January 25, 2021
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       CS for CS for SB 2044                            First Engrossed
       
       
       
       
       
       
       
       
       20102044e1
       
    1                        A bill to be entitled                      
    2         An act relating to property insurance; amending s.
    3         215.555, F.S.; delaying the repeal of a provision
    4         exempting medical malpractice insurance premiums from
    5         emergency assessments to the Hurricane Catastrophe
    6         Fund; delaying the date on and after which medical
    7         malpractice insurance premiums become subject to
    8         emergency assessments; amending s. 624.408, F.S.;
    9         revising the minimum surplus as to policyholders which
   10         must be maintained by certain insurers; authorizing
   11         the Office of Insurance Regulation to reduce the
   12         surplus requirement under specified circumstances;
   13         amending s. 624.4085, F.S.; defining the term “surplus
   14         action level”; expanding the list of items that must
   15         be included in an insurer’s risk-based capital plan;
   16         specifying actions constituting a surplus action level
   17         event; requiring that an insurer submit to the office
   18         a risk-based capital plan upon the occurrence of such
   19         event; providing requirements for such plan;
   20         preserving the existing authority of the office;
   21         amending s. 624.4095, F.S.; excluding certain premiums
   22         for federal multiple-peril crop insurance from
   23         calculations for an insurer’s gross writing ratio;
   24         requiring insurers to disclose the gross written
   25         premiums for federal multiple-peril crop insurance in
   26         a financial statement; amending s. 626.221, F.S.;
   27         exempting certain individuals from the requirement to
   28         pass an examination before being issued a license as
   29         an agent, customer representative, or adjuster;
   30         amending s. 624.424, F.S.; revising the frequency that
   31         an insurer may use the same accountant or partner to
   32         prepare an annual audited financial report; creating
   33         s. 624.611, F.S.; authorizing an insurer to submit to
   34         the Office of Insurance Regulation a plan to use
   35         financial contracts other than reinsurance contracts
   36         to provide catastrophe loss funding; providing
   37         requirements for such a plan; authorizing an insurer
   38         to take certain action if the office approves such
   39         plan; amending s. 626.7452, F.S.; removing an
   40         exception relating to the examination of managing
   41         general agents; amending s. 626.854, F.S.; providing
   42         statements that may be considered deceptive or
   43         misleading if made in any public adjuster’s
   44         advertisement or solicitation; providing a definition
   45         for the term “written advertisement”; requiring that a
   46         disclaimer be included in any public adjuster’s
   47         written advertisement; providing requirements for such
   48         disclaimer; providing limitations on the amount of
   49         compensation that may be received for a reopened or
   50         supplemental claim; requiring certain persons who act
   51         on behalf of an insurer to provide notice to the
   52         insurer, claimant, public adjuster, or legal
   53         representative for an onsite inspection of the insured
   54         property; authorizing the insured or claimant to deny
   55         access to the property if notice is not provided;
   56         requiring the public adjuster to ensure prompt notice
   57         of certain property loss claims; providing that an
   58         insurer be allowed to interview the insured directly
   59         about the loss claim; prohibiting the insurer from
   60         obstructing or preventing the public adjuster from
   61         communicating with the insured; requiring that the
   62         insurer communicate with the public adjuster in an
   63         effort to reach agreement as to the scope of the
   64         covered loss under the insurance policy; prohibiting a
   65         public adjuster from restricting or preventing persons
   66         acting on behalf of the insured from having reasonable
   67         access to the insured or the insured’s property;
   68         prohibiting a public adjuster from restricting or
   69         preventing the insured’s adjuster from having
   70         reasonable access to or inspecting the insured’s
   71         property; authorizing the insured’s adjuster to be
   72         present for the inspection; prohibiting a licensed
   73         contractor or subcontractor from adjusting a claim on
   74         behalf of an insured if such contractor or
   75         subcontractor is not a licensed public adjuster;
   76         providing an exception; amending s. 626.8651, F.S.;
   77         requiring that a public adjuster apprentice complete a
   78         minimum number of hours of continuing education to
   79         qualify for licensure; amending s. 626.8796, F.S.;
   80         providing requirements for a public adjuster contract;
   81         creating s. 626.70132, F.S.; requiring that notice of
   82         a claim, supplemental claim, or reopened claim be
   83         given to the insurer within a specified period after a
   84         windstorm or hurricane occurs; providing a definition
   85         for the terms “supplemental claim” or “reopened
   86         claim”; providing applicability; amending s. 626.9744,
   87         F.S.; requiring insurers to use retail cost quotations
   88         or estimates based on current market prices in
   89         determining repair or replacement cost estimates;
   90         amending s. 627.0613, F.S.; requiring the office of
   91         the consumer advocate to objectively grade insurers
   92         annually based on the number of valid consumer
   93         complaints and other measurable and objective factors;
   94         defining the term “valid consumer complaint”; amending
   95         s. 627.062, F.S.; requiring that the office issue an
   96         approval rather than a notice of intent to approve
   97         following its approval of a file and use filing;
   98         prohibiting the Office of Insurance Regulation from,
   99         directly or indirectly, prohibiting an insurer from
  100         paying acquisition costs based on the full amount of
  101         the premium; prohibiting the Office of Insurance
  102         Regulation from, directly or indirectly, impeding the
  103         right of an insurer to acquire policyholders,
  104         advertise or appoint agents, or regulate agent
  105         commissions; authorizing an insurer to make a rate
  106         filing limited to changes in the cost of reinsurance,
  107         the cost of financing products used as a replacement
  108         for reinsurance, or changes in an inflation trend
  109         factor published annually by the Office of Insurance
  110         Regulation; providing that an insurer may use this
  111         provision only if the increase from such filing and
  112         any other rate filing does not exceed 10 percent for
  113         any policyholder in a policy year; deleting provisions
  114         relating to a rate filing for financing products
  115         relating to the Temporary Increase in Coverage Limits;
  116         revising the information that must be included in a
  117         rate filing relating to certain reinsurance or
  118         financing products; deleting a provision that
  119         prohibited an insurer from making certain rate filings
  120         within a certain period of time after a rate increase;
  121         deleting a provision prohibiting an insurer from
  122         filing for a rate increase within 6 months after it
  123         makes certain rate filings; specifying the information
  124         that an insurer must include in a rate filing based on
  125         the change in an inflation trend factor published by
  126         the Office of Insurance Regulation; requiring that the
  127         office annually publish one or more inflation trend
  128         factors; exempting the inflation trend factors from
  129         rulemaking; providing that an insurer is not required
  130         to adopt an inflation trend factor; requiring the
  131         Office of Insurance Regulation to propose a plan for
  132         developing a website, contingent upon an
  133         appropriation, which provides consumers with
  134         information necessary to make an informed decision
  135         when purchasing homeowners’ insurance; requiring that
  136         the Financial Services Commission review the proposed
  137         plan to implement the website; specifying matters that
  138         the Office of Insurance Regulation must consider in
  139         developing the website; deleting obsolete provisions
  140         relating to legislation enacted during the 2003
  141         Special Session D of the Legislature; amending s.
  142         627.0629, F.S.; providing legislative intent that
  143         insurers provide consumers with accurate pricing
  144         signals for alterations in order to minimize losses,
  145         but that mitigation discounts not result in a loss of
  146         income for the insurer; requiring rate filings for
  147         residential property insurance to include actuarially
  148         reasonable debits that provide proper pricing;
  149         deleting provisions that require the office to develop
  150         certain rate differentials for hurricane mitigation
  151         measures; providing for an increase in base rates if
  152         mitigation discounts exceed the aggregate reduction in
  153         expected losses; requiring the Office of Insurance
  154         Regulation to reevaluate discounts, debits, credits,
  155         and other rate differentials by a certain date;
  156         requiring the Office of Insurance Regulation, in
  157         consultation with the Department of Financial Services
  158         and the Department of Community Affairs, to develop a
  159         method for insurers to establish debits for certain
  160         hurricane mitigation measures by a certain date;
  161         requiring the Financial Services Commission to adopt
  162         rules relating to such debits by a certain date;
  163         deleting a provision that prohibits an insurer from
  164         including an expense or profit load in the cost of
  165         reinsurance to replace the Temporary Increase in
  166         Coverage Limits; amending s. 627.351, F.S.; renaming
  167         the “high-risk account” as the “coastal account”;
  168         revising the conditions under which the Citizens
  169         policyholder surcharge may be imposed; providing that
  170         members of the Citizens Property Insurance Corporation
  171         Board of Governors are not prohibited from practicing
  172         in a certain profession if not prohibited by law or
  173         ordinance; requiring applicants for coverage and
  174         policyholders to sign an acknowledgment that a policy
  175         may be subject to surcharges under certain
  176         circumstances; prohibiting board members from voting
  177         on certain measures; changing the date on which the
  178         boundaries of high-risk areas eligible for certain
  179         wind-only coverages will be reduced if certain
  180         circumstances exist; providing a directive to the
  181         Division of Statutory Revision; amending s. 627.4133,
  182         F.S.; authorizing an insurer to cancel policies after
  183         45 days’ notice if the Office of Insurance Regulation
  184         determines that the cancellation of policies is
  185         necessary to protect the interests of the public or
  186         policyholders; authorizing the Office of Insurance
  187         Regulation to place an insurer under administrative
  188         supervision or appoint a receiver upon the consent of
  189         the insurer under certain circumstances; creating s.
  190         627.41341, F.S.; providing definitions; requiring the
  191         delivery of a “Notice of Change in Policy Terms” under
  192         certain circumstances; specifying requirements for
  193         such notice; specifying actions constituting proof of
  194         notice; authorizing policy renewals to contain a
  195         change in policy terms; providing that receipt of
  196         payment by an insurer is deemed acceptance of new
  197         policy terms by an insured; providing that the
  198         original policy remains in effect until the occurrence
  199         of specified events if an insurer fails to provide
  200         notice; providing intent; amending s. 627.7011, F.S.;
  201         requiring that an insurer pay the actual cash value of
  202         an insured loss, less any applicable deductible, under
  203         certain circumstances; requiring that a policyholder
  204         enter into a contract for the performance of building
  205         and structural repairs; requiring that an insurer pay
  206         certain remaining amounts; prohibiting a mortgagor
  207         from retaining payments from an insurer for a loss;
  208         restricting insurers and contractors from requiring
  209         advance payments for certain repairs and expenses;
  210         authorizing an insured to make a claim for replacement
  211         costs within a certain period after the insurer pays
  212         actual cash value to make a claim for replacement
  213         costs; requiring an insurer to pay the replacement
  214         costs if a total loss occurs; amending s. 627.70131,
  215         F.S.; specifying application of certain time periods
  216         to initial or supplemental property insurance claim
  217         notices and payments; amending s. 627.7015, F.S.;
  218         requiring the Department of Financial Services to
  219         prepare a statement or information by rule which must
  220         be included in a notice by an insurer informing
  221         claimants of the right to participate in a mediation
  222         program; specifying documentation that an insurer and
  223         insured must provide to a mediator in a dispute over
  224         an estimate to repair or replace property; requiring
  225         the Department of Financial Services to adopt rules
  226         specifying the type of documentation that must be
  227         submitted during a mediation; defining the term “claim
  228         dispute” as it relates to disputes between an insurer
  229         and insured; amending s. 627.707, F.S.; revising
  230         standards for investigation of sinkhole claims by
  231         insurers; specifying requirements for contracts for
  232         repairs to prevent additional damage to buildings or
  233         structures; providing for applicability; amending s.
  234         627.7073, F.S.; revising requirements for sinkhole
  235         reports; providing for applicability; amending s.
  236         627.7074, F.S.; revising requirements and procedures
  237         for alternative dispute resolution of sinkhole
  238         insurance claims; defining the term “substantially
  239         related matter”; providing criteria and procedures for
  240         disqualification of neutral evaluators; providing
  241         requirements and procedures for neutral evaluators to
  242         enlist assistance from other professionals under
  243         certain circumstances; providing for applicability;
  244         amending s. 627.711, F.S.; revising the list of
  245         persons qualified to sign certain mitigation
  246         verification forms for certain purposes; authorizing
  247         insurers to accept forms from certain other persons;
  248         providing requirements for persons authorized to sign
  249         mitigation forms; prohibiting misconduct in performing
  250         hurricane mitigation inspection or completing uniform
  251         mitigation forms causing certain harm; specifying what
  252         constitutes misconduct; authorizing certain licensing
  253         boards to commence disciplinary proceedings and impose
  254         administrative fines and sanctions; providing for
  255         liability of mitigation inspectors; requiring certain
  256         entities to file reports of evidence of fraud;
  257         providing for immunity from liability for reporting
  258         fraud; providing for investigative reports from the
  259         Division of Insurance Fraud; providing penalties;
  260         authorizing insurers to require independent
  261         verification of uniform mitigation verification forms;
  262         creating s. 628.252, F.S.; requiring that every
  263         domestic property insurer notify the office of its
  264         intention to enter into certain agreements, contracts,
  265         and arrangements; prohibiting a domestic property
  266         insurer from entering into such agreements, contracts,
  267         or arrangements unless specified criteria are met;
  268         preserving the existing authority of the office;
  269         providing an appropriation to the Office of Insurance
  270         Regulation and authorizing an additional position;
  271         providing effective dates.
  272  
  273  Be It Enacted by the Legislature of the State of Florida:
  274  
  275         Section 1. Paragraph (b) of subsection (6) of section
  276  215.555, Florida Statutes, is amended to read:
  277         215.555 Florida Hurricane Catastrophe Fund.—
  278         (6) REVENUE BONDS.—
  279         (b) Emergency assessments.—
  280         1. If the board determines that the amount of revenue
  281  produced under subsection (5) is insufficient to fund the
  282  obligations, costs, and expenses of the fund and the
  283  corporation, including repayment of revenue bonds and that
  284  portion of the debt service coverage not met by reimbursement
  285  premiums, the board shall direct the Office of Insurance
  286  Regulation to levy, by order, an emergency assessment on direct
  287  premiums for all property and casualty lines of business in this
  288  state, including property and casualty business of surplus lines
  289  insurers regulated under part VIII of chapter 626, but not
  290  including any workers’ compensation premiums or medical
  291  malpractice premiums. As used in this subsection, the term
  292  “property and casualty business” includes all lines of business
  293  identified on Form 2, Exhibit of Premiums and Losses, in the
  294  annual statement required of authorized insurers by s. 624.424
  295  and any rule adopted under this section, except for those lines
  296  identified as accident and health insurance and except for
  297  policies written under the National Flood Insurance Program. The
  298  assessment shall be specified as a percentage of direct written
  299  premium and is subject to annual adjustments by the board in
  300  order to meet debt obligations. The same percentage shall apply
  301  to all policies in lines of business subject to the assessment
  302  issued or renewed during the 12-month period beginning on the
  303  effective date of the assessment.
  304         2. A premium is not subject to an annual assessment under
  305  this paragraph in excess of 6 percent of premium with respect to
  306  obligations arising out of losses attributable to any one
  307  contract year, and a premium is not subject to an aggregate
  308  annual assessment under this paragraph in excess of 10 percent
  309  of premium. An annual assessment under this paragraph shall
  310  continue as long as the revenue bonds issued with respect to
  311  which the assessment was imposed are outstanding, including any
  312  bonds the proceeds of which were used to refund the revenue
  313  bonds, unless adequate provision has been made for the payment
  314  of the bonds under the documents authorizing issuance of the
  315  bonds.
  316         3. Emergency assessments shall be collected from
  317  policyholders. Emergency assessments shall be remitted by
  318  insurers as a percentage of direct written premium for the
  319  preceding calendar quarter as specified in the order from the
  320  Office of Insurance Regulation. The office shall verify the
  321  accurate and timely collection and remittance of emergency
  322  assessments and shall report the information to the board in a
  323  form and at a time specified by the board. Each insurer
  324  collecting assessments shall provide the information with
  325  respect to premiums and collections as may be required by the
  326  office to enable the office to monitor and verify compliance
  327  with this paragraph.
  328         4. With respect to assessments of surplus lines premiums,
  329  each surplus lines agent shall collect the assessment at the
  330  same time as the agent collects the surplus lines tax required
  331  by s. 626.932, and the surplus lines agent shall remit the
  332  assessment to the Florida Surplus Lines Service Office created
  333  by s. 626.921 at the same time as the agent remits the surplus
  334  lines tax to the Florida Surplus Lines Service Office. The
  335  emergency assessment on each insured procuring coverage and
  336  filing under s. 626.938 shall be remitted by the insured to the
  337  Florida Surplus Lines Service Office at the time the insured
  338  pays the surplus lines tax to the Florida Surplus Lines Service
  339  Office. The Florida Surplus Lines Service Office shall remit the
  340  collected assessments to the fund or corporation as provided in
  341  the order levied by the Office of Insurance Regulation. The
  342  Florida Surplus Lines Service Office shall verify the proper
  343  application of such emergency assessments and shall assist the
  344  board in ensuring the accurate and timely collection and
  345  remittance of assessments as required by the board. The Florida
  346  Surplus Lines Service Office shall annually calculate the
  347  aggregate written premium on property and casualty business,
  348  other than workers’ compensation and medical malpractice,
  349  procured through surplus lines agents and insureds procuring
  350  coverage and filing under s. 626.938 and shall report the
  351  information to the board in a form and at a time specified by
  352  the board.
  353         5. Any assessment authority not used for a particular
  354  contract year may be used for a subsequent contract year. If,
  355  for a subsequent contract year, the board determines that the
  356  amount of revenue produced under subsection (5) is insufficient
  357  to fund the obligations, costs, and expenses of the fund and the
  358  corporation, including repayment of revenue bonds and that
  359  portion of the debt service coverage not met by reimbursement
  360  premiums, the board shall direct the Office of Insurance
  361  Regulation to levy an emergency assessment up to an amount not
  362  exceeding the amount of unused assessment authority from a
  363  previous contract year or years, plus an additional 4 percent
  364  provided that the assessments in the aggregate do not exceed the
  365  limits specified in subparagraph 2.
  366         6. The assessments otherwise payable to the corporation
  367  under this paragraph shall be paid to the fund unless and until
  368  the Office of Insurance Regulation and the Florida Surplus Lines
  369  Service Office have received from the corporation and the fund a
  370  notice, which shall be conclusive and upon which they may rely
  371  without further inquiry, that the corporation has issued bonds
  372  and the fund has no agreements in effect with local governments
  373  under paragraph (c). On or after the date of the notice and
  374  until the date the corporation has no bonds outstanding, the
  375  fund shall have no right, title, or interest in or to the
  376  assessments, except as provided in the fund’s agreement with the
  377  corporation.
  378         7. Emergency assessments are not premium and are not
  379  subject to the premium tax, to the surplus lines tax, to any
  380  fees, or to any commissions. An insurer is liable for all
  381  assessments that it collects and must treat the failure of an
  382  insured to pay an assessment as a failure to pay the premium. An
  383  insurer is not liable for uncollectible assessments.
  384         8. When an insurer is required to return an unearned
  385  premium, it shall also return any collected assessment
  386  attributable to the unearned premium. A credit adjustment to the
  387  collected assessment may be made by the insurer with regard to
  388  future remittances that are payable to the fund or corporation,
  389  but the insurer is not entitled to a refund.
  390         9. When a surplus lines insured or an insured who has
  391  procured coverage and filed under s. 626.938 is entitled to the
  392  return of an unearned premium, the Florida Surplus Lines Service
  393  Office shall provide a credit or refund to the agent or such
  394  insured for the collected assessment attributable to the
  395  unearned premium prior to remitting the emergency assessment
  396  collected to the fund or corporation.
  397         10. The exemption of medical malpractice insurance premiums
  398  from emergency assessments under this paragraph is repealed May
  399  31, 2013 2010, and medical malpractice insurance premiums shall
  400  be subject to emergency assessments attributable to loss events
  401  occurring in the contract years commencing on June 1, 2013 2010.
  402         Section 2. Section 624.408, Florida Statutes, is amended to
  403  read:
  404         624.408 Surplus as to policyholders required; new and
  405  existing insurers.—
  406         (1)(a) To maintain a certificate of authority to transact
  407  any one kind or combinations of kinds of insurance, as defined
  408  in part V of this chapter, an insurer in this state shall at all
  409  times maintain surplus as to policyholders at least not less
  410  than the greater of:
  411         (a)1. Except as provided in paragraphs (e), (f), and (g)
  412  subparagraph 5. and paragraph (b), $1.5 million;
  413         (b)2. For life insurers, 4 percent of the insurer’s total
  414  liabilities;
  415         (c)3. For life and health insurers, 4 percent of the
  416  insurer’s total liabilities plus 6 percent of the insurer’s
  417  liabilities relative to health insurance; or
  418         (d)4. For all insurers other than mortgage guaranty
  419  insurers, life insurers, and life and health insurers, 10
  420  percent of the insurer’s total liabilities.
  421         (e)5. For property and casualty insurers, $4 million,
  422  except property and casualty insurers authorized to underwrite
  423  any line of residential property insurance.
  424         (f)(b) For a residential any property and casualty insurer
  425  not holding a certificate of authority before July 1, 2010 on
  426  December 1, 1993, $15 million. the
  427         (g) For a residential property insurer having a certificate
  428  of authority before July 1, 2010, $5 million until July 1, 2015,
  429  and $15 million after July 1, 2015. The office may reduce this
  430  surplus requirement if the insurer is not writing new business,
  431  has premiums in force of less than $1 million per year in
  432  residential property insurance, or is a mutual insurance
  433  company. following amounts apply instead of the $4 million
  434  required by subparagraph (a)5.:
  435         1.On December 31, 2001, and until December 30, 2002, $3
  436  million.
  437         2.On December 31, 2002, and until December 30, 2003, $3.25
  438  million.
  439         3.On December 31, 2003, and until December 30, 2004, $3.6
  440  million.
  441         4.On December 31, 2004, and thereafter, $4 million.
  442         (2) For purposes of this section, liabilities do shall not
  443  include liabilities required under s. 625.041(4). For purposes
  444  of computing minimum surplus as to policyholders pursuant to s.
  445  625.305(1), liabilities shall include liabilities required under
  446  s. 625.041(4).
  447         (3) This section does not require any No insurer shall be
  448  required under this section to have surplus as to policyholders
  449  greater than $100 million.
  450         (4) A mortgage guaranty insurer shall maintain a minimum
  451  surplus as required by s. 635.042.
  452         Section 3. Present paragraph (q) of subsection (1) of
  453  section 624.4085, Florida Statutes, is redesignated as paragraph
  454  (r), and a new paragraph (q) is added to that subsection,
  455  paragraph (b) of subsection (3) of that section is amended, and
  456  subsections (7) through (13) of that section are redesignated as
  457  subsections (9) through (15), respectively, and new subsections
  458  (7) and (8) are added to that section, to read:
  459         624.4085 Risk-based capital requirements for insurers.—
  460         (1) As used in this section, the term:
  461         (q) “Surplus action level” means a loss of surplus on any
  462  quarterly or annual financial report which exceeds 15 percent,
  463  or which cumulatively for the calendar year exceeds 15 percent
  464  as of the most recent filed quarterly or annual report.
  465         (3)
  466         (b) If a company action level event occurs, the insurer
  467  shall prepare and submit to the office a risk-based capital
  468  plan, which must:
  469         1. Identify the conditions that contribute to the company
  470  action level event;
  471         2. Contain proposals of corrective actions that the insurer
  472  intends to take and that are reasonably expected to result in
  473  the elimination of the company action level event;
  474         3. Provide projections of the insurer’s financial results
  475  in the current year and at least the 4 succeeding years, both in
  476  the absence of proposed corrective actions and giving effect to
  477  the proposed corrective actions, including projections of
  478  statutory operating income, net income, capital, and surplus.
  479  The projections for both new and renewal business may include
  480  separate projections for each major line of business and, if
  481  separate projections are provided, must separately identify each
  482  significant income, expense, and benefit component;
  483         4. Identify the key assumptions affecting the insurer’s
  484  projections and the sensitivity of the projections to the
  485  assumptions; and
  486         5. Identify the quality of, and problems associated with,
  487  the insurer’s business, including, but not limited to, its
  488  assets, anticipated business growth and associated surplus
  489  strain, extraordinary exposure to risk, mix of business, and any
  490  use of reinsurance; and.
  491         6. Include, at the request of the office, for a residential
  492  property insurer that conducts any business with affiliates, a
  493  columnar worksheet, which shall include all affiliates who have
  494  contracted with, done business with, or otherwise received
  495  remuneration from the insurer and shall list the following
  496  financial information from the immediately preceding calendar
  497  year, listed separately for each affiliate:
  498         a. Total assets;
  499         b. Total liabilities;
  500         c. Surplus or shareholders equity;
  501         d. Net income after taxes or distributions made solely for
  502  satisfying tax liabilities;
  503         e. Total amounts received or receivable from parents,
  504  subsidiaries, and affiliates;
  505         f. Total amounts paid or payable to any parent,
  506  subsidiaries, and affiliates;
  507         g. Dividends paid or payable to shareholders of common
  508  stock;
  509         h. Debt service, including principle and interest, paid on
  510  debt incurred to capitalize or recapitalize insurance companies
  511  or fund other insurance-related activities; and
  512         i. Payments made for other contractual obligations to
  513  support insurance-related activities.
