mitigation improvements provided in paragraph (e), limited to 20
  870  percent of the grant value. The program may accept a
  871  certification directly from a low-income homeowner that the
  872  homeowner meets the requirements of s. 420.0004(10) if the
  873  homeowner provides such certification in a signed or
  874  electronically verified statement made under penalty of perjury.
  875         (h) The department shall establish objective, reasonable
  876  criteria for prioritizing grant applications, consistent with
  877  the requirements of this section.
  878         (i) The department shall develop a process that ensures the
  879  most efficient means to collect and verify grant applications to
  880  determine eligibility and may direct hurricane mitigation
  881  inspectors to collect and verify grant application information
  882  or use the Internet or other electronic means to collect
  883  information and determine eligibility.
  884         (3) EDUCATION AND CONSUMER AWARENESS.—The department may
  885  undertake a statewide multimedia public outreach and advertising
  886  campaign to inform consumers of the availability and benefits of
  887  hurricane inspections and of the safety and financial benefits
  888  of residential hurricane damage mitigation. The department may
  889  seek out and use local, state, federal, and private funds to
  890  support the campaign.
  891         (4) ADVISORY COUNCIL.—There is created an advisory council
  892  to provide advice and assistance to the department regarding
  893  administration of the program. The advisory council shall
  894  consist of:
  895         (a) A representative of lending institutions, selected by
  896  the Financial Services Commission from a list of at least three
  897  persons recommended by the Florida Bankers Association.
  898         (b) A representative of residential property insurers,
  899  selected by the Financial Services Commission from a list of at
  900  least three persons recommended by the Florida Insurance
  901  Council.
  902         (c) A representative of home builders, selected by the
  903  Financial Services Commission from a list of at least three
  904  persons recommended by the Florida Home Builders Association.
  905         (d) A faculty member of a state university, selected by the
  906  Financial Services Commission, who is an expert in hurricane
  907  resistant construction methodologies and materials.
  908         (e) Two members of the House of Representatives, selected
  909  by the Speaker of the House of Representatives.
  910         (f) Two members of the Senate, selected by the President of
  911  the Senate.
  912         (g) The Chief Executive Officer of the Federal Alliance for
  913  Safe Homes, Inc., or his or her designee.
  914         (h) The senior officer of the Florida Hurricane Catastrophe
  915  Fund.
  916         (i) The executive director of Citizens Property Insurance
  917  Corporation.
  918         (j) The director of the Florida Division of Emergency
  919  Management of the Department of Community Affairs.
  920  
  921  Members appointed under paragraphs (a)-(d) shall serve at the
  922  pleasure of the Financial Services Commission. Members appointed
  923  under paragraphs (e) and (f) shall serve at the pleasure of the
  924  appointing officer. All other members shall serve as voting ex
  925  officio members. Members of the advisory council shall serve
  926  without compensation but may receive reimbursement as provided
  927  in s. 112.061 for per diem and travel expenses incurred in the
  928  performance of their official duties.
  929         (5) FUNDING.—The department may seek out and leverage
  930  local, state, federal, or private funds to enhance the financial
  931  resources of the program.
  932         (6) RULES.—The Department of Financial Services shall adopt
  933  rules pursuant to ss. 120.536(1) and 120.54 to govern the
  934  program; implement the provisions of this section; including
  935  rules governing hurricane mitigation inspections and grants,
  936  mitigation contractors, and training of inspectors and
  937  contractors; and carry out the duties of the department under
  938  this section.
  939         (7) HURRICANE MITIGATION INSPECTOR LIST.—The department
  940  shall develop and maintain as a public record a current list of
  941  hurricane mitigation inspectors authorized to conduct hurricane
  942  mitigation inspections pursuant to this section.
  943         (8)NO-INTEREST LOANS.—The department shall implement a no
  944  interest loan program by October 1, 2008, contingent upon the
  945  selection of a qualified vendor and execution of a contract
  946  acceptable to the department and the vendor. The department
  947  shall enter into partnerships with the private sector to provide
  948  loans to owners of site-built, single-family, residential
  949  property to pay for mitigation measures listed in subsection
  950  (2). A loan eligible for interest payments pursuant to this
  951  subsection may be for a term of up to 3 years and cover up to
  952  $5,000 in mitigation measures. The department shall pay the
  953  creditor the market rate of interest using funds appropriated
  954  for the My Safe Florida Home Program. In no case shall the
  955  department pay more than the interest rate set by s. 687.03. To
  956  be eligible for a loan, a loan applicant must first obtain a
  957  home inspection and report that specifies what improvements are
  958  needed to reduce the property’s vulnerability to windstorm
  959  damage pursuant to this section and meet loan underwriting
  960  requirements set by the lender. The department may adopt rules
  961  pursuant to ss. 120.536(1) and 120.54 to implement this
  962  subsection which may include eligibility criteria.
  963         (8)(9) PUBLIC OUTREACH FOR CONTRACTORS AND REAL ESTATE
  964  BROKERS AND SALES ASSOCIATES.—The program shall develop
  965  brochures for distribution to general contractors, roofing
  966  contractors, and real estate brokers and sales associates
  967  licensed under part I of chapter 475 explaining the benefits to
  968  homeowners of residential hurricane damage mitigation. The
  969  program shall encourage contractors to distribute the brochures
  970  to homeowners at the first meeting with a homeowner who is
  971  considering contracting for home or roof repairs or contracting
  972  for the construction of a new home. The program shall encourage
  973  real estate brokers and sales associates licensed under part I
  974  of chapter 475 to distribute the brochures to clients prior to
  975  the purchase of a home. The brochures may be made available
  976  electronically.
  977         (9)(10) CONTRACT MANAGEMENT.—The department may contract
  978  with third parties for grants management, inspection services,
  979  contractor services for low-income homeowners, information
  980  technology, educational outreach, and auditing services. Such
  981  contracts shall be considered direct costs of the program and
  982  shall not be subject to administrative cost limits, but
  983  contracts valued at $1 million $500,000 or more shall be subject
  984  to review and approval by the Legislative Budget Commission. The
  985  department shall contract with providers that have a
  986  demonstrated record of successful business operations in areas
  987  directly related to the services to be provided and shall ensure
  988  the highest accountability for use of state funds, consistent
  989  with this section.
  990         (10)(11) INTENT.—It is the intent of the Legislature that
  991  grants made to residential property owners under this section
  992  shall be considered disaster-relief assistance within the
  993  meaning of s. 139 of the Internal Revenue Code of 1986, as
  994  amended.
  995         (11)(12) REPORTS.—The department shall make an annual
  996  report on the activities of the program that shall account for
  997  the use of state funds and indicate the number of inspections
  998  requested, the number of inspections performed, the number of
  999  grant applications received, and the number and value of grants
 1000  approved. The report shall be delivered to the President of the
 1001  Senate and the Speaker of the House of Representatives by
 1002  February 1 of each year.
 1003         Section 3. Subsection (13) is added to section 626.854,
 1004  Florida Statutes, to read:
 1005         626.854 “Public adjuster” defined; prohibitions.—The
 1006  Legislature finds that it is necessary for the protection of the
 1007  public to regulate public insurance adjusters and to prevent the
 1008  unauthorized practice of law.
 1009         (13) A public adjuster, public adjuster apprentice, or any
 1010  person acting on behalf of a public adjuster or apprentice may
 1011  not accept referrals of business from any person with whom the
 1012  public adjuster conducts business if there is any form or manner
 1013  of agreement to compensate the person, whether directly or
 1014  indirectly, for referring business to the public adjuster. A
 1015  public adjuster may not compensate any person, except for
 1016  another public adjuster, whether directly or indirectly, for the
 1017  principal purpose of referring business to the public adjuster.
 1018  
 1019  The provisions of subsections (5)-(13) subsections (5)-(12)
 1020  apply only to residential property insurance policies and
 1021  condominium association policies as defined in s. 718.111(11).
 1022         Section 4. Subsection (7) is added to section 627.7011,
 1023  Florida Statutes, to read:
 1024         627.7011 Homeowners’ policies; offer of replacement cost
 1025  coverage and law and ordinance coverage.—
 1026         (7) This section does not prohibit an insurer from
 1027  exercising its right to repair damaged property in compliance
 1028  with its policy and s. 627.702(7).
 1029         Section 5. Subsection (1) of section 626.865, Florida
 1030  Statutes, is amended to read:
 1031         626.865 Public adjuster’s qualifications, bond.—
 1032         (1) The department shall issue a license to an applicant
 1033  for a public adjuster’s license upon determining that the
 1034  applicant has paid the applicable fees specified in s. 624.501
 1035  and possesses the following qualifications:
 1036         (a) Is a natural person at least 18 years of age.
 1037         (b) Is a United States citizen or legal alien who possesses
 1038  work authorization from the United States Bureau of Citizenship
 1039  and Immigration Services and a bona fide resident of this state.
 1040         (c) Is trustworthy and has such business reputation as
 1041  would reasonably assure that the applicant will conduct his or
 1042  her business as insurance adjuster fairly and in good faith and
 1043  without detriment to the public.
 1044         (d) Has had sufficient experience, training, or instruction
 1045  concerning the adjusting of damages or losses under insurance
 1046  contracts, other than life and annuity contracts, is
 1047  sufficiently informed as to the terms and effects of the
 1048  provisions of those types of insurance contracts, and possesses
 1049  adequate knowledge of the laws of this state relating to such
 1050  contracts as to enable and qualify him or her to engage in the
 1051  business of insurance adjuster fairly and without injury to the
 1052  public or any member thereof with whom the applicant may have
 1053  business as a public adjuster.
 1054         (e) Has passed the required written examination.
 1055         Section 6. Section 626.8651, Florida Statutes, is amended
 1056  to read:
 1057         626.8651 Public adjuster apprentice license;
 1058  qualifications.—
 1059         (1) The department shall issue a license as a public
 1060  adjuster apprentice to an applicant who is:
 1061         (a) A natural person at least 18 years of age.
