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Bill No. 1486
Amendment No. 865571
Senate House

1Representative Ross offered the following:
3     Amendment (with title amendment)
4Delete everything after the enacting clause and insert:
5     Section 1.  Effective June 1, 2005, paragraph (e) of
6subsection (2) of section 215.555, Florida Statutes, is amended
7to read:
8     215.555  Florida Hurricane Catastrophe Fund.--
9     (2)  DEFINITIONS.--As used in this section:
10     (e)  "Retention" means the amount of losses below which an
11insurer is not entitled to reimbursement from the fund. An
12insurer's retention shall be calculated as follows:
13     1.  The board shall calculate and report to each insurer
14the retention multiples for that year. For the contract year
15beginning June 1, 2005 2004, the retention multiple shall be
16equal to $4.5 billion divided by the total estimated
17reimbursement premium for the contract year; for subsequent
18years, the retention multiple shall be equal to $4.5 billion,
19adjusted based upon the reported exposure from the prior
20contract year to reflect the percentage growth in exposure to
21the fund for covered policies since 2004 2003, divided by the
22total estimated reimbursement premium for the contract year.
23Total reimbursement premium for purposes of the calculation
24under this subparagraph shall be estimated using the assumption
25that all insurers have selected the 90-percent coverage level.
26     2.  The retention multiple as determined under subparagraph
271. shall be adjusted to reflect the coverage level elected by
28the insurer. For insurers electing the 90-percent coverage
29level, the adjusted retention multiple is 100 percent of the
30amount determined under subparagraph 1. For insurers electing
31the 75-percent coverage level, the retention multiple is 120
32percent of the amount determined under subparagraph 1. For
33insurers electing the 45-percent coverage level, the adjusted
34retention multiple is 200 percent of the amount determined under
35subparagraph 1.
36     3.  An insurer shall determine its provisional retention by
37multiplying its provisional reimbursement premium by the
38applicable adjusted retention multiple and shall determine its
39actual retention by multiplying its actual reimbursement premium
40by the applicable adjusted retention multiple.
41     4.  For insurers who experience multiple covered events
42causing loss during the contract year, beginning June 1, 2005,
43each insurer's full retention shall be applied to each of the
44covered events causing the two largest losses for that insurer.
45For each other covered event resulting in losses, the insurer's
46retention shall be reduced to one-third of the full retention.
47The reimbursement contract shall provide for the reimbursement
48of losses for each covered event based on the full retention
49with adjustments made to reflect the reduced retentions after
50January 1 of the contract year provided the insurer reports its
51losses as specified in the reimbursement contract.
52     Section 2.  Effective July 1, 2005, section 215.559,
53Florida Statutes, is amended to read:
54     215.559  Hurricane Loss Mitigation Program.--
55     (1)  There is created a Hurricane Loss Mitigation Program.
56The Legislature shall annually appropriate $10 million of the
57moneys authorized for appropriation under s. 215.555(7)(c) from
58the Florida Hurricane Catastrophe Fund to the Department of
59Community Affairs for the purposes set forth in this section.
60     (2)(a)  Seven million dollars in funds provided in
61subsection (1) shall be used for programs to improve the wind
62resistance of residences and mobile homes, including loans,
63subsidies, grants, demonstration projects, and direct
64assistance; cooperative programs with local governments and the
65Federal Government; and other efforts to prevent or reduce
66losses or reduce the cost of rebuilding after a disaster.
67     (b)  Three million dollars in funds provided in subsection
68(1) shall be used to retrofit existing facilities used as public
69hurricane shelters. The department must prioritize the use of
70these funds for projects included in the September 1, 2000,
71version of the Shelter Retrofit Report prepared in accordance
72with s. 252.385(3), and each annual report thereafter. The
73department must give funding priority to projects in regional
74planning council regions that have shelter deficits and to
75projects that maximize use of state funds.
76     (3)  By the 2006-2007 fiscal year, the Department of
77Community Affairs shall develop a low-interest loan program for
78homeowners and mobile home owners to retrofit their homes with
79fixtures or apply construction techniques that have been
80demonstrated to reduce the amount of damage or loss due to a
81hurricane. Funding for the program shall be used to subsidize or
82guaranty private-sector loans for this purpose to qualified
83homeowners by financial institutions chartered by the state or
84Federal Government. The department may enter into contracts with
85financial institutions for this purpose. The department shall
86establish criteria for determining eligibility for the loans and
87selecting recipients, standards for retrofitting homes or mobile
88homes, limitations on loan subsidies and loan guaranties, and
89other terms and conditions of the program, which must be
90specified in the department's report to the Legislature on
91January 1, 2006, required by subsection (8). For the 2005-2006
92fiscal year, the Department of Community Affairs may use up to
93$1 million of the funds appropriated pursuant to paragraph
94(2)(a) to begin the low-interest loan program as a pilot project
95in one or more counties. The Department of Financial Services,
96the Office of Financial Regulation, the Florida Housing Finance
97Corporation, and the Office of Tourism, Trade, and Economic
98Development shall assist the Department of Community Affairs in
99establishing the program and pilot project. The department may
100use up to 2.5 percent of the funds appropriated in any given
101fiscal year for administering the loan program. The department
102may adopt rules to implement the program.
103     (4)(3)  Forty percent of the total appropriation in
104paragraph (2)(a) shall be used to inspect and improve tie-downs
105for mobile homes. Within 30 days after the effective date of
106that appropriation, the department shall contract with a public
107higher educational institution in this state which has previous
108experience in administering the programs set forth in this
109subsection to serve as the administrative entity and fiscal
110agent pursuant to s. 216.346 for the purpose of administering
111the programs set forth in this subsection in accordance with
112established policy and procedures. The administrative entity
113working with the advisory council set up under subsection (6)
114(5) shall develop a list of mobile home parks and counties that
115may be eligible to participate in the tie-down program.
116     (5)(4)  Of moneys provided to the Department of Community
117Affairs in paragraph (2)(a), 10 percent shall be allocated to a
118Type I Center within the State University System dedicated to
119hurricane research. The Type I Center shall develop a
120preliminary work plan approved by the advisory council set forth
121in subsection (6) (5) to eliminate the state and local barriers
122to upgrading existing mobile homes and communities, research and
123develop a program for the recycling of existing older mobile
124homes, and support programs of research and development relating
125to hurricane loss reduction devices and techniques for site-
126built residences. The State University System also shall consult
127with the Department of Community Affairs and assist the
128department with the report required under subsection (8) (7).
129     (6)(5)  Except for the program set forth in subsection (3),
130The Department of Community Affairs shall develop the programs
131set forth in this section in consultation with an advisory
132council consisting of a representative designated by the Chief
133Financial Officer, a representative designated by the Florida
134Home Builders Association, a representative designated by the
135Florida Insurance Council, a representative designated by the
136Federation of Manufactured Home Owners, a representative
137designated by the Florida Association of Counties, and a
138representative designated by the Florida Manufactured Housing
140     (7)(6)  Moneys provided to the Department of Community
141Affairs under this section are intended to supplement other
142funding sources of the Department of Community Affairs and may
143not supplant other funding sources of the Department of
144Community Affairs.
145     (8)(7)  On January 1st of each year, the Department of
146Community Affairs shall provide a full report and accounting of
147activities under this section and an evaluation of such
148activities to the Speaker of the House of Representatives, the
149President of the Senate, and the Majority and Minority Leaders
150of the House of Representatives and the Senate.
151     (9)(8)  This section is repealed June 30, 2011.
152     Section 3.  Subsections (4) and (5) of section 627.062,
153Florida Statutes, are amended to read:
154     627.062  Rate standards.--
155     (4)  The establishment of any rate, rating classification,
156rating plan or schedule, or variation thereof in violation of
157part IX of chapter 626 is also in violation of this section. In
158order to enhance the ability of consumers to compare premiums
159and to increase the accuracy and usefulness of rate-comparison
160information provided by the office to the public, the office
161shall develop a proposed standard rating territory plan to be
162used by all authorized property and casualty insurers for
163residential property insurance. In adopting the proposed plan,
164the office may consider geographical characteristics relevant to
165risk, county lines, major roadways, existing rating territories
166used by a significant segment of the market, and other relevant
167factors. Such plan shall be submitted to the President of the
168Senate and the Speaker of the House of Representatives by
169January 15, 2006. The plan may not be implemented unless
170authorized by further act of the Legislature.
171     (5)  With respect to a rate filing involving coverage of
172the type for which the insurer is required to pay a
173reimbursement premium to the Florida Hurricane Catastrophe Fund,
174the insurer may fully recoup in its property insurance premiums
175any reimbursement premiums paid to the Florida Hurricane
176Catastrophe Fund, together with reasonable costs of other
177reinsurance, but may not recoup reinsurance costs that duplicate
178coverage provided by the Florida Hurricane Catastrophe Fund. An
179insurer may not recoup more than 1 year of reimbursement premium
180at a time. Any under-recoupment from the prior year may be added
181to the following year's reimbursement premium and any over-
182recoupment shall be subtracted from the following year's
183reimbursement premium.
184     Section 4.  Paragraph (c) of subsection (1) and paragraph
185(c) of subsection (3) of section 627.0628, Florida Statutes, are
186amended to read:
187     627.0628  Florida Commission on Hurricane Loss Projection
190     (c)  It is the intent of the Legislature to create the
191Florida Commission on Hurricane Loss Projection Methodology as a
192panel of experts to provide the most actuarially sophisticated
193guidelines and standards for projection of hurricane losses
194possible, given the current state of actuarial science. It is
195the further intent of the Legislature that such standards and
196guidelines must be used by the State Board of Administration in
197developing reimbursement premium rates for the Florida Hurricane
198Catastrophe Fund, and, subject to paragraph (3)(c), may be used
199by insurers in rate filings under s. 627.062 unless the way in
200which such standards and guidelines were applied by the insurer
201was erroneous, as shown by a preponderance of the evidence.
203     (c)  With respect to a rate filing under s. 627.062, an
204insurer may employ actuarial methods, principles, standards,
205models, or output ranges found by the commission to be accurate
206or reliable to determine hurricane loss factors for use in a
207rate filing under s. 627.062. Such, which findings and factors
208are admissible and relevant in consideration of a rate filing by
209the office or in any arbitration or administrative or judicial
210review only if the office and the consumer advocate appointed
211pursuant to s. 627.0613 have access to all of the assumptions
212and factors that were used in developing the actuarial methods,
213principles, standards, models, or output ranges, and are not
214precluded from disclosing such information in a rate proceeding.
215     Section 5.  Subsection (7) of section 627.0629, Florida
216Statutes, is amended to read:
217     627.0629  Residential property insurance; rate filings.--
218     (7)  Any rate filing that is based in whole or part on data
219from a computer model may not exceed 15 25 percent unless there
220is a public hearing.
221     Section 6.  Section 627.06281, Florida Statutes, is created
222to read:
223     627.06281  Public hurricane loss projection model;
224reporting of data by insurers.--Within 30 days after a written
225request for loss data and associated exposure data by the office
226or a type I center within the State University System
227established to study mitigation, residential property insurers
228and licensed rating and advisory organizations that compile
229residential property insurance loss data shall provide loss data
230and associated exposure data for residential property insurance
231policies to the office or to a type I center within the State
232University System established to study mitigation, as directed
233by the office, for the purposes of developing, maintaining, and
234updating a public model for hurricane loss projections. The loss
235data and associated exposure data provided shall be in writing.
236     Section 7.  Paragraphs (a), (c), and (d) of subsection (6)
237of section 627.351, Florida Statutes, are amended to read:
238     627.351  Insurance risk apportionment plans.--
240     (a)1.  The Legislature finds that actual and threatened
241catastrophic losses to property in this state from hurricanes
242have caused insurers to be unwilling or unable to provide
243property insurance coverage to the extent sought and needed. It
244is in the public interest and a public purpose to assist in
245assuring that property in the state is insured so as to
246facilitate the remediation, reconstruction, and replacement of
247damaged or destroyed property in order to reduce or avoid the
248negative effects otherwise resulting to the public health,
249safety, and welfare; to the economy of the state; and to the
250revenues of the state and local governments needed to provide
251for the public welfare. It is necessary, therefore, to provide
252property insurance to applicants who are in good faith entitled
253to procure insurance through the voluntary market but are unable
254to do so. The Legislature intends by this subsection that
255property insurance be provided and that it continues, as long as
256necessary, through an entity organized to achieve efficiencies
257and economies, while providing service to policyholders,
258applicants, and agents that is no less than the quality
259generally provided in the voluntary market, all toward the
260achievement of the foregoing public purposes. Because it is
261essential for the corporation to have the maximum financial
262resources to pay claims following a catastrophic hurricane, it
263is the intent of the Legislature that the income of the
264corporation be exempt from federal income taxation and that
265interest on the debt obligations issued by the corporation be
266exempt from federal income taxation.