  514         (7)(a)A surplus action level event includes:
  515         1. The filing of a quarterly or annual statutory financial
  516  statement by an insurer, which indicates that the insurer’s
  517  total surplus has declined by more than 15 percent from the
  518  previous year’s annual statement, or cumulatively for the
  519  current year through the most recent quarterly financial
  520  statement;
  521         2. The notification by the office to the insurer of an
  522  adjusted quarterly or annual financial statement that indicates
  523  an event in subparagraph 1., unless the insurer challenges the
  524  adjusted quarterly or annual financial statement under
  525  subsection (9); or
  526         3. The notification by the office to the insurer that the
  527  office has, after a hearing, rejected the insurer’s challenge if
  528  an insurer challenges, under subsection (9), an adjusted
  529  quarterly or annual financial statement that indicates an event
  530  in subparagraph 1.
  531         (b) If a surplus action level event occurs, the insurer
  532  must prepare and submit to the office a risk-based capital plan,
  533  which must:
  534         1. Identify the conditions that contribute to the surplus
  535  action level event;
  536         2. Contain proposals of corrective actions that the insurer
  537  intends to take and that are reasonably expected to ultimately
  538  result in the elimination of additional surplus losses;
  539         3. Provide projections of the insurer’s financial results
  540  in the current year and at least the 2 succeeding years, both in
  541  the absence of proposed corrective actions and giving effect to
  542  the proposed corrective actions, including projections of
  543  statutory operating income, net income, capital, and surplus.
  544  The projections for both new and renewal business may include
  545  separate projections for each major line of business and, if
  546  separate projections are provided, must separately identify each
  547  significant income, expense, and benefit component;
  548         4. Identify the key assumptions affecting the insurer’s
  549  projections and the sensitivity of the projections to the
  550  assumptions;
  551         5. Identify the quality of, and problems associated with,
  552  the insurer’s business, including, but not limited to, its
  553  assets, anticipated business growth and associated surplus
  554  strain, extraordinary exposure to risk, mix of business, and any
  555  use of reinsurance;
  556         6. Include, at the request of the office, for a residential
  557  property insurer that conducts any business with affiliates, a
  558  columnar worksheet, which shall include all affiliates who have
  559  received remuneration from the insurer and shall list the
  560  following financial information from the immediately preceding
  561  calendar year listed separately for each affiliate:
  562         a. Total assets;
  563         b. Total liabilities;
  564         c. Surplus or shareholders equity;
  565         d. Net income after taxes or distributions made solely for
  566  satisfying tax liabilities;
  567         e. Total amounts received or receivable from parents,
  568  subsidiaries, and affiliates;
  569         f. Total amounts paid or payable to any parent,
  570  subsidiaries, and affiliates;
  571         g. Dividends paid or payable to shareholders of common
  572  stock;
  573         h. Debt service, including principle and interest, paid on
  574  debt incurred to capitalize or recapitalize insurance companies
  575  or fund other insurance-related activities; and
  576         i. Payments made for other contractual obligations to
  577  support insurance-related activities.
  578         7. Contain, at the request of the office, a recertification
  579  of reserves for the insurer prepared by an actuary.
  580         (c) The risk-based capital plan must be submitted:
  581         1. Within 45 days after the surplus action level event; or
  582         2. If the insurer challenges an adjusted quarterly or
  583  annual financial statement under subsection (9), within 45 days
  584  after notification to the insurer that the office has, after a
  585  hearing, rejected the insurer’s challenge.
  586         (8) This section does not limit any existing authority of
  587  the office.
  588         Section 4. Subsection (7) is added to section 624.4095,
  589  Florida Statutes, to read:
  590         624.4095 Premiums written; restrictions.—
  591         (7)For purposes of this section, s. 624.407, and s.
  592  624.408, with regard to capital and surplus requirements, gross
  593  written premiums for federal multiple-peril crop insurance which
  594  are ceded to the Federal Crop Insurance Corporation or
  595  authorized reinsurers may not be included in the calculation of
  596  an insurer’s gross writing ratio. The liabilities for ceded
  597  reinsurance premiums payable for federal multiple-peril crop
  598  insurance ceded to the Federal Crop Insurance Corporation and
  599  authorized reinsurers shall be netted against the asset for
  600  amounts recoverable from reinsurers. Each insurer that writes
  601  other insurance products together with federal multiple-peril
  602  crop insurance shall disclose in the notes to its annual and
  603  quarterly financial statements, or in a supplement to those
  604  statements, the gross written premiums for federal multiple
  605  peril crop insurance.
  606         Section 5. Paragraph (n) is added to subsection (2) of
  607  section 626.221, Florida Statutes, to read:
  608         626.221 Examination requirement; exemptions.—
  609         (2) However, no such examination shall be necessary in any
  610  of the following cases:
  611         (n)An applicant for license as a customer representative
  612  with respect to property insurance who has earned the
  613  designation of Certified Insurance Representative (CIR) from the
  614  National Association of Christian Catastrophe Insurance
  615  Adjusters.
  616         Section 6. Subsection (8) of section 624.424, Florida
  617  Statutes, is amended to read:
  618         624.424 Annual statement and other information.—
  619         (8)(a) All authorized insurers must have conducted an
  620  annual audit by an independent certified public accountant and
  621  must file an audited financial report with the office on or
  622  before June 1 for the preceding year ending December 31. The
  623  office may require an insurer to file an audited financial
  624  report earlier than June 1 upon 90 days’ advance notice to the
  625  insurer. The office may immediately suspend an insurer’s
  626  certificate of authority by order if an insurer’s failure to
  627  file required reports, financial statements, or information
  628  required by this subsection or rule adopted pursuant thereto
  629  creates a significant uncertainty as to the insurer’s continuing
  630  eligibility for a certificate of authority.
  631         (b) Any authorized insurer otherwise subject to this
  632  section having direct premiums written in this state of less
  633  than $1 million in any calendar year and fewer than 1,000
  634  policyholders or certificateholders of directly written policies
  635  nationwide at the end of such calendar year is exempt from this
  636  section for such year unless the office makes a specific finding
  637  that compliance is necessary in order for the office to carry
  638  out its statutory responsibilities. However, any insurer having
  639  assumed premiums pursuant to contracts or treaties or
  640  reinsurance of $1 million or more is not exempt. Any insurer
  641  subject to an exemption must submit by March 1 following the
  642  year to which the exemption applies an affidavit sworn to by a
  643  responsible officer of the insurer specifying the amount of
  644  direct premiums written in this state and number of
  645  policyholders or certificateholders.
  646         (c) The board of directors of an insurer shall hire the
  647  certified public accountant that prepares the audit required by
  648  this subsection and the board shall establish an audit committee
  649  of three or more directors of the insurer or an affiliated
  650  company. The audit committee shall be responsible for discussing
  651  audit findings and interacting with the certified public
  652  accountant with regard to her or his findings. The audit
  653  committee shall be comprised solely of members who are free from
  654  any relationship that, in the opinion of its board of directors,
  655  would interfere with the exercise of independent judgment as a
  656  committee member. The audit committee shall report to the board
  657  any findings of adverse financial conditions or significant
  658  deficiencies in internal controls that have been noted by the
  659  accountant. The insurer may request the office to waive this
  660  requirement of the audit committee membership based upon unusual
  661  hardship to the insurer.
  662         (d) An insurer may not use the same accountant or partner
  663  of an accounting firm responsible for preparing the report
  664  required by this subsection for more than 5 7 consecutive years.
  665  Following this period, the insurer may not use such accountant
  666  or partner for a period of 5 2 years, but may use another
  667  accountant or partner of the same firm. An insurer may request
  668  the office to waive this prohibition based upon an unusual
  669  hardship to the insurer and a determination that the accountant
  670  is exercising independent judgment that is not unduly influenced
  671  by the insurer considering such factors as the number of
  672  partners, expertise of the partners or the number of insurance
  673  clients of the accounting firm; the premium volume of the
  674  insurer; and the number of jurisdictions in which the insurer
  675  transacts business.
  676         (e) The commission shall adopt rules to implement this
  677  subsection, which rules must be in substantial conformity with
  678  the 1998 Model Rule Requiring Annual Audited Financial Reports
  679  adopted by the National Association of Insurance Commissioners
  680  or subsequent amendments, except where inconsistent with the
  681  requirements of this subsection. Any exception to, waiver of, or
  682  interpretation of accounting requirements of the commission must
  683  be in writing and signed by an authorized representative of the
  684  office. No insurer may raise as a defense in any action, any
  685  exception to, waiver of, or interpretation of accounting
  686  requirements, unless previously issued in writing by an
  687  authorized representative of the office.
  688         Section 7. Section 624.611, Florida Statutes, is created to
  689  read:
  690         624.611 Catastrophe contracts.—An insurer may submit to the
  691  Office of Insurance Regulation, in advance of the hurricane
  692  season, a plan to use financial contracts other than reinsurance
  693  contracts to provide catastrophe loss funding. In such a plan,
  694  the insurer must demonstrate that the coverage, together with
  695  its reinsurance program, will provide adequate protection for
  696  policyholders in the event of a natural catastrophe. If the
  697  contract does not provide for coverage that is highly correlated
  698  with the actual losses of the insurer, the insurer must
  699  demonstrate its ability to cover the risk created by such lack
  700  of correlation. If the office approves the plan, the insurer may
  701  purchase the contracts and take credit for reinsurance for
  702  amounts expected or due from other parties to the contracts in
  703  accordance with any terms, conditions, or limitations
  704  established by the office.
  705         Section 8. Section 626.7452, Florida Statutes, is amended
  706  to read:
  707         626.7452 Managing general agents; examination authority.
  708  The acts of the managing general agent are considered to be the
  709  acts of the insurer on whose behalf it is acting. A managing
  710  general agent may be examined as if it were the insurer except
  711  in the case where the managing general agent solely represents a
  712  single domestic insurer.
  713         Section 9. Effective June 1, 2010, subsection (11) of
  714  section 626.854, Florida Statutes, is amended to read:
  715         626.854 “Public adjuster” defined; prohibitions.—The
  716  Legislature finds that it is necessary for the protection of the
  717  public to regulate public insurance adjusters and to prevent the
  718  unauthorized practice of law.
  719         (11)(a) If a public adjuster enters into a contract with an
  720  insured or claimant to reopen a claim or to file a supplemental
  721  claim that seeks additional payments for a claim that has been
  722  previously paid in part or in full or settled by the insurer,
  723  the public adjuster may not charge, agree to, or accept any
  724  compensation, payment, commission, fee, or other thing of value
  725  based on a previous settlement or previous claim payments by the
  726  insurer for the same cause of loss. The charge, compensation,
  727  payment, commission, fee, or other thing of value may be based
  728  only on the claim payments or settlement obtained through the
  729  work of the public adjuster after entering into the contract
  730  with the insured or claimant. Compensation for a reopened or
  731  supplemental claim may not exceed 20 percent of the reopened or
  732  supplemental claim payment. The contracts described in this
  733  paragraph are not subject to the limitations in paragraph (b).
  734         (b) A public adjuster may not charge, agree to, or accept
  735  any compensation, payment, commission, fee, or other thing of
  736  value in excess of:
  737         1. Ten percent of the amount of insurance claim payments by
  738  the insurer for claims based on events that are the subject of a
  739  declaration of a state of emergency by the Governor. This
  740  provision applies to claims made during the period of 1 year
  741  after the declaration of emergency. After the period of 1 year,
  742  the limitations in subparagraph 2. apply.
  743         2. Twenty percent of the amount of all other insurance
  744  claim payments by the insurer for claims that are not based on
  745  events that are the subject of a declaration of a state of
  746  emergency by the Governor.
  747  
  748  The provisions of subsections (5)-(13) apply only to residential
  749  property insurance policies and condominium association policies
  750  as defined in s. 718.111(11).
  751         Section 10. Effective January 1, 2011, section 626.854,
  752  Florida Statutes, as amended by this act, is amended to read:
  753         626.854 “Public adjuster” defined; prohibitions.—The
  754  Legislature finds that it is necessary for the protection of the
  755  public to regulate public insurance adjusters and to prevent the
  756  unauthorized practice of law.
  757         (1) A “public adjuster” is any person, except a duly
  758  licensed attorney at law as hereinafter in s. 626.860 provided,
  759  who, for money, commission, or any other thing of value,
  760  prepares, completes, or files an insurance claim form for an
  761  insured or third-party claimant or who, for money, commission,
  762  or any other thing of value, acts or aids in any manner on
  763  behalf of an insured or third-party claimant in negotiating for
  764  or effecting the settlement of a claim or claims for loss or
  765  damage covered by an insurance contract or who advertises for
  766  employment as an adjuster of such claims, and also includes any
  767  person who, for money, commission, or any other thing of value,
  768  solicits, investigates, or adjusts such claims on behalf of any
  769  such public adjuster.
  770         (2) This definition does not apply to:
  771         (a) A licensed health care provider or employee thereof who
  772  prepares or files a health insurance claim form on behalf of a
  773  patient.
  774         (b) A person who files a health claim on behalf of another
  775  and does so without compensation.
  776         (3) A public adjuster may not give legal advice. A public
  777  adjuster may not act on behalf of or aid any person in
  778  negotiating or settling a claim relating to bodily injury,
  779  death, or noneconomic damages.
  780         (4) For purposes of this section, the term “insured”
  781  includes only the policyholder and any beneficiaries named or
  782  similarly identified in the policy.
  783         (5) A public adjuster may not directly or indirectly
  784  through any other person or entity solicit an insured or
  785  claimant by any means except on Monday through Saturday of each
  786  week and only between the hours of 8 a.m. and 8 p.m. on those
  787  days.
  788         (6) A public adjuster may not directly or indirectly
  789  through any other person or entity initiate contact or engage in
  790  face-to-face or telephonic solicitation or enter into a contract
  791  with any insured or claimant under an insurance policy until at
  792  least 48 hours after the occurrence of an event that may be the
  793  subject of a claim under the insurance policy unless contact is
  794  initiated by the insured or claimant.
  795         (7) An insured or claimant may cancel a public adjuster’s
  796  contract to adjust a claim without penalty or obligation within
  797  3 business days after the date on which the contract is executed
  798  or within 3 business days after the date on which the insured or
  799  claimant has notified the insurer of the claim, by phone or in
  800  writing, whichever is later. The public adjuster’s contract
  801  shall disclose to the insured or claimant his or her right to
  802  cancel the contract and advise the insured or claimant that
  803  notice of cancellation must be submitted in writing and sent by
  804  certified mail, return receipt requested, or other form of
  805  mailing which provides proof thereof, to the public adjuster at
  806  the address specified in the contract; provided, during any
  807  state of emergency as declared by the Governor and for a period
  808  of 1 year after the date of loss, the insured or claimant shall
  809  have 5 business days after the date on which the contract is
  810  executed to cancel a public adjuster’s contract.
  811         (8) It is an unfair and deceptive insurance trade practice
  812  pursuant to s. 626.9541 for a public adjuster or any other
  813  person to circulate or disseminate any advertisement,
  814  announcement, or statement containing any assertion,
  815  representation, or statement with respect to the business of
  816  insurance which is untrue, deceptive, or misleading.
  817         (a) For purposes of this section, the following statements,
  818  if made in any public adjuster’s advertisement or solicitation,
  819  shall be considered deceptive or misleading:
  820         1. A statement or representation that invites an insured
  821  policyholder to submit a claim when the policyholder does not
  822  have covered damage to insured property.
  823         2. Any statement or representation that invites an insured
  824  policyholder to submit a claim by offering monetary or other
  825  valuable inducement.
  826         3. A statement or representation that invites an insured
  827  policyholder to submit a claim by stating that there is “no
  828  risk” to the policyholder by submitting such claim.
  829         4. Any statement or representation, or use of a logo or
  830  shield, that would imply or could be mistakenly construed that
  831  the solicitation was issued or distributed by a governmental
  832  agency or is sanctioned or endorsed by a governmental agency.
  833         (b) For purposes of this paragraph, the term “written
  834  advertisement” includes only newspapers, magazines, flyers, and
  835  bulk mailers. The following disclaimer, which is not required to
  836  be printed on standard size business cards, shall be added in
  837  bold print and capital letters in typeface no smaller than the
  838  typeface of the body of the text to all written advertisements
  839  by any public adjuster:
  840         “THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD
  841         A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU
  842         ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU
  843         MAY DISREGARD THIS ADVERTISEMENT.”
  844         (9) A public adjuster, a public adjuster apprentice, or any
  845  person or entity acting on behalf of a public adjuster or public
  846  adjuster apprentice may not give or offer to give a monetary
  847  loan or advance to a client or prospective client.
  848         (10) A public adjuster, public adjuster apprentice, or any
  849  individual or entity acting on behalf of a public adjuster or
  850  public adjuster apprentice may not give or offer to give,
  851  directly or indirectly, any article of merchandise having a
  852  value in excess of $25 to any individual for the purpose of
  853  advertising or as an inducement to entering into a contract with
  854  a public adjuster.
  855         (11)(a) If a public adjuster enters into a contract with an
  856  insured or claimant to reopen a claim or to file a supplemental
  857  claim that seeks additional payments for a claim that has been
  858  previously paid in part or in full or settled by the insurer,
  859  the public adjuster may not charge, agree to, or accept any
  860  compensation, payment, commission, fee, or other thing of value
  861  based on a previous settlement or previous claim payments by the
  862  insurer for the same cause of loss. The charge, compensation,
  863  payment, commission, fee, or other thing of value may be based
  864  only on the claim payments or settlement obtained through the
  865  work of the public adjuster after entering into the contract
  866  with the insured or claimant. Compensation for a reopened or
  867  supplemental claim may not exceed 20 percent of the reopened or
  868  supplemental claim payment. The contracts described in this
  869  paragraph are not subject to the limitations in paragraph (b).
  870         (b) A public adjuster may not charge, agree to, or accept
  871  any compensation, payment, commission, fee, or other thing of
  872  value in excess of:
  873         1. Ten percent of the amount of insurance claim payments by
  874  the insurer for claims based on events that are the subject of a
  875  declaration of a state of emergency by the Governor. This
  876  provision applies to claims made during the period of 1 year
  877  after the declaration of emergency. After the period of 1 year,
  878  the limitations in subparagraph 2. apply.
  879         2. Twenty percent of the amount of insurance claim payments
  880  by the insurer for claims that are not based on events that are
  881  the subject of a declaration of a state of emergency by the
  882  Governor.
  883         (12) Each public adjuster shall provide to the claimant or
  884  insured a written estimate of the loss to assist in the
  885  submission of a proof of loss or any other claim for payment of
  886  insurance proceeds. The public adjuster shall retain such
  887  written estimate for at least 5 years and shall make such
  888  estimate available to the claimant or insured and the department
  889  upon request.
  890         (13) A public adjuster, public adjuster apprentice, or any
  891  person acting on behalf of a public adjuster or apprentice may
  892  not accept referrals of business from any person with whom the
  893  public adjuster conducts business if there is any form or manner
  894  of agreement to compensate the person, whether directly or
  895  indirectly, for referring business to the public adjuster. A
  896  public adjuster may not compensate any person, except for
  897  another public adjuster, whether directly or indirectly, for the
  898  principal purpose of referring business to the public adjuster.
  899         (14) A company employee adjuster, independent adjuster,
  900  attorney, investigator, or other persons acting on behalf of an
  901  insurer that needs access to an insured or claimant or to the
  902  insured property that is the subject of a claim shall provide at
  903  least 48 hours’ notice to the insured or claimant, public
  904  adjuster, or legal representative before scheduling a meeting
  905  with the claimant or an onsite inspection of the insured
  906  property. The insured or claimant may deny access to the
  907  property if this notice has not been provided. The insured or
  908  claimant may waive this 48-hour notice.
  909         (15)(a) A public adjuster shall ensure prompt notice of any
  910  property loss claim submitted to an insurer by or through a
  911  public adjuster or on which a public adjuster represents the
  912  insured at the time the claim or notice of loss is submitted to
  913  the insurer. The public adjuster shall ensure that notice is
  914  given to the insurer, the public adjuster’s contract is provided
  915  to the insurer, the property is made available for inspection of
  916  the loss or damage by the insurer, and the insurer is given an
  917  opportunity to interview the insured directly about the loss and
  918  claim. The insurer shall be allowed to obtain necessary
  919  information to investigate and respond to the claim. The insurer
  920  may not exclude the public adjuster from its in-person meetings
  921  with the insured. The insurer shall meet or communicate with the
  922  public adjuster in an effort to reach agreement as to the scope
  923  of the covered loss under the insurance policy. This section
  924  does not impair the terms and conditions of the insurance policy
  925  in effect at the time the claim is filed.
  926         (b) A public adjuster may not restrict or prevent an
  927  insurer, company employee adjuster, independent adjuster,
  928  attorney, investigator, or other person acting on behalf of the
  929  insurer from having reasonable access at reasonable times to any
  930  insured or claimant or to the insured property that is the
  931  subject of a claim.
  932         (c) A public adjuster may not act or fail to reasonably act
  933  in any manner that would obstruct or prevent an insurer or
  934  insurer’s adjuster from timely gaining access to conduct an
  935  inspection of any part of the insured property for which there
  936  is a claim for loss or damage to the property. The public
  937  adjuster that represents the insured may be present for the
  938  insurer’s inspection of the property loss or damage but, if the
  939  lack of availability of the public adjuster would otherwise
  940  delay the access to or the inspection of the insured property by
  941  the insurer, the public adjuster or the insured must allow the
  942  insurer to gain access to the insured property to facilitate the
  943  insurer’s prompt inspection of the loss or damage without the
  944  participation or presence of the public adjuster or insured.
  945         (16) A licensed contractor under part I of chapter 489, or
  946  a subcontractor, may not adjust a claim on behalf of an insured
  947  without being licensed and compliant as a public adjuster under
  948  this chapter. However, if asked by the residential property
  949  owner who has suffered loss or damage covered by a property
  950  insurance policy, or the insurer of such property, a licensed
  951  contractor may discuss or explain a bid for construction or
  952  repair of covered property if the contractor is doing so for
  953  usual and customary fees applicable to the work to be performed
  954  as stated in the contract between the contractor and the
  955  insured.
  956  
  957  The provisions of subsections (5)-(16) (5)-(13) apply only to
  958  residential property insurance policies and condominium unit
  959  owner association policies as defined in s. 718.111(11).
  960         Section 11. Effective January 1, 2011, present subsections
  961  (7) through (11) of section 626.8651, Florida Statutes, are
  962  redesignated as subsections (8) through (12), respectively, and
  963  a new subsection (7) is added to that section, to read:
  964         626.8651 Public adjuster apprentice license;
  965  qualifications.—
  966         (7) A public adjuster apprentice shall complete a minimum
  967  of 8 hours of continuing education specific to the practice of a
  968  public adjuster, 2 hours of which must relate to ethics, in
  969  order to qualify for licensure as a public adjuster. The
  970  continuing education must be in subjects designed to inform the
  971  licensee regarding the current insurance laws of this state for
  972  the purpose of enabling him or her to engage in business as an
  973  insurance adjuster fairly and without injury to the public and
  974  to adjust all claims in accordance with the insurance contract
  975  and the laws of this state.
  976         Section 12. Effective January 1, 2011, section 626.8796,
  977  Florida Statutes, is amended to read:
  978         626.8796 Public adjuster contracts; fraud statement.—
  979         (1) All contracts for public adjuster services must be in
  980  writing and must prominently display the following statement on
  981  the contract: “Pursuant to s. 817.234, Florida Statutes, any
  982  person who, with the intent to injure, defraud, or deceive any
  983  insurer or insured, prepares, presents, or causes to be
  984  presented a proof of loss or estimate of cost or repair of
  985  damaged property in support of a claim under an insurance policy
  986  knowing that the proof of loss or estimate of claim or repairs
  987  contains any false, incomplete, or misleading information
  988  concerning any fact or thing material to the claim commits a
  989  felony of the third degree, punishable as provided in s.
  990  775.082, s. 775.083, or s. 775.084, Florida Statutes.”
  991         (2) A public adjuster contract must contain the following
  992  information: full name, permanent business address, and license
  993  number of the public adjuster, the full name of the public
  994  adjusting firm, and the insured’s full name and street address,
  995  together with a brief description of the loss. The contract must
  996  state the percentage of compensation for the public adjuster’s
  997  services, the type of claim, including an emergency claim,
  998  nonemergency claim, or supplemental claim, the signatures of the
  999  public adjuster and all named insureds, and the signature date.
 1000  If all named insureds signatures are not available, the public
 1001  adjuster shall submit an affidavit signed by the available named
 1002  insureds attesting that they have authority to enter into the
 1003  contract and to settle all claim issues on behalf of all named
 1004  insureds. An unaltered copy of the executed contract must be
 1005  remitted to the insurer within 30 days after execution.