 1062         (b) A United States citizen or legal alien who possesses
 1063  work authorization from the United States Bureau of Citizenship
 1064  and Immigration Services and is a resident of this state.
 1065         (c) Trustworthy and has such business reputation as would
 1066  reasonably ensure that the applicant will conduct business as a
 1067  public adjuster apprentice fairly and in good faith and without
 1068  detriment to the public.
 1069         (2) All applicable license fees, as prescribed in s.
 1070  624.501, must be paid in full before issuance of the license.
 1071         (3) An applicant must pass the required written examination
 1072  before a license may be issued.
 1073         (4) An applicant must have received designation as an
 1074  Accredited Claims Adjuster (ACA) after completion of training
 1075  that qualifies the applicant to engage in the business of a
 1076  public adjuster apprentice fairly and without injury to the
 1077  public. Such training and instruction must address adjusting
 1078  damages and losses under insurance contracts, the terms and
 1079  effects of insurance contracts, and knowledge of the laws of
 1080  this state relating to insurance contracts.
 1081         (5) At the time of application for license as a public
 1082  adjuster apprentice, the applicant shall file with the
 1083  department a bond executed and issued by a surety insurer
 1084  authorized to transact such business in this state in the amount
 1085  of $50,000, conditioned upon the faithful performance of his or
 1086  her duties as a public adjuster apprentice under the license for
 1087  which the applicant has applied, and thereafter maintain the
 1088  bond unimpaired throughout the existence of the license and for
 1089  at least 1 year after termination of the license. The bond shall
 1090  be in favor of the department and shall specifically authorize
 1091  recovery by the department of the damages sustained in case the
 1092  licensee commits fraud or unfair practices in connection with
 1093  his or her business as a public adjuster apprentice. The
 1094  aggregate liability of the surety for all such damages may not
 1095  exceed the amount of the bond, and the bond may not be
 1096  terminated by the issuing insurer unless written notice of at
 1097  least 30 days is given to the licensee and filed with the
 1098  department.
 1099         (6)(4) A public adjuster apprentice shall complete at a
 1100  minimum 100 hours of employment per month for 12 months of
 1101  employment under the supervision of a licensed and appointed
 1102  all-lines public adjuster in order to qualify for licensure as a
 1103  public adjuster. The department may adopt rules that establish
 1104  standards for such employment requirements.
 1105         (7)(5)An appointing public adjusting firm may not maintain
 1106  more than 12 public adjuster apprentices simultaneously.
 1107  However, a supervising public adjuster may not shall be
 1108  responsible for more than 3 public adjuster apprentices
 1109  simultaneously and shall be accountable for the acts of all a
 1110  public adjuster apprentices apprentice which are related to
 1111  transacting business as a public adjuster apprentice.
 1112         (8)(6) An apprentice license is effective for 18 months
 1113  unless the license expires due to lack of maintaining an
 1114  appointment; is surrendered by the licensee; is terminated,
 1115  suspended, or revoked by the department; or is canceled by the
 1116  department upon issuance of a public adjuster license. The
 1117  department may not issue a public adjuster apprentice license to
 1118  any individual who has held such a license in this state within
 1119  2 years after expiration, surrender, termination, revocation, or
 1120  cancellation of the license.
 1121         (9)(7) After completing the requirements for employment as
 1122  a public adjuster apprentice, the licensee may file an
 1123  application for a public adjuster license. The applicant and
 1124  supervising public adjuster or public adjusting firm must each
 1125  file a sworn affidavit, on a form prescribed by the department,
 1126  verifying that the employment of the public adjuster apprentice
 1127  meets the requirements of this section.
 1128         (10)(8) In no event shall a public adjuster apprentice
 1129  licensed under this section perform any of the functions for
 1130  which a public adjuster’s license is required after expiration
 1131  of the public adjuster apprentice license without having
 1132  obtained a public adjuster license.
 1133         (11)(9) A public adjuster apprentice has the same authority
 1134  as the licensed public adjuster or public adjusting firm that
 1135  employs the apprentice except that an apprentice may not execute
 1136  contracts for the services of a public adjuster or public
 1137  adjusting firm and may not solicit contracts for the services
 1138  except under the direct supervision and guidance of the
 1139  supervisory public adjuster. An individual may not be, act as,
 1140  or hold himself or herself out to be a public adjuster
 1141  apprentice unless the individual is licensed and holds a current
 1142  appointment by a licensed public all-lines adjuster or a public
 1143  adjusting firm that employs a licensed all-lines public
 1144  adjuster.
 1145         Section 7. Subsections (2) and (5) of section 627.062,
 1146  Florida Statutes, are amended to read:
 1147         627.062 Rate standards.—
 1148         (2) As to all such classes of insurance:
 1149         (a) Insurers or rating organizations shall establish and
 1150  use rates, rating schedules, or rating manuals to allow the
 1151  insurer a reasonable rate of return on such classes of insurance
 1152  written in this state. A copy of rates, rating schedules, rating
 1153  manuals, premium credits or discount schedules, and surcharge
 1154  schedules, and changes thereto, shall be filed with the office
 1155  under one of the following procedures except as provided in
 1156  subparagraph 3.:
 1157         1. If the filing is made at least 90 days before the
 1158  proposed effective date and the filing is not implemented during
 1159  the office’s review of the filing and any proceeding and
 1160  judicial review, then such filing shall be considered a “file
 1161  and use” filing. In such case, the office shall finalize its
 1162  review by issuance of a notice of intent to approve or a notice
 1163  of intent to disapprove within 90 days after receipt of the
 1164  filing. The notice of intent to approve and the notice of intent
 1165  to disapprove constitute agency action for purposes of the
 1166  Administrative Procedure Act. Requests for supporting
 1167  information, requests for mathematical or mechanical
 1168  corrections, or notification to the insurer by the office of its
 1169  preliminary findings shall not toll the 90-day period during any
 1170  such proceedings and subsequent judicial review. The rate shall
 1171  be deemed approved if the office does not issue a notice of
 1172  intent to approve or a notice of intent to disapprove within 90
 1173  days after receipt of the filing.
 1174         2. If the filing is not made in accordance with the
 1175  provisions of subparagraph 1., such filing shall be made as soon
 1176  as practicable, but no later than 30 days after the effective
 1177  date, and shall be considered a “use and file” filing. An
 1178  insurer making a “use and file” filing is potentially subject to
 1179  an order by the office to return to policyholders portions of
 1180  rates found to be excessive, as provided in paragraph (h).
 1181         3. For all residential property insurance filings made or
 1182  submitted after January 25, 2007, but before December 31, 2012
 1183  2009, an insurer seeking a rate that is greater than the rate
 1184  most recently approved by the office shall make a “file and use”
 1185  filing. For purposes of this subparagraph, motor vehicle
 1186  collision and comprehensive coverages are not considered to be
 1187  property coverages.
 1188         (b) Upon receiving a rate filing, the office shall review
 1189  the rate filing to determine if a rate is excessive, inadequate,
 1190  or unfairly discriminatory. In making that determination, the
 1191  office shall, in accordance with generally accepted and
 1192  reasonable actuarial techniques, consider the following factors:
 1193         1. Past and prospective loss experience within and without
 1194  this state.
 1195         2. Past and prospective expenses.
 1196         3. The degree of competition among insurers for the risk
 1197  insured.
 1198         4. Investment income reasonably expected by the insurer,
 1199  consistent with the insurer’s investment practices, from
 1200  investable premiums anticipated in the filing, plus any other
 1201  expected income from currently invested assets representing the
 1202  amount expected on unearned premium reserves and loss reserves.
 1203  The commission may adopt rules using reasonable techniques of
 1204  actuarial science and economics to specify the manner in which
 1205  insurers shall calculate investment income attributable to such
 1206  classes of insurance written in this state and the manner in
 1207  which such investment income shall be used to calculate
 1208  insurance rates. Such manner shall contemplate allowances for an
 1209  underwriting profit factor and full consideration of investment
 1210  income which produce a reasonable rate of return; however,
 1211  investment income from invested surplus may not be considered.
 1212         5. The reasonableness of the judgment reflected in the
 1213  filing.
 1214         6. Dividends, savings, or unabsorbed premium deposits
 1215  allowed or returned to Florida policyholders, members, or
 1216  subscribers.
 1217         7. The adequacy of loss reserves.
 1218         8. The cost of reinsurance. The office shall not disapprove
 1219  a rate as excessive solely due to the insurer having obtained
 1220  catastrophic reinsurance to cover the insurer’s estimated 250
 1221  year probable maximum loss or any lower level of loss.
 1222         9. Trend factors, including trends in actual losses per
 1223  insured unit for the insurer making the filing.
 1224         10. Conflagration and catastrophe hazards, if applicable.
 1225         11. Projected hurricane losses, if applicable, which must
 1226  be estimated using a model or method found to be acceptable or
 1227  reliable by the Florida Commission on Hurricane Loss Projection
 1228  Methodology, and as further provided in s. 627.0628.
 1229         12. A reasonable margin for underwriting profit and
 1230  contingencies.
 1231         13. The cost of medical services, if applicable.
 1232         14. Other relevant factors which impact upon the frequency
 1233  or severity of claims or upon expenses.
 1234         (c) In the case of fire insurance rates, consideration
 1235  shall be given to the availability of water supplies and the
 1236  experience of the fire insurance business during a period of not
 1237  less than the most recent 5-year period for which such
 1238  experience is available.
 1239         (d) If conflagration or catastrophe hazards are given
 1240  consideration by an insurer in its rates or rating plan,
 1241  including surcharges and discounts, the insurer shall establish
 1242  a reserve for that portion of the premium allocated to such
 1243  hazard and shall maintain the premium in a catastrophe reserve.