267     2.  The Residential Property and Casualty Joint
268Underwriting Association originally created by this statute
269shall be known, as of July 1, 2002, as the Citizens Property
270Insurance Corporation. The corporation shall provide insurance
271for residential and commercial property, for applicants who are
272in good faith entitled, but are unable, to procure insurance
273through the voluntary market. The corporation shall operate
274pursuant to a plan of operation approved by order of the office.
275The plan is subject to continuous review by the office. The
276office may, by order, withdraw approval of all or part of a plan
277if the office determines that conditions have changed since
278approval was granted and that the purposes of the plan require
279changes in the plan. For the purposes of this subsection,
280residential coverage includes both personal lines residential
281coverage, which consists of the type of coverage provided by
282homeowner's, mobile home owner's, dwelling, tenant's,
283condominium unit owner's, and similar policies, and commercial
284lines residential coverage, which consists of the type of
285coverage provided by condominium association, apartment
286building, and similar policies.
287     3.  It is the intent of the Legislature that policyholders,
288applicants, and agents of the corporation receive service and
289treatment of the highest possible level but never less than that
290generally provided in the voluntary market. It also is intended
291that the corporation be held to service standards no less than
292those applied to insurers in the voluntary market by the office
293with respect to responsiveness, timeliness, customer courtesy,
294and overall dealings with policyholders, applicants, or agents
295of the corporation.
296     (c)  The plan of operation of the corporation:
297     1.  Must provide for adoption of residential property and
298casualty insurance policy forms and commercial residential and
299nonresidential property insurance forms, which forms must be
300approved by the office prior to use. The corporation shall adopt
301the following policy forms:
302     a.  Standard personal lines policy forms that are
303comprehensive multiperil policies providing full coverage of a
304residential property equivalent to the coverage provided in the
305private insurance market under an HO-3, HO-4, or HO-6 policy.
306     b.  Basic personal lines policy forms that are policies
307similar to an HO-8 policy or a dwelling fire policy that provide
308coverage meeting the requirements of the secondary mortgage
309market, but which coverage is more limited than the coverage
310under a standard policy.
311     c.  Commercial lines residential policy forms that are
312generally similar to the basic perils of full coverage
313obtainable for commercial residential structures in the admitted
314voluntary market.
315     d.  Personal lines and commercial lines residential
316property insurance forms that cover the peril of wind only. The
317forms are applicable only to residential properties located in
318areas eligible for coverage under the high-risk account referred
319to in sub-subparagraph (b)2.a.
320     e.  Commercial lines nonresidential property insurance
321forms that cover the peril of wind only. The forms are
322applicable only to nonresidential properties located in areas
323eligible for coverage under the high-risk account referred to in
324sub-subparagraph (b)2.a.
325     2.a.  Must provide that the corporation adopt a program in
326which the corporation and authorized insurers enter into quota
327share primary insurance agreements for hurricane coverage, as
328defined in s. 627.4025(2)(a), for eligible risks, and adopt
329property insurance forms for eligible risks which cover the
330peril of wind only. As used in this subsection, the term:
331     (I)  "Quota share primary insurance" means an arrangement
332in which the primary hurricane coverage of an eligible risk is
333provided in specified percentages by the corporation and an
334authorized insurer. The corporation and authorized insurer are
335each solely responsible for a specified percentage of hurricane
336coverage of an eligible risk as set forth in a quota share
337primary insurance agreement between the corporation and an
338authorized insurer and the insurance contract. The
339responsibility of the corporation or authorized insurer to pay
340its specified percentage of hurricane losses of an eligible
341risk, as set forth in the quota share primary insurance
342agreement, may not be altered by the inability of the other
343party to the agreement to pay its specified percentage of
344hurricane losses. Eligible risks that are provided hurricane
345coverage through a quota share primary insurance arrangement
346must be provided policy forms that set forth the obligations of
347the corporation and authorized insurer under the arrangement,
348clearly specify the percentages of quota share primary insurance
349provided by the corporation and authorized insurer, and
350conspicuously and clearly state that neither the authorized
351insurer nor the corporation may be held responsible beyond its
352specified percentage of coverage of hurricane losses.
353     (II)  "Eligible risks" means personal lines residential and
354commercial lines residential risks that meet the underwriting
355criteria of the corporation and are located in areas that were
356eligible for coverage by the Florida Windstorm Underwriting
357Association on January 1, 2002.
358     b.  The corporation may enter into quota share primary
359insurance agreements with authorized insurers at corporation
360coverage levels of 90 percent and 50 percent.
361     c.  If the corporation determines that additional coverage
362levels are necessary to maximize participation in quota share
363primary insurance agreements by authorized insurers, the
364corporation may establish additional coverage levels. However,
365the corporation's quota share primary insurance coverage level
366may not exceed 90 percent.
367     d.  Any quota share primary insurance agreement entered
368into between an authorized insurer and the corporation must
369provide for a uniform specified percentage of coverage of
370hurricane losses, by county or territory as set forth by the
371corporation board, for all eligible risks of the authorized
372insurer covered under the quota share primary insurance
374     e.  Any quota share primary insurance agreement entered
375into between an authorized insurer and the corporation is
376subject to review and approval by the office. However, such
377agreement shall be authorized only as to insurance contracts
378entered into between an authorized insurer and an insured who is
379already insured by the corporation for wind coverage.
380     f.  For all eligible risks covered under quota share
381primary insurance agreements, the exposure and coverage levels
382for both the corporation and authorized insurers shall be
383reported by the corporation to the Florida Hurricane Catastrophe
384Fund. For all policies of eligible risks covered under quota
385share primary insurance agreements, the corporation and the
386authorized insurer shall maintain complete and accurate records
387for the purpose of exposure and loss reimbursement audits as
388required by Florida Hurricane Catastrophe Fund rules. The
389corporation and the authorized insurer shall each maintain
390duplicate copies of policy declaration pages and supporting
391claims documents.
392     g.  The corporation board shall establish in its plan of
393operation standards for quota share agreements which ensure that
394there is no discriminatory application among insurers as to the
395terms of quota share agreements, pricing of quota share
396agreements, incentive provisions if any, and consideration paid
397for servicing policies or adjusting claims.
398     h.  The quota share primary insurance agreement between the
399corporation and an authorized insurer must set forth the
400specific terms under which coverage is provided, including, but
401not limited to, the sale and servicing of policies issued under
402the agreement by the insurance agent of the authorized insurer
403producing the business, the reporting of information concerning
404eligible risks, the payment of premium to the corporation, and
405arrangements for the adjustment and payment of hurricane claims
406incurred on eligible risks by the claims adjuster and personnel
407of the authorized insurer. Entering into a quota sharing
408insurance agreement between the corporation and an authorized
409insurer shall be voluntary and at the discretion of the
410authorized insurer.
411     3.  May provide that the corporation may employ or
412otherwise contract with individuals or other entities to provide
413administrative or professional services that may be appropriate
414to effectuate the plan. The corporation shall have the power to
415borrow funds, by issuing bonds or by incurring other
416indebtedness, and shall have other powers reasonably necessary
417to effectuate the requirements of this subsection, including
418without limitation, the power to issue bonds and incur other
419indebtedness in order to refinance outstanding bonds or other
420indebtedness. The corporation may, but is not required to, seek
421judicial validation of its bonds or other indebtedness under
422chapter 75. The corporation may issue bonds or incur other
423indebtedness, or have bonds issued on its behalf by a unit of
424local government pursuant to subparagraph (g)2., in the absence
425of a hurricane or other weather-related event, upon a
426determination by the corporation, subject to approval by the
427office, that such action would enable it to efficiently meet the
428financial obligations of the corporation and that such
429financings are reasonably necessary to effectuate the
430requirements of this subsection. The corporation is authorized
431to take all actions needed to facilitate tax-free status for any
432such bonds or indebtedness, including formation of trusts or
433other affiliated entities. The corporation shall have the
434authority to pledge assessments, projected recoveries from the
435Florida Hurricane Catastrophe Fund, other reinsurance
436recoverables, market equalization and other surcharges, and
437other funds available to the corporation as security for bonds
438or other indebtedness. In recognition of s. 10, Art. I of the
439State Constitution, prohibiting the impairment of obligations of
440contracts, it is the intent of the Legislature that no action be
441taken whose purpose is to impair any bond indenture or financing
442agreement or any revenue source committed by contract to such
443bond or other indebtedness.
444     4.a.  Must require that the corporation operate subject to
445the supervision and approval of a board of governors consisting
446of 8 7 individuals who are residents of this state, from
447different geographical areas of this state, appointed by the
448Chief Financial Officer. The Governor, the Chief Financial
449Officer, the President of the Senate, and the Speaker of the
450House of Representatives shall each appoint two members of the
451board, effective August 1, 2005. At least one of the two members
452appointed by each appointing officer must have demonstrated
453expertise in insurance. The Chief Financial Officer shall
454designate one of the appointees as chair. All board members
455serve at the pleasure of the appointing officer Chief Financial
456Officer. All board members, including the chair, must be
457appointed to serve for 3-year terms beginning annually on a date
458designated by the plan. Any board vacancy shall be filled for
459the unexpired term by the appointing officer Chief Financial
460Officer. The Chief Financial Officer shall appoint a technical
461advisory group to provide information and advice to the board of
462governors in connection with the board's duties under this
463subsection. The executive director and senior managers of the
464corporation shall be engaged by the board, as recommended by the
465Chief Financial Officer and serve at the pleasure of the board
466Chief Financial Officer. The executive director is responsible
467for employing other staff as the corporation may require,
468subject to review and concurrence by the board and office of the
469Chief Financial Officer.
470     b.  The board shall create a Market Accountability Advisory
471Committee to assist the corporation in developing awareness of
472its rates and its customer and agent service levels in
473relationship to the voluntary market insurers writing similar
474coverage. The members of the advisory committee shall consist of
475the following 11 persons, one of whom must be elected chair by
476the members of the committee: four representatives, one
477appointed by the Florida Association of Insurance Agents, one by
478the Florida Association of Insurance and Financial Advisors, one
479by the Professional Insurance Agents of Florida, and one by the
480Latin American Association of Insurance Agencies; three
481representatives appointed by the insurers with the three highest
482voluntary market share of residential property insurance
483business in the state; one representative from the Office of
484Insurance Regulation; one consumer appointed by the board who is
485insured by the corporation at the time of appointment to the
486committee; one representative appointed by the Florida
487Association of Realtors; and one representative appointed by the
488Florida Bankers Association. All members must serve for 3-year
489terms and may serve for consecutive terms. The committee shall
490report to the corporation at each board meeting on insurance
491market issues which may include rates and rate competition with
492the voluntary market; service, including policy issuance, claims
493processing, and general responsiveness to policyholders,
494applicants, and agents; and matters relating to depopulation.
495     5.  Must provide a procedure for determining the
496eligibility of a risk for coverage, as follows:
497     a.  Subject to the provisions of s. 627.3517, with respect
498to personal lines residential risks, if the risk is offered
499coverage from an authorized insurer at the insurer's approved
500rate under either a standard policy including wind coverage or,
501if consistent with the insurer's underwriting rules as filed
502with the office, a basic policy including wind coverage, the
503risk is not eligible for any policy issued by the corporation.
504If the risk is not able to obtain any such offer, the risk is
505eligible for either a standard policy including wind coverage or
506a basic policy including wind coverage issued by the
507corporation; however, if the risk could not be insured under a
508standard policy including wind coverage regardless of market
509conditions, the risk shall be eligible for a basic policy
510including wind coverage unless rejected under subparagraph 8.
511The corporation shall determine the type of policy to be
512provided on the basis of objective standards specified in the
513underwriting manual and based on generally accepted underwriting
515     (I)  If the risk accepts an offer of coverage through the
516market assistance plan or an offer of coverage through a
517mechanism established by the corporation before a policy is
518issued to the risk by the corporation or during the first 30
519days of coverage by the corporation, and the producing agent who
520submitted the application to the plan or to the corporation is
521not currently appointed by the insurer, the insurer shall:
522     (A)  Pay to the producing agent of record of the policy,
523for the first year, an amount that is the greater of the
524insurer's usual and customary commission for the type of policy
525written or a fee equal to the usual and customary commission of
526the corporation; or
527     (B)  Offer to allow the producing agent of record of the
528policy to continue servicing the policy for a period of not less
529than 1 year and offer to pay the agent the greater of the
530insurer's or the corporation's usual and customary commission
531for the type of policy written.
533If the producing agent is unwilling or unable to accept
534appointment, the new insurer shall pay the agent in accordance
535with sub-sub-sub-subparagraph (A).
536     (II)  When the corporation enters into a contractual
537agreement for a take-out plan, the producing agent of record of
538the corporation policy is entitled to retain any unearned
539commission on the policy, and the insurer shall:
540     (A)  Pay to the producing agent of record of the
541corporation policy, for the first year, an amount that is the
542greater of the insurer's usual and customary commission for the
543type of policy written or a fee equal to the usual and customary
544commission of the corporation; or
545     (B)  Offer to allow the producing agent of record of the
546corporation policy to continue servicing the policy for a period
547of not less than 1 year and offer to pay the agent the greater
548of the insurer's or the corporation's usual and customary
549commission for the type of policy written.