 1006         Section 13. Effective June 1, 2010, section 626.70132,
 1007  Florida Statutes, is created to read:
 1008         626.70132 Duty to file windstorm or hurricane claim.—A
 1009  claim, supplemental claim, or reopened claim under an insurance
 1010  policy that provides personal lines residential coverage, as
 1011  defined in s. 627.4025, for loss or damage caused by the peril
 1012  of windstorm or hurricane is barred unless notice of the claim,
 1013  supplemental claim, or reopened claim was given to the insurer
 1014  in accordance with the terms of the policy within 3 years after
 1015  the hurricane first made landfall or the windstorm caused the
 1016  covered damage. For purposes of this section, the term
 1017  “supplemental claim” or “reopened claim” means any additional
 1018  claim for recovery from the insurer for losses from the same
 1019  hurricane or windstorm for which the insurer has previously
 1020  adjusted pursuant to the initial claim. This section may not be
 1021  interpreted to affect any applicable limitation on civil actions
 1022  provided in s. 95.11 for claims, supplemental claims, or
 1023  reopened claims timely filed under this section.
 1024         Section 14. Section 626.9744, Florida Statutes, is amended
 1025  to read:
 1026         626.9744 Claim settlement practices relating to property
 1027  insurance.—Unless otherwise provided by the policy, if when a
 1028  homeowner’s insurance policy provides for the adjustment and
 1029  settlement of first-party losses based on repair or replacement
 1030  cost, the following requirements apply:
 1031         (1) When a loss requires repair or replacement of an item
 1032  or part, any physical damage incurred in making such repair or
 1033  replacement which is covered and not otherwise excluded by the
 1034  policy shall be included in the loss to the extent of any
 1035  applicable limits. The insured may not be required to pay for
 1036  betterment required by ordinance or code except for the
 1037  applicable deductible, unless specifically excluded or limited
 1038  by the policy.
 1039         (2) When a loss requires replacement of items and the
 1040  replaced items do not match in quality, color, or size, the
 1041  insurer shall make reasonable repairs or replacement of items in
 1042  adjoining areas. In determining the extent of the repairs or
 1043  replacement of items in adjoining areas, the insurer may
 1044  consider the cost of repairing or replacing the undamaged
 1045  portions of the property, the degree of uniformity that can be
 1046  achieved without such cost, the remaining useful life of the
 1047  undamaged portion, and other relevant factors.
 1048         (3) In determining repair or replacement cost estimates,
 1049  the insurer shall use only the following:
 1050         (a)The retail cost using quotations obtained by the
 1051  insurer or insured from licensed contractors or retail
 1052  establishments in the local market area; or
 1053         (b) Computer software or other databases that produce
 1054  estimates based on market prices for products, materials, and
 1055  labor in the local geographic region, if the pertinent portions
 1056  of the valuation documents generated by a database are provided
 1057  by the insurer to the first-party insured upon request.
 1058         (4)(3) This section does shall not be construed to make the
 1059  insurer a warrantor of the repairs made pursuant to this
 1060  section.
 1061         (5)(4)Nothing in This section does not shall be construed
 1062  to authorize or preclude enforcement of policy provisions
 1063  relating to settlement disputes.
 1064         Section 15. Section 627.0613, Florida Statutes, is amended
 1065  to read:
 1066         627.0613 Consumer advocate.—The Chief Financial Officer
 1067  must appoint a consumer advocate who must represent the general
 1068  public of the state before the department and the office. The
 1069  consumer advocate must report directly to the Chief Financial
 1070  Officer, but is not otherwise under the authority of the
 1071  department or of any employee of the department. The consumer
 1072  advocate has such powers as are necessary to carry out the
 1073  duties of the office of consumer advocate, including, but not
 1074  limited to, the powers to:
 1075         (1) Recommend to the department or office, by petition, the
 1076  commencement of any proceeding or action; appear in any
 1077  proceeding or action before the department or office; or appear
 1078  in any proceeding before the Division of Administrative Hearings
 1079  relating to subject matter under the jurisdiction of the
 1080  department or office.
 1081         (2) Have access to and use of all files, records, and data
 1082  of the department or office.
 1083         (3) Examine rate and form filings submitted to the office,
 1084  hire consultants as necessary to aid in the review process, and
 1085  recommend to the department or office any position deemed by the
 1086  consumer advocate to be in the public interest.
 1087         (4) By June 1, 2012, and each June 1 thereafter, prepare an
 1088  annual report card for each authorized personal residential
 1089  property insurer, on a form and using a letter-grade scale
 1090  developed by the commission by rule, which objectively grades
 1091  each insurer based on the following factors:
 1092         (a) The number and nature of valid consumer complaints, as
 1093  a market share ratio, received by the department against the
 1094  insurer.
 1095         (b) The disposition of all valid consumer complaints
 1096  received by the department.
 1097         (c) The average length of time for payment of claims by the
 1098  insurer.
 1099         (d) Any other measurable and objective factors the
 1100  commission identifies as capable of assisting policyholders in
 1101  making informed choices about homeowner’s insurance.
 1102  
 1103  For purposes of this subsection, the term “valid consumer
 1104  complaint” means a written communication, or oral communication
 1105  that is subsequently converted to a written form, from a
 1106  consumer that expresses dissatisfaction involving a personal
 1107  residential insurance policy with a specific personal
 1108  residential property insurer. However, a valid complaint does
 1109  not arise if in the disposition thereof by the department the
 1110  insurer or agent position is upheld, the policy provision is
 1111  upheld, the coverage is explained, additional information is
 1112  provided, the complaint is withdrawn, the complaint is referred
 1113  outside the department, or if an inquiry has missing or
 1114  insufficient information, is not within the jurisdiction of the
 1115  department or requests mediation of a claim that is not eligible
 1116  for mediation.
 1117         (5) Prepare an annual budget for presentation to the
 1118  Legislature by the department, which budget must be adequate to
 1119  carry out the duties of the office of consumer advocate.
 1120         Section 16. Section 627.062, Florida Statutes, is amended
 1121  to read:
 1122         627.062 Rate standards.—
 1123         (1) The rates for all classes of insurance to which the
 1124  provisions of this part are applicable shall not be excessive,
 1125  inadequate, or unfairly discriminatory.
 1126         (2) As to all such classes of insurance:
 1127         (a) Insurers or rating organizations shall establish and
 1128  use rates, rating schedules, or rating manuals to allow the
 1129  insurer a reasonable rate of return on such classes of insurance
 1130  written in this state. A copy of rates, rating schedules, rating
 1131  manuals, premium credits or discount schedules, and surcharge
 1132  schedules, and changes thereto, shall be filed with the office
 1133  under one of the following procedures except as provided in
 1134  subparagraph 3.:
 1135         1. If the filing is made at least 90 days before the
 1136  proposed effective date and the filing is not implemented during
 1137  the office’s review of the filing and any proceeding and
 1138  judicial review, then such filing shall be considered a “file
 1139  and use” filing. In such case, the office shall finalize its
 1140  review by issuance of an approval a notice of intent to approve
 1141  or a notice of intent to disapprove within 90 days after receipt
 1142  of the filing. The approval notice of intent to approve and the
 1143  notice of intent to disapprove constitute agency action for
 1144  purposes of the Administrative Procedure Act. Requests for
 1145  supporting information, requests for mathematical or mechanical
 1146  corrections, or notification to the insurer by the office of its
 1147  preliminary findings shall not toll the 90-day period during any
 1148  such proceedings and subsequent judicial review. The rate shall
 1149  be deemed approved if the office does not issue an approval a
 1150  notice of intent to approve or a notice of intent to disapprove
 1151  within 90 days after receipt of the filing.
 1152         2. If the filing is not made in accordance with the
 1153  provisions of subparagraph 1., such filing shall be made as soon
 1154  as practicable, but no later than 30 days after the effective
 1155  date, and shall be considered a “use and file” filing. An
 1156  insurer making a “use and file” filing is potentially subject to
 1157  an order by the office to return to policyholders portions of
 1158  rates found to be excessive, as provided in paragraph (h).
 1159         3. For all property insurance filings made or submitted
 1160  after January 25, 2007, but before December 31, 2012 2010, an
 1161  insurer seeking a rate that is greater than the rate most
 1162  recently approved by the office shall make a “file and use”
 1163  filing. For purposes of this subparagraph, motor vehicle
 1164  collision and comprehensive coverages are not considered to be
 1165  property coverages.
 1166         (b) Upon receiving a rate filing, the office shall review
 1167  the rate filing to determine if a rate is excessive, inadequate,
 1168  or unfairly discriminatory. In making that determination, the
 1169  office shall, in accordance with generally accepted and
 1170  reasonable actuarial techniques, consider the following factors:
 1171         1. Past and prospective loss experience within and without
 1172  this state.
 1173         2. Past and prospective expenses.
 1174         3. The degree of competition among insurers for the risk
 1175  insured.
 1176         4. Investment income reasonably expected by the insurer,
 1177  consistent with the insurer’s investment practices, from
 1178  investable premiums anticipated in the filing, plus any other
 1179  expected income from currently invested assets representing the
 1180  amount expected on unearned premium reserves and loss reserves.
 1181  The commission may adopt rules using reasonable techniques of
 1182  actuarial science and economics to specify the manner in which
 1183  insurers shall calculate investment income attributable to such
 1184  classes of insurance written in this state and the manner in
 1185  which such investment income shall be used to calculate
 1186  insurance rates. Such manner shall contemplate allowances for an
 1187  underwriting profit factor and full consideration of investment
 1188  income which produce a reasonable rate of return; however,
 1189  investment income from invested surplus may not be considered.
 1190         5. The reasonableness of the judgment reflected in the
 1191  filing.
 1192         6. Dividends, savings, or unabsorbed premium deposits
 1193  allowed or returned to Florida policyholders, members, or
 1194  subscribers.
 1195         7. The adequacy of loss reserves.
 1196         8. The cost of reinsurance. The office shall not disapprove
 1197  a rate as excessive solely due to the insurer having obtained
 1198  catastrophic reinsurance to cover the insurer’s estimated 250
 1199  year probable maximum loss or any lower level of loss.
 1200         9. Trend factors, including trends in actual losses per
 1201  insured unit for the insurer making the filing.
 1202         10. Conflagration and catastrophe hazards, if applicable.
 1203         11. Projected hurricane losses, if applicable, which must
 1204  be estimated using a model or method found to be acceptable or
 1205  reliable by the Florida Commission on Hurricane Loss Projection
 1206  Methodology, and as further provided in s. 627.0628.
 1207         12. A reasonable margin for underwriting profit and
 1208  contingencies.
 1209         13. The cost of medical services, if applicable.
 1210         14. Other relevant factors which impact upon the frequency
 1211  or severity of claims or upon expenses.
 1212         (c) In the case of fire insurance rates, consideration
 1213  shall be given to the availability of water supplies and the
 1214  experience of the fire insurance business during a period of not
 1215  less than the most recent 5-year period for which such
 1216  experience is available.
 1217         (d) If conflagration or catastrophe hazards are given
 1218  consideration by an insurer in its rates or rating plan,
 1219  including surcharges and discounts, the insurer shall establish
 1220  a reserve for that portion of the premium allocated to such
 1221  hazard and shall maintain the premium in a catastrophe reserve.
 1222  Any removal of such premiums from the reserve for purposes other
 1223  than paying claims associated with a catastrophe or purchasing
 1224  reinsurance for catastrophes shall be subject to approval of the
 1225  office. Any ceding commission received by an insurer purchasing
 1226  reinsurance for catastrophes shall be placed in the catastrophe
 1227  reserve.
 1228         (e) After consideration of the rate factors provided in
 1229  paragraphs (b), (c), and (d), a rate may be found by the office
 1230  to be excessive, inadequate, or unfairly discriminatory based
 1231  upon the following standards:
 1232         1. Rates shall be deemed excessive if they are likely to
 1233  produce a profit from Florida business that is unreasonably high
 1234  in relation to the risk involved in the class of business or if
 1235  expenses are unreasonably high in relation to services rendered.
 1236         2. Rates shall be deemed excessive if, among other things,
 1237  the rate structure established by a stock insurance company
 1238  provides for replenishment of surpluses from premiums, when the
 1239  replenishment is attributable to investment losses.
 1240         3. Rates shall be deemed inadequate if they are clearly
 1241  insufficient, together with the investment income attributable
 1242  to them, to sustain projected losses and expenses in the class
 1243  of business to which they apply.
 1244         4. A rating plan, including discounts, credits, or
 1245  surcharges, shall be deemed unfairly discriminatory if it fails
 1246  to clearly and equitably reflect consideration of the
 1247  policyholder’s participation in a risk management program
 1248  adopted pursuant to s. 627.0625.
 1249         5. A rate shall be deemed inadequate as to the premium
 1250  charged to a risk or group of risks if discounts or credits are
 1251  allowed which exceed a reasonable reflection of expense savings
 1252  and reasonably expected loss experience from the risk or group
 1253  of risks.
 1254         6. A rate shall be deemed unfairly discriminatory as to a
 1255  risk or group of risks if the application of premium discounts,
 1256  credits, or surcharges among such risks does not bear a
 1257  reasonable relationship to the expected loss and expense
 1258  experience among the various risks.
 1259         (f) In reviewing a rate filing, the office may require the
 1260  insurer to provide at the insurer’s expense all information
 1261  necessary to evaluate the condition of the company and the
 1262  reasonableness of the filing according to the criteria
 1263  enumerated in this section.
 1264         (g) The office may at any time review a rate, rating
 1265  schedule, rating manual, or rate change; the pertinent records
 1266  of the insurer; and market conditions. If the office finds on a
 1267  preliminary basis that a rate may be excessive, inadequate, or
 1268  unfairly discriminatory, the office shall initiate proceedings
 1269  to disapprove the rate and shall so notify the insurer. However,
 1270  the office may not disapprove as excessive any rate for which it
 1271  has given final approval or which has been deemed approved for a
 1272  period of 1 year after the effective date of the filing unless
 1273  the office finds that a material misrepresentation or material
 1274  error was made by the insurer or was contained in the filing.
 1275  Upon being so notified, the insurer or rating organization
 1276  shall, within 60 days, file with the office all information
 1277  which, in the belief of the insurer or organization, proves the
 1278  reasonableness, adequacy, and fairness of the rate or rate
 1279  change. The office shall issue a notice of intent to approve or
 1280  a notice of intent to disapprove pursuant to the procedures of
 1281  paragraph (a) within 90 days after receipt of the insurer’s
 1282  initial response. In such instances and in any administrative
 1283  proceeding relating to the legality of the rate, the insurer or
 1284  rating organization shall carry the burden of proof by a
 1285  preponderance of the evidence to show that the rate is not
 1286  excessive, inadequate, or unfairly discriminatory. After the
 1287  office notifies an insurer that a rate may be excessive,
 1288  inadequate, or unfairly discriminatory, unless the office
 1289  withdraws the notification, the insurer shall not alter the rate
 1290  except to conform with the office’s notice until the earlier of
 1291  120 days after the date the notification was provided or 180
 1292  days after the date of the implementation of the rate. The
 1293  office may, subject to chapter 120, disapprove without the 60
 1294  day notification any rate increase filed by an insurer within
 1295  the prohibited time period or during the time that the legality
 1296  of the increased rate is being contested.
 1297         (h) If In the event the office finds that a rate or rate
 1298  change is excessive, inadequate, or unfairly discriminatory, the
 1299  office shall issue an order of disapproval specifying that a new
 1300  rate or rate schedule which responds to the findings of the
 1301  office be filed by the insurer. The office shall further order,
 1302  for any “use and file” filing made in accordance with
 1303  subparagraph (a)2., that premiums charged each policyholder
 1304  constituting the portion of the rate above that which was
 1305  actuarially justified be returned to such policyholder in the
 1306  form of a credit or refund. If the office finds that an
 1307  insurer’s rate or rate change is inadequate, the new rate or
 1308  rate schedule filed with the office in response to such a
 1309  finding shall be applicable only to new or renewal business of
 1310  the insurer written on or after the effective date of the
 1311  responsive filing.
 1312         (i)1. Except as otherwise specifically provided in this
 1313  chapter, the office shall not, directly or indirectly, prohibit
 1314  any insurer, including any residual market plan or joint
 1315  underwriting association, from paying acquisition costs based on
 1316  the full amount of premium, as defined in s. 627.403, applicable
 1317  to any policy, or directly or indirectly prohibit any such
 1318  insurer from including the full amount of acquisition costs in a
 1319  rate filing.
 1320         2. The office shall not, directly or indirectly, impede,
 1321  abridge, or otherwise compromise an insurer’s right to acquire
 1322  policyholders, advertise, or appoint agents, including the
 1323  calculation, manner, or amount of such agent commissions, if
 1324  any.
 1325         (j) With respect to residential property insurance rate
 1326  filings, the rate filing must account for mitigation measures
 1327  undertaken by policyholders to reduce hurricane losses.
 1328         (k)1.a. An insurer may make a separate filing limited
 1329  solely to an adjustment of its rates for reinsurance, the cost
 1330  of financing products used as a replacement for reinsurance, or
 1331  financing costs incurred in the purchase of reinsurance, and an
 1332  inflation trend factor published by the office pursuant to
 1333  subparagraph 4. If an insurer chooses to make a separate filing
 1334  under this paragraph, it must implement the rate in such a
 1335  manner that all rate increases implemented as a result of the
 1336  separate filing, together with rate increases associated with
 1337  any other rate filing, do or financing products to replace or
 1338  finance the payment of the amount covered by the Temporary
 1339  Increase in Coverage Limits (TICL) portion of the Florida
 1340  Hurricane Catastrophe Fund including replacement reinsurance for
 1341  the TICL reductions made pursuant to s. 215.555(17)(e); the
 1342  actual cost paid due to the application of the TICL premium
 1343  factor pursuant to s. 215.555(17)(f); and the actual cost paid
 1344  due to the application of the cash build-up factor pursuant to
 1345  s. 215.555(5)(b) if the insurer:
 1346         a.Elects to purchase financing products such as a
 1347  liquidity instrument or line of credit, in which case the cost
 1348  included in the filing for the liquidity instrument or line of
 1349  credit may not result in a premium increase exceeding 3 percent
 1350  for any individual policyholder. All costs contained in the
 1351  filing may not result in an overall premium increase of more
 1352  than 10 percent for any individual policyholder, excluding
 1353  coverage changes and surcharges, within the same policy year.
 1354         b. An insurer that makes a filing relating to reinsurance
 1355  or financing products must include the following Includes in the
 1356  filing: a copy of all of its reinsurance, liquidity instrument,
 1357  or line of credit contracts; proof of the billing or payment for
 1358  the contracts; and the calculation upon which the proposed rate
 1359  change is based demonstrating demonstrates that the costs meet
 1360  the criteria of this section and are not loaded for expenses or
 1361  profit for the insurer making the filing.
 1362         c. Any filing made pursuant this paragraph may include only
 1363  the Includes no other changes to its rates which are expressly
 1364  authorized by this paragraph in the filing.
 1365         d.Has not implemented a rate increase within the 6 months
 1366  immediately preceding the filing.
 1367         e.Does not file for a rate increase under any other
 1368  paragraph within 6 months after making a filing under this
 1369  paragraph.
 1370         d.f.An insurer that purchases reinsurance or financing
 1371  products from an affiliated company may make a filing pursuant
 1372  to in compliance with this paragraph does so only if the costs
 1373  for such reinsurance or financing products are charged at or
 1374  below charges made for comparable coverage by nonaffiliated
 1375  reinsurers or financial entities making such coverage or
 1376  financing products available in this state.
 1377         e. An insurer that makes a filing as the result of a change
 1378  in an inflation trend factor published by the office need
 1379  support that filing only with rates and rating examples and an
 1380  explanation demonstrating the insurer’s eligibility to adopt the
 1381  inflation trend factor.
 1382         2. An insurer may only make only one filing in any 12-month
 1383  period under this paragraph.
 1384         3. An insurer that elects to implement a rate change under
 1385  this paragraph must file its rate filing with the office at
 1386  least 45 days before the effective date of the rate change.
 1387  After an insurer submits a complete filing that meets all of the
 1388  requirements of this paragraph, the office has 45 days after the
 1389  date of the filing to review the rate filing and determine if
 1390  the rate is excessive, inadequate, or unfairly discriminatory.
 1391         4.Beginning January 1, 2011, the office shall publish an
 1392  annual informational memorandum to establish one or more
 1393  inflation trend factors that may be stated separately for
 1394  personal and residential property and for building coverage,
 1395  contents coverage, additional living expense coverage, and
 1396  liability coverage, if applicable. These factors shall represent
 1397  an estimate of cost increases or decreases based upon publicly
 1398  available relevant data and economic indices that are identified
 1399  in the memorandum. Such factors are exempt from the rulemaking
 1400  requirements of chapter 120, and insurers are not required to
 1401  adopt the factors. The office may publish factors for any line
 1402  of insurance, but is required to publish a factor only for
 1403  residential property insurance.
 1404  
 1405  The provisions of this subsection do shall not apply to workers’
 1406  compensation and employer’s liability insurance and to motor
 1407  vehicle insurance.
 1408         (3)(a) For individual risks that are not rated in
 1409  accordance with the insurer’s rates, rating schedules, rating
 1410  manuals, and underwriting rules filed with the office and which
 1411  have been submitted to the insurer for individual rating, the
 1412  insurer must maintain documentation on each risk subject to
 1413  individual risk rating. The documentation must identify the
 1414  named insured and specify the characteristics and classification
 1415  of the risk supporting the reason for the risk being
 1416  individually risk rated, including any modifications to existing
 1417  approved forms to be used on the risk. The insurer must maintain
 1418  these records for a period of at least 5 years after the
 1419  effective date of the policy.
 1420         (b) Individual risk rates and modifications to existing
 1421  approved forms are not subject to this part or part II, except
 1422  for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404,
 1423  627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132,
 1424  627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426,
 1425  627.4265, 627.427, and 627.428, but are subject to all other
 1426  applicable provisions of this code and rules adopted thereunder.
 1427         (c) This subsection does not apply to private passenger
 1428  motor vehicle insurance.
 1429         (4)(a)Contingent on specific appropriations made to
 1430  implement this subsection, in order to enhance the ability of
 1431  consumers to compare premiums and to increase the accuracy and
 1432  usefulness of rate and product comparison information for
 1433  homeowners insurance, the office shall develop or contract with
 1434  a private entity to develop a comprehensive program for
 1435  providing the consumer with all available information necessary
 1436  to make an informed purchase of the insurance product that best
 1437  serves the needs of the individual.
 1438         (b)In developing the comprehensive program, the office
 1439  shall rely as much as is practical on information that is
 1440  currently available and shall consider:
 1441         1.The most efficient means for developing, hosting, and
 1442  operating a separate website that consolidates all consumer
 1443  information for price comparisons, filed complaints, financial
 1444  strength, underwriting, and receivership information and other
 1445  data useful to consumers;
 1446         2.Whether all admitted insurers should be required to
 1447  submit additional information to populate the composite website
 1448  and how often such submissions must be made;
 1449         3.Whether all admitted insurers should be required to
 1450  provide links from the website into each individual insurer’s
 1451  website in order to enable consumers to access product rate
 1452  information and apply for quotations;
 1453         4. Developing a plan to publicize the existence,
 1454  availability, and value of the website; and
 1455         5.Any other provision that would make relevant homeowners
 1456  insurance information more readily available so that consumers
 1457  can make informed product comparisons and purchasing decisions.
 1458         (c)Before establishing the program or website, the office
 1459  shall conduct a cost-benefit analysis to determine the most
 1460  effective approach for establishing and operating the program
 1461  and website. Based on the results of the analysis, the office
 1462  shall submit a proposed implementation plan for review and
 1463  approval by the Financial Services Commission. The
 1464  implementation plan shall include an estimated timeline for
 1465  establishing the program and website; a description of the data
 1466  and functionality to be provided by the site, a strategy for
 1467  publicizing the website to consumers; a recommended approach for
 1468  developing, hosting, and operating the website; and an estimate
 1469  of all major nonrecurring and recurring costs required to
 1470  establish and operate the website. Upon approval of the plan,
 1471  the office may initiate the establishment of the program.
 1472         (5)(4) The establishment of any rate, rating
 1473  classification, rating plan or schedule, or variation thereof in
 1474  violation of part IX of chapter 626 is also in violation of this
 1475  section. In order to enhance the ability of consumers to compare
 1476  premiums and to increase the accuracy and usefulness of rate
 1477  comparison information provided by the office to the public, the
 1478  office shall develop a proposed standard rating territory plan
 1479  to be used by all authorized property and casualty insurers for
 1480  residential property insurance. In adopting the proposed plan,
 1481  the office may consider geographical characteristics relevant to
 1482  risk, county lines, major roadways, existing rating territories
 1483  used by a significant segment of the market, and other relevant
 1484  factors. Such plan shall be submitted to the President of the
 1485  Senate and the Speaker of the House of Representatives by
 1486  January 15, 2006. The plan may not be implemented unless
 1487  authorized by further act of the Legislature.
 1488         (6)(5) With respect to a rate filing involving coverage of
 1489  the type for which the insurer is required to pay a
 1490  reimbursement premium to the Florida Hurricane Catastrophe Fund,
 1491  the insurer may fully recoup in its property insurance premiums
 1492  any reimbursement premiums paid to the Florida Hurricane
 1493  Catastrophe Fund, together with reasonable costs of other
 1494  reinsurance, but except as otherwise provided in this section,
 1495  may not recoup reinsurance costs that duplicate coverage
 1496  provided by the Florida Hurricane Catastrophe Fund. An insurer
 1497  may not recoup more than 1 year of reimbursement premium at a
 1498  time. Any under-recoupment from the prior year may be added to
 1499  the following year’s reimbursement premium, and any over
 1500  recoupment shall be subtracted from the following year’s
 1501  reimbursement premium.