 1244  Any removal of such premiums from the reserve for purposes other
 1245  than paying claims associated with a catastrophe or purchasing
 1246  reinsurance for catastrophes shall be subject to approval of the
 1247  office. Any ceding commission received by an insurer purchasing
 1248  reinsurance for catastrophes shall be placed in the catastrophe
 1249  reserve.
 1250         (e) After consideration of the rate factors provided in
 1251  paragraphs (b), (c), and (d), a rate may be found by the office
 1252  to be excessive, inadequate, or unfairly discriminatory based
 1253  upon the following standards:
 1254         1. Rates shall be deemed excessive if they are likely to
 1255  produce a profit from Florida business that is unreasonably high
 1256  in relation to the risk involved in the class of business or if
 1257  expenses are unreasonably high in relation to services rendered.
 1258         2. Rates shall be deemed excessive if, among other things,
 1259  the rate structure established by a stock insurance company
 1260  provides for replenishment of surpluses from premiums, when the
 1261  replenishment is attributable to investment losses.
 1262         3. Rates shall be deemed inadequate if they are clearly
 1263  insufficient, together with the investment income attributable
 1264  to them, to sustain projected losses and expenses in the class
 1265  of business to which they apply.
 1266         4. A rating plan, including discounts, credits, or
 1267  surcharges, shall be deemed unfairly discriminatory if it fails
 1268  to clearly and equitably reflect consideration of the
 1269  policyholder’s participation in a risk management program
 1270  adopted pursuant to s. 627.0625.
 1271         5. A rate shall be deemed inadequate as to the premium
 1272  charged to a risk or group of risks if discounts or credits are
 1273  allowed which exceed a reasonable reflection of expense savings
 1274  and reasonably expected loss experience from the risk or group
 1275  of risks.
 1276         6. A rate shall be deemed unfairly discriminatory as to a
 1277  risk or group of risks if the application of premium discounts,
 1278  credits, or surcharges among such risks does not bear a
 1279  reasonable relationship to the expected loss and expense
 1280  experience among the various risks.
 1281         (f) In reviewing a rate filing, the office may require the
 1282  insurer to provide at the insurer’s expense all information
 1283  necessary to evaluate the condition of the company and the
 1284  reasonableness of the filing according to the criteria
 1285  enumerated in this section.
 1286         (g) The office may at any time review a rate, rating
 1287  schedule, rating manual, or rate change; the pertinent records
 1288  of the insurer; and market conditions. If the office finds on a
 1289  preliminary basis that a rate may be excessive, inadequate, or
 1290  unfairly discriminatory, the office shall initiate proceedings
 1291  to disapprove the rate and shall so notify the insurer. However,
 1292  the office may not disapprove as excessive any rate for which it
 1293  has given final approval or which has been deemed approved for a
 1294  period of 1 year after the effective date of the filing unless
 1295  the office finds that a material misrepresentation or material
 1296  error was made by the insurer or was contained in the filing.
 1297  Upon being so notified, the insurer or rating organization
 1298  shall, within 60 days, file with the office all information
 1299  which, in the belief of the insurer or organization, proves the
 1300  reasonableness, adequacy, and fairness of the rate or rate
 1301  change. The office shall issue a notice of intent to approve or
 1302  a notice of intent to disapprove pursuant to the procedures of
 1303  paragraph (a) within 90 days after receipt of the insurer’s
 1304  initial response. In such instances and in any administrative
 1305  proceeding relating to the legality of the rate, the insurer or
 1306  rating organization shall carry the burden of proof by a
 1307  preponderance of the evidence to show that the rate is not
 1308  excessive, inadequate, or unfairly discriminatory. After the
 1309  office notifies an insurer that a rate may be excessive,
 1310  inadequate, or unfairly discriminatory, unless the office
 1311  withdraws the notification, the insurer shall not alter the rate
 1312  except to conform with the office’s notice until the earlier of
 1313  120 days after the date the notification was provided or 180
 1314  days after the date of the implementation of the rate. The
 1315  office may, subject to chapter 120, disapprove without the 60
 1316  day notification any rate increase filed by an insurer within
 1317  the prohibited time period or during the time that the legality
 1318  of the increased rate is being contested.
 1319         (h) In the event the office finds that a rate or rate
 1320  change is excessive, inadequate, or unfairly discriminatory, the
 1321  office shall issue an order of disapproval specifying that a new
 1322  rate or rate schedule which responds to the findings of the
 1323  office be filed by the insurer. The office shall further order,
 1324  for any “use and file” filing made in accordance with
 1325  subparagraph (a)2., that premiums charged each policyholder
 1326  constituting the portion of the rate above that which was
 1327  actuarially justified be returned to such policyholder in the
 1328  form of a credit or refund. If the office finds that an
 1329  insurer’s rate or rate change is inadequate, the new rate or
 1330  rate schedule filed with the office in response to such a
 1331  finding shall be applicable only to new or renewal business of
 1332  the insurer written on or after the effective date of the
 1333  responsive filing.
 1334         (i) Except as otherwise specifically provided in this
 1335  chapter, the office shall not prohibit any insurer, including
 1336  any residual market plan or joint underwriting association, from
 1337  paying acquisition costs based on the full amount of premium, as
 1338  defined in s. 627.403, applicable to any policy, or prohibit any
 1339  such insurer from including the full amount of acquisition costs
 1340  in a rate filing.
 1341         (j) With respect to residential property insurance rate
 1342  filings, the rate filing must account for mitigation measures
 1343  undertaken by policyholders to reduce hurricane losses.
 1344         (k)1. An insurer may make a separate filing limited solely
 1345  to an adjustment of its rates for reinsurance or financing costs
 1346  to replace or finance payment of amounts covered by the Florida
 1347  Hurricane Catastrophe Fund if:
 1348         a. Reinsurance costs contained in the filing do not result
 1349  in an overall premium increase of more than 10 percent for any
 1350  individual policyholder. If the insurer elects to purchase a
 1351  liquidity instrument or line of credit instead of reinsurance,
 1352  the cost included in the filing for the liquidity instrument or
 1353  line of credit may not result in a premium increase exceeding 3
 1354  percent for any individual policyholder;
 1355         b. The insurer includes in the filing a copy of all of its
 1356  reinsurance, liquidity instrument, or line of credit contracts;
 1357  proof of the billing or payment for the contracts; and the
 1358  calculations upon which the proposed rate changes are based
 1359  demonstrating that the costs meet the criteria of this section
 1360  and are not loaded for expenses or profit;
 1361         c. The insurer makes no other changes to its rates; and
 1362         d. The insurer has not implemented an increase in its rate
 1363  within the 6 months immediately preceding the filing.
 1364         2. An insurer making a filing pursuant to this paragraph is
 1365  not eligible to file for any additional rate increase for the
 1366  same business for at least 12 months after implementation of the
 1367  limited filing.
 1368         3. This paragraph does not limit the authority of the
 1369  office to disapprove the rate filing as excessive, inadequate,
 1370  or unfairly discriminatory. All other standards of the rating
 1371  law apply, including the standard of reasonableness.
 1372         4. This paragraph does not apply to rate filings for any
 1373  insurance other than residential property insurance.
 1374  
 1375  The provisions of this subsection do shall not apply to workers’
 1376  compensation and employer’s liability insurance and to motor
 1377  vehicle insurance.
 1378         (5) With respect to a rate filing involving coverage of the
 1379  type for which the insurer is required to pay a reimbursement
 1380  premium to the Florida Hurricane Catastrophe Fund, the insurer
 1381  may fully recoup in its property insurance premiums any
 1382  reimbursement premiums paid to the Florida Hurricane Catastrophe
 1383  Fund, together with reasonable costs of other reinsurance, but
 1384  except as otherwise provided in this section, may not recoup
 1385  reinsurance costs that duplicate coverage provided by the
 1386  Florida Hurricane Catastrophe Fund. An insurer may not recoup
 1387  more than 1 year of reimbursement premium at a time. Any under
 1388  recoupment from the prior year may be added to the following
 1389  year’s reimbursement premium and any over-recoupment shall be
 1390  subtracted from the following year’s reimbursement premium.
 1391         Section 8. Section 627.0621, Florida Statutes, is amended
 1392  to read:
 1393         627.0621 Transparency in rate regulation.—
 1394         (1) DEFINITIONS.—As used in this section, the term:
 1395         (a) “Rate filing” means any original or amended rate
 1396  residential property insurance filing.
 1397         (b) “Recommendation” means any proposed, preliminary, or
 1398  final recommendation from an office actuary reviewing a rate
 1399  filing with respect to the issue of approval or disapproval of
 1400  the rate filing or with respect to rate indications that the
 1401  office would consider acceptable.
 1402         (2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING INFORMATION.—
 1403         (a) With respect to any residential property rate filing
 1404  made on or after July 1, 2008, the office shall provide the
 1405  following information on a publicly accessible Internet website:
 1406         1.(a) The overall rate change requested by the insurer.
 1407         2. The rate change approved by the office along with all of
 1408  the actuary’s assumptions and recommendations forming the basis
 1409  of the office’s decision.
 1410         3.Certification by the office’s actuary that, based on the
 1411  actuary’s knowledge, his or her recommendations are consistent
 1412  with accepted actuarial principles.
 1413         (b) For any rate filing, whether or not the filing is
 1414  subject to a public hearing, the office shall provide on its
 1415  website a means for any policyholder who may be affected by a
 1416  proposed rate change to send an e-mail regarding the proposed
 1417  rate change. Such e-mail must be accessible to the actuary
 1418  assigned to review the rate filing.
 1419         (b) All assumptions made by the office’s actuaries.
 1420         (c) A statement describing any assumptions or methods that
 1421  deviate from the actuarial standards of practice of the Casualty
 1422  Actuarial Society or the American Academy of Actuaries,
 1423  including an explanation of the nature, rationale, and effect of
 1424  the deviation.
 1425         (d) All recommendations made by any office actuary who
 1426  reviewed the rate filing.
