February 19, 2019
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128731
  Amendment
Bill No. CS/CS/SB 2860
Amendment No. 128731
CHAMBER ACTION
Senate House
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1Representatives Ross, Reagan, and Brown offered the following:
2
3     Substitute Amendment for Amendment (439287) to Senate Bill
4(with title amendment)
5     Remove everything after the enacting clause and insert:
6
7     Section 1.  Section 215.5595, Florida Statutes, is amended
8to read:
9     215.5595  Insurance Capital Build-Up Incentive Program.--
10     (1)  Upon entering the 2008 2006 hurricane season, the
11Legislature finds that:
12     (a)  The losses in this state Florida from eight hurricanes
13in 2004 and 2005 have seriously strained the resources of both
14the voluntary insurance market and the public sector mechanisms
15of Citizens Property Insurance Corporation and the Florida
16Hurricane Catastrophe Fund.
17     (b)  Private reinsurance is much less available and at a
18significantly greater cost to residential property insurers as
19compared to 1 year ago, particularly for amounts below the
20insurer's retention or retained losses that must be paid before
21reimbursement is provided by the Florida Hurricane Catastrophe
22Fund.
23     (c)  The Office of Insurance Regulation has reported that
24the insolvency of certain insurers may be imminent.
25     (d)  Hurricane forecast experts predict that the 2006
26hurricane season will be an active hurricane season and that the
27Atlantic and Gulf Coast regions face an active hurricane cycle
28of 10 to 20 years or longer.
29     (b)(e)  Citizens Property Insurance Corporation has over
301.2 million policies in force, has the largest market share of
31any insurer writing residential property insurer in the state,
32and faces the threat of a catastrophic loss that The number of
33cancellations or nonrenewals of residential property insurance
34policies is expected to increase and the number of new
35residential policies written in the voluntary market are likely
36to decrease, causing increased policy growth and exposure to the
37state insurer of last resort, Citizens Property Insurance
38Corporation, and threatening to increase the deficit of the
39corporation, currently estimated to be over $1.7 billion. This
40deficit must be funded by assessments against insurers and
41policyholders, unless otherwise funded by the state. The program
42has a substantial positive effect on the depopulation efforts of
43Citizens Property Insurance Corporation since companies
44participating in the program have removed over 199,000 policies
45from the corporation. Companies participating in the program
46have issued a significant number of new policies, thereby
47keeping an estimated 480,000 new policies out of the
48corporation.
49     (c)(f)  Policyholders are subject to high increased
50premiums and assessments that are increasingly making such
51coverage unaffordable and that may force policyholders to sell
52their homes and even leave the state.
53     (d)(g)  The increased risk to the public sector and private
54sector continues to pose poses a serious threat to the economy
55of this state, particularly the building and financing of
56residential structures, and existing mortgages may be placed in
57default.
58     (h)  The losses from 2004 and 2005, combined with the
59expectation that the increase in hurricane activity will
60continue for the foreseeable future, have caused both insurers
61and reinsurers to limit the capital they are willing to commit
62to covering the hurricane risk in Florida; attracting new
63capital to the Florida market is a critical priority; and
64providing a low-cost source of capital would enable insurers to
65write additional residential property insurance coverage and act
66to mitigate premium increases.
67     (e)(i)  Appropriating state funds to be exchanged for used
68as surplus notes issued by for residential property insurers,
69under conditions requiring the insurer to contribute additional
70private sector capital and to write a minimum level of premiums
71for residential hurricane coverage, is a valid and important
72public purpose.
73     (f)  Extending the Insurance Capital Build-up Incentive
74Program will provide an incentive for investors to commit
75additional capital to Florida's residential insurance market.
76     (2)  The purpose of this section is to provide funds in
77exchange for surplus notes to be issued by to new or existing
78authorized residential property insurers under the Insurance
79Capital Build-Up Incentive Program administered by the State
80Board of Administration, under the following conditions:
81     (a)  The amount of state funds provided in exchange for a
82the surplus note to for any insurer or insurer group, other than
83an insurer writing only manufactured housing policies, may not
84exceed $25 million or 20 percent of the total amount of funds
85appropriated for available under the program, whichever is
86greater. The amount of the surplus note for any insurer or
87insurer group writing residential property insurance covering
88only manufactured housing may not exceed $7 million.
89     (b)  On or after April 1, 2008, the insurer must contribute
90an amount of new capital to its surplus which is at least equal
91to the amount of the surplus note and must apply to the board by
92September 1, 2008 July 1, 2006. If an insurer applies after
93September 1, 2008 July 1, 2006, but before June 1, 2009 2007,
94the amount of the surplus note is limited to one-half of the new
95capital that the insurer contributes to its surplus, except that
96an insurer writing only manufactured housing policies is
97eligible to receive a surplus note of up to $7 million. For
98purposes of this section, new capital must be in the form of
99cash or cash equivalents as specified in s. 625.012(1).
100     (c)  The insurer's surplus, new capital, and the surplus
101note must total at least $50 million, except for insurers
102writing residential property insurance covering only
103manufactured housing. The insurer's surplus, new capital, and
104the surplus note must total at least $14 million for insurers
105writing only residential property insurance covering
106manufactured housing policies as provided in paragraph (a).
107     (d)  The insurer must commit to increase its writings of
108residential property insurance, including the peril of wind, and
109to meet meeting a minimum writing ratio of net written premium
110to surplus of at least 1:1 for the first calendar year after
111receiving the state funds or renegotiation of the surplus note,
1121.5:1 for the second calendar year, and 2:1 for the remaining
113term of the surplus note. Alternatively, the insurer must meet a
114minimum writing ratio of gross written premium to surplus of at
115least 3:1 for the first calendar year after receiving the state
116funds or renegotiation of the surplus note, 4.5:1 for the second
117calendar year, and 6:1 for the remaining term of the surplus
118note. The writing ratios, which shall be determined by the
119Office of Insurance Regulation and certified quarterly to the
120board. For this purpose, the term "premium" "net written
121premium" means net written premium for residential property
122insurance in this state Florida, including the peril of wind,
123and "surplus" means the new capital and surplus note refers to
124the entire surplus of the insurer. An insurer that makes an
125initial application after July 1, 2008, must also commit to
126writing at least 15 percent of its net or gross written premium
127for new policies, not including renewal premiums, for policies
128taken out of Citizens Property Insurance Corporation, during
129each of the first 3 years after receiving the state funds in
130exchange for the surplus note, which shall be determined by the
131Office of Insurance Regulation and certified annually to the
132board. The insurer must also commit to maintaining a level of
133surplus and reinsurance sufficient to cover in excess of its 1-
134in-100 year probable maximum loss, as determined by a hurricane
135loss model accepted by the Florida Commission on Hurricane Loss
136Projection Methodology, which shall be determined by the Office
137of Insurance Regulation and certified annually to the board. If
138the board determines that the insurer has failed to meet any of
139the requirements of this paragraph required ratio is not
140maintained during the term of the surplus note, the board may
141increase the interest rate, accelerate the repayment of interest
142and principal, or shorten the term of the surplus note, subject
143to approval by the Commissioner of Insurance of payments by the
144insurer of principal and interest as provided in paragraph (f).
145     (e)  If the requirements of this section are met, the board
146may approve an application by an insurer for funds in exchange
147for issuance of a surplus note, unless the board determines that
148the financial condition of the insurer and its business plan for
149writing residential property insurance in Florida places an
150unreasonably high level of financial risk to the state of
151nonpayment in full of the interest and principal. The board
152shall consult with the Office of Insurance Regulation and may
153contract with independent financial and insurance consultants in
154making this determination.
155     (f)  The surplus note must be repayable to the state with a
156term of 20 years. The surplus note shall accrue interest on the
157unpaid principal balance at a rate equivalent to the 10-year
158U.S. Treasury Bond rate, require the payment only of interest
159during the first 3 years, and include such other terms as
160approved by the board. The board may charge late fees up to 5
161percent for late payments or other late remittances. Payment of
162principal, or interest, or late fees by the insurer on the
163surplus note must be approved by the Commissioner of Insurance,
164who shall approve such payment unless the commissioner
165determines that such payment will substantially impair the
166financial condition of the insurer. If such a determination is
167made, the commissioner shall approve such payment that will not
168substantially impair the financial condition of the insurer.
169     (g)  The total amount of funds available for the program is
170limited to the amount appropriated by the Legislature for this
171purpose. If the amount of surplus notes requested by insurers
172exceeds the amount of funds available, the board may prioritize
173insurers that are eligible and approved, with priority for
174funding given to insurers writing only manufactured housing
175policies, regardless of the date of application, based on the
176financial strength of the insurer, the viability of its proposed
177business plan for writing additional residential property
178insurance in the state, and the effect on competition in the
179residential property insurance market. Between insurers writing
180residential property insurance covering manufactured housing,
181priority shall be given to the insurer writing the highest
182percentage of its policies covering manufactured housing.
183     (h)  The board may allocate portions of the funds available
184for the program and establish dates for insurers to apply for
185surplus notes from such allocation which are earlier than the
186dates established in paragraph (b).
187     (h)(i)  Notwithstanding paragraph (d), a newly formed
188manufactured housing insurer that is eligible for a surplus note
189under this section shall meet the premium to surplus ratio
190provisions of s. 624.4095.
191     (i)(j)  As used in this section, "an insurer writing only
192manufactured housing policies" includes:
193     1.  A Florida domiciled insurer that begins writing
194personal lines residential manufactured housing policies in
195Florida after March 1, 2007, and that removes a minimum of
19650,000 policies from Citizens Property Insurance Corporation
197without accepting a bonus, provided at least 25 percent of its
198policies cover manufactured housing. Such an insurer may count
199any funds above the minimum capital and surplus requirement that
200were contributed into the insurer after March 1, 2007, as new
201capital under this section.
202     2.  A Florida domiciled insurer that writes at least 40
203percent of its policies covering manufactured housing in
204Florida.
205     (3)  As used in this section, the term:
206     (a)  "Board" means the State Board of Administration.
207     (b)  "Program" means the Insurance Capital Build-Up
208Incentive Program established by this section.
209     (4)  The state funds provided to the insurer in exchange
210for the A surplus note provided to an insurer pursuant to this
211section are is considered borrowed surplus an asset of the
212insurer pursuant to s. 628.401 s. 625.012.
213     (5)  If an insurer that receives funds in exchange for
214issuance of a surplus note pursuant to this section is rendered
215insolvent, the state is a class 3 creditor pursuant to s.
216631.271 for the unpaid principal and interest on the surplus
217note.
218     (6)  The board shall adopt rules prescribing the
219procedures, administration, and criteria for approving the
220applications of insurers to receive funds in exchange for
221issuance of surplus notes pursuant to this section, which may be
222adopted pursuant to the procedures for emergency rules of
223chapter 120. Otherwise, actions and determinations by the board
224pursuant to this section are exempt from chapter 120.
225     (7)  The board shall invest and reinvest the funds
226appropriated for the program in accordance with s. 215.47 and
227consistent with board policy.
228     (8)  Costs and fees incurred by the board in administering
229this program, including fees for investment services, shall be
230paid from funds appropriated by the Legislature for this
231program, but are limited to 1 percent of the amount
232appropriated.
233     (9)  The board shall submit a report to the President of
234the Senate and the Speaker of the House of Representatives by
235February 1 of each year as to the results of the program and
236each insurer's compliance with the terms of its surplus note.
237     (10)  The amendments to this section enacted in 2008 do not
238affect the terms or conditions of the surplus notes that were
239approved prior to January 1, 2008. However, the board may
240renegotiate the terms of any surplus note issued by an insurer
241prior to January 2008 under this program upon the agreement of
242the insurer and the board and consistent with the requirements
243of this section as amended in 2008.
244     (11)  On January 15, 2009, the State Board of
245Administration shall transfer to Citizens Property Insurance
246Corporation any funds that have not been committed or reserved
247for insurers approved to receive such funds under the program,
248from the funds that were appropriated from Citizens Property
249Insurance Corporation in 2008-2009 for such purposes.
250     Section 2.  Subsection (6) is added to section, 624.3161,
251Florida Statutes, to read:
252     624.3161  Market conduct examinations.--
253     (6)  Based on the findings of a market conduct examination
254that an insurer has exhibited a pattern or practice of willful
255violations of an unfair insurance trade practice related to
256claims-handling which caused harm to policyholders, as
257prohibited by s. 626.9541(1)(i), the office may order an insurer
258pursuant to chapter 120 to file its claims-handling practices
259and procedures related to that line of insurance with the office
260for review and inspection, to be held by the office for the
261following 36-month period. Such claims-handling practices and
262procedures are public records and are not trade secrets or
263otherwise exempt from the provisions of s. 119.07(1). As used in
264this section, "claims-handling practices and procedures" are any
265policies, guidelines, rules, protocols, standard operating
266procedures, instructions, or directives that govern or guide how
267and the manner in which an insured's claims for benefits under
268any policy will be processed.
269     Section 3.  Subsections (2) and (3) of section 624.4211,
270Florida Statutes, are amended to read:
271     624.4211  Administrative fine in lieu of suspension or
272revocation.--
273     (2)  With respect to any nonwillful violation, such fine
274may shall not exceed $5,000 $2,500 per violation. In no event
275shall such fine exceed an aggregate amount of $20,000 $10,000
276for all nonwillful violations arising out of the same action. If
277When an insurer discovers a nonwillful violation, the insurer
278shall correct the violation and, if restitution is due, make
279restitution to all affected persons. Such restitution shall
280include interest at 12 percent per year from either the date of
281the violation or the date of inception of the affected person's
282policy, at the insurer's option. The restitution may be a credit
283against future premiums due provided that the interest
284accumulates shall accumulate until the premiums are due. If the
285amount of restitution due to any person is $50 or more and the
286insurer wishes to credit it against future premiums, it shall
287notify such person that she or he may receive a check instead of
288a credit. If the credit is on a policy that which is not
289renewed, the insurer shall pay the restitution to the person to
290whom it is due.
291     (3)  With respect to any knowing and willful violation of a
292lawful order or rule of the office or commission or a provision
293of this code, the office may impose a fine upon the insurer in
294an amount not to exceed $40,000 $20,000 for each such violation.
295In no event shall such fine exceed an aggregate amount of
296$200,000 $100,000 for all knowing and willful violations arising
297out of the same action. In addition to such fines, the such
298insurer shall make restitution when due in accordance with the
299provisions of subsection (2).
300     Section 4.  Section 624.4213, Florida Statutes, is created
301to read:
302     624.4213  Trade secret documents.--
303     (1)  If any person who is required to submit documents or
304other information to the office or department pursuant to the
305Insurance Code or by rule or order of the office, department, or
306commission claims that such submission contains a trade secret,
307such person may file with the office or department a notice of
308trade secret as provided in this section. Failure to do so
309constitutes a waiver of any claim by such person that the
310document or information is a trade secret.
311     (a)  Each page of such document or specific portion of a
312document claimed to be a trade secret must be clearly marked as
313"trade secret."
314     (b)  All material marked as a trade secret must be
315separated from all non-trade secret material, such as being
316submitted in a separate envelope clearly marked as "trade
317secret."
318     (c)  In submitting a notice of trade secret to the office
319or department, the submitting party must include an affidavit
320certifying under oath to the truth of the following statements
321concerning all documents or information that are claimed to be
322trade secrets:
323     1.  [I consider/My company considers] this information a
324trade secret that has value and provides an advantage or an
325opportunity to obtain an advantage over those who do not know or
326use it.
327     2.  [I have/My company has] taken measures to prevent the
328disclosure of the information to anyone other that those who
329have been selected to have access for limited purposes, and [I
330intend/my company intends] to continue to take such measures.
331     3.  The information is not, and has not been, reasonably
332obtainable without [my/our] consent by other persons by use of
333legitimate means.
334     4.  The information is not publicly available elsewhere.
335     (2)  If the office or department receives a public-records
336request for a document or information that is marked and
337certified as a trade secret, the office or department shall
338promptly notify the person that certified the document as a
339trade secret. The notice shall inform such person that he or she
340or his or her company has 30 days following receipt of such
341notice to file an action in circuit court seeking a
342determination whether the document in question contains trade
343secrets and an order barring public disclosure of the document.
344If that person or company files an action within 30 days after
345receipt of notice of the public-records request, the office or
346department may not release the documents pending the outcome of
347the legal action. The failure to file an action within 30 days
348constitutes a waiver of any claim of confidentiality and the
349office or department shall release the document as requested.
350     (3)  The office or department may disclose a trade secret,
351together with the claim that it is a trade secret, to an officer
352or employee of another governmental agency whose use of the
353trade secret is within the scope of his or her employment.
354     Section 5. Section 624.4305, Florida Statutes, is created
355to read:
356     624.4305  Nonrenewal of residential property insurance
357policies.--Any insurer planning to nonrenew more than 10,000
358residential property insurance policies in this state within a
35912-month period shall give notice in writing to the Office of
360Insurance Regulation for informational purposes 90 days before
361the issuance of any notices of nonrenewal. The notice provided
362to the office must set forth the insurer's reasons for such
363action, the effective dates of nonrenewal, and any arrangements
364made for other insurers to offer coverage to affected
365policyholders.
366     Section 6.  Subsection (2) of section 626.9521, Florida
367Statutes, is amended to read:
368     626.9521  Unfair methods of competition and unfair or
369deceptive acts or practices prohibited; penalties.--
370     (2)  Any person who violates any provision of this part
371shall be subject to a fine in an amount not greater than $5,000
372$2,500 for each nonwillful violation and not greater than
373$40,000 $20,000 for each willful violation. Fines under this
374subsection imposed against an insurer may not exceed an
375aggregate amount of $20,000 $10,000 for all nonwillful
376violations arising out of the same action or an aggregate amount
377of $200,000 $100,000 for all willful violations arising out of
378the same action. The fines authorized by this subsection may be
379imposed in addition to any other applicable penalty.
380     Section 7.  Paragraph (i) of subsection (1) of section
381626.9541, Florida Statutes, is amended to read:
382     626.9541  Unfair methods of competition and unfair or
383deceptive acts or practices defined.--
384     (1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
385ACTS.--The following are defined as unfair methods of
386competition and unfair or deceptive acts or practices:
387     (i)  Unfair claim settlement practices.--
388     1.  Attempting to settle claims on the basis of an
389application, when serving as a binder or intended to become a
390part of the policy, or any other material document which was
391altered without notice to, or knowledge or consent of, the
392insured;
393     2.  A material misrepresentation made to an insured or any
394other person having an interest in the proceeds payable under
395such contract or policy, for the purpose and with the intent of
396effecting settlement of such claims, loss, or damage under such
397contract or policy on less favorable terms than those provided
398in, and contemplated by, such contract or policy; or
399     3.  Committing or performing with such frequency as to
400indicate a general business practice any of the following:
401     a.  Failing to adopt and implement standards for the proper
402investigation of claims;
403     b.  Misrepresenting pertinent facts or insurance policy
404provisions relating to coverages at issue;
405     c.  Failing to acknowledge and act promptly upon
406communications with respect to claims;
407     d.  Denying claims without conducting reasonable
408investigations based upon available information;
409     e.  Failing to affirm or deny full or partial coverage of
410claims, and, as to partial coverage, the dollar amount or extent
411of coverage, or failing to provide a written statement that the
412claim is being investigated, upon the written request of the
413insured within 30 days after proof-of-loss statements have been
414completed;
415     f.  Failing to promptly provide a reasonable explanation in
416writing to the insured of the basis in the insurance policy, in
417relation to the facts or applicable law, for denial of a claim
418or for the offer of a compromise settlement;
419     g.  Failing to promptly notify the insured of any
420additional information necessary for the processing of a claim;
421or
422     h.  Failing to clearly explain the nature of the requested
423information and the reasons why such information is necessary.
424     4.  Failing to pay undisputed amounts of partial or full
425benefits owed under first-party property insurance policies  
426within 90 days after an insurer receives notice of a residential  
427property insurance claim, determines the amounts of partial or  
428full benefits, and agrees to coverage, unless payment of the
429undisputed benefits is prevented by an act of God, prevented by
430unforeseen circumstances beyond the control of the insurer, or
431due to actions by the insured or claimant that constitute fraud,
432lack of cooperation, or intentional misrepresentation regarding
433the claim for which benefits are owed.