 1502         (7)(6)(a) If an insurer requests an administrative hearing
 1503  pursuant to s. 120.57 related to a rate filing under this
 1504  section, the director of the Division of Administrative Hearings
 1505  shall expedite the hearing and assign an administrative law
 1506  judge who shall commence the hearing within 30 days after the
 1507  receipt of the formal request and shall enter a recommended
 1508  order within 30 days after the hearing or within 30 days after
 1509  receipt of the hearing transcript by the administrative law
 1510  judge, whichever is later. Each party shall be allowed 10 days
 1511  in which to submit written exceptions to the recommended order.
 1512  The office shall enter a final order within 30 days after the
 1513  entry of the recommended order. The provisions of this paragraph
 1514  may be waived upon stipulation of all parties.
 1515         (b) Upon entry of a final order, the insurer may request a
 1516  expedited appellate review pursuant to the Florida Rules of
 1517  Appellate Procedure. It is the intent of the Legislature that
 1518  the First District Court of Appeal grant an insurer’s request
 1519  for an expedited appellate review.
 1520         (8)(7)(a) The provisions of this subsection apply only with
 1521  respect to rates for medical malpractice insurance and shall
 1522  control to the extent of any conflict with other provisions of
 1523  this section.
 1524         (b) Any portion of a judgment entered or settlement paid as
 1525  a result of a statutory or common-law bad faith action and any
 1526  portion of a judgment entered which awards punitive damages
 1527  against an insurer may not be included in the insurer’s rate
 1528  base, and shall not be used to justify a rate or rate change.
 1529  Any common-law bad faith action identified as such, any portion
 1530  of a settlement entered as a result of a statutory or common-law
 1531  action, or any portion of a settlement wherein an insurer agrees
 1532  to pay specific punitive damages may not be used to justify a
 1533  rate or rate change. The portion of the taxable costs and
 1534  attorney’s fees which is identified as being related to the bad
 1535  faith and punitive damages in these judgments and settlements
 1536  may not be included in the insurer’s rate base and may not be
 1537  used utilized to justify a rate or rate change.
 1538         (c) Upon reviewing a rate filing and determining whether
 1539  the rate is excessive, inadequate, or unfairly discriminatory,
 1540  the office shall consider, in accordance with generally accepted
 1541  and reasonable actuarial techniques, past and present
 1542  prospective loss experience, either using loss experience solely
 1543  for this state or giving greater credibility to this state’s
 1544  loss data after applying actuarially sound methods of assigning
 1545  credibility to such data.
 1546         (d) Rates shall be deemed excessive if, among other
 1547  standards established by this section, the rate structure
 1548  provides for replenishment of reserves or surpluses from
 1549  premiums when the replenishment is attributable to investment
 1550  losses.
 1551         (e) The insurer must apply a discount or surcharge based on
 1552  the health care provider’s loss experience or shall establish an
 1553  alternative method giving due consideration to the provider’s
 1554  loss experience. The insurer must include in the filing a copy
 1555  of the surcharge or discount schedule or a description of the
 1556  alternative method used, and must provide a copy of such
 1557  schedule or description, as approved by the office, to
 1558  policyholders at the time of renewal and to prospective
 1559  policyholders at the time of application for coverage.
 1560         (f) Each medical malpractice insurer must make a rate
 1561  filing under this section, sworn to by at least two executive
 1562  officers of the insurer, at least once each calendar year.
 1563         (8)(a)1.No later than 60 days after the effective date of
 1564  medical malpractice legislation enacted during the 2003 Special
 1565  Session D of the Florida Legislature, the office shall calculate
 1566  a presumed factor that reflects the impact that the changes
 1567  contained in such legislation will have on rates for medical
 1568  malpractice insurance and shall issue a notice informing all
 1569  insurers writing medical malpractice coverage of such presumed
 1570  factor. In determining the presumed factor, the office shall use
 1571  generally accepted actuarial techniques and standards provided
 1572  in this section in determining the expected impact on losses,
 1573  expenses, and investment income of the insurer. To the extent
 1574  that the operation of a provision of medical malpractice
 1575  legislation enacted during the 2003 Special Session D of the
 1576  Florida Legislature is stayed pending a constitutional
 1577  challenge, the impact of that provision shall not be included in
 1578  the calculation of a presumed factor under this subparagraph.
 1579         2.No later than 60 days after the office issues its notice
 1580  of the presumed rate change factor under subparagraph 1., each
 1581  insurer writing medical malpractice coverage in this state shall
 1582  submit to the office a rate filing for medical malpractice
 1583  insurance, which will take effect no later than January 1, 2004,
 1584  and apply retroactively to policies issued or renewed on or
 1585  after the effective date of medical malpractice legislation
 1586  enacted during the 2003 Special Session D of the Florida
 1587  Legislature. Except as authorized under paragraph (b), the
 1588  filing shall reflect an overall rate reduction at least as great
 1589  as the presumed factor determined under subparagraph 1. With
 1590  respect to policies issued on or after the effective date of
 1591  such legislation and prior to the effective date of the rate
 1592  filing required by this subsection, the office shall order the
 1593  insurer to make a refund of the amount that was charged in
 1594  excess of the rate that is approved.
 1595         (b)Any insurer or rating organization that contends that
 1596  the rate provided for in paragraph (a) is excessive, inadequate,
 1597  or unfairly discriminatory shall separately state in its filing
 1598  the rate it contends is appropriate and shall state with
 1599  specificity the factors or data that it contends should be
 1600  considered in order to produce such appropriate rate. The
 1601  insurer or rating organization shall be permitted to use all of
 1602  the generally accepted actuarial techniques provided in this
 1603  section in making any filing pursuant to this subsection. The
 1604  office shall review each such exception and approve or
 1605  disapprove it prior to use. It shall be the insurer’s burden to
 1606  actuarially justify any deviations from the rates required to be
 1607  filed under paragraph (a). The insurer making a filing under
 1608  this paragraph shall include in the filing the expected impact
 1609  of medical malpractice legislation enacted during the 2003
 1610  Special Session D of the Florida Legislature on losses,
 1611  expenses, and rates.
 1612         (c)If any provision of medical malpractice legislation
 1613  enacted during the 2003 Special Session D of the Florida
 1614  Legislature is held invalid by a court of competent
 1615  jurisdiction, the office shall permit an adjustment of all
 1616  medical malpractice rates filed under this section to reflect
 1617  the impact of such holding on such rates so as to ensure that
 1618  the rates are not excessive, inadequate, or unfairly
 1619  discriminatory.
 1620         (d)Rates approved on or before July 1, 2003, for medical
 1621  malpractice insurance shall remain in effect until the effective
 1622  date of a new rate filing approved under this subsection.
 1623         (e)The calculation and notice by the office of the
 1624  presumed factor pursuant to paragraph (a) is not an order or
 1625  rule that is subject to chapter 120. If the office enters into a
 1626  contract with an independent consultant to assist the office in
 1627  calculating the presumed factor, such contract shall not be
 1628  subject to the competitive solicitation requirements of s.
 1629  287.057.
 1630         (9)(a) The chief executive officer or chief financial
 1631  officer of a property insurer and the chief actuary of a
 1632  property insurer must certify under oath and subject to the
 1633  penalty of perjury, on a form approved by the commission, the
 1634  following information, which must accompany a rate filing:
 1635         1. The signing officer and actuary have reviewed the rate
 1636  filing;
 1637         2. Based on the signing officer’s and actuary’s knowledge,
 1638  the rate filing does not contain any untrue statement of a
 1639  material fact or omit to state a material fact necessary in
 1640  order to make the statements made, in light of the circumstances
 1641  under which such statements were made, not misleading;
 1642         3. Based on the signing officer’s and actuary’s knowledge,
 1643  the information and other factors described in paragraph (2)(b),
 1644  including, but not limited to, investment income, fairly present
 1645  in all material respects the basis of the rate filing for the
 1646  periods presented in the filing; and
 1647         4. Based on the signing officer’s and actuary’s knowledge,
 1648  the rate filing reflects all premium savings that are reasonably
 1649  expected to result from legislative enactments and are in
 1650  accordance with generally accepted and reasonable actuarial
 1651  techniques.
 1652         (b) A signing officer or actuary knowingly making a false
 1653  certification under this subsection commits a violation of s.
 1654  626.9541(1)(e) and is subject to the penalties under s.
 1655  626.9521.
 1656         (c) Failure to provide such certification by the officer
 1657  and actuary shall result in the rate filing being disapproved
 1658  without prejudice to be refiled.
 1659         (d) A certification made pursuant to paragraph (a) is not
 1660  rendered false if, after making the subject rate filing, the
 1661  insurer provides the office with additional or supplementary
 1662  information pursuant to a formal or informal request from the
 1663  office or for any other reason.
 1664         (e)(d) The commission may adopt rules and forms pursuant to
 1665  ss. 120.536(1) and 120.54 to administer this subsection.
 1666         (10) The burden is on the office to establish that rates
 1667  are excessive for personal lines residential coverage with a
 1668  dwelling replacement cost of $1 million or more or for a single
 1669  condominium unit with a combined dwelling and contents
 1670  replacement cost of $1 million or more. Upon request of the
 1671  office, the insurer shall provide to the office such loss and
 1672  expense information as the office reasonably needs to meet this
 1673  burden.
 1674         (11) Any interest paid pursuant to s. 627.70131(5) may not
 1675  be included in the insurer’s rate base and may not be used to
 1676  justify a rate or rate change.
 1677         Section 17. Section 627.0629, Florida Statutes, is amended
 1678  to read:
 1679         627.0629 Residential property insurance; rate filings.—
 1680         (1)(a) It is the intent of the Legislature that insurers
 1681  must provide the most accurate pricing signals available savings
 1682  to encourage consumers to who install or implement windstorm
 1683  damage mitigation techniques, alterations, or solutions to their
 1684  properties to prevent windstorm losses. It is also the intent of
 1685  the Legislature that implementation of mitigation discounts not
 1686  result in a loss of income to the insurers granting the
 1687  discounts, so that the aggregate of mitigation discounts should
 1688  not exceed the aggregate of the expected reduction in loss that
 1689  is attributable to the mitigation efforts for which discounts
 1690  are granted. A rate filing for residential property insurance
 1691  must include actuarially reasonable discounts, credits, debits,
 1692  or other rate differentials, or appropriate reductions in
 1693  deductibles, which provide the proper pricing for all
 1694  properties. The rate filing must take into account the presence
 1695  or absence of on which fixtures or construction techniques
 1696  demonstrated to reduce the amount of loss in a windstorm have
 1697  been installed or implemented. The fixtures or construction
 1698  techniques shall include, but not be limited to, fixtures or
 1699  construction techniques that which enhance roof strength, roof
 1700  covering performance, roof-to-wall strength, wall-to-floor-to
 1701  foundation strength, opening protection, and window, door, and
 1702  skylight strength. Credits, debits, discounts, or other rate
 1703  differentials, or appropriate reductions or increases in
 1704  deductibles, which recognize the presence or absence of for
 1705  fixtures and construction techniques that which meet the minimum
 1706  requirements of the Florida Building Code must be included in
 1707  the rate filing. If an insurer demonstrates that the aggregate
 1708  of its mitigation discounts results in a reduction to revenue
 1709  which exceeds the reduction of the aggregate loss that is
 1710  expected to result from the mitigation, that insurer may recover
 1711  the lost revenue through an increase in its base rates. All
 1712  insurance companies must make a rate filing which includes the
 1713  credits, discounts, or other rate differentials or reductions in
 1714  deductibles by February 28, 2003. By July 1, 2007, the office
 1715  shall reevaluate the discounts, credits, other rate
 1716  differentials, and appropriate reductions in deductibles for
 1717  fixtures and construction techniques that meet the minimum
 1718  requirements of the Florida Building Code, based upon actual
 1719  experience or any other loss relativity studies available to the
 1720  office. The office shall determine the discounts, credits,
 1721  debits, other rate differentials, and appropriate reductions or
 1722  increases in deductibles that reflect the full actuarial value
 1723  of such revaluation, which may be used by insurers in rate
 1724  filings.
 1725         (b) By February 1, 2011, the Office of Insurance
 1726  Regulation, in consultation with the Department of Financial
 1727  Services and the Department of Community Affairs, shall develop
 1728  and make publicly available a proposed method for insurers to
 1729  establish discounts, credits, or other rate differentials for
 1730  hurricane mitigation measures which directly correlate to the
 1731  numerical rating assigned to a structure pursuant to the uniform
 1732  home grading scale adopted by the Financial Services Commission
 1733  pursuant to s. 215.55865, including any proposed changes to the
 1734  uniform home grading scale. By October 1, 2011, the commission
 1735  shall adopt rules requiring insurers to make rate filings for
 1736  residential property insurance which revise insurers’ discounts,
 1737  credits, or other rate differentials for hurricane mitigation
 1738  measures so that such rate differentials correlate directly to
 1739  the uniform home grading scale. The rules may include such
 1740  changes to the uniform home grading scale as the commission
 1741  determines are necessary, and may specify the minimum required
 1742  discounts, credits, or other rate differentials. Such rate
 1743  differentials must be consistent with generally accepted
 1744  actuarial principles and wind-loss mitigation studies. The rules
 1745  shall allow a period of at least 2 years after the effective
 1746  date of the revised mitigation discounts, credits, or other rate
 1747  differentials for a property owner to obtain an inspection or
 1748  otherwise qualify for the revised credit, during which time the
 1749  insurer shall continue to apply the mitigation credit that was
 1750  applied immediately prior to the effective date of the revised
 1751  credit. Discounts, credits, and other rate differentials
 1752  established for rate filings under this paragraph shall
 1753  supersede, after adoption, the discounts, credits, and other
 1754  rate differentials included in rate filings under paragraph (a).
 1755         (2)(a) A rate filing for residential property insurance
 1756  made on or before the implementation of paragraph (b) may
 1757  include rate factors that reflect the manner in which building
 1758  code enforcement in a particular jurisdiction addresses the risk
 1759  of wind damage.; However, such a rate filing must also provide
 1760  for variations from such rate factors on an individual basis
 1761  based on an inspection of a particular structure by a licensed
 1762  home inspector, which inspection may be at the cost of the
 1763  insured.
 1764         (b) A rate filing for residential property insurance made
 1765  more than 150 days after approval by the office of a building
 1766  code rating factor plan submitted by a statewide rating
 1767  organization shall include positive and negative rate factors
 1768  that reflect the manner in which building code enforcement in a
 1769  particular jurisdiction addresses risk of wind damage. The rate
 1770  filing shall include variations from standard rate factors on an
 1771  individual basis based on inspection of a particular structure
 1772  by a licensed home inspector. If an inspection is requested by
 1773  the insured, the insurer may require the insured to pay the
 1774  reasonable cost of the inspection. This paragraph applies to
 1775  structures constructed or renovated after the implementation of
 1776  this paragraph.
 1777         (c) The premium notice shall specify the amount by which
 1778  the rate has been adjusted as a result of this subsection and
 1779  shall also specify the maximum possible positive and negative
 1780  adjustments that are approved for use by the insurer under this
 1781  subsection.
 1782         (3) A rate filing made on or after July 1, 1995, for mobile
 1783  home owner’s insurance must include appropriate discounts,
 1784  credits, or other rate differentials for mobile homes
 1785  constructed to comply with American Society of Civil Engineers
 1786  Standard ANSI/ASCE 7-88, adopted by the United States Department
 1787  of Housing and Urban Development on July 13, 1994, and that also
 1788  comply with all applicable tie-down requirements provided by
 1789  state law.
 1790         (4) The Legislature finds that separate consideration and
 1791  notice of hurricane insurance premiums will assist consumers by
 1792  providing greater assurance that hurricane premiums are lawful
 1793  and by providing more complete information regarding the
 1794  components of property insurance premiums. Effective January 1,
 1795  1997, A rate filing for residential property insurance shall be
 1796  separated into two components, rates for hurricane coverage and
 1797  rates for all other coverages. A premium notice reflecting a
 1798  rate implemented on the basis of such a filing shall separately
 1799  indicate the premium for hurricane coverage and the premium for
 1800  all other coverages.
 1801         (5) In order to provide an appropriate transition period,
 1802  an insurer may, in its sole discretion, implement an approved
 1803  rate filing for residential property insurance over a period of
 1804  years. An insurer electing to phase in its rate filing must
 1805  provide an informational notice to the office setting out its
 1806  schedule for implementation of the phased-in rate filing. An
 1807  insurer may include in its rate the actual cost of private
 1808  market reinsurance that corresponds to available coverage of the
 1809  Temporary Increase in Coverage Limits, TICL, from the Florida
 1810  Hurricane Catastrophe Fund. The insurer may also include the
 1811  cost of reinsurance to replace the TICL reduction implemented
 1812  pursuant to s. 215.555(17)(d)9. However, this cost for
 1813  reinsurance may not include any expense or profit load or result
 1814  in a total annual base rate increase in excess of 10 percent.
 1815         (6) Any rate filing that is based in whole or part on data
 1816  from a computer model may not exceed 15 percent unless there is
 1817  a public hearing.
 1818         (7) An insurer may implement appropriate discounts or other
 1819  rate differentials of up to 10 percent of the annual premium to
 1820  mobile home owners who provide to the insurer evidence of a
 1821  current inspection of tie-downs for the mobile home, certifying
 1822  that the tie-downs have been properly installed and are in good
 1823  condition.
 1824         (8) EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL
 1825  SOUNDNESS.—
 1826         (a) It is the intent of the Legislature to provide a
 1827  program whereby homeowners may obtain an evaluation of the wind
 1828  resistance of their homes with respect to preventing damage from
 1829  hurricanes, together with a recommendation of reasonable steps
 1830  that may be taken to upgrade their homes to better withstand
 1831  hurricane force winds.
 1832         (b) To the extent that funds are provided for this purpose
 1833  in the General Appropriations Act, the Legislature hereby
 1834  authorizes the establishment of a program to be administered by
 1835  the Citizens Property Insurance Corporation for homeowners
 1836  insured in the high-risk account.
 1837         (c) The program shall provide grants to homeowners, for the
 1838  purpose of providing homeowner applicants with funds to conduct
 1839  an evaluation of the integrity of their homes with respect to
 1840  withstanding hurricane force winds, recommendations to retrofit
 1841  the homes to better withstand damage from such winds, and the
 1842  estimated cost to make the recommended retrofits.
 1843         (d) The Department of Community Affairs shall establish by
 1844  rule standards to govern the quality of the evaluation, the
 1845  quality of the recommendations for retrofitting, the eligibility
 1846  of the persons conducting the evaluation, and the selection of
 1847  applicants under the program. In establishing the rule, the
 1848  Department of Community Affairs shall consult with the advisory
 1849  committee to minimize the possibility of fraud or abuse in the
 1850  evaluation and retrofitting process, and to ensure that funds
 1851  spent by homeowners acting on the recommendations achieve
 1852  positive results.
 1853         (e) The Citizens Property Insurance Corporation shall
 1854  identify areas of this state with the greatest wind risk to
 1855  residential properties and recommend annually to the Department
 1856  of Community Affairs priority target areas for such evaluations
 1857  and inclusion with the associated residential construction
 1858  mitigation program.
 1859         (9) A property insurance rate filing that includes any
 1860  adjustments related to premiums paid to the Florida Hurricane
 1861  Catastrophe Fund must include a complete calculation of the
 1862  insurer’s catastrophe load, and the information in the filing
 1863  may not be limited solely to recovery of moneys paid to the
 1864  fund.
 1865         Section 18. Paragraphs (b), (c), (d), and (y) of subsection
 1866  (6) of section 627.351, Florida Statutes, are amended to read:
 1867         627.351 Insurance risk apportionment plans.—
 1868         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
 1869         (b)1. All insurers authorized to write one or more subject
 1870  lines of business in this state are subject to assessment by the
 1871  corporation and, for the purposes of this subsection, are
 1872  referred to collectively as “assessable insurers.” Insurers
 1873  writing one or more subject lines of business in this state
 1874  pursuant to part VIII of chapter 626 are not assessable
 1875  insurers, but insureds who procure one or more subject lines of
 1876  business in this state pursuant to part VIII of chapter 626 are
 1877  subject to assessment by the corporation and are referred to
 1878  collectively as “assessable insureds.” An authorized insurer’s
 1879  assessment liability begins shall begin on the first day of the
 1880  calendar year following the year in which the insurer was issued
 1881  a certificate of authority to transact insurance for subject
 1882  lines of business in this state and terminates shall terminate 1
 1883  year after the end of the first calendar year during which the
 1884  insurer no longer holds a certificate of authority to transact
 1885  insurance for subject lines of business in this state.
 1886         2.a. All revenues, assets, liabilities, losses, and
 1887  expenses of the corporation are shall be divided into three
 1888  separate accounts as follows:
 1889         (I) A personal lines account for personal residential
 1890  policies issued by the corporation or issued by the Residential
 1891  Property and Casualty Joint Underwriting Association and renewed
 1892  by the corporation which provides that provide comprehensive,
 1893  multiperil coverage on risks that are not located in areas
 1894  eligible for coverage in the Florida Windstorm Underwriting
 1895  Association as those areas were defined on January 1, 2002, and
 1896  for such policies that do not provide coverage for the peril of
 1897  wind on risks that are located in such areas;
 1898         (II) A commercial lines account for commercial residential
 1899  and commercial nonresidential policies issued by the corporation
 1900  or issued by the Residential Property and Casualty Joint
 1901  Underwriting Association and renewed by the corporation which
 1902  that provide coverage for basic property perils on risks which
 1903  that are not located in areas eligible for coverage in the
 1904  Florida Windstorm Underwriting Association as those areas were
 1905  defined on January 1, 2002, and for such policies that do not
 1906  provide coverage for the peril of wind on risks that are located
 1907  in such areas; and
 1908         (III) A coastal high-risk account for personal residential
 1909  policies and commercial residential and commercial
 1910  nonresidential property policies issued by the corporation or
 1911  transferred to the corporation which provides that provide
 1912  coverage for the peril of wind on risks that are located in
 1913  areas eligible for coverage in the Florida Windstorm
 1914  Underwriting Association as those areas were defined on January
 1915  1, 2002. The corporation may offer policies that provide
 1916  multiperil coverage and the corporation shall continue to offer
 1917  policies that provide coverage only for the peril of wind for
 1918  risks located in areas eligible for coverage in the coastal
 1919  high-risk account. In issuing multiperil coverage, the
 1920  corporation may use its approved policy forms and rates for the
 1921  personal lines account. An applicant or insured who is eligible
 1922  to purchase a multiperil policy from the corporation may
 1923  purchase a multiperil policy from an authorized insurer without
 1924  prejudice to the applicant’s or insured’s eligibility to
 1925  prospectively purchase a policy that provides coverage only for
 1926  the peril of wind from the corporation. An applicant or insured
 1927  who is eligible for a corporation policy that provides coverage
 1928  only for the peril of wind may elect to purchase or retain such
 1929  policy and also purchase or retain coverage excluding wind from
 1930  an authorized insurer without prejudice to the applicant’s or
 1931  insured’s eligibility to prospectively purchase a policy that
 1932  provides multiperil coverage from the corporation. It is the
 1933  goal of the Legislature that there would be an overall average
 1934  savings of 10 percent or more for a policyholder who currently
 1935  has a wind-only policy with the corporation, and an ex-wind
 1936  policy with a voluntary insurer or the corporation, and who then
 1937  obtains a multiperil policy from the corporation. It is the
 1938  intent of the Legislature that the offer of multiperil coverage
 1939  in the coastal high-risk account be made and implemented in a
 1940  manner that does not adversely affect the tax-exempt status of
 1941  the corporation or creditworthiness of or security for currently
 1942  outstanding financing obligations or credit facilities of the
 1943  coastal high-risk account, the personal lines account, or the
 1944  commercial lines account. The coastal high-risk account must
 1945  also include quota share primary insurance under subparagraph
 1946  (c)2. The area eligible for coverage under the coastal high-risk
 1947  account also includes the area within Port Canaveral, which is
 1948  bordered on the south by the City of Cape Canaveral, bordered on
 1949  the west by the Banana River, and bordered on the north by
 1950  Federal Government property.
 1951         b. The three separate accounts must be maintained as long
 1952  as financing obligations entered into by the Florida Windstorm
 1953  Underwriting Association or Residential Property and Casualty
 1954  Joint Underwriting Association are outstanding, in accordance
 1955  with the terms of the corresponding financing documents. If When
 1956  the financing obligations are no longer outstanding, in
 1957  accordance with the terms of the corresponding financing
 1958  documents, the corporation may use a single account for all
 1959  revenues, assets, liabilities, losses, and expenses of the
 1960  corporation. Consistent with the requirement of this
 1961  subparagraph and prudent investment policies that minimize the
 1962  cost of carrying debt, the board shall exercise its best efforts
 1963  to retire existing debt or to obtain approval of necessary
 1964  parties to amend the terms of existing debt, so as to structure
 1965  the most efficient plan to consolidate the three separate
 1966  accounts into a single account. By February 1, 2007, the board
 1967  shall submit a report to the Financial Services Commission, the
 1968  President of the Senate, and the Speaker of the House of
 1969  Representatives which includes an analysis of consolidating the
 1970  accounts, the actions the board has taken to minimize the cost
 1971  of carrying debt, and its recommendations for executing the most
 1972  efficient plan.