551If the producing agent is unwilling or unable to accept
552appointment, the new insurer shall pay the agent in accordance
553with sub-sub-sub-subparagraph (A).
554     b.  With respect to commercial lines residential risks, if
555the risk is offered coverage under a policy including wind
556coverage from an authorized insurer at its approved rate, the
557risk is not eligible for any policy issued by the corporation.
558If the risk is not able to obtain any such offer, the risk is
559eligible for a policy including wind coverage issued by the
561     (I)  If the risk accepts an offer of coverage through the
562market assistance plan or an offer of coverage through a
563mechanism established by the corporation before a policy is
564issued to the risk by the corporation or during the first 30
565days of coverage by the corporation, and the producing agent who
566submitted the application to the plan or the corporation is not
567currently appointed by the insurer, the insurer shall:
568     (A)  Pay to the producing agent of record of the policy,
569for the first year, an amount that is the greater of the
570insurer's usual and customary commission for the type of policy
571written or a fee equal to the usual and customary commission of
572the corporation; or
573     (B)  Offer to allow the producing agent of record of the
574policy to continue servicing the policy for a period of not less
575than 1 year and offer to pay the agent the greater of the
576insurer's or the corporation's usual and customary commission
577for the type of policy written.
579If the producing agent is unwilling or unable to accept
580appointment, the new insurer shall pay the agent in accordance
581with sub-sub-sub-subparagraph (A).
582     (II)  When the corporation enters into a contractual
583agreement for a take-out plan, the producing agent of record of
584the corporation policy is entitled to retain any unearned
585commission on the policy, and the insurer shall:
586     (A)  Pay to the producing agent of record of the
587corporation policy, for the first year, an amount that is the
588greater of the insurer's usual and customary commission for the
589type of policy written or a fee equal to the usual and customary
590commission of the corporation; or
591     (B)  Offer to allow the producing agent of record of the
592corporation policy to continue servicing the policy for a period
593of not less than 1 year and offer to pay the agent the greater
594of the insurer's or the corporation's usual and customary
595commission for the type of policy written.
597If the producing agent is unwilling or unable to accept
598appointment, the new insurer shall pay the agent in accordance
599with sub-sub-sub-subparagraph (A).
600     6.  Must include rules for classifications of risks and
601rates therefor.
602     7.  Must provide that if premium and investment income for
603an account attributable to a particular calendar year are in
604excess of projected losses and expenses for the account
605attributable to that year, such excess shall be held in surplus
606in the account. Such surplus shall be available to defray
607deficits in that account as to future years and shall be used
608for that purpose prior to assessing assessable insurers and
609assessable insureds as to any calendar year.
610     8.  Must provide objective criteria and procedures to be
611uniformly applied for all applicants in determining whether an
612individual risk is so hazardous as to be uninsurable. In making
613this determination and in establishing the criteria and
614procedures, the following shall be considered:
615     a.  Whether the likelihood of a loss for the individual
616risk is substantially higher than for other risks of the same
617class; and
618     b.  Whether the uncertainty associated with the individual
619risk is such that an appropriate premium cannot be determined.
621The acceptance or rejection of a risk by the corporation shall
622be construed as the private placement of insurance, and the
623provisions of chapter 120 shall not apply.
624     9.  Must provide that the corporation shall make its best
625efforts to procure catastrophe reinsurance at reasonable rates,
626to cover its projected 100-year probable maximum loss as
627determined by the board of governors.
628     10.  Must provide that in the event of regular deficit
629assessments under sub-subparagraph (b)3.a. or sub-subparagraph
630(b)3.b., in the personal lines account, the commercial lines
631residential account, or the high-risk account, the corporation
632shall levy upon corporation policyholders in its next rate
633filing, or by a separate rate filing solely for this purpose, a
634market equalization surcharge arising from a regular assessment
635in such account in a percentage equal to the total amount of
636such regular assessments divided by the aggregate statewide
637direct written premium for subject lines of business for the
638prior calendar year. Market equalization surcharges under this
639subparagraph are not considered premium and are not subject to
640commissions, fees, or premium taxes; however, failure to pay a
641market equalization surcharge shall be treated as failure to pay
643     11.  The policies issued by the corporation must provide
644that, if the corporation or the market assistance plan obtains
645an offer from an authorized insurer to cover the risk at its
646approved rates, the risk is no longer eligible for renewal
647through the corporation.
648     12.  Corporation policies and applications must include a
649notice that the corporation policy could, under this section, be
650replaced with a policy issued by an authorized insurer that does
651not provide coverage identical to the coverage provided by the
652corporation. The notice shall also specify that acceptance of
653corporation coverage creates a conclusive presumption that the
654applicant or policyholder is aware of this potential.
655     13.  May establish, subject to approval by the office,
656different eligibility requirements and operational procedures
657for any line or type of coverage for any specified county or
658area if the board determines that such changes to the
659eligibility requirements and operational procedures are
660justified due to the voluntary market being sufficiently stable
661and competitive in such area or for such line or type of
662coverage and that consumers who, in good faith, are unable to
663obtain insurance through the voluntary market through ordinary
664methods would continue to have access to coverage from the
665corporation. When coverage is sought in connection with a real
666property transfer, such requirements and procedures shall not
667provide for an effective date of coverage later than the date of
668the closing of the transfer as established by the transferor,
669the transferee, and, if applicable, the lender.
670     14.  Must provide that, with respect to the high-risk
671account, any assessable insurer with a surplus as to
672policyholders of $25 million or less writing 25 percent or more
673of its total countrywide property insurance premiums in this
674state may petition the office, within the first 90 days of each
675calendar year, to qualify as a limited apportionment company. In
676no event shall a limited apportionment company be required to
677participate in the portion of any assessment, within the high-
678risk account, pursuant to sub-subparagraph (b)3.a. or sub-
679subparagraph (b)3.b. in the aggregate which exceeds $50 million
680after payment of available high-risk account funds in any
681calendar year. However, a limited apportionment company shall
682collect from its policyholders any emergency assessment imposed
683under sub-subparagraph (b)3.d. The plan shall provide that, if
684the office determines that any regular assessment will result in
685an impairment of the surplus of a limited apportionment company,
686the office may direct that all or part of such assessment be
687deferred as provided in subparagraph (g)4. However, there shall
688be no limitation or deferment of an emergency assessment to be
689collected from policyholders under sub-subparagraph (b)3.d.
690     15.  Must provide that the corporation appoint as its
691licensed agents only those agents who also hold an appointment
692as defined in s. 626.015(3) with an insurer who at the time of
693the agent's initial appointment by the corporation is authorized
694to write and is actually writing personal lines residential
695property coverage, commercial residential property coverage, or
696commercial nonresidential property coverage within the state.
697     (d)1.  It is the intent of the Legislature that the rates
698for coverage provided by the corporation be actuarially sound
699and not competitive with approved rates charged in the admitted
700voluntary market, so that the corporation functions as a
701residual market mechanism to provide insurance only when the
702insurance cannot be procured in the voluntary market. Rates
703shall include an appropriate catastrophe loading factor that
704reflects the actual catastrophic exposure of the corporation.
705     2.  For each county, the average rates of the corporation
706for each line of business for personal lines residential
707policies excluding rates for wind-only policies shall be no
708lower than the average rates charged by the insurer that had the
709highest average rate in that county among the 20 insurers with
710the greatest total direct written premium in the state for that
711line of business in the preceding year, except that with respect
712to mobile home coverages, the average rates of the corporation
713shall be no lower than the average rates charged by the insurer
714that had the highest average rate in that county among the 5
715insurers with the greatest total written premium for mobile home
716owner's policies in the state in the preceding year.
717     3.  Rates for personal lines residential wind-only policies
718must be actuarially sound and not competitive with approved
719rates charged by authorized insurers. However, for personal
720lines residential wind-only policies issued or renewed between
721July 1, 2002, and June 30, 2003, the maximum premium increase
722must be no greater than 10 percent of the Florida Windstorm
723Underwriting Association premium for that policy in effect on
724June 30, 2002, as adjusted for coverage changes and seasonal
725occupancy surcharges. For personal lines residential wind-only
726policies issued or renewed between July 1, 2003, and June 30,
7272004, the corporation shall use its existing filed and approved
728wind-only rating and classification plans, provided, however,
729that the maximum premium increase must be no greater than 20
730percent of the premium for that policy in effect on June 30,
7312003, as adjusted for coverage changes and seasonal occupancy
732surcharges. Corporation rate manuals shall include a rate
733surcharge for seasonal occupancy. To ensure that personal lines
734residential wind-only rates effective on or after July 1, 2004,
735are not competitive with approved rates charged by authorized
736insurers, the corporation, in conjunction with the office, shall
737develop a wind-only ratemaking methodology, which methodology
738shall be contained in each a rate filing made by the corporation
739with the office by January 1, 2004. If the office thereafter
740determines that the wind-only rates or rating factors filed by
741the corporation fail to comply with the wind-only ratemaking
742methodology provided for in this subsection, it shall so notify
743the corporation and require the corporation to amend its rates
744or rating factors to come into compliance within 90 days of
745notice from the office. The office shall report to the Speaker
746of the House of Representatives and the President of the Senate
747on the provisions of the wind-only ratemaking methodology by
748January 31, 2004.
749     4.  For the purposes of establishing a pilot program to
750evaluate issues relating to the availability and affordability
751of insurance in an area where historically there has been little
752market competition, the provisions of subparagraph 2. do not
753apply to coverage provided by the corporation in Monroe County
754if the office determines that a reasonable degree of competition
755does not exist for personal lines residential policies. The
756provisions of subparagraph 3. do not apply to coverage provided
757by the corporation in Monroe County if the office determines
758that a reasonable degree of competition does not exist for
759personal lines residential policies in the area of that county
760which is eligible for wind-only coverage. In this county, the
761rates for personal lines residential coverage shall be
762actuarially sound and not excessive, inadequate, or unfairly
763discriminatory and are subject to the other provisions of the
764paragraph and s. 627.062. The commission shall adopt rules
765establishing the criteria for determining whether a reasonable
766degree of competition exists for personal lines residential
767policies in Monroe County. By March 1, 2006, the office shall
768submit a report to the Legislature providing an evaluation of
769the implementation of the pilot program affecting Monroe County.
770     5.4.  Rates for commercial lines coverage shall not be
771subject to the requirements of subparagraph 2., but shall be
772subject to all other requirements of this paragraph and s.
774     6.5.  Nothing in this paragraph shall require or allow the
775corporation to adopt a rate that is inadequate under s. 627.062.
776     7.6.  The corporation shall certify to the office at least
777twice annually that its personal lines rates comply with the
778requirements of subparagraphs 1. and 2. If any adjustment in the
779rates or rating factors of the corporation is necessary to
780ensure such compliance, the corporation shall make and implement
781such adjustments and file its revised rates and rating factors
782with the office. If the office thereafter determines that the
783revised rates and rating factors fail to comply with the
784provisions of subparagraphs 1. and 2., it shall notify the
785corporation and require the corporation to amend its rates or
786rating factors in conjunction with its next rate filing. The
787office must notify the corporation by electronic means of any
788rate filing it approves for any insurer among the insurers
789referred to in subparagraph 2.
790     8.7.  In addition to the rates otherwise determined
791pursuant to this paragraph, the corporation shall impose and
792collect an amount equal to the premium tax provided for in s.
793624.509 to augment the financial resources of the corporation.
794     9.8.a.  To assist the corporation in developing additional
795ratemaking methods to assure compliance with subparagraphs 1.
796and 4., the corporation shall appoint a rate methodology panel
797consisting of one person recommended by the Florida Association
798of Insurance Agents, one person recommended by the Professional
799Insurance Agents of Florida, one person recommended by the
800Florida Association of Insurance and Financial Advisors, one
801person recommended by the insurer with the highest voluntary
802market share of residential property insurance business in the
803state, one person recommended by the insurer with the second-
804highest voluntary market share of residential property insurance
805business in the state, one person recommended by an insurer
806writing commercial residential property insurance in this state,
807one person recommended by the Office of Insurance Regulation,
808and one board member designated by the board chairman, who shall
809serve as chairman of the panel.
810     b.  By January 1, 2004, the rate methodology panel shall
811provide a report to the corporation of its findings and
812recommendations for the use of additional ratemaking methods and
813procedures, including the use of a rate equalization surcharge
814in an amount sufficient to assure that the total cost of
815coverage for policyholders or applicants to the corporation is
816sufficient to comply with subparagraph 1.
817     c.  Within 30 days after such report, the corporation shall
818present to the President of the Senate, the Speaker of the House
819of Representatives, the minority party leaders of each house of
820the Legislature, and the chairs of the standing committees of
821each house of the Legislature having jurisdiction of insurance
822issues, a plan for implementing the additional ratemaking
823methods and an outline of any legislation needed to facilitate
824use of the new methods.