 1427         (e) Certification by the office’s actuary that, based on
 1428  the actuary’s knowledge, his or her recommendations are
 1429  consistent with accepted actuarial principles.
 1430         (f) The overall rate change approved by the office.
 1431         (3) ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.—It is the
 1432  intent of the Legislature that the principles of the public
 1433  records and open meetings laws apply to the assertion of
 1434  attorney-client privilege and work product confidentiality by
 1435  the office in connection with a challenge to its actions on a
 1436  rate filing. Therefore, in any administrative or judicial
 1437  proceeding relating to a rate filing, attorney-client privilege
 1438  and work product exemptions from disclosure do not apply to
 1439  communications with office attorneys or records prepared by or
 1440  at the direction of an office attorney, except when the
 1441  conditions of paragraphs (a) and (b) have been met:
 1442         (a) The communication or record reflects a mental
 1443  impression, conclusion, litigation strategy, or legal theory of
 1444  the attorney or office that was prepared exclusively for civil
 1445  or criminal litigation or adversarial administrative
 1446  proceedings.
 1447         (b) The communication occurred or the record was prepared
 1448  after the initiation of an action in a court of competent
 1449  jurisdiction, after the issuance of a notice of intent to deny a
 1450  rate filing, or after the filing of a request for a proceeding
 1451  under ss. 120.569 and 120.57.
 1452         Section 9. Section 627.0612, Florida Statutes, is repealed.
 1453         Section 10. Subsection (5) of section 627.0629, Florida
 1454  Statutes, is amended to read:
 1455         627.0629 Residential property insurance; rate filings.—
 1456         (5) In order to provide an appropriate transition period,
 1457  an insurer may, in its sole discretion, implement an approved
 1458  rate filing for residential property insurance over a period of
 1459  years. An insurer electing to phase in its rate filing must
 1460  provide an informational notice to the office setting out its
 1461  schedule for implementation of the phased-in rate filing. An
 1462  insurer may include in its rate the actual cost of private
 1463  market reinsurance that corresponds to available coverage of the
 1464  Temporary Increase in Coverage Limits, TICL, from the Florida
 1465  Hurricane Catastrophe Fund. The insurer may also include the
 1466  cost of reinsurance to replace the TICL reduction implemented
 1467  pursuant to s. 215.555(17)(d)9. However, this cost for
 1468  reinsurance may not include any expense or profit load or result
 1469  in a total annual base rate increase in excess of 10 percent.
 1470         Section 11. Paragraphs (a), (c), (m), and (x) of subsection
 1471  (6) of section 627.351, Florida Statutes, are amended to read:
 1472         627.351 Insurance risk apportionment plans.—
 1473         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
 1474         (a)1. It is the public purpose of this subsection to ensure
 1475  the existence of an orderly market for property insurance for
 1476  Floridians and Florida businesses. The Legislature finds that
 1477  private insurers are unwilling or unable to provide affordable
 1478  property insurance coverage in this state to the extent sought
 1479  and needed. The absence of affordable property insurance
 1480  threatens the public health, safety, and welfare and likewise
 1481  threatens the economic health of the state. The state therefore
 1482  has a compelling public interest and a public purpose to assist
 1483  in assuring that property in the state is insured and that it is
 1484  insured at affordable rates so as to facilitate the remediation,
 1485  reconstruction, and replacement of damaged or destroyed property
 1486  in order to reduce or avoid the negative effects otherwise
 1487  resulting to the public health, safety, and welfare, to the
 1488  economy of the state, and to the revenues of the state and local
 1489  governments which are needed to provide for the public welfare.
 1490  It is necessary, therefore, to provide affordable property
 1491  insurance to applicants who are in good faith entitled to
 1492  procure insurance through the voluntary market but are unable to
 1493  do so. The Legislature intends by this subsection that
 1494  affordable property insurance be provided and that it continue
 1495  to be provided, as long as necessary, through Citizens Property
 1496  Insurance Corporation, a government entity that is an integral
 1497  part of the state, and that is not a private insurance company.
 1498  To that end, Citizens Property Insurance Corporation shall
 1499  strive to increase the availability of affordable property
 1500  insurance in this state, while achieving efficiencies and
 1501  economies, and while providing service to policyholders,
 1502  applicants, and agents which is no less than the quality
 1503  generally provided in the voluntary market, for the achievement
 1504  of the foregoing public purposes. Because it is essential for
 1505  this government entity to have the maximum financial resources
 1506  to pay claims following a catastrophic hurricane, it is the
 1507  intent of the Legislature that Citizens Property Insurance
 1508  Corporation continue to be an integral part of the state and
 1509  that the income of the corporation be exempt from federal income
 1510  taxation and that interest on the debt obligations issued by the
 1511  corporation be exempt from federal income taxation.
 1512         2. The Residential Property and Casualty Joint Underwriting
 1513  Association originally created by this statute shall be known,
 1514  as of July 1, 2002, as the Citizens Property Insurance
 1515  Corporation. The corporation shall provide insurance for
 1516  residential and commercial property, for applicants who are in
 1517  good faith entitled, but are unable, to procure insurance
 1518  through the voluntary market. The corporation shall operate
 1519  pursuant to a plan of operation approved by order of the
 1520  Financial Services Commission. The plan is subject to continuous
 1521  review by the commission. The commission may, by order, withdraw
 1522  approval of all or part of a plan if the commission determines
 1523  that conditions have changed since approval was granted and that
 1524  the purposes of the plan require changes in the plan. The
 1525  corporation shall continue to operate pursuant to the plan of
 1526  operation approved by the Office of Insurance Regulation until
 1527  October 1, 2006. For the purposes of this subsection,
 1528  residential coverage includes both personal lines residential
 1529  coverage, which consists of the type of coverage provided by
 1530  homeowner’s, mobile home owner’s, dwelling, tenant’s,
 1531  condominium unit owner’s, and similar policies, and commercial
 1532  lines residential coverage, which consists of the type of
 1533  coverage provided by condominium association, apartment
 1534  building, and similar policies.
 1535         3. Effective January 1, 2009, a personal lines residential
 1536  structure that has a dwelling replacement cost of $2 million or
 1537  more, or a single condominium unit that has a combined dwelling
 1538  and content replacement cost of $2 million or more is not
 1539  eligible for coverage by the corporation. Such dwellings insured
 1540  by the corporation on December 31, 2008, may continue to be
 1541  covered by the corporation until the end of the policy term.
 1542  However, such dwellings that are insured by the corporation and
 1543  become ineligible for coverage due to the provisions of this
 1544  subparagraph may reapply and obtain coverage if the property
 1545  owner provides the corporation with a sworn affidavit from one
 1546  or more insurance agents, on a form provided by the corporation,
 1547  stating that the agents have made their best efforts to obtain
 1548  coverage and that the property has been rejected for coverage by
 1549  at least one authorized insurer and at least three surplus lines
 1550  insurers. If such conditions are met, the dwelling may be
 1551  insured by the corporation for up to 3 years, after which time
 1552  the dwelling is ineligible for coverage. The office shall
 1553  approve the method used by the corporation for valuing the
 1554  dwelling replacement cost for the purposes of this subparagraph.
 1555  If a policyholder is insured by the corporation prior to being
 1556  determined to be ineligible pursuant to this subparagraph and
 1557  such policyholder files a lawsuit challenging the determination,
 1558  the policyholder may remain insured by the corporation until the
 1559  conclusion of the litigation.
 1560         4. It is the intent of the Legislature that policyholders,
 1561  applicants, and agents of the corporation receive service and
 1562  treatment of the highest possible level but never less than that
 1563  generally provided in the voluntary market. It also is intended
 1564  that the corporation be held to service standards no less than
 1565  those applied to insurers in the voluntary market by the office
 1566  with respect to responsiveness, timeliness, customer courtesy,
 1567  and overall dealings with policyholders, applicants, or agents
 1568  of the corporation.
 1569         5. Effective January 1, 2009, a personal lines residential
 1570  structure that is located in the “wind-borne debris region,” as
 1571  defined in s. 1609.2, International Building Code (2006), and
 1572  that has an insured value on the structure of $750,000 or more
 1573  is not eligible for coverage by the corporation unless the
 1574  structure has opening protections as required under the Florida
 1575  Building Code for a newly constructed residential structure in
 1576  that area. A residential structure shall be deemed to comply
 1577  with the requirements of this subparagraph if it has shutters or
 1578  opening protections on all openings and if such opening
 1579  protections complied with the Florida Building Code at the time
 1580  they were installed. Effective January 1, 2010, for personal
 1581  lines residential property insured by the corporation that is
 1582  located in the wind-borne debris region and has an insured value
 1583  on the structure of $500,000 or more, a prospective purchaser of
 1584  any such residential property must be provided by the seller a
 1585  written disclosure that contains the structure’s windstorm
 1586  mitigation rating based on the uniform home grading scale
 1587  adopted under s. 215.55865. Such rating shall be provided to the
 1588  purchaser at or before the time the purchaser executes a
 1589  contract for sale and purchase.
 1590         (c) The plan of operation of the corporation:
 1591         1. Must provide for adoption of residential property and
 1592  casualty insurance policy forms and commercial residential and
 1593  nonresidential property insurance forms, which forms must be
 1594  approved by the office prior to use. The corporation shall adopt
 1595  the following policy forms:
 1596         a. Standard personal lines policy forms that are
 1597  comprehensive multiperil policies providing full coverage of a
 1598  residential property equivalent to the coverage provided in the
 1599  private insurance market under an HO-3, HO-4, or HO-6 policy.
 1600         b. Basic personal lines policy forms that are policies
 1601  similar to an HO-8 policy or a dwelling fire policy that provide
 1602  coverage meeting the requirements of the secondary mortgage
 1603  market, but which coverage is more limited than the coverage
 1604  under a standard policy.
 1605         c. Commercial lines residential and nonresidential policy
 1606  forms that are generally similar to the basic perils of full
 1607  coverage obtainable for commercial residential structures and
 1608  commercial nonresidential structures in the admitted voluntary
 1609  market.