 1973         c. Creditors of the Residential Property and Casualty Joint
 1974  Underwriting Association and of the accounts specified in sub
 1975  sub-subparagraphs a.(I) and (II) may have a claim against, and
 1976  recourse to, the accounts referred to in sub-sub-subparagraphs
 1977  a.(I) and (II) and shall have no claim against, or recourse to,
 1978  the account referred to in sub-sub-subparagraph a.(III).
 1979  Creditors of the Florida Windstorm Underwriting Association
 1980  shall have a claim against, and recourse to, the account
 1981  referred to in sub-sub-subparagraph a.(III) and shall have no
 1982  claim against, or recourse to, the accounts referred to in sub
 1983  sub-subparagraphs a.(I) and (II).
 1984         d. Revenues, assets, liabilities, losses, and expenses not
 1985  attributable to particular accounts shall be prorated among the
 1986  accounts.
 1987         e. The Legislature finds that the revenues of the
 1988  corporation are revenues that are necessary to meet the
 1989  requirements set forth in documents authorizing the issuance of
 1990  bonds under this subsection.
 1991         f. No part of the income of the corporation may inure to
 1992  the benefit of any private person.
 1993         3. With respect to a deficit in an account:
 1994         a. After accounting for the Citizens policyholder surcharge
 1995  imposed under sub-subparagraph i., if when the remaining
 1996  projected deficit incurred in a particular calendar year is not
 1997  greater than 6 percent of the aggregate statewide direct written
 1998  premium for the subject lines of business for the prior calendar
 1999  year, the entire deficit shall be recovered through regular
 2000  assessments of assessable insurers under paragraph (p) and
 2001  assessable insureds.
 2002         b. After accounting for the Citizens policyholder surcharge
 2003  imposed under sub-subparagraph i., when the remaining projected
 2004  deficit incurred in a particular calendar year exceeds 6 percent
 2005  of the aggregate statewide direct written premium for the
 2006  subject lines of business for the prior calendar year, the
 2007  corporation shall levy regular assessments on assessable
 2008  insurers under paragraph (q) (p) and on assessable insureds in
 2009  an amount equal to the greater of 6 percent of the deficit or 6
 2010  percent of the aggregate statewide direct written premium for
 2011  the subject lines of business for the prior calendar year. Any
 2012  remaining deficit shall be recovered through emergency
 2013  assessments under sub-subparagraph d.
 2014         c. Each assessable insurer’s share of the amount being
 2015  assessed under sub-subparagraph a. or sub-subparagraph b. must
 2016  shall be in the proportion that the assessable insurer’s direct
 2017  written premium for the subject lines of business for the year
 2018  preceding the assessment bears to the aggregate statewide direct
 2019  written premium for the subject lines of business for that year.
 2020  The assessment percentage applicable to each assessable insured
 2021  is the ratio of the amount being assessed under sub-subparagraph
 2022  a. or sub-subparagraph b. to the aggregate statewide direct
 2023  written premium for the subject lines of business for the prior
 2024  year. Assessments levied by the corporation on assessable
 2025  insurers under sub-subparagraphs a. and b. shall be paid as
 2026  required by the corporation’s plan of operation and paragraph
 2027  (q) (p). Assessments levied by the corporation on assessable
 2028  insureds under sub-subparagraphs a. and b. shall be collected by
 2029  the surplus lines agent at the time the surplus lines agent
 2030  collects the surplus lines tax required by s. 626.932 and shall
 2031  be paid to the Florida Surplus Lines Service Office at the time
 2032  the surplus lines agent pays the surplus lines tax to the
 2033  Florida Surplus Lines Service Office. Upon receipt of regular
 2034  assessments from surplus lines agents, the Florida Surplus Lines
 2035  Service Office shall transfer the assessments directly to the
 2036  corporation as determined by the corporation.
 2037         d. Upon a determination by the board of governors that a
 2038  deficit in an account exceeds the amount that will be recovered
 2039  through regular assessments under sub-subparagraph a. or sub
 2040  subparagraph b., plus the amount that is expected to be
 2041  recovered through surcharges under sub-subparagraph i., as to
 2042  the remaining projected deficit the board shall levy, after
 2043  verification by the office, emergency assessments, for as many
 2044  years as necessary to cover the deficits, to be collected by
 2045  assessable insurers and the corporation and collected from
 2046  assessable insureds upon issuance or renewal of policies for
 2047  subject lines of business, excluding National Flood Insurance
 2048  policies. The amount of the emergency assessment collected in a
 2049  particular year shall be a uniform percentage of that year’s
 2050  direct written premium for subject lines of business and all
 2051  accounts of the corporation, excluding National Flood Insurance
 2052  Program policy premiums, as annually determined by the board and
 2053  verified by the office. The office shall verify the arithmetic
 2054  calculations involved in the board’s determination within 30
 2055  days after receipt of the information on which the determination
 2056  was based. Notwithstanding any other provision of law, the
 2057  corporation and each assessable insurer that writes subject
 2058  lines of business shall collect emergency assessments from its
 2059  policyholders without such obligation being affected by any
 2060  credit, limitation, exemption, or deferment. Emergency
 2061  assessments levied by the corporation on assessable insureds
 2062  shall be collected by the surplus lines agent at the time the
 2063  surplus lines agent collects the surplus lines tax required by
 2064  s. 626.932 and shall be paid to the Florida Surplus Lines
 2065  Service Office at the time the surplus lines agent pays the
 2066  surplus lines tax to the Florida Surplus Lines Service Office.
 2067  The emergency assessments so collected shall be transferred
 2068  directly to the corporation on a periodic basis as determined by
 2069  the corporation and shall be held by the corporation solely in
 2070  the applicable account. The aggregate amount of emergency
 2071  assessments levied for an account under this sub-subparagraph in
 2072  any calendar year may, at the discretion of the board of
 2073  governors, be less than but may not exceed the greater of 10
 2074  percent of the amount needed to cover the deficit, plus
 2075  interest, fees, commissions, required reserves, and other costs
 2076  associated with financing of the original deficit, or 10 percent
 2077  of the aggregate statewide direct written premium for subject
 2078  lines of business and for all accounts of the corporation for
 2079  the prior year, plus interest, fees, commissions, required
 2080  reserves, and other costs associated with financing the deficit.
 2081         e. The corporation may pledge the proceeds of assessments,
 2082  projected recoveries from the Florida Hurricane Catastrophe
 2083  Fund, other insurance and reinsurance recoverables, policyholder
 2084  surcharges and other surcharges, and other funds available to
 2085  the corporation as the source of revenue for and to secure bonds
 2086  issued under paragraph (p), bonds or other indebtedness issued
 2087  under subparagraph (c)3., or lines of credit or other financing
 2088  mechanisms issued or created under this subsection, or to retire
 2089  any other debt incurred as a result of deficits or events giving
 2090  rise to deficits, or in any other way that the board determines
 2091  will efficiently recover such deficits. The purpose of the lines
 2092  of credit or other financing mechanisms is to provide additional
 2093  resources to assist the corporation in covering claims and
 2094  expenses attributable to a catastrophe. As used in this
 2095  subsection, the term “assessments” includes regular assessments
 2096  under sub-subparagraph a., sub-subparagraph b., or subparagraph
 2097  (p)1. and emergency assessments under sub-subparagraph d.
 2098  Emergency assessments collected under sub-subparagraph d. are
 2099  not part of an insurer’s rates, are not premium, and are not
 2100  subject to premium tax, fees, or commissions; however, failure
 2101  to pay the emergency assessment shall be treated as failure to
 2102  pay premium. The emergency assessments under sub-subparagraph d.
 2103  shall continue as long as any bonds issued or other indebtedness
 2104  incurred with respect to a deficit for which the assessment was
 2105  imposed remain outstanding, unless adequate provision has been
 2106  made for the payment of such bonds or other indebtedness
 2107  pursuant to the documents governing such bonds or other
 2108  indebtedness.
 2109         f. As used in this subsection for purposes of any deficit
 2110  incurred on or after January 25, 2007, the term “subject lines
 2111  of business” means insurance written by assessable insurers or
 2112  procured by assessable insureds for all property and casualty
 2113  lines of business in this state, but not including workers’
 2114  compensation or medical malpractice. As used in the sub
 2115  subparagraph, the term “property and casualty lines of business”
 2116  includes all lines of business identified on Form 2, Exhibit of
 2117  Premiums and Losses, in the annual statement required of
 2118  authorized insurers by s. 624.424 and any rule adopted under
 2119  this section, except for those lines identified as accident and
 2120  health insurance and except for policies written under the
 2121  National Flood Insurance Program or the Federal Crop Insurance
 2122  Program. For purposes of this sub-subparagraph, the term
 2123  “workers’ compensation” includes both workers’ compensation
 2124  insurance and excess workers’ compensation insurance.
 2125         g. The Florida Surplus Lines Service Office shall determine
 2126  annually the aggregate statewide written premium in subject
 2127  lines of business procured by assessable insureds and shall
 2128  report that information to the corporation in a form and at a
 2129  time the corporation specifies to ensure that the corporation
 2130  can meet the requirements of this subsection and the
 2131  corporation’s financing obligations.
 2132         h. The Florida Surplus Lines Service Office shall verify
 2133  the proper application by surplus lines agents of assessment
 2134  percentages for regular assessments and emergency assessments
 2135  levied under this subparagraph on assessable insureds and shall
 2136  assist the corporation in ensuring the accurate, timely
 2137  collection and payment of assessments by surplus lines agents as
 2138  required by the corporation.
 2139         i.(I) If a deficit is incurred in any account in 2008 or
 2140  thereafter, the board of governors shall levy a Citizens
 2141  policyholder surcharge against all policyholders of the
 2142  corporation. for a 12-month period, which
 2143         (II) The Citizens policyholder surcharge shall be levied
 2144  collected at the time of issuance or renewal of a policy, as a
 2145  uniform percentage of the premium for the policy of up to 15
 2146  percent of such premium, which funds shall be used to offset the
 2147  deficit.
 2148         (III) The Citizens policyholder surcharge is payable upon
 2149  cancellation or termination of the policy, upon renewal of the
 2150  policy, or upon issuance of a new policy by Citizens within the
 2151  first 12 months after the date of the levy or the period of time
 2152  necessary to fully collect the Citizens policyholder surcharge
 2153  amount.
 2154         (IV) The corporation may not levy any regular assessments
 2155  under paragraph (q) pursuant to sub-subparagraph a. or sub
 2156  subparagraph b. with respect to a particular year’s deficit
 2157  until the corporation has first levied a Citizens policyholder
 2158  surcharge under this sub-subparagraph in the full amount
 2159  authorized by this sub-subparagraph.
 2160         (V) Citizens policyholder surcharges under this sub
 2161  subparagraph are not considered premium and are not subject to
 2162  commissions, fees, or premium taxes. However, failure to pay
 2163  such surcharges shall be treated as failure to pay premium.
 2164         j. If the amount of any assessments or surcharges collected
 2165  from corporation policyholders, assessable insurers or their
 2166  policyholders, or assessable insureds exceeds the amount of the
 2167  deficits, such excess amounts shall be remitted to and retained
 2168  by the corporation in a reserve to be used by the corporation,
 2169  as determined by the board of governors and approved by the
 2170  office, to pay claims or reduce any past, present, or future
 2171  plan-year deficits or to reduce outstanding debt.
 2172         (c) The plan of operation of the corporation:
 2173         1. Must provide for adoption of residential property and
 2174  casualty insurance policy forms and commercial residential and
 2175  nonresidential property insurance forms, which forms must be
 2176  approved by the office prior to use. The corporation shall adopt
 2177  the following policy forms:
 2178         a. Standard personal lines policy forms that are
 2179  comprehensive multiperil policies providing full coverage of a
 2180  residential property equivalent to the coverage provided in the
 2181  private insurance market under an HO-3, HO-4, or HO-6 policy.
 2182         b. Basic personal lines policy forms that are policies
 2183  similar to an HO-8 policy or a dwelling fire policy that provide
 2184  coverage meeting the requirements of the secondary mortgage
 2185  market, but which coverage is more limited than the coverage
 2186  under a standard policy.
 2187         c. Commercial lines residential and nonresidential policy
 2188  forms that are generally similar to the basic perils of full
 2189  coverage obtainable for commercial residential structures and
 2190  commercial nonresidential structures in the admitted voluntary
 2191  market.
 2192         d. Personal lines and commercial lines residential property
 2193  insurance forms that cover the peril of wind only. The forms are
 2194  applicable only to residential properties located in areas
 2195  eligible for coverage under the coastal high-risk account
 2196  referred to in sub-subparagraph (b)2.a.
 2197         e. Commercial lines nonresidential property insurance forms
 2198  that cover the peril of wind only. The forms are applicable only
 2199  to nonresidential properties located in areas eligible for
 2200  coverage under the coastal high-risk account referred to in sub
 2201  subparagraph (b)2.a.
 2202         f. The corporation may adopt variations of the policy forms
 2203  listed in sub-subparagraphs a.-e. that contain more restrictive
 2204  coverage.
 2205         2.a. Must provide that the corporation adopt a program in
 2206  which the corporation and authorized insurers enter into quota
 2207  share primary insurance agreements for hurricane coverage, as
 2208  defined in s. 627.4025(2)(a), for eligible risks, and adopt
 2209  property insurance forms for eligible risks which cover the
 2210  peril of wind only. As used in this subsection, the term:
 2211         (I) “Quota share primary insurance” means an arrangement in
 2212  which the primary hurricane coverage of an eligible risk is
 2213  provided in specified percentages by the corporation and an
 2214  authorized insurer. The corporation and authorized insurer are
 2215  each solely responsible for a specified percentage of hurricane
 2216  coverage of an eligible risk as set forth in a quota share
 2217  primary insurance agreement between the corporation and an
 2218  authorized insurer and the insurance contract. The
 2219  responsibility of the corporation or authorized insurer to pay
 2220  its specified percentage of hurricane losses of an eligible
 2221  risk, as set forth in the quota share primary insurance
 2222  agreement, may not be altered by the inability of the other
 2223  party to the agreement to pay its specified percentage of
 2224  hurricane losses. Eligible risks that are provided hurricane
 2225  coverage through a quota share primary insurance arrangement
 2226  must be provided policy forms that set forth the obligations of
 2227  the corporation and authorized insurer under the arrangement,
 2228  clearly specify the percentages of quota share primary insurance
 2229  provided by the corporation and authorized insurer, and
 2230  conspicuously and clearly state that neither the authorized
 2231  insurer nor the corporation may be held responsible beyond its
 2232  specified percentage of coverage of hurricane losses.
 2233         (II) “Eligible risks” means personal lines residential and
 2234  commercial lines residential risks that meet the underwriting
 2235  criteria of the corporation and are located in areas that were
 2236  eligible for coverage by the Florida Windstorm Underwriting
 2237  Association on January 1, 2002.
 2238         b. The corporation may enter into quota share primary
 2239  insurance agreements with authorized insurers at corporation
 2240  coverage levels of 90 percent and 50 percent.
 2241         c. If the corporation determines that additional coverage
 2242  levels are necessary to maximize participation in quota share
 2243  primary insurance agreements by authorized insurers, the
 2244  corporation may establish additional coverage levels. However,
 2245  the corporation’s quota share primary insurance coverage level
 2246  may not exceed 90 percent.
 2247         d. Any quota share primary insurance agreement entered into
 2248  between an authorized insurer and the corporation must provide
 2249  for a uniform specified percentage of coverage of hurricane
 2250  losses, by county or territory as set forth by the corporation
 2251  board, for all eligible risks of the authorized insurer covered
 2252  under the quota share primary insurance agreement.
 2253         e. Any quota share primary insurance agreement entered into
 2254  between an authorized insurer and the corporation is subject to
 2255  review and approval by the office. However, such agreement shall
 2256  be authorized only as to insurance contracts entered into
 2257  between an authorized insurer and an insured who is already
 2258  insured by the corporation for wind coverage.
 2259         f. For all eligible risks covered under quota share primary
 2260  insurance agreements, the exposure and coverage levels for both
 2261  the corporation and authorized insurers shall be reported by the
 2262  corporation to the Florida Hurricane Catastrophe Fund. For all
 2263  policies of eligible risks covered under quota share primary
 2264  insurance agreements, the corporation and the authorized insurer
 2265  shall maintain complete and accurate records for the purpose of
 2266  exposure and loss reimbursement audits as required by Florida
 2267  Hurricane Catastrophe Fund rules. The corporation and the
 2268  authorized insurer shall each maintain duplicate copies of
 2269  policy declaration pages and supporting claims documents.
 2270         g. The corporation board shall establish in its plan of
 2271  operation standards for quota share agreements which ensure that
 2272  there is no discriminatory application among insurers as to the
 2273  terms of quota share agreements, pricing of quota share
 2274  agreements, incentive provisions if any, and consideration paid
 2275  for servicing policies or adjusting claims.
 2276         h. The quota share primary insurance agreement between the
 2277  corporation and an authorized insurer must set forth the
 2278  specific terms under which coverage is provided, including, but
 2279  not limited to, the sale and servicing of policies issued under
 2280  the agreement by the insurance agent of the authorized insurer
 2281  producing the business, the reporting of information concerning
 2282  eligible risks, the payment of premium to the corporation, and
 2283  arrangements for the adjustment and payment of hurricane claims
 2284  incurred on eligible risks by the claims adjuster and personnel
 2285  of the authorized insurer. Entering into a quota sharing
 2286  insurance agreement between the corporation and an authorized
 2287  insurer shall be voluntary and at the discretion of the
 2288  authorized insurer.
 2289         3. May provide that the corporation may employ or otherwise
 2290  contract with individuals or other entities to provide
 2291  administrative or professional services that may be appropriate
 2292  to effectuate the plan. The corporation shall have the power to
 2293  borrow funds, by issuing bonds or by incurring other
 2294  indebtedness, and shall have other powers reasonably necessary
 2295  to effectuate the requirements of this subsection, including,
 2296  without limitation, the power to issue bonds and incur other
 2297  indebtedness in order to refinance outstanding bonds or other
 2298  indebtedness. The corporation may, but is not required to, seek
 2299  judicial validation of its bonds or other indebtedness under
 2300  chapter 75. The corporation may issue bonds or incur other
 2301  indebtedness, or have bonds issued on its behalf by a unit of
 2302  local government pursuant to subparagraph (p)2., in the absence
 2303  of a hurricane or other weather-related event, upon a
 2304  determination by the corporation, subject to approval by the
 2305  office, that such action would enable it to efficiently meet the
 2306  financial obligations of the corporation and that such
 2307  financings are reasonably necessary to effectuate the
 2308  requirements of this subsection. The corporation is authorized
 2309  to take all actions needed to facilitate tax-free status for any
 2310  such bonds or indebtedness, including formation of trusts or
 2311  other affiliated entities. The corporation shall have the
 2312  authority to pledge assessments, projected recoveries from the
 2313  Florida Hurricane Catastrophe Fund, other reinsurance
 2314  recoverables, market equalization and other surcharges, and
 2315  other funds available to the corporation as security for bonds
 2316  or other indebtedness. In recognition of s. 10, Art. I of the
 2317  State Constitution, prohibiting the impairment of obligations of
 2318  contracts, it is the intent of the Legislature that no action be
 2319  taken whose purpose is to impair any bond indenture or financing
 2320  agreement or any revenue source committed by contract to such
 2321  bond or other indebtedness.
 2322         4.a. Must require that the corporation operate subject to
 2323  the supervision and approval of a board of governors consisting
 2324  of eight individuals who are residents of this state, from
 2325  different geographical areas of this state. The Governor, the
 2326  Chief Financial Officer, the President of the Senate, and the
 2327  Speaker of the House of Representatives shall each appoint two
 2328  members of the board. At least one of the two members appointed
 2329  by each appointing officer must have demonstrated expertise in
 2330  insurance, and is deemed to be within the scope of the exemption
 2331  provided in s. 112.313(7)(b). The Chief Financial Officer shall
 2332  designate one of the appointees as chair. All board members
 2333  serve at the pleasure of the appointing officer. All members of
 2334  the board of governors are subject to removal at will by the
 2335  officers who appointed them. All board members, including the
 2336  chair, must be appointed to serve for 3-year terms beginning
 2337  annually on a date designated by the plan. However, for the
 2338  first term beginning on or after July 1, 2009, each appointing
 2339  officer shall appoint one member of the board for a 2-year term
 2340  and one member for a 3-year term. Any board vacancy shall be
 2341  filled for the unexpired term by the appointing officer. The
 2342  Chief Financial Officer shall appoint a technical advisory group
 2343  to provide information and advice to the board of governors in
 2344  connection with the board’s duties under this subsection. The
 2345  executive director and senior managers of the corporation shall
 2346  be engaged by the board and serve at the pleasure of the board.
 2347  Any executive director appointed on or after July 1, 2006, is
 2348  subject to confirmation by the Senate. The executive director is
 2349  responsible for employing other staff as the corporation may
 2350  require, subject to review and concurrence by the board.
 2351         b. The board shall create a Market Accountability Advisory
 2352  Committee to assist the corporation in developing awareness of
 2353  its rates and its customer and agent service levels in
 2354  relationship to the voluntary market insurers writing similar
 2355  coverage. The members of the advisory committee shall consist of
 2356  the following 11 persons, one of whom must be elected chair by
 2357  the members of the committee: four representatives, one
 2358  appointed by the Florida Association of Insurance Agents, one by
 2359  the Florida Association of Insurance and Financial Advisors, one
 2360  by the Professional Insurance Agents of Florida, and one by the
 2361  Latin American Association of Insurance Agencies; three
 2362  representatives appointed by the insurers with the three highest
 2363  voluntary market share of residential property insurance
 2364  business in the state; one representative from the Office of
 2365  Insurance Regulation; one consumer appointed by the board who is
 2366  insured by the corporation at the time of appointment to the
 2367  committee; one representative appointed by the Florida
 2368  Association of Realtors; and one representative appointed by the
 2369  Florida Bankers Association. All members must serve for 3-year
 2370  terms and may serve for consecutive terms. The committee shall
 2371  report to the corporation at each board meeting on insurance
 2372  market issues which may include rates and rate competition with
 2373  the voluntary market; service, including policy issuance, claims
 2374  processing, and general responsiveness to policyholders,
 2375  applicants, and agents; and matters relating to depopulation.
 2376         5. Must provide a procedure for determining the eligibility
 2377  of a risk for coverage, as follows:
 2378         a. Subject to the provisions of s. 627.3517, with respect
 2379  to personal lines residential risks, if the risk is offered
 2380  coverage from an authorized insurer at the insurer’s approved
 2381  rate under either a standard policy including wind coverage or,
 2382  if consistent with the insurer’s underwriting rules as filed
 2383  with the office, a basic policy including wind coverage, for a
 2384  new application to the corporation for coverage, the risk is not
 2385  eligible for any policy issued by the corporation unless the
 2386  premium for coverage from the authorized insurer is more than 15
 2387  percent greater than the premium for comparable coverage from
 2388  the corporation. If the risk is not able to obtain any such
 2389  offer, the risk is eligible for either a standard policy
 2390  including wind coverage or a basic policy including wind
 2391  coverage issued by the corporation; however, if the risk could
 2392  not be insured under a standard policy including wind coverage
 2393  regardless of market conditions, the risk shall be eligible for
 2394  a basic policy including wind coverage unless rejected under
 2395  subparagraph 8. However, with regard to a policyholder of the
 2396  corporation or a policyholder removed from the corporation
 2397  through an assumption agreement until the end of the assumption
 2398  period, the policyholder remains eligible for coverage from the
 2399  corporation regardless of any offer of coverage from an
 2400  authorized insurer or surplus lines insurer. The corporation
 2401  shall determine the type of policy to be provided on the basis
 2402  of objective standards specified in the underwriting manual and
 2403  based on generally accepted underwriting practices.
 2404         (I) If the risk accepts an offer of coverage through the
 2405  market assistance plan or an offer of coverage through a
 2406  mechanism established by the corporation before a policy is
 2407  issued to the risk by the corporation or during the first 30
 2408  days of coverage by the corporation, and the producing agent who
 2409  submitted the application to the plan or to the corporation is
 2410  not currently appointed by the insurer, the insurer shall:
 2411         (A) Pay to the producing agent of record of the policy, for
 2412  the first year, an amount that is the greater of the insurer’s
 2413  usual and customary commission for the type of policy written or
 2414  a fee equal to the usual and customary commission of the
 2415  corporation; or
 2416         (B) Offer to allow the producing agent of record of the
 2417  policy to continue servicing the policy for a period of not less
 2418  than 1 year and offer to pay the agent the greater of the
 2419  insurer’s or the corporation’s usual and customary commission
 2420  for the type of policy written.