825     d.  The plan must include a provision that producer
826commissions paid by the corporation shall not be calculated in
827such a manner as to include any rate equalization surcharge.
828However, without regard to the plan to be developed or its
829implementation, producer commissions paid by the corporation for
830each account, other than the quota share primary program, shall
831remain fixed as to percentage, effective rate, calculation, and
832payment method until January 1, 2004.
833     10.9.  By January 1, 2004, the corporation shall develop a
834notice to policyholders or applicants that the rates of Citizens
835Property Insurance Corporation are intended to be higher than
836the rates of any admitted carrier and providing other
837information the corporation deems necessary to assist consumers
838in finding other voluntary admitted insurers willing to insure
839their property.
840     Section 8.  Section 627.40951, Florida Statutes, is created
841to read:
842     627.40951  Standard personal lines residential insurance
844     (1)  The Legislature finds that many consumers who filed
845property loss claims as a result of the hurricanes that struck
846this state in 2004 were inadequately insured due to the
847difficulty consumers encounter in trying to understand the
848complex nature of property insurance policies. The purpose and
849intent of this section is to have property and casualty insurers
850offer standard personal lines residential property insurance
851policies and standard checklists of policy contents, in
852accordance with s. 627.4143, to consumers and to ensure that
853these policies and checklists are written in a simple format
854with easily readable language that will enable most consumers to
855understand the principal benefits and coverage provided in the
856policy; the principal exclusions and limitations or reductions
857contained in the policy, including, but not limited to,
858deductibles, coinsurance, and any other limitations or
859reductions; and any additional coverage provided through any
860rider or endorsement that accompanies the policy and renewal or
861cancellation provisions.
862     (2)  The Chief Financial Officer shall appoint an advisory
863committee composed of two representatives of insurers currently
864selling personal lines residential property insurance coverage,
865two representatives of property and casualty agents, two
866representatives of consumers, two representatives of the
867Commissioner of Insurance Regulation, and the Insurance Consumer
868Advocate or her or his designee. The Chief Financial Officer or
869her or his designee shall serve as chair of the committee. The
870committee shall develop policy language for coverage that
871represents general industry standards in the market for
872comprehensive coverage under personal lines residential
873insurance policies and shall develop a checklist to be used with
874each type of personal lines residential property insurance
875policy. The committee shall review policies and related forms
876written by Insurance Services Office, Inc. The committee shall
877file a report containing its recommendations to the President of
878the Senate and the Speaker of the House of Representatives by
879January 15, 2006. No insurer shall be required to offer the
880standard policy unless required by further act of the
882     Section 9.  Subsection (1) of section 627.411, Florida
883Statutes, is amended to read:
884     627.411  Grounds for disapproval.--
885     (1)  The office shall disapprove any form filed under s.
886627.410, or withdraw any previous approval thereof, only if the
888     (a)  Is in any respect in violation of, or does not comply
889with, this code.
890     (b)  Contains or incorporates by reference, where such
891incorporation is otherwise permissible, any inconsistent,
892ambiguous, or misleading clauses, or exceptions and conditions
893which deceptively affect the risk purported to be assumed in the
894general coverage of the contract.
895     (c)  Has any title, heading, or other indication of its
896provisions which is misleading.
897     (d)  Is printed or otherwise reproduced in such manner as
898to render any material provision of the form substantially
900     (e)  Is for residential property insurance and contains
901provisions that are unfair or inequitable or encourage
903     (f)(e)  Is for health insurance, and:
904     1.  Provides benefits that are unreasonable in relation to
905the premium charged.;
906     2.  Contains provisions that are unfair or inequitable or
907contrary to the public policy of this state or that encourage
909     3.  Contains provisions that apply rating practices that
910result in unfair discrimination pursuant to s. 626.9541(1)(g)2.
911     (g)(f)  Excludes coverage for human immunodeficiency virus
912infection or acquired immune deficiency syndrome or contains
913limitations in the benefits payable, or in the terms or
914conditions of such contract, for human immunodeficiency virus
915infection or acquired immune deficiency syndrome which are
916different than those which apply to any other sickness or
917medical condition.
918     Section 10.  Paragraphs (d) and (e) are added to subsection
919(2) of section 627.4133, Florida Statutes, to read:
920     627.4133  Notice of cancellation, nonrenewal, or renewal
922     (2)  With respect to any personal lines or commercial
923residential property insurance policy, including, but not
924limited to, any homeowner's, mobile home owner's, farmowner's,
925condominium association, condominium unit owner's, apartment
926building, or other policy covering a residential structure or
927its contents:
928     (d)1.  Upon a declaration of an emergency pursuant to s.
929252.36 and the filing of an order by the Commissioner of
930Insurance Regulation, an insurer may not cancel or nonrenew a
931personal residential or commercial residential property
932insurance policy covering a dwelling or residential property
933located in this state which has been damaged as a result of a
934hurricane or wind loss that is the subject of the declaration of
935emergency for a period of 90 days after the dwelling or
936residential property has been repaired. A structure is deemed to
937be repaired when substantially completed and restored to the
938extent that it is insurable by another authorized insurer that
939is writing policies in this state.
940     2.  However, an insurer or agent may cancel or nonrenew
941such a policy prior to the repair of the dwelling or residential
943     a.  Upon 10 days' notice for nonpayment of premium; or
944     b.  Upon 45 days' notice:
945     (I)  For a material misstatement or fraud related to the
947     (II)  If the insurer determines that the insured has
948unreasonably caused a delay in the repair of the dwelling; or
949     (III)  If the insurer has paid policy limits.
950     3.  If the insurer elects to nonrenew a policy covering a
951property that has been damaged, the insurer shall provide at
952least 90 days' notice to the insured that the insurer intends to
953nonrenew the policy 90 days after the dwelling or residential
954property has been repaired. Nothing in this paragraph shall
955prevent the insurer from canceling or nonrenewing the policy 90
956days after the repairs are complete for the same reasons the
957insurer would otherwise have canceled or nonrenewed the policy
958but for the limitations of subparagraph 1. The Financial
959Services Commission may adopt rules, and the Commissioner of
960Insurance Regulation may issue orders, necessary to implement
961this paragraph.
962     4.  This paragraph shall also apply to personal residential
963and commercial residential policies covering property that was
964damaged as the result of Tropical Storm Bonnie, Hurricane
965Charley, Hurricane Frances, Hurricane Ivan, or Hurricane Jeanne.
966     (e)  If any cancellation or nonrenewal of a policy subject
967to this subsection is to take effect during the duration of a
968hurricane as defined in s. 627.4025(2)(c), the effective date of
969such cancellation or nonrenewal is extended until the end of the
970duration of such hurricane. The insurer may collect premium at
971the prior rates or the rates then in effect for the period of
972time for which coverage is extended. This paragraph does not
973apply to any property with respect to which replacement coverage
974has been obtained and which is in effect for a claim occurring
975during the duration of the hurricane.
976     Section 11.  Effective January 1, 2006, section 627.4143,
977Florida Statutes, is amended to read:
978     627.4143  Outline of coverage.--
979     (1)  No private passenger automobile or basic homeowner's
980policy shall be delivered or issued for delivery in this state
981unless an appropriate outline of coverage has been delivered
982prior to issuance of the policy or accompanies the policy when
984     (2)  The outline of coverage for a private passenger motor
985vehicle insurance policy shall contain all of the following:
986     (a)  A brief description of the principal benefits and
987coverage provided in the policy, broken down by each class or
988type of coverage provided under the policy for which a premium
989is charged, and itemization of the applicable premium.
990     (b)  A summary statement of the principal exclusions and
991limitations or reductions contained in the policy by class or
992type, including, but not limited to, deductibles, coinsurance,
993and any other limitations or reductions.
994     (c)  A summary statement of any renewal or cancellation
996     (d)  A description of the credit or surcharge plan that is
997being applied.  The description may display numerical or
998alphabetical codes on the declarations page or premium notice to
999enable the insured to determine the reason or reasons why her or
1000his policy is being surcharged or is receiving a credit.
1001     (e)  A list of any additional coverage provided through any
1002rider or endorsement which accompanies the policy.  The list
1003shall contain a descriptive reference to each additional
1004coverage, rather than solely a reference to a form or code
1006     (f)  For a private passenger motor vehicle insurance
1007policy, The extent of coverage provided to the insured in the
1008event of collision damage to a rental vehicle rented by the
1009insured. The proof-of-insurance card required by s. 316.646 must
1010also specify whether rental car coverage is provided, and may
1011refer to the outline of coverage as to the details or extent of
1013     (3)  A basic homeowners', mobile homeowners', dwelling, or
1014condominium unit owners' policy may not be delivered or issued
1015for delivery in this state unless a comprehensive checklist of
1016coverage on a form adopted by the commission and an appropriate
1017outline of coverage have been delivered prior to issuance of the
1018policy or accompanies the policy when issued. The commission
1019shall, by rule, adopt a form for the checklist for each type of
1020policy to which this subsection applies. Each form shall
1021indicate that it was adopted by the commission.
1022     (a)  The checklist must contain a list of the standard
1023provisions and elements that may typically be included in these
1024policies, whether or not they are included in the particular
1025policy being issued, in a format that allows the insurer to
1026place a check mark next to the provisions elements that are
1027included so that the consumer can see both what is included and
1028what is not included in the policy. As an alternative to
1029checking the boxes on the checklist, an insurer may delete the
1030check boxes from the form and replace them with text indicating
1031whether the provision's elements are included or not. Limits of
1032liability shall be listed for each item. The checklist must
1033include, but is not limited to, the following:
1034     1.  Property coverage for the principal premises shown in
1035the declarations.
1036     2.  Property coverage for other structures on the residence
1038     3.  Whether the principal premises and other structures are
1039insured against the following perils:
1040     a.  Fire.
1041     b.  Lightning.
1042     c.  Explosion.
1043     d.  Hurricane loss.
1044     e.  Nonhurricane wind loss.
1045     f.  Collapse.
1046     g.  Mold.
1047     h.  Sinkhole loss.
1048     i.  Vandalism.
1049     4.  Personal property coverage.
1050     5.  Whether personal property is insured against the
1051following perils:
1052     a.  Fire.
1053     b.  Lightning.
1054     c.  Hurricane loss.
1055     d.  Nonhurricane wind loss.
1056     e.  Collapse.
1057     f.  Mold.
1058     g.  Sinkhole loss.
1059     h.  Theft.
1060     6.  The following additional coverages:
1061     a.  Debris removal.
1062     b.  Loss assessment.
1063     c.  Additional living expenses.
1064     7.  Personal liability coverage.
1065     8.  Medical payments coverage.
1066     9.  Discounts applied to the premium.
1067     10.  Deductibles for loss due to hurricane and loss to
1068other perils.
1069     11.  Building ordinance or law coverage.
1070     12.  Replacement cost coverage.
1071     13.  Actual cash value coverage.
1072     (b)  The forms shall allow insurers to place other
1073coverages on the checklists which may or may not be included in
1074the insurer's policies.
1075     (c)  The outline of coverage must contain:
1076     1.  A brief description of the principal benefits and
1077coverage provided in the policy, broken down by each class or
1078type of coverage provided under the policy for which a premium
1079is charged, and itemization of the applicable premium.
1080     2.  A summary statement of the principal exclusions and
1081limitations or reductions contained in the policy by class or
1082type, including, but not limited to, deductibles, coinsurance,
1083and any other limitations or reductions.
1084     3.  A summary statement of any renewal or cancellation
1086     4.  A description of the credit or surcharge plan that is
1087being applied. The description may display numerical or
1088alphabetical codes on the declarations page or premium notice to
1089enable the insured to determine the reason or reasons why her or
1090his policy is being surcharged or is receiving a credit.
1091     5.  A summary of any additional coverage provided through
1092any rider or endorsement that accompanies the policy.
1093     (4)(3)  The outline of coverage for a private passenger
1094motor vehicle policy is required only on the initial policy
1095issued by an insurer. The outline of coverage and the checklist
1096for a basic homeowners', mobile homeowners', dwelling, or
1097condominium unit owners' policy is required on the initial
1098policy and each renewal thereof issued by an insurer.
1099     (5)(4)  An insurer must insert the following language on
1100the outline of coverage:
1102"The following outline of coverage or checklist is for
1103informational purposes only. Florida law prohibits this outline  
1104or checklist from changing any of the provisions of the
1105insurance contract which is the subject of this outline.  Any
1106endorsement regarding changes in types of coverage, exclusions,
1107limitations, reductions, deductibles, coinsurance, renewal
1108provisions, cancellation provisions, surcharges, or credits will
1109be sent separately."
1110     (6)(5)  Neither this section nor the outline of coverage or
1111checklist mandated by this section alters or modifies the terms
1112of the insurance contract, creates a cause of action, or is
1113admissible in any civil action.