434     Section 8.  Section 627.0612, Florida Statutes, is amended
435to read:
436     627.0612  Administrative proceedings in rating
437determinations.--
438     (1)  In any proceeding to determine whether rates, rating
439plans, or other matters governed by this part comply with the
440law, the appellate court shall set aside a final order of the
441office if the office has violated s. 120.57(1)(k) by
442substituting its findings of fact for findings of an
443administrative law judge which were supported by competent
444substantial evidence.
445     (2)  In an administrative hearing to determine whether an
446insurer's rates, rating schedules, rating manuals, premium
447credits, discount schedules, surcharge schedules, or changes
448thereto, for property insurance comply with the law, in addition
449to any other findings of fact, findings on the following matters
450shall be considered findings of fact:
451     (a)  Whether a factor or factors used in a rate filing or
452applied by the office is consistent with standard actuarial
453techniques or practices or are otherwise based on reasonable
454actuarial judgment.
455     (b)  Whether a factor for underwriting profit and
456contingencies is reasonable or excessive.
457     (c)  Whether the cost of reinsurance is reasonable or
458excessive.
459     (3)  In an administrative hearing to determine whether an
460insurer's rates, rating schedules, rating manuals, premium
461credits, discount schedules, surcharge schedules, or changes
462thereto, for property insurance comply with the law, a
463recommended order may be entered that approves, modifies, or
464rejects the requested change. A recommended order modifying the
465requested rate change shall recommend such change as is
466supported by the record in the case.
467     Section 9.  Paragraphs (a), (b), and (g) of subsection (2),
468subsection (6), and paragraph (a) of subsection (9) of section
469627.062, Florida Statutes, are amended to read:
470     627.062  Rate standards.--
471     (2)  As to all such classes of insurance:
472     (a)  Insurers or rating organizations shall establish and
473use rates, rating schedules, or rating manuals to allow the
474insurer a reasonable rate of return on such classes of insurance
475written in this state. A copy of rates, rating schedules, rating
476manuals, premium credits or discount schedules, and surcharge
477schedules, and changes thereto, shall be filed with the office
478under one of the following procedures except as provided in
479subparagraph 3.:
480     1.  If the filing is made at least 90 days before the
481proposed effective date and the filing is not implemented during
482the office's review of the filing and any proceeding and
483judicial review, then such filing shall be considered a "file
484and use" filing. In such case, the office shall finalize its
485review by issuance of a notice of intent to approve or a notice
486of intent to disapprove within 90 days after receipt of the
487filing. The notice of intent to approve and the notice of intent
488to disapprove constitute agency action for purposes of the
489Administrative Procedure Act. Requests for supporting
490information, requests for mathematical or mechanical
491corrections, or notification to the insurer by the office of its
492preliminary findings shall not toll the 90-day period during any
493such proceedings and subsequent judicial review. The rate shall
494be deemed approved if the office does not issue a notice of
495intent to approve or a notice of intent to disapprove within 90
496days after receipt of the filing.
497     2.  If the filing is not made in accordance with the
498provisions of subparagraph 1., such filing shall be made as soon
499as practicable, but no later than 30 days after the effective
500date, and shall be considered a "use and file" filing. An
501insurer making a "use and file" filing is potentially subject to
502an order by the office to return to policyholders portions of
503rates found to be excessive, as provided in paragraph (h).
504     3.  For all property insurance filings made or submitted
505after January 25, 2007, but before December 31, 2009 2008, an
506insurer seeking a rate that is greater than the rate most
507recently approved by the office shall make a "file and use"
508filing. This subparagraph applies to property insurance only.
509For purposes of this subparagraph, motor vehicle collision and
510comprehensive coverages are not considered to be property
511coverages.
512     (b)  Upon receiving a rate filing, the office shall review
513the rate filing to determine if a rate is excessive, inadequate,
514or unfairly discriminatory. In making that determination, the
515office shall, in accordance with generally accepted and
516reasonable actuarial techniques, consider the following factors:
517     1.  Past and prospective loss experience within and without
518this state.
519     2.  Past and prospective expenses.
520     3.  The degree of competition among insurers for the risk
521insured.
522     4.  Investment income reasonably expected by the insurer,
523consistent with the insurer's investment practices, from
524investable premiums anticipated in the filing, plus any other
525expected income from currently invested assets representing the
526amount expected on unearned premium reserves and loss reserves.
527The commission may adopt rules using utilizing reasonable
528techniques of actuarial science and economics to specify the
529manner in which insurers shall calculate investment income
530attributable to such classes of insurance written in this state
531and the manner in which such investment income shall be used to
532calculate in the calculation of insurance rates. Such manner
533shall contemplate allowances for an underwriting profit factor
534and full consideration of investment income which produce a
535reasonable rate of return; however, investment income from
536invested surplus may shall not be considered.
537     5.  The reasonableness of the judgment reflected in the
538filing.
539     6.  Dividends, savings, or unabsorbed premium deposits
540allowed or returned to Florida policyholders, members, or
541subscribers.
542     7.  The adequacy of loss reserves.
543     8.  The cost of reinsurance. The office shall not
544disapprove a rate as excessive solely due to the insurer having
545obtained catastrophic reinsurance to cover the insurer's
546estimated 250-year probable maximum loss or any lower level of
547loss.
548     9.  Trend factors, including trends in actual losses per
549insured unit for the insurer making the filing.
550     10.  Conflagration and catastrophe hazards, if applicable.
551     11.  Projected hurricane losses, if applicable, which must
552be estimated using a model or method found to be acceptable or
553reliable by the Florida Commission on Hurricane Loss Projection
554Methodology, and as further provided in s. 627.0628.
555     12.11.  A reasonable margin for underwriting profit and
556contingencies. For that portion of the rate covering the risk of
557hurricanes and other catastrophic losses for which the insurer
558has not purchased reinsurance and has exposed its capital and
559surplus to such risk, the office must approve a rating factor
560that provides the insurer a reasonable rate of return that is
561commensurate with such risk.
562     13.12.  The cost of medical services, if applicable.
563     14.13.  Other relevant factors which impact upon the
564frequency or severity of claims or upon expenses.
565     (g)  The office may at any time review a rate, rating
566schedule, rating manual, or rate change; the pertinent records
567of the insurer; and market conditions. If the office finds on a
568preliminary basis that a rate may be excessive, inadequate, or
569unfairly discriminatory, the office shall initiate proceedings
570to disapprove the rate and shall so notify the insurer. However,
571the office may not disapprove as excessive any rate for which it
572has given final approval or which has been deemed approved for a
573period of 1 year after the effective date of the filing unless
574the office finds that a material misrepresentation or material
575error was made by the insurer or was contained in the filing.
576Upon being so notified, the insurer or rating organization
577shall, within 60 days, file with the office all information
578which, in the belief of the insurer or organization, proves the
579reasonableness, adequacy, and fairness of the rate or rate
580change. The office shall issue a notice of intent to approve or
581a notice of intent to disapprove pursuant to the procedures of
582paragraph (a) within 90 days after receipt of the insurer's
583initial response. In such instances and in any administrative
584proceeding relating to the legality of the rate, the insurer or
585rating organization shall carry the burden of proof by a
586preponderance of the evidence to show that the rate is not
587excessive, inadequate, or unfairly discriminatory. After the
588office notifies an insurer that a rate may be excessive,
589inadequate, or unfairly discriminatory, unless the office
590withdraws the notification, the insurer shall not alter the rate
591except to conform with the office's notice until the earlier of
592120 days after the date the notification was provided or 180
593days after the date of the implementation of the rate. The
594office may, subject to chapter 120, disapprove without the 60-
595day notification any rate increase filed by an insurer within
596the prohibited time period or during the time that the legality
597of the increased rate is being contested.
598
599The provisions of this subsection shall not apply to workers'
600compensation and employer's liability insurance and to motor
601vehicle insurance.
602     (6)(a)  If an insurer requests an administrative hearing
603pursuant to s. 120.57 related to a rate filing under this
604section, the director of the Division of Administrative Hearings
605shall expedite the hearing and assign an administrative law
606judge who shall commence the hearing within 30 days after the
607receipt of the formal request and shall enter a recommended  
608order within 30 days after the hearing or within 30 days after
609receipt of the hearing transcript by the administrative law
610judge, whichever is later. Each party shall be allowed 10 days
611in which to submit written exceptions to the recommended order.
612The office shall enter a final order within 30 days after the
613entry of the recommended order. The provisions of this paragraph
614may be waived upon stipulation of all parties.
615     (b)  Upon entry of a final order, the insurer may request a
616expedited appellate review pursuant to the Florida Rules of
617Appellate Procedure. It is the intent of the Legislature that
618the First District Court of Appeal grant an insurer's request
619for an expedited appellate review.
620     (a)  After any action with respect to a rate filing that
621constitutes agency action for purposes of the Administrative
622Procedure Act, except for a rate filing for medical malpractice,
623an insurer may, in lieu of demanding a hearing under s. 120.57,
624require arbitration of the rate filing. However, the arbitration
625option provision in this subsection does not apply to a rate
626filing that is made on or after the effective date of this act
627until January 1, 2009. Arbitration shall be conducted by a board
628of arbitrators consisting of an arbitrator selected by the
629office, an arbitrator selected by the insurer, and an arbitrator
630selected jointly by the other two arbitrators. Each arbitrator
631must be certified by the American Arbitration Association. A
632decision is valid only upon the affirmative vote of at least two
633of the arbitrators. No arbitrator may be an employee of any
634insurance regulator or regulatory body or of any insurer,
635regardless of whether or not the employing insurer does business
636in this state. The office and the insurer must treat the
637decision of the arbitrators as the final approval of a rate
638filing. Costs of arbitration shall be paid by the insurer.
639     (b)  Arbitration under this subsection shall be conducted
640pursuant to the procedures specified in ss. 682.06-682.10.
641Either party may apply to the circuit court to vacate or modify
642the decision pursuant to s. 682.13 or s. 682.14. The commission
643shall adopt rules for arbitration under this subsection, which
644rules may not be inconsistent with the arbitration rules of the
645American Arbitration Association as of January 1, 1996.
646     (c)  Upon initiation of the arbitration process, the
647insurer waives all rights to challenge the action of the office
648under the Administrative Procedure Act or any other provision of
649law; however, such rights are restored to the insurer if the
650arbitrators fail to render a decision within 90 days after
651initiation of the arbitration process.
652     (9)(a)  Effective March 1, 2007, The chief executive
653officer or chief financial officer of a property insurer and the
654chief actuary of a property insurer must certify under oath and
655subject to the penalty of perjury, on a form approved by the
656commission, the following information, which must accompany a
657rate filing:
658     1.  The signing officer and actuary have reviewed the rate
659filing;
660     2.  Based on the signing officer's and actuary's knowledge,
661the rate filing does not contain any untrue statement of a
662material fact or omit to state a material fact necessary in
663order to make the statements made, in light of the circumstances
664under which such statements were made, not misleading;
665     3.  Based on the signing officer's and actuary's knowledge,
666the information and other factors described in paragraph (2)(b),
667including, but not limited to, investment income, fairly present
668in all material respects the basis of the rate filing for the
669periods presented in the filing; and
670     4.  Based on the signing officer's and actuary's knowledge,
671the rate filing reflects all premium savings that are reasonably
672expected to result from legislative enactments and are in
673accordance with generally accepted and reasonable actuarial
674techniques.
675     Section 10.  Paragraph (c) of subsection (1) and subsection
676(3) of section 627.0628, Florida Statutes, are amended, and
677paragraph (e) is added to subsection (1) of that section, to
678read:
679     627.0628  Florida Commission on Hurricane Loss Projection
680Methodology; public records exemption; public meetings
681exemption.--
682     (1)  LEGISLATIVE FINDINGS AND INTENT.--
683     (c)  It is the intent of the Legislature to create the
684Florida Commission on Hurricane Loss Projection Methodology as a
685panel of experts to provide the most actuarially sophisticated
686guidelines and standards for projection of hurricane losses
687possible, given the current state of actuarial science. It is
688the further intent of the Legislature that such standards and
689guidelines must be used by the State Board of Administration in
690developing reimbursement premium rates for the Florida Hurricane
691Catastrophe Fund, and, subject to paragraph (3)(c), must may be
692used by insurers in rate filings under s. 627.062 unless the way
693in which such standards and guidelines were applied by the
694insurer was erroneous, as shown by a preponderance of the
695evidence.
696     (e)  The Legislature finds that the authority to take final
697agency action with respect to insurance ratemaking is vested in
698the Office of Insurance Regulation and the Financial Services
699Commission, and that the processes, standards, and guidelines of
700the Florida Commission on Hurricane Loss Projection Methodology
701do not constitute final agency action or statements of general
702applicability that implement, interpret, or prescribe law or
703policy; accordingly, chapter 120 does not apply to the
704processes, standards, and guidelines of the Florida Commission
705on Hurricane Loss Projection Methodology.
706     (3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
707     (a)  The commission shall consider any actuarial methods,
708principles, standards, models, or output ranges that have the
709potential for improving the accuracy of or reliability of the
710hurricane loss projections used in residential property
711insurance rate filings. The commission shall, from time to time,
712adopt findings as to the accuracy or reliability of particular
713methods, principles, standards, models, or output ranges.
714     (b)  The commission shall consider any actuarial methods,
715principles, standards, or models that have the potential for
716improving the accuracy of or reliability of projecting probable  
717maximum loss levels. The commission shall adopt findings as to
718the accuracy or reliability of particular methods, principles,
719standards, or models related to probable maximum loss
720calculations.
721     (c)(b)  In establishing reimbursement premiums for the
722Florida Hurricane Catastrophe Fund, the State Board of
723Administration must, to the extent feasible, employ actuarial
724methods, principles, standards, models, or output ranges found
725by the commission to be accurate or reliable.
726     (d)(c)  With respect to a rate filing under s. 627.062, an
727insurer shall may employ and may not modify or adjust actuarial
728methods, principles, standards, models, or output ranges found
729by the commission to be accurate or reliable in determining to
730determine hurricane loss factors for use in a rate filing under
731s. 627.062. An insurer shall employ and may not modify or adjust
732models found by the commission to be accurate or reliable in
733determining probable maximum loss levels pursuant to paragraph
734(b) with respect to a rate filing under s. 627.062 made more
735than 60 days after the commission has made such findings. Such
736findings and factors are admissible and relevant in
737consideration of a rate filing by the office or in any
738arbitration or administrative or judicial review only if the
739office and the consumer advocate appointed pursuant to s.
740627.0613 have access to all of the assumptions and factors that
741were used in developing the actuarial methods, principles,
742standards, models, or output ranges, and are not precluded from
743disclosing such information in a rate proceeding. In any rate
744hearing under s. 120.57 or in any arbitration proceeding under
745s. 627.062(6), the hearing officer, judge, or arbitration panel
746may determine whether the office and the consumer advocate were
747provided with access to all of the assumptions and factors that
748were used in developing the actuarial methods, principles,
749standards, models, or output ranges and to determine their
750admissibility.
751     (e)(d)  The commission shall adopt revisions to previously
752adopted actuarial methods, principles, standards, models, or
753output ranges at least annually.
754     (f)(e)1.  A trade secret, as defined in s. 812.081, that is
755used in designing and constructing a hurricane loss model and
756that is provided pursuant to this section, by a private company,
757to the commission, office, or consumer advocate appointed
758pursuant to s. 627.0613, is confidential and exempt from s.
759119.07(1) and s. 24(a), Art. I of the State Constitution.
760     2.  That portion of a meeting of the commission or of a
761rate proceeding on an insurer's rate filing at which a trade
762secret made confidential and exempt by this paragraph is
763discussed is exempt from s. 286.011 and s. 24(b), Art. I of the
764State Constitution.
765     3.  This paragraph is subject to the Open Government Sunset
766Review Act of 1995 in accordance with s. 119.15, and shall stand
767repealed on October 2, 2010, unless reviewed and saved from
768repeal through reenactment by the Legislature.
769     Section 11.  Subsection (1) of section 627.0629, Florida
770Statutes, is amended to read:
771     627.0629  Residential property insurance; rate filings.--
772     (1)(a)  It is the intent of the Legislature that insurers
773must provide savings to consumers who install or implement
774windstorm damage mitigation techniques, alterations, or
775solutions to their properties to prevent windstorm losses. A
776rate filing for residential property insurance must include
777actuarially reasonable discounts, credits, or other rate
778differentials, or appropriate reductions in deductibles, for
779properties on which fixtures or construction techniques
780demonstrated to reduce the amount of loss in a windstorm have
781been installed or implemented. The fixtures or construction
782techniques shall include, but not be limited to, fixtures or
783construction techniques which enhance roof strength, roof
784covering performance, roof-to-wall strength, wall-to-floor-to-
785foundation strength, opening protection, and window, door, and
786skylight strength. Credits, discounts, or other rate
787differentials, or appropriate reductions in deductibles, for
788fixtures and construction techniques which meet the minimum
789requirements of the Florida Building Code must be included in
790the rate filing. All insurance companies must make a rate filing
791which includes the credits, discounts, or other rate
792differentials or reductions in deductibles by February 28, 2003.
793By July 1, 2007, the office shall reevaluate the discounts,
794credits, other rate differentials, and appropriate reductions in
795deductibles for fixtures and construction techniques that meet
796the minimum requirements of the Florida Building Code, based
797upon actual experience or any other loss relativity studies
798available to the office. The office shall determine the
799discounts, credits, other rate differentials, and appropriate
800reductions in deductibles that reflect the full actuarial value
801of such revaluation, which may be used by insurers in rate
802filings.
803     (b)  By February 1, 2011, the Office of Insurance
804Regulation, in consultation with the Department of Financial
805Services and the Department of Community Affairs, shall develop
806and make publicly available a proposed method for insurers to
807establish discounts, credits, or other rate differentials for
808hurricane mitigation measures which directly correlate to the
809numerical rating assigned to a structure pursuant to the uniform
810home grading scale adopted by the Financial Services Commission
811pursuant to s. 215.55865, including any proposed changes to the
812uniform home grading scale. By October 1, 2011, the commission
813shall adopt rules requiring insurers to make rate filings for
814residential property insurance which revise insurers' discounts,
815credits, or other rate differentials for hurricane mitigation
816measures so that such rate differentials correlate directly to
817the uniform home grading scale. The rules may include such
818changes to the uniform home grading scale as the commission
819determines are necessary, and may specify the minimum required
820discounts, credits, or other rate differentials. Such rate
821differentials must be consistent with generally accepted
822actuarial principles and wind-loss mitigation studies. The rules
823shall allow a period of at least 2 years after the effective
824date of the revised mitigation discounts, credits, or other rate
825differentials for a property owner to obtain an inspection or
826otherwise qualify for the revised credit, during which time the
827insurer shall continue to apply the mitigation credit that was
828applied immediately prior to the effective date of the revised
829credit.
830     Section 12.  Subsection (2) and paragraphs (a), (b), (c),
831(m), (p), (w), (dd), (ee), and (ff) of subsection (6) of section
832627.351, Florida Statutes, are amended to read:
833     627.351  Insurance risk apportionment plans.--
834     (2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
835     (b)  The department shall require all insurers holding a
836certificate of authority to transact property insurance on a
837direct basis in this state, other than joint underwriting
838associations and other entities formed pursuant to this section,
839to provide windstorm coverage to applicants from areas
840determined to be eligible pursuant to paragraph (c) who in good
841faith are entitled to, but are unable to procure, such coverage
842through ordinary means; or it shall adopt a reasonable plan or
843plans for the equitable apportionment or sharing among such
844insurers of windstorm coverage, which may include formation of
845an association for this purpose. As used in this subsection, the
846term "property insurance" means insurance on real or personal
847property, as defined in s. 624.604, including insurance for
848fire, industrial fire, allied lines, farmowners multiperil,
849homeowners' multiperil, commercial multiperil, and mobile homes,
850and including liability coverages on all such insurance, but
851excluding inland marine as defined in s. 624.607(3) and
852excluding vehicle insurance as defined in s. 624.605(1)(a) other
853than insurance on mobile homes used as permanent dwellings. The
854department shall adopt rules that provide a formula for the
855recovery and repayment of any deferred assessments.