 2421  
 2422  If the producing agent is unwilling or unable to accept
 2423  appointment, the new insurer shall pay the agent in accordance
 2424  with sub-sub-sub-subparagraph (A).
 2425         (II) When the corporation enters into a contractual
 2426  agreement for a take-out plan, the producing agent of record of
 2427  the corporation policy is entitled to retain any unearned
 2428  commission on the policy, and the insurer shall:
 2429         (A) Pay to the producing agent of record of the corporation
 2430  policy, for the first year, an amount that is the greater of the
 2431  insurer’s usual and customary commission for the type of policy
 2432  written or a fee equal to the usual and customary commission of
 2433  the corporation; or
 2434         (B) Offer to allow the producing agent of record of the
 2435  corporation policy to continue servicing the policy for a period
 2436  of not less than 1 year and offer to pay the agent the greater
 2437  of the insurer’s or the corporation’s usual and customary
 2438  commission for the type of policy written.
 2439  
 2440  If the producing agent is unwilling or unable to accept
 2441  appointment, the new insurer shall pay the agent in accordance
 2442  with sub-sub-sub-subparagraph (A).
 2443         b. With respect to commercial lines residential risks, for
 2444  a new application to the corporation for coverage, if the risk
 2445  is offered coverage under a policy including wind coverage from
 2446  an authorized insurer at its approved rate, the risk is not
 2447  eligible for any policy issued by the corporation unless the
 2448  premium for coverage from the authorized insurer is more than 15
 2449  percent greater than the premium for comparable coverage from
 2450  the corporation. If the risk is not able to obtain any such
 2451  offer, the risk is eligible for a policy including wind coverage
 2452  issued by the corporation. However, with regard to a
 2453  policyholder of the corporation or a policyholder removed from
 2454  the corporation through an assumption agreement until the end of
 2455  the assumption period, the policyholder remains eligible for
 2456  coverage from the corporation regardless of any offer of
 2457  coverage from an authorized insurer or surplus lines insurer.
 2458         (I) If the risk accepts an offer of coverage through the
 2459  market assistance plan or an offer of coverage through a
 2460  mechanism established by the corporation before a policy is
 2461  issued to the risk by the corporation or during the first 30
 2462  days of coverage by the corporation, and the producing agent who
 2463  submitted the application to the plan or the corporation is not
 2464  currently appointed by the insurer, the insurer shall:
 2465         (A) Pay to the producing agent of record of the policy, for
 2466  the first year, an amount that is the greater of the insurer’s
 2467  usual and customary commission for the type of policy written or
 2468  a fee equal to the usual and customary commission of the
 2469  corporation; or
 2470         (B) Offer to allow the producing agent of record of the
 2471  policy to continue servicing the policy for a period of not less
 2472  than 1 year and offer to pay the agent the greater of the
 2473  insurer’s or the corporation’s usual and customary commission
 2474  for the type of policy written.
 2475  
 2476  If the producing agent is unwilling or unable to accept
 2477  appointment, the new insurer shall pay the agent in accordance
 2478  with sub-sub-sub-subparagraph (A).
 2479         (II) When the corporation enters into a contractual
 2480  agreement for a take-out plan, the producing agent of record of
 2481  the corporation policy is entitled to retain any unearned
 2482  commission on the policy, and the insurer shall:
 2483         (A) Pay to the producing agent of record of the corporation
 2484  policy, for the first year, an amount that is the greater of the
 2485  insurer’s usual and customary commission for the type of policy
 2486  written or a fee equal to the usual and customary commission of
 2487  the corporation; or
 2488         (B) Offer to allow the producing agent of record of the
 2489  corporation policy to continue servicing the policy for a period
 2490  of not less than 1 year and offer to pay the agent the greater
 2491  of the insurer’s or the corporation’s usual and customary
 2492  commission for the type of policy written.
 2493  
 2494  If the producing agent is unwilling or unable to accept
 2495  appointment, the new insurer shall pay the agent in accordance
 2496  with sub-sub-sub-subparagraph (A).
 2497         c. For purposes of determining comparable coverage under
 2498  sub-subparagraphs a. and b., the comparison shall be based on
 2499  those forms and coverages that are reasonably comparable. The
 2500  corporation may rely on a determination of comparable coverage
 2501  and premium made by the producing agent who submits the
 2502  application to the corporation, made in the agent’s capacity as
 2503  the corporation’s agent. A comparison may be made solely of the
 2504  premium with respect to the main building or structure only on
 2505  the following basis: the same coverage A or other building
 2506  limits; the same percentage hurricane deductible that applies on
 2507  an annual basis or that applies to each hurricane for commercial
 2508  residential property; the same percentage of ordinance and law
 2509  coverage, if the same limit is offered by both the corporation
 2510  and the authorized insurer; the same mitigation credits, to the
 2511  extent the same types of credits are offered both by the
 2512  corporation and the authorized insurer; the same method for loss
 2513  payment, such as replacement cost or actual cash value, if the
 2514  same method is offered both by the corporation and the
 2515  authorized insurer in accordance with underwriting rules; and
 2516  any other form or coverage that is reasonably comparable as
 2517  determined by the board. If an application is submitted to the
 2518  corporation for wind-only coverage in the coastal high-risk
 2519  account, the premium for the corporation’s wind-only policy plus
 2520  the premium for the ex-wind policy that is offered by an
 2521  authorized insurer to the applicant shall be compared to the
 2522  premium for multiperil coverage offered by an authorized
 2523  insurer, subject to the standards for comparison specified in
 2524  this subparagraph. If the corporation or the applicant requests
 2525  from the authorized insurer a breakdown of the premium of the
 2526  offer by types of coverage so that a comparison may be made by
 2527  the corporation or its agent and the authorized insurer refuses
 2528  or is unable to provide such information, the corporation may
 2529  treat the offer as not being an offer of coverage from an
 2530  authorized insurer at the insurer’s approved rate.
 2531         6. Must include rules for classifications of risks and
 2532  rates therefor.
 2533         7. Must provide that if premium and investment income for
 2534  an account attributable to a particular calendar year are in
 2535  excess of projected losses and expenses for the account
 2536  attributable to that year, such excess shall be held in surplus
 2537  in the account. Such surplus shall be available to defray
 2538  deficits in that account as to future years and shall be used
 2539  for that purpose prior to assessing assessable insurers and
 2540  assessable insureds as to any calendar year.
 2541         8. Must provide objective criteria and procedures to be
 2542  uniformly applied for all applicants in determining whether an
 2543  individual risk is so hazardous as to be uninsurable. In making
 2544  this determination and in establishing the criteria and
 2545  procedures, the following shall be considered:
 2546         a. Whether the likelihood of a loss for the individual risk
 2547  is substantially higher than for other risks of the same class;
 2548  and
 2549         b. Whether the uncertainty associated with the individual
 2550  risk is such that an appropriate premium cannot be determined.
 2551  
 2552  The acceptance or rejection of a risk by the corporation shall
 2553  be construed as the private placement of insurance, and the
 2554  provisions of chapter 120 shall not apply.
 2555         9. Must provide that the corporation shall make its best
 2556  efforts to procure catastrophe reinsurance at reasonable rates,
 2557  to cover its projected 100-year probable maximum loss as
 2558  determined by the board of governors.
 2559         10. The policies issued by the corporation must provide
 2560  that, if the corporation or the market assistance plan obtains
 2561  an offer from an authorized insurer to cover the risk at its
 2562  approved rates, the risk is no longer eligible for renewal
 2563  through the corporation, except as otherwise provided in this
 2564  subsection.
 2565         11. Corporation policies and applications must include a
 2566  notice that the corporation policy could, under this section, be
 2567  replaced with a policy issued by an authorized insurer that does
 2568  not provide coverage identical to the coverage provided by the
 2569  corporation. The notice shall also specify that acceptance of
 2570  corporation coverage creates a conclusive presumption that the
 2571  applicant or policyholder is aware of this potential.
 2572         12. May establish, subject to approval by the office,
 2573  different eligibility requirements and operational procedures
 2574  for any line or type of coverage for any specified county or
 2575  area if the board determines that such changes to the
 2576  eligibility requirements and operational procedures are
 2577  justified due to the voluntary market being sufficiently stable
 2578  and competitive in such area or for such line or type of
 2579  coverage and that consumers who, in good faith, are unable to
 2580  obtain insurance through the voluntary market through ordinary
 2581  methods would continue to have access to coverage from the
 2582  corporation. When coverage is sought in connection with a real
 2583  property transfer, such requirements and procedures shall not
 2584  provide for an effective date of coverage later than the date of
 2585  the closing of the transfer as established by the transferor,
 2586  the transferee, and, if applicable, the lender.
 2587         13. Must provide that, with respect to the coastal high
 2588  risk account, any assessable insurer with a surplus as to
 2589  policyholders of $25 million or less writing 25 percent or more
 2590  of its total countrywide property insurance premiums in this
 2591  state may petition the office, within the first 90 days of each
 2592  calendar year, to qualify as a limited apportionment company. A
 2593  regular assessment levied by the corporation on a limited
 2594  apportionment company for a deficit incurred by the corporation
 2595  for the coastal high-risk account in 2006 or thereafter may be
 2596  paid to the corporation on a monthly basis as the assessments
 2597  are collected by the limited apportionment company from its
 2598  insureds pursuant to s. 627.3512, but the regular assessment
 2599  must be paid in full within 12 months after being levied by the
 2600  corporation. A limited apportionment company shall collect from
 2601  its policyholders any emergency assessment imposed under sub
 2602  subparagraph (b)3.d. The plan shall provide that, if the office
 2603  determines that any regular assessment will result in an
 2604  impairment of the surplus of a limited apportionment company,
 2605  the office may direct that all or part of such assessment be
 2606  deferred as provided in subparagraph (p)4. However, there shall
 2607  be no limitation or deferment of an emergency assessment to be
 2608  collected from policyholders under sub-subparagraph (b)3.d.
 2609         14. Must provide that the corporation appoint as its
 2610  licensed agents only those agents who also hold an appointment
 2611  as defined in s. 626.015(3) with an insurer who at the time of
 2612  the agent’s initial appointment by the corporation is authorized
 2613  to write and is actually writing personal lines residential
 2614  property coverage, commercial residential property coverage, or
 2615  commercial nonresidential property coverage within the state.
 2616         15. Must provide, by July 1, 2007, a premium payment plan
 2617  option to its policyholders which allows at a minimum for
 2618  quarterly and semiannual payment of premiums. A monthly payment
 2619  plan may, but is not required to, be offered.
 2620         16. Must limit coverage on mobile homes or manufactured
 2621  homes built prior to 1994 to actual cash value of the dwelling
 2622  rather than replacement costs of the dwelling.
 2623         17. May provide such limits of coverage as the board
 2624  determines, consistent with the requirements of this subsection.
 2625         18. May require commercial property to meet specified
 2626  hurricane mitigation construction features as a condition of
 2627  eligibility for coverage.
 2628         19.a.Shall require the agent to obtain from any applicant
 2629  for coverage the following acknowledgement, signed by the
 2630  applicant, and shall require the agent of record to obtain the
 2631  following acknowledgment from each corporation policyholder,
 2632  signed by the policyholder, before the policy’s first renewal on
 2633  or after July 1, 2010:
 2634  
 2635        ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT      
 2636                             LIABILITY:                            
 2637  
 2638         I UNDERSTAND, AS A CITIZENS PROPERTY INSURANCE CORPORATION
 2639  POLICYHOLDER, THAT IF THE CORPORATION SUSTAINS A DEFICIT AS A
 2640  RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY
 2641  COULD BE SUBJECT TO CITIZENS POLICYHOLDER SURCHARGES, WHICH
 2642  WOULD BE DUE AND PAYABLE UPON ISSUANCE, RENEWAL, CANCELLATION,
 2643  OR TERMINATION OF THE POLICY, AND THAT THE SURCHARGES COULD BE
 2644  AS HIGH AS 15 PERCENT OF MY PREMIUM FOR DEFICITS IN EACH OF
 2645  THREE CITIZENS ACCOUNTS, OR A DIFFERENT AMOUNT AS ESTABLISHED BY
 2646  THE FLORIDA LEGISLATURE.
 2647         I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
 2648  ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
 2649  INSURANCE COMPANIES.
 2650  
 2651         ...(Signature of applicant or policyholder)......(date)...
 2652  
 2653         b. The corporation shall permanently maintain a copy of the
 2654  signed acknowledgement required by this subparagraph, and the
 2655  agent may also retain a copy.
 2656         c. The signed acknowledgement form creates a conclusive
 2657  presumption that the policyholder understood and accepted his or
 2658  her potential surcharge and assessment liability as a Citizens
 2659  policyholder.
 2660         (d)1. All prospective employees for senior management
 2661  positions, as defined by the plan of operation, are subject to
 2662  background checks as a prerequisite for employment. The office
 2663  shall conduct background checks on such prospective employees
 2664  pursuant to ss. 624.34, 624.404(3), and 628.261.
 2665         2. On or before July 1 of each year, employees of the
 2666  corporation are required to sign and submit a statement
 2667  attesting that they do not have a conflict of interest, as
 2668  defined in part III of chapter 112. As a condition of
 2669  employment, all prospective employees are required to sign and
 2670  submit to the corporation a conflict-of-interest statement.
 2671         3. Senior managers and members of the board of governors
 2672  are subject to the provisions of part III of chapter 112,
 2673  including, but not limited to, the code of ethics and public
 2674  disclosure and reporting of financial interests, pursuant to s.
 2675  112.3145. Notwithstanding s. 112.3143(2), a board member may not
 2676  vote on any measure that would inure to his or her special
 2677  private gain or loss; that he or she knows would inure to the
 2678  special private gain or loss of any principal by whom he or she
 2679  is retained or to the parent organization or subsidiary of a
 2680  corporate principal by which he or she is retained, other than
 2681  an agency as defined in s. 112.312; or that he or she knows
 2682  would inure to the special private gain or loss of a relative or
 2683  business associate of the public officer. Before the vote is
 2684  taken, such member shall publicly state to the assembly the
 2685  nature of the his or her interest in the matter from which he or
 2686  she is abstaining from voting and, within 15 days after the vote
 2687  occurs, disclose the nature of his or her interest as a public
 2688  record in a memorandum filed with the person responsible for
 2689  recording the minutes of the meeting, who shall incorporate the
 2690  memorandum in the minutes. Senior managers and board members are
 2691  also required to file such disclosures with the Commission on
 2692  Ethics and the Office of Insurance Regulation. The executive
 2693  director of the corporation or his or her designee shall notify
 2694  each existing and newly appointed and existing appointed member
 2695  of the board of governors and senior managers of their duty to
 2696  comply with the reporting requirements of part III of chapter
 2697  112. At least quarterly, the executive director or his or her
 2698  designee shall submit to the Commission on Ethics a list of
 2699  names of the senior managers and members of the board of
 2700  governors who are subject to the public disclosure requirements
 2701  under s. 112.3145.
 2702         4. Notwithstanding s. 112.3148 or s. 112.3149, or any other
 2703  provision of law, an employee or board member may not knowingly
 2704  accept, directly or indirectly, any gift or expenditure from a
 2705  person or entity, or an employee or representative of such
 2706  person or entity, that has a contractual relationship with the
 2707  corporation or who is under consideration for a contract. An
 2708  employee or board member who fails to comply with subparagraph
 2709  3. or this subparagraph is subject to penalties provided under
 2710  ss. 112.317 and 112.3173.
 2711         5. Any senior manager of the corporation who is employed on
 2712  or after January 1, 2007, regardless of the date of hire, who
 2713  subsequently retires or terminates employment is prohibited from
 2714  representing another person or entity before the corporation for
 2715  2 years after retirement or termination of employment from the
 2716  corporation.
 2717         6. Any senior manager of the corporation who is employed on
 2718  or after January 1, 2007, regardless of the date of hire, who
 2719  subsequently retires or terminates employment is prohibited from
 2720  having any employment or contractual relationship for 2 years
 2721  with an insurer that has entered into a take-out bonus agreement
 2722  with the corporation.
 2723         (y) It is the intent of the Legislature that the amendments
 2724  to this subsection enacted in 2002 should, over time, reduce the
 2725  probable maximum windstorm losses in the residual markets and
 2726  should reduce the potential assessments to be levied on property
 2727  insurers and policyholders statewide. In furtherance of this
 2728  intent:
 2729         1. The board shall, on or before February 1 of each year,
 2730  provide a report to the President of the Senate and the Speaker
 2731  of the House of Representatives showing the reduction or
 2732  increase in the 100-year probable maximum loss attributable to
 2733  wind-only coverages and the quota share program under this
 2734  subsection combined, as compared to the benchmark 100-year
 2735  probable maximum loss of the Florida Windstorm Underwriting
 2736  Association. For purposes of this paragraph, the benchmark 100
 2737  year probable maximum loss of the Florida Windstorm Underwriting
 2738  Association shall be the calculation dated February 2001 and
 2739  based on November 30, 2000, exposures. In order to ensure
 2740  comparability of data, the board shall use the same methods for
 2741  calculating its probable maximum loss as were used to calculate
 2742  the benchmark probable maximum loss.
 2743         2. Beginning December 1, 2012 2010, if the report under
 2744  subparagraph 1. for any year indicates that the 100-year
 2745  probable maximum loss attributable to wind-only coverages and
 2746  the quota share program combined does not reflect a reduction of
 2747  at least 25 percent from the benchmark, the board shall reduce
 2748  the boundaries of the high-risk area eligible for wind-only
 2749  coverages under this subsection in a manner calculated to reduce
 2750  such probable maximum loss to an amount at least 25 percent
 2751  below the benchmark.
 2752         3. Beginning February 1, 2015, if the report under
 2753  subparagraph 1. for any year indicates that the 100-year
 2754  probable maximum loss attributable to wind-only coverages and
 2755  the quota share program combined does not reflect a reduction of
 2756  at least 50 percent from the benchmark, the boundaries of the
 2757  high-risk area eligible for wind-only coverages under this
 2758  subsection shall be reduced by the elimination of any area that
 2759  is not seaward of a line 1,000 feet inland from the Intracoastal
 2760  Waterway.
 2761         Section 19. The Division of Statutory Revision is directed
 2762  to prepare a reviser’s bill for introduction at the next regular
 2763  session of the Legislature to change the term “high-risk
 2764  account” to “coastal account” to conform the Florida Statutes to
 2765  the amendment to s. 627.351(6)(b)2.a.(III), Florida Statutes,
 2766  made by the this act.
 2767         Section 20. Subsection (2) of section 627.4133, Florida
 2768  Statutes, is amended to read:
 2769         627.4133 Notice of cancellation, nonrenewal, or renewal
 2770  premium.—
 2771         (2) With respect to any personal lines or commercial
 2772  residential property insurance policy, including, but not
 2773  limited to, any homeowner’s, mobile home owner’s, farmowner’s,
 2774  condominium association, condominium unit owner’s, apartment
 2775  building, or other policy covering a residential structure or
 2776  its contents:
 2777         (a) The insurer shall give the named insured at least 45
 2778  days’ advance written notice of the renewal premium.
 2779         (b) The insurer shall give the named insured written notice
 2780  of nonrenewal, cancellation, or termination at least 100 days
 2781  before prior to the effective date of the nonrenewal,
 2782  cancellation, or termination. However, the insurer shall give at
 2783  least 100 days’ written notice, or written notice by June 1,
 2784  whichever is earlier, for any nonrenewal, cancellation, or
 2785  termination that would be effective between June 1 and November
 2786  30. The notice must include the reason or reasons for the
 2787  nonrenewal, cancellation, or termination, except that:
 2788         1. The insurer must shall give the named insured written
 2789  notice of nonrenewal, cancellation, or termination at least 180
 2790  days before prior to the effective date of the nonrenewal,
 2791  cancellation, or termination for a named insured whose
 2792  residential structure has been insured by that insurer or an
 2793  affiliated insurer for at least a 5-year period immediately
 2794  prior to the date of the written notice.
 2795         2. When cancellation is for nonpayment of premium, at least
 2796  10 days’ written notice of cancellation accompanied by the
 2797  reason therefor must shall be given. As used in this
 2798  subparagraph, the term “nonpayment of premium” means failure of
 2799  the named insured to discharge when due any of her or his
 2800  obligations in connection with the payment of premiums on a
 2801  policy or any installment of such premium, whether the premium
 2802  is payable directly to the insurer or its agent or indirectly
 2803  under any premium finance plan or extension of credit, or
 2804  failure to maintain membership in an organization if such
 2805  membership is a condition precedent to insurance coverage.
 2806  “Nonpayment of premium” also means the failure of a financial
 2807  institution to honor an insurance applicant’s check after
 2808  delivery to a licensed agent for payment of a premium, even if
 2809  the agent has previously delivered or transferred the premium to
 2810  the insurer. If a dishonored check represents the initial
 2811  premium payment, the contract and all contractual obligations
 2812  are shall be void ab initio unless the nonpayment is cured
 2813  within the earlier of 5 days after actual notice by certified
 2814  mail is received by the applicant or 15 days after notice is
 2815  sent to the applicant by certified mail or registered mail, and
 2816  if the contract is void, any premium received by the insurer
 2817  from a third party must shall be refunded to that party in full.
 2818         3. When such cancellation or termination occurs during the
 2819  first 90 days during which the insurance is in force and the
 2820  insurance is canceled or terminated for reasons other than
 2821  nonpayment of premium, at least 20 days’ written notice of
 2822  cancellation or termination accompanied by the reason therefor
 2823  must shall be given except if where there has been a material
 2824  misstatement or misrepresentation or failure to comply with the
 2825  underwriting requirements established by the insurer.
 2826         4. The requirement for providing written notice of
 2827  nonrenewal by June 1 of any nonrenewal that would be effective
 2828  between June 1 and November 30 does not apply to the following
 2829  situations, but the insurer remains subject to the requirement
 2830  to provide such notice at least 100 days before prior to the
 2831  effective date of nonrenewal:
 2832         a. A policy that is nonrenewed due to a revision in the
 2833  coverage for sinkhole losses and catastrophic ground cover
 2834  collapse pursuant to s. 627.706, as amended by s. 30, chapter
 2835  2007-1, Laws of Florida.
 2836         b. A policy that is nonrenewed by Citizens Property
 2837  Insurance Corporation, pursuant to s. 627.351(6), for a policy
 2838  that has been assumed by an authorized insurer offering
 2839  replacement or renewal coverage to the policyholder is exempt
 2840  from the notice requirements of paragraph (a) and this
 2841  paragraph. In such cases, Citizens Property Insurance
 2842  Corporation shall give the named insured written notice of
 2843  nonrenewal at least 45 days before the effective date of the
 2844  nonrenewal.
 2845  
 2846  After the policy has been in effect for 90 days, the policy may
 2847  shall not be canceled by the insurer except if when there has
 2848  been a material misstatement, a nonpayment of premium, a failure
 2849  to comply with underwriting requirements established by the
 2850  insurer within 90 days of the date of effectuation of coverage,
 2851  or a substantial change in the risk covered by the policy or if
 2852  when the cancellation is for all insureds under such policies
 2853  for a given class of insureds. This paragraph does not apply to
 2854  individually rated risks having a policy term of less than 90
 2855  days.
 2856         5.Notwithstanding any other provision of law, an insurer
 2857  may cancel or nonrenew a property insurance policy upon a
 2858  minimum of 45 days notice if the office finds that the early
 2859  cancellation of some or all of the insurer’s policies is
 2860  necessary to protect the best interests of the public or
 2861  policyholders and the office approves the insurer’s plan for
 2862  early cancellation or nonrenewal of some or all of its policies.
 2863  The office may base such a finding upon the financial condition
 2864  of the insurer, lack of adequate reinsurance coverage for
 2865  hurricane risk, or other relevant factors. The office may
 2866  condition its finding on the consent of the insurer to be placed
 2867  in administrative supervision pursuant to s. 624.81 or consent
 2868  to the appointment of a receiver under chapter 631.
 2869         (c) If the insurer fails to provide the notice required by
 2870  this subsection, other than the 10-day notice, the coverage
 2871  provided to the named insured shall remain in effect until the
 2872  effective date of replacement coverage or until the expiration
 2873  of a period of days after the notice is given equal to the
 2874  required notice period, whichever occurs first. The premium for
 2875  the coverage shall remain the same during any such extension
 2876  period except that, in the event of failure to provide notice of
 2877  nonrenewal, if the rate filing then in effect would have
 2878  resulted in a premium reduction, the premium during such
 2879  extension must shall be calculated based on the later rate
 2880  filing.
 2881         (d)1. Upon a declaration of an emergency pursuant to s.
 2882  252.36 and the filing of an order by the Commissioner of
 2883  Insurance Regulation, an insurer may not cancel or nonrenew a
 2884  personal residential or commercial residential property
 2885  insurance policy covering a dwelling or residential property
 2886  located in this state which has been damaged as a result of a
 2887  hurricane or wind loss that is the subject of the declaration of
 2888  emergency for a period of 90 days after the dwelling or
 2889  residential property has been repaired. A structure is deemed to
 2890  be repaired when substantially completed and restored to the
 2891  extent that it is insurable by another authorized insurer that
 2892  is writing policies in this state.