1114     Section 12.  Effective October 1, 2005, subsections (3),
1115(4), (8), and (9) of section 627.701, Florida Statutes, as
1116amended by section 4 of chapter 2004-480, Laws of Florida, are
1117amended to read:
1118     627.701  Liability of insureds; coinsurance; deductibles.--
1119     (3)(a)  A policy of residential property insurance shall
1120include a deductible amount applicable to hurricane or wind
1121losses no lower than $500 and no higher than 2 percent of the
1122policy dwelling limits with respect to personal lines
1123residential risks, and no higher than 3 percent of the policy
1124limits with respect to commercial lines residential risks;
1125however, if a risk was covered on August 24, 1992, under a
1126policy having a higher deductible than the deductibles allowed
1127by this paragraph, a policy covering such risk may include a
1128deductible no higher than the deductible in effect on August 24,
11291992. Notwithstanding the other provisions of this paragraph, a
1130personal lines residential policy covering a risk valued at
1131$50,000 or less may include a deductible amount attributable to
1132hurricane or wind losses no lower than $250, and a personal
1133lines residential policy covering a risk valued at $100,000 or
1134more may include a deductible amount attributable to hurricane
1135or wind losses no higher than 10 5 percent of the policy limits
1136unless subject to a higher deductible on August 24, 1992;
1137however, no maximum deductible is required with respect to a
1138personal lines residential policy covering a risk valued at more
1139than $500,000.  An insurer may require a higher deductible,
1140provided such deductible is the same as or similar to a
1141deductible program lawfully in effect on June 14, 1995.  In
1142addition to the deductible amounts authorized by this paragraph,
1143an insurer may also offer policies with a copayment provision
1144under which, after exhaustion of the deductible, the
1145policyholder is responsible for 10 percent of the next $10,000
1146of insured hurricane or wind losses.
1147     (b)1.  Except as otherwise provided in this paragraph,
1148prior to issuing a personal lines residential property insurance
1149policy on or after January 1, 2006 April 1, 1996, or prior to
1150the first renewal of a residential property insurance policy on
1151or after January 1, 2006 April 1, 1996, the insurer must offer
1152alternative deductible amounts applicable to hurricane or wind
1153losses equal to $500, and 2 percent, 5 percent, and 10 percent
1154of the policy dwelling limits, unless the specific percentage 2
1155percent deductible is less than $500. The written notice of the
1156offer shall specify the hurricane or wind deductible to be
1157applied in the event that the applicant or policyholder fails to
1158affirmatively choose a hurricane deductible. The insurer must
1159provide such policyholder with notice of the availability of the
1160deductible amounts specified in this paragraph in a form
1161approved by the office in conjunction with each renewal of the
1162policy. The failure to provide such notice constitutes a
1163violation of this code but does not affect the coverage provided
1164under the policy.
1165     2.  This paragraph does not apply with respect to a
1166deductible program lawfully in effect on June 14, 1995, or to
1167any similar deductible program, if the deductible program
1168requires a minimum deductible amount of no less than 2 percent
1169of the policy limits.
1170     3.  With respect to a policy covering a risk with dwelling
1171limits of at least $100,000, but less than $250,000, the insurer
1172may, in lieu of offering a policy with a $500 hurricane or wind
1173deductible as required by subparagraph 1., offer a policy that
1174the insurer guarantees it will not nonrenew for reasons of
1175reducing hurricane loss for one renewal period and that contains
1176up to a 2 percent hurricane or wind deductible as required by
1177subparagraph 1.
1178     4.  With respect to a policy covering a risk with dwelling
1179limits of $250,000 or more, the insurer need not offer the $500
1180hurricane or wind deductible as required by subparagraph 1., but
1181must, except as otherwise provided in this subsection, offer the
1182other 2 percent hurricane deductibles or wind deductible as
1183required by subparagraph 1.
1184     (c)  In order to provide for the transition from wind
1185deductibles to hurricane deductibles as required by this
1186subsection, an insurer is required to provide wind deductibles
1187meeting the requirements of this subsection until the effective
1188date of the insurer's first rate filing made after January 1,
11891997, and is thereafter required to provide hurricane
1190deductibles meeting the requirements of this subsection.
1191     (4)(a)  Any policy that contains a separate hurricane
1192deductible must on its face include in boldfaced type no smaller
1193than 18 points the following statement: "THIS POLICY CONTAINS A
1195HIGH OUT-OF-POCKET EXPENSES TO YOU." A policy containing a
1196coinsurance provision applicable to hurricane losses must on its
1197face include in boldfaced type no smaller than 18 points the
1200     (b)  Beginning October 1, 2005, for any personal lines
1201residential property insurance policy containing a separate
1202hurricane deductible, the insurer shall compute and prominently
1203display the actual dollar value of the hurricane deductible on
1204the declarations page of the policy at issuance and, for
1205renewal, on the renewal declarations page of the policy or on
1206the premium renewal notice.
1207     (c)  Beginning October 1, 2005, for any personal lines
1208residential property insurance policy containing an inflation
1209guard rider, the insurer shall compute and prominently display
1210the actual dollar value of the hurricane deductible on the
1211declarations page of the policy at issuance and, for renewal, on
1212the renewal declarations page of the policy or on the premium
1213renewal notice. In addition, beginning October 1, 2005, for any
1214personal lines residential property insurance policy containing
1215an inflation guard rider, the insurer shall notify the
1216policyholder of the possibility that the hurricane deductible
1217may be higher than indicated when loss occurs due to application
1218of the inflation guard rider. Such notification shall be made on
1219the declarations page of the policy at issuance and, for
1220renewal, on the renewal declarations page of the policy or on
1221the premium renewal notice.
1222     (8)(a)  The Legislature finds that property insurance
1223coverage has become unaffordable for a significant number of
1224mobile home owners, as evidenced by reports that up to 100,000
1225mobile home owners have terminated their insurance coverage
1226because they cannot afford to pay approved rates charged in the
1227voluntary or residual markets. The Legislature further finds
1228that additional flexibility in available coverages will enable
1229mobile home owners to obtain affordable insurance and increase
1231     (b)  Notwithstanding the provisions of subsection (3), with
1232respect to mobile home policies:
1233     1.  The deductible for hurricane coverage may not exceed 10
1234percent of the property value if the property is not subject to
1235any liens and may not exceed 5 percent of the property value if
1236the property is subject to any liens.
1237     2.  The insurer need not make the offers required by
1238paragraph (3)(b).
1239     (8)(9)  Notwithstanding the other provisions of this
1240section or of other law, but only as to hurricane coverage as
1241defined in s. 627.4025 for commercial lines residential
1242coverages, an insurer may offer a deductible in an amount not
1243exceeding 5 percent of the insured value with respect to a
1244condominium association or cooperative association policy, or in
1245an amount not exceeding 10 percent of the insured value with
1246respect to any other commercial lines residential policy, if, at
1247the time of such offer and at each renewal, the insurer also
1248offers to the policyholder a deductible in the amount of 3
1249percent of the insured value. Nothing in this subsection
1250prohibits any deductible otherwise authorized by this section.
1251All forms by which the offers authorized in this subsection are
1252made or required to be made shall be on forms that are adopted
1253or approved by the commission or office.
1254     Section 13.  Subsection (5) of section 627.701, Florida
1255Statutes, as amended by section 4 of chapter 2004-480, Laws of
1256Florida, is amended to read:
1257     627.701  Liability of Insureds; coinsurance; deductibles.--
1258     (5)(a)  The hurricane deductible of any personal lines
1259residential property insurance policy issued or renewed on or
1260after May 1, 2005, shall be applied as follows:
1261     1.(a)  The hurricane deductible shall apply on an annual
1262basis to all covered hurricane losses that occur during the
1263calendar year for losses that are covered under one or more
1264policies issued by the same insurer or an insurer in the same
1265insurer group.
1266     2.(b)  If a hurricane deductible applies separately to each
1267of one or more structures insured under a single policy, the
1268requirements of this paragraph subsection apply with respect to
1269the deductible for each structure.
1270     3.(c)  If there was a hurricane loss for a prior hurricane
1271or hurricanes during the calendar year, the insurer may apply a
1272deductible to a subsequent hurricane which that is the greater
1273of the remaining amount of the hurricane deductible or the
1274amount of the deductible that applies to perils other than a
1275hurricane. Insurers may require policyholders to report
1276hurricane losses that are below the hurricane deductible or to
1277maintain receipts or other records of such hurricane losses in
1278order to apply such losses to subsequent hurricane claims.
1279     4.(d)  If there are hurricane losses in a calendar year on
1280more than one policy issued by the same insurer or an insurer in
1281the same insurer group, the hurricane deductible shall be the
1282highest amount stated in any one of the policies. If a
1283policyholder who had a hurricane loss under the prior policy is
1284provided or offered a lower hurricane deductible under the new
1285or renewal policy, the insurer must notify the policyholder, in
1286writing, at the time the lower hurricane deductible is provided
1287or offered, that the lower hurricane deductible will not apply
1288until January 1 of the following calendar year.
1289     (b)  For commercial residential property insurance policies
1290issued or renewed on or after January 1, 2006, the insurer must
1291offer the policyholder the following alternative hurricane
1293     1.  A hurricane deductible that applies on an annual basis
1294as provided in paragraph (a); and
1295     2.  A hurricane deductible that applies to each hurricane.
1296     Section 14.  Effective October 1, 2005, section 627.7011,
1297Florida Statutes, is amended to read:
1298     627.7011  Homeowners' policies; offer of replacement cost
1299coverage and law and ordinance coverage.--
1300     (1)  Prior to issuing a homeowner's insurance policy on or
1301after October 1, 2005 June 1, 1994, or prior to the first
1302renewal of a homeowner's insurance policy on or after October 1,
13032005 June 1, 1994, the insurer must offer each of the following:
1304     (a)  A policy or endorsement providing that any loss which
1305is repaired or replaced will be adjusted on the basis of
1306replacement costs not exceeding policy limits as to the
1307dwelling, rather than actual cash value, but not including costs
1308necessary to meet applicable laws and ordinances regulating the
1309construction, use, or repair of any property or requiring the
1310tearing down of any property, including the costs of removing
1312     (b)  A policy or endorsement providing that, subject to
1313other policy provisions, any loss which is repaired or replaced
1314at any location will be adjusted on the basis of replacement
1315costs not exceeding policy limits as to the dwelling, rather
1316than actual cash value, and also including costs necessary to
1317meet applicable laws and ordinances regulating the construction,
1318use, or repair of any property or requiring the tearing down of
1319any property, including the costs of removing debris; however,
1320such additional costs necessary to meet applicable laws and
1321ordinances may be limited to either 25 percent or 50 percent of
1322the dwelling limit, as selected by the policyholder, and such
1323coverage shall apply only to repairs of the damaged portion of
1324the structure unless the total damage to the structure exceeds
132550 percent of the replacement cost of the structure.
1327An insurer is not required to make the offers required by this
1328subsection with respect to the issuance or renewal of a
1329homeowner's policy that contains the provisions specified in
1330paragraph (b) for law and ordinance coverage limited to 25
1331percent of the dwelling limit, except that the insurer must
1332offer the law and ordinance coverage limited to 50 percent of
1333the dwelling limit. This subsection does not prohibit the offer
1334of a guaranteed replacement cost policy.
1335     (2)  Unless the insurer obtains the policyholder's written
1336refusal of the policies or endorsements specified in subsection
1337(1), any policy covering the dwelling is deemed to include the
1338coverage specified in paragraph (1)(b). The rejection or
1339selection of alternative coverage shall be made on a form
1340approved by the office. The form shall fully advise the
1341applicant of the nature of the coverage being rejected. If this
1342form is signed by a named insured, it will be conclusively
1343presumed that there was an informed, knowing rejection of the
1344coverage or election of the alternative coverage on behalf of
1345all insureds. Unless the policyholder requests in writing the
1346coverage specified in this section, it need not be provided in
1347or supplemental to any other policy that renews, insures,
1348extends, changes, supersedes, or replaces an existing policy
1349when the policyholder has rejected the coverage specified in
1350this section or has selected alternative coverage. The insurer
1351must provide such policyholder with notice of the availability
1352of such coverage in a form approved by the office at least once
1353every 3 years. The failure to provide such notice constitutes a
1354violation of this code, but does not affect the coverage
1355provided under the policy.
1356     (3)  In the event of a loss for which a dwelling or
1357personal property is insured on the basis of replacement costs,
1358the insurer shall pay the replacement cost without reservation
1359or holdback of any depreciation in value, whether or not the
1360insured replaces or repairs the dwelling or property.
1361     (4)  Any homeowner's insurance policy issued or renewed on
1362or after October 1, 2005, must include in bold type no smaller
1363than 18 points the following statement:
1371The intent of this subsection is to encourage policyholders to
1372purchase sufficient coverage to protect them in case events
1373excluded from the standard homeowners policy, such as law and
1374ordinance enforcement and flood, combine with covered events to
1375produce damage or loss to the insured property. The intent is
1376also to encourage policyholders to discuss these issues with
1377their insurance agent.