 1610         d. Personal lines and commercial lines residential property
 1611  insurance forms that cover the peril of wind only. The forms are
 1612  applicable only to residential properties located in areas
 1613  eligible for coverage under the high-risk account referred to in
 1614  sub-subparagraph (b)2.a.
 1615         e. Commercial lines nonresidential property insurance forms
 1616  that cover the peril of wind only. The forms are applicable only
 1617  to nonresidential properties located in areas eligible for
 1618  coverage under the high-risk account referred to in sub
 1619  subparagraph (b)2.a.
 1620         f. The corporation may adopt variations of the policy forms
 1621  listed in sub-subparagraphs a.-e. that contain more restrictive
 1622  coverage.
 1623         2.a. Must provide that the corporation adopt a program in
 1624  which the corporation and authorized insurers enter into quota
 1625  share primary insurance agreements for hurricane coverage, as
 1626  defined in s. 627.4025(2)(a), for eligible risks, and adopt
 1627  property insurance forms for eligible risks which cover the
 1628  peril of wind only. As used in this subsection, the term:
 1629         (I) “Quota share primary insurance” means an arrangement in
 1630  which the primary hurricane coverage of an eligible risk is
 1631  provided in specified percentages by the corporation and an
 1632  authorized insurer. The corporation and authorized insurer are
 1633  each solely responsible for a specified percentage of hurricane
 1634  coverage of an eligible risk as set forth in a quota share
 1635  primary insurance agreement between the corporation and an
 1636  authorized insurer and the insurance contract. The
 1637  responsibility of the corporation or authorized insurer to pay
 1638  its specified percentage of hurricane losses of an eligible
 1639  risk, as set forth in the quota share primary insurance
 1640  agreement, may not be altered by the inability of the other
 1641  party to the agreement to pay its specified percentage of
 1642  hurricane losses. Eligible risks that are provided hurricane
 1643  coverage through a quota share primary insurance arrangement
 1644  must be provided policy forms that set forth the obligations of
 1645  the corporation and authorized insurer under the arrangement,
 1646  clearly specify the percentages of quota share primary insurance
 1647  provided by the corporation and authorized insurer, and
 1648  conspicuously and clearly state that neither the authorized
 1649  insurer nor the corporation may be held responsible beyond its
 1650  specified percentage of coverage of hurricane losses.
 1651         (II) “Eligible risks” means personal lines residential and
 1652  commercial lines residential risks that meet the underwriting
 1653  criteria of the corporation and are located in areas that were
 1654  eligible for coverage by the Florida Windstorm Underwriting
 1655  Association on January 1, 2002.
 1656         b. The corporation may enter into quota share primary
 1657  insurance agreements with authorized insurers at corporation
 1658  coverage levels of 90 percent and 50 percent.
 1659         c. If the corporation determines that additional coverage
 1660  levels are necessary to maximize participation in quota share
 1661  primary insurance agreements by authorized insurers, the
 1662  corporation may establish additional coverage levels. However,
 1663  the corporation’s quota share primary insurance coverage level
 1664  may not exceed 90 percent.
 1665         d. Any quota share primary insurance agreement entered into
 1666  between an authorized insurer and the corporation must provide
 1667  for a uniform specified percentage of coverage of hurricane
 1668  losses, by county or territory as set forth by the corporation
 1669  board, for all eligible risks of the authorized insurer covered
 1670  under the quota share primary insurance agreement.
 1671         e. Any quota share primary insurance agreement entered into
 1672  between an authorized insurer and the corporation is subject to
 1673  review and approval by the office. However, such agreement shall
 1674  be authorized only as to insurance contracts entered into
 1675  between an authorized insurer and an insured who is already
 1676  insured by the corporation for wind coverage.
 1677         f. For all eligible risks covered under quota share primary
 1678  insurance agreements, the exposure and coverage levels for both
 1679  the corporation and authorized insurers shall be reported by the
 1680  corporation to the Florida Hurricane Catastrophe Fund. For all
 1681  policies of eligible risks covered under quota share primary
 1682  insurance agreements, the corporation and the authorized insurer
 1683  shall maintain complete and accurate records for the purpose of
 1684  exposure and loss reimbursement audits as required by Florida
 1685  Hurricane Catastrophe Fund rules. The corporation and the
 1686  authorized insurer shall each maintain duplicate copies of
 1687  policy declaration pages and supporting claims documents.
 1688         g. The corporation board shall establish in its plan of
 1689  operation standards for quota share agreements which ensure that
 1690  there is no discriminatory application among insurers as to the
 1691  terms of quota share agreements, pricing of quota share
 1692  agreements, incentive provisions if any, and consideration paid
 1693  for servicing policies or adjusting claims.
 1694         h. The quota share primary insurance agreement between the
 1695  corporation and an authorized insurer must set forth the
 1696  specific terms under which coverage is provided, including, but
 1697  not limited to, the sale and servicing of policies issued under
 1698  the agreement by the insurance agent of the authorized insurer
 1699  producing the business, the reporting of information concerning
 1700  eligible risks, the payment of premium to the corporation, and
 1701  arrangements for the adjustment and payment of hurricane claims
 1702  incurred on eligible risks by the claims adjuster and personnel
 1703  of the authorized insurer. Entering into a quota sharing
 1704  insurance agreement between the corporation and an authorized
 1705  insurer shall be voluntary and at the discretion of the
 1706  authorized insurer.
 1707         3. May provide that the corporation may employ or otherwise
 1708  contract with individuals or other entities to provide
 1709  administrative or professional services that may be appropriate
 1710  to effectuate the plan. The corporation shall have the power to
 1711  borrow funds, by issuing bonds or by incurring other
 1712  indebtedness, and shall have other powers reasonably necessary
 1713  to effectuate the requirements of this subsection, including,
 1714  without limitation, the power to issue bonds and incur other
 1715  indebtedness in order to refinance outstanding bonds or other
 1716  indebtedness. The corporation may, but is not required to, seek
 1717  judicial validation of its bonds or other indebtedness under
 1718  chapter 75. The corporation may issue bonds or incur other
 1719  indebtedness, or have bonds issued on its behalf by a unit of
 1720  local government pursuant to subparagraph (p)2., in the absence
 1721  of a hurricane or other weather-related event, upon a
 1722  determination by the corporation, subject to approval by the
 1723  office, that such action would enable it to efficiently meet the
 1724  financial obligations of the corporation and that such
 1725  financings are reasonably necessary to effectuate the
 1726  requirements of this subsection. The corporation is authorized
 1727  to take all actions needed to facilitate tax-free status for any
 1728  such bonds or indebtedness, including formation of trusts or
 1729  other affiliated entities. The corporation shall have the
 1730  authority to pledge assessments, projected recoveries from the
 1731  Florida Hurricane Catastrophe Fund, other reinsurance
 1732  recoverables, market equalization and other surcharges, and
 1733  other funds available to the corporation as security for bonds
 1734  or other indebtedness. In recognition of s. 10, Art. I of the
 1735  State Constitution, prohibiting the impairment of obligations of
 1736  contracts, it is the intent of the Legislature that no action be
 1737  taken whose purpose is to impair any bond indenture or financing
 1738  agreement or any revenue source committed by contract to such
 1739  bond or other indebtedness.
 1740         4.a. Must require that the corporation operate subject to
 1741  the supervision and approval of a board of governors consisting
 1742  of eight individuals who are residents of this state, from
 1743  different geographical areas of this state. The Governor, the
 1744  Chief Financial Officer, the President of the Senate, and the
 1745  Speaker of the House of Representatives shall each appoint two
 1746  members of the board. At least one of the two members appointed
 1747  by each appointing officer must have demonstrated expertise in
 1748  insurance. The Chief Financial Officer shall designate one of
 1749  the appointees as chair. All board members serve at the pleasure
 1750  of the appointing officer. All members of the board of governors
 1751  are subject to removal at will by the officers who appointed
 1752  them. All board members, including the chair, must be appointed
 1753  to serve for 3-year terms beginning annually on a date
 1754  designated by the plan. However, for the first term beginning on
 1755  or after July 1, 2009, each appointing officer shall appoint one
 1756  member of the board for a 2-year term and one member for a 3
 1757  year term. Any board vacancy shall be filled for the unexpired
 1758  term by the appointing officer. The Chief Financial Officer
 1759  shall appoint a technical advisory group to provide information
 1760  and advice to the board of governors in connection with the
 1761  board’s duties under this subsection. The executive director and
 1762  senior managers of the corporation shall be engaged by the board
 1763  and serve at the pleasure of the board. Any executive director
 1764  appointed on or after July 1, 2006, is subject to confirmation
 1765  by the Senate. The executive director is responsible for
 1766  employing other staff as the corporation may require, subject to
 1767  review and concurrence by the board.
 1768         b. The board shall create a Market Accountability Advisory
 1769  Committee to assist the corporation in developing awareness of
 1770  its rates and its customer and agent service levels in
 1771  relationship to the voluntary market insurers writing similar
 1772  coverage. The members of the advisory committee shall consist of
 1773  the following 11 persons, one of whom must be elected chair by
 1774  the members of the committee: four representatives, one
 1775  appointed by the Florida Association of Insurance Agents, one by
 1776  the Florida Association of Insurance and Financial Advisors, one
 1777  by the Professional Insurance Agents of Florida, and one by the
 1778  Latin American Association of Insurance Agencies; three
 1779  representatives appointed by the insurers with the three highest
 1780  voluntary market share of residential property insurance
 1781  business in the state; one representative from the Office of
 1782  Insurance Regulation; one consumer appointed by the board who is
 1783  insured by the corporation at the time of appointment to the
 1784  committee; one representative appointed by the Florida
 1785  Association of Realtors; and one representative appointed by the
 1786  Florida Bankers Association. All members must serve for 3-year
 1787  terms and may serve for consecutive terms. The committee shall
 1788  report to the corporation at each board meeting on insurance
 1789  market issues which may include rates and rate competition with
 1790  the voluntary market; service, including policy issuance, claims
 1791  processing, and general responsiveness to policyholders,
 1792  applicants, and agents; and matters relating to depopulation.