856     1.  For the purpose of this section, properties eligible
857for such windstorm coverage are defined as dwellings, buildings,
858and other structures, including mobile homes which are used as
859dwellings and which are tied down in compliance with mobile home
860tie-down requirements prescribed by the Department of Highway
861Safety and Motor Vehicles pursuant to s. 320.8325, and the
862contents of all such properties. An applicant or policyholder is
863eligible for coverage only if an offer of coverage cannot be
864obtained by or for the applicant or policyholder from an
865admitted insurer at approved rates.
866     2.a.(I)  All insurers required to be members of such
867association shall participate in its writings, expenses, and
868losses. Surplus of the association shall be retained for the
869payment of claims and shall not be distributed to the member
870insurers. Such participation by member insurers shall be in the
871proportion that the net direct premiums of each member insurer
872written for property insurance in this state during the
873preceding calendar year bear to the aggregate net direct
874premiums for property insurance of all member insurers, as
875reduced by any credits for voluntary writings, in this state
876during the preceding calendar year. For the purposes of this
877subsection, the term "net direct premiums" means direct written
878premiums for property insurance, reduced by premium for
879liability coverage and for the following if included in allied
880lines: rain and hail on growing crops; livestock; association
881direct premiums booked; National Flood Insurance Program direct
882premiums; and similar deductions specifically authorized by the
883plan of operation and approved by the department. A member's
884participation shall begin on the first day of the calendar year
885following the year in which it is issued a certificate of
886authority to transact property insurance in the state and shall
887terminate 1 year after the end of the calendar year during which
888it no longer holds a certificate of authority to transact
889property insurance in the state. The commissioner, after review
890of annual statements, other reports, and any other statistics
891that the commissioner deems necessary, shall certify to the
892association the aggregate direct premiums written for property
893insurance in this state by all member insurers.
894     (II)  Effective July 1, 2002, the association shall operate
895subject to the supervision and approval of a board of governors
896who are the same individuals that have been appointed by the
897Treasurer to serve on the board of governors of the Citizens
898Property Insurance Corporation.
899     (III)  The plan of operation shall provide a formula
900whereby a company voluntarily providing windstorm coverage in
901affected areas will be relieved wholly or partially from
902apportionment of a regular assessment pursuant to sub-sub-
903subparagraph d.(I) or sub-sub-subparagraph d.(II).
904     (IV)  A company which is a member of a group of companies
905under common management may elect to have its credits applied on
906a group basis, and any company or group may elect to have its
907credits applied to any other company or group.
908     (V)  There shall be no credits or relief from apportionment
909to a company for emergency assessments collected from its
910policyholders under sub-sub-subparagraph d.(III).
911     (VI)  The plan of operation may also provide for the award
912of credits, for a period not to exceed 3 years, from a regular
913assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
914subparagraph d.(II) as an incentive for taking policies out of
915the Residential Property and Casualty Joint Underwriting
916Association. In order to qualify for the exemption under this
917sub-sub-subparagraph, the take-out plan must provide that at
918least 40 percent of the policies removed from the Residential
919Property and Casualty Joint Underwriting Association cover risks
920located in Dade, Broward, and Palm Beach Counties or at least 30
921percent of the policies so removed cover risks located in Dade,
922Broward, and Palm Beach Counties and an additional 50 percent of
923the policies so removed cover risks located in other coastal
924counties, and must also provide that no more than 15 percent of
925the policies so removed may exclude windstorm coverage. With the
926approval of the department, the association may waive these
927geographic criteria for a take-out plan that removes at least
928the lesser of 100,000 Residential Property and Casualty Joint
929Underwriting Association policies or 15 percent of the total
930number of Residential Property and Casualty Joint Underwriting
931Association policies, provided the governing board of the
932Residential Property and Casualty Joint Underwriting Association
933certifies that the take-out plan will materially reduce the
934Residential Property and Casualty Joint Underwriting
935Association's 100-year probable maximum loss from hurricanes.
936With the approval of the department, the board may extend such
937credits for an additional year if the insurer guarantees an
938additional year of renewability for all policies removed from
939the Residential Property and Casualty Joint Underwriting
940Association, or for 2 additional years if the insurer guarantees
9412 additional years of renewability for all policies removed from
942the Residential Property and Casualty Joint Underwriting
943Association.
944     b.  Assessments to pay deficits in the association under
945this subparagraph shall be included as an appropriate factor in
946the making of rates as provided in s. 627.3512.
947     c.  The Legislature finds that the potential for unlimited
948deficit assessments under this subparagraph may induce insurers
949to attempt to reduce their writings in the voluntary market, and
950that such actions would worsen the availability problems that
951the association was created to remedy. It is the intent of the
952Legislature that insurers remain fully responsible for paying
953regular assessments and collecting emergency assessments for any
954deficits of the association; however, it is also the intent of
955the Legislature to provide a means by which assessment
956liabilities may be amortized over a period of years.
957     d.(I)  When the deficit incurred in a particular calendar
958year is 10 percent or less of the aggregate statewide direct
959written premium for property insurance for the prior calendar
960year for all member insurers, the association shall levy an
961assessment on member insurers in an amount equal to the deficit.
962     (II)  When the deficit incurred in a particular calendar
963year exceeds 10 percent of the aggregate statewide direct
964written premium for property insurance for the prior calendar
965year for all member insurers, the association shall levy an
966assessment on member insurers in an amount equal to the greater
967of 10 percent of the deficit or 10 percent of the aggregate
968statewide direct written premium for property insurance for the
969prior calendar year for member insurers. Any remaining deficit
970shall be recovered through emergency assessments under sub-sub-
971subparagraph (III).
972     (III)  Upon a determination by the board of directors that
973a deficit exceeds the amount that will be recovered through
974regular assessments on member insurers, pursuant to sub-sub-
975subparagraph (I) or sub-sub-subparagraph (II), the board shall
976levy, after verification by the department, emergency
977assessments to be collected by member insurers and by
978underwriting associations created pursuant to this section which
979write property insurance, upon issuance or renewal of property
980insurance policies other than National Flood Insurance policies
981in the year or years following levy of the regular assessments.
982The amount of the emergency assessment collected in a particular
983year shall be a uniform percentage of that year's direct written
984premium for property insurance for all member insurers and
985underwriting associations, excluding National Flood Insurance
986policy premiums, as annually determined by the board and
987verified by the department. The department shall verify the
988arithmetic calculations involved in the board's determination
989within 30 days after receipt of the information on which the
990determination was based. Notwithstanding any other provision of
991law, each member insurer and each underwriting association
992created pursuant to this section shall collect emergency
993assessments from its policyholders without such obligation being
994affected by any credit, limitation, exemption, or deferment. The
995emergency assessments so collected shall be transferred directly
996to the association on a periodic basis as determined by the
997association. The aggregate amount of emergency assessments
998levied under this sub-sub-subparagraph in any calendar year may
999not exceed the greater of 10 percent of the amount needed to
1000cover the original deficit, plus interest, fees, commissions,
1001required reserves, and other costs associated with financing of
1002the original deficit, or 10 percent of the aggregate statewide
1003direct written premium for property insurance written by member
1004insurers and underwriting associations for the prior year, plus
1005interest, fees, commissions, required reserves, and other costs
1006associated with financing the original deficit. The board may
1007pledge the proceeds of the emergency assessments under this sub-
1008sub-subparagraph as the source of revenue for bonds, to retire
1009any other debt incurred as a result of the deficit or events
1010giving rise to the deficit, or in any other way that the board
1011determines will efficiently recover the deficit. The emergency
1012assessments under this sub-sub-subparagraph shall continue as
1013long as any bonds issued or other indebtedness incurred with
1014respect to a deficit for which the assessment was imposed remain
1015outstanding, unless adequate provision has been made for the
1016payment of such bonds or other indebtedness pursuant to the
1017document governing such bonds or other indebtedness. Emergency
1018assessments collected under this sub-sub-subparagraph are not
1019part of an insurer's rates, are not premium, and are not subject
1020to premium tax, fees, or commissions; however, failure to pay
1021the emergency assessment shall be treated as failure to pay
1022premium.
1023     (IV)  Each member insurer's share of the total regular
1024assessments under sub-sub-subparagraph (I) or sub-sub-
1025subparagraph (II) shall be in the proportion that the insurer's
1026net direct premium for property insurance in this state, for the
1027year preceding the assessment bears to the aggregate statewide
1028net direct premium for property insurance of all member
1029insurers, as reduced by any credits for voluntary writings for
1030that year.
1031     (V)  If regular deficit assessments are made under sub-sub-
1032subparagraph (I) or sub-sub-subparagraph (II), or by the
1033Residential Property and Casualty Joint Underwriting Association
1034under sub-subparagraph (6)(b)3.a. or sub-subparagraph
1035(6)(b)3.b., the association shall levy upon the association's
1036policyholders, as part of its next rate filing, or by a separate
1037rate filing solely for this purpose, a market equalization
1038surcharge in a percentage equal to the total amount of such
1039regular assessments divided by the aggregate statewide direct
1040written premium for property insurance for member insurers for
1041the prior calendar year. Market equalization surcharges under
1042this sub-sub-subparagraph are not considered premium and are not
1043subject to commissions, fees, or premium taxes; however, failure
1044to pay a market equalization surcharge shall be treated as
1045failure to pay premium.
1046     e.  The governing body of any unit of local government, any
1047residents of which are insured under the plan, may issue bonds
1048as defined in s. 125.013 or s. 166.101 to fund an assistance
1049program, in conjunction with the association, for the purpose of
1050defraying deficits of the association. In order to avoid
1051needless and indiscriminate proliferation, duplication, and
1052fragmentation of such assistance programs, any unit of local
1053government, any residents of which are insured by the
1054association, may provide for the payment of losses, regardless
1055of whether or not the losses occurred within or outside of the
1056territorial jurisdiction of the local government. Revenue bonds
1057may not be issued until validated pursuant to chapter 75, unless
1058a state of emergency is declared by executive order or
1059proclamation of the Governor pursuant to s. 252.36 making such
1060findings as are necessary to determine that it is in the best
1061interests of, and necessary for, the protection of the public
1062health, safety, and general welfare of residents of this state
1063and the protection and preservation of the economic stability of
1064insurers operating in this state, and declaring it an essential
1065public purpose to permit certain municipalities or counties to
1066issue bonds as will provide relief to claimants and
1067policyholders of the association and insurers responsible for
1068apportionment of plan losses. Any such unit of local government
1069may enter into such contracts with the association and with any
1070other entity created pursuant to this subsection as are
1071necessary to carry out this paragraph. Any bonds issued under
1072this sub-subparagraph shall be payable from and secured by
1073moneys received by the association from assessments under this
1074subparagraph, and assigned and pledged to or on behalf of the
1075unit of local government for the benefit of the holders of such
1076bonds. The funds, credit, property, and taxing power of the
1077state or of the unit of local government shall not be pledged
1078for the payment of such bonds. If any of the bonds remain unsold
107960 days after issuance, the department shall require all
1080insurers subject to assessment to purchase the bonds, which
1081shall be treated as admitted assets; each insurer shall be
1082required to purchase that percentage of the unsold portion of
1083the bond issue that equals the insurer's relative share of
1084assessment liability under this subsection. An insurer shall not
1085be required to purchase the bonds to the extent that the
1086department determines that the purchase would endanger or impair
1087the solvency of the insurer. The authority granted by this sub-
1088subparagraph is additional to any bonding authority granted by
1089subparagraph 6.
1090     3.  The plan shall also provide that any member with a
1091surplus as to policyholders of $20 million or less writing 25
1092percent or more of its total countrywide property insurance
1093premiums in this state may petition the department, within the
1094first 90 days of each calendar year, to qualify as a limited
1095apportionment company. The apportionment of such a member
1096company in any calendar year for which it is qualified shall not
1097exceed its gross participation, which shall not be affected by
1098the formula for voluntary writings. In no event shall a limited
1099apportionment company be required to participate in any
1100apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
1101or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
1102$50 million after payment of available plan funds in any
1103calendar year. However, a limited apportionment company shall
1104collect from its policyholders any emergency assessment imposed
1105under sub-sub-subparagraph 2.d.(III). The plan shall provide
1106that, if the department determines that any regular assessment
1107will result in an impairment of the surplus of a limited
1108apportionment company, the department may direct that all or
1109part of such assessment be deferred. However, there shall be no
1110limitation or deferment of an emergency assessment to be
1111collected from policyholders under sub-sub-subparagraph
11122.d.(III).
1113     4.  The plan shall provide for the deferment, in whole or
1114in part, of a regular assessment of a member insurer under sub-
1115sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
1116not for an emergency assessment collected from policyholders
1117under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
1118commissioner, payment of such regular assessment would endanger
1119or impair the solvency of the member insurer. In the event a
1120regular assessment against a member insurer is deferred in whole
1121or in part, the amount by which such assessment is deferred may
1122be assessed against the other member insurers in a manner
1123consistent with the basis for assessments set forth in sub-sub-
1124subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
1125     5.a.  The plan of operation may include deductibles and
1126rules for classification of risks and rate modifications
1127consistent with the objective of providing and maintaining funds
1128sufficient to pay catastrophe losses.
1129     b.  The association may require arbitration of a rate
1130filing under s. 627.062(6). It is the intent of the Legislature
1131that the rates for coverage provided by the association be
1132actuarially sound and not competitive with approved rates
1133charged in the admitted voluntary market such that the
1134association functions as a residual market mechanism to provide
1135insurance only when the insurance cannot be procured in the
1136voluntary market. The plan of operation shall provide a
1137mechanism to assure that, beginning no later than January 1,
11381999, the rates charged by the association for each line of
1139business are reflective of approved rates in the voluntary
1140market for hurricane coverage for each line of business in the
1141various areas eligible for association coverage.
1142     c.  The association shall provide for windstorm coverage on
1143residential properties in limits up to $10 million for
1144commercial lines residential risks and up to $1 million for
1145personal lines residential risks. If coverage with the
1146association is sought for a residential risk valued in excess of
1147these limits, coverage shall be available to the risk up to the
1148replacement cost or actual cash value of the property, at the
1149option of the insured, if coverage for the risk cannot be
1150located in the authorized market. The association must accept a
1151commercial lines residential risk with limits above $10 million
1152or a personal lines residential risk with limits above $1
1153million if coverage is not available in the authorized market.
1154The association may write coverage above the limits specified in
1155this subparagraph with or without facultative or other
1156reinsurance coverage, as the association determines appropriate.
1157     d.  The plan of operation must provide objective criteria
1158and procedures, approved by the department, to be uniformly
1159applied for all applicants in determining whether an individual
1160risk is so hazardous as to be uninsurable. In making this
1161determination and in establishing the criteria and procedures,
1162the following shall be considered:
1163     (I)  Whether the likelihood of a loss for the individual
1164risk is substantially higher than for other risks of the same
1165class; and
1166     (II)  Whether the uncertainty associated with the
1167individual risk is such that an appropriate premium cannot be
1168determined.
1169
1170The acceptance or rejection of a risk by the association
1171pursuant to such criteria and procedures must be construed as
1172the private placement of insurance, and the provisions of
1173chapter 120 do not apply.
1174     e.  If the risk accepts an offer of coverage through the
1175market assistance program or through a mechanism established by
1176the association, either before the policy is issued by the
1177association or during the first 30 days of coverage by the
1178association, and the producing agent who submitted the
1179application to the association is not currently appointed by the
1180insurer, the insurer shall:
1181     (I)  Pay to the producing agent of record of the policy,
1182for the first year, an amount that is the greater of the
1183insurer's usual and customary commission for the type of policy
1184written or a fee equal to the usual and customary commission of
1185the association; or
1186     (II)  Offer to allow the producing agent of record of the
1187policy to continue servicing the policy for a period of not less
1188than 1 year and offer to pay the agent the greater of the
1189insurer's or the association's usual and customary commission
1190for the type of policy written.
1191
1192If the producing agent is unwilling or unable to accept
1193appointment, the new insurer shall pay the agent in accordance
1194with sub-sub-subparagraph (I). Subject to the provisions of s.
1195627.3517, the policies issued by the association must provide
1196that if the association obtains an offer from an authorized
1197insurer to cover the risk at its approved rates under either a
1198standard policy including wind coverage or, if consistent with
1199the insurer's underwriting rules as filed with the department, a
1200basic policy including wind coverage, the risk is no longer
1201eligible for coverage through the association. Upon termination
1202of eligibility, the association shall provide written notice to
1203the policyholder and agent of record stating that the
1204association policy must be canceled as of 60 days after the date
1205of the notice because of the offer of coverage from an
1206authorized insurer. Other provisions of the insurance code
1207relating to cancellation and notice of cancellation do not apply
1208to actions under this sub-subparagraph.
1209     f.  When the association enters into a contractual
1210agreement for a take-out plan, the producing agent of record of
1211the association policy is entitled to retain any unearned
1212commission on the policy, and the insurer shall:
1213     (I)  Pay to the producing agent of record of the
1214association policy, for the first year, an amount that is the
1215greater of the insurer's usual and customary commission for the
1216type of policy written or a fee equal to the usual and customary
1217commission of the association; or
1218     (II)  Offer to allow the producing agent of record of the
1219association policy to continue servicing the policy for a period
1220of not less than 1 year and offer to pay the agent the greater
1221of the insurer's or the association's usual and customary
1222commission for the type of policy written.
1223
1224If the producing agent is unwilling or unable to accept
1225appointment, the new insurer shall pay the agent in accordance
1226with sub-sub-subparagraph (I).
1227     6.a.  The plan of operation may authorize the formation of
1228a private nonprofit corporation, a private nonprofit
1229unincorporated association, a partnership, a trust, a limited
1230liability company, or a nonprofit mutual company which may be
1231empowered, among other things, to borrow money by issuing bonds
1232or by incurring other indebtedness and to accumulate reserves or
1233funds to be used for the payment of insured catastrophe losses.
1234The plan may authorize all actions necessary to facilitate the
1235issuance of bonds, including the pledging of assessments or
1236other revenues.
1237     b.  Any entity created under this subsection, or any entity
1238formed for the purposes of this subsection, may sue and be sued,
1239may borrow money; issue bonds, notes, or debt instruments;
1240pledge or sell assessments, market equalization surcharges and
1241other surcharges, rights, premiums, contractual rights,
1242projected recoveries from the Florida Hurricane Catastrophe
1243Fund, other reinsurance recoverables, and other assets as
1244security for such bonds, notes, or debt instruments; enter into
1245any contracts or agreements necessary or proper to accomplish
1246such borrowings; and take other actions necessary to carry out
1247the purposes of this subsection. The association may issue bonds
1248or incur other indebtedness, or have bonds issued on its behalf
1249by a unit of local government pursuant to subparagraph (6)(p)2.,
1250in the absence of a hurricane or other weather-related event,
1251upon a determination by the association subject to approval by
1252the department that such action would enable it to efficiently
1253meet the financial obligations of the association and that such
1254financings are reasonably necessary to effectuate the
1255requirements of this subsection. Any such entity may accumulate
1256reserves and retain surpluses as of the end of any association
1257year to provide for the payment of losses incurred by the
1258association during that year or any future year. The association
1259shall incorporate and continue the plan of operation and
1260articles of agreement in effect on the effective date of chapter
126176-96, Laws of Florida, to the extent that it is not
1262inconsistent with chapter 76-96, and as subsequently modified
1263consistent with chapter 76-96. The board of directors and
1264officers currently serving shall continue to serve until their
1265successors are duly qualified as provided under the plan. The
1266assets and obligations of the plan in effect immediately prior
1267to the effective date of chapter 76-96 shall be construed to be
1268the assets and obligations of the successor plan created herein.
1269     c.  In recognition of s. 10, Art. I of the State
1270Constitution, prohibiting the impairment of obligations of
1271contracts, it is the intent of the Legislature that no action be
1272taken whose purpose is to impair any bond indenture or financing
1273agreement or any revenue source committed by contract to such
1274bond or other indebtedness issued or incurred by the association
1275or any other entity created under this subsection.
1276     7.  On such coverage, an agent's remuneration shall be that
1277amount of money payable to the agent by the terms of his or her
1278contract with the company with which the business is placed.