 2893         2. However, an insurer or agent may cancel or nonrenew such
 2894  a policy before prior to the repair of the dwelling or
 2895  residential property:
 2896         a. Upon 10 days’ notice for nonpayment of premium; or
 2897         b. Upon 45 days’ notice:
 2898         (I) For a material misstatement or fraud related to the
 2899  claim;
 2900         (II) If the insurer determines that the insured has
 2901  unreasonably caused a delay in the repair of the dwelling; or
 2902         (III) If the insurer has paid policy limits.
 2903         3. If the insurer elects to nonrenew a policy covering a
 2904  property that has been damaged, the insurer shall provide at
 2905  least 90 days’ notice to the insured that the insurer intends to
 2906  nonrenew the policy 90 days after the dwelling or residential
 2907  property has been repaired. Nothing in this paragraph shall
 2908  prevent the insurer from canceling or nonrenewing the policy 90
 2909  days after the repairs are complete for the same reasons the
 2910  insurer would otherwise have canceled or nonrenewed the policy
 2911  but for the limitations of subparagraph 1. The Financial
 2912  Services Commission may adopt rules, and the Commissioner of
 2913  Insurance Regulation may issue orders, necessary to implement
 2914  this paragraph.
 2915         4. This paragraph shall also applies apply to personal
 2916  residential and commercial residential policies covering
 2917  property that was damaged as the result of Tropical Storm
 2918  Bonnie, Hurricane Charley, Hurricane Frances, Hurricane Ivan, or
 2919  Hurricane Jeanne.
 2920         (e) If any cancellation or nonrenewal of a policy subject
 2921  to this subsection is to take effect during the duration of a
 2922  hurricane as defined in s. 627.4025(2)(c), the effective date of
 2923  such cancellation or nonrenewal is extended until the end of the
 2924  duration of such hurricane. The insurer may collect premium at
 2925  the prior rates or the rates then in effect for the period of
 2926  time for which coverage is extended. This paragraph does not
 2927  apply to any property with respect to which replacement coverage
 2928  has been obtained and which is in effect for a claim occurring
 2929  during the duration of the hurricane.
 2930         Section 21. Section 627.43141, Florida Statutes, is created
 2931  to read:
 2932         627.43141 Notice of change in policy terms.—
 2933         (1) As used in this section, the term:
 2934         (a) “Change in policy terms” means the modification,
 2935  addition, or deletion of any term, coverage, duty, or condition
 2936  from the previous policy. The correction of typographical or
 2937  scrivener’s errors or the application of mandated legislative
 2938  changes is not a change in policy terms.
 2939         (b) “Policy” means a written contract of personal lines
 2940  property insurance or a written agreement for insurance, or the
 2941  certificate of such insurance, by whatever name called, and
 2942  includes all clauses, riders, endorsements, and papers that are
 2943  a part of such policy. The term does not include a binder as
 2944  defined in s. 627.420 unless the duration of the binder period
 2945  exceeds 60 days.
 2946         (c) “Renewal” means the issuance and delivery by an insurer
 2947  of a policy superseding at the end of the policy period a policy
 2948  previously issued and delivered by the same insurer or the
 2949  issuance and delivery of a certificate or notice extending the
 2950  term of a policy beyond its policy period or term. Any policy
 2951  that has a policy period or term of less than 6 months or any
 2952  policy that does not have a fixed expiration date shall, for
 2953  purposes of this section, be considered as written for
 2954  successive policy periods or terms of 6 months.
 2955         (2) A renewal policy may contain a change in policy terms.
 2956  If a renewal policy contains a change in policy terms, the
 2957  insurer shall give the named insured a written notice of the
 2958  change in policy terms, which must be enclosed along with the
 2959  written notice of renewal premium required by ss. 627.4133 and
 2960  627.728. Such notice should be entitled “Notice of Change in
 2961  Policy Terms.”
 2962         (3) Although not required, proof of mailing or registered
 2963  mailing through the United States Postal Service of the Notice
 2964  of Change in Policy Terms to the named insured at the address
 2965  shown in the policy is sufficient proof of notice.
 2966         (4) Receipt of payment of the premium for the renewal
 2967  policy by the insurer is deemed to be acceptance of the new
 2968  policy terms by the named insured.
 2969         (5) If an insurer fails to provide the notice required in
 2970  subsection (2), the original policy terms shall remain in effect
 2971  until the next renewal and the proper service of the notice or
 2972  until the effective date of replacement coverage obtained by the
 2973  named insured, whichever occurs first.
 2974         (6) The intent of this section is to:
 2975         (a) Allow an insurer to make a change in policy terms
 2976  without nonrenewing policyholders that the insurer wishes to
 2977  continue insuring.
 2978         (b) Alleviate concern and confusion to the policyholder
 2979  caused by the required policy nonrenewal for the limited issue
 2980  when an insurer intends to renew the insurance policy but the
 2981  new policy contains a change in policy terms.
 2982         (c) Encourage policyholders to discuss their coverages with
 2983  their insurance agents.
 2984         Section 22. Section 627.7011, Florida Statutes, is amended
 2985  to read:
 2986         627.7011 Homeowners’ policies; offer of replacement cost
 2987  coverage and law and ordinance coverage.—
 2988         (1) Before Prior to issuing or renewing a homeowner’s
 2989  insurance policy on or after October 1, 2005, or prior to the
 2990  first renewal of a homeowner’s insurance policy on or after
 2991  October 1, 2005, the insurer must offer each of the following:
 2992         (a) A policy or endorsement providing that any loss which
 2993  is repaired or replaced will be adjusted on the basis of
 2994  replacement costs not exceeding policy limits as to the
 2995  dwelling, rather than actual cash value, but not including costs
 2996  necessary to meet applicable laws and ordinances regulating the
 2997  construction, use, or repair of any property or requiring the
 2998  tearing down of any property, including the costs of removing
 2999  debris.
 3000         (b) A policy or endorsement providing that, subject to
 3001  other policy provisions, any loss which is repaired or replaced
 3002  at any location will be adjusted on the basis of replacement
 3003  costs not exceeding policy limits as to the dwelling, rather
 3004  than actual cash value, and also including costs necessary to
 3005  meet applicable laws and ordinances regulating the construction,
 3006  use, or repair of any property or requiring the tearing down of
 3007  any property, including the costs of removing debris.; However,
 3008  such additional costs necessary to meet applicable laws and
 3009  ordinances may be limited to either 25 percent or 50 percent of
 3010  the dwelling limit, as selected by the policyholder, and such
 3011  coverage shall apply only to repairs of the damaged portion of
 3012  the structure unless the total damage to the structure exceeds
 3013  50 percent of the replacement cost of the structure.
 3014  
 3015  An insurer is not required to make the offers required by this
 3016  subsection with respect to the issuance or renewal of a
 3017  homeowner’s policy that contains the provisions specified in
 3018  paragraph (b) for law and ordinance coverage limited to 25
 3019  percent of the dwelling limit, except that the insurer must
 3020  offer the law and ordinance coverage limited to 50 percent of
 3021  the dwelling limit. This subsection does not prohibit the offer
 3022  of a guaranteed replacement cost policy.
 3023         (2) Unless the insurer obtains the policyholder’s written
 3024  refusal of the policies or endorsements specified in subsection
 3025  (1), any policy covering the dwelling is deemed to include the
 3026  law and ordinance coverage limited to 25 percent of the dwelling
 3027  limit. The rejection or selection of alternative coverage shall
 3028  be made on a form approved by the office. The form shall fully
 3029  advise the applicant of the nature of the coverage being
 3030  rejected. If this form is signed by a named insured, it will be
 3031  conclusively presumed that there was an informed, knowing
 3032  rejection of the coverage or election of the alternative
 3033  coverage on behalf of all insureds. Unless the policyholder
 3034  requests in writing the coverage specified in this section, it
 3035  need not be provided in or supplemental to any other policy that
 3036  renews, insures, extends, changes, supersedes, or replaces an
 3037  existing policy when the policyholder has rejected the coverage
 3038  specified in this section or has selected alternative coverage.
 3039  The insurer must provide such policyholder with notice of the
 3040  availability of such coverage in a form approved by the office
 3041  at least once every 3 years. The failure to provide such notice
 3042  constitutes a violation of this code, but does not affect the
 3043  coverage provided under the policy.
 3044         (3)(a) In the event of a loss for which a dwelling is
 3045  insured on the basis of replacement costs, the insurer initially
 3046  must pay at least the actual cash value of the insured loss,
 3047  less any applicable deductible. An insured shall subsequently
 3048  enter into a contract for the performance of building and
 3049  structural repairs. The insurer shall pay any remaining amounts
 3050  incurred to perform such repairs as the work is performed. With
 3051  the exception of incidental expenses to mitigate further damage,
 3052  the insurer or any contractor or subcontractor may not require
 3053  the policyholder to advance payment for such repairs or
 3054  expenses. The insurer may waive the requirement for a contract
 3055  as provided in this paragraph. An insured shall have a period of
 3056  one 1 year after the date the insurer pays actual cash value to
 3057  make a claim for replacement cost. If a total loss of a dwelling
 3058  occurs, the insurer shall pay the replacement cost coverage
 3059  without reservation or holdback of any depreciation in value,
 3060  pursuant to s._627.702(1)(a).
 3061         (b) In the event of a loss for which a dwelling or personal
 3062  property is insured on the basis of replacement costs, the
 3063  insurer shall pay the replacement cost without reservation or
 3064  holdback of any depreciation in value, whether or not the
 3065  insured replaces or repairs the dwelling or property.
 3066         (4) A Any homeowner’s insurance policy issued or renewed on
 3067  or after October 1, 2005, must include in bold type no smaller
 3068  than 18 points the following statement:
 3069  
 3070         “LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE
 3071         THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO
 3072         CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE
 3073         NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS
 3074         COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE
 3075         DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT.”
 3076  The intent of this subsection is to encourage policyholders to
 3077  purchase sufficient coverage to protect them in case events
 3078  excluded from the standard homeowners policy, such as law and
 3079  ordinance enforcement and flood, combine with covered events to
 3080  produce damage or loss to the insured property. The intent is
 3081  also to encourage policyholders to discuss these issues with
 3082  their insurance agent.
 3083         (5) Nothing in This section does not shall be construed to
 3084  apply to policies not considered to be “homeowners’ policies,”
 3085  as that term is commonly understood in the insurance industry.
 3086  This section specifically does not apply to mobile home
 3087  policies. Nothing in This section does not limit shall be
 3088  construed as limiting the ability of any insurer to reject or
 3089  nonrenew any insured or applicant on the grounds that the
 3090  structure does not meet underwriting criteria applicable to
 3091  replacement cost or law and ordinance policies or for other
 3092  lawful reasons.
 3093         (6) This section does not prohibit an insurer from limiting
 3094  its liability under a policy or endorsement providing that loss
 3095  will be adjusted on the basis of replacement costs to the lesser
 3096  of:
 3097         (a) The limit of liability shown on the policy declarations
 3098  page;
 3099         (b) The reasonable and necessary cost to repair the
 3100  damaged, destroyed, or stolen covered property; or
 3101         (c) The reasonable and necessary cost to replace the
 3102  damaged, destroyed, or stolen covered property.
 3103         (7) This section does not prohibit an insurer from
 3104  exercising its right to repair damaged property in compliance
 3105  with its policy and s. 627.702(7).
 3106         Section 23. Paragraph (a) of subsection (5) of section
 3107  627.70131, Florida Statutes, is amended to read:
 3108         627.70131 Insurer’s duty to acknowledge communications
 3109  regarding claims; investigation.—
 3110         (5)(a) Within 90 days after an insurer receives notice of
 3111  an initial or supplemental a property insurance claim from a
 3112  policyholder, the insurer shall pay or deny such claim or a
 3113  portion of the claim unless the failure to pay such claim or a
 3114  portion of the claim is caused by factors beyond the control of
 3115  the insurer which reasonably prevent such payment. Any payment
 3116  of an initial or supplemental a claim or portion of such a claim
 3117  made paid 90 days after the insurer receives notice of the
 3118  claim, or made paid more than 15 days after there are no longer
 3119  factors beyond the control of the insurer which reasonably
 3120  prevented such payment, whichever is later, shall bear interest
 3121  at the rate set forth in s. 55.03. Interest begins to accrue
 3122  from the date the insurer receives notice of the claim. The
 3123  provisions of this subsection may not be waived, voided, or
 3124  nullified by the terms of the insurance policy. If there is a
 3125  right to prejudgment interest, the insured shall select whether
 3126  to receive prejudgment interest or interest under this
 3127  subsection. Interest is payable when the claim or portion of the
 3128  claim is paid. Failure to comply with this subsection
 3129  constitutes a violation of this code. However, failure to comply
 3130  with this subsection shall not form the sole basis for a private
 3131  cause of action.
 3132         Section 24. Section 627.7015, Florida Statutes, is amended
 3133  to read:
 3134         627.7015 Alternative procedure for resolution of disputed
 3135  property insurance claims.—
 3136         (1) PURPOSE AND SCOPE.—This section sets forth a
 3137  nonadversarial alternative dispute resolution procedure for a
 3138  mediated claim resolution conference prompted by the need for
 3139  effective, fair, and timely handling of property insurance
 3140  claims. There is a particular need for an informal,
 3141  nonthreatening forum for helping parties who elect this
 3142  procedure to resolve their claims disputes because most
 3143  homeowner’s and commercial residential insurance policies
 3144  obligate insureds to participate in a potentially expensive and
 3145  time-consuming adversarial appraisal process before prior to
 3146  litigation. The procedure set forth in this section is designed
 3147  to bring the parties together for a mediated claims settlement
 3148  conference without any of the trappings or drawbacks of an
 3149  adversarial process. Before resorting to these procedures,
 3150  insureds and insurers are encouraged to resolve claims as
 3151  quickly and fairly as possible. This section is available with
 3152  respect to claims under personal lines and commercial
 3153  residential policies for all claimants and insurers prior to
 3154  commencing the appraisal process, or commencing litigation. If
 3155  requested by the insured, participation by legal counsel shall
 3156  be permitted. Mediation under this section is also available to
 3157  litigants referred to the department by a county court or
 3158  circuit court. This section does not apply to commercial
 3159  coverages, to private passenger motor vehicle insurance
 3160  coverages, or to disputes relating to liability coverages in
 3161  policies of property insurance.
 3162         (2) At the time a first-party claim dispute within the
 3163  scope of this section is filed, the insurer shall notify all
 3164  first-party claimants of their right to participate in the
 3165  mediation program under this section. The department shall
 3166  prepare a statement or information relating to the mediation
 3167  program which an insurer must include in the notice. The content
 3168  of the statement or information must be adopted by rule of the
 3169  department consumer information pamphlet for distribution to
 3170  persons participating in mediation under this section.
 3171         (3) The costs of mediation shall be reasonable, and the
 3172  insurer shall bear all of the cost of conducting mediation
 3173  conferences, except as otherwise provided in this section. If an
 3174  insured fails to appear at the conference, the conference shall
 3175  be rescheduled upon the insured’s payment of the costs of a
 3176  rescheduled conference. If the insurer fails to appear at the
 3177  conference, the insurer shall pay the insured’s actual cash
 3178  expenses incurred in attending the conference if the insurer’s
 3179  failure to attend was not due to a good cause acceptable to the
 3180  department. An insurer will be deemed to have failed to appear
 3181  if the insurer’s representative lacks authority to settle the
 3182  full value of the claim. The insurer shall incur an additional
 3183  fee for a rescheduled conference necessitated by the insurer’s
 3184  failure to appear at a scheduled conference. The fees assessed
 3185  by the administrator shall include a charge necessary to defray
 3186  the expenses of the department related to its duties under this
 3187  section and shall be deposited in the Insurance Regulatory Trust
 3188  Fund.
 3189         (4) In a dispute over the cost to replace or repair insured
 3190  property, the insurer and insured shall each provide
 3191  documentation to the mediator which supports his or her estimate
 3192  to repair or replace the property. The documentation must be
 3193  provided before the beginning of the mediation conference. The
 3194  insurer’s documentation must include its reports or other
 3195  evidence relating to the loss and show that the insurer’s
 3196  estimates were created in compliance with s. 626.9744(3). The
 3197  insured must submit quotes obtained from licensed contractors in
 3198  the local market area, retail price quotes for products and
 3199  materials, or other documentation specific to the loss which
 3200  clearly documents the actual cost to repair or replace the
 3201  property.
 3202         (5)(4) The department shall adopt by rule a property
 3203  insurance mediation program to be administered by the department
 3204  or its designee. The department may also adopt special rules
 3205  that which are applicable in cases of an emergency within the
 3206  state. The rules shall be modeled after practices and procedures
 3207  set forth in mediation rules of procedure adopted by the Supreme
 3208  Court. The rules shall provide for:
 3209         (a) Reasonable requirement for processing and scheduling of
 3210  requests for mediation.
 3211         (b) Qualifications of mediators as provided in s. 627.745
 3212  and in the Florida Rules of Certified and Court Appointed
 3213  Mediators, and for such other individuals as are qualified by
 3214  education, training, or experience as the department determines
 3215  to be appropriate.
 3216         (c) Provisions governing who may attend mediation
 3217  conferences.
 3218         (d) Selection of mediators.
 3219         (e) Criteria for the conduct of mediation conferences.
 3220         (f) Right to legal counsel.
 3221         (g) The types of documentation required to be submitted
 3222  during the mediation process.
 3223         (6)(5) All statements made and documents produced at a
 3224  mediation conference shall be deemed to be settlement
 3225  negotiations in anticipation of litigation within the scope of
 3226  s. 90.408. All parties to the mediation must negotiate in good
 3227  faith and must have the authority to immediately settle the
 3228  claim. Mediators are deemed to be agents of the department and
 3229  shall have the immunity from suit provided in s. 44.107.
 3230         (7)(6) Mediation is nonbinding.; However, if a written
 3231  settlement is reached, the insured has 3 business days within
 3232  which the insured may rescind the settlement unless the insured
 3233  has cashed or deposited any check or draft disbursed to the
 3234  insured for the disputed matters as a result of the conference.
 3235  If a settlement agreement is reached and is not rescinded, it
 3236  shall be binding and act as a release of all specific claims
 3237  that were presented in that mediation conference.
 3238         (8)(7) If the insurer fails to comply with subsection (2)
 3239  by failing to notify a first-party claimant of its right to
 3240  participate in the mediation program under this section or if
 3241  the insurer requests the mediation, and the mediation results
 3242  are rejected by either party, the insured may shall not be
 3243  required to submit to or participate in any contractual loss
 3244  appraisal process of the property loss damage as a precondition
 3245  to legal action for breach of contract against the insurer for
 3246  its failure to pay the policyholder’s claims covered by the
 3247  policy.
 3248         (9)(8) The department may designate an entity or person to
 3249  serve as administrator to carry out any of the provisions of
 3250  this section and may take this action by means of a written
 3251  contract or agreement.
 3252         (10)(9)As used in For purposes of this section, the term
 3253  “claim dispute” refers to any dispute between an insurer and an
 3254  insured relating to a material issue of fact other than a
 3255  dispute:
 3256         (a) With respect to which the insurer has a reasonable
 3257  basis to suspect fraud;
 3258         (b) Where, based on agreed-upon facts as to the cause of
 3259  loss, there is no coverage under the policy;
 3260         (c) With respect to which the insurer has a reasonable
 3261  basis to believe that the claimant has intentionally made a
 3262  material misrepresentation of fact which is relevant to the
 3263  claim, and the entire request for payment of a loss has been
 3264  denied on the basis of the material misrepresentation; or
 3265         (d) With respect to which the amount in controversy is less
 3266  than $500, unless the parties agree to mediate a dispute
 3267  involving a lesser amount; or.
 3268         (e)With respect to which the date of loss occurred more
 3269  than 5 years before the request for mediation, unless the
 3270  parties agree to mediate a dispute involving a longer period.
 3271         Section 25. Effective June 1, 2010, and applying only to
 3272  insurance claims made on or after that date, subsection (1),
 3273  paragraph (b) of subsection (2), and subsections (5), (7), and
 3274  (8) of section 627.707, Florida Statutes, are amended to read:
 3275         627.707 Standards for investigation of sinkhole claims by
 3276  insurers; nonrenewals.—Upon receipt of a claim for a sinkhole
 3277  loss, an insurer must meet the following standards in
 3278  investigating a claim:
 3279         (1) The insurer must make an inspection of the insured’s
 3280  premises to determine if there has been physical damage to the
 3281  structure which is consistent with may be the result of sinkhole
 3282  loss activity.
 3283         (2) Following the insurer’s initial inspection, the insurer
 3284  shall engage a professional engineer or a professional geologist
 3285  to conduct testing as provided in s. 627.7072 to determine the
 3286  cause of the loss within a reasonable professional probability
 3287  and issue a report as provided in s. 627.7073, if:
 3288         (b) The policyholder demands testing in accordance with
 3289  this section or s. 627.7072 and coverage under the policy is
 3290  available if sinkhole loss is verified.
 3291         (5)(a) Subject to paragraph (b), if a sinkhole loss is
 3292  verified, the insurer shall pay to stabilize the land and
 3293  building and repair the foundation in accordance with the
 3294  recommendations of the professional engineer as provided under
 3295  s. 627.7073, with notice to and in consultation with the
 3296  policyholder, subject to the coverage and terms of the policy.
 3297  The insurer shall pay for other repairs to the structure and
 3298  contents in accordance with the terms of the policy.
 3299         (b)1. After a The insurer may limit its payment to the
 3300  actual cash value of the sinkhole loss, not including
 3301  underpinning or grouting or any other repair technique performed
 3302  below the existing foundation of the building, until the
 3303  policyholder enters into a contract for the performance of
 3304  building stabilization or foundation repairs, the claim shall be
 3305  paid up to the full cost of the stabilization or foundation
 3306  repairs and up to full replacement cost for above-ground repairs
 3307  as set forth in this paragraph, less the insured’s deductible.
 3308  After the policyholder enters into a contract for the
 3309  performance of building stabilization or foundation repairs, the
 3310  insurer may:
 3311         a. Limit its initial payment to 10 percent of the estimated
 3312  costs to implement the building stabilization and foundation
 3313  repairs.
 3314         b. Limit its initial payment to the actual cash value of
 3315  the sinkhole loss for above-ground repairs to the structure.
 3316         2.However, after the policyholder enters into the contract
 3317  for the performance of building stabilization or foundation
 3318  repairs, the insurer shall pay the amounts necessary to begin
 3319  and perform such stabilization and repairs as the work is
 3320  performed and the expenses are incurred. Final payments for the
 3321  structural or building stabilization and foundation repair work
 3322  shall be remitted within 20 days after such work is completed in
 3323  accordance with the terms of the policy and the report’s
 3324  recommendations and after final bills or receipts have been
 3325  submitted to the insurer. An insured shall have 1 year after the
 3326  date the insurer pays actual cash value to make a claim for
 3327  replacement cost. If a total loss of a dwelling occurs, the
 3328  insurer shall pay the replacement cost coverage without
 3329  reservation or holdback of any depreciation in value, pursuant
 3330  to s._627.702. The insurer may not require the policyholder to
 3331  advance payment for such repairs. If repair covered by a
 3332  personal lines residential property insurance policy has begun
 3333  and the professional engineer selected or approved by the
 3334  insurer determines that the repair cannot be completed within
 3335  the policy limits, the insurer must either complete the
 3336  professional engineer’s recommended repair or tender the policy
 3337  limits to the policyholder without a reduction for the repair
 3338  expenses incurred.
 3339         (c) The policyholder shall enter into such contract for
 3340  repairs within 90 days after the insurance company approves
 3341  coverage for a sinkhole loss to prevent additional damage to the
 3342  building or structure. The 90-day period may be extended for an
 3343  additional reasonable time period if the policyholder is unable
 3344  to find a qualified person or entity to contract for such
 3345  repairs within the 90-day period based upon factors beyond the
 3346  policyholder’s control or if the policyholder is actively
 3347  seeking to retain a professional engineer or geologist as
 3348  provided in s. 627.7073(1)(c). This period shall be tolled if
 3349  either party invokes neutral evaluation.
 3350         (d) The stabilization and all other repairs to the
 3351  structure and contents must be completed within 12 months after
 3352  entering into the contract for repairs as described in paragraph
 3353  (c) unless:
 3354         1. There is a mutual agreement between the insurer and the
 3355  insured;
 3356         2. The stabilization and all other repairs cannot be
 3357  completed due to factors beyond the control of the insured which
 3358  reasonably prevent completion;
 3359         3. The claim is involved with the neutral evaluation
 3360  process under s. 627.7074;
 3361         4. The claim is in litigation; or
 3362         5. The claim is under appraisal.
 3363         (e)(c) Upon the insurer’s obtaining the written approval of
 3364  the policyholder and any lienholder, the insurer may make
 3365  payment directly to the persons selected by the policyholder to
 3366  perform the land and building stabilization and foundation
 3367  repairs. The decision by the insurer to make payment to such
 3368  persons does not hold the insurer liable for the work performed.