1378     (5)(3)  Nothing in this section shall be construed to apply
1379to policies not considered to be "homeowners' policies," as that
1380term is commonly understood in the insurance industry. This
1381section specifically does not apply to mobile home policies.
1382Nothing in this section shall be construed as limiting the
1383ability of any insurer to reject or nonrenew any insured or
1384applicant on the grounds that the structure does not meet
1385underwriting criteria applicable to replacement cost or law and
1386ordinance policies or for other lawful reasons.
1387     Section 15.  Effective July 1, 2005, subsections (1) and
1388(7) of section 627.7015, Florida Statutes, are amended, and
1389subsection (2) of that section is reenacted, to read:
1390     627.7015  Alternative procedure for resolution of disputed
1391property insurance claims.--
1392     (1)  PURPOSE AND SCOPE.--This section sets forth a
1393nonadversarial alternative dispute resolution procedure for a
1394mediated claim resolution conference prompted by the need for
1395effective, fair, and timely handling of property insurance
1396claims. There is a particular need for an informal,
1397nonthreatening forum for helping parties who elect this
1398procedure to resolve their claims disputes because most
1399homeowner's and commercial residential insurance policies
1400obligate insureds to participate in a potentially expensive and
1401time-consuming adversarial appraisal process prior to
1402litigation. The procedure set forth in this section is designed
1403to bring the parties together for a mediated claims settlement
1404conference without any of the trappings or drawbacks of an
1405adversarial process. Before resorting to these procedures,
1406insureds and insurers are encouraged to resolve claims as
1407quickly and fairly as possible. This section is available with
1408respect to claims under personal lines and commercial
1409residential policies for all claimants and insurers prior to
1410commencing the appraisal process, or commencing litigation. If
1411requested by the insured, participation by legal counsel shall
1412be permitted. Mediation under this section is also available to
1413litigants referred to the department by a county court or
1414circuit court. This section does not apply to commercial
1415coverages, to private passenger motor vehicle insurance
1416coverages, or to disputes relating to liability coverages in
1417policies of property insurance.
1418     (2)  At the time a first-party claim within the scope of
1419this section is filed, the insurer shall notify all first-party
1420claimants of their right to participate in the mediation program
1421under this section. The department shall prepare a consumer
1422information pamphlet for distribution to persons participating
1423in mediation under this section.
1424     (7)  If the insurer fails to comply with subsection (2) by
1425failing to notify a first-party claimant of its right to
1426participate in the mediation program under this section or if
1427the insurer requests the mediation, and the mediation results
1428are rejected by either party, the insured shall not be required
1429to submit to or participate in any contractual loss appraisal
1430process of the property loss damage as a precondition to legal
1431action for breach of contract against the insurer for its
1432failure to pay the policyholder's claims covered by the policy.
1433     Section 16.  Subsection (1) of section 627.702, Florida
1434Statutes, is amended to read:
1435     627.702  Valued policy law.--
1436     (1)(a)  In the event of the total loss of any building,
1437structure, mobile home as defined in s. 320.01(2), or
1438manufactured building as defined in s. 553.36(12), located in
1439this state and insured by any insurer as to a covered peril, in
1440the absence of any change increasing the risk without the
1441insurer's consent and in the absence of fraudulent or criminal
1442fault on the part of the insured or one acting in her or his
1443behalf, the insurer's liability, if any, under the policy for
1444such total loss, if caused by a covered peril, shall be in the
1445amount of money for which such property was so insured as
1446specified in the policy and for which a premium has been charged
1447and paid.
1448     (b)  The intent of this subsection is not to deprive an
1449insurer of any proper defense under the policy, to create new or
1450additional coverage under the policy, or to require an insurer
1451to pay for a loss caused by a peril other than the covered
1452peril. In furtherance of such legislative intent, when a loss
1453was caused in part by a covered peril and in part by a
1454noncovered peril, paragraph (a) does not apply. In such
1455circumstances, the insurer's liability under this section shall
1456be limited to the amount of the loss caused by the covered
1457peril. However, if the covered perils alone would have caused
1458the total loss, paragraph (a) shall apply. The insurer is never
1459liable for more than the amount necessary to repair, rebuild, or
1460replace the structure following the total loss, after
1461considering all other benefits actually paid for the total loss.
1462     (c)  It is the intent of the Legislature that the amendment
1463to this section shall not be applied retroactively and shall
1464apply only to claims filed after effective date of such
1466     Section 17.  Section 627.706, Florida Statutes, is amended
1467to read:
1468     627.706  Sinkhole insurance; definitions.--
1469     (1)  Every insurer authorized to transact property
1470insurance in this state shall make available coverage for
1471insurable sinkhole losses on any structure, including contents
1472of personal property contained therein, to the extent provided
1473in the form to which the sinkhole coverage attaches.
1474     (2)  As used in ss. 627.706-627.7074, and as used in
1475connection with any policy providing coverage for sinkhole
1477     (a)  "Sinkhole" means a landform created by subsidence of
1478soil, sediment, or rock as underlying strata are dissolved by
1479ground water. A sinkhole may form by collapse into subterranean
1480voids created by dissolution of limestone or dolostone or by
1481subsidence as these strata are dissolved.
1482     (b)(2)  "Sinkhole loss" means structural damage to the
1483building, including the foundation, caused by sinkhole activity.
1484Contents coverage shall apply only if there is structural damage
1485to the building caused by sinkhole activity.
1486     (c)(3)  "Sinkhole activity loss" means actual physical
1487damage to the property covered arising out of or caused by
1488sudden settlement or systematic weakening collapse of the earth
1489supporting such property only when such settlement or systematic
1490weakening collapse results from movement or raveling of soils,
1491sediments, or rock materials into subterranean voids created by
1492the effect action of water on a limestone or similar rock
1494     (d)  "Engineer" means a person, as defined in s. 471.005,
1495who has a bachelor degree or higher in engineering with a
1496specialty in the geotechnical engineering field. An engineer
1497must have geotechnical experience and expertise in the
1498identification of sinkhole activity as well as other potential
1499causes of damage to the structure.
1500     (e)  "Professional geologist" means a person, as defined by
1501s. 492.102, who has a bachelor degree or higher in geology or
1502related earth science with expertise in the geology of Florida.
1503A professional geologist must have geological experience and
1504expertise in the identification of sinkhole activity as well as
1505other potential geologic causes of damage to the structure.
1506     (3)(4)  Every insurer authorized to transact property
1507insurance in this state shall make a proper filing with the
1508office for the purpose of extending the appropriate forms of
1509property insurance to include coverage for insurable sinkhole
1511     Section 18.  Section 627.7065, Florida Statutes, is created
1512to read:
1513     627.7065  Database of information relating to sinkholes;
1514the Department of Financial Services and the Department of
1515Environmental Protection.--
1516     (1)  The Legislature finds that there has been a dramatic
1517increase in the number of sinkholes and insurance claims for
1518sinkhole damage in the state during the past 10 years.
1519Accordingly, the Legislature recognizes the need to track
1520current and past sinkhole activity and to make the information
1521available for prevention and remediation activities. The
1522Legislature further finds that the Florida Geological Survey of
1523the Department of Environmental Protection has created a partial
1524database of some sinkholes identified in Florida, although the
1525database is not reflective of all sinkholes or insurance claims
1526for sinkhole damage. The Legislature determines that creating a
1527complete electronic database of sinkhole activity serves an
1528important purpose in protecting the public and in studying
1529property claims activities in the insurance industry.
1530     (2)  The Department of Financial Services, including the
1531employee of the Division of Consumer Services designated as the
1532primary contact for consumers on issues relating to sinkholes,
1533and the Office of the Insurance Consumer Advocate shall consult
1534with the Florida Geological Survey and the Department of
1535Environmental Protection to implement a statewide automated
1536database of sinkholes and related activity identified in the
1538     (3)  Representatives of the Department of Financial
1539Services, with the agreement of the Department of Environmental
1540Protection, shall determine the form and content of the
1541database. The content may include standards for reporting and
1542investigating sinkholes for inclusion in the database and
1543requirements for insurers to report to the departments the
1544receipt of claims involving sinkhole loss and other similar
1545activities. The Department of Financial Services may require
1546insurers to report present and past data of sinkhole claims. The
1547database also may include information of damage due to ground
1548settling and other subsidence activity.
1549     (4)  The Department of Financial Services may manage the
1550database or may contract for its management and maintenance. The
1551Department of Environmental Protection shall investigate reports
1552of sinkhole activity and include its findings and investigations
1553in the database.
1554     (5)  The Department of Environmental Protection, in
1555consultation with the Department of Financial Services, shall
1556present a report of activities relating to the sinkhole
1557database, including recommendations regarding the database and
1558similar matters, to the Governor, the Speaker of the House of
1559Representatives, the President of the Senate, and the Chief
1560Financial Officer by December 31, 2005. The report may consider
1561the need for the Legislature to create an entity to study the
1562increase in sinkhole activity in the state and other similar
1563issues relating to sinkhole damage, including recommendations
1564and costs for staffing the entity. The report may include other
1565information, as appropriate.
1566     (6)  The Department of Financial Services, in consultation
1567with the Department of Environmental Protection, may adopt rules
1568to implement this section.
1569     Section 19.  Section 627.707, Florida Statutes, is amended
1570to read:
1571     627.707  Minimum Standards for investigation of sinkhole
1572claims by insurers; nonrenewals.--
1573     (1)  Upon receipt of a claim for a sinkhole loss, an
1574insurer must meet the following minimum standards in
1575investigating a claim:
1576     (1)(a)  Upon receipt of a claim for a sinkhole loss, The
1577insurer must make an inspection of the insured's premises to
1578determine if there has been physical damage to the structure
1579which may might be the result of sinkhole activity.
1580     (b)  If, upon the investigation pursuant to paragraph (a),
1581the insurer discovers damage to a structure which is consistent
1582with sinkhole activity or if the structure is located in close
1583proximity to a structure in which sinkhole damage has been
1584verified, then prior to denying a claim, the insurer must obtain
1585a written certification from an individual qualified to
1586determine the existence of sinkhole activity, stating that the
1587cause of the claim is not sinkhole activity, and that the
1588analysis conducted was of sufficient scope to eliminate sinkhole
1589activity as the cause of damage within a reasonable professional
1590probability. The written certification must also specify the
1591professional discipline and professional licensure or
1592registration under which the analysis was conducted.
1593     (2)  Following the insurer's initial inspection, the
1594insurer shall engage an engineer or a professional geologist to
1595conduct testing as provided in s. 627.7072 to determine the
1596cause of the loss within a reasonable professional probability
1597and issue a report as provided in s. 627.7073, if:
1598     (a)  The insurer is unable to identify a valid cause of the
1599damage or discovers damage to the structure which is consistent
1600with sinkhole loss; or
1601     (b)  The policyholder demands testing in accordance with
1602this section or s. 627.7072.
1603     (3)  Following the initial inspection of the insured
1604premises, the insurer shall provide written notice to the
1605policyholder disclosing the following information:
1606     (a)  What the insurer has determined to be the cause of
1607damage, if the insurer has made such a determination.
1608     (b)  A statement of the circumstances under which the
1609insurer is required to engage an engineer or a professional
1610geologist to verify or eliminate sinkhole loss and to engage an
1611engineer to make recommendations regarding land and building
1612stabilization and foundation repair.
1613     (c)  A statement regarding the right of the policyholder to
1614request testing by an engineer or a professional geologist and
1615the circumstances under which the policyholder may demand
1616certain testing.
1617     (4)  If the insurer determines that there is no sinkhole
1618loss, the insurer may deny the claim. If the insurer denies the
1619claim, without performing testing under s. 627.7072, the
1620policyholder may demand testing by the insurer under s.
1621627.7072. The policyholder's demand for testing must be
1622communicated to the insurer in writing after the policyholder's
1623receipt of the insurer's denial of the claim.
1624     (5)(a)  Subject to paragraph (b), if a sinkhole loss is
1625verified, the insurer shall pay to stabilize the land and
1626building and repair the foundation in accordance with the
1627recommendations of the engineer as provided under s. 627.7073,
1628and in consultation with the policyholder, subject to the
1629coverage and terms of the policy. The insurer shall pay for
1630other repairs to the structure and contents in accordance with
1631the terms of the policy.
1632     (b)  The insurer may limit its payment to the actual cash
1633value of the sinkhole loss, not including underpinning or
1634grouting or any other repair technique performed below the
1635existing foundation of the building, until the policyholder
1636enters into a contract for the performance of building
1637stabilization or foundation repairs. After the policyholder
1638enters into the contract, the insurer shall pay the amounts
1639necessary to begin and perform such repairs as the work is
1640performed and the expenses are incurred. The insurer may not
1641require the policyholder to advance payment for such repairs. If
1642repair has begun and the engineer selected or approved by the
1643insurer determines that the repair cannot be completed within
1644the policy limits, the insurer must either complete the
1645engineer's recommended repair or tender the policy limits to the
1646policyholder without a reduction for the repair expenses
1648     (6)  Except as provided in subsection (7), the fees and
1649costs of the engineer or the professional geologist shall be
1650paid by the insurer.