1279However, no commission will be paid on that portion of the
1280premium which is in excess of the standard premium of that
1281company.
1282     8.  Subject to approval by the department, the association
1283may establish different eligibility requirements and operational
1284procedures for any line or type of coverage for any specified
1285eligible area or portion of an eligible area if the board
1286determines that such changes to the eligibility requirements and
1287operational procedures are justified due to the voluntary market
1288being sufficiently stable and competitive in such area or for
1289such line or type of coverage and that consumers who, in good
1290faith, are unable to obtain insurance through the voluntary
1291market through ordinary methods would continue to have access to
1292coverage from the association. When coverage is sought in
1293connection with a real property transfer, such requirements and
1294procedures shall not provide for an effective date of coverage
1295later than the date of the closing of the transfer as
1296established by the transferor, the transferee, and, if
1297applicable, the lender.
1298     9.  Notwithstanding any other provision of law:
1299     a.  The pledge or sale of, the lien upon, and the security
1300interest in any rights, revenues, or other assets of the
1301association created or purported to be created pursuant to any
1302financing documents to secure any bonds or other indebtedness of
1303the association shall be and remain valid and enforceable,
1304notwithstanding the commencement of and during the continuation
1305of, and after, any rehabilitation, insolvency, liquidation,
1306bankruptcy, receivership, conservatorship, reorganization, or
1307similar proceeding against the association under the laws of
1308this state or any other applicable laws.
1309     b.  No such proceeding shall relieve the association of its
1310obligation, or otherwise affect its ability to perform its
1311obligation, to continue to collect, or levy and collect,
1312assessments, market equalization or other surcharges, projected
1313recoveries from the Florida Hurricane Catastrophe Fund,
1314reinsurance recoverables, or any other rights, revenues, or
1315other assets of the association pledged.
1316     c.  Each such pledge or sale of, lien upon, and security
1317interest in, including the priority of such pledge, lien, or
1318security interest, any such assessments, emergency assessments,
1319market equalization or renewal surcharges, projected recoveries
1320from the Florida Hurricane Catastrophe Fund, reinsurance
1321recoverables, or other rights, revenues, or other assets which
1322are collected, or levied and collected, after the commencement
1323of and during the pendency of or after any such proceeding shall
1324continue unaffected by such proceeding.
1325     d.  As used in this subsection, the term "financing
1326documents" means any agreement, instrument, or other document
1327now existing or hereafter created evidencing any bonds or other
1328indebtedness of the association or pursuant to which any such
1329bonds or other indebtedness has been or may be issued and
1330pursuant to which any rights, revenues, or other assets of the
1331association are pledged or sold to secure the repayment of such
1332bonds or indebtedness, together with the payment of interest on
1333such bonds or such indebtedness, or the payment of any other
1334obligation of the association related to such bonds or
1335indebtedness.
1336     e.  Any such pledge or sale of assessments, revenues,
1337contract rights or other rights or assets of the association
1338shall constitute a lien and security interest, or sale, as the
1339case may be, that is immediately effective and attaches to such
1340assessments, revenues, contract, or other rights or assets,
1341whether or not imposed or collected at the time the pledge or
1342sale is made. Any such pledge or sale is effective, valid,
1343binding, and enforceable against the association or other entity
1344making such pledge or sale, and valid and binding against and
1345superior to any competing claims or obligations owed to any
1346other person or entity, including policyholders in this state,
1347asserting rights in any such assessments, revenues, contract, or
1348other rights or assets to the extent set forth in and in
1349accordance with the terms of the pledge or sale contained in the
1350applicable financing documents, whether or not any such person
1351or entity has notice of such pledge or sale and without the need
1352for any physical delivery, recordation, filing, or other action.
1353     f.  There shall be no liability on the part of, and no
1354cause of action of any nature shall arise against, any member
1355insurer or its agents or employees, agents or employees of the
1356association, members of the board of directors of the
1357association, or the department or its representatives, for any
1358action taken by them in the performance of their duties or
1359responsibilities under this subsection. Such immunity does not
1360apply to actions for breach of any contract or agreement
1361pertaining to insurance, or any willful tort.
1362     (6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1363     (a)1.  It is the public purpose of this subsection to
1364ensure the existence of an orderly market for property insurance
1365for Floridians and Florida businesses. The Legislature finds
1366that private insurers are unwilling or unable to provide
1367affordable property insurance coverage in this state to the
1368extent sought and needed. The absence of affordable property
1369insurance threatens the public health, safety, and welfare and
1370likewise threatens the economic health of the state. The state
1371therefore has a compelling public interest and a public purpose
1372to assist in assuring that property in the state is insured and
1373that it is insured at affordable rates so as to facilitate the
1374remediation, reconstruction, and replacement of damaged or
1375destroyed property in order to reduce or avoid the negative
1376effects otherwise resulting to the public health, safety, and
1377welfare, to the economy of the state, and to the revenues of the
1378state and local governments which are needed to provide for the
1379public welfare. It is necessary, therefore, to provide
1380affordable property insurance to applicants who are in good
1381faith entitled to procure insurance through the voluntary market
1382but are unable to do so. The Legislature intends by this
1383subsection that affordable property insurance be provided and
1384that it continue to be provided, as long as necessary, through
1385Citizens Property Insurance Corporation, a government entity
1386that is an integral part of the state, and that is not a private
1387insurance company. To that end, Citizens Property Insurance
1388Corporation shall strive to increase the availability of
1389affordable property insurance in this state, while achieving
1390efficiencies and economies, and while providing service to
1391policyholders, applicants, and agents which is no less than the
1392quality generally provided in the voluntary market, for the
1393achievement of the foregoing public purposes. Because it is
1394essential for this government entity to have the maximum
1395financial resources to pay claims following a catastrophic
1396hurricane, it is the intent of the Legislature that Citizens
1397Property Insurance Corporation continue to be an integral part
1398of the state and that the income of the corporation be exempt
1399from federal income taxation and that interest on the debt
1400obligations issued by the corporation be exempt from federal
1401income taxation.
1402     2.  The Residential Property and Casualty Joint
1403Underwriting Association originally created by this statute
1404shall be known, as of July 1, 2002, as the Citizens Property
1405Insurance Corporation. The corporation shall provide insurance
1406for residential and commercial property, for applicants who are
1407in good faith entitled, but are unable, to procure insurance
1408through the voluntary market. The corporation shall operate
1409pursuant to a plan of operation approved by order of the
1410Financial Services Commission. The plan is subject to continuous
1411review by the commission. The commission may, by order, withdraw
1412approval of all or part of a plan if the commission determines
1413that conditions have changed since approval was granted and that
1414the purposes of the plan require changes in the plan. The
1415corporation shall continue to operate pursuant to the plan of
1416operation approved by the Office of Insurance Regulation until
1417October 1, 2006. For the purposes of this subsection,
1418residential coverage includes both personal lines residential
1419coverage, which consists of the type of coverage provided by
1420homeowner's, mobile home owner's, dwelling, tenant's,
1421condominium unit owner's, and similar policies, and commercial
1422lines residential coverage, which consists of the type of
1423coverage provided by condominium association, apartment
1424building, and similar policies.
1425     3.  For the purposes of this subsection, the term
1426"homestead property" means:
1427     a.  Property that has been granted a homestead exemption
1428under chapter 196;
1429     b.  Property for which the owner has a current, written
1430lease with a renter for a term of at least 7 months and for
1431which the dwelling is insured by the corporation for $200,000 or
1432less;
1433     c.  An owner-occupied mobile home or manufactured home, as
1434defined in s. 320.01, which is permanently affixed to real
1435property, is owned by a Florida resident, and has been granted a
1436homestead exemption under chapter 196 or, if the owner does not
1437own the real property, the owner certifies that the mobile home
1438or manufactured home is his or her principal place of residence;
1439     d.  Tenant's coverage;
1440     e.  Commercial lines residential property; or
1441     f.  Any county, district, or municipal hospital; a hospital
1442licensed by any not-for-profit corporation qualified under s.
1443501(c)(3) of the United States Internal Revenue Code; or a
1444continuing care retirement community that is certified under
1445chapter 651 and that receives an exemption from ad valorem taxes
1446under chapter 196.
1447     4.  For the purposes of this subsection, the term
1448"nonhomestead property" means property that is not homestead
1449property.
1450     3.5.  Effective January 1, 2009, a personal lines
1451residential structure that has a dwelling replacement cost of $2
1452$1 million or more, or a single condominium unit that has a
1453combined dwelling and content replacement cost of $2 $1 million
1454or more is not eligible for coverage by the corporation. Such
1455dwellings insured by the corporation on December 31, 2008, may
1456continue to be covered by the corporation until the end of the
1457policy term. However, such dwellings that are insured by the
1458corporation and become ineligible for coverage due to the
1459provisions of this subparagraph may reapply and obtain coverage
1460in the high-risk account and be considered "nonhomestead
1461property" if the property owner provides the corporation with a
1462sworn affidavit from one or more insurance agents, on a form
1463provided by the corporation, stating that the agents have made
1464their best efforts to obtain coverage and that the property has
1465been rejected for coverage by at least one authorized insurer
1466and at least three surplus lines insurers. If such conditions
1467are met, the dwelling may be insured by the corporation for up
1468to 3 years, after which time the dwelling is ineligible for
1469coverage. The office shall approve the method used by the
1470corporation for valuing the dwelling replacement cost for the
1471purposes of this subparagraph. If a policyholder is insured by
1472the corporation prior to being determined to be ineligible
1473pursuant to this subparagraph and such policyholder files a
1474lawsuit challenging the determination, the policyholder may
1475remain insured by the corporation until the conclusion of the
1476litigation.
1477     6.  For properties constructed on or after January 1, 2009,
1478the corporation may not insure any property located within 2,500
1479feet landward of the coastal construction control line created
1480pursuant to s. 161.053 unless the property meets the
1481requirements of the code-plus building standards developed by
1482the Florida Building Commission.
1483     4.7.  It is the intent of the Legislature that
1484policyholders, applicants, and agents of the corporation receive
1485service and treatment of the highest possible level but never
1486less than that generally provided in the voluntary market. It
1487also is intended that the corporation be held to service
1488standards no less than those applied to insurers in the
1489voluntary market by the office with respect to responsiveness,
1490timeliness, customer courtesy, and overall dealings with
1491policyholders, applicants, or agents of the corporation.
1492     5.8.  Effective January 1, 2009, a personal lines
1493residential structure that is located in the "wind-borne debris
1494region," as defined in s. 1609.2, International Building Code
1495(2006), and that has an insured value on the structure of
1496$750,000 or more is not eligible for coverage by the corporation
1497unless the structure has opening protections as required under
1498the Florida Building Code for a newly constructed residential
1499structure in that area. A residential structure shall be deemed
1500to comply with the requirements of this subparagraph if it has
1501shutters or opening protections on all openings and if such
1502opening protections complied with the Florida Building Code at
1503the time they were installed. Effective January 1, 2010, for
1504personal lines residential property insured by the corporation
1505that is located in the wind-borne debris region and has an
1506insured value on the structure of $500,000 or more, a
1507prospective purchaser of any such residential property must be
1508provided by the seller a written disclosure that contains the
1509structure's windstorm mitigation rating based on the uniform
1510home grading scale adopted under s. 215.55865. Such rating shall
1511be provided to the purchaser at or before the time the purchaser
1512executes a contract for sale and purchase.
1513     (b)1.  All insurers authorized to write one or more subject
1514lines of business in this state are subject to assessment by the
1515corporation and, for the purposes of this subsection, are
1516referred to collectively as "assessable insurers." Insurers
1517writing one or more subject lines of business in this state
1518pursuant to part VIII of chapter 626 are not assessable
1519insurers, but insureds who procure one or more subject lines of
1520business in this state pursuant to part VIII of chapter 626 are
1521subject to assessment by the corporation and are referred to
1522collectively as "assessable insureds." An authorized insurer's
1523assessment liability shall begin on the first day of the
1524calendar year following the year in which the insurer was issued
1525a certificate of authority to transact insurance for subject
1526lines of business in this state and shall terminate 1 year after
1527the end of the first calendar year during which the insurer no
1528longer holds a certificate of authority to transact insurance
1529for subject lines of business in this state.
1530     2.a.  All revenues, assets, liabilities, losses, and
1531expenses of the corporation shall be divided into three separate
1532accounts as follows:
1533     (I)  A personal lines account for personal residential
1534policies issued by the corporation or issued by the Residential
1535Property and Casualty Joint Underwriting Association and renewed
1536by the corporation that provide comprehensive, multiperil
1537coverage on risks that are not located in areas eligible for
1538coverage in the Florida Windstorm Underwriting Association as
1539those areas were defined on January 1, 2002, and for such
1540policies that do not provide coverage for the peril of wind on
1541risks that are located in such areas;
1542     (II)  A commercial lines account for commercial residential
1543and commercial nonresidential policies issued by the corporation
1544or issued by the Residential Property and Casualty Joint
1545Underwriting Association and renewed by the corporation that
1546provide coverage for basic property perils on risks that are not
1547located in areas eligible for coverage in the Florida Windstorm
1548Underwriting Association as those areas were defined on January
15491, 2002, and for such policies that do not provide coverage for
1550the peril of wind on risks that are located in such areas; and
1551     (III)  A high-risk account for personal residential
1552policies and commercial residential and commercial
1553nonresidential property policies issued by the corporation or
1554transferred to the corporation that provide coverage for the
1555peril of wind on risks that are located in areas eligible for
1556coverage in the Florida Windstorm Underwriting Association as
1557those areas were defined on January 1, 2002. Subject to the
1558approval of a business plan by the Financial Services Commission
1559and Legislative Budget Commission as provided in this sub-sub-
1560subparagraph, but no earlier than March 31, 2007, The
1561corporation may offer policies that provide multiperil coverage
1562and the corporation shall continue to offer policies that
1563provide coverage only for the peril of wind for risks located in
1564areas eligible for coverage in the high-risk account. In issuing
1565multiperil coverage, the corporation may use its approved policy
1566forms and rates for the personal lines account. An applicant or
1567insured who is eligible to purchase a multiperil policy from the
1568corporation may purchase a multiperil policy from an authorized
1569insurer without prejudice to the applicant's or insured's
1570eligibility to prospectively purchase a policy that provides
1571coverage only for the peril of wind from the corporation. An
1572applicant or insured who is eligible for a corporation policy
1573that provides coverage only for the peril of wind may elect to
1574purchase or retain such policy and also purchase or retain
1575coverage excluding wind from an authorized insurer without
1576prejudice to the applicant's or insured's eligibility to
1577prospectively purchase a policy that provides multiperil
1578coverage from the corporation. It is the goal of the Legislature
1579that there would be an overall average savings of 10 percent or
1580more for a policyholder who currently has a wind-only policy
1581with the corporation, and an ex-wind policy with a voluntary
1582insurer or the corporation, and who then obtains a multiperil
1583policy from the corporation. It is the intent of the Legislature
1584that the offer of multiperil coverage in the high-risk account
1585be made and implemented in a manner that does not adversely
1586affect the tax-exempt status of the corporation or
1587creditworthiness of or security for currently outstanding
1588financing obligations or credit facilities of the high-risk
1589account, the personal lines account, or the commercial lines
1590account. By March 1, 2007, the corporation shall prepare and
1591submit for approval by the Financial Services Commission and
1592Legislative Budget Commission a report detailing the
1593corporation's business plan for issuing multiperil coverage in
1594the high-risk account. The business plan shall be approved or
1595disapproved within 30 days after receipt, as submitted or
1596modified and resubmitted by the corporation. The business plan
1597must include: the impact of such multiperil coverage on the
1598corporation's financial resources, the impact of such multiperil
1599coverage on the corporation's tax-exempt status, the manner in
1600which the corporation plans to implement the processing of
1601applications and policy forms for new and existing
1602policyholders, the impact of such multiperil coverage on the
1603corporation's ability to deliver customer service at the high
1604level required by this subsection, the ability of the
1605corporation to process claims, the ability of the corporation to
1606quote and issue policies, the impact of such multiperil coverage
1607on the corporation's agents, the impact of such multiperil
1608coverage on the corporation's existing policyholders, and the
1609impact of such multiperil coverage on rates and premium. The
1610high-risk account must also include quota share primary
1611insurance under subparagraph (c)2. The area eligible for
1612coverage under the high-risk account also includes the area
1613within Port Canaveral, which is bordered on the south by the
1614City of Cape Canaveral, bordered on the west by the Banana
1615River, and bordered on the north by Federal Government property.
1616     b.  The three separate accounts must be maintained as long
1617as financing obligations entered into by the Florida Windstorm
1618Underwriting Association or Residential Property and Casualty
1619Joint Underwriting Association are outstanding, in accordance
1620with the terms of the corresponding financing documents. When
1621the financing obligations are no longer outstanding, in
1622accordance with the terms of the corresponding financing
1623documents, the corporation may use a single account for all
1624revenues, assets, liabilities, losses, and expenses of the
1625corporation. Consistent with the requirement of this
1626subparagraph and prudent investment policies that minimize the
1627cost of carrying debt, the board shall exercise its best efforts
1628to retire existing debt or to obtain approval of necessary
1629parties to amend the terms of existing debt, so as to structure
1630the most efficient plan to consolidate the three separate
1631accounts into a single account. By February 1, 2007, the board
1632shall submit a report to the Financial Services Commission, the
1633President of the Senate, and the Speaker of the House of
1634Representatives which includes an analysis of consolidating the
1635accounts, the actions the board has taken to minimize the cost
1636of carrying debt, and its recommendations for executing the most
1637efficient plan.
1638     c.  Creditors of the Residential Property and Casualty
1639Joint Underwriting Association and of the accounts specified in
1640sub-sub-subparagraphs a.(I) and (II) may have a claim against,
1641and recourse to, the accounts referred to in sub-sub-
1642subparagraphs a.(I) and (II) and shall have no claim against, or
1643recourse to, the account referred to in sub-sub-subparagraph
1644a.(III). Creditors of the Florida Windstorm Underwriting
1645Association shall have a claim against, and recourse to, the
1646account referred to in sub-sub-subparagraph a.(III) and shall
1647have no claim against, or recourse to, the accounts referred to
1648in sub-sub-subparagraphs a.(I) and (II).
1649     d.  Revenues, assets, liabilities, losses, and expenses not
1650attributable to particular accounts shall be prorated among the
1651accounts.
1652     e.  The Legislature finds that the revenues of the
1653corporation are revenues that are necessary to meet the
1654requirements set forth in documents authorizing the issuance of
1655bonds under this subsection.
1656     f.  No part of the income of the corporation may inure to
1657the benefit of any private person.
1658     3.  With respect to a deficit in an account:
1659     a.  After accounting for the Citizens policyholder
1660surcharge imposed under sub-subparagraph i., when the remaining
1661projected deficit incurred in a particular calendar year is not
1662greater than 6 10 percent of the aggregate statewide direct
1663written premium for the subject lines of business for the prior
1664calendar year, the entire deficit shall be recovered through
1665regular assessments of assessable insurers under paragraph (p)
1666and assessable insureds.
1667     b.  After accounting for the Citizens policyholder
1668surcharge imposed under sub-subparagraph i., when the remaining
1669projected deficit incurred in a particular calendar year exceeds
16706 10 percent of the aggregate statewide direct written premium
1671for the subject lines of business for the prior calendar year,
1672the corporation shall levy regular assessments on assessable
1673insurers under paragraph (p) and on assessable insureds in an
1674amount equal to the greater of 6 10 percent of the deficit or 6
167510 percent of the aggregate statewide direct written premium for
1676the subject lines of business for the prior calendar year. Any
1677remaining deficit shall be recovered through emergency
1678assessments under sub-subparagraph d.
1679     c.  Each assessable insurer's share of the amount being
1680assessed under sub-subparagraph a. or sub-subparagraph b. shall
1681be in the proportion that the assessable insurer's direct
1682written premium for the subject lines of business for the year
1683preceding the assessment bears to the aggregate statewide direct
1684written premium for the subject lines of business for that year.