 1793         5. Must provide a procedure for determining the eligibility
 1794  of a risk for coverage, as follows:
 1795         a. Subject to the provisions of s. 627.3517, with respect
 1796  to personal lines residential risks, if the risk is offered
 1797  coverage from an authorized insurer at the insurer’s approved
 1798  rate under either a standard policy including wind coverage or,
 1799  if consistent with the insurer’s underwriting rules as filed
 1800  with the office, a basic policy including wind coverage, for a
 1801  new application to the corporation for coverage, the risk is not
 1802  eligible for any policy issued by the corporation unless the
 1803  premium for coverage from the authorized insurer is more than 15
 1804  percent greater than the premium for comparable coverage from
 1805  the corporation. If the risk is not able to obtain any such
 1806  offer, the risk is eligible for either a standard policy
 1807  including wind coverage or a basic policy including wind
 1808  coverage issued by the corporation; however, if the risk could
 1809  not be insured under a standard policy including wind coverage
 1810  regardless of market conditions, the risk shall be eligible for
 1811  a basic policy including wind coverage unless rejected under
 1812  subparagraph 8. However, with regard to a policyholder of the
 1813  corporation or a policyholder removed from the corporation
 1814  through an assumption agreement until the end of the assumption
 1815  period, the policyholder remains eligible for coverage from the
 1816  corporation regardless of any offer of coverage from an
 1817  authorized insurer or surplus lines insurer. The corporation
 1818  shall determine the type of policy to be provided on the basis
 1819  of objective standards specified in the underwriting manual and
 1820  based on generally accepted underwriting practices.
 1821         (I) If the risk accepts an offer of coverage through the
 1822  market assistance plan or an offer of coverage through a
 1823  mechanism established by the corporation before a policy is
 1824  issued to the risk by the corporation or during the first 30
 1825  days of coverage by the corporation, and the producing agent who
 1826  submitted the application to the plan or to the corporation is
 1827  not currently appointed by the insurer, the insurer shall:
 1828         (A) Pay to the producing agent of record of the policy, for
 1829  the first year, an amount that is the greater of the insurer’s
 1830  usual and customary commission for the type of policy written or
 1831  a fee equal to the usual and customary commission of the
 1832  corporation; or
 1833         (B) Offer to allow the producing agent of record of the
 1834  policy to continue servicing the policy for a period of not less
 1835  than 1 year and offer to pay the agent the greater of the
 1836  insurer’s or the corporation’s usual and customary commission
 1837  for the type of policy written.
 1838  
 1839  If the producing agent is unwilling or unable to accept
 1840  appointment, the new insurer shall pay the agent in accordance
 1841  with sub-sub-sub-subparagraph (A).
 1842         (II) When the corporation enters into a contractual
 1843  agreement for a take-out plan, the producing agent of record of
 1844  the corporation policy is entitled to retain any unearned
 1845  commission on the policy, and the insurer shall:
 1846         (A) Pay to the producing agent of record of the corporation
 1847  policy, for the first year, an amount that is the greater of the
 1848  insurer’s usual and customary commission for the type of policy
 1849  written or a fee equal to the usual and customary commission of
 1850  the corporation; or
 1851         (B) Offer to allow the producing agent of record of the
 1852  corporation policy to continue servicing the policy for a period
 1853  of not less than 1 year and offer to pay the agent the greater
 1854  of the insurer’s or the corporation’s usual and customary
 1855  commission for the type of policy written.
 1856  
 1857  If the producing agent is unwilling or unable to accept
 1858  appointment, the new insurer shall pay the agent in accordance
 1859  with sub-sub-sub-subparagraph (A).
 1860         b. With respect to commercial lines residential risks, for
 1861  a new application to the corporation for coverage, if the risk
 1862  is offered coverage under a policy including wind coverage from
 1863  an authorized insurer at its approved rate, the risk is not
 1864  eligible for any policy issued by the corporation unless the
 1865  premium for coverage from the authorized insurer is more than 15
 1866  percent greater than the premium for comparable coverage from
 1867  the corporation. If the risk is not able to obtain any such
 1868  offer, the risk is eligible for a policy including wind coverage
 1869  issued by the corporation. However, with regard to a
 1870  policyholder of the corporation or a policyholder removed from
 1871  the corporation through an assumption agreement until the end of
 1872  the assumption period, the policyholder remains eligible for
 1873  coverage from the corporation regardless of any offer of
 1874  coverage from an authorized insurer or surplus lines insurer.
 1875         (I) If the risk accepts an offer of coverage through the
 1876  market assistance plan or an offer of coverage through a
 1877  mechanism established by the corporation before a policy is
 1878  issued to the risk by the corporation or during the first 30
 1879  days of coverage by the corporation, and the producing agent who
 1880  submitted the application to the plan or the corporation is not
 1881  currently appointed by the insurer, the insurer shall:
 1882         (A) Pay to the producing agent of record of the policy, for
 1883  the first year, an amount that is the greater of the insurer’s
 1884  usual and customary commission for the type of policy written or
 1885  a fee equal to the usual and customary commission of the
 1886  corporation; or
 1887         (B) Offer to allow the producing agent of record of the
 1888  policy to continue servicing the policy for a period of not less
 1889  than 1 year and offer to pay the agent the greater of the
 1890  insurer’s or the corporation’s usual and customary commission
 1891  for the type of policy written.
 1892  
 1893  If the producing agent is unwilling or unable to accept
 1894  appointment, the new insurer shall pay the agent in accordance
 1895  with sub-sub-sub-subparagraph (A).
 1896         (II) When the corporation enters into a contractual
 1897  agreement for a take-out plan, the producing agent of record of
 1898  the corporation policy is entitled to retain any unearned
 1899  commission on the policy, and the insurer shall:
 1900         (A) Pay to the producing agent of record of the corporation
 1901  policy, for the first year, an amount that is the greater of the
 1902  insurer’s usual and customary commission for the type of policy
 1903  written or a fee equal to the usual and customary commission of
 1904  the corporation; or
 1905         (B) Offer to allow the producing agent of record of the
 1906  corporation policy to continue servicing the policy for a period
 1907  of not less than 1 year and offer to pay the agent the greater
 1908  of the insurer’s or the corporation’s usual and customary
 1909  commission for the type of policy written.
 1910  
 1911  If the producing agent is unwilling or unable to accept
 1912  appointment, the new insurer shall pay the agent in accordance
 1913  with sub-sub-sub-subparagraph (A).
 1914         c. For purposes of determining comparable coverage under
 1915  sub-subparagraphs a. and b., the comparison shall be based on
 1916  those forms and coverages that are reasonably comparable. The
 1917  corporation may rely on a determination of comparable coverage
 1918  and premium made by the producing agent who submits the
 1919  application to the corporation, made in the agent’s capacity as
 1920  the corporation’s agent. A comparison may be made solely of the
 1921  premium with respect to the main building or structure only on
 1922  the following basis: the same coverage A or other building
 1923  limits; the same percentage hurricane deductible that applies on
 1924  an annual basis or that applies to each hurricane for commercial
 1925  residential property; the same percentage of ordinance and law
 1926  coverage, if the same limit is offered by both the corporation
 1927  and the authorized insurer; the same mitigation credits, to the
 1928  extent the same types of credits are offered both by the
 1929  corporation and the authorized insurer; the same method for loss
 1930  payment, such as replacement cost or actual cash value, if the
 1931  same method is offered both by the corporation and the
 1932  authorized insurer in accordance with underwriting rules; and
 1933  any other form or coverage that is reasonably comparable as
 1934  determined by the board. If an application is submitted to the
 1935  corporation for wind-only coverage in the high-risk account, the
 1936  premium for the corporation’s wind-only policy plus the premium
 1937  for the ex-wind policy that is offered by an authorized insurer
 1938  to the applicant shall be compared to the premium for multiperil
 1939  coverage offered by an authorized insurer, subject to the
 1940  standards for comparison specified in this subparagraph. If the
 1941  corporation or the applicant requests from the authorized
 1942  insurer a breakdown of the premium of the offer by types of
 1943  coverage so that a comparison may be made by the corporation or
 1944  its agent and the authorized insurer refuses or is unable to
 1945  provide such information, the corporation may treat the offer as
 1946  not being an offer of coverage from an authorized insurer at the
 1947  insurer’s approved rate.
 1948         6. Must include rules for classifications of risks and
 1949  rates therefor.
 1950         7. Must provide that if premium and investment income for
 1951  an account attributable to a particular calendar year are in
 1952  excess of projected losses and expenses for the account
 1953  attributable to that year, such excess shall be held in surplus
 1954  in the account. Such surplus shall be available to defray
 1955  deficits in that account as to future years and shall be used
 1956  for that purpose prior to assessing assessable insurers and
 1957  assessable insureds as to any calendar year.
 1958         8. Must provide objective criteria and procedures to be
 1959  uniformly applied for all applicants in determining whether an
 1960  individual risk is so hazardous as to be uninsurable. In making
 1961  this determination and in establishing the criteria and
 1962  procedures, the following shall be considered:
 1963         a. Whether the likelihood of a loss for the individual risk
 1964  is substantially higher than for other risks of the same class;
 1965  and
 1966         b. Whether the uncertainty associated with the individual
 1967  risk is such that an appropriate premium cannot be determined.
 1968  
 1969  The acceptance or rejection of a risk by the corporation shall
 1970  be construed as the private placement of insurance, and the
 1971  provisions of chapter 120 shall not apply.
 1972         9. Must provide that the corporation shall make its best
 1973  efforts to procure catastrophe reinsurance at reasonable rates,
 1974  to cover its projected 100-year probable maximum loss as
 1975  determined by the board of governors.