1651     (7)(c)  If the insurer obtains, pursuant to s. 627.7073
1652paragraph (b), written certification that there is no sinkhole
1653loss or that the cause of the damage claim was not sinkhole
1654activity, and if the policyholder has submitted the sinkhole
1655claim without good faith grounds for submitting such claim, the
1656policyholder shall reimburse the insurer for 50 percent of the
1657actual costs cost of the analyses and services provided analysis
1658under ss. 627.7072 and 627.7073 paragraph (b); however, a
1659policyholder is not required to reimburse an insurer more than
1660$2,500 with respect to any claim. A policyholder is required to
1661pay reimbursement under this subsection paragraph only if the
1662insurer, prior to ordering the analysis under s. 627.7072
1663paragraph (b), informs the policyholder in writing of the
1664policyholder's potential liability for reimbursement and gives
1665the policyholder the opportunity to withdraw the claim.
1666     (8)(2)  No insurer shall nonrenew any policy of property
1667insurance on the basis of filing of claims for partial loss
1668caused by sinkhole damage or clay shrinkage as long as the total
1669of such payments does not exceed the current policy limits of
1670coverage for property damage, and provided the insured has
1671repaired the structure in accordance with the engineering
1672recommendations upon which any payment or policy proceeds were
1674     (9)  The insurer may engage a structural engineer to make
1675recommendations as to the repair of the structure.
1676     Section 20.  Section 627.7072, Florida Statutes, is created
1677to read:
1678     627.7072  Testing standards for sinkholes.--
1679     (1)  The engineer and professional geologist shall perform
1680such tests as sufficient, in their professional opinion, to
1681determine the presence or absence of sinkhole loss or other
1682cause of damage within reasonable professional probability and
1683for the engineer to make recommendations regarding necessary
1684building stabilization, and foundation repair.
1685     (2)  Testing by a professional geologist shall be conducted
1686in compliance with the Florida Geological Survey Special
1687Publication No. 57 (2005).
1688     Section 21.  Section 627.7073, Florida Statutes, is created
1689to read:
1690     627.7073  Sinkhole reports.--
1691     (1)  Upon completion of testing as provided in s. 627.7072,
1692the engineer and professional geologist shall issue a report and
1693certification to the insurer and the policyholder as provided in
1694this section.
1695     (a)  Sinkhole loss is verified if, based upon tests
1696performed in accordance with s. 627.7072, an engineer and a
1697professional geologist issue a written report and certification
1699     1.  That the cause of the actual physical and structural
1700damage is sinkhole activity within a reasonable professional
1702     2.  That the analyses conducted were of sufficient scope to
1703identify sinkhole activity as the cause of damage within a
1704reasonable professional probability.
1705     3.  A description of the tests performed.
1706     4.  A recommendation by the engineer of methods for
1707stabilizing the land and building and for making repairs to the
1709     (b)  If sinkhole activity is eliminated as the cause of
1710damage to the structure, the engineer and professional geologist
1711shall issue a written report and certification to the
1712policyholder and the insurer stating:
1713     1.  That the cause of the damage is not sinkhole activity
1714within a reasonable professional probability.
1715     2.  That the analyses and tests conducted were of
1716sufficient scope to eliminate sinkhole activity as the cause of
1717damage within a reasonable professional probability.
1718     3.  A statement of the cause of the damage within a
1719reasonable professional probability.
1720     4.  A description of the tests performed.
1721     (c)  The respective findings, opinions, and recommendations
1722of the engineer and professional geologist as to the
1723verification or elimination of a sinkhole loss and the findings,
1724opinions, and recommendations of the engineer as to land and
1725building stabilization and foundation repair shall be presumed
1727     (2)  Any insurer that has paid a claim for a sinkhole loss
1728shall file a copy of the report and certification, prepared
1729pursuant to subsection (1), with the county property appraiser
1730who shall record the report and certification with the parcel
1731number. The insurer shall bear the cost of filing and recording
1732the report and certification. There shall be no cause of action
1733or liability against an insurer for compliance with this
1734section. The seller of real property upon which a sinkhole claim
1735has been made shall disclose to the buyer of such property that
1736a claim has been paid and whether or not the full amount of the
1737proceeds were used to repair the sinkhole damage.
1738     Section 22.  Effective October 1, 2005, and applicable to
1739policies issued or renewed on or after that date, section
1740627.711, Florida Statutes, is created to read:
1741     627.711  Notice of premium discounts for hurricane loss
1742mitigation.--Using a form prescribed by the Office of Insurance
1743Regulation, the insurer shall clearly notify the applicant or
1744policyholder of any personal lines residential property
1745insurance policy, at the time of the issuance of the policy and
1746at each renewal, of the availability and the range of each
1747premium discount, credit, other rate differential, or reduction
1748in deductibles for properties on which fixtures or construction
1749techniques demonstrated to reduce the amount of loss in a
1750windstorm can or have been installed or implemented. The
1751prescribed form shall describe generally what actions the
1752policyholders may be able to take to reduce their windstorm
1753premium. The prescribed form and a list of such ranges approved
1754by the office for each insurer licensed in the state and
1755providing such discounts, credits, other rate differentials, or
1756reductions in deductibles for properties described in this
1757subsection shall be available for electronic viewing and
1758download from the Department of Financial Services' or the
1759Office of Insurance Regulation's Internet website. The Financial
1760Services Commission may adopt rules to implement this
1762     Section 23.  (1)(a)  Upon an insurer's receiving a
1763communication with respect to a claim, the insurer shall, within
176414 calendar days, review and acknowledge receipt of such
1765communication unless payment is made within that period of time
1766or unless the failure to acknowledge is caused by factors beyond
1767the control of the insurer which reasonably prevent such
1768acknowledgement. If the acknowledgement is not in writing, a
1769notification indicating acknowledgement shall be made in the
1770insurer's claim file and dated. A communication made to or by an
1771agent of an insurer with respect to a claim shall constitute
1772communication to or by the insurer.
1773     (b)  As used in this subsection, the term "agent" means any
1774person to whom an insurer has granted authority or
1775responsibility to receive or make such communications with
1776respect to claims on behalf of the insurer.
1777     (c)  This subsection shall not apply to claimants
1778represented by counsel beyond those communications necessary to
1779provide forms and instructions.
1780     (2)  Such acknowledgement shall be responsive to the
1781communication. If the communication constitutes a notification
1782of a claim, unless the acknowledgement reasonably advises the
1783claimant that the claim appears not to be covered by the
1784insurer, the acknowledgement shall provide necessary claim
1785forms, and instructions, including an appropriate telephone
1787     (3)  Unless otherwise provided by the policy of insurance
1788or by law, within 10 working days after an insurer receives
1789proof of loss statements the insurer shall begin such
1790investigation as is reasonably necessary unless the failure to
1791begin such investigation is caused by factors beyond the control
1792of the insurer which reasonably prevent the commencement of such
1794     (4)  For purposes of this section, the term "insurer" means
1795any residential property insurer.
1796     Section 24.  Task Force on Long-Term Solutions for
1797Florida's Hurricane Insurance Market.--
1798     (1)  TASK FORCE CREATED.--There is created the Task Force
1799on Long-Term Solutions for Florida's Hurricane Insurance Market.
1800     (2)  ADMINISTRATION.--The task force shall be
1801administratively housed within the Office of the Chief Financial
1802Officer, but shall operate independently of any state officer or
1803agency. The Office of the Chief Financial Officer shall provide
1804such administrative support as the task force deems necessary to
1805accomplish its mission and shall provide necessary funding for
1806the task force within its existing resources. The Executive
1807Office of the Governor, the Department of Financial Services,
1808and the Office of Insurance Regulation shall provide substantive
1809staff support for the task force.
1810     (3)  MEMBERSHIP.--The members of the task force shall be
1811appointed as follows:
1812     (a)  The Governor shall appoint three members who have
1813expertise in financial matters, one of whom is a representative
1814of the mortgage lending industry, one of whom is a
1815representative of the real estate or construction industry, and
1816one of whom is a representative of insurance consumers.
1817     (b)  The Chief Financial Officer shall appoint three
1818members who have expertise in financial matters, one of whom is
1819a representative of a national property insurer or of a Florida-
1820only subsidiary of a national property insurer, one of whom is a
1821representative of a domestic property insurer in this state, and
1822one of whom is a representative of insurance agents.
1823     (c)  The President of the Senate shall appoint three
1825     (d)  The Speaker of the House of Representatives shall
1826appoint three members.
1827     (e)  The Commissioner of Insurance Regulation shall serve
1828as an ex officio voting member of the task force.
1830Members of the task force shall serve without compensation but
1831are entitled to receive reimbursement for per diem and travel
1832expenses as provided in section 112.061, Florida Statutes.
1833     (4)  PURPOSE AND INTENT.--The Legislature recognizes that
1834the continued availability of hurricane insurance coverage for
1835property owners in this state is essential to the state's
1836economic survival. The Legislature further recognizes that
1837legislative efforts to resolve problems in the hurricane
1838insurance market in 2005 may not be sufficient to address this
1839state's long-term needs and that further action may be necessary
1840in subsequent legislative sessions. The purpose of the task
1841force is to make recommendations to the legislative and
1842executive branches of this state's government relating to the
1843creation and maintenance of insurance capacity in the private
1844sector and public sector which is sufficient to ensure that all
1845property owners in this state are able to obtain appropriate
1846insurance coverage for hurricane losses, as further described in
1847this section.
1848     (5)  SPECIFIC TASKS.--The task force shall conduct such
1849research and hearings as it deems necessary to achieve the
1850purposes specified in subsection (4) and shall develop
1851information on relevant issues, including, but not limited to,
1852the following issues:
1853     (a)  Whether this state currently has sufficient hurricane
1854insurance capacity to ensure the continuation of a healthy,
1855competitive marketplace, taking into consideration both private-
1856sector resources and public-sector resources.
1857     (b)  Identifying the future demands on this state's
1858hurricane insurance capacity, taking into account population
1859growth, coastal growth, and anticipated future hurricane
1861     (c)  Whether the Florida Hurricane Catastrophe Fund
1862fulfilled its purpose of creating additional insurance capacity
1863sufficient to ameliorate the current dangers to the state's
1864economy and to the public health, safety, and welfare in its
1865response to the 2004 hurricane season.
1866     (d)  The extent to which the growth in Citizens Property
1867Insurance Corporation is attributable to insufficient insurance
1869     (e)  The extent to which the growth trends of Citizens
1870Property Insurance Corporation create long-term problems for
1871property owners, buyers, and sellers in this state and for other
1872persons and businesses that depend on a viable market.
1873     (f)  The operation and role of Citizens Property Insurance
1874Corporation, including:
1875     1.  How to ensure that the corporation operates as an
1876insurer of last resort which does not compete with insurers in
1877the voluntary market, but which charges rates that are not
1878excessive, inadequate, or unfairly discriminatory;
1879     2.  Whether the bonuses paid by the corporation to carriers
1880taking policies out of the corporation provide a cost-effective
1881means of reducing the potential liability of the corporation;
1882     3.  Whether the "Consumer Choice" law should be repealed or
1883amended to ensure that the corporation serves as the insurer of
1884last resort;
1885     4.  Whether coverage amounts should be limited;
1886     5.  Whether the corporation has hired an adequate level of
1887permanent claims and adjusting staff in addition to outsourcing
1888its claims-adjusting functions to independent adjusting firms;
1889     6.  The effect of reducing or expanding the areas that are
1890eligible for coverage in the high-risk, wind-only account;
1891     7.  Whether the corporation should purchase reinsurance or
1892take other actions that reduce the potential for debt financing
1893and deficit assessments; and
1894     8.  An evaluation of the infrastructure and administration
1895of the corporation and how to improve customer service, claims
1896handling, and communication and the exchange of information with
1897agents of policyholders of the corporation.
1898     (6)  REPORT AND RECOMMENDATIONS.--By April 1, 2006, the
1899task force shall provide a report containing findings relating
1900to the tasks identified in subsection (5) and recommendations
1901consistent with the purposes of this section and also consistent
1902with such findings. The task force shall submit the report to
1903the Governor, the Chief Financial Officer, the President of the
1904Senate, and the Speaker of the House of Representatives. The
1905task force may also submit such interim reports as it deems
1907     (7)  ADDITIONAL ACTIVITIES.--The task force shall monitor
1908the implementation of hurricane insurance-related legislation
1909enacted during the 2005 Regular Session and shall make such
1910additional recommendations as it deems appropriate for further
1911legislative action during the 2004-2006 legislative biennium.
1912     (8)  EXPIRATION.--The task force shall expire at the end of
1913the 2004-2006 legislative biennium.