1685The assessment percentage applicable to each assessable insured
1686is the ratio of the amount being assessed under sub-subparagraph
1687a. or sub-subparagraph b. to the aggregate statewide direct
1688written premium for the subject lines of business for the prior
1689year. Assessments levied by the corporation on assessable
1690insurers under sub-subparagraphs a. and b. shall be paid as
1691required by the corporation's plan of operation and paragraph
1692(p). notwithstanding any other provision of this subsection, the
1693aggregate amount of a regular assessment for a deficit incurred
1694in a particular calendar year shall be reduced by the estimated
1695amount to be received by the corporation from the Citizens
1696policyholder surcharge under subparagraph (c)10. and the amount
1697collected or estimated to be collected from the assessment on
1698Citizens policyholders pursuant to sub-subparagraph i.
1699Assessments levied by the corporation on assessable insureds
1700under sub-subparagraphs a. and b. shall be collected by the
1701surplus lines agent at the time the surplus lines agent collects
1702the surplus lines tax required by s. 626.932 and shall be paid
1703to the Florida Surplus Lines Service Office at the time the
1704surplus lines agent pays the surplus lines tax to the Florida
1705Surplus Lines Service Office. Upon receipt of regular
1706assessments from surplus lines agents, the Florida Surplus Lines
1707Service Office shall transfer the assessments directly to the
1708corporation as determined by the corporation.
1709     d.  Upon a determination by the board of governors that a
1710deficit in an account exceeds the amount that will be recovered
1711through regular assessments under sub-subparagraph a. or sub-
1712subparagraph b., plus the amount that is expected to be
1713recovered through surcharges under sub-subparagraph i., as to
1714the remaining projected deficit the board shall levy, after
1715verification by the office, emergency assessments, for as many
1716years as necessary to cover the deficits, to be collected by
1717assessable insurers and the corporation and collected from
1718assessable insureds upon issuance or renewal of policies for
1719subject lines of business, excluding National Flood Insurance
1720policies. The amount of the emergency assessment collected in a
1721particular year shall be a uniform percentage of that year's
1722direct written premium for subject lines of business and all
1723accounts of the corporation, excluding National Flood Insurance
1724Program policy premiums, as annually determined by the board and
1725verified by the office. The office shall verify the arithmetic
1726calculations involved in the board's determination within 30
1727days after receipt of the information on which the determination
1728was based. Notwithstanding any other provision of law, the
1729corporation and each assessable insurer that writes subject
1730lines of business shall collect emergency assessments from its
1731policyholders without such obligation being affected by any
1732credit, limitation, exemption, or deferment. Emergency
1733assessments levied by the corporation on assessable insureds
1734shall be collected by the surplus lines agent at the time the
1735surplus lines agent collects the surplus lines tax required by
1736s. 626.932 and shall be paid to the Florida Surplus Lines
1737Service Office at the time the surplus lines agent pays the
1738surplus lines tax to the Florida Surplus Lines Service Office.
1739The emergency assessments so collected shall be transferred
1740directly to the corporation on a periodic basis as determined by
1741the corporation and shall be held by the corporation solely in
1742the applicable account. The aggregate amount of emergency
1743assessments levied for an account under this sub-subparagraph in
1744any calendar year may, at the discretion of the board of
1745governors, be less than but may not exceed the greater of 10
1746percent of the amount needed to cover the original deficit, plus
1747interest, fees, commissions, required reserves, and other costs
1748associated with financing of the original deficit, or 10 percent
1749of the aggregate statewide direct written premium for subject
1750lines of business and for all accounts of the corporation for
1751the prior year, plus interest, fees, commissions, required
1752reserves, and other costs associated with financing the original
1753deficit.
1754     e.  The corporation may pledge the proceeds of assessments,
1755projected recoveries from the Florida Hurricane Catastrophe
1756Fund, other insurance and reinsurance recoverables, policyholder
1757surcharges and other surcharges, and other funds available to
1758the corporation as the source of revenue for and to secure bonds
1759issued under paragraph (p), bonds or other indebtedness issued
1760under subparagraph (c)3., or lines of credit or other financing
1761mechanisms issued or created under this subsection, or to retire
1762any other debt incurred as a result of deficits or events giving
1763rise to deficits, or in any other way that the board determines
1764will efficiently recover such deficits. The purpose of the lines
1765of credit or other financing mechanisms is to provide additional
1766resources to assist the corporation in covering claims and
1767expenses attributable to a catastrophe. As used in this
1768subsection, the term "assessments" includes regular assessments
1769under sub-subparagraph a., sub-subparagraph b., or subparagraph
1770(p)1. and emergency assessments under sub-subparagraph d.
1771Emergency assessments collected under sub-subparagraph d. are
1772not part of an insurer's rates, are not premium, and are not
1773subject to premium tax, fees, or commissions; however, failure
1774to pay the emergency assessment shall be treated as failure to
1775pay premium. The emergency assessments under sub-subparagraph d.
1776shall continue as long as any bonds issued or other indebtedness
1777incurred with respect to a deficit for which the assessment was
1778imposed remain outstanding, unless adequate provision has been
1779made for the payment of such bonds or other indebtedness
1780pursuant to the documents governing such bonds or other
1781indebtedness.
1782     f.  As used in this subsection for purposes of any deficit
1783incurred on or after January 25, 2007, the term "subject lines
1784of business" means insurance written by assessable insurers or
1785procured by assessable insureds for all property and casualty
1786lines of business in this state, but not including workers'
1787compensation or medical malpractice. As used in the sub-
1788subparagraph, the term "property and casualty lines of business"
1789includes all lines of business identified on Form 2, Exhibit of
1790Premiums and Losses, in the annual statement required of
1791authorized insurers by s. 624.424 and any rule adopted under
1792this section, except for those lines identified as accident and
1793health insurance and except for policies written under the
1794National Flood Insurance Program or the Federal Crop Insurance
1795Program. For purposes of this sub-subparagraph, the term
1796"workers' compensation" includes both workers' compensation
1797insurance and excess workers' compensation insurance.
1798     g.  The Florida Surplus Lines Service Office shall
1799determine annually the aggregate statewide written premium in
1800subject lines of business procured by assessable insureds and
1801shall report that information to the corporation in a form and
1802at a time the corporation specifies to ensure that the
1803corporation can meet the requirements of this subsection and the
1804corporation's financing obligations.
1805     h.  The Florida Surplus Lines Service Office shall verify
1806the proper application by surplus lines agents of assessment
1807percentages for regular assessments and emergency assessments
1808levied under this subparagraph on assessable insureds and shall
1809assist the corporation in ensuring the accurate, timely
1810collection and payment of assessments by surplus lines agents as
1811required by the corporation.
1812     i.  If a deficit is incurred in any account in 2008 or
1813thereafter, the board of governors shall levy a Citizens
1814policyholder surcharge an immediate assessment against the
1815premium of each nonhomestead property policyholder in all
1816accounts of the corporation, as a uniform percentage of the
1817premium of the policy of up to 10 percent of such premium, which
1818funds shall be used to offset the deficit. If this assessment is
1819insufficient to eliminate the deficit, the board of governors
1820shall levy an additional assessment against all policyholders of
1821the corporation for a 12-month period, which shall be collected
1822at the time of issuance or renewal of a policy, as a uniform
1823percentage of the premium for the policy of up to 15 10 percent
1824of such premium, which funds shall be used to further offset the
1825deficit. Citizens policyholder surcharges under this sub-
1826subparagraph are not considered premium and are not subject to
1827commissions, fees, or premium taxes. However, failure to pay
1828such surcharges shall be treated as failure to pay premium.
1829     j.  If the amount of any assessments or surcharges
1830collected from corporation policyholders, assessable insurers or
1831their policyholders, or assessable insureds exceeds the amount
1832of the deficits, such excess amounts shall be remitted to and
1833retained by the corporation in a reserve to be used by the
1834corporation, as determined by the board of governors and
1835approved by the office, to pay claims or reduce any past,
1836present, or future plan-year deficits or to reduce outstanding
1837debt. The board of governors shall maintain separate accounting
1838records that consolidate data for nonhomestead properties,
1839including, but not limited to, number of policies, insured
1840values, premiums written, and losses. The board of governors
1841shall annually report to the office and the Legislature a
1842summary of such data.
1843     (c)  The plan of operation of the corporation:
1844     1.  Must provide for adoption of residential property and
1845casualty insurance policy forms and commercial residential and
1846nonresidential property insurance forms, which forms must be
1847approved by the office prior to use. The corporation shall adopt
1848the following policy forms:
1849     a.  Standard personal lines policy forms that are
1850comprehensive multiperil policies providing full coverage of a
1851residential property equivalent to the coverage provided in the
1852private insurance market under an HO-3, HO-4, or HO-6 policy.
1853     b.  Basic personal lines policy forms that are policies
1854similar to an HO-8 policy or a dwelling fire policy that provide
1855coverage meeting the requirements of the secondary mortgage
1856market, but which coverage is more limited than the coverage
1857under a standard policy.
1858     c.  Commercial lines residential and nonresidential policy
1859forms that are generally similar to the basic perils of full
1860coverage obtainable for commercial residential structures and
1861commercial nonresidential structures in the admitted voluntary
1862market.
1863     d.  Personal lines and commercial lines residential
1864property insurance forms that cover the peril of wind only. The
1865forms are applicable only to residential properties located in
1866areas eligible for coverage under the high-risk account referred
1867to in sub-subparagraph (b)2.a.
1868     e.  Commercial lines nonresidential property insurance
1869forms that cover the peril of wind only. The forms are
1870applicable only to nonresidential properties located in areas
1871eligible for coverage under the high-risk account referred to in
1872sub-subparagraph (b)2.a.
1873     f.  The corporation may adopt variations of the policy
1874forms listed in sub-subparagraphs a.-e. that contain more
1875restrictive coverage.
1876     2.a.  Must provide that the corporation adopt a program in
1877which the corporation and authorized insurers enter into quota
1878share primary insurance agreements for hurricane coverage, as
1879defined in s. 627.4025(2)(a), for eligible risks, and adopt
1880property insurance forms for eligible risks which cover the
1881peril of wind only. As used in this subsection, the term:
1882     (I)  "Quota share primary insurance" means an arrangement
1883in which the primary hurricane coverage of an eligible risk is
1884provided in specified percentages by the corporation and an
1885authorized insurer. The corporation and authorized insurer are
1886each solely responsible for a specified percentage of hurricane
1887coverage of an eligible risk as set forth in a quota share
1888primary insurance agreement between the corporation and an
1889authorized insurer and the insurance contract. The
1890responsibility of the corporation or authorized insurer to pay
1891its specified percentage of hurricane losses of an eligible
1892risk, as set forth in the quota share primary insurance
1893agreement, may not be altered by the inability of the other
1894party to the agreement to pay its specified percentage of
1895hurricane losses. Eligible risks that are provided hurricane
1896coverage through a quota share primary insurance arrangement
1897must be provided policy forms that set forth the obligations of
1898the corporation and authorized insurer under the arrangement,
1899clearly specify the percentages of quota share primary insurance
1900provided by the corporation and authorized insurer, and
1901conspicuously and clearly state that neither the authorized
1902insurer nor the corporation may be held responsible beyond its
1903specified percentage of coverage of hurricane losses.
1904     (II)  "Eligible risks" means personal lines residential and
1905commercial lines residential risks that meet the underwriting
1906criteria of the corporation and are located in areas that were
1907eligible for coverage by the Florida Windstorm Underwriting
1908Association on January 1, 2002.
1909     b.  The corporation may enter into quota share primary
1910insurance agreements with authorized insurers at corporation
1911coverage levels of 90 percent and 50 percent.
1912     c.  If the corporation determines that additional coverage
1913levels are necessary to maximize participation in quota share
1914primary insurance agreements by authorized insurers, the
1915corporation may establish additional coverage levels. However,
1916the corporation's quota share primary insurance coverage level
1917may not exceed 90 percent.
1918     d.  Any quota share primary insurance agreement entered
1919into between an authorized insurer and the corporation must
1920provide for a uniform specified percentage of coverage of
1921hurricane losses, by county or territory as set forth by the
1922corporation board, for all eligible risks of the authorized
1923insurer covered under the quota share primary insurance
1924agreement.
1925     e.  Any quota share primary insurance agreement entered
1926into between an authorized insurer and the corporation is
1927subject to review and approval by the office. However, such
1928agreement shall be authorized only as to insurance contracts
1929entered into between an authorized insurer and an insured who is
1930already insured by the corporation for wind coverage.
1931     f.  For all eligible risks covered under quota share
1932primary insurance agreements, the exposure and coverage levels
1933for both the corporation and authorized insurers shall be
1934reported by the corporation to the Florida Hurricane Catastrophe
1935Fund. For all policies of eligible risks covered under quota
1936share primary insurance agreements, the corporation and the
1937authorized insurer shall maintain complete and accurate records
1938for the purpose of exposure and loss reimbursement audits as
1939required by Florida Hurricane Catastrophe Fund rules. The
1940corporation and the authorized insurer shall each maintain
1941duplicate copies of policy declaration pages and supporting
1942claims documents.
1943     g.  The corporation board shall establish in its plan of
1944operation standards for quota share agreements which ensure that
1945there is no discriminatory application among insurers as to the
1946terms of quota share agreements, pricing of quota share
1947agreements, incentive provisions if any, and consideration paid
1948for servicing policies or adjusting claims.
1949     h.  The quota share primary insurance agreement between the
1950corporation and an authorized insurer must set forth the
1951specific terms under which coverage is provided, including, but
1952not limited to, the sale and servicing of policies issued under
1953the agreement by the insurance agent of the authorized insurer
1954producing the business, the reporting of information concerning
1955eligible risks, the payment of premium to the corporation, and
1956arrangements for the adjustment and payment of hurricane claims
1957incurred on eligible risks by the claims adjuster and personnel
1958of the authorized insurer. Entering into a quota sharing
1959insurance agreement between the corporation and an authorized
1960insurer shall be voluntary and at the discretion of the
1961authorized insurer.
1962     3.  May provide that the corporation may employ or
1963otherwise contract with individuals or other entities to provide
1964administrative or professional services that may be appropriate
1965to effectuate the plan. The corporation shall have the power to
1966borrow funds, by issuing bonds or by incurring other
1967indebtedness, and shall have other powers reasonably necessary
1968to effectuate the requirements of this subsection, including,
1969without limitation, the power to issue bonds and incur other
1970indebtedness in order to refinance outstanding bonds or other
1971indebtedness. The corporation may, but is not required to, seek
1972judicial validation of its bonds or other indebtedness under
1973chapter 75. The corporation may issue bonds or incur other
1974indebtedness, or have bonds issued on its behalf by a unit of
1975local government pursuant to subparagraph (p)2., in the absence
1976of a hurricane or other weather-related event, upon a
1977determination by the corporation, subject to approval by the
1978office, that such action would enable it to efficiently meet the
1979financial obligations of the corporation and that such
1980financings are reasonably necessary to effectuate the
1981requirements of this subsection. The corporation is authorized
1982to take all actions needed to facilitate tax-free status for any
1983such bonds or indebtedness, including formation of trusts or
1984other affiliated entities. The corporation shall have the
1985authority to pledge assessments, projected recoveries from the
1986Florida Hurricane Catastrophe Fund, other reinsurance
1987recoverables, market equalization and other surcharges, and
1988other funds available to the corporation as security for bonds
1989or other indebtedness. In recognition of s. 10, Art. I of the
1990State Constitution, prohibiting the impairment of obligations of
1991contracts, it is the intent of the Legislature that no action be
1992taken whose purpose is to impair any bond indenture or financing
1993agreement or any revenue source committed by contract to such
1994bond or other indebtedness.
1995     4.a.  Must require that the corporation operate subject to
1996the supervision and approval of a board of governors consisting
1997of eight individuals who are residents of this state, from
1998different geographical areas of this state. The Governor, the
1999Chief Financial Officer, the President of the Senate, and the
2000Speaker of the House of Representatives shall each appoint two
2001members of the board. At least one of the two members appointed
2002by each appointing officer must have demonstrated expertise in
2003insurance. The Chief Financial Officer shall designate one of
2004the appointees as chair. All board members serve at the pleasure
2005of the appointing officer. All members of the board of governors
2006are subject to removal at will by the officers who appointed
2007them. All board members, including the chair, must be appointed
2008to serve for 3-year terms beginning annually on a date
2009designated by the plan. Any board vacancy shall be filled for
2010the unexpired term by the appointing officer. The Chief
2011Financial Officer shall appoint a technical advisory group to
2012provide information and advice to the board of governors in
2013connection with the board's duties under this subsection. The
2014executive director and senior managers of the corporation shall
2015be engaged by the board and serve at the pleasure of the board.
2016Any executive director appointed on or after July 1, 2006, is
2017subject to confirmation by the Senate. The executive director is
2018responsible for employing other staff as the corporation may
2019require, subject to review and concurrence by the board.
2020     b.  The board shall create a Market Accountability Advisory
2021Committee to assist the corporation in developing awareness of
2022its rates and its customer and agent service levels in
2023relationship to the voluntary market insurers writing similar
2024coverage. The members of the advisory committee shall consist of
2025the following 11 persons, one of whom must be elected chair by
2026the members of the committee: four representatives, one
2027appointed by the Florida Association of Insurance Agents, one by
2028the Florida Association of Insurance and Financial Advisors, one
2029by the Professional Insurance Agents of Florida, and one by the
2030Latin American Association of Insurance Agencies; three
2031representatives appointed by the insurers with the three highest
2032voluntary market share of residential property insurance
2033business in the state; one representative from the Office of
2034Insurance Regulation; one consumer appointed by the board who is
2035insured by the corporation at the time of appointment to the
2036committee; one representative appointed by the Florida
2037Association of Realtors; and one representative appointed by the
2038Florida Bankers Association. All members must serve for 3-year
2039terms and may serve for consecutive terms. The committee shall
2040report to the corporation at each board meeting on insurance
2041market issues which may include rates and rate competition with
2042the voluntary market; service, including policy issuance, claims
2043processing, and general responsiveness to policyholders,
2044applicants, and agents; and matters relating to depopulation.
2045     5.  Must provide a procedure for determining the
2046eligibility of a risk for coverage, as follows:
2047     a.  Subject to the provisions of s. 627.3517, with respect
2048to personal lines residential risks, if the risk is offered
2049coverage from an authorized insurer at the insurer's approved
2050rate under either a standard policy including wind coverage or,
2051if consistent with the insurer's underwriting rules as filed
2052with the office, a basic policy including wind coverage, for a
2053new application to the corporation for coverage, the risk is not
2054eligible for any policy issued by the corporation unless the
2055premium for coverage from the authorized insurer is more than 15
2056percent greater than the premium for comparable coverage from
2057the corporation. If the risk is not able to obtain any such
2058offer, the risk is eligible for either a standard policy
2059including wind coverage or a basic policy including wind
2060coverage issued by the corporation; however, if the risk could
2061not be insured under a standard policy including wind coverage
2062regardless of market conditions, the risk shall be eligible for
2063a basic policy including wind coverage unless rejected under
2064subparagraph 9. However, with regard to a policyholder of the
2065corporation or a policyholder removed from the corporation
2066through an assumption agreement until the end of the assumption
2067period, the policyholder remains eligible for coverage from the
2068corporation regardless of any offer of coverage from an
2069authorized insurer or surplus lines insurer. The corporation
2070shall determine the type of policy to be provided on the basis
2071of objective standards specified in the underwriting manual and
2072based on generally accepted underwriting practices.
2073     (I)  If the risk accepts an offer of coverage through the
2074market assistance plan or an offer of coverage through a
2075mechanism established by the corporation before a policy is
2076issued to the risk by the corporation or during the first 30
2077days of coverage by the corporation, and the producing agent who
2078submitted the application to the plan or to the corporation is
2079not currently appointed by the insurer, the insurer shall:
2080     (A)  Pay to the producing agent of record of the policy,
2081for the first year, an amount that is the greater of the
2082insurer's usual and customary commission for the type of policy
2083written or a fee equal to the usual and customary commission of
2084the corporation; or
2085     (B)  Offer to allow the producing agent of record of the
2086policy to continue servicing the policy for a period of not less
2087than 1 year and offer to pay the agent the greater of the
2088insurer's or the corporation's usual and customary commission
2089for the type of policy written.