 1976         10. The policies issued by the corporation must provide
 1977  that, if the corporation or the market assistance plan obtains
 1978  an offer from an authorized insurer to cover the risk at its
 1979  approved rates, the risk is no longer eligible for renewal
 1980  through the corporation, except as otherwise provided in this
 1981  subsection.
 1982         11. Corporation policies and applications must include a
 1983  notice that the corporation policy could, under this section, be
 1984  replaced with a policy issued by an authorized insurer that does
 1985  not provide coverage identical to the coverage provided by the
 1986  corporation. The notice shall also specify that acceptance of
 1987  corporation coverage creates a conclusive presumption that the
 1988  applicant or policyholder is aware of this potential.
 1989         12. May establish, subject to approval by the office,
 1990  different eligibility requirements and operational procedures
 1991  for any line or type of coverage for any specified county or
 1992  area if the board determines that such changes to the
 1993  eligibility requirements and operational procedures are
 1994  justified due to the voluntary market being sufficiently stable
 1995  and competitive in such area or for such line or type of
 1996  coverage and that consumers who, in good faith, are unable to
 1997  obtain insurance through the voluntary market through ordinary
 1998  methods would continue to have access to coverage from the
 1999  corporation. When coverage is sought in connection with a real
 2000  property transfer, such requirements and procedures shall not
 2001  provide for an effective date of coverage later than the date of
 2002  the closing of the transfer as established by the transferor,
 2003  the transferee, and, if applicable, the lender.
 2004         13. Must provide that, with respect to the high-risk
 2005  account, any assessable insurer with a surplus as to
 2006  policyholders of $25 million or less writing 25 percent or more
 2007  of its total countrywide property insurance premiums in this
 2008  state may petition the office, within the first 90 days of each
 2009  calendar year, to qualify as a limited apportionment company. A
 2010  regular assessment levied by the corporation on a limited
 2011  apportionment company for a deficit incurred by the corporation
 2012  for the high-risk account in 2006 or thereafter may be paid to
 2013  the corporation on a monthly basis as the assessments are
 2014  collected by the limited apportionment company from its insureds
 2015  pursuant to s. 627.3512, but the regular assessment must be paid
 2016  in full within 12 months after being levied by the corporation.
 2017  A limited apportionment company shall collect from its
 2018  policyholders any emergency assessment imposed under sub
 2019  subparagraph (b)3.d. The plan shall provide that, if the office
 2020  determines that any regular assessment will result in an
 2021  impairment of the surplus of a limited apportionment company,
 2022  the office may direct that all or part of such assessment be
 2023  deferred as provided in subparagraph (p)4. However, there shall
 2024  be no limitation or deferment of an emergency assessment to be
 2025  collected from policyholders under sub-subparagraph (b)3.d.
 2026         14. Must provide that the corporation appoint as its
 2027  licensed agents only those agents who also hold an appointment
 2028  as defined in s. 626.015(3) with an insurer who at the time of
 2029  the agent’s initial appointment by the corporation is authorized
 2030  to write and is actually writing personal lines residential
 2031  property coverage, commercial residential property coverage, or
 2032  commercial nonresidential property coverage within the state.
 2033         15. Must provide, by July 1, 2007, a premium payment plan
 2034  option to its policyholders which allows at a minimum for
 2035  quarterly and semiannual payment of premiums. A monthly payment
 2036  plan may, but is not required to, be offered.
 2037         16. Must limit coverage on mobile homes or manufactured
 2038  homes built prior to 1994 to actual cash value of the dwelling
 2039  rather than replacement costs of the dwelling.
 2040         17. May provide such limits of coverage as the board
 2041  determines, consistent with the requirements of this subsection.
 2042         18. May require commercial property to meet specified
 2043  hurricane mitigation construction features as a condition of
 2044  eligibility for coverage.
 2045         (m)1. Rates for coverage provided by the corporation shall
 2046  be actuarially sound and subject to the requirements of s.
 2047  627.062, except as otherwise provided in this paragraph. The
 2048  corporation shall file its recommended rates with the office at
 2049  least annually. The corporation shall provide any additional
 2050  information regarding the rates which the office requires. The
 2051  office shall consider the recommendations of the board and issue
 2052  a final order establishing the rates for the corporation within
 2053  45 days after the recommended rates are filed. The corporation
 2054  may not pursue an administrative challenge or judicial review of
 2055  the final order of the office.
 2056         2. In addition to the rates otherwise determined pursuant
 2057  to this paragraph, the corporation shall impose and collect an
 2058  amount equal to the premium tax provided for in s. 624.509 to
 2059  augment the financial resources of the corporation.
 2060         3. After the public hurricane loss-projection model under
 2061  s. 627.06281 has been found to be accurate and reliable by the
 2062  Florida Commission on Hurricane Loss Projection Methodology,
 2063  that model shall serve as the minimum benchmark for determining
 2064  the windstorm portion of the corporation’s rates. This
 2065  subparagraph does not require or allow the corporation to adopt
 2066  rates lower than the rates otherwise required or allowed by this
 2067  paragraph.
 2068         4. The rate filings for the corporation which were approved
 2069  by the office and which took effect January 1, 2007, are
 2070  rescinded, except for those rates that were lowered. As soon as
 2071  possible, the corporation shall begin using the lower rates that
 2072  were in effect on December 31, 2006, and shall provide refunds
 2073  to policyholders who have paid higher rates as a result of that
 2074  rate filing. The rates in effect on December 31, 2006, shall
 2075  remain in effect for the 2007 and 2008 calendar years except for
 2076  any rate change that results in a lower rate. The next rate
 2077  change that may increase rates shall take effect pursuant to a
 2078  new rate filing recommended by the corporation and established
 2079  by the office, subject to the requirements of this paragraph.
 2080         5. Beginning on July 15, 2009, and each year thereafter,
 2081  the corporation must make a recommended actuarially sound rate
 2082  filing for each personal and commercial line of business it
 2083  writes, to be effective no earlier than January 1, 2010.
 2084         6.Notwithstanding the board’s recommended rates and the
 2085  office’s final order regarding the corporation’s filed rates
 2086  under subparagraph 1., the corporation shall implement a rate
 2087  increase each year which does not exceed 5 percent for any
 2088  single policy issued by the corporation, excluding coverage
 2089  changes and surcharges.
 2090         7. The corporation may also implement an increase to
 2091  reflect the effect on the corporation of the cash buildup factor
 2092  pursuant to s. 215.555(5)(b).
 2093         8. The corporation’s implementation of rates as prescribed
 2094  in subparagraph 6. shall cease upon the corporation’s
 2095  implementation of actuarially sound rates.
 2096         9. Beginning January 1, 2010, and each quarter thereafter,
 2097  the corporation shall transfer an amount equal to 10 percent of
 2098  the funds projected to be collected from the rate increase
 2099  prescribed by subparagraph 6. to the General Revenue Fund. The
 2100  corporation shall cease such transfers upon the implementation
 2101  of actuarially sound rates or the existence of a deficit in any
 2102  account as described in subparagraph (b)3.
 2103         (x) It is the intent of the Legislature that the amendments
 2104  to this subsection enacted in 2002 should, over time, reduce the
 2105  probable maximum windstorm losses in the residual markets and
 2106  should reduce the potential assessments to be levied on property
 2107  insurers and policyholders statewide. In furtherance of this
 2108  intent:
 2109         1. The board shall, on or before February 1 of each year,
 2110  provide a report to the President of the Senate and the Speaker
 2111  of the House of Representatives showing the reduction or
 2112  increase in the 100-year probable maximum loss attributable to
 2113  wind-only coverages and the quota share program under this
 2114  subsection combined, as compared to the benchmark 100-year
 2115  probable maximum loss of the Florida Windstorm Underwriting
 2116  Association. For purposes of this paragraph, the benchmark 100
 2117  year probable maximum loss of the Florida Windstorm Underwriting
 2118  Association shall be the calculation dated February 2001 and
 2119  based on November 30, 2000, exposures. In order to ensure
 2120  comparability of data, the board shall use the same methods for
 2121  calculating its probable maximum loss as were used to calculate
 2122  the benchmark probable maximum loss.
 2123         2. Beginning December 1, 2010 February 1, 2010, if the
 2124  report under subparagraph 1. for any year indicates that the
 2125  100-year probable maximum loss attributable to wind-only
 2126  coverages and the quota share program combined does not reflect
 2127  a reduction of at least 25 percent from the benchmark, the board
 2128  shall reduce the boundaries of the high-risk area eligible for
 2129  wind-only coverages under this subsection in a manner calculated
 2130  to reduce such probable maximum loss to an amount at least 25
 2131  percent below the benchmark.
 2132         3. Beginning February 1, 2015, if the report under
 2133  subparagraph 1. for any year indicates that the 100-year
 2134  probable maximum loss attributable to wind-only coverages and
 2135  the quota share program combined does not reflect a reduction of
 2136  at least 50 percent from the benchmark, the boundaries of the
 2137  high-risk area eligible for wind-only coverages under this
 2138  subsection shall be reduced by the elimination of any area that
 2139  is not seaward of a line 1,000 feet inland from the Intracoastal
 2140  Waterway.
 2141         Section 12. Section 627.3512, Florida Statutes, is amended
 2142  to read:
 2143         627.3512 Recoupment of residual market deficit
 2144  assessments.—
 2145         (1) The Legislature finds and declares that all assessments
 2146  paid by an insurer or insurer group as a result of a levy by any
 2147  residual market entity, including regular assessments levied on
 2148  insurers by Citizens Property Insurance Corporation and any
 2149  other assessments levied on insurers by an insurance risk
 2150  apportionment plan or assigned risk plan under s. 627.311 or s.