1914     Section 25.  The Office of Insurance Regulation shall, by
1915January 1, 2006, submit a report to the President of the Senate,
1916the Speaker of the House of Representatives, the minority party
1917leaders of the Senate and the House of Representatives, and the
1918chairs of the standing committees of the Senate and the House of
1919Representatives having jurisdiction over matters relating to
1920property and casualty insurance. The report shall include
1921findings and recommendations on requiring residential property
1922insurers to provide law and ordinance coverage for residential
1923property insurance policies, the increase or decrease in
1924insurance costs associated with requiring such coverage, and
1925such other related information as the Office of Insurance
1926Regulation determines is appropriate for the Legislature to
1928     Section 26.  Notwithstanding that revenues of Citizens
1929Property Insurance Corporation are not state revenues, the
1930Auditor General shall perform an operational audit, as defined
1931in section 11.45(1), Florida Statutes, of the Citizens Property
1932Insurance Corporation created under section 627.351(6), Florida
1933Statutes. The scope of the audit shall also include:
1934     (1)  An analysis of the corporation's infrastructure,
1935customer service, claims handling, accessibility of policyholder
1936information to the agent of record, take-out programs, take-out
1937bonuses, and financing arrangements.
1938     (2)  An evaluation of costs associated with the
1939administration and servicing of the policies issued by the
1940corporation to determine alternatives by which costs can be
1941reduced, customer service improved, and claims handling
1944The audit shall contain policy alternatives for the Legislature
1945to consider. The Auditor General shall submit a report to the
1946Governor, the President of the Senate, and the Speaker of the
1947House of Representatives no later than February 1, 2006.
1948     Section 27.  The board of governors of the Citizens
1949Property Insurance Corporation created under section 627.351(6),
1950Florida Statutes, shall, by February 1, 2006, submit a report to
1951the President of the Senate, the Speaker of the House of
1952Representatives, the minority party leaders of the Senate and
1953the House of Representatives, and the chairs of the standing
1954committees of the Senate and the House of Representatives having
1955jurisdiction over matters relating to property and casualty
1956insurance. The report shall include the board's findings and
1957recommendations on the following issues:
1958     (1)  The number of policies and the aggregate premium of
1959the Citizens Property Insurance Corporation, before and after
1960enactment of this act, and projections for future policy and
1961premium growth.
1962     (2)  Increases or decreases in availability of residential
1963property coverage in the voluntary market and the effectiveness
1964of this act in improving the availability of residential
1965property coverage in the voluntary market in the state.
1966     (3)  The board's efforts to depopulate the corporation and
1967the willingness of insurers in the voluntary market to avail
1968themselves of depopulation incentives.
1969     (4)  Further actions that could be taken by the Legislature
1970to improve availability of residential property coverage in the
1971voluntary and residual markets.
1972     (5)  Actions that the board has taken to restructure the
1973corporation and recommendations for legislative action to
1974restructure the corporation, including, but not limited to,
1975actions relating to claims handling and customer service.
1976     (6)  Projected surpluses or deficits and possible means of
1977providing funding to ensure the continued solvency of the
1979     (7)  The corporation's efforts to procure catastrophe
1980reinsurance to cover its projected 100-year probable maximum
1981loss with specification as to what best efforts were made by the
1982corporation to procure such reinsurance.
1983     (8)  Such other issues as the board determines are worthy
1984of the Legislature's consideration.
1985     Section 28.  For the 2005-2006 fiscal year, there is
1986appropriated $350,000 in recurring funds from the Insurance
1987Regulatory Trust Fund and four positions are authorized to the
1988Office of the Consumer Advocate within the Department of
1989Financial Services for the purposes provided in section
1990627.0613, Florida Statutes.
1991     Section 29.  The amendment to section 627.0628, Florida
1992Statutes, and the creation of section 627.06281, Florida
1993Statutes, as provided in this act shall take effect on the same
1994date that House Bill 1939, Senate Bill 1478, or similar
1995legislation takes effect, if such legislation is adopted in the
1996same legislative session or an extension thereof and becomes a
1998     Section 30.  Except as otherwise expressly provided in this
1999act, this act shall take effect upon becoming a law.
2001================ T I T L E  A M E N D M E N T =============
2003Delete everything before the enacting clause and insert:
A bill to be entitled
2005An act relating to property insurance; amending s.
2006215.555, F.S.; revising the retention of losses for which
2007an insurer is not entitled to reimbursement from the
2008Florida Hurricane Catastrophe Fund; amending s. 215.559,
2009F.S.; revising the allocation of funds appropriated to the
2010Department of Community Affairs from the Florida Hurricane
2011Catastrophe Fund for the Hurricane Loss Mitigation
2012Program; requiring that the department establish a low-
2013interest loan program and pilot project for hurricane loss
2014mitigation; authorizing contractual agreements between the
2015department and financial institutions; authorizing the
2016Department of Community Affairs to adopt rules; amending
2017s. 627.062, F.S.; requiring the Office of Insurance
2018Regulation to submit a proposed plan to the Legislature
2019establishing uniform rating territories to be used by
2020insurers for residential property insurance rate filings;
2021requiring a further act of the Legislature to implement
2022the plan; limiting the recoupment by an insurer in its
2023rates of the reimbursement premium it pays to the Florida
2024Hurricane Catastrophe Fund; amending s. 627.0628, F.S.;
2025restricting the admissibility and relevance in rate
2026proceedings of findings of the Florida Commission on
2027Hurricane Loss Projection Methodology; amending s.
2028627.0629, F.S.; lowering the percentage amount of a rate
2029filing based on a computer model which requires a public
2030hearing; creating s. 627.06281, F.S.; requiring
2031residential property insurers and rating and advisory
2032organizations to report hurricane loss data for
2033development of a public hurricane model for hurricane loss
2034projections; amending s. 627.351, F.S.; revising the
2035appointments to the board and the approval of officers and
2036employees of the corporation; providing additional
2037legislative intent relating to the Citizens Property
2038Insurance Corporation; authorizing the corporation to
2039issue bonds and incur indebtedness for certain purposes;
2040requiring creation of a Market Accountability Advisory
2041Committee to assist the corporation for certain purposes;
2042providing for appointment of committee members; providing
2043for terms; requiring reports to the corporation; revising
2044requirements for the plan of operation of the corporation;
2045deleting an obsolete reporting requirement; establishing a
2046pilot program; specifying nonapplication of certain policy
2047requirements in a county lacking reasonable degrees of
2048competition for certain policies under certain
2049circumstances; requiring the commission to adopt rules;
2050deleting an obsolete rate methodology panel reporting
2051requirement provision; creating s. 627.40951, F.S.;
2052providing legislative findings and intent; providing for
2053an advisory committee; providing for membership; providing
2054for recommendations to be submitted to the Legislature
2055regarding standard residential property insurance
2056policies; amending s. 627.411, F.S.; adding grounds for
2057which the Office of Insurance Regulation must disapprove a
2058form filed by an insurer; amending s. 627.4133, F.S.;
2059prohibiting insurers from canceling or nonrenewing
2060residential property insurance policies under certain
2061emergency circumstances; providing exceptions; providing
2062notice requirements; providing application to personal
2063residential and commercial residential policies covering
2064certain damaged property; extending the effective date of
2065certain policies under certain hurricane circumstances;
2066authorizing the insurer to collect premiums for the
2067extended period; providing nonapplication; amending s.
2068627.4143, F.S.; requiring insurers to provide personal
2069lines property insurance policyholders with a checklist of
2070items contained in policies; authorizing the Financial
2071Services Commission to adopt rules; prescribing elements
2072to be contained in the checklist; requiring the checklist
2073and outline of insurance coverage to be sent with each
2074renewal; clarifying that homeowners' insurance includes
2075mobile homeowners', dwelling, and condominium unit owners'
2076insurance for purposes of the outline of coverage;
2077amending s. 627.701, F.S.; increasing the maximum
2078allowable hurricane deductible for personal lines and
2079certain commercial lines residential policies; requiring
2080insurers to offer specified hurricane deductibles for such
2081policies; requiring insurers to provide written notice
2082explaining hurricane deductible options for such policies;
2083providing for computation and display of the dollar value
2084of hurricane deductibles; requiring insurers to compute
2085and display actual dollar values of certain riders for
2086certain policies; amending s. 627.701, F.S.; providing
2087that the requirement for a hurricane deductible to apply
2088on an annual basis applies to personal lines residential
2089property insurance policies; requiring insurers that
2090provide commercial residential property insurance to offer
2091alternative hurricane deductibles that apply on an annual
2092basis or to each hurricane; amending s. 627.7011, F.S.;
2093requiring insurers to offer coverage for additional costs
2094of repair due to laws and ordinances; requiring insurers
2095to pay the replacement cost for a loss insured on that
2096basis, whether or not the insured replaces or repairs the
2097dwelling or property; requiring certain homeowner's
2098insurance policies to contain a specified statement;
2099providing intent; amending s. 627.7015, F.S.; revising
2100purpose and scope provisions relating to an alternative
2101procedure for resolution of disputed property insurance
2102claims; providing that failure of an insurer to notify a
2103claimant of the availability of mediation excuses an
2104insured from being required to submit to certain loss
2105appraisal processes; amending s. 627.702, F.S.; providing
2106legislative intent regarding the requirement that an
2107insurer pay policy limits if there is a total loss of a
2108building; providing nonapplication of certain insurer
2109liability requirements under certain circumstances;
2110limiting an insurer's liability to certain loss covered by
2111a covered peril; amending s. 627.706, F.S., relating to
2112sinkhole insurance; providing definitions; creating s.
2113627.7065, F.S.; providing legislative findings; requiring
2114the Department of Financial Services and the Office of the
2115Insurance Consumer Advocate to consult with the Florida
2116Geological Survey and the Department of Environmental
2117Protection to implement a statewide automated database of
2118sinkholes and related activity; providing requirements for
2119the form and content of the database; authorizing the
2120Department of Financial Services to require insurers to
2121provide certain information; providing for management of
2122the database; requiring the department to investigate
2123sinkhole activity reports and include findings and
2124investigations in the database; requiring the Department
2125of Environmental Protection to report on the database to
2126the Governor, Legislature, and Chief Financial Officer;
2127authorizing the Department of Financial Services to adopt
2128implementing rules; amending s. 627.707, F.S.; revising
2129standards for investigations of sinkhole claims by
2130insurers; requiring an insurer to engage an engineer or
2131professional geologist for certain purposes; requiring a
2132report under certain circumstances; requiring an insurer
2133to provide written notice to a policyholder disclosing
2134certain information; authorizing an insurer to deny a
2135claim under certain circumstances; authorizing a
2136policyholder to demand certain testing; providing
2137requirements; specifying required activities for insurers
2138if a sinkhole loss is verified; specifying payment
2139requirements for insurers; providing limitations;
2140requiring the insurer to pay fees of the engineer and
2141geologist; authorizing an insurer to engage a structural
2142engineer for certain purposes; creating s. 627.7072, F.S.;
2143specifying requirements for sinkhole testing by engineers
2144and geologists; creating s. 627.7073, F.S.; providing
2145reporting requirements for engineers and geologists after
2146testing for sinkholes; specifying a presumption of
2147correctness of certain findings; requiring an insurer
2148paying a sinkhole loss claim to file a report and
2149certification with the county property appraiser;
2150requiring the property appraiser to record the report and
2151certification; requiring the insurer to bear the cost of
2152filing and recording; requiring a seller of certain
2153property to make certain disclosures to property buyers
2154under certain circumstances; creating s. 627.711, F.S.;
2155requiring insurers to notify applicants or policyholders
2156of the availability and amounts of certain discounts,
2157credits, rate differentials, or reductions in deductibles
2158for properties on which certain fixtures have been
2159installed or construction techniques have been
2160implemented; requiring insurers to provide qualifying
2161information; authorizing the Financial Services Commission
2162to adopt rules; creating s. 627.712, F.S.; requiring
2163property insurers to pay or deny claims within certain
2164time periods; providing that overdue payments bear
2165interest; creating the Task Force on Long-Term Solutions
2166for Florida's Hurricane Insurance Market; requiring the
2167Executive Office of the Governor, the Department of
2168Financial Services, and the Office of Insurance Regulation
2169to provide administrative support and staff support;
2170providing membership; providing purpose and intent;
2171providing for research and hearings on specified issues;
2172requiring the task force to submit a report of findings
2173and recommendations to the Governor, the Chief Financial
2174Officer, the President of the Senate, and the Speaker of
2175the House of Representatives; providing for additional
2176activities; providing for expiration of the task force;
2177requiring the Office of Insurance Regulation to submit a
2178report to the Legislature relating to residential property
2179insurance; providing report requirements; requiring the
2180Office of the Auditor General to conduct an operational
2181audit of Citizens Property Insurance Corporation;
2182specifying audit requirements; requiring a report;
2183requiring the board of governors of the Citizens Property
2184Insurance Corporation to submit a report to the
2185Legislature relating to property and casualty insurance;
2186specifying report requirements; providing an appropriation
2187and authorizing positions; providing a contingent
2188effective date; providing effective dates.

CODING: Words stricken are deletions; words underlined are additions.
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