 3369         (7) If the insurer obtains, pursuant to s. 627.7073,
 3370  written certification that there is no sinkhole loss or that the
 3371  cause of the damage was not sinkhole activity, and if the
 3372  policyholder has submitted the sinkhole claim without good faith
 3373  grounds for submitting such claim, the policyholder shall
 3374  reimburse the insurer for 50 percent of the actual costs of the
 3375  analyses and services provided under ss. 627.7072 and 627.7073;
 3376  however, a policyholder is not required to reimburse an insurer
 3377  more than $2,500 with respect to any claim. A policyholder is
 3378  required to pay reimbursement under this subsection only if the
 3379  insurer, prior to ordering the analysis under s. 627.7072,
 3380  informs the policyholder in writing of the policyholder’s
 3381  potential liability for reimbursement and gives the policyholder
 3382  the opportunity to withdraw the claim.
 3383         (8) No insurer shall nonrenew any policy of property
 3384  insurance on the basis of filing of claims for partial loss
 3385  caused by sinkhole damage or clay shrinkage as long as the total
 3386  of such payments does not exceed the current policy limits of
 3387  coverage for property damage for the policy in effect on the
 3388  date of the loss, and provided the insured has repaired the
 3389  structure in accordance with the engineering recommendations
 3390  upon which any payment or policy proceeds were based.
 3391         Section 26. Effective June 1, 2010, and applying only to
 3392  insurance claims made on or after that date, section 627.7073,
 3393  Florida Statutes, is amended to read:
 3394         627.7073 Sinkhole reports.—
 3395         (1) Upon completion of testing as provided in s. 627.7072,
 3396  the professional engineer or professional geologist shall issue
 3397  a report and certification to the insurer, with an additional
 3398  copy and certification for the insurer to forward to and the
 3399  policyholder as provided in this section.
 3400         (a) Sinkhole loss is verified if, based upon tests
 3401  performed in accordance with s. 627.7072, a professional
 3402  engineer or a professional geologist issues a written report and
 3403  certification stating:
 3404         1. That the cause of the actual physical and structural
 3405  damage is sinkhole activity within a reasonable professional
 3406  probability.
 3407         2. That the analyses conducted were of sufficient scope to
 3408  identify sinkhole activity as the cause of damage within a
 3409  reasonable professional probability.
 3410         3. A description of the tests performed.
 3411         4. A recommendation by the professional engineer of methods
 3412  for stabilizing the land and building and for making repairs to
 3413  the foundation.
 3414         (b) If sinkhole activity is eliminated as the cause of
 3415  damage to the structure, the professional engineer or
 3416  professional geologist shall issue a written report and
 3417  certification to the policyholder and the insurer stating:
 3418         1. That the cause of the damage is not sinkhole activity
 3419  within a reasonable professional probability.
 3420         2. That the analyses and tests conducted were of sufficient
 3421  scope to eliminate sinkhole activity as the cause of damage
 3422  within a reasonable professional probability.
 3423         3. A statement of the cause of the damage within a
 3424  reasonable professional probability.
 3425         4. A description of the tests performed.
 3426         (c) If the policyholder disagrees with the findings,
 3427  opinions, or recommendations of the professional engineer or
 3428  professional geologist engaged by the insurer, the policyholder
 3429  may engage a professional engineer or professional geologist, at
 3430  the policyholder’s expense, to conduct testing under s.
 3431  627.7072; to render findings, opinions, and recommendations as
 3432  to the cause of distress to the property and the appropriate
 3433  method of land and building stabilization and foundation repair;
 3434  certify such findings, opinions, and recommendations in a report
 3435  that meets the requirements of this section; and forward a copy
 3436  of the report to the insurer. Unless the policyholder engages a
 3437  professional engineer or professional geologist as described in
 3438  this paragraph who disputes the findings of the insurer’s
 3439  engineer or geologist, the respective findings, opinions, and
 3440  recommendations of the professional engineer or professional
 3441  geologist as to the cause of distress to the property and the
 3442  findings, opinions, and recommendations of the insurer’s
 3443  professional engineer as to land and building stabilization and
 3444  foundation repair as required by s. 627.707(2), shall be
 3445  presumed correct, and such presumption shall shift the burden of
 3446  proof under s. 90.304.
 3447         (2)(a) Any insurer that has paid a claim for a sinkhole
 3448  loss shall file a copy of the report and certification, prepared
 3449  pursuant to subsection (1), including the legal description of
 3450  the real property, and the name of the property owner, and the
 3451  amount paid by the insurer, with the county clerk of court, who
 3452  shall record the report and certification. The insurer shall
 3453  also file a copy of any report prepared on behalf of the insured
 3454  or the insured’s representative which has been provided to the
 3455  insurer which indicates that sinkhole loss caused the damage
 3456  claimed. The insurer shall bear the cost of filing and recording
 3457  of one or more reports the report and certifications
 3458  certification. There shall be no cause of action or liability
 3459  against an insurer for compliance with this section. The
 3460  recording of the report and certification does not:
 3461         1. Constitute a lien, encumbrance, or restriction on the
 3462  title to the real property or constitute a defect in the title
 3463  to the real property;
 3464         2. Create any cause of action or liability against any
 3465  grantor of the real property for breach of any warranty of good
 3466  title or warranty against encumbrances; or
 3467         3. Create any cause of action or liability against any
 3468  title insurer that insures the title to the real property.
 3469         (b) The seller of real property upon which a sinkhole claim
 3470  has been made by the seller and paid by the insurer shall
 3471  disclose to the buyer of such property that a claim has been
 3472  paid, the amount of the payment, and whether or not the full
 3473  amount of the proceeds were used to repair the sinkhole damage.
 3474  The seller shall also provide to the buyer a copy of the report
 3475  prepared pursuant to subsection (1) and any report prepared on
 3476  behalf of the insured.
 3477         Section 27. Effective June 1, 2010, and applying only to
 3478  insurance claims made on or after that date, section 627.7074,
 3479  Florida Statutes, is amended to read:
 3480         627.7074 Alternative procedure for resolution of disputed
 3481  sinkhole insurance claims.—
 3482         (1) As used in this section, the term:
 3483         (a) “Neutral evaluation” means the alternative dispute
 3484  resolution provided for in this section.
 3485         (b) “Neutral evaluator” means a professional engineer or a
 3486  professional geologist who has completed a course of study in
 3487  alternative dispute resolution designed or approved by the
 3488  department for use in the neutral evaluation process, who is
 3489  determined to be fair and impartial.
 3490         (2)(a) The department shall certify and maintain a list of
 3491  persons who are neutral evaluators.
 3492         (b) The department shall prepare a consumer information
 3493  pamphlet for distribution by insurers to policyholders which
 3494  clearly describes the neutral evaluation process and includes
 3495  information and forms necessary for the policyholder to request
 3496  a neutral evaluation.
 3497         (3) Neutral evaluation is available to either party if a
 3498  sinkhole report has been issued pursuant to s. 627.7073. Neutral
 3499  evaluation shall, at a minimum, determine causation, all methods
 3500  of stabilization and repair both above and below ground, and
 3501  information necessary to carry out subsection (13). Following
 3502  the receipt of the report provided under s. 627.7073 or the
 3503  denial of a claim for a sinkhole loss, the insurer shall notify
 3504  the policyholder of his or her right to participate in the
 3505  neutral evaluation program under this section. Neutral
 3506  evaluation supersedes the alternative dispute resolution process
 3507  under s. 627.7015 but does not invalidate the appraisal clause
 3508  if an appraisal clause is provided by the insurance policy. The
 3509  appraisal process must be performed in accordance with the terms
 3510  of the applicable policy and the requirements of this section.
 3511  The insurer shall provide to the policyholder the consumer
 3512  information pamphlet prepared by the department pursuant to
 3513  paragraph (2)(b).
 3514         (4) Neutral evaluation is nonbinding, but mandatory if
 3515  requested by either party. A request for neutral evaluation may
 3516  be filed with the department by the policyholder or the insurer
 3517  on a form approved by the department. The insurance carrier must
 3518  request neutral evaluation within 1 year after the
 3519  policyholder’s written notice to the insurer’s claims adjuster
 3520  who is primarily responsible for adjusting the loss of a
 3521  disputed issue relating to the sinkhole claim. The request for
 3522  neutral evaluation must state the reason for the request and
 3523  must include an explanation of all the issues in dispute at the
 3524  time of the request. Filing a request for neutral evaluation
 3525  tolls the applicable time requirements for filing suit for a
 3526  period of 60 days following the conclusion of the neutral
 3527  evaluation process or the time prescribed in s. 95.11, whichever
 3528  is later.
 3529         (5) Neutral evaluation shall be conducted as an informal
 3530  process in which formal rules of evidence and procedure need not
 3531  be observed. A party to neutral evaluation is not required to
 3532  attend neutral evaluation if a representative of the party
 3533  attends and has the authority to make a binding decision on
 3534  behalf of the party. All parties shall participate in the
 3535  evaluation in good faith. If an appraisal clause is present in
 3536  the policy, a remaining dispute as to the amount of the loss may
 3537  be resolved in the applicable policy’s appraisal process in
 3538  compliance with the terms of such policy, by other proceedings
 3539  agreed to by the parties, or by trial.
 3540         (6) The insurer shall pay the costs associated with the
 3541  neutral evaluation.
 3542         (7)(a) Upon receipt of a request for neutral evaluation,
 3543  the department shall provide the parties a list of certified
 3544  neutral evaluators. the parties shall mutually select a neutral
 3545  evaluator from the list and promptly inform the department. If
 3546  the parties cannot agree to a neutral evaluator within 10
 3547  business days, the department allow the parties to submit
 3548  requests to disqualify neutral evaluators on the list for cause.
 3549  For purposes of this subsection, a ground for cause is required
 3550  to be found by the department only if:
 3551         1. A familial relationship exists between the neutral
 3552  evaluator and either party or a representative of either party
 3553  within the third degree;
 3554         2. The proposed neutral evaluator has, in a professional
 3555  capacity, previously represented either party or a
 3556  representative of either party in the same or a substantially
 3557  related matter;
 3558         3. The proposed neutral evaluator has, in a professional
 3559  capacity, represented another person in the same or a
 3560  substantially related matter and that person’s interests are
 3561  materially adverse to the interests of the parties;
 3562         4. The proposed neutral evaluator works in the same firm or
 3563  corporation as a person who has, in a professional capacity,
 3564  previously represented either party or a representative of
 3565  either party in the same or a substantially related matter; or
 3566         5. The proposed neutral evaluator has, within the preceding
 3567  5 years, worked as an employee of any party to the case.
 3568         (b) The parties shall mutually appoint a neutral evaluator
 3569  from the department list and promptly inform the department. If
 3570  the parties cannot agree to a neutral evaluator within 10
 3571  business days, the department shall appoint a neutral evaluator
 3572  from the department’s list of certified neutral evaluators. The
 3573  department shall allow each party to disqualify one neutral
 3574  evaluator without cause. Upon selection or appointment, the
 3575  department shall promptly refer the request to the neutral
 3576  evaluator.
 3577         (c) Within 5 business days after the referral, the neutral
 3578  evaluator shall notify the policyholder and the insurer of the
 3579  date, time, and place of the neutral evaluation conference. The
 3580  conference may be held by telephone, if feasible and desirable.
 3581  The neutral evaluation conference shall be held within 90 45
 3582  days after the receipt of the request by the department. If the
 3583  neutral evaluator fails to hold a neutral evaluation conference
 3584  in accordance with this paragraph, the neutral evaluator’s fee
 3585  will be reduced by 10 percent unless the delay was due to
 3586  factors beyond the control of the neutral evaluator.
 3587         (d) As used in this subsection, the term “substantially
 3588  related matter” means participation by the neutral evaluator on
 3589  the same claim, property, or any adjacent property.
 3590         (8) The department shall adopt rules of procedure for the
 3591  neutral evaluation process.
 3592         (9) For policyholders not represented by an attorney, a
 3593  consumer affairs specialist of the department or an employee
 3594  designated as the primary contact for consumers on issues
 3595  relating to sinkholes under s. 20.121 shall be available for
 3596  consultation to the extent that he or she may lawfully do so.
 3597         (10) Evidence of an offer to settle a claim during the
 3598  neutral evaluation process, as well as any relevant conduct or
 3599  statements made in negotiations concerning the offer to settle a
 3600  claim, is inadmissible to prove liability or absence of
 3601  liability for the claim or its value, except as provided in
 3602  subsection (14) (13).
 3603         (11) Regardless of when invoked, any court proceeding
 3604  related to the subject matter of the neutral evaluation shall be
 3605  stayed pending completion of the neutral evaluation and for 5
 3606  days after the filing of the neutral evaluator’s report with the
 3607  court.
 3608         (12)If the neutral evaluator, based upon his or her
 3609  professional training and credentials, is qualified only to
 3610  determine the causation issue or the method of repair issue, the
 3611  department shall allow the neutral evaluator to enlist the
 3612  assistance of another professional from the qualified neutral
 3613  evaluators list, not previously stricken by parties with respect
 3614  to the subject evaluation, who, based upon his or her
 3615  professional training and credentials, is able to provide an
 3616  opinion as to the other disputed issue. Any professional who, if
 3617  appointed as the neutral evaluator, would be disqualified for
 3618  any reason listed in subsection (7) must be disqualified. In
 3619  addition, the neutral evaluator may use the service of other
 3620  experts or professionals as necessary to ensure that all items
 3621  in dispute are addressed in order to complete the neutral
 3622  evaluation. Any experts or professionals retained by the neutral
 3623  evaluator to provide an opinion may be disqualified for any of
 3624  the reasons listed in subsection (7) and must be agreed upon by
 3625  both parties to the neutral evaluation. The neutral evaluator
 3626  may request that the entity that performed testing pursuant to
 3627  s. 627.7072 perform such additional reasonable testing deemed
 3628  necessary in the professional opinion of the neutral evaluator
 3629  to complete the neutral evaluation.
 3630         (13)(12) For all matters that are not resolved by the
 3631  parties at the conclusion of the neutral evaluation, the neutral
 3632  evaluator shall prepare a report stating that in his or her
 3633  opinion the sinkhole loss has been verified or eliminated within
 3634  a reasonable degree of professional probability and, if
 3635  verified, whether the sinkhole loss has caused structural or
 3636  cosmetic damage to the building and, if so, the need for and
 3637  estimated costs of stabilizing the land and any covered
 3638  structures or buildings and other appropriate remediation or
 3639  structural repairs that are necessary due to the sinkhole loss.
 3640  The evaluator’s report shall be sent to all parties in
 3641  attendance at the neutral evaluation and to the department.
 3642         (14)(13) The recommendation of the neutral evaluator is not
 3643  binding on any party, and the parties retain access to court.
 3644  The neutral evaluator’s written recommendation is admissible in
 3645  any subsequent action or proceeding relating to the claim or to
 3646  the cause of action giving rise to the claim.
 3647         (15)(14) If the neutral evaluator first verifies the
 3648  existence of a sinkhole and, second, recommends the need for and
 3649  estimates costs of stabilizing the land and any covered
 3650  structures or buildings and other appropriate remediation or
 3651  structural repairs, which costs exceed the amount that the
 3652  insurer has offered to pay the policyholder, the insurer is
 3653  liable to the policyholder for up to $2,500 in attorney’s fees
 3654  for the attorney’s participation in the neutral evaluation
 3655  process. For purposes of this subsection, the term “offer to
 3656  pay” means a written offer signed by the insurer or its legal
 3657  representative and delivered to the policyholder within 10 days
 3658  after the insurer receives notice that a request for neutral
 3659  evaluation has been made under this section.
 3660         (16)(15) If the insurer timely agrees in writing to comply
 3661  and timely complies with the recommendation of the neutral
 3662  evaluator, but the policyholder declines to resolve the matter
 3663  in accordance with the recommendation of the neutral evaluator
 3664  pursuant to this section:
 3665         (a) The insurer is not liable for extracontractual damages
 3666  related to a claim for a sinkhole loss but only as related to
 3667  the issues determined by the neutral evaluation process. This
 3668  section does not affect or impair claims for extracontractual
 3669  damages unrelated to the issues determined by the neutral
 3670  evaluation process contained in this section; and
 3671         (b) The insurer is not liable for attorney’s fees under s.
 3672  627.428 or other provisions of the insurance code unless the
 3673  policyholder obtains a judgment that is more favorable than the
 3674  recommendation of the neutral evaluator.
 3675         (17) If the insurer agrees to comply with the neutral
 3676  evaluator’s report, payment for stabilizing the land and
 3677  building and repairing the foundation shall be made in
 3678  accordance with the terms and conditions of the applicable
 3679  insurance policy.
 3680         Section 28. Section 627.711, Florida Statutes, is amended
 3681  to read:
 3682         627.711 Notice of premium discounts for hurricane loss
 3683  mitigation; uniform mitigation verification inspection form.—
 3684         (1) Using a form prescribed by the Office of Insurance
 3685  Regulation, the insurer shall clearly notify the applicant or
 3686  policyholder of any personal lines residential property
 3687  insurance policy, at the time of the issuance of the policy and
 3688  at each renewal, of the availability and the range of each
 3689  premium discount, credit, other rate differential, or reduction
 3690  in deductibles, and combinations of discounts, credits, rate
 3691  differentials, or reductions in deductibles, for properties on
 3692  which fixtures or construction techniques demonstrated to reduce
 3693  the amount of loss in a windstorm can be or have been installed
 3694  or implemented. The prescribed form shall describe generally
 3695  what actions the policyholders may be able to take to reduce
 3696  their windstorm premium. The prescribed form and a list of such
 3697  ranges approved by the office for each insurer licensed in the
 3698  state and providing such discounts, credits, other rate
 3699  differentials, or reductions in deductibles for properties
 3700  described in this subsection shall be available for electronic
 3701  viewing and download from the Department of Financial Services’
 3702  or the Office of Insurance Regulation’s Internet website. The
 3703  Financial Services Commission may adopt rules to implement this
 3704  subsection.
 3705         (2)(a)By July 1, 2007, The Financial Services Commission
 3706  shall develop by rule a uniform mitigation verification
 3707  inspection form that shall be used by all insurers when
 3708  submitted by policyholders for the purpose of factoring
 3709  discounts for wind insurance. In developing the form, the
 3710  commission shall seek input from insurance, construction, and
 3711  building code representatives. Further, the commission shall
 3712  provide guidance as to the length of time the inspection results
 3713  are valid. An insurer shall accept as valid a uniform mitigation
 3714  verification form certified by the Department of Financial
 3715  Services or signed by the following authorized mitigation
 3716  inspectors:
 3717         1.(a) A home inspector licensed under s. 468.8314 who has
 3718  completed at least 3 hours of hurricane mitigation training
 3719  which includes hurricane mitigation techniques and compliance
 3720  with the uniform mitigation verification form and completion of
 3721  a proficiency exam. Thereafter, home inspectors licensed under
 3722  s. 468.8314, must complete at least 2 hours of continuing
 3723  education, as part of the existing licensure renewal
 3724  requirements each year, related to mitigation inspection and the
 3725  uniform mitigation form hurricane mitigation inspector certified
 3726  by the My Safe Florida Home program;
 3727         2.(b) A building code inspector certified under s. 468.607;
 3728         3.(c) A general, building, or residential contractor
 3729  licensed under s. 489.111;
 3730         4.(d) A professional engineer licensed under s. 471.015 who
 3731  has passed the appropriate equivalency test of the building code
 3732  training program as required by s. 553.841;
 3733         5.(e) A professional architect licensed under s. 481.213;
 3734  or
 3735         6.(f) Any other individual or entity recognized by the
 3736  insurer as possessing the necessary qualifications to properly
 3737  complete a uniform mitigation verification form.
 3738         (b) An insurer may, but is not required to, accept a form
 3739  from any other person possessing qualifications and experience
 3740  acceptable to the insurer.
 3741         (3) A person who is authorized to sign a mitigation
 3742  verification form must inspect the structures referenced by the
 3743  form personally, not through employees or other persons, and
 3744  must certify or attest to personal inspection of the structures
 3745  referenced by the form. However, licensees under s. 489.111, may
 3746  authorize a direct employee, who is not an independent
 3747  contractor, and who possesses the requisite skill, knowledge and
 3748  experience to conduct a mitigation verification inspection.
 3749  Insurers shall have the right to request and obtain information
 3750  from the authorized mitigation inspector under s. 489.111,
 3751  regarding any authorized employee’s qualifications prior to
 3752  accepting a mitigation verification form performed by an
 3753  employee that is not licensed under s. 489.111.
 3754         (4) An authorized mitigation inspector that signs a uniform
 3755  mitigation form, and a direct employee authorized to conduct
 3756  mitigation verification inspections under paragraph (3), may not
 3757  commit misconduct in performing hurricane mitigation inspections
 3758  or in completing a uniform mitigation form that causes financial
 3759  harm to a customer or their insurer; or that jeopardizes a
 3760  customer’s health and safety. Misconduct occurs when an
 3761  authorized mitigation inspector signs a uniform mitigation
 3762  verification form that:
 3763         (a) Falsely indicates that he or she personally inspected
 3764  the structures referenced by the form;
 3765         (b) Falsely indicates the existence of a feature which
 3766  entitles an insured to a mitigation discount which the inspector
 3767  knows does not exist or did not personally inspect;
 3768         (c) Contains erroneous information due to the gross
 3769  negligence of the inspector; or
 3770         (d) Contains a pattern of demonstrably false information
 3771  regarding the existence of mitigation features that could give
 3772  an insured a false evaluation of the ability of the structure to
 3773  withstand major damage from a hurricane endangering the safety
 3774  of the insured’s life and property.
 3775         (5) The licensing board of an authorized mitigation
 3776  inspector that violates subsection (4) may commence disciplinary
 3777  proceedings and impose administrative fines and other sanctions
 3778  authorized under the authorized mitigation inspector’s licensing
 3779  act. Authorized mitigation inspectors licensed under s. 489.111,
 3780  shall be directly liable for the acts of employees that violate
 3781  subsection (4) as if the authorized mitigation inspector
 3782  personally performed the inspection.
 3783         (6) An insurer, person, or other entity that obtains
 3784  evidence of fraud or evidence that an authorized mitigation
 3785  inspector or an employee authorized to conduct mitigation
 3786  verification inspections under paragraph (3), has made false
 3787  statements in the completion of a mitigation inspection form
 3788  shall file a report with the Division of Insurance Fraud, along
 3789  with all of the evidence in its possession that supports the
 3790  allegation of fraud or falsity. An insurer, person, or other
 3791  entity making the report shall be immune from liability in
 3792  accordance with s. 626.989(4), for any statements made in the
 3793  report, during the investigation, or in connection with the
 3794  report. The Division of Insurance Fraud shall issue an
 3795  investigative report if it finds that probable cause exists to
 3796  believe that the authorized mitigation inspector, or an employee
 3797  authorized to conduct mitigation verification inspections under
 3798  paragraph (3), made intentionally false or fraudulent statements
 3799  in the inspection form. Upon conclusion of the investigation and
 3800  a finding of probable cause that a violation has occurred, the
 3801  Division of Insurance Fraud shall send a copy of the
 3802  investigative report to the office and a copy to the agency
 3803  responsible for the professional licensure of the authorized
 3804  mitigation inspector, whether or not a prosecutor takes action
 3805  based upon the report.
 3806         (7)(3) An individual or entity who knowingly provides or
 3807  utters a false or fraudulent mitigation verification form with
 3808  the intent to obtain or receive a discount on an insurance
 3809  premium to which the individual or entity is not entitled
 3810  commits a misdemeanor of the first degree, punishable as
 3811  provided in s. 775.082 or s. 775.083.
 3812         (8) At its expense, the insurer may require that any
 3813  uniform mitigation verification form provided by an authorized
 3814  mitigation inspector or inspection company be independently
 3815  verified by an inspector, inspection company or an independent
 3816  third-party quality assurance provider which does possess a
 3817  quality assurance program prior to accepting the uniform
 3818  mitigation verification form as valid.
 3819         Section 29. Section 628.252, Florida Statutes, is created
 3820  to read:
 3821         628.252 Servicing affiliates of domestic property
 3822  insurers.—Every domestic property insurer shall notify the
 3823  office of its intention to enter into with affiliates all
 3824  management agreements, service contracts, and cost-sharing
 3825  arrangements. A domestic property insurer may not enter into
 3826  such an agreement, contract, or arrangement unless the insurer
 3827  has it has provided the office with at least 30 days’ written
 3828  notice of its intention to enter into such agreement, contract,
 3829  or arrangement, or such shorter period as the office, in its
 3830  discretion, may permit and the office has not disapproved such
 3831  agreement, contract, or arrangement within such period. This
 3832  section does not limit any existing authority of the office.
 3833         Section 30. The sums of $263,200 in nonrecurring funds and
 3834  $47,500 in recurring funds from the Insurance Regulatory Trust
 3835  Fund are appropriated and one full-time equivalent position and
 3836  associated salary rate is authorized to the Office of Insurance
 3837  Regulation to implement the provisions of the act relating to
 3838  the design, development, and operation of a comprehensive
 3839  website for consumers which provides comparisons of homeowners’
 3840  insurance rates and products.
 3841         Section 31. Except as otherwise expressly provided in this
 3842  act and except for this section, which shall take effect June 1,
 3843  2010, this act shall take effect July 1, 2010.

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