2090
2091If the producing agent is unwilling or unable to accept
2092appointment, the new insurer shall pay the agent in accordance
2093with sub-sub-sub-subparagraph (A).
2094     (II)  When the corporation enters into a contractual
2095agreement for a take-out plan, the producing agent of record of
2096the corporation policy is entitled to retain any unearned
2097commission on the policy, and the insurer shall:
2098     (A)  Pay to the producing agent of record of the
2099corporation policy, for the first year, an amount that is the
2100greater of the insurer's usual and customary commission for the
2101type of policy written or a fee equal to the usual and customary
2102commission of the corporation; or
2103     (B)  Offer to allow the producing agent of record of the
2104corporation policy to continue servicing the policy for a period
2105of not less than 1 year and offer to pay the agent the greater
2106of the insurer's or the corporation's usual and customary
2107commission for the type of policy written.
2108
2109If the producing agent is unwilling or unable to accept
2110appointment, the new insurer shall pay the agent in accordance
2111with sub-sub-sub-subparagraph (A).
2112     b.  With respect to commercial lines residential risks, for
2113a new application to the corporation for coverage, if the risk
2114is offered coverage under a policy including wind coverage from
2115an authorized insurer at its approved rate, the risk is not
2116eligible for any policy issued by the corporation unless the
2117premium for coverage from the authorized insurer is more than 15
2118percent greater than the premium for comparable coverage from
2119the corporation. If the risk is not able to obtain any such
2120offer, the risk is eligible for a policy including wind coverage
2121issued by the corporation. However, with regard to a
2122policyholder of the corporation or a policyholder removed from
2123the corporation through an assumption agreement until the end of
2124the assumption period, the policyholder remains eligible for
2125coverage from the corporation regardless of any offer of
2126coverage from an authorized insurer or surplus lines insurer.
2127     (I)  If the risk accepts an offer of coverage through the
2128market assistance plan or an offer of coverage through a
2129mechanism established by the corporation before a policy is
2130issued to the risk by the corporation or during the first 30
2131days of coverage by the corporation, and the producing agent who
2132submitted the application to the plan or the corporation is not
2133currently appointed by the insurer, the insurer shall:
2134     (A)  Pay to the producing agent of record of the policy,
2135for the first year, an amount that is the greater of the
2136insurer's usual and customary commission for the type of policy
2137written or a fee equal to the usual and customary commission of
2138the corporation; or
2139     (B)  Offer to allow the producing agent of record of the
2140policy to continue servicing the policy for a period of not less
2141than 1 year and offer to pay the agent the greater of the
2142insurer's or the corporation's usual and customary commission
2143for the type of policy written.
2144
2145If the producing agent is unwilling or unable to accept
2146appointment, the new insurer shall pay the agent in accordance
2147with sub-sub-sub-subparagraph (A).
2148     (II)  When the corporation enters into a contractual
2149agreement for a take-out plan, the producing agent of record of
2150the corporation policy is entitled to retain any unearned
2151commission on the policy, and the insurer shall:
2152     (A)  Pay to the producing agent of record of the
2153corporation policy, for the first year, an amount that is the
2154greater of the insurer's usual and customary commission for the
2155type of policy written or a fee equal to the usual and customary
2156commission of the corporation; or
2157     (B)  Offer to allow the producing agent of record of the
2158corporation policy to continue servicing the policy for a period
2159of not less than 1 year and offer to pay the agent the greater
2160of the insurer's or the corporation's usual and customary
2161commission for the type of policy written.
2162
2163If the producing agent is unwilling or unable to accept
2164appointment, the new insurer shall pay the agent in accordance
2165with sub-sub-sub-subparagraph (A).
2166     c.  For purposes of determining comparable coverage under
2167sub-subparagraphs a. and b., the comparison shall be based on
2168those forms and coverages that are reasonably comparable. The
2169corporation may rely on a determination of comparable coverage
2170and premium made by the producing agent who submits the
2171application to the corporation, made in the agent's capacity as
2172the corporation's agent. A comparison may be made solely of the
2173premium with respect to the main building or structure only on
2174the following basis: the same coverage A or other building
2175limits; the same percentage hurricane deductible that applies on
2176an annual basis or that applies to each hurricane for commercial
2177residential property; the same percentage of ordinance and law
2178coverage, if the same limit is offered by both the corporation
2179and the authorized insurer; the same mitigation credits, to the
2180extent the same types of credits are offered both by the
2181corporation and the authorized insurer; the same method for loss
2182payment, such as replacement cost or actual cash value, if the
2183same method is offered both by the corporation and the
2184authorized insurer in accordance with underwriting rules; and
2185any other form or coverage that is reasonably comparable as
2186determined by the board. If an application is submitted to the
2187corporation for wind-only coverage in the high-risk account, the
2188premium for the corporation's wind-only policy plus the premium
2189for the ex-wind policy that is offered by an authorized insurer
2190to the applicant shall be compared to the premium for multiperil
2191coverage offered by an authorized insurer, subject to the
2192standards for comparison specified in this subparagraph. If the
2193corporation or the applicant requests from the authorized
2194insurer a breakdown of the premium of the offer by types of
2195coverage so that a comparison may be made by the corporation or
2196its agent and the authorized insurer refuses or is unable to
2197provide such information, the corporation may treat the offer as
2198not being an offer of coverage from an authorized insurer at the
2199insurer's approved rate.
2200     6.  Must include rules for classifications of risks and
2201rates therefor.
2202     7.  Must provide that if premium and investment income for
2203an account attributable to a particular calendar year are in
2204excess of projected losses and expenses for the account
2205attributable to that year, such excess shall be held in surplus
2206in the account. Such surplus shall be available to defray
2207deficits in that account as to future years and shall be used
2208for that purpose prior to assessing assessable insurers and
2209assessable insureds as to any calendar year.
2210     8.  Must provide objective criteria and procedures to be
2211uniformly applied for all applicants in determining whether an
2212individual risk is so hazardous as to be uninsurable. In making
2213this determination and in establishing the criteria and
2214procedures, the following shall be considered:
2215     a.  Whether the likelihood of a loss for the individual
2216risk is substantially higher than for other risks of the same
2217class; and
2218     b.  Whether the uncertainty associated with the individual
2219risk is such that an appropriate premium cannot be determined.
2220
2221The acceptance or rejection of a risk by the corporation shall
2222be construed as the private placement of insurance, and the
2223provisions of chapter 120 shall not apply.
2224     9.  Must provide that the corporation shall make its best
2225efforts to procure catastrophe reinsurance at reasonable rates,
2226to cover its projected 100-year probable maximum loss as
2227determined by the board of governors.
2228     10.  Must provide that in the event of regular deficit
2229assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2230(b)3.b., in the personal lines account, the commercial lines
2231residential account, or the high-risk account, the corporation
2232shall levy upon corporation policyholders in its next rate
2233filing, or by a separate rate filing solely for this purpose, a
2234Citizens policyholder surcharge arising from a regular
2235assessment in such account in a percentage equal to the total
2236amount of such regular assessments divided by the aggregate
2237statewide direct written premium for subject lines of business
2238for the prior calendar year. For purposes of calculating the
2239Citizens policyholder surcharge to be levied under this
2240subparagraph, the total amount of the regular assessment to
2241which this surcharge is related shall be determined as set forth
2242in subparagraph (b)3., without deducting the estimated Citizens
2243policyholder surcharge. Citizens policyholder surcharges under
2244this subparagraph are not considered premium and are not subject
2245to commissions, fees, or premium taxes; however, failure to pay
2246a market equalization surcharge shall be treated as failure to
2247pay premium.
2248     10.11.  The policies issued by the corporation must provide
2249that, if the corporation or the market assistance plan obtains
2250an offer from an authorized insurer to cover the risk at its
2251approved rates, the risk is no longer eligible for renewal
2252through the corporation, except as otherwise provided in this
2253subsection.
2254     11.12.  Corporation policies and applications must include
2255a notice that the corporation policy could, under this section,
2256be replaced with a policy issued by an authorized insurer that
2257does not provide coverage identical to the coverage provided by
2258the corporation. The notice shall also specify that acceptance
2259of corporation coverage creates a conclusive presumption that
2260the applicant or policyholder is aware of this potential.
2261     12.13.  May establish, subject to approval by the office,
2262different eligibility requirements and operational procedures
2263for any line or type of coverage for any specified county or
2264area if the board determines that such changes to the
2265eligibility requirements and operational procedures are
2266justified due to the voluntary market being sufficiently stable
2267and competitive in such area or for such line or type of
2268coverage and that consumers who, in good faith, are unable to
2269obtain insurance through the voluntary market through ordinary
2270methods would continue to have access to coverage from the
2271corporation. When coverage is sought in connection with a real
2272property transfer, such requirements and procedures shall not
2273provide for an effective date of coverage later than the date of
2274the closing of the transfer as established by the transferor,
2275the transferee, and, if applicable, the lender.
2276     13.14.  Must provide that, with respect to the high-risk
2277account, any assessable insurer with a surplus as to
2278policyholders of $25 million or less writing 25 percent or more
2279of its total countrywide property insurance premiums in this
2280state may petition the office, within the first 90 days of each
2281calendar year, to qualify as a limited apportionment company. A
2282regular assessment levied by the corporation on a limited
2283apportionment company for a deficit incurred by the corporation
2284for the high-risk account in 2006 or thereafter may be paid to
2285the corporation on a monthly basis as the assessments are
2286collected by the limited apportionment company from its insureds
2287pursuant to s. 627.3512, but the regular assessment must be paid
2288in full within 12 months after being levied by the corporation.
2289A limited apportionment company shall collect from its
2290policyholders any emergency assessment imposed under sub-
2291subparagraph (b)3.d. The plan shall provide that, if the office
2292determines that any regular assessment will result in an
2293impairment of the surplus of a limited apportionment company,
2294the office may direct that all or part of such assessment be
2295deferred as provided in subparagraph (p)4. However, there shall
2296be no limitation or deferment of an emergency assessment to be
2297collected from policyholders under sub-subparagraph (b)3.d.
2298     14.15.  Must provide that the corporation appoint as its
2299licensed agents only those agents who also hold an appointment
2300as defined in s. 626.015(3) with an insurer who at the time of
2301the agent's initial appointment by the corporation is authorized
2302to write and is actually writing personal lines residential
2303property coverage, commercial residential property coverage, or
2304commercial nonresidential property coverage within the state.
2305     15.16.  Must provide, by July 1, 2007, a premium payment
2306plan option to its policyholders which allows at a minimum for
2307quarterly and semiannual payment of premiums. A monthly payment
2308plan may, but is not required to, be offered.
2309     16.17.  Must limit coverage on mobile homes or manufactured
2310homes built prior to 1994 to actual cash value of the dwelling
2311rather than replacement costs of the dwelling.
2312     17.18.  May provide such limits of coverage as the board
2313determines, consistent with the requirements of this subsection.
2314     18.19.  May require commercial property to meet specified
2315hurricane mitigation construction features as a condition of
2316eligibility for coverage.
2317     (m)1.  Rates for coverage provided by the corporation shall
2318be actuarially sound and subject to the requirements of s.
2319627.062, except as otherwise provided in this paragraph. The
2320corporation shall file its recommended rates with the office at
2321least annually. The corporation shall provide any additional
2322information regarding the rates which the office requires. The
2323office shall consider the recommendations of the board and issue
2324a final order establishing the rates for the corporation within
232545 days after the recommended rates are filed. The corporation
2326may not pursue an administrative challenge or judicial review of
2327the final order of the office.
2328     2.  In addition to the rates otherwise determined pursuant
2329to this paragraph, the corporation shall impose and collect an
2330amount equal to the premium tax provided for in s. 624.509 to
2331augment the financial resources of the corporation.
2332     3.  After the public hurricane loss-projection model under
2333s. 627.06281 has been found to be accurate and reliable by the
2334Florida Commission on Hurricane Loss Projection Methodology,
2335that model shall serve as the minimum benchmark for determining
2336the windstorm portion of the corporation's rates. This
2337subparagraph does not require or allow the corporation to adopt
2338rates lower than the rates otherwise required or allowed by this
2339paragraph.
2340     4.  The rate filings for the corporation which were
2341approved by the office and which took effect January 1, 2007,
2342are rescinded, except for those rates that were lowered. As soon
2343as possible, the corporation shall begin using the lower rates
2344that were in effect on December 31, 2006, and shall provide
2345refunds to policyholders who have paid higher rates as a result
2346of that rate filing. The rates in effect on December 31, 2006,
2347shall remain in effect for the 2007 and 2008 calendar years
2348except for any rate change that results in a lower rate. The
2349next rate change that may increase rates shall take effect
2350January 1, 2009, pursuant to a new rate filing recommended by
2351the corporation and established by the office, subject to the
2352requirements of this paragraph.
2353     5.  Beginning on July 15, 2009, and each year thereafter,
2354the corporation must make a recommended actuarially sound rate
2355filing for each personal and commercial line of business it
2356writes, to be effective no earlier than January 1, 2010.
2357     (p)1.  The corporation shall certify to the office its
2358needs for annual assessments as to a particular calendar year,
2359and for any interim assessments that it deems to be necessary to
2360sustain operations as to a particular year pending the receipt
2361of annual assessments. Upon verification, the office shall
2362approve such certification, and the corporation shall levy such
2363annual or interim assessments. Such assessments shall be
2364prorated as provided in paragraph (b). The corporation shall
2365take all reasonable and prudent steps necessary to collect the
2366amount of assessment due from each assessable insurer,
2367including, if prudent, filing suit to collect such assessment.
2368If the corporation is unable to collect an assessment from any
2369assessable insurer, the uncollected assessments shall be levied
2370as an additional assessment against the assessable insurers and
2371any assessable insurer required to pay an additional assessment
2372as a result of such failure to pay shall have a cause of action
2373against such nonpaying assessable insurer. Assessments shall be
2374included as an appropriate factor in the making of rates. The
2375failure of a surplus lines agent to collect and remit any
2376regular or emergency assessment levied by the corporation is
2377considered to be a violation of s. 626.936 and subjects the
2378surplus lines agent to the penalties provided in that section.
2379     2.  The governing body of any unit of local government, any
2380residents of which are insured by the corporation, may issue
2381bonds as defined in s. 125.013 or s. 166.101 from time to time
2382to fund an assistance program, in conjunction with the
2383corporation, for the purpose of defraying deficits of the
2384corporation. In order to avoid needless and indiscriminate
2385proliferation, duplication, and fragmentation of such assistance
2386programs, any unit of local government, any residents of which
2387are insured by the corporation, may provide for the payment of
2388losses, regardless of whether or not the losses occurred within
2389or outside of the territorial jurisdiction of the local
2390government. Revenue bonds under this subparagraph may not be
2391issued until validated pursuant to chapter 75, unless a state of
2392emergency is declared by executive order or proclamation of the
2393Governor pursuant to s. 252.36 making such findings as are
2394necessary to determine that it is in the best interests of, and
2395necessary for, the protection of the public health, safety, and
2396general welfare of residents of this state and declaring it an
2397essential public purpose to permit certain municipalities or
2398counties to issue such bonds as will permit relief to claimants
2399and policyholders of the corporation. Any such unit of local
2400government may enter into such contracts with the corporation
2401and with any other entity created pursuant to this subsection as
2402are necessary to carry out this paragraph. Any bonds issued
2403under this subparagraph shall be payable from and secured by
2404moneys received by the corporation from emergency assessments
2405under sub-subparagraph (b)3.d., and assigned and pledged to or
2406on behalf of the unit of local government for the benefit of the
2407holders of such bonds. The funds, credit, property, and taxing
2408power of the state or of the unit of local government shall not
2409be pledged for the payment of such bonds. If any of the bonds
2410remain unsold 60 days after issuance, the office shall require
2411all insurers subject to assessment to purchase the bonds, which
2412shall be treated as admitted assets; each insurer shall be
2413required to purchase that percentage of the unsold portion of
2414the bond issue that equals the insurer's relative share of
2415assessment liability under this subsection. An insurer shall not
2416be required to purchase the bonds to the extent that the office
2417determines that the purchase would endanger or impair the
2418solvency of the insurer.
2419     3.a.  The corporation shall adopt one or more programs
2420subject to approval by the office for the reduction of both new
2421and renewal writings in the corporation. Beginning January 1,
24222008, any program the corporation adopts for the payment of
2423bonuses to an insurer for each risk the insurer removes from the
2424corporation shall comply with s. 627.3511(2) and may not exceed
2425the amount referenced in s. 627.3511(2) for each risk removed.
2426The corporation may consider any prudent and not unfairly
2427discriminatory approach to reducing corporation writings, and
2428may adopt a credit against assessment liability or other
2429liability that provides an incentive for insurers to take risks
2430out of the corporation and to keep risks out of the corporation
2431by maintaining or increasing voluntary writings in counties or
2432areas in which corporation risks are highly concentrated and a
2433program to provide a formula under which an insurer voluntarily
2434taking risks out of the corporation by maintaining or increasing
2435voluntary writings will be relieved wholly or partially from
2436assessments under sub-subparagraphs (b)3.a. and b. However, any
2437"take-out bonus" or payment to an insurer must be conditioned on
2438the property being insured for at least 5 years by the insurer,
2439unless canceled or nonrenewed by the policyholder. If the policy
2440is canceled or nonrenewed by the policyholder before the end of
2441the 5-year period, the amount of the take-out bonus must be
2442prorated for the time period the policy was insured. When the
2443corporation enters into a contractual agreement for a take-out
2444plan, the producing agent of record of the corporation policy is
2445entitled to retain any unearned commission on such policy, and
2446the insurer shall either:
2447     (I)  Pay to the producing agent of record of the policy,
2448for the first year, an amount which is the greater of the
2449insurer's usual and customary commission for the type of policy
2450written or a policy fee equal to the usual and customary
2451commission of the corporation; or
2452     (II)  Offer to allow the producing agent of record of the
2453policy to continue servicing the policy for a period of not less
2454than 1 year and offer to pay the agent the insurer's usual and
2455customary commission for the type of policy written. If the
2456producing agent is unwilling or unable to accept appointment by
2457the new insurer, the new insurer shall pay the agent in
2458accordance with sub-sub-subparagraph (I).
2459     b.  Any credit or exemption from regular assessments
2460adopted under this subparagraph shall last no longer than the 3
2461years following the cancellation or expiration of the policy by
2462the corporation. With the approval of the office, the board may
2463extend such credits for an additional year if the insurer
2464guarantees an additional year of renewability for all policies
2465removed from the corporation, or for 2 additional years if the
2466insurer guarantees 2 additional years of renewability for all
2467policies so removed.
2468     c.  There shall be no credit, limitation, exemption, or
2469deferment from emergency assessments to be collected from
2470policyholders pursuant to sub-subparagraph (b)3.d.
2471     4.  The plan shall provide for the deferment, in whole or
2472in part, of the assessment of an assessable insurer, other than
2473an emergency assessment collected from policyholders pursuant to
2474sub-subparagraph (b)3.d., if the office finds that payment of
2475the assessment would endanger or impair the solvency of the
2476insurer. In the event an assessment against an assessable
2477insurer is deferred in whole or in part, the amount by which
2478such assessment is deferred may be assessed against the other
2479assessable insurers in a manner consistent with the basis for
2480assessments set forth in paragraph (b).
2481     5.  Effective July 1, 2007, in order to evaluate the costs
2482and benefits of approved take-out plans, if the corporation pays
2483a bonus or other payment to an insurer for an approved take-out
2484plan, it shall maintain a record of the address or such other
2485identifying information on the property or risk removed in order
2486to track if and when the property or risk is later insured by
2487the corporation.
2488     6.  Any policy taken out, assumed, or removed from the
2489corporation is, as of the effective date of the take-out,
2490assumption, or removal, direct insurance issued by the insurer
2491and not by the corporation, even if the corporation continues to
2492service the policies. This subparagraph applies to policies of
2493the corporation and not policies taken out, assumed, or removed
2494from any other entity.