 2151  627.351 constitute advances of funds from the insurer to the
 2152  residual market entity, and that the insurer is entitled to
 2153  fully recoup such advances. An insurer or insurer group may
 2154  recoup any assessments that have been paid during or after 1995
 2155  by the insurer or insurer group to defray deficits of an
 2156  insurance risk apportionment plan or assigned risk plan under
 2157  ss. 627.311 and 627.351, net of any earnings returned to the
 2158  insurer or insurer group by the association or plan for any year
 2159  after 1993. A limited apportionment company as defined in s.
 2160  627.351(6)(c) may recoup any regular assessment that has been
 2161  levied by, or paid to, Citizens Property Insurance Corporation.
 2162         (2) The recoupment shall be made by applying a separate
 2163  recoupment assessment factor on policies of the same line or
 2164  type as were considered by the residual markets in determining
 2165  the assessment liability of the insurer or insurer group. An
 2166  insurer or insurer group shall calculate a separate assessment
 2167  factor for personal lines and commercial lines. The separate
 2168  assessment factor shall provide for full recoupment of the
 2169  assessments over a period of 1 year, unless the insurer or
 2170  insurer group, at its option, elects to recoup the assessments
 2171  over a longer period. The assessment factor expires upon
 2172  collection of the full amount allowed to be recouped. Amounts
 2173  recouped under this section are not subject to premium taxes,
 2174  fees, or commissions.
 2175         (3)(2) The recoupment assessment factor may must not be
 2176  more than 3 percentage points above the ratio of the deficit
 2177  assessment to the Florida direct written premium for policies
 2178  for the lines or types of business as to which the assessment
 2179  was calculated, as written in the year the deficit assessment
 2180  was paid. If an insurer or insurer group does not fails to
 2181  collect the full amount of the deficit assessment during one 12
 2182  month period, the insurer or insurer group may apply
 2183  recalculated recoupment factors to policies issued or renewed
 2184  during one or more succeeding 12-month periods must carry
 2185  forward the amount of the deficit and adjust the deficit
 2186  assessment to be recouped in a subsequent year by that amount.
 2187         (4)(3) The insurer or insurer group shall file with the
 2188  office a statement for informational purposes only setting forth
 2189  the amount of the recoupment assessment factor and an
 2190  explanation of how the factor will be applied, at least 15 days
 2191  prior to the factor being applied to any policies. The
 2192  informational statement shall include documentation of the
 2193  assessment paid by the insurer or insurer group and the
 2194  arithmetic calculations supporting the recoupment assessment
 2195  factor. The office shall complete its review within 15 days
 2196  after receipt of the filing and shall limit its review to
 2197  verification of the arithmetic calculations. The insurer or
 2198  insurer group may use the recoupment assessment factor at any
 2199  time after the expiration of the 15-day period unless the office
 2200  has notified the insurer or insurer group in writing that the
 2201  arithmetic calculations are incorrect. The recoupment factor
 2202  shall apply to all policies described in subsection (3) that are
 2203  issued or renewed by the insurer or insurer group during a 12
 2204  month period. If full recoupment requires the insurer or insurer
 2205  group to apply a recoupment factor over a subsequent 12-month
 2206  period, the insurer or insurer group must file a supplemental
 2207  informational statement pursuant to this subsection.
 2208         (5) No later than 90 days after the insurer or insurer
 2209  group has completed the recoupment process, it shall file with
 2210  the office a final accounting report documenting the recoupment.
 2211  The report shall provide the amounts of assessments paid by the
 2212  insurer or insurer group, the amounts and percentages recouped
 2213  by year from each affected line of business, and the direct
 2214  written premium subject to recoupment by year.
 2215         (6)(4) The commission may adopt rules to implement this
 2216  section.
 2217         Section 13. Subsection (2) of section 627.711, Florida
 2218  Statutes, is amended, and subsection (3) is added to that
 2219  section, to read:
 2220         627.711 Notice of premium discounts for hurricane loss
 2221  mitigation; uniform mitigation verification inspection form.—
 2222         (2) By July 1, 2007, the Financial Services Commission
 2223  shall develop by rule a uniform mitigation verification
 2224  inspection form that shall be used by all insurers when
 2225  submitted by policyholders for the purpose of factoring
 2226  discounts for wind insurance. In developing the form, the
 2227  commission shall seek input from insurance, construction, and
 2228  building code representatives. Further, the commission shall
 2229  provide guidance as to the length of time the inspection results
 2230  are valid. An insurer shall accept as valid a uniform mitigation
 2231  verification form certified by the Department of Financial
 2232  Services or signed by:
 2233         (a) A hurricane mitigation inspector certified employed by
 2234  the an approved My Safe Florida Home program wind certification
 2235  entity;
 2236         (b) A building code inspector certified under s. 468.607;
 2237         (c) A general or residential contractor licensed under s.
 2238  489.111;
 2239         (d) A professional engineer licensed under s. 471.015 who
 2240  has passed the appropriate equivalency test of the Building Code
 2241  Training Program as required by s. 553.841; or
 2242         (e) A professional architect licensed under s. 481.213; or
 2243         (f) Any other individual or entity recognized by the
 2244  insurer as possessing the necessary qualifications to properly
 2245  complete a uniform mitigation verification form.
 2246         (3) An individual or entity who knowingly provides or
 2247  utters a false or fraudulent mitigation verification form with
 2248  the intent to obtain or receive a discount on an insurance
 2249  premium to which the individual or entity is not entitled
 2250  commits a misdemeanor of the first degree, punishable as
 2251  provided in s. 775.082 or s. 775.083.
 2252         Section 14. Subsections (1) and (2) of section 627.712,
 2253  Florida Statutes, are amended to read:
 2254         627.712 Residential windstorm coverage required;
 2255  availability of exclusions for windstorm or contents.—
 2256         (1) An insurer issuing a residential property insurance
 2257  policy must provide windstorm coverage. Except as provided in
 2258  paragraph (2)(c), this section does not apply with respect to
 2259  risks that are eligible for wind-only coverage from Citizens
 2260  Property Insurance Corporation under s. 627.351(6), and with
 2261  respect to risks that are not eligible for coverage from
 2262  Citizens Property Insurance Corporation under s. 627.351(6)(a)3.
 2263  or s. 627.351(6)(a)5. A risk ineligible for Citizens coverage
 2264  under s. 627.351(6)(a)3. or s. 627.351(6)(a)5. is exempt from
 2265  the requirements of this section only if the risk is located
 2266  within the boundaries of the high-risk account of the
 2267  corporation.
 2268         (2) A property insurer must make available, at the option
 2269  of the policyholder, an exclusion of windstorm coverage.
 2270         (a) The coverage may be excluded only if:
 2271         1. When the policyholder is a natural person, the
 2272  policyholder personally writes and provides to the insurer the
 2273  following statement in his or her own handwriting and signs his
 2274  or her name, which must also be signed by every other named
 2275  insured on the policy, and dated: “I do not want the insurance
 2276  on my (home/mobile home/condominium unit) to pay for damage from
 2277  windstorms. I will pay those costs. My insurance will not.”
 2278         2. When the policyholder is other than a natural person,
 2279  the policyholder provides to the insurer on the policyholder’s
 2280  letterhead the following statement that must be signed by the
 2281  policyholder’s authorized representative and dated: “...(Name of
 2282  entity)... does not want the insurance on its ...(type of
 2283  structure)... to pay for damage from windstorms. ...(Name of
 2284  entity)... will be responsible for these costs. ...(Name of
 2285  entity’s)... insurance will not.”
 2286         (b) If the structure insured by the policy is subject to a
 2287  mortgage or lien, the policyholder must provide the insurer with
 2288  a written statement from the mortgageholder or lienholder
 2289  indicating that the mortgageholder or lienholder approves the
 2290  policyholder electing to exclude windstorm coverage or hurricane
 2291  coverage from his or her or its property insurance policy.
 2292         (c) If the residential structure is eligible for wind-only
 2293  coverage from Citizens Property Insurance Corporation, An
 2294  insurer nonrenewing a policy and issuing a replacement policy,
 2295  or issuing a new policy, that does not provide wind coverage
 2296  shall provide a notice to the mortgageholder or lienholder
 2297  indicating the policyholder has elected coverage that does not
 2298  cover wind.
 2299         Section 15. Section 631.65, Florida Statutes, is amended to
 2300  read:
 2301         631.65 Prohibited advertisement or solicitation.—No person
 2302  shall make, publish, disseminate, circulate, or place before the
 2303  public, or cause, directly or indirectly, to be made, published,
 2304  disseminated, circulated, or placed before the public, in a
 2305  newspaper, magazine, or other publication, or in the form of a
 2306  notice, circular, pamphlet, letter, or poster, or over any radio
 2307  station or television station, or in any other way, any
 2308  advertisement, announcement, or statement which uses the
 2309  existence of the insurance guaranty association for the purpose
 2310  of sales, solicitation, or inducement to purchase any form of
 2311  insurance covered under this part. However, this section does
 2312  not prohibit a duly licensed insurance agent from explaining the
 2313  existence or function of the insurance guaranty association to
 2314  policyholders, prospects, or applicants for coverage.
 2315         Section 16. Upon receipt of funds transferred to the
 2316  General Revenue fund pursuant to s. 627.351(6)(m)8., Florida
 2317  Statutes, the funds transferred are appropriated on a
 2318  nonrecurring basis from the General Revenue Fund to the
 2319  Insurance Regulatory Trust Fund in the Department of Financial
 2320  Services for purposes of the My Safe Florida Home Program
 2321  specified in s. 215.5586, Florida Statutes. The My Safe Florida
 2322  Home Program shall use the funds solely for the provision of
 2323  mitigation grants pursuant to s. 215.5586(2), Florida Statutes,
 2324  for single-family homes insured by the Citizens Property
 2325  Insurance Corporation on June 1, 2009. The department shall
 2326  establish a separate account within the trust fund for
 2327  accounting purposes.
 2328         Section 17. This act shall take effect June 1, 2009.

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