2495     (w)1.  The following records of the corporation are
2496confidential and exempt from the provisions of s. 119.07(1) and
2497s. 24(a), Art. I of the State Constitution:
2498     a.  Underwriting files, except that a policyholder or an
2499applicant shall have access to his or her own underwriting
2500files. Confidential and exempt underwriting file records may
2501also be released to other governmental agencies upon written
2502request and demonstration of need; such records held by the
2503receiving agency remain confidential and exempt as provided
2504herein.
2505     b.  Claims files, until termination of all litigation and
2506settlement of all claims arising out of the same incident,
2507although portions of the claims files may remain exempt, as
2508otherwise provided by law. Confidential and exempt claims file
2509records may be released to other governmental agencies upon
2510written request and demonstration of need; such records held by
2511the receiving agency remain confidential and exempt as provided
2512for herein.
2513     c.  Records obtained or generated by an internal auditor
2514pursuant to a routine audit, until the audit is completed, or if
2515the audit is conducted as part of an investigation, until the
2516investigation is closed or ceases to be active. An investigation
2517is considered "active" while the investigation is being
2518conducted with a reasonable, good faith belief that it could
2519lead to the filing of administrative, civil, or criminal
2520proceedings.
2521     d.  Matters reasonably encompassed in privileged attorney-
2522client communications.
2523     e.  Proprietary information licensed to the corporation
2524under contract and the contract provides for the confidentiality
2525of such proprietary information.
2526     f.  All information relating to the medical condition or
2527medical status of a corporation employee which is not relevant
2528to the employee's capacity to perform his or her duties, except
2529as otherwise provided in this paragraph. Information that which
2530is exempt shall include, but is not limited to, information
2531relating to workers' compensation, insurance benefits, and
2532retirement or disability benefits.
2533     g.  Upon an employee's entrance into the employee
2534assistance program, a program to assist any employee who has a
2535behavioral or medical disorder, substance abuse problem, or
2536emotional difficulty which affects the employee's job
2537performance, all records relative to that participation shall be
2538confidential and exempt from the provisions of s. 119.07(1) and
2539s. 24(a), Art. I of the State Constitution, except as otherwise
2540provided in s. 112.0455(11).
2541     h.  Information relating to negotiations for financing,
2542reinsurance, depopulation, or contractual services, until the
2543conclusion of the negotiations.
2544     i.  Minutes of closed meetings regarding underwriting
2545files, and minutes of closed meetings regarding an open claims
2546file until termination of all litigation and settlement of all
2547claims with regard to that claim, except that information
2548otherwise confidential or exempt by law shall will be redacted.
2549     2.  If When an authorized insurer is considering
2550underwriting a risk insured by the corporation, relevant
2551underwriting files and confidential claims files may be released
2552to the insurer provided the insurer agrees in writing, notarized
2553and under oath, to maintain the confidentiality of such files.
2554If When a file is transferred to an insurer that file is no
2555longer a public record because it is not held by an agency
2556subject to the provisions of the public records law.
2557Underwriting files and confidential claims files may also be
2558released to staff of and the board of governors of the market
2559assistance plan established pursuant to s. 627.3515, who must
2560retain the confidentiality of such files, except such files may
2561be released to authorized insurers that are considering assuming
2562the risks to which the files apply, provided the insurer agrees
2563in writing, notarized and under oath, to maintain the
2564confidentiality of such files. Finally, the corporation or the
2565board or staff of the market assistance plan may make the
2566following information obtained from underwriting files and
2567confidential claims files available to licensed general lines
2568insurance agents: name, address, and telephone number of the
2569residential property owner or insured; location of the risk;
2570rating information; loss history; and policy type. The receiving
2571licensed general lines insurance agent must retain the
2572confidentiality of the information received.
2573     3.  A policyholder who has filed suit against the
2574corporation has the right to discover the contents of his or her
2575own claims file to the same extent that discovery of such
2576contents would be available from a private insurer in litigation
2577as provided by the Florida Rules of Civil Procedure, the Florida
2578Evidence Code, and other applicable law. Pursuant to subpoena, a
2579third party has the right to discover the contents of an
2580insured's or applicant's underwriting or claims file to the same
2581extent that discovery of such contents would be available from a
2582private insurer by subpoena as provided by the Florida Rules of
2583Civil Procedure, the Florida Evidence Code, and other applicable
2584law, and subject to any confidentiality protections requested by
2585the corporation and agreed to by the seeking party or ordered by
2586the court. The corporation may release confidential underwriting
2587and claims file contents and information as it deems necessary
2588and appropriate to underwrite or service insurance policies and
2589claims, subject to any confidentiality protections deemed
2590necessary and appropriate by the corporation.
2591     4.2.  Portions of meetings of the corporation are exempt
2592from the provisions of s. 286.011 and s. 24(b), Art. I of the
2593State Constitution wherein confidential underwriting files or
2594confidential open claims files are discussed. All portions of
2595corporation meetings which are closed to the public shall be
2596recorded by a court reporter. The court reporter shall record
2597the times of commencement and termination of the meeting, all
2598discussion and proceedings, the names of all persons present at
2599any time, and the names of all persons speaking. No portion of
2600any closed meeting shall be off the record. Subject to the
2601provisions hereof and s. 119.07(1)(e)-(g), the court reporter's
2602notes of any closed meeting shall be retained by the corporation
2603for a minimum of 5 years. A copy of the transcript, less any
2604exempt matters, of any closed meeting wherein claims are
2605discussed shall become public as to individual claims after
2606settlement of the claim.
2607     (dd)1.  For policies subject to nonrenewal as a result of
2608the risk being no longer eligible for coverage due to being
2609valued at $1 million or more, the corporation shall, directly or
2610through the market assistance plan, make information from
2611confidential underwriting and claims files of policyholders
2612available only to licensed general lines agents who register
2613with the corporation to receive such information according to
2614the following procedures:
2615     2.  By August 1, 2006, the corporation shall provide such
2616policyholders who are not eligible for renewal the opportunity
2617to request in writing, within 30 days after the notification is
2618sent, that information from their confidential underwriting and
2619claims files not be released to licensed general lines agents
2620registered pursuant to this paragraph.
2621     3.  By August 1, 2006, the corporation shall make available
2622to licensed general lines agents the registration procedures to
2623be used to obtain confidential information from underwriting and
2624claims files for such policies not eligible for renewal. As a
2625condition of registration, the corporation shall require the
2626licensed general lines agent to attest that the agent has the
2627experience and relationships with authorized or surplus lines
2628carriers to attempt to offer replacement coverage for such
2629policies.
2630     4.  By September 1, 2006, the corporation shall make
2631available through a secured website to licensed general lines
2632agents registered pursuant to this paragraph application,
2633rating, loss history, mitigation, and policy type information
2634relating to such policies not eligible for renewal and for which
2635the policyholder has not requested the corporation withhold such
2636information. The registered licensed general lines agent may use
2637such information to contact and assist the policyholder in
2638securing replacement policies, and the agent may disclose to the
2639policyholder that such information was obtained from the
2640corporation.
2641     (dd)(ee)  The assets of the corporation may be invested and
2642managed by the State Board of Administration.
2643     (ee)(ff)  The office may establish a pilot program to offer
2644optional sinkhole coverage in one or more counties or other
2645territories of the corporation for the purpose of implementing
2646s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
2647Florida. Under the pilot program, the corporation is not
2648required to issue a notice of nonrenewal to exclude sinkhole
2649coverage upon the renewal of existing policies, but may exclude
2650such coverage using a notice of coverage change.
2651     Section 13.  Paragraph (b) of subsection (2) of section
2652627.4133, Florida Statutes, is amended to read:
2653     627.4133  Notice of cancellation, nonrenewal, or renewal
2654premium.--
2655     (2)  With respect to any personal lines or commercial
2656residential property insurance policy, including, but not
2657limited to, any homeowner's, mobile home owner's, farmowner's,
2658condominium association, condominium unit owner's, apartment
2659building, or other policy covering a residential structure or
2660its contents:
2661     (b)  The insurer shall give the named insured written
2662notice of nonrenewal, cancellation, or termination at least 100
2663days prior to the effective date of the nonrenewal,
2664cancellation, or termination. However, the insurer shall give at
2665least 100 days' written notice, or written notice by June 1,
2666whichever is earlier, for any nonrenewal, cancellation, or
2667termination that would be effective between June 1 and November
266830. The notice must include the reason or reasons for the
2669nonrenewal, cancellation, or termination, except that:
2670     1.  The insurer shall give the named insured written notice
2671of nonrenewal, cancellation, or termination at least 180 days
2672prior to the effective date of the nonrenewal, cancellation, or
2673termination for a named insured whose residential structure has
2674been insured by that insurer or an affiliated insurer for at
2675least a 5-year period immediately prior to date of the written
2676notice.
2677     2.1.  When cancellation is for nonpayment of premium, at
2678least 10 days' written notice of cancellation accompanied by the
2679reason therefor shall be given. As used in this subparagraph,
2680the term "nonpayment of premium" means failure of the named
2681insured to discharge when due any of her or his obligations in
2682connection with the payment of premiums on a policy or any
2683installment of such premium, whether the premium is payable
2684directly to the insurer or its agent or indirectly under any
2685premium finance plan or extension of credit, or failure to
2686maintain membership in an organization if such membership is a
2687condition precedent to insurance coverage. "Nonpayment of
2688premium" also means the failure of a financial institution to
2689honor an insurance applicant's check after delivery to a
2690licensed agent for payment of a premium, even if the agent has
2691previously delivered or transferred the premium to the insurer.
2692If a dishonored check represents the initial premium payment,
2693the contract and all contractual obligations shall be void ab
2694initio unless the nonpayment is cured within the earlier of 5
2695days after actual notice by certified mail is received by the
2696applicant or 15 days after notice is sent to the applicant by
2697certified mail or registered mail, and if the contract is void,
2698any premium received by the insurer from a third party shall be
2699refunded to that party in full.
2700     3.2.  When such cancellation or termination occurs during
2701the first 90 days during which the insurance is in force and the
2702insurance is canceled or terminated for reasons other than
2703nonpayment of premium, at least 20 days' written notice of
2704cancellation or termination accompanied by the reason therefor
2705shall be given except where there has been a material
2706misstatement or misrepresentation or failure to comply with the
2707underwriting requirements established by the insurer.
2708     4.3.  The requirement for providing written notice of
2709nonrenewal by June 1 of any nonrenewal that would be effective
2710between June 1 and November 30 does not apply to the following
2711situations, but the insurer remains subject to the requirement
2712to provide such notice at least 100 days prior to the effective
2713date of nonrenewal:
2714     a.  A policy that is nonrenewed due to a revision in the
2715coverage for sinkhole losses and catastrophic ground cover
2716collapse pursuant to s. 627.730, as amended by s. 30, chapter
27172007-1, Laws of Florida.
2718     b.  A policy that is nonrenewed by Citizens Property
2719Insurance Corporation, pursuant to s. 627.351(6), for a policy
2720that has been assumed by an authorized insurer offering
2721replacement or renewal coverage to the policyholder.
2722
2723After the policy has been in effect for 90 days, the policy
2724shall not be canceled by the insurer except when there has been
2725a material misstatement, a nonpayment of premium, a failure to
2726comply with underwriting requirements established by the insurer
2727within 90 days of the date of effectuation of coverage, or a
2728substantial change in the risk covered by the policy or when the
2729cancellation is for all insureds under such policies for a given
2730class of insureds. This paragraph does not apply to individually
2731rated risks having a policy term of less than 90 days.
2732     Section 14.  Effective January 1, 2011, section 689.262,
2733Florida Statutes, is created to read:
2734     689.262  Sale of residential property; disclosure of
2735windstorm mitigation rating.--A purchaser of residential
2736property that is located in the wind-borne debris region, as
2737defined in s. 1609.2 of the International Building Code(2006),  
2738must be informed of the windstorm mitigation rating of the
2739structure, based on the uniform home grading scale adopted
2740pursuant to s. 215.55865. The rating must be included in the
2741contract for sale or as a separate document attached to the
2742contract for sale. The Financial Services Commission may adopt
2743rules, consistent with other state laws, to administer this
2744section, including the form of the disclosure and the
2745requirements for the windstorm mitigation inspection or report
2746that is required for purposes of determining the rating.
2747     Section 15.  (1)  By December 15, 2008, Citizens Property
2748Insurance Corporation shall transfer $250 million to the General
2749Revenue Fund, from the personal lines account and the commercial
2750lines account only, if the combined surplus of the personal
2751lines account and commercial lines account as defined in s.
2752627.351(6), Florida Statutes, exceeds $1 billion. The board of
2753governors of Citizens Property Insurance Corporation must make a
2754reasonable estimate of such surplus on or after December 1,
27552008, and no later than December 14, 2008, using generally
2756accepted actuarial and accounting practices, recognizing that
2757audited financial statements will not yet be available.
2758     (2)  Beginning July 1, 2009, the board shall make quarterly
2759transfers of any interest earned prior to the issuance of any
2760surplus notes, interest paid, and principal repaid to the state
2761for any surplus notes issued by the program after December 1,
27622008, to Citizens Property Insurance Corporation, provided such
2763surplus notes were funded exclusively by an appropriation to the
2764program by the Legislature for the 2008-2009 fiscal year. The
2765corporation shall credit each account as defined in s.
2766627.351(6) in a pro rata manner for the funds removed from each
2767account to make the transfer required by subsection (1).
2768     (3)  On July 1, 2009, the State Board of Administration
2769shall transfer to Citizens Property Insurance Corporation any  
2770funds that have not been committed or reserved for insurers
2771approved to receive such funds under the program from the funds
2772that were appropriated from the corporation in 2008-2009 for
2773such purposes.
2774     Section 16.  Citizens Property Insurance Corporation may
2775not use any amendments made to s. 215.5595, Florida Statutes, by
2776this act or any transfer of funds authorized by this act as
2777justification or cause in seeking any rate or assessment
2778increase.
2779     Section 17.  Subsection (3) is added to section 627.06281,
2780Florida Statutes, to read:
2781     627.06281  Public hurricane loss projection model;
2782reporting of data by insurers.--
2783     (3)(a)  A residential property insurer may have access to
2784and use the public hurricane loss projection model, including
2785all assumptions and factors and all detailed loss results, for
2786the purpose of calculating rate indications in a rate filing and
2787for analytical purposes, including any analysis or evaluation of
2788the model required under actuarial standards of practice.
2789     (b)  By January 1, 2009, the office shall establish by rule
2790a fee schedule for access to and the use of the model. The fee
2791schedule must be reasonably calculated to cover only the actual
2792costs of providing access to and the use of the model.
2793     Section 18.  Section 627.0655, Florida Statutes, is amended
2794to read:
2795     627.0655  Policyholder loss or expense-related premium
2796discounts.--An insurer or person authorized to engage in the
2797business of insurance in this state may include, in the premium
2798charged an insured for any policy, contract, or certificate of
2799insurance, a discount based on the fact that another policy,
2800contract, or certificate of any type has been purchased by the
2801insured from the same insurer or insurer group, the Citizens
2802Property Insurance Corporation created under s. 627.351(6) if
2803the same insurance agent is servicing both policies, or an
2804insurer that has removed the policy from the Citizens Property
2805Insurance Corporation if the same insurance agent is servicing
2806both policies.
2807     Section 19.  (1)  The Citizens Property Insurance
2808Corporation Mission Review Task Force is created to analyze and
2809compile available data and to develop a report setting forth the
2810statutory and operational changes needed to return Citizens
2811Property Insurance Corporation to its former role as a state-
2812created, noncompetitive residual market mechanism that provides
2813property insurance coverage to risks that are otherwise entitled
2814but unable to obtain such coverage in the private insurance
2815market. The task force shall submit a report to the Governor,
2816the President of the Senate, and the Speaker of the House of
2817Representatives by January 31, 2009. At a minimum, the task
2818force shall analyze and evaluate relevant and applicable
2819information and data and develop recommendations concerning:
2820     (a)  The nature of Citizens Property Insurance
2821Corporation's role in providing property insurance coverage only
2822if such coverage is not available from private insurers.
2823     (b)  The ability of the admitted market to offer policies
2824to those consumers formerly insured through Citizens Property
2825Insurance Corporation. This consideration shall include, but not
2826be limited to, the availability of private market reinsurance
2827and coverage through the Florida Hurricane Catastrophe Fund and
2828the capacity of the industry to offer policies to former
2829Citizens Property Insurance Corporation policyholders within
2830existing writing ratio limitations.
2831     (c)  The relationship of rates charged by Citizens Property
2832Insurance Corporation to rates charged by private insurers, with
2833due consideration for the corporation's role as a noncompetitive
2834residual market mechanism.
2835     (d)  The relationships between the exposure of Citizens
2836Property Insurance Corporation to catastrophic hurricane losses,
2837the corporation's history of purchasing any reinsurance
2838coverage, and the corporation's capital capacity to meet its
2839potential claim obligations without incurring large deficits.
2840     (e)  The projected assessments on all policies required to
2841offset the lack of capitol to pay claims.
2842     (f)  The projections under paragraph (e) shall be specific
2843to losses of $3 billion, $12 billion, and $23 billion caused by
2844a storm or a group of storms in any given year.
2845     (g)  The operational implications of the variation in the
2846number of policies in force over time in Citizens Property
2847Insurance Corporation and the merits of outsourcing some or all
2848of its operational responsibilities.
2849     (h)  Changes in the mission and operations of Citizens
2850Property Insurance Corporation to reduce or eliminate any
2851adverse effect such mission and operations may be having on the
2852promotion of sound and economic growth and development of the
2853coastal areas of this state.
2854     (i)  Appropriate and consistent geographic boundaries of
2855the high-risk account.
2856     (j)  The rankings, by county, of the average approved rates
2857in Citizens Property Insurance Corporation and any savings
2858associated with policyholder choice in selecting Citizens.
2859     (2)  The task force shall be composed of 11 members as
2860follows:
2861     (a)  Two members appointed by the Speaker of the House of
2862Representatives.
2863     1.  One member representing a property and casualty
2864residential insurer that provides at least 150,000 homeowner's
2865insurance policies in this state at the time of the creation of
2866the task force.
2867     2.  One member representing a surplus lines insurance
2868company.
2869     (b)  Two members appointed by the President of the
2870Senate.
2871     1.  One member representing a property and casualty
2872commercial non-residential insurer.
2873     2.  One member representing a property and casualty
2874residential insurer with fewer than 150,000 homeowner's policies
2875in this state at the time of the creation of the task force.
2876     (c)  Three members appointed by the Governor who are not
2877employed by or professionally affiliated with an insurance
2878company or a subsidiary of an insurance company, at least one of
2879whom must be consumer advocates or members of a consumer
2880advocacy organization or agency.
2881     (d)  Two members appointed by the Chief Financial Officer
2882representing insurance agents in this state.
2883     (e)  One member representing Citizens Property Insurance
2884Corporation selected by Citizens Chairman of the Board.
2885     (f)  The Commissioner of Insurance Regulation or his or her
2886designee.
2887     (3)  The task force shall conduct research, hold public
2888meetings, receive testimony, employ consultants and
2889administrative staff, and undertake other activities determined
2890by its members to be necessary to complete its responsibilities.
2891Citizens Property Insurance Corporation shall have appropriate
2892senior staff attend task force meetings, shall respond to
2893requests for testimony and data by the task force, shall
2894otherwise cooperate with the task force, and shall provide
2895funding for the necessary costs of implementing the provisions
2896of this section.
2897     (4)  A member of the task force may not delegate his or her
2898attendance or voting power to a designee.
2899     (5)  Members of the task force shall serve without
2900compensation but are entitled to receive reimbursement for
2901travel and per diem as provided in s. 112.061, Florida Statutes.
2902     (6)  The appointments to the task force must be completed
2903within 30 calendar days after the effective date of this act,
2904and the task force must hold its initial meeting within 1 month
2905after appointment of all members. The task force shall expire no
2906later than 60 calendar days after submission of the report
2907required in subsection (1).
2908     Section 20.  The Chief Financial Officer shall provide a
2909report on the economic impact on the state of a 1-in-100-year
2910hurricane to the Governor, the President of the Senate, and the
2911Speaker of the House of Representatives by March 1 of each year.
2912The report shall include an estimate of the short-term and long-
2913term fiscal impacts of such a storm on Citizens Property
2914Insurance Corporation, the Florida Hurricane Catastrophe Fund,
2915the private insurance and reinsurance markets, the state
2916economy, and the state debt. The report shall also include an
2917analysis of the average premium increase to fund a 1-in-100-year
2918hurricane event and list the average cost, in both a percentage
2919and dollar amount, impact to consumers on a county-level basis.
2920The report may also include recommendations by the Chief
2921Financial Officer for preparing for such a hurricane and
2922reducing the economic impact of such a hurricane on the state.
2923In preparing the analysis, the Chief Financial Officer shall
2924coordinate with and obtain data from the Office of Insurance
2925Regulation, Citizens Property Insurance Corporation, the Florida
2926Hurricane Catastrophe Fund, the Florida Commission on Hurricane
2927Loss Projection Methodology, the State Board of Administration,
2928the Office of Economic and Demographic Research, and other state
2929agencies.
2930     Section 21.  Section 627.0621, Florida Statutes, is created
2931to read:
2932     627.0621  Transparency in rate regulation.--
2933     (1)  DEFINITIONS.--As used in this section, the term:
2934     (a)  "Rate filing" means any original or amended rate
2935residential property insurance filing.
2936     (b)  "Recommendation" means any proposed, preliminary, or
2937final recommendation from an office actuary reviewing a rate
2938filing with respect to the issue of approval or disapproval of
2939the rate filing or with respect to rate indications that the
2940office would consider acceptable.
2941     (2)  WEBSITE FOR PUBLIC ACCESS TO RATE FILING
2942INFORMATION.--With respect to any rate filing made on after July
29431, 2008, the office shall provide the following information on a
2944publicly accessible Internet website:
2945     (a)  The overall rate change requested by the insurer.
2946     (b)  All assumptions made by the office's actuaries.
2947     (c)  A statement describing any assumptions or methods that
2948deviate from the actuarial standards of practice of the Casualty
2949Actuarial Society or the American Academy of Actuaries,
2950including an explanation of the nature, rationale, and effect of
2951the deviation.
2952     (d)  All recommendations made by any office actuary who
2953reviewed the rate filing.
2954     (e)  Certification by the office's actuary that, based on
2955the actuary's knowledge, his or her recommendations are
2956consistent with accepted actuarial principles.
2957     (f)  The overall rate change approved by the office.
2958     (3)  ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.--It is the
2959intent of the Legislature that the principles of the public
2960records and open meetings laws apply to the assertion of
2961attorney-client privilege and work product confidentiality by
2962the office in connection with a challenge to its actions on a
2963rate filing. Therefore, in any administrative or judicial
2964proceeding relating to a rate filing, attorney-client privilege
2965and work product exemptions from disclosure do not apply to
2966communications with office attorneys or records prepared by or
2967at the direction of an office attorney, except when the
2968conditions of paragraphs (a) and (b) have been met:
2969     (a)  The communication or record reflects a mental
2970impression, conclusion, litigation strategy, or legal theory of
2971the attorney or office that was prepared exclusively for civil
2972or criminal litigation or adversarial administrative
2973proceedings.
2974     (b)  The communication occurred or the record was prepared
2975after the initiation of an action in a court of competent
2976jurisdiction, after the issuance of a notice of intent to deny a
2977rate filing, or after the filing of a request for a proceeding
2978under ss. 120.569 and 120.57.
2979     Section 22.  Paragraph (b) of subsection (4) of section
2980215.555, Florida Statutes, is amended to read:
2981     215.555  Florida Hurricane Catastrophe Fund.--
2982     (4)  REIMBURSEMENT CONTRACTS.--
2983     (b)1.  The contract shall contain a promise by the board to
2984reimburse the insurer for 45 percent, 75 percent, or 90 percent
2985of its losses from each covered event in excess of the insurer's
2986retention, plus 5 percent of the reimbursed losses to cover loss
2987adjustment expenses.
2988     2.  The insurer must elect one of the percentage coverage
2989levels specified in this paragraph and may, upon renewal of a
2990reimbursement contract, elect a lower percentage coverage level
2991if no revenue bonds issued under subsection (6) after a covered
2992event are outstanding, or elect a higher percentage coverage
2993level, regardless of whether or not revenue bonds are
2994outstanding. All members of an insurer group must elect the same
2995percentage coverage level. Any joint underwriting association,
2996risk apportionment plan, or other entity created under s.
2997627.351 must elect the 90-percent coverage level.
2998     3.  The contract shall provide that reimbursement amounts
2999shall not be reduced by reinsurance paid or payable to the
3000insurer from other sources.
3001     4.  Notwithstanding any other provision contained in this
3002section, the board shall make available to insurers that
3003purchased coverage provided by this subparagraph in 2007 2006,
3004insurers qualifying as limited apportionment companies under s.
3005627.351(6)(c), and insurers that have been were approved to
3006participate in 2006 or that are approved in 2007 for the
3007Insurance Capital Build-Up Incentive Program pursuant to s.
3008215.5595, a contract or contract addendum that provides an
3009additional amount of reimbursement coverage of up to $10
3010million. The premium to be charged for this additional
3011reimbursement coverage shall be 50 percent of the additional
3012reimbursement coverage provided, which shall include one prepaid
3013reinstatement. The minimum retention level that an eligible
3014participating insurer must retain associated with this
3015additional coverage layer is 30 percent of the insurer's surplus
3016as of December 31, 2007 2006. This coverage shall be in addition
3017to all other coverage that may be provided under this section.
3018The coverage provided by the fund under this subparagraph shall
3019be in addition to the claims-paying capacity as defined in
3020subparagraph (c)1., but only with respect to those insurers that
3021select the additional coverage option and meet the requirements
3022of this subparagraph. The claims-paying capacity with respect to
3023all other participating insurers and limited apportionment
3024companies that do not select the additional coverage option
3025shall be limited to their reimbursement premium's proportionate
3026share of the actual claims-paying capacity otherwise defined in
3027subparagraph (c)1. and as provided for under the terms of the
3028reimbursement contract. Coverage provided in the reimbursement
3029contract shall will not be affected by the additional premiums
3030paid by participating insurers exercising the additional
3031coverage option allowed in this subparagraph. This subparagraph
3032expires on May 31, 2009 2008.
3033     Section 23.  Subsection (1) of section 627.0613, Florida
3034Statutes, is amended to read:
3035     627.0613  Consumer advocate.--The Chief Financial Officer
3036must appoint a consumer advocate who must represent the general
3037public of the state before the department and the office. The
3038consumer advocate must report directly to the Chief Financial
3039Officer, but is not otherwise under the authority of the
3040department or of any employee of the department. The consumer
3041advocate has such powers as are necessary to carry out the
3042duties of the office of consumer advocate, including, but not
3043limited to, the powers to:
3044     (1)  Recommend to the department or office, by petition,
3045the commencement of any proceeding or action; appear in any
3046proceeding or action before the department or office; or appear
3047in any proceeding before the Division of Administrative Hearings
3048or arbitration panel specified in s. 627.062(6) relating to
3049subject matter under the jurisdiction of the department or
3050office.
3051     Section 24.  Subsections (1) and (2) of section 627.712,
3052Florida Statutes, are amended to read:
3053     627.712  Residential windstorm coverage required;
3054availability of exclusions for windstorm or contents.--
3055     (1)  An insurer issuing a residential property insurance
3056policy must provide windstorm coverage. Except as provided in
3057paragraph (2)(c), this section subsection does not apply with
3058respect to risks that are eligible for wind-only coverage from
3059Citizens Property Insurance Corporation under s. 627.351(6).
3060     (2)  A property insurer must make available, at the option
3061of the policyholder, an exclusion of windstorm coverage.
3062     (a)  The coverage may be excluded only if:
3063     (a)1.  When the policyholder is a natural person, the
3064policyholder personally writes and provides to the insurer the
3065following statement in his or her own handwriting and signs his
3066or her name, which must also be signed by every other named
3067insured on the policy, and dated: "I do not want the insurance
3068on my (home/mobile home/condominium unit) to pay for damage from
3069windstorms. I will pay those costs. My insurance will not."
3070     2.  When the policyholder is other than a natural person,
3071the policyholder provides to the insurer on the policyholder's
3072letterhead the following statement that must be signed by the
3073policyholder's authorized representative and dated: "  (Name of
3074entity)   does not want the insurance on its   (type of
3075structure)   to pay for damage from windstorms.   (Name of
3076entity)   will be responsible for these costs.   (Name of
3077entity's)   insurance will not."
3078     (b)  If the structure insured by the policy is subject to a
3079mortgage or lien, the policyholder must provide the insurer with
3080a written statement from the mortgageholder or lienholder
3081indicating that the mortgageholder or lienholder approves the
3082policyholder electing to exclude windstorm coverage or hurricane
3083coverage from his or her or its property insurance policy.
3084     (c)  If the residential structure is eligible for wind-only
3085coverage from Citizens Property Insurance Corporation, an
3086insurer nonrenewing a policy and issuing a replacement policy,
3087or issuing a new policy, that does not provide wind coverage
3088shall provide a notice to the mortgageholder or lienholder
3089indicating the policyholder has elected coverage that does not
3090cover wind.
3091     Section 25.  The provisions of this act shall supersede and
3092control over any conflicting provisions adopted in House Bill
30935057, 2008 Regular Session, to the extent of such conflict, if
3094that bill becomes a law.
3095     Section 26.  Except as otherwise expressly provided in this
3096act, this act shall take effect July 1, 2008.
3097
3098
3099
3100
3101
3102
-----------------------------------------------------
3103
T I T L E  A M E N D M E N T
3104     Remove the entire title and insert:
3105
A bill to be entitled
3106An act relating to insurance; amending s. 215.5595, F.S.;
3107revising legislative findings; providing for an appropriation of
3108state funds in exchange for surplus notes issued by residential
3109property insurers under the program; revising the conditions and
3110requirements for providing funds to insurers under the program;
3111requiring a commitment by the insurer to meet minimum premium-
3112to-surplus writing ratios for residential property insurance and
3113for taking policies out of Citizens Property Insurance
3114Corporation; requiring insurers to commit to maintaining certain
3115levels of surplus and reinsurance; authorizing the State Board
3116of Administration to charge a fee for late payments; providing
3117for payment of costs and fees incurred by the board in
3118administering the program from funds appropriated to the
3119program, subject to a specified limit; requiring the board to
3120submit an annual report to the Legislature on the program and
3121insurer compliance with certain requirements; providing that
3122amendments made by the act do not affect the terms of surplus
3123notes approved prior to a specified date; authorizing the State
3124Board of Administration and an insurer to renegotiate such terms
3125consistent with such amendments; requiring the State Board of
3126Administration to transfer to Citizens Property Insurance
3127Corporation certain uncommitted or unreserved funds; amending s.
3128624.3161, F.S.; authorizing the Office of Insurance Regulation
3129to require an insurer to file its claims handling practices and
3130procedures as a public record based on findings of a market
3131conduct examination; amending s. 624.4211, F.S.; increasing the
3132maximum amounts of administrative fines that may be imposed upon
3133an insurer by the Office of Insurance Regulation for nonwillful
3134and willful violations of an order or rule of the office or any
3135provision of the Florida Insurance Code; creating s. 624.4213,
3136F.S.; specifying requirements for submission of a document or
3137information to the Office of Insurance Regulation or the
3138Department of Financial Services in order for a person to claim
3139that the document is a trade secret; requiring each page or
3140portion to be labeled as a trade secret and be separated from
3141non-trade secret material; requiring the submitting party to
3142include an affidavit certifying certain information about the
3143documents claimed to be trade secrets; requiring the office or
3144department to notify persons who submit trade secret documents
3145of any public-records request and the opportunity to file a
3146court action to bar disclosure; specifying conditions for the
3147office to retain or release such documents; creating s.
3148624.4305, F.S.; requiring that an insurer planning to nonrenew
3149more than a specified number of residential property insurance
3150policies notify the Office of Insurance Regulation and obtain
3151approval for such nonrenewals; specifying procedures for
3152issuance of such notice; amending s. 626.9521, F.S.; increasing
3153the maximum fines that may be imposed by the office or
3154department for nonwillful and willful violations of state law
3155regarding unfair methods of competition and unfair or deceptive
3156acts or practices related to insurance; amending s. 626.9541,
3157F.S.; specifying an additional unfair claims settlement
3158practice; amending s. 627.0612, F.S.; providing criteria for
3159administrative hearings to determine whether an insurer's
3160property insurance rates, rating manuals, premium credits,
3161discount schedules, and surcharge schedules comply with the law;
3162providing for entry of certain  orders; amending s. 627.062,
3163F.S.; requiring that an insurer seeking a rate for property
3164insurance that is greater than the rate most recently approved
3165by the Office of Insurance Regulation make a "file and use"
3166filing for all such rate filings made after a specified date;
3167revising the factors the office must consider in reviewing a
3168rate filing; prohibiting the Office of Insurance Regulation from
3169disapproving as excessive a rate solely because the insurer
3170obtained reinsurance covering a specified probably maximum loss;
3171allowing the office to disapprove a rate as excessive within 1
3172year after the rate has been approved under certain conditions
3173related to nonrenewal of policies by the insurer; requiring the
3174Division of Administrative Hearings to expedite a hearing
3175request by an insurer and for the administrative law judge to
3176commence the hearing within a specified time; authorizing an
3177insurer to request an expedited appellate review pursuant to the
3178Florida Rules of Appellate Procedure; expressing legislative
3179intent for an expedited appellate review; revising provisions
3180relating to the submission of a disputed rate filing, other than
3181a rate filing for medical malpractice insurance, to an
3182arbitration panel in lieu of an administrative hearing if the
3183rate is filed before a specified date; deleting provisions
3184relating to mandatory arbitration in lieu of certain hearings;
3185amending s. 627.0628, F.S.; providing legislative findings
3186relating to final agency action for insurance ratemaking;
3187requiring the Financial Services Commission to consider and
3188adopt findings relating to certain actuarial models, principles,
3189standards, or models for certain maximum loss level
3190calculations; requiring that with respect to rate filings,
3191insurers must use actuarial methods or models found to be
3192accurate or reliable by the Florida Commission on Hurricane Loss
3193Projection Methodology; deleting the requirement for the Office
3194of Insurance Regulation and the Consumer Advocate to have access
3195to all assumptions of a hurricane loss model in order for a
3196model that has been found to be accurate and reliable by the
3197Florida Commission on Hurricane Loss Projection Methodology to
3198be admissible in a rate proceeding; deleting cross-references to
3199conform to changes made by the act; amending s. 627.0629, F.S.;
3200requiring that the Office of Insurance Regulation develop and
3201make publicly available before a specified deadline a proposed
3202method for insurers to establish windstorm mitigation premium
3203discounts that correlate to the uniform home rating scale;
3204requiring that the Financial Services Commission adopt rules
3205before a specified deadline; requiring insurers to make rate
3206filings pursuant to such method; authorizing the commission to
3207make changes by rule to the uniform home grading scale and
3208specify by rule the minimum required discounts, credits, or
3209other rate differentials; requiring that such rate differentials
3210be consistent with generally accepted actuarial principles and
3211wind loss mitigation studies; amending s. 627.351, F.S.,
3212relating to Citizens Property Insurance Corporation; deleting a
3213provision to conform to changes made in the act; deleting
3214provisions defining the terms "homestead property" and
3215"nonhomestead property"; increasing threshold replacement costs
3216of certain structures for eligibility for coverage by the
3217corporation; deleting requirements for certain properties to
3218meeting building code plus requirements as a condition of
3219eligibility for coverage by the corporation; decreasing the
3220value at which certain structures are eligible for coverage;
3221requiring written disclosure of windstorm mitigation ratings for
3222certain structures; deleting outdated provisions requiring the
3223corporation to submit a report for approval of offering
3224multiperil coverage; revising threshold amounts of deficits
3225incurred in a calendar year on which the decision to levy
3226assessments and the types of such assessments are based;
3227revising the formula used to calculate shares of assessments
3228owed by certain assessable insureds; requiring that the board of
3229governors make certain determinations before levying emergency
3230assessments; providing the board of governors with discretion to
3231set the amount of an emergency assessment within specified
3232limits; requiring the board of governors to levy a Citizens
3233policyholder surcharge under certain conditions; increasing the
3234amount of the surcharge; deleting a provision requiring the levy
3235of an immediate assessment against certain policyholders under
3236such conditions; requiring that funds collected from the levy of
3237such surcharges be used for certain purposes; providing that
3238such surcharges are not considered premium and are not subject
3239to commissions, fees, or premium taxes; requiring that the
3240failure to pay such surcharges be treated as failure to pay
3241premium; requiring that the amount of any assessment or
3242surcharge which exceeds the amount of deficits be remitted to
3243and used by the corporation for specified purposes; deleting
3244provisions requiring that the plan of operation of the
3245corporation provide for the levy of a Citizens policyholder
3246surcharge if regular deficit assessments are levied as a result
3247of deficits in certain accounts; deleting provisions related to
3248the calculation, classification, and nonpayment of such
3249surcharge; requiring that the corporation make an annual filing
3250for each personal or commercial line of business it writes,
3251beginning on a specified date; deleting a provision requiring an
3252insurer to purchase bonds that remain unsold; deleting
3253provisions requiring the corporation to make certain
3254confidential underwriting and claims files available to agents
3255to conform to changes made by the act relating to ineligibility
3256of certain dwellings; clarifying the right of certain parties to
3257discover underwriting and claims file records; authorizing the
3258corporation to release such records as it deems necessary;  
3259amending s. 627.4133, F.S.; requiring insurers to provide
3260written notice of certain cancellations, nonrenewals, or
3261terminations; creating s. 689.262, F.S.; requiring a purchaser
3262of residential property in wind-borne debris regions to be
3263presented with the windstorm mitigation rating of the structure;
3264authorizing the Financial Services Commission to adopt rules;
3265requiring Citizens Property Insurance Corporation to transfer
3266funds to the General Revenue Fund if the losses due to a
3267hurricane do not exceed a specified amount; requiring the board
3268of governors of Citizens Property Insurance Corporation to make
3269a reasonable estimate of such losses by a certain date;
3270requiring the board to make quarterly transfers of funds to the
3271corporation under certain circumstances; requiring the
3272corporation to credit certain accounts for funds removed to make
3273certain transfers; requiring the State Board of Administration
3274to transfer to Citizens Property Insurance Corporation certain
3275uncommitted or unreserved funds under certain circumstances;  
3276prohibiting Citizens Property Insurance Corporation from using
3277certain statutory changes or authorized transfers of funds as
3278justification or cause to seek any rate or assessment increase;
3279amending s. 627.06281, F.S.; providing for residential property
3280insurers to have access to and use a public hurricane loss
3281projection model; requiring the office to establish a fee
3282schedule for such model access and use; amending s. 627.0655,
3283F.S.; expanding application of policyholder loss or expense-
3284related premium discounts; creating the Citizens Property
3285Insurance Corporation Mission Review Task Force; providing
3286purposes; requiring a report; providing report requirements;
3287providing for appointment of members; providing
3288responsibilities; specifying service without compensation;
3289providing for reimbursement of per diem and travel expenses;
3290providing meeting requirements; requiring the corporation to
3291assist the task force; providing for the expiration of the task
3292force; requiring the Chief Financial Officer to provide a report
3293on the economic impact on the state of certain hurricanes;
3294providing report requirements; creating s. 627.0621, F.S.;
3295providing requirements for transparency in rate regulation;
3296providing definitions; providing for a website for public access
3297to rate filing information; providing requirements; providing
3298for application of public meeting requirements; specifying
3299nonapplication of attorney-client or work-product privileges to
3300certain communications in certain administrative or judicial
3301proceedings under certain circumstances; specifying criteria;
3302amending s. 215.555, F.S.; extending for an additional year the
3303offer of reimbursement coverage for specified insurers; revising
3304the qualifying criteria for such insurers; revising provisions
3305to conform; amending s. 627.0613, F.S.; deleting cross-
3306references to conform to changes made by the act; amending s.
3307627.712, F.S.; requiring insurers to provide notice to
3308mortgageholders or lienholders of certain policies not providing
3309wind coverage for certain structures; providing for provisions
3310of the act to supersede and control over conflicting provisions
3311of House Bill 5057; providing effective dates.
3312
3